[House Hearing, 106 Congress]
[From the U.S. Government Publishing Office]



 
  AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED
                    AGENCIES APPROPRIATIONS FOR 2000

_______________________________________________________________________

                                HEARINGS

                                BEFORE A

                           SUBCOMMITTEE OF THE

                       COMMITTEE ON APPROPRIATIONS

                         HOUSE OF REPRESENTATIVES

                       ONE HUNDRED SIXTH CONGRESS
                              FIRST SESSION
                                ________

     SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG 
                  ADMINISTRATION, AND RELATED AGENCIES
                     JOE SKEEN, New Mexico, Chairman

 JAMES T. WALSH, New York          MARCY KAPTUR, Ohio
 JAY DICKEY, Arkansas              ROSA L. DeLAURO, Connecticut
 JACK KINGSTON, Georgia            MAURICE D. HINCHEY, New York
 GEORGE R. NETHERCUTT, Jr.,        SAM FARR, California
Washington                         ALLEN BOYD, Florida
 HENRY BONILLA, Texas
 TOM LATHAM, Iowa
 JO ANN EMERSON, Missouri           

 NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full 
Committee, and Mr. Obey, as Ranking Minority Member of the Full 
Committee, are authorized to sit as Members of all Subcommittees.
  Henry E. Moore, John J. Ziolkowski, Martin P. Delgado, and Joanne L. 
                       Orndorff, Staff Assistants
                                ________

                                 PART 1
                                                                   Page
 Office of the Inspector General..................................    1
 Secretary of Agriculture.........................................  287
     Office of the Chief Economist
     Office of Budget and Program Analysis
 Departmental Administration......................................  649
     Office of the Chief Financial Officer
     Office of the Chief Information Officer
     Office of Communications
     Office of the General Counsel
     National Appeals Division
     Support Services Bureau
                                ________

         Printed for the use of the Committee on Appropriations
                                ________

                     U.S. GOVERNMENT PRINTING OFFICE
 55-678                     WASHINGTON : 1999




                         COMMITTEE ON APPROPRIATIONS

                   C. W. BILL YOUNG, Florida, Chairman

 RALPH REGULA, Ohio                   DAVID R. OBEY, Wisconsin
 JERRY LEWIS, California              JOHN P. MURTHA, Pennsylvania
 JOHN EDWARD PORTER, Illinois         NORMAN D. DICKS, Washington
 HAROLD ROGERS, Kentucky              MARTIN OLAV SABO, Minnesota
 JOE SKEEN, New Mexico                JULIAN C. DIXON, California
 FRANK R. WOLF, Virginia              STENY H. HOYER, Maryland
 TOM DeLAY, Texas                     ALAN B. MOLLOHAN, West Virginia
 JIM KOLBE, Arizona                   MARCY KAPTUR, Ohio
 RON PACKARD, California              NANCY PELOSI, California
 SONNY CALLAHAN, Alabama              PETER J. VISCLOSKY, Indiana
 JAMES T. WALSH, New York             NITA M. LOWEY, New York
 CHARLES H. TAYLOR, North Carolina    JOSE E. SERRANO, New York
 DAVID L. HOBSON, Ohio                ROSA L. DeLAURO, Connecticut
 ERNEST J. ISTOOK, Jr., Oklahoma      JAMES P. MORAN, Virginia
 HENRY BONILLA, Texas                 JOHN W. OLVER, Massachusetts
 JOE KNOLLENBERG, Michigan            ED PASTOR, Arizona
 DAN MILLER, Florida                  CARRIE P. MEEK, Florida
 JAY DICKEY, Arkansas                 DAVID E. PRICE, North Carolina
 JACK KINGSTON, Georgia               CHET EDWARDS, Texas
 RODNEY P. FRELINGHUYSEN, New Jersey  ROBERT E. ``BUD'' CRAMER, Jr., 
 ROGER F. WICKER, Mississippi           Alabama
 MICHAEL P. FORBES, New York          JAMES E. CLYBURN, South Carolina
 GEORGE R. NETHERCUTT, Jr.,           MAURICE D. HINCHEY, New York
Washington                            LUCILLE ROYBAL-ALLARD, California
 RANDY ``DUKE'' CUNNINGHAM,           SAM FARR, California
California                            JESSE L. JACKSON, Jr., Illinois
 TODD TIAHRT, Kansas                  CAROLYN C. KILPATRICK, Michigan
 ZACH WAMP, Tennessee                 ALLEN BOYD, Florida
 TOM LATHAM, Iowa
 ANNE M. NORTHUP, Kentucky
 ROBERT B. ADERHOLT, Alabama
 JO ANN EMERSON, Missouri
 JOHN E. SUNUNU, New Hampshire
 KAY GRANGER, Texas
 JOHN E. PETERSON, Pennsylvania     

                 James W. Dyer, Clerk and Staff Director

                                  (ii)



   AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND 
                RELATED AGENCIES APPROPRIATIONS FOR 2000

                              ----------                              

                                       Thursday, February 11, 1999.

                      OFFICE OF INSPECTOR GENERAL

                               WITNESSES

ROGER C. VIADERO, INSPECTOR GENERAL
JAMES R. EBBITT, ASSISTANT INSPECTOR GENERAL FOR AUDIT
GREGORY S. SEYBOLD, ASSISTANT INSPECTOR GENERAL FOR INVESTIGATIONS
DELMAS R. THORNSBURY, DIRECTOR, RESOURCES MANAGEMENT DIVISION
STEPHEN B. DEWHURST, BUDGET OFFICER


                            opening remarks


    Mr. Skeen. Let's come to order. We are on the record.
    Today, we will hear from the USDA's Inspector General's 
office. We have read your written statement, and we appreciate 
the broad overview of the USDA programs, that your testimony 
provides for us, as we continue hearings on the President's 
fiscal year 2000 budget request.
    We have the authority on all that. Mr. Dewhurst is here 
again, and with that kind of help, we are going to expedite 
this thing. He is writing out the check already. [Laughter.]
    Mr. Skeen. Roger, your prepared statement will be printed 
in full for the record. We know you and we like you, and we 
would ask that you would be brief in your opening remarks so 
that we can get on with the questions.
    We had a 4-hour marathon session with Secretary Glickman 
yesterday. We would like to keep this focused today if we can, 
and so it is all yours.
    Mr. Viadero. Good afternoon, Chairman and Members of the 
Committee. I am pleased to have this opportunity to visit with 
you again today and discuss the activities of the Office of 
Inspector General. Before I begin, I want to introduce members 
of my staff who are with me here today.
    Mr. Chairman, Ms. Kaptur, we have Jim Ebbitt, of course, 
the Assistant Inspector General for Audit, and we have a new 
person, Mr. Greg Seybold, who is the Assistant Inspector 
General for Investigations who has joined us recently.
    Mr. Skeen. Welcome, Mr. Seybold.
    Mr. Viadero. We have Delmas Thornsbury, the Director of our 
Resources Management Division, and as you, Mr. Chairman, we 
feel blessed that we have the esteemed Steve Dewhurst, the 
Department of Agriculture's Budget Officer at the table with us 
here today.
    Mr. Skeen. Let's not overdo it. [Laughter.]
    Mr. Viadero. I want to thank the committee for its support 
during the nearly 4\1/2\ years since my appointment as 
Inspector General. We have tried to work closely with you, and 
I hope that you have been able to address some of the concerns 
you have toward us and gotten proper responses.
    OIG's mission is to perform audits and investigations of 
the Department's more than 300 programs and operations, 
recommend policies, and actions to promote economy and 
efficiency and prevent and detect waste, fraud, and 
mismanagement in these programs and operations.
    We keep you and the Secretary informed about problems and 
deficiencies, and report criminal violations to the United 
States Attorney General.
    We have a diverse staff of auditors, criminal 
investigators, and other personnel in offices throughout the 
Nation to carry out these activities. I am proud to say that in 
fiscal year 1998, we continued to more than pay our own way.
    In the audit arena, we issued 220 audit reports and 
obtained management agreement on 1,122 recommendations. Our 
audits resulted in questioned costs of over $112 million. Also, 
as a result of the audit work, management agreed to recover 
more than $39 million and put another $128 million into better 
use.
    Most importantly, implementation of our recommendations by 
USDA managers will result in more effective operations of USDA 
programs.
    Additionally, our investigative staff completed 815 
investigations and obtained 777 indictments, 604 convictions, 
and in excess of 2,780 arrests. Our investigations also 
resulted in $81 million in fines, restitutions, other 
recoveries, and penalties during the year.
    We continued to work closely with agency officials during 
fiscal 1998 to address key issues and to expand our cooperation 
with other Federal, State, and local law enforcement and audit 
agencies to help us broaden the impact of our work. Working 
together, our staffs identified program weaknesses and program 
violators. Capitalizing on the staff's respective expertise, we 
created solutions for positive action.
    In 1999, we are focusing our efforts primarily on food 
safety and smuggling of uninspected, unapproved food products, 
carrying unwanted pests and diseases into the United States 
that affect the wholesomeness of the Nation's food supply.
    We are also focusing our audit efforts on the Department's 
financial accounting systems, Farm Credit programs, the Rural 
Rental Housing Program, the Food Stamp Program including its 
electronic benefits transfer efforts, and the Child and Adult 
Care Food Program.
    In addition to investigations and emergency responses to 
threats to the health and safety of food, our investigative 
priorities include investigations of sponsors abusing the child 
and adult care programs, employee integrity issues, and fraud 
in the Department's loan, regulatory and benefit programs.
    Mr. Chairman, at this time, I would particularly like to 
focus on our year 2000 law enforcement initiatives. The quality 
or wholesomeness of the Nation's food supply from production to 
consumer is of special concern to this office. Investigations 
of any criminal activity that pose a threat to the general 
health and safety of the public remain our highest priority. 
Criminal investigations have usually involved the processing 
and sale of adulterated meat or 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.
    Recent and ongoing investigations involving real or alleged 
threats to food products intended for the public have 
necessitated the immediate--I say again, immediate deployment 
of OIG agents and auditors to several U.S. cities. These cases 
have involved real or threatened adulteration or contamination 
of meat with everything from E. coli bacteria or listeria to 
HIV-infected human blood. Some of these products were destined 
for or actually ended up in the National School Lunch program 
or on military bases. The increasing threat to the 
wholesomeness of domestic and exported food requires not only 
vigilance, but also advanced preparedness, including preemptive 
operations.
    Profit-motivated criminal activity that threatens the food 
industry can cause economic disruption, while victimizing 
innocent members of the community.
    Likewise, threats of criminal adulteration and biological 
contamination of food products from outside the food industry 
for extortion or ideological motives can victimize and disrupt 
the Nation's food production and distribution systems. These 
threats must be resolved through a vigilant and established 
emergency law enforcement and health and safety response.
    A threat in a Milwaukee, Wisconsin, meat plant is a good 
example of these types of dangers. This past December, December 
19, 1998, a plant received a threat of biological contamination 
using HIV-infected human blood. We immediately deployed 30 
special agents, including eight bilingual agents to converse 
with Spanish-speaking plant employees, and four auditors to the 
scene to determine the validity of the threat and to identify 
those responsible.
    Personnel from the Food Safety Inspection Service assisted 
in this investigation, with FSIS staff taking the lead role in 
ensuring that potential contaminants had not been introduced to 
the food chain. Our investigative efforts to resolve this 
bioterrorism threat continue.
    By the way, Mr. Chairman, we have a joint investigation 
ongoing with the FBI and several of the other large health 
agencies such as CDC on this issue, and it is a continuing 
operation. To date, approximately 580 interviews have been 
conducted, and I am pleased to be able to report that extensive 
testing of the samples taken from the plant has not indicated 
the presence of HIV-infected human blood.
    We are currently investigating a significant case involving 
another meat company alleged to have intentionally adulterated 
and misbranded beef and pork products, which have also tested 
positive for E. coli bacteria. Approximately, 4 million pounds 
of this company's meat product containing ground pork or ground 
beef are under voluntary hold at various school districts, 
prisons, military installations and the like. In addition, 
another 1,600,000 pounds of this product are being retained or 
detained at these facilities.
    We have also investigated other cases in which health and 
safety of the public were at serious risk. For example, in 
Buffalo, New York, three feed company employees recently pled 
guilty to Federal charges and are awaiting sentencing for their 
role in selling canned meat products to the public which were 
unfit for human consumption. This product was being shipped 
from a Canadian company to the feed company to be used 
exclusively as animal food, but was diverted by these 
individuals to be sold for human consumption.
    I have a picture of the deplorable and unsanitary 
conditions at the plant that I want to show you. This is a tub 
of unidentified waste and food product, if you will, found just 
sitting around outside the open site.
    The Office of Inspector General needs to be prepared to 
immediately respond to these emergency situations. To do so, we 
must be equipped with the specialized equipment, protective 
clothing, and supplies necessary to ensure the health and 
safety of our personnel responding to these crises.
    We also need to be mindful of the economic impact of 
closing a major food processing plant. To our knowledge, the 
Milwaukee plant I mentioned earlier had violated no laws and 
had been successfully implementing the new food safety 
procedures for inspecting meat and poultry plants.
    The Hazard Analysis Critical Control Point system, or HACCP 
as you know it, inspection procedures--yet, its production line 
was successfully halted by outside forces. Tons, actually 
millions of pounds, 15 million pounds of this product were put 
on hold, and the facility was temporarily shut down.
    Due to our rapid response and deployment of considerable 
staff resources, we not only helped protect the health and 
safety of the consumers, but also allowed the plant to reopen, 
reemploying approximately 1,500 people with a minimum 
disruption of production, lost profit, and impact on the local 
economy as opposed to an indefinite and costly closure.
    The costs of rapid response by OIG, such as this, are 
indeed great. In addition to the personnel time and the 
disruption of other critical OIG work, to date we have expended 
approximately $40,000 alone in unanticipated travel costs in 
the Wisconsin investigation. This figure will continue to rise 
until the matter is resolved.
    Another form of criminal enterprise that poses a 
significant threat to the Nation's food supply and its economic 
well-being is smuggling of uninspected, unapproved food 
products into the United States. A direct result and a 
byproduct of smuggling is the danger that comes from 
pestilents, whether insects, fungi, bacteria, or viruses not 
previously present in the United States, could be introduced 
here.
    As a result, entire crops of the United States agricultural 
industry, such as citrus, vegetables, trees, and other plants 
or beef, poultry, and pork products could be severely, severely 
damaged, devastating the economy of the local communities 
producing these products, as well as reducing both the quantity 
and quality of our Nation's food supply.
    OIG has begun an anti-smuggling campaign to interdict and 
suppress foreign contraband that is dangerous when consumed by 
the American population and potentially catastrophic to the 
economic stability of certain agricultural products. Ongoing 
criminal investigations are targeting smuggled fruits, 
vegetables, plants, and other commodities or animals that bring 
high dollars in underground black-market commerce. This 
initiative requires significant agent resources dedicated to 
intelligence collection, undercover operations, and foreign law 
enforcement cooperative efforts that cross the international 
boundaries. These activities normally require extensive 
surveillance utilizing high-tech investigative devices and 
equipment.
    The smuggling of infested fruits into the United Statesis 
indeed a serious law enforcement problem because of the criminal 
profit. It is tremendous while the deterrent is grossly inadequate at 
present.
    Animal pests and disease importation are a severe problem, 
for instance, in Florida, and due to the favorable climate in 
most of the Southeastern United States, the pests and diseases 
could easily spread throughout the area.
    The costs to protect the industry are staggering. Since 
1980, over $256 million in California, State and Federal funds, 
have been spent to eradicate medfly infestations in quarantine 
areas.
    In the last 10 years, Florida has spent in excess of $150 
million to eradicate such infestations. A risk to the 
agricultural industry including exports is clear. The State of 
California alone produces in excess of $25 billion in fruits, 
nuts, and vegetables annually, about 55 percent of the Nation's 
output. About $11.8 billion of these commodities is exported to 
other countries each year.
    In carrying out successful smuggling operations, OIG must 
perform extensive travel, procure and maintain the necessary 
specialized equipment needed to investigate these incidents, 
provide essential protective supplies and equipment to ensure 
the health and safety of our agents and auditors, and provide 
specialized training to our staff, to prepare them to cover 
various types of such emergencies.
    OIG must also provide state-of-the-art, Y2K-compliant 
automated data processing equipment and systems to track data, 
analyze intelligence-based information, and provide faster and 
more responsive information to better support this mission 
work. All of these items are essential to ensure that this 
office can adequately address this critical public health and 
safety issue concerning the quality and wholesomeness of the 
Nation's food supply.
    Just before I conclude, Mr. Chairman, I would like to show 
you and the committee another example of our work. This is a 
picture of a set of counterfeit plates we found being used by 
store owners and a wholesaler to relabel the illegally received 
WIC formula so that it could be resold to commercial sources, 
another large area for us to look at.
    Mr. Chairman, I am sure you are happy that this concludes 
my presentation, and I would be pleased to respond to any 
questions you or any of the members may have.
    Thank you.
    [The prepared statement and biographies of Roger C. Viadero 
and Gregory S. Seybold follow:]

[The official Committee record contains additional information here.]


                            operation talon

    Mr. Skeen. Thank you, Roger. We appreciate the effort to 
get on with this meeting.
    On page 86 of the explanatory notes, as I read it, that is 
part of your justification to increase your confidential fund 
authority from $100,000 to $125,000, and the special law 
enforcement initiative known as Operation Talon would involve 
extensive undercover-type operations and would be expanded 
nationwide. The Talon initiative was proposed last year. The 
best we can tell is that there are no funds requested in fiscal 
year 2000 for Operation Talon.
    Would you explain in more detail how the operation fits 
into the request for an increase to the confidential fund? 
Would you give me some idea of the other parts of the 
justification for the increase? The confidential fund states 
that current limitation is insufficient for all nationwide 
undercover investigative operation, and you might give us some 
specific examples.
    Mr. Viadero. Yes, sir.
    I think I have supplied every Member of the Committee with 
two reports. The first report is our Operation Talon report, 
and the second one is the Forest Service Timber Sale 
Environment Analysis.
    Regarding the reason why we did not ask for an increase as 
part of Talon, we now mold Talon in as we can pay for it, a 
pay-as-you-go operation across the country.
    Mr. Skeen. I see.
    Mr. Viadero. We are primarily concentrating on places that 
we have at least the suboffice at, and we do not have to incur 
as much in travel costs. So we have smartened our operation up 
for that.
    Last week, I met with the National Governors Association 
and the individual superintendents of State police or highway 
patrols across the country. In particular, three of our larger, 
more populated concentrated States want to resume an Operation 
Talon in their State.
    In particular, Mr. Hinchey, we met with Jim McMahon, a dear 
friend from New York State Police, and we are planning an 
operation across the southern tier from Buffalo right through 
Albany. That will be a joint operation between the Office of 
Inspector General and New York State Police, but using the 
resources of the violent fugitive warrant squads that Jim has 
in place up there.
    We can give absolution if you surrender today.
    Regarding the $3 million request, this is primarily due to 
us responding to this somewhat--I do not want to exaggerate it, 
but this issue was an exploding issue for us, being able to 
respond to these health emergencies.
    We presently have at a minimum six health cases ongoing, 
food safety cases. These are exceptionally costly, as I 
mentioned, just in the travel and per diem cost, much less 
removing personnel from routine operations such as Talon and 
taking them and moving them across the country.
    So, as far as the increase for the confidential fund, the 
current $100,000 amount is insufficient to provide the funds 
for all of the undercover operations that we have identified.
    Particularly, part of the $3 million includes the smuggling 
operation. The smuggling operation is envisioned, if I can give 
you a thumbnail sketch on it. We are finding--and let's take 
medfly as an example, when there are literally hundreds of 
other examples to use, and other types of pestilents and fungi 
coming in, but if we get a freighter full of, let's say, 
longans, which is an Asian fruit, which are known to carry 
medflies--and we know that they carry medflies because we have 
interdicted them--they are allowed lawfully to come into the 
United States. They are then transshipped to Canada. Canada 
does not really care because, as you well know, any frost will 
kill off a medfly.
    Once they hit Canada, they are transshipped illegally back 
into the United States. When they first enter, they are in 
sealed containers, which meets our APHIS and Customs 
requirements. They then get transshipped to Canada. They are 
not even unloaded. They are just off-loaded to another truck, 
and they are transshipped right back to the United States.
    These fruits and vegetables that we find coming in here 
from Canada, for the most part, as we found, our intelligence 
lets us know that they end up on the west coast.
    The initiative would include us training, and we have 
chatted with our APHIS counterparts--would let us use some 
APHIS dogs that would be trained specifically for this 
operation, and we would be working, for instance, in areas such 
as weight stations to ascertain and locate the vehicles and 
then from there normal investigative procedures in vouching and 
tracing through the books and records at the terminus of the 
fruit.
    This is really a big issue, and again, we would like to run 
a pilot project, particularly in Florida because in Florida, as 
I understand it, they have 20 international points of entry. So 
that is somewhat manageable, and it is a peninsula. So we can 
control the access, egress and exit routes out of the State a 
little bit better, and that is what the bulk of the money is 
for.
    When you look at agriculture as being 15 percent of the 
gross domestic product, or roughly $1 trillion, we look at this 
as sort of a minuscule amount to be invested into this great 
portion of the economy.

                           confidential funds

    Mr. Skeen. Roger, can you give me some specific examples of 
where you are conducting an undercover investigation, and that 
the confidential fund limitation actually caused a problem for 
you?
    Mr. Viadero. Mr. Seybold, do you have anything?
    Mr. Seybold. Years past, in addition to the operations that 
we were conducting in smuggling, we had utilized the sting 
operations for the purpose of our Talon operation. This 
requires the leasing sometimes of facilities that will 
accommodate large numbers of fugitives that we are in the 
process of identifying and getting in, mainly for the purpose 
of being able to execute mass arrest with the least amount of 
concern for injury for our agents and for the arrestees.
    These operations can be extremely expensive, and depending 
upon what other investigations we have had ongoing during that 
year, it will and can create some shortages for us.
    Mr. Viadero. Mr. Chairman, the last page of the Talon 
report gives you some flavor for what we have been able to do.
    When you open the door for a fugitive operation, generally 
we are not talking about the creme de la creme of our society, 
needless to say, and to turn some people in, they want to be 
paid to let us know where they are.
    Mr. Skeen. So the limitation has a real effect on whether 
you can get information or not that you need?
    Mr. Viadero. Yes, sir. That is street information that we 
are purchasing here.
    I am very proud of this. We have gotten approximately two 
dozen people for murder, but, more importantly, I would like to 
draw attention to the 15 child molesters because, with those 15 
child molesters, we have received 2 that have not registered, 
that have been found guilty under the State's Megan law 
statutes. That is just, gosh darn, great to participate in 
because these are the real lechers in society. They are the 
ones that are taking care of the future generation here, and I 
am very proud that we picked those up.
    Mr. Skeen. Thank you.
    I think we are going to have a recess so we can go vote.
    Mr. Viadero. Sure thing.
    Mr. Skeen. We will continue from that point on. That is the 
second bell.
    Mr. Viadero. Thank you, sir.
    [Recess.]
    Mr. Skeen. We will go back on the record.
    Ms. Kaptur. Marcy, it is yours.

           fines, restitution, other recoveries and penalties

    Ms. Kaptur. Thank you very much, Mr. Chairman, and we 
welcome you, Mr. Viadero. We are always so happy to have you 
before the committee, with all of your fine colleagues who do 
such a fine job.
    I have a few questions here. One relates to page 3 where 
you talk about the total of all investigations before your 
division of USDA resulting in $81 million in fines, 
restitutions, other recoveries and penalties during the year.
    This year, you are requesting an appropriation of $68 
million. I guess my question really is, of the $81 million in 
fines, restitutions, et cetera, how much of those dollars 
actually come back to the Government of the United States, and 
in what form?
    Mr. Viadero. As I understand it, ma'am, the bulk of that 
$81 million does come back to the United States. Most of it 
goes to main Treasury.
    Ms. Kaptur. What would be the logic behind that?
    Mr. Viadero. That is the way the Department of Justice and 
the Treasury handle it. We get nothing back on it. It does not 
go back to the programs. It gets counted against the main U.S. 
budget.
    Ms. Kaptur. This is an area, I would have to express to the 
chairman, I have a personal interest in. I do not know if this 
is a governmentwide policy or not.
    Mr. Skeen. Well, let's make it policy.
    Ms. Kaptur. I just think that they do such a tremendous job 
that we ought to really look into why these dollars flow back 
to Treasury now, in spite of the fact that we appear to be 
running annual surpluses. Maybe now is a good time for us to 
look at the flow of these dollars and to what extent we might 
be able to redirect them back into USDA. I do not know whether 
that is even possible.
    Mr. Skeen. That is something that has a lot to do with the 
efficiency of operations.
    Ms. Kaptur. Yes.
    Is the IG aware of any other agency that receives fees that 
are reimbursed directly to the agency? Or, perhaps we could ask 
you to work with Mr. Dewhurst and get back to our committee, if 
we wanted to develop an argument to the executive branch that 
this is atypical. Do we have enough information, or are there 
other exceptions that were made if it truly is an exceptional 
way of handling these dollars? Are those dollars spent by 
Justice or strictly go into the general Treasury?
    Mr. Viadero. As I understand it, Ms. Kaptur, Justice 
actually is a conduit back to main Treasury. The Justice 
receives the funds for the Judiciary. The fines and most 
restitutions come in through the court system,
    Ms. Kaptur. Let me ask Mr. Dewhurst. What would be a good 
way for me to be thinking about this if my objective were to 
take the funds that had been received as a result of your 
investigations and direct them back to USDA?
    Mr. Dewhurst. Well, I am thinking about that.
    We have some user fee programs in the Department, for 
instance, where we grade meat, and we charge a fee for that 
service. There is a specific law that causes that money to come 
back into the Department and go back into the program which 
provides service.
    So the dedication of receipts to a certain purpose is not 
totally unusual in the Government. It happens, but I am not 
aware that it happens very often when you are talking about 
fines or criminal penalties or that sort of thing. Most all of 
those go back into the general Treasury, but, obviously, you 
can write a law that dedicates those receipts to a certain 
purpose. It would be a question of how you did that. I just do 
not know what the governmentwide situation is. My impression is 
most of those things go back in the general Treasury.
    Mr. Viadero. Yes, and they go to the general fund.
    However, Ms. Kaptur, what would be most helpful is, 
particularly on the audit side of the House--for instance, when 
Congress appropriates funds, such as the emergency 
appropriation, the disaster money, if USDA follows what AID 
does, when there is a program appropriated, either a certain 
dollar amount or a certain percentage of the program gets 
budgeted for the Office of Inspector General to do its review 
and oversight and report back to the Congress with. That would 
greatly help us.
    For instance--is it $6 billion, Steve?
    Mr. Dewhurst. Yes.
    Mr. Viadero. If we received even 1 percent of the $6 
billion that is going for the emergency farm loans, that would 
greatly help us. It is either pay me now or pay me later. They 
are either going to be allowed to get out there and commit 
these egregious acts, and some of them do it unknowingly 
because there is no oversight out there, or we can get in and 
work with the States and the various USDA agencies up front and 
prevent the frauds from happening. So it is pay me now or pay 
me later. We would just as soon get the money and work with 
them and prevent it. I do not think you need any more papers 
and reports from us telling you that something is wrong out 
there. We would be happy to report that something is right when 
we find it.
    Ms. Kaptur. We appreciate your advice on that, and I think 
you more than pay for your presence. I guess the thought that 
runs through my mind is if we had twice as much money, would we 
recover even more?
    Mr. Viadero. Absolutely.
    I am constrained as the Inspector General, and this 
organization and these fine folks that are with me here today, 
we are constrained due to the limited resources.
    Mr. Chairman, before we left, I sort of fumbled over a 
question. I would be happy to respond to you with a detailed 
answer on the reason for the additional confidential funds and 
how exactly the breakdown of that $3,118,000 will be.
    Mr. Skeen. If you would do that, I would appreciate it.
    Mr. Viadero. Yes, sir.
    [The information follows:]

    The Office of Inspector General (OIG) has begun a long-term 
initiative to identify and prosecute organized transportation 
and distribution networks responsible for the smuggling of 
foreign animals and plant products contaminated with pests and 
disease into the United States. Smuggling or shipment through 
deceit of produce, plants, animals, and birds are an ever more 
serious problem to American agriculture because of the pests 
and diseases which can and are inadvertently brought into the 
United States via these products and animals.
    As part of this initiative, OIG has teamed up with APHIS 
and local agriculture officials to conduct surveys of markets 
to locate illegal produce. These surveys have shown that 
illegal Asian fruits are readily available in west coast 
markets from Los Angeles, California, to Seattle, Washington. 
Often, the fruit is not displayed in the store but is held in 
back rooms and provided to customers upon request. In Florida, 
USDA and OIG officials have conducted sweeps of stores in 
Miami, Tampa, and Orlando and again discovered smuggled fruits 
and vegetables from Asia and Central America.
    OIG and other law enforcement agencies do not have 
sufficient reliable contacts within the communities where OIG 
has found these illegal products; therefore, we must develop a 
network of informants. Confidential fund incentive payments to 
individuals within communities/businesses will allow OIG to 
develop intelligence to identify when and where these products 
are entering the United States. As OIG moves forward with this 
initiative, additional confidential fund expenditures for 
information will be necessary to allow OIG to intercept these 
contaminated products before they can enter the United States 
and cause disease or pest outbreaks.
    In addition to our smuggling initiative, we have increased 
our investigative workload in the area of public health and 
safety. These types of cases vary considerably and have been 
mentioned by the Inspector General in his testimony. They vary 
from meat packers who process and sell adulterated beef from 
sick and dying cattle, to companies which sell tainted products 
to school systems and other tainted food products to the 
public. Again, we need to use confidential funds to develop 
sources in these industries.
    A total of $2.6 million of the requested increase would be 
used to purchase supplies and protective clothing and 
surveillance equipment and travel expenses, training, 
vaccination and immunization shots, and expertise services. 
This would allow OIG to enhance and effectively apply its 
criminal investigative and law enforcement expertise in 
responding to emergency situations threatening the Nation's 
food supply. The remainder of these funds would be used to 
enhance OIG's computer hardware and software capabilities to 
support this investigative endeavor.

    Ms. Kaptur. I would like you to think on this line of 
questioning that I have pursued here, and if you have other 
recommendations you wish to make for us--and I am going to ask 
for Mr. Dewhurst to do me a favor and talk with some of your 
colleagues across the Government and see if all of these 
various funds go through Justice to Treasury, and now in a time 
of relative surplus annually, maybe we should be rethinking 
some of this to the agencies that are actually doing the work.
    Mr. Chairman, I have many other questions that I wanted to 
submit for the record, but I do want to ask a question on this 
Russia food aid because it is a significant amount of money, 
$1.7 billion, most of that, over a billion, going into the 
transportation costs, over 60 ocean freighters of various types 
of commodities.

                           russia's food aid

    Ms. Kaptur. We have worked with the administration since 
October to beef up the investigatory and logistical support on 
the ground.
    I have to tell you, when the Secretary testified here 
yesterday, that my own view, the best thing in the agreement is 
if the first six freighters' cargo gets ripped off in some way, 
they will not send any more. They will figure out what went 
haywire, but I have two sets of concerns regarding what is 
happening.
    Number one, that the Commodity Credit Corporation, in spite 
of even past experience of some failures in this regard, are 
now prepared to double the amount that has been sent in past 
years with some greater oversight, but not the kind of 
certainty that I would want if I actually owned that cargo 
myself.
    So I had one set of concerns about logistical support, 
auditing support. It is not clear to me whether auditors are 
now serving on some of these working groups that have been set 
up. There are a couple of monitoring groups in the United 
States and in Russia. USDA will send four monitors and get 
another five from the embassy, from Treasury, from AID, from 
other personnel serving in Moscow.
    Most of the people will be based in Moscow, and less than 
10 percent of what we are sending will be spot-checked, which 
means that 90 percent is out there somewhere.
    All of the proceeds from the sale of those donated 
commodities will be placed in what is called the Russian 
pension fund. Until we got involved, there was not a dime of 
this aid that was going to be directed toward the development 
of a privatized agriculture in Russia, which right now is 
breaking the back of the country.
    If you look at what is really going on there and in the 
adjoining Ukraine, the lack of reform there is quite troubling, 
and only with the seed, the 15,000 tons of seed, were we able 
to get a separate account set up to use to support the 
development of a privatized agriculture so we could actually 
relate to livestock growers in New Mexico or wheat growers in 
Missouri or hog producers in Ohio, our input people and so 
forth, and that is really a problem.
    I do not understand why the Commodity Credit Corporation at 
the same time as it is interested in sales cannot also be 
interested in the development of privatized agriculture in some 
of these other countries, and so my question to you really is, 
you did a report back early in the decade about what had gone 
wrong with prior shipments. However, part of that report really 
did not deal with privatization and the extent to which USDA 
dollars and USDA taxpayer dollars had helped to contribute to 
the privatization of agriculture. How are you involved in 
oversight on this shipment?
    Mr. Viadero. Once again, we have not been invited in to 
participate in this, and this is a perfect example, Ms. Kaptur, 
of you pay me now up front or pay me later at the back end.
    For instance, I will ask Mr. Ebbitt to jump in on this one 
because it was his folks that directly had impact and did those 
reviews.
    Mr. Ebbitt. Thank you, Ms. Kaptur.
    As Roger indicated, FAS did not come and say please come 
and join us. As we frequently do, we invited ourselves into the 
process early on from the standpoint of going over to Foreign 
Agricultural Service and saying what are you doing relative to 
monitoring plans.
    We found out that, much to your direct involvement, they 
were really trying to beef up the plan that they had, and so we 
have in effect reviewed the plan that they put out.
    We had a meeting with FAS staff and indicated to them 
that--I think you said it best. If it was your own truckload, 
your own shipload going over there--I told them. I said I did 
not feel very comfortable with what I saw down on a sheet of 
paper as far as their oversight efforts.
    Part of it is based on a promise from the embassies and 
consulates around Russia and the rest of the former Soviet 
Union countries to have staff available, but other than the 
promise, they do not have people identified. There is no 
schedule.
    Some of that is difficult from the standpoint that they do 
not know for sure yet where all of these shipments are going to 
be delivered, what ports they are going to go into. So it is 
somewhat difficult to develop a schedule, but right now, 
really, all they have is a promise from those folks.
    Our comment back to them was it surely would help if they 
had some kind of a schedule, some kind of a commitment, more 
than just this promise that they currently have. It is going to 
be a major effort.
    When we were there the last time, back in the early '90s 
time frame, most of their monitoring staff was located in 
Russia, but most of their monitoring staff was one person. They 
were monitoring in Moscow. They were looking at the paperwork 
flow that came in.
    They did not have people there to follow this stuff around, 
where was it going, what was happening to it. That just was not 
there.
    We talked about a shipment of butter, for example, that was 
going to be monetized. It was going to be sold on the local 
market and the local currency used, and part of it was supposed 
to be used for privatization and things of that nature.
    The controls were simply just lacking. The butter was sold 
at certainly less than the U.S. anticipated that it would be, 
and it was not easy to track the money as far as what happened 
to it. It was not easy to track the commodities.
    FAS has a massive job or task that they are faced with in 
this monitoring process, and I think given the amount of money 
that is going to be delivered, it is perhaps a bit foolish to 
expect that the complement of people that they have so far 
indicated will be involved will in fact be able to provide much 
in an oversight process.
    Ms. Kaptur. Well, I would very much appreciate your 
recommendations in this area and what we could do to tighten up 
the agreement.
    Do you have access to the agreement to read it?
    Mr. Ebbitt. Yes, we do.
    Ms. Kaptur. You do?
    Mr. Ebbitt. Yes.
    Ms. Kaptur. I would be very interested in your comments on 
where it is today.
    I know where we are compared to where we started with them 
in October, but I am also very interested in your 
recommendations. If we are to require a set-aside of dollars 
related to this shipment to increase the auditing staff 
associated with it, what would it require?
    We have 60 ocean freighters going over, starting later this 
month. As far as I am concerned, it is just a billiondollars 
being shipped there in the form of food, and from a foreign policy 
standpoint, just following the dollar flow would be an interesting one, 
but we are not properly equipped to do that, in my opinion, in spite of 
the ambassador's involvement over there and some of the little teams he 
is pulling together. This is a lot.
    The Europeans even admit they have got a similar shipment. 
They admit that they figure it is all going to be stolen. So 
what are we doing as a freedom-loving country to help to 
encourage the reforms that we have tried so hard to achieve 
inside that country? It seems to me, this is going to be--
especially with the presidential elections coming up there, 
there is just too much temptation to divert this for the money 
that it can be sold for and to do other things with it.
    So I really want your recommendation, and I will take that 
under consideration, both this committee, the full committee, 
and on the floor, how do we strengthen the agreement and what 
kinds of resources do we need for proper auditing at not just 
the Moscow level, but down into the regions.
    Mr. Viadero. Ms. Kaptur, when Jim came back and we met and 
we chatted about it, I asked for us to get ahead of the curve 
and develop a little plan. So far, it is approximately--the 
high end is just about $5 million, and that includes 
transportation, translators--and needless to say, 
transportation and drivers and translators in a foreign country 
are essential, and staff time. So it is about $5 million to do 
it, and that would be going to the individual ports, both 
domestic ports and foreign ports, and then monitoring 
distribution at various distribution points.
    Ms. Kaptur. Thank you very much.
    Mr. Chairman, I will wait for a second round and let other 
members question. Thank you very much.
    Mr. Skeen. Thank you.
    Mr. Kingston?

                               americorp

    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Viadero, last year we had talked about Americorps owing 
the USDA $290,000, and I had asked you about it and you were 
going to look into it. To my knowledge, I never got a response. 
I could have, but I am not aware of it.
    Do you remember what happened? Did you get your money back?
    Mr. Ebbitt. To be honest with you, Mr. Kingston, I do not 
recall offhand.
    I know we did look into that, but I do not recall what the 
answer was. I would be happy to go back and check into that for 
you.
    [The information follows:]

    Since the release of the December 1996 audit report, we 
have worked closely with USDA agencies and obtained legal 
opinions from the Office of General Counsel (OGC) as to the 
best way to deal with questionable payments totaling $520,139 
to the Greater Jackson Youth Service Corps (GJYSC). Our audit 
identified about $230,000 in unsupported or unallowable 
expenditures. A Bill for Collection has been issued, but we do 
not feel that recovery is likely. The money is owned by a 
small, non-profit organization and the bill issued over a year 
ago has not been paid. The storefront previously occupied by 
GJYSC is vacant and the telephone disconnected.
    Our audit also questioned an additional $290,000 based on 
GJYSC failure to meet the terms of the service agreements. 
Based on advice from OGC, the Department will not seek recovery 
of this amount. We concur in this decision, given the small 
chance of successful collection.

    Mr. Kingston. Since the President is proposing to increase 
Americorps 2\1/2\ times, it would be good to know.
    Also, there was a problem with some of the ex-employees 
misusing credit cards and I think current credit cards. I think 
you were moving in the right direction, clamping down on that. 
Are there any other misuses that you know of this year?
    Mr. Ebbitt. Not really.
    In fact, when we went back and put all the statistics 
together, the Department of Agriculture really had a good track 
record relative to credit card use. We had identified, as we 
talked last year, where a number of individuals that had in 
fact abused the card, but when you looked governmentwide, USDA 
was really at the top of the list as far as not misusing the 
card and also on having low delinquencies. So we were pretty 
satisfied that the Department was doing the right thing 
relative to that credit card.
    Mr. Kingston. I did get the impression that you were moving 
in the right direction.
    Please look into Americorps because it is a pretty big 
chunk of money to be owing another Federal agency.
    Mr. Ebbitt. We will be right back to you on that.
    Mr. Kingston. Thank you. Mr. Chairman.
    Mr. Skeen. Mr. Boyd.

                               smuggling

    Mr. Boyd. Thank you, Mr. Chairman.
    Mr. Viadero, I have a couple of issues. You need to pardon 
me. As a new Member, I am still trying to understand exactly 
all the things that you do and how you do it, but the two 
issues I would like to discuss, number one, I was pleased to 
hear you talk about the efforts to try to detect or stop the 
illegal shipment of contraband which may introduce some sort of 
pest.
    We had a discussion here yesterday about a citrus canker 
outbreak in Florida that is currently going on. We do not think 
it came in under those conditions. We think it was probably an 
unintentional act of one plant somebody brought in as a gift, 
but we certainly would support and advocate a redoubling of 
efforts, particularly with Florida, as you said, with 17 
international ports. If you might elaborate on that some?
    Mr. Viadero. Yes, sir.
    Mr. Boyd. I noticed that you did not in your Talon report 
have any instance in Florida.
    Mr. Viadero. There is an operation planned for the State of 
Florida.
    So far as the smuggling operation is concerned--and please 
understand there is no smuggling operation in Operation Talon. 
Operation Talon is totally based uponwelfare reform that you 
folks up here at the Congress passed, and this allows us to take the 
outstanding fugitive felons and compare them to food stamp recipient 
rolls, and then we take that match and we work with the State, county 
and local authority, together with my agents here, and we go out and 
apprehend these people.
    The smuggling initiative to me is just, if you pardon the 
expression, a no-brainer. We see States putting in hundreds of 
millions of dollars to eradicate, and we are asking for a 
couple of million dollars to prevent.
    So the scale so far as we have seen them are sort of 
weighted in our favor. Would I rather spend $150 million out of 
my State budget or see the Federal Government toss $2-or $3 
million and prevent this thing from happening to begin with?
    We are more than pleased--I must say, we are very pleased 
with the results of previous operations that we have seen in 
the State of Texas and California, which involved Mexico 
because Mexico's economy is greatly dependent upon agriculture. 
So there are checks on both sides of the border there, 
particularly for pests because that would also devastate their 
economy as well.
    So far as we see it, needless to say, there are more than 
100 types of pests and fungi and bacteria, but we can get in 
there and develop a plan, and that is all we are asking for. 
This is seed money, if you will. Develop a plan. Run a pilot 
project to see if we can get a handle on this, and then we will 
take it out to the other--needless to say, the next great 
State, which would be, so far as economy is concerned, 
California. If it gets into the fertile valleys, we have a real 
problem in the country.

                               ebt fraud

    Mr. Boyd. Thank you very much.
    The second issue has to do with benefits fraud work.
    Mr. Viadero. Yes, sir.
    Mr. Boyd. Would you elaborate about the process you go 
through to determine the existence of fraud before you turn it 
over to--I believe you turn it over to the Justice Department 
for prosecution. If you would, please talk about that process a 
little bit.
    Mr. Viadero. Okay. Let's start with a program, food stamps, 
since most people know how the food stamp program works. 
Fortunately, the paper coupons are leaving us. They will be 
gone by 2002, and all States will be on electronic benefits 
transfer, the EBT card.
    It was this office that had the lead from the Government to 
establish the controls. People in Government were going to let 
this system roll out in all 50 States and it had no controls.
    Now, from this IG's point, I have a simple response to 
controls and auditing. I have two questions. Are there controls 
in place, yes or no? Next question, are they working, yes or 
no? Well, in this case, they were not working because we did 
not have any, and we are still working on developing the 
controls and particularly working with the vendors to develop 
the individual fraud profiles that will be in place.
    So now we are going to come up--and I am also happy to say 
that just within Philadelphia and New York, we developed 55 
targets and had cases that are being litigated now totalling 
$99 million in benefits. That is an awful lot of money, $99 
million in just two cities.
    To that end, though, we take the case. We develop it. We 
present it to the United States Attorney, who will give us a 
prosecutive opinion. From that stage, as a general rule, we 
will go to a grand jury and indictment, and then we are at a 
trial.
    Mr. Boyd. I am more particularly interested in the 
agricultural--and Mr. Seybold just handed you a note. I suspect 
he may even know where I am headed here--on the agricultural 
side, rather than the food stamp side.
    We recently had a case in Florida that was prosecuted and I 
believe ended up being thrown out, and some people were hurt 
pretty badly in the process. My question was directed at how 
far do you go and how sure are you that you got your ducks in a 
row before you turn it over to the Justice Department for 
prosecution.
    Mr. Viadero. Just understand, we are like any other Federal 
criminal investigative agency. I am a careerist from the FBI 
before I got this job. We take a case. We will present it to 
the United States Attorney who will give us a prosecutive 
opinion, and we then work with that office if it chooses to 
prosecute. The investigation is over once we get the 
prosecutive opinion for the most part.
    The people are indicted by a grand jury of their peers, and 
they are tried by a jury of their peers. Once that case goes to 
trial, the investigation is over. So it is left up to the 
individual United States Attorney.
    I have been in this business for 31 years. I have sort of 
become numb to if you lose a case, and you do not win every 
one. I am not trying to be trite with this, but some people 
will say their lawyer was better than our lawyer, and in many 
cases, that is why we do lose the case.
    Mr. Boyd. Thank you very much.
    Maybe Mr. Seybold and I can sit down and discuss some more 
specifics on that later on.
    Mr. Viadero. Sure thing, no problem. Thank you, sir.
    Mr. Boyd. Thank you, Mr. Chairman.
    Mr. Skeen. Mr. Dickey?
    Mr. Dickey. No questions.
    Mr. Skeen. Jo Ann? There she is.

                          farm credit program

    Mrs. Emerson. Thanks, Mr. Chairman.
    I have three questions that are all on different subjects, 
but obviously all relate since you are the overseer of 
management here.
    The first has to do with the farm credit program and farm 
loans. I have a very, very intensive agriculture district, and 
I told the Secretary yesterday that with our emergency loans, 
only 15 percent have been given out and they are out of money 
already, just for example. There are lots of other problems.
    I noticed in your report here, you talk about the overall 
management of the farm credit program as being of concern to 
you, and I just wonder if you might elaborate on that somewhat 
for me, please.
    Mr. Viadero. Yes, ma'am, and I am going to ask Mr. Ebbitt 
to please step in.
    Mrs. Emerson. Great.
    Mr. Viadero. Please step in.
    Mr. Ebbitt. Thank you, Mrs. Emerson.
    In particular, you mentioned the emergency loan program, 
and Roger was talking about this earlier. The best place that 
the OIG can be effective is at the front end of the process. 
There is not a lot of value to come in after the fact and say 
you made the wrong payment or you made the wrong loan. So it is 
important for auditors particularly to be outthere when these 
program dollars are being awarded, be it an emergency loan, be it an 
emergency disaster payment of some sort or whatever.
    What we want to do, as sign-up is happening, we want to be 
there, be able to provide information back to managers who are 
running this program to say County X is being operated 
differently than County Y or State A versus State B. There are 
differences in how you are administering the program. You need 
to bring them into line. That is where we can be most effective 
and utilize the dollars appropriated to us most effectively in 
these kinds of loan areas.
    I think it is a given. In an emergency situation where 
loans are being made, program dollars, payments are being made, 
you have people that need money. They have real needs, and you 
have a lot of people, generally, in a lot of these emergency 
situations that show up at the door of the county office, all 
needing help at the same time. Everybody is rushed, and that is 
when mistakes happen. That is really what our concern stems 
from is that you have county offices frequently that are faced 
with a lot of people, all at the same time, all need help, all 
need assistance, and they are all making these decisions at the 
same time.
    So we want to be there at the front end to try and get a 
good look at it and be the eyes and ears, if you will, of 
management, give them feedback as they are running the program. 
That is where we can be most beneficial.
    Mrs. Emerson. But wouldn't you all say that the management 
of the farm credit program is of concern? Is that just based on 
investigations and seeing people who perhaps should not be 
getting loans, way-too-high-risk people?
    Mr. Ebbitt. Well, it is some of all of that. It is based on 
a long history of us seeing these kinds of programs occur over 
the years. Every time we look at these programs, you can rest 
assured we are going to find problems, and we do find problems. 
We give them to management quickly so that they can change.
    Mrs. Emerson. Do you make recommendations----
    Mr. Ebbitt. Yes.
    Mrs. Emerson [continuing]. About how to change them as 
well?
    Mr. Ebbitt. Yes. Oh, absolutely. We make recommendations to 
management based on what we have seen and what we think they 
need to do to strengthen the program activity.
    Mrs. Emerson. That leads me to a question that I was not 
going to ask. In my particular congressional district, we have 
had a real problem with the LDPs for cotton producers, 
particularly because our State and local FSA offices have said 
mistakes were made based on dates of the 709's, but we are 
being stonewalled at USDA on it.
    So it presents somewhat of a dilemma, and I do not know if 
you all get involved in investigating those sorts of things or 
having to sort out those kinds of problems.
    Mr. Ebbitt. Well, on occasion, we do. In fact, last year, 
we talked to Mr. Nethercutt about the CRP program, and the 
exact same thing there. In the CRP bid process, we saw a lot of 
problems, a lot of differences in the awarding of points and 
deciding who was going to be accepted under the conservation 
reserve program.
    Primarily, again, County A was handling it one way, County 
B one way, and so on, and we said this is not making sense 
here. We immediately made some recommendations to NRCS and FSA 
management to try and fix that.
    We went in after the fact because we were asked to do that, 
to do exactly what you are talking about, to try and sort 
through some of that and figure out why these differences had 
occurred.
    LDPs are a real, real issue. You have LDPs and farmers are 
standing in line. They are knocking at the door of FSA county 
offices to make their applications, to sign up right now in 
large numbers, with frequently small county office staffs 
trying to handle all of this, and mistakes are going to happen 
when you have that kind of a situation.
    Mrs. Emerson. Yes. In our particular case, what happened 
was wrong dates were given for filing and that sort of thing, 
which has caused a huge or much lower payment to our cotton 
producers as opposed to, say, those in Arkansas.
    Mr. Ebbitt. I am not sure I understand the problem of----
    Mr. Dickey. Wait a minute. What did you say about Arkansas? 
[Laughter.]
    Mrs. Emerson. Do you have cotton down there in your 
district? I am teasing you, Jay.
    Is that a request that we can make to you all to help us 
look into the situation?
    Mr. Ebbitt. Certainly. I mean, that is the kind of thing 
that we can try and do.
    We do have audit staff out around the country right now, as 
sign-up is occurring. I am not sure exactly which area you are 
talking about.

                     federal crop insurance program

    Mrs. Emerson. Yes. Perhaps I will follow up with you, if 
that would be okay, because it is something that goes way back 
to September. We have been trying to get USDA to sort it out, 
and we have not been able to do that yet.
    Another question, and one which obviously is related 
because it deals with the fact that our farmers are in crisis 
right now, you all also mentioned that the Federal crop 
insurance program is plagued with abuse, conflict-of-interest 
problems. Tell us a little bit about that and suggestions that 
you perhaps have made because this is a huge problem.
    For example, in my district, our cotton producers, again, 
pay $4 for every $1 of coverage. Whereas, corn would be a 14-
to-1 ratio. It is too expensive for a lot of our folks. What 
suggestions or what recommendations have you all made to fix 
the program?
    Mr. Ebbitt. Well, particularly when you get into the ratio 
area, I am not an expert in that field. I am not an insurance--
--
    Mrs. Emerson. Actuary?
    Mr. Ebbitt [continuing]. Underwriter, actuary, but, in 
fact, we are working with the Risk Management Agency presently.
    I know you are thinking of some changes here in Congress on 
what you might want to do with the Risk Management Agency and 
the program, but we want to try and bring some suggestions to 
the table as you are having that debate in this next cycle. We 
are working on that right now.
    Specifically regarding claims and claims adjustors, we have 
had concerns. We mentioned conflict of interest. One of our 
concerns is that you have agents that sell insurance. You have 
the same agents in the same companies that then turn around and 
adjust any losses that occur. We have examples. We have 
investigations and cases that have been made where that has 
been a problem.
    You have got some inherent conflicts built into that kindof 
a process, and so it is in that area specifically, but we are also 
looking at broader areas where we are hoping to make some suggestions 
as we get into the springtime this year.

                             Forest Service

    Mrs. Emerson. We desperately need it.
    My last question, and one that I normally would not bring 
up because our subcommittee does not have direct jurisdiction, 
but since you brought the Forest Service study that you did, as 
well as the fact that I have got four-fifths of the Mark Twain 
National Forest in my district, which is probably 90 percent of 
it, and over a million acres, I have been extraordinarily 
concerned about the management or mismanagement of funds within 
the Forest Service.
    Last year, in the House Ag Committee, we learned that 
overhead costs were totally out of sight, comprising, we were 
told, up to 40 percent of the budget. Just how bad is the 
problem over there, and what suggestions have you made as far 
as streamlining and perhaps helping to reduce the 
administrative overhead so that those monies can be used for 
the timber sale program and money actually can go to producers 
rather than bureaucrats?
    Mr. Ebbitt. The Forest Service has many challenges, believe 
me. I guess I would characterize them as ``challenges.'' They 
have major things they are trying to deal with.
    Financial management is one of their primary challenges. 
The IG, every year, we are required to audit the financial 
statements of the Department of Agriculture, including the 
Forest Service, and so far, we have not been able to attest to 
the numbers on their financial statement. In other words, in 
accounting parlance, we have had to give a disclaimer of 
opinion. We do not know what the right answer is, nor does the 
Forest Service, and that in and of itself, as you might expect, 
makes it almost impossible to have good numbers regarding 
overhead and how much is really in the pot and what should not 
have been there and what should have been there. Because their 
systems are in such a state of disrepair, the questions, you 
cannot answer them very well right now.
    Mrs. Emerson. Okay.
    Mr. Ebbitt. The Forest Service has a number of things that 
they are trying to do to fix that, and they are working hard at 
it, but they are not there yet. I would prefer that you ask the 
Forest Service when they are going to get that fixed.
    Mrs. Emerson. Oh, I understand that, but that is why I 
asked you because you all----
    Mr. Viadero. Well, Mrs. Emerson, let me respond. As 
somebody said, Forest Service and financial management is like 
military and intelligence and jumbo shrimp. They just do not--
--
    Mrs. Emerson. Oxymoron.
    Mr. Viadero. Yes, thank you.
    The other part--and one of the reasons we brought this to 
the attention of this body, a Forest Service report--is that 
when you folks appropriate funds for us, we get appropriated 
for the Department of Agriculture, and 10 percent of our work 
is spent annually on average in the Forest Service.
    Perhaps, Mr. Chairman, if you see fit, you and members of 
this body to perhaps call over to the Interior, Appropriations 
Committee and perhaps give us a hand and some relief and get--
we do a lot more work in the Forest Service, and we would like 
to see some appropriations. Since the Forest Service gets 
funded from the Interior appropriation and we are doing 10 
percent of the work, it is sort of that this is a pro bono job 
that we end up doing for the Forest Service.
    Thank you for bringing that up.
    Mrs. Emerson. Well, I did just in a very selfish way, and I 
realize it, but it is important.
    I do want to say that where you say here that they actually 
took immediate action to correct something, that perhaps we 
could expand that to take immediate action on correcting things 
that impact people's lives, those who harvest the timber, et 
cetera. So, hopefully, we can figure out a way to help you do 
your jobs.
    Mr. Viadero. Again, ma'am, I am here 4\1/2\ years, and I 
think the Forest Service has come a long way in the time that I 
am here, especially under the leadership of the Chief, Mike 
Dombeck, who is very concerned with these issues and does in 
fact work with us to correct them.
    When the Forest Service initially started with the 
financial statements, they expensed everything. I do not know 
if you are familiar with the rules of accounting at all. They 
did not depreciate, amortize, or otherwise depreciate or 
deplete any of their assets. They just said, ``Oh, they are the 
largest bridge-builders and largest road-builders in the world, 
and they just took everything. Oh, okay, $9 billion. We will 
expense $9 billion this year instead of taking it over 30 and 
50 years,'' just as a quick example.
    Mrs. Emerson. I appreciate your candor.
    Mr. Viadero. Yes, ma'am. Thank you.
    Mrs. Emerson. Thank you very much, Mr. Chairman.
    Thank you.
    Mr. Skeen. The message is received at Interior because I am 
on that committee as well.
    Mr. Viadero. Thank you very much, Mr. Chairman.
    Mr. Skeen. Mr. Hinchey.
    Mr. Hinchey. Thank you very much.
    Mr. Skeen. And another member also on the Interior 
Committee.

                                Medflies

    Mr. Hinchey. Thank you very much, Mr. Chairman.
    I want to thank the gentlemen for the work that you do. I 
think it is very critically important in the food production 
and distribution system and making sure that the food supply is 
safe.
    I was intrigued by your story about the medflies coming in 
sealed containers on a particular fruit. I did not get the name 
of the fruit.
    Mr. Viadero. Well, one example that we used was a longan. 
It is an Asian fruit. It is prohibited to this country to begin 
with, but they smuggle them in, anyway.
    Mr. Hinchey. So it comes in here, in sealed containers. It 
is transhipped across the United States to Canada----
    Mr. Viadero. Yes, sir.
    Mr. Hinchey [continuing]. Without being opened, just 
unloaded and reloaded, and then in some cases shipped back.
    Mr. Viadero. Yes, sir.
    Mr. Hinchey. And you have to be vigilant in those instances 
to make certain that any contaminated product in those 
shipments does not stay here or does not get into the United 
States.
    Mr. Viadero. Yes, sir.
    Mr. Hinchey. That sounds like a very tough job, especially 
if you are doing it in that way, on a kind of ad hoc basis.
    It seems to me that if we thought about it, we might be 
able to come up with a program that would deal with this in a 
broader way because I am struck by the almost Herculean task it 
must be for an agency like yours to deal with an issue like 
that ad hoc, given all of the products that are coming into the 
country.
    Mr. Viadero. Well, again, we have entered into an 
agreement, an arrangement if you will, with our friends and 
brethren at APHIS, the Animal Plant Health Inspection Service, 
who needless to say are responsible at points of entry.
    To put it the best way and in its most descriptive form, we 
work and play very well in the sandbox with APHIS. We support 
them because we have the powers of arrest that they do not 
have. So we work with these folks on a daily basis.
    We ran our ideas past them insofar as training the animals 
to detect these scents, and they said they can train the dogs 
to do this. Again, we are asking for these funds. It is a pilot 
project. I think if we can take the pilot project--and if you 
will, it will come right down the thruway, right across the 
southern tier coming in from Buffalo, right across the southern 
tier, down through 81. We are fortunate because, for instance, 
right here in Virginia, we have the weigh stations where every 
truck has to stop both on Route 81 and on 95 here. It would be 
our point to develop the interdiction if we do not get it at 
the border at one of these truck stops where it would not be 
out of the ordinary for somebody to be walking around with a 
dog and just follow that vehicle down to its terminus point and 
begin the investigation with books and records there.

                               Contraband

    Mr. Hinchey. But you must have some kind of a suspicion or 
a lead that a particular truck might be carrying that kind of 
contraband?
    Mr. Viadero. Yes, sir, and that goes into our--that 
separate issue that I said to the chairman I would respond back 
to him on, on the additional confidential funds. You are only 
as good as your cheapest informant, if you will, and that is 
what the monies will go for. A large amount of the monies will 
go for the purchasing of that information.
    Mr. Hinchey. I am still curious about this issue because I 
think that in spite of the very good work that you are doing 
that there might be some programmatic way to deal with this, 
which would relieve us of the obligation to be paying such 
specific attention to individual trucks.
    Mr. Viadero. I think Mr. Seybold----
    Mr. Hinchey. Seybold, yes.
    Mr. Seybold. Yes, Mr. Hinchey. What I was going to add to 
that is the two-pronged effort that we are embarking on as far 
as interdiction, the more complicated side of the effort is to 
identify, infiltrate, and then resolve the criminal enterprises 
that are responsible for the shipments.
    The interdiction of shipments is something that can be done 
certainly in an inspection mode. It is somewhat similar to the 
way APHIS is set up at our airports and ports. However, the 
infiltration of the actual criminal enterprise--because to get 
the individuals receiving the smuggled goods, the contraband, 
it is probably good from the standpoint of removing that 
contraband from the public.
    However, if we do not get the enterprise by the neck and 
get that strangled, then it is a constant process. So that is 
really the more complicated area that you are addressing, and 
it is one of our priorities at this point.
    Mr. Hinchey. I would imagine also in the case of these 
exotic fruits that they are targeted for a specific population.
    Mr. Viadero. They are generally ethnic-based.
    Mr. Hinchey. Ethnic-based.
    Mr. Viadero. Yes, sir.
    Mr. Hinchey. Right.
    Mr. Viadero. Yes, sir.
    In addition to that, I would also like to add that we also 
have an agent that is on staff at Interpol because we are 
participating, an actively participating agency, at Interpol, 
and we have run this by Interpol personnel both here and in 
Lyon, and they have no problem in cooperating with us because 
they also count on us to clean our products up.
    We have certain pests here that would be detrimental to 
their products, and again, we do put out some $25 million worth 
of products there. So they are equally as concerned. They have 
said they would help us out.
    Mr. Hinchey. Turning to the Food Safety issue of 
contaminants in the food supply, I think you pointed out in 
your testimony, E. coli, listeria, things of that nature, seem 
to be becoming more prevalent.
    In your experience, is that true? Have these instances 
become more prevalent over time, or are we seeing a flare-up of 
them recently?
    To what extent are these problems an example of faulty 
inspections and careless attitudes on the part of the meat 
processors as opposed to an actual criminal enterprise which is 
designed to bring about poor quality meats in the market in a 
concentrated way?
    Mr. Viadero. I would probably start off by saying yes, we 
do see a marked increase in these type cases, and here is the 
accountant coming out in me, the capitalist. It is because a 
lot of these plants are running at the margin. So the more they 
put out there, the better the margin.
    On the other side of it, though, we have three concerns. 
The first concern is the public safety overall. The second 
concern is the safety of the employees, both the plant 
employees and the auditors and agents that I send in, and that 
FSIS, the meat inspectors are there--necessarily do not have 
the proper equipment to go in there, just plain safety 
equipment. We cannot afford that. The third thing is the 
continued financial viability of the going concern of the plant 
itself.
    If we can use two examples, we have one place, one 
investigation ongoing now where--since it is at the grand jury, 
I will be careful how I put this, but let's put it like this, 
that we observe that certain compounds, cleaning compounds that 
we believe to be bleach, regular Chlorox, and sanitizer added 
to 1997 food product and reprocessed and dated into 1998 
product, and people may have gotten sick on it.
    Now the Department through FSIS puts a hold on the product, 
but routinely, the company must pay for the recall. The company 
pays for the recall.
    However, the next day after the execution of a search 
warrant on his plant he shot and killed himself. He had a 
problem. As Jim said, we have challenges. He had a problem.
    Now we end up with this product, 1.6 million pounds of that 
product located in Miami storage facilities.No recall was 
issued by the Department because the product was already detained. Now, 
that is just a lousy excuse because sooner or later--and this has an 
economic impact, if you can bear with me on this.
    The meat locker--it is only a matter of time until somebody 
says, ``Oh, there is hamburger sitting there, and I am going to 
take some,'' okay?
    The second part of it is, that directly impacts on Food 
Nutrition Service's commodity program because some of these 
cities are saying you are going to get this commodity out of my 
lockers or I am not going to buy your commodities anymore, I 
will go out and put it on the street for bid. So that has a 
double-edged sword; number one, public safety; number two, the 
economic impact because it is always, it is not the money--it 
is the money. That is the bottom line. It has an economic 
impact, too.
    I would also like to say that this company put food into 
the school and the military program as well as prisons and 
jails, and the average fat content of this product was over 29 
percent. How we got involved, one of the prisons called USDA 
and said this product is rancid. That is how we got involved, 
and we find that the overall food safety issues, we feel we are 
a little behind the curve in them.
    So far as the reporting, that is because of HACCP and the 
tests required by HACCP that the plants in many cases--not all 
cases, but many cases--are able to find this out in a much 
faster vein.
    Mr. Hinchey. Thank you very much.
    Mr. Viadero. Yes, sir.
    Mr. Skeen. Mr. Walsh.

                                  ebt

    Mr. Walsh. Thank you, Mr. Chairman.
    Mr. Inspector General, thank you for coming in today, and 
we welcome all your staff. It is good to see you.
    Just really one or two questions, on food stamps and 
electronic benefit transfer. EBT, we all felt, would deter and 
prevent fraud, waste, and mismanagement and abuse. It would 
prevent the use of food stamps from becoming black market 
money, and it would eliminate that problem.
    I just wonder what your experience has been with the EBT 
program so far, and what, if any, significant data you have on 
its successes or failures and what you are encountering in your 
investigation of this new program.
    Mr. Viadero. Well, first of all, we cannot speak too highly 
of EBT, not to be glib, but it is taking the fraud off the 
street and puts it in the store where it belongs. That is what 
it has done.
    It has eliminated--the bulk of it has eliminated street 
trafficking. We do not see people exchanging stamps for cash or 
stamps for drugs. We generally do not see the street operation 
going on.
    What we do see and what EBT enables us to do is to 
readily--I mean quickly, like overnight--identify through the 
development of a fraud profile, working with the vendors that 
are handling it for the States, the processing companies 
themselves, whether it be Deluxe or Citibank, one of the 
financial institutions such as that, that is handling it. It 
allows us to identify suspect retailers and recipients.
    For instance, if you were to take Greg, Roger, and Jim and 
let's say that we go to a 7-Eleven in Alexandria, Virginia, and 
that Greg shows up at 3:00 in the morning and buys $400 worth 
of food product, Roger shows up at 3:01 for $300, and Jim shows 
up at 3:02 for $400. That kicks out a bell to us because that 
does match the fraud profile.
    For instance, we have all been to 7-Elevens and WaWa's, and 
at 3:00 in the morning, they cannot ring up product worth large 
dollar amounts in a minute, much less $1,100 worth in 3 
minutes. So that is one identifier.
    The other identifier that we have in there is, for 
instance, that Greg's profile would say he normally buys in a 
major food store between 4:00 in the afternoon and 9:00 at 
night, and that is pretty much the rule for the average person 
in the country. All of a sudden, what are we doing out of a 
major food store and what are we doing processing these types 
of purchases at 3:00 in the morning, basically the maxed-out 
amount on that card for that month.
    Additionally, the investigations that we have had have been 
astronomical as is usual in food stamp coupon cases. We 
currently have food stamp coupon cases in four locations 
involving 55 individuals and $99 million worth of product. 
Those cases are being identified. They are being tried as we 
speak. That is an example.
    Now, try this. Can you imagine how long it would take to go 
in and traffic in food stamps in individual stores? My agents 
do not like me because of this because now, instead of the work 
that used to take 6 months, it should take about an hour and a 
half with the machines, and you do not even have to put your 
cup of coffee down. We are getting these things in through 
printouts. The machines are doing the job for us.
    EBT has put integrity back in the program. It has helped 
put a lot of integrity back in the program. However, in one 
store just in New Jersey, we went in and found three cigar 
boxes. What happens is the people sell their EBT benefits. So 
we found cigar boxes filled with approximately 60 EBT cards in 
there. That translates, at max, at about $400 per card. CPA, 
cannot pass arithmetic. And we keep it simple, about $400 a 
month for those people. You know, we are talking in the area of 
$24,000 of benefit per month.
    EBT went in five northern counties in New Jersey during 
July of 1997. We did an operation involving 10 stores and 
roughly $9.5 million worth of food stamp benefits, including 
one individual. You folks will all get a kick out of this.
    This individual, based upon his food purchases that he 
stated to FNS--he did about $150,000 a year in food purchases 
or food sales, right? Now, he reports that part. He does not 
report the $1.6 million worth of food stamps. Now, hopefully, 
food stamps buy food purchases. So, again, CPA, cannot pass 
arithmetic. This is not rocket science for us to figure out 
here.
    Mr. Walsh. How does the scam work with the purchase of the 
cards?
    Mr. Viadero. Well, the cards are issued by the individual 
State. The State is still responsible for the issuance of the 
card and qualifying the recipients.
    Normally, what happened, let's say that----
    Mr. Walsh. I mean, with the store owner buying the cards, 
how does that scam work?
    Mr. Viadero. Generally, they will buy them for about 50 to 
70% of the food stamp benefit on the card. People really want 
cash. It might even be a stolen card and pin number that they 
are buying.
    Mr. Walsh. Not knowing what the total purchase-ability of 
that card is?
    Mr. Viadero. He knows very readily. The merchant can take 
it and run it through the EBT machine, and that puts out the 
maximum benefit that is on that card.
    Mr. Walsh. Okay. So then he buys it for $100. They get the 
cash so they can go buy whatever they are going to buy, and 
then how does he use that card?
    Mr. Viadero. He just runs the card through the machine as 
if that person is there and puts the benefit on there. Again, 
let's say a $400 benefit. He gets $400 a month every time he 
runs that.
    Mr. Walsh. Credited to his electronic account?
    Mr. Viadero. That is right, and it is deposited in his 
account that night. So we have even made it better for those 
folks because they do not even have the bother of filling out 
the forms and going to the bank. It is automatically wired to 
their account.
    However, EBT has really helped put integrity back in the 
program. Needless to say, on the investigative side, we only 
talk of the negativeness of the card, the crime, but on the 
audit side, on the financial management side, it has helped FNS 
control the costs.
    Mr. Walsh. While you still have fraud, it is concentrated 
now between the shopkeeper and the beneficiary, the recipient 
of the benefit.
    Mr. Viadero. Right. For the most part, we have taken the 
street person out.
    Mr. Walsh. It adequately reduces the points of contact with 
crime.
    Mr. Viadero. I will give you the glowing example of what 
this has enabled us to do. Nothing like talking to the cop on 
the street, and one of the police officers in New Jersey that 
worked with us said we knew EBT came in. I said to him, ``Yeah? 
How did you know?'' He said, ``Because all the small take-out 
places closed up that week,'' all the take-out food places that 
are not authorized to take food stamps. Well, what was the 
message there? People were going in and trafficking their food 
stamp benefit. They cannot do that because the take-out stores 
are not authorized establishments. So, in other words, those 
places went out of business.
    Mr. Walsh. Well, that is great. That is a great report. The 
problem is human beings are incredibly smart, and always, where 
there is a will, there is a way. So stay alert, because 
somebody else will figure out a way to beat you and you will 
just have to figure out a way to catch them.
    Mr. Viadero. It didn't take them much time in Texas to 
learn how to beat the system. I would also like to say, we have 
an outstanding relationship with both the Texas Department of 
Human Services and their Inspector General, who work closely 
with us.

                             milk promotion

    Mr. Walsh. The best thing about EBT is not only the savings 
to the taxpayer, but also because it makes the temptation to 
engage in fraudulent activity go away. People are hopefully 
spending that money on their kids and keeping their families 
healthy, and the taxpayer and the farmer and everybody else who 
are involved in this are getting a boost in their bang for the 
buck that we are spending for poor people who need good 
nutrition.
    One other question, and that is on this milk promotion 
board. I notice in your testimony oversight problems that exist 
with ag marketing services and their relationship with the 
National Food Milk Board. I understand that there are a number 
of other promotional boards that have oversight problems.
    Can you comment on the problems that you found and how 
prevalent this is, this oversight problem with these promotion 
boards?
    Mr. Viadero. Well, I will address this. I will also ask Mr. 
Ebbitt, when I am finished, to give you the more macro view.
    What we have had in this specific board was $170 million 
collected in assessments to the processors. Of that, $127 
million was spent without AMS approval. The advertising was let 
to a firm, 3 months before the board was seated and before the 
request for proposal. So we did have a problem with that 
because this money----
    Mr. Walsh. Before the request for proposal?
    Mr. Viadero. Yes, sir, before.
    Again, the not-too-bright agent in me says there is a keen 
investigative clue. So we had $127 million of this money 
already encumbered or obligated prior AMS approval. That is 
number one.
    Number two, we had approximately $3 million on the ``Got 
Milk'' campaign those photographs cost this Government about 
$12,500 every time one is displayed again because AMS failed to 
oversee the contract. This is what we mean by giving it back to 
AMS. We have no problem with the photographer. I only wish I 
could get, since I am eligible to retire, the attorney that cut 
her contract to make me a similar contract. She has all of the 
rights, the copyrights to the property, the photographs. We end 
up paying every time we want to use those photographs. We end 
up paying for them, which we should have the right to that. 
That is another example.
    The bottom line is AMS did not perform its oversight 
function for 75 percent of the money. The Secretary is supposed 
to sign off on it, and AMS is supposed to sign off on it. AMS 
did not perform its oversight function.
    So far as the other programs are concerned, the honey 
board, the cotton board----
    Mr. Walsh. Why don't we leave it at that. I do not want to 
monopolize the time.
    Mr. Viadero. Okay.
    Mr. Walsh. Thank you.
    Thank you, Mr. Chairman.
    Mr. Skeen. We have got a vote on, but, Mr. Latham, we will 
cut you off at the second bell.

                                  ldp

    Mr. Latham. All right. Thank you, sir.
    Welcome. I always appreciate your testimony very much.
    We have had some real problems in the discrepancy reported 
regarding the posted county prices in the Midwest. In my 
district, I border with Minnesota, South Dakota, and Nebraska, 
three States. We have a lot of people who are close to the 
border who will actually go, say, up to Minnesota or South 
Dakota to sell their grain there because there is such a huge 
discrepancy between the price, and the posted county price in 
Iowa.
    Have you looked into any of this?
    Mr. Ebbitt. No, Mr. Latham. We really have not gotten into 
that specific issue there.
    Mr. Latham. Do you have any plan to look at it?
    Mr. Ebbitt. We are spending a lot of time in the whole LDP 
area and all these payments that are being made. I am not real 
familiar with that particular problem.

             food safety and food imports Responsibilities

    Mr. Latham. There are huge discrepancies right across the 
State lines, and basically, what happens, they will deliver the 
grain, say, in South Dakota and then they will have to haul it 
back to Iowa for the delivery point. It is a mess.
    On page 3 of your written testimony, you stated that in 
fiscal year 1999, we are focussing our efforts primarily onfood 
safety and smuggling of uninspected, unapproved products carrying 
unwanted pests and diseases in the United States that affect the 
wholesomeness of the Nation's food supply.
    I would like to know what duties you are doing that is 
different, really, from the food safety and food imports 
responsibilities within like the FSIS, APHIS, and FDA. Is there 
a redundancy here, inspecting the inspectors or what?
    Mr. Viadero. No, sir. FSIS and APHIS, they are not criminal 
investigators.
    Mr. Latham. Right.
    Mr. Viadero. They have no authority to open up a criminal 
case. We are the enforcement arm for the Department.
    Each of our responses initially is to get there, number 
one, public safety, safety of employees, and the continuing 
financial viability of the going concern, keeping the plant 
open.
    So we initially go there to determine if in fact there is a 
criminal case, as there is out at EMPAK Foods in Milwaukee, 
Wisconsin--I am sorry--there is not. It was initially responded 
to both by the FBI and this office.
    The FBI had it open as an extortion case and a bioterrorism 
case, weapons of mass destruction, because it was alleged to be 
human HIV-contaminated blood product, and we responded the same 
way and we worked with them.
    We are monitoring at this time, for instance, as it 
appeared in the paper today, certain outbreaks of listeria and 
listeriosis. We are monitoring those.
    In certain cases--we have several cases. We have about six 
cases open right now in that arena that are criminal cases. So 
we are taking it one step beyond the review of FSIS. They are 
going to handle their meat and safety issues. We are going to 
handle the criminal side of this. We are going to find out who 
is doing this.
    Mr. Latham. Okay.
    Mr. Chairman?
    Mr. Skeen. That is the second bell. We can hold this 
longer, or do you want to come back? Does anybody else want to 
close it up now or hold it?
    Mr. Latham. Would I have a chance to ask one more question, 
and would we have time, do you think?
    Mr. Skeen. Well, when we come back? Well, we will just come 
back.
    Ms. Kaptur. I have a couple of questions.
    Mr. Latham. You do? Okay, then fine.
    Mr. Skeen. We will come back. [Recess.]
    Mr. Skeen. Let's go back on the record.
    Marcy, we will turn it over to you.

                 commodity credit corporation agreement

    Ms. Kaptur. Thanks, Mr. Chairman, and thank you for doing a 
second round. This will not take long, I hope.
    I wanted to ask the Inspector General if you could comment 
for us and bring to the record the current Commodity Credit 
Corporation agreement that the administration is working on 
with Russia. I think we would like to place that in the full 
record for this hearing, but then also, would you be in a 
position to comment on it and how it might be strengthened?
    Mr. Ebbitt. In the record, Ms. Kaptur? Is that what you are 
asking?
    Ms. Kaptur. Yes.
    Mr. Ebbitt. Yes.
    [The information follows:]
    [Clerk's note.--The requested Commodity Credit Corporation 
Agreement is printed in response to Ms. Kaptur's question for 
the record beginning on page 104 of this Hearing record.]
    Ms. Kaptur. If that could be done in a timely way because 
the first sales are to occur late this month, if they have not 
already been negotiated and the shipments begun.
    Mr. Viadero. Yes, ma'am.
    Ms. Kaptur. I also wanted to ask you, have you ever done 
investigations of the Commodity Credit Corporation and its 
sales in foreign lands?
    Mr. Ebbitt. Well, I am thinking. I mean, we did the work in 
Russia, the last go-around. I know we have, Ms. Kaptur. I do 
not have recall right now, but, again, I can check the record 
on that.
    Ms. Kaptur. My concerns there really deal with diversion of 
product.
    As it was explained to me, I asked the question when do the 
commodities become the property of the country to which we are 
shipping, and I was told from the moment they leave our shores.
    I guess I had a question about that, especially when it is 
a humanitarian shipment being sent to a place where the rule of 
law is not the same as ours. I have a lot of questions about 
the way the CCC handles sales in countries that do not have the 
full--we do not have the same opportunities in the court system 
to recover a product if it is lost. I wonder if you have got 
any thought to that.
    Mr. Ebbitt. I guess I cannot really answer right now. I am 
going to have to go back and take a look at that.
    I think General Counsel will have to weigh in, too, as to 
when does it become the property of the foreign government. 
They are going to have to give the advice on that, and once it 
becomes the property of the foreign government, most probably--
and again, I am talking off the top of my head here--the 
agreement that FAS signs with the foreign government will 
dictate what they can do with the commodity or how they can 
handle it and program activity that they are to carry out with 
that.
    If they do not follow that agreement, if they do not carry 
out the agreement to the terms that the agreement calls for, I 
would expect that that would be the vehicle by which FAS could 
go back against the foreign government, if that were the case.
    In other words, it would not really matter who that 
commodity belonged to if it was not used in accordance with the 
agreement. FAS, I would think--but, again, I think General 
Counsel would have to weigh in on that. FAS would have a claim 
to go back against the foreign government because of the 
agreement.
    Ms. Kaptur. But as I read the prior report that you 
produced from the early 1990's, that was not done in the 
Russian situation, for example.
    Mr. Ebbitt. Yes.
    Mr. Viadero. Again, let us go back. We are going to have 
General Counsel--pull the agreement, and General Counsel will 
give us an opinion on it, and we will report back to you as to 
specifically the ownership of the property, when it becomes the 
property of another nation.
    Ms. Kaptur. All right.
    Mr. Viadero. This way, we will get it on the record with 
you and we will work with you and develop the proper response 
on this.
    Ms. Kaptur. I appreciate that, Mr. Viadero.
    We also would like to share with you privately some of the 
information we are receiving from organizations like the Center 
for the Study of Transnational Crime and Corruption and some of 
their observations about the nature of the current agreement 
and how it might be strengthened.
    Am I correct, you stated to the committee that you as an 
office have not yet been asked to partner with the Department 
and the Foreign Agricultural Service in auditing the shipment?
    Mr. Ebbitt. Well, I think the answer to that is yes.
    When I met with Foreign Agricultural staff, I asked them--I 
said what do you expect the OIG role to be, and at that point, 
they said, well, come on in. That was just about 2 weeks ago.
    Mr. Viadero. I have not received anything in writing or any 
phone calls from any of the sub-cabinet or other Secretary's 
office asking us to participate in this venture. So any 
negotiations that have gone on have been informal and probably 
at the staff level, the same way you guys are going to be in, 
anyway, but the initial response when we asked if we were going 
in, we were told no. That was the last official communication 
that I received was no.
    Ms. Kaptur. May I ask you this question? It is my 
understanding the Department is thinking about and reviewing 
the possible involvement of certain private sector 
organizations to be added to the monitoring efforts that they 
are considering. Why would they go to the private sector rather 
than involving the IG's office?
    Mr. Viadero. I have absolutely no idea, ma'am. It is my 
understanding that these other firms or other firm that would 
be considered, again, is after the product is shipped and 
distributed. So we get back to, okay, so now you are going to 
report on all that went wrong.
    Again, our thought was let's get in and do some up-front 
work and try to prevent anything from going wrong.

                  child and adult food investigations

    Ms. Kaptur. I would just like to say for the record, the 
people of the United States are paying for the FBI to be 
located in Moscow, with a special office there relating to 
crime and corruption, and the diversion of dollars and product 
outside of that country--and it just seems to me, with your 
experience and with the types of skills that your people bring 
or that you could add to the organization you already have put 
together there--it just seems to me, it is a logical addition 
and a very important addition, and I really cannot understand 
why the Department of Agriculture has not formally requested--
it is troubling to me that the Department has not more fully 
involved you from the beginning.
    I wanted to just for a moment say that I read in your 
formal testimony the child and adult food investigations that 
have been going on there, and this was a very high priority of 
your office over the past year. I think you formally began 
those investigations within the last year.
    Mr. Viadero. Yes, ma'am.
    Ms. Kaptur. Are they yielding the types of results that you 
expected? I noticed there were some indictments. I cannot tell 
whether you have recovered anything yet from that or not, but 
is this an area that needs additional resources?
    Mr. Viadero. Yes, ma'am. This is a continuing problem, and 
again, we are working with Food and Nutrition Services under 
the special nutrition programs just to clean the program up.
    It is unfortunate. Again, as I say to the question from--I 
believe it was from Mr. Nethercutt--I'm sorry--Mr. Walsh--our 
work on the investigative side, we do not have a lot of 
resources. So it is basically targeted. This was a joint audit 
and investigative effort. So everybody or every organization we 
looked at has somewhat been targeted for matching a fraud 
profile that we developed, and we are almost at 100 percent of 
those sponsors that we find to be errant.
    To date, as of December 1998, or January 1st of this year, 
54 sponsors in 23 States have been audited or investigated, and 
14 so far have been terminated. Several others have been 
indicted and prosecuted. So far as the benefits are concerned, 
again, we have gone out and will share with you that picture 
last year that we showed of the vacant lot in the testimony. 
That was a sponsor that fraudulently received monies for the 
center that was located in that vacant lot that was out in 
Toledo. So we did get a successful prosecution on that.
    Ms. Kaptur. I hope you keep working in Toledo. Try harder.
    Mr. Viadero. Well, actually, you will be happy to know, it 
is not as bad as we thought.
    Ms. Kaptur. Other places?
    Mr. Viadero. Yes. It is not as bad as other places. That 
was the New Jerusalem issue, and seven persons including the 
sponsor and director entered guilty pleas. They had been doing 
this since 1995, and they set up more than 40 false providers, 
resulting in submission of false claims of more than $750,000. 
That is a lot of money.
    The investigation does continue, and we are in the process 
of restitution. Again, we do not get that restitution.
    Ms. Kaptur. Will you have a continuing emphasis on this 
particular set of investigations over this next year?
    Mr. Viadero. Yes, ma'am. There is more than enough open 
cases right now that we are carrying as open cases and auditing 
and investigating than our resources allow us to handle. That 
is fundamentally why we have had to back off. I am out of 
people. I am out of people. Some of them are beginning to look 
like--if you recall the movie, ``Gone With the Wind,'' some of 
them are looking like Rhett Butler coming back from the war. 
Q01
    These people--auditors spend in excess of 70 percent of 
their time on the road. So that puts a lot of strain both on 
them professionally and on their personal lives as well. We are 
out of people.

    Ms. Kaptur. That is why I go back to my request of Mr. 
Dewhurst. If you could really look across the Government and 
give us some insight on this, maybe we can do something here to 
try to help and to augment the staff.

    There was quite a bit of excellent testimony presented on 
the tainted foreign imported food coming in here, and can you 
detect the most troubling entry points in the country? Are

there certain areas that are more vulnerable than others?

    Mr. Viadero. Yes. We have had some smuggling 
investigations. The vast majority of our criminal cases have 
been on the West Coast. For instance, we worked with APHIS on a 
shipment containing dried snakes. Because they are used as 
Asian aphrodisiacs, they are all--viper snakes are all 
venomous.

    In another Conex, we had several thousand bear scrotums and 
testicles, which, again, are used as Asian aphrodisiacs. At the 
same point of entry, we also seized several thousand pounds of 
deer antlers and tendons. Just the tendons were taken off the 
hind quarter of the deer, which are used in Asian medicines. 
So, needless to say, we would have our large concentration or 
large effort at that port.

    So far as the East Coast ports, we have not seen direct 
importation of prohibited fruits and vegetables coming in from 
both South America and from Asian ports being transhipped into 
Canada and then back into the United States.

    We really do not have too--our borders are really, fairly 
open.

    Ms. Kaptur. Finally, for the verbal questioning, on the 
meat plants that you highlight in your testimony, you do not 
reference who they are. Are these vest-pocket plants, or are 
these major corporations whose names we would know?

    Mr. Viadero. They are large corporations within the meat 
business. And again, I am sure you know that many of these 
companies, their names are owned by several other companies, 
and the parent company, yes, would be most notable who owns 
them.
    Ms. Kaptur. With HACCP and other inspectors in there, why 
would this be happening, then?
    Mr. Viadero. Well, that is our question. That is our 
question.
    Again, the company in Wisconsin was victimized. They were a 
victim. The other companies--and again, I have to be careful, 
and you will bear with me, please, that a lot of these cases 
have been accepted for prosecution and are under grand jury 
review. So I am limited to what I can say here on the record.
    We just find that the response time--I mean, we have one 
question as to why FSIS pulled the stamp, if you will, removed 
the inspectors, which in essence shut a plant down on December 
31st, yet did not have a recall of product until January 22nd. 
That is more than 3 weeks. So that sort of makes me wonder. If 
you are going to stop the inspection and pull the stamp, shut 
the plant down, why don't you recall the product if you had 
basis to shut the plant down. That is just an example, if you 
will, of one of the cases we have.
    Ms. Kaptur. All right. Thank you very much, and thank you, 
Mr. Chairman.
    Mr. Viadero. Thank you, ma'am.
    Mr. Skeen. Mr. Latham.
    Mr. Latham. Thank you, Mr. Chairman.
    I would like to know, have you done any work in seeing the 
effectiveness of these aphrodisiacs? I am kind of interested in 
those.
    Mr. Viadero. I have got more hair in my comb in the morning 
than I have on the top of my head. No, I have not seen the 
effects of that. Thank you. [Laughter.]
    Mr. Latham. Okay. This committee is just full of levity, 
right, Mr. Chairman?
    Mr. Skeen. It is full of something. [Laughter.]

                         information technology

    Mr. Latham. Just one subject matter I would like to hear 
your response to, in the last 2 years, trying to get after 
somehow in the Department, the information technology systems 
and the authority given the information officer and the 29 
different agencies, each with their own systems. Can you give 
me any insight? Are they doing anything over there? Is it 
business as usual?
    Mr. Ebbitt. Well, this is another challenge for the 
Department of Agriculture, and it is a huge challenge, Mr. 
Latham.
    One of the main areas--and they are moving ahead, 
particularly at the county office systems, our county offices 
throughout the United States. There is a major effort underway 
to bring all of those offices with the same kind of technology, 
same kind of telecommunications, same wiring, et cetera, huge 
costs involved, a lot of--just an awful lot of work just to get 
it all set up, but I think to that end, at least there--I mean, 
the Department now has a plan and they are working on that plan 
to move that effort forward, but it is certainly not all 
accomplished yet and there is a big challenge there to get that 
accomplished.
    Mr. Latham. Has Ms. Reed given the authority to actually 
make changes, or is it still dependent upon each of the 
agencies signing off, or can she actually make things happen? I 
mean, does she have that authority? Do you know?
    Mr. Viadero. Yes, sir. She has the authority under the 
Chief Information Officers Act.
    Mr. Latham. In reality?
    Mr. Viadero. Yes, sir.
    Mr. Latham. But that has been the problem before is the 
agencies basically have ignored guidelines set down from the 
Department. In the past, they have each gone ahead with their 
own systems and not worried about what the other agency next 
door is doing. It is just if she has got the authority, they 
are ignoring it.
    Can you give me any--okay. I think we are back to square 
one again.
    Kind of in the same area, do you have an update or anything 
on the Year 2000 compliance department? Do you look into that?
    Mr. Viadero. Yes. Yes, we do.
    Mr. Ebbitt. Yes. We have been spending a lot of time 
monitoring what the Department is doing, and I think in most 
areas, the Department, they have identified the systems that 
are critical and the kinds of fixes that need to be made. They 
have a plan to fix them.
    Their plan would indicate that in some areas, they are 
behind the time frames that have been set forth by OMB to make 
these fixes. They are telling the Department, they are telling 
the Secretary that they can have these things fixed by the Year 
2000, the things that are critical. Some things will not make 
it, but they are not in the critical areas.
    Mr. Latham. Can you define the critical areas?
    Mr. Viadero. Well, throughout the Department, each 
particular agency has identified systems critical to their 
operations, and that will vary, of course, from agency to 
agency depending on the program that they are delivering.
    I have forgotten the example number. There are 4- or 500 
different--it is right here--354. Steve had it right here, 354 
critical systems in the Department. He has got a goodchart 
here. Maybe he can share that.
    Mr. Latham. It is probably here.
    Mr. Ebbitt. But, again, they are telling us that they are 
going to make it.
    Now, in our next phase, we are going to be looking at their 
testing processes to see if they are on target with our testing 
processes, what are the tests showing.
    Down at the National Finance Center, which is so important 
to USDA's operations, a lot of--first of all, employee salaries 
are paid out of National Finance Center, as well as about 40--
almost 50 other Government agencies are paid out of National 
Finance Center. We have been down there. That operation appears 
to be on target with identifying and fixing the problems, and 
the National Finance Center is reporting 100-percent compliant 
on that.
    Mr. Viadero. I would also like to add, Mr. Latham, we will 
know how well everything is working on April 1st because New 
York State is the first State to become Year 2000. So far as 
distribution of benefits, particularly from the large 
entitlement Departments, Agriculture, HHS, HUD, New York State, 
it will be online first. So our machines have to kick into a 
2000 date to correspond to New York State. So we have worked 
very closely with John Ortego and the Chief Financial Officer, 
Sally Thompson, to ensure that the National Finance Center is 
up to par.
    We are, however--and it was reported by Ms. Thompson, the 
CFO there--I am sorry--by Ms. Watkins who is in charge of FNS--
the problem is that some of the States do not want to report 
back to the people whether or not they are Y2K-proof.
    Mr. Attmore who is the State auditor in New York--we share 
a committee together of--this is a real boring committee of 
auditors. You think this is a lap-slapping time, you ought to 
go to one of those meetings. He assures me that New York State 
is up and running, but we will know, again, on the 1st, and 
then, again, right here in Virginia because Virginia starts a 
May 1st fiscal year, 21 States are July 1st, and the rest are 
October 31st. So we will be challenged in the next 6 to 8 weeks 
here.
    Mr. Latham. I would just kind of go back to my first 
question. The ultimate test for the Department is to see if 
they are coordinating their efforts and cooperating and to see 
if they can now e-mail from the North Building to the South 
Building, and that which they have not been able to do before. 
I mean, that is the amount of cooperation the Chief Information 
Officer has. Hopefully, things have gotten better. I would 
question it.
    Thank you, Mr. Chairman.
    Mr. Skeen. I thank all of you, and I think that enough has 
been said.
    Roger, yours is always one of the most interesting groups 
that we visit with. You do your work, and you do it very well. 
You are well-accompanied, and I can assure you that we are 
going to try to help you get the compensation that you need to 
keep doing your work and expanding on it. I think you have been 
under-recognized, which is not an unusual thing around the 
Government.
    Mr. Viadero. Thank you, Mr. Chairman.
    Mr. Skeen. I think you have done well.
    Anyone else? Marcy?
    Ms. Kaptur. No, Mr. Chairman.
    Mr. Skeen. Thank you all, and we are adjourned.
    Mr. Viadero. Thank you.
    Mr. Skeen. We also would like to know if we have other 
questions that we can send to you--
    Mr. Viadero. Absolutely.
    Mr. Skeen. We appreciate that.
    Mr. Viadero. Happy to have them.
    Mr. Skeen. Glad to have you.
    [The following questions were submitted for the record:]

[The official Committee record contains additional information here.]


                                      Wednesday, February 10, 1999.

                        SECRETARY OF AGRICULTURE

                               WITNESSES

HON. DAN GLICKMAN, SECRETARY OF AGRICULTURE
RICHARD ROMINGER, DEPUTY SECRETARY
KEITH COLLINS, CHIEF ECONOMIST
STEPHEN DEWHURST, BUDGET OFFICER

                            Opening Remarks

    Mr. Skeen. Well, good afternoon. I would like to welcome 
everyone to the first hearing on the Administration's Fiscal 
Year 2000 budget request for programs under the jurisdiction of 
the Subcommittee on Agriculture, Rural Development, Food and 
Drug Administration, and Related Agencies.
    Today, we have with us the distinguished Secretary of 
Agriculture, the Honorable Dan Glickman. He's accompanied by 
the very able Deputy Secretary Rich Rominger. Also at the 
witness table today are two of the best career civil servants 
in the Government to listen to, that's Keith Collins, the chief 
economist at USDA, and Stephen Dewhurst, the chief budget 
officer. We couldn't run this business without Steve. He's been 
here and we're going to make a monument out of you. [Laughter.]
    Mr. Skeen. That's not a threat. Our new chairman, the 
distinguished gentleman from Florida, Mr. Young, won't be able 
to join us because he's got another commitment, but he sent his 
regards to the Secretary and the whole entourage.
    So, along with us, is the gentlelady from Missouri, Mrs. 
Emerson. Returning on the Republican side are: Jim Walsh, Jay 
Dickey, Jack Kingston, George Nethercutt, Henry Bonilla, and 
Tom Latham.
    On the Democrat side we have three new members: Maurice 
Hinchey of New York; Sam Farr of California; and Allen Boyd of 
Florida. And I'm pleased to welcome back our good friend and 
the ranking Democrat on the subcommittee, Marcy Kaptur. It's a 
pleasure, as always. The subcommittee is also fortunate to have 
back the gentlelady from Connecticut, Rosa DeLauro; and, of 
course, the man who needs no introduction, my good friend from 
Wisconsin and the ranking Democrat on the full committee, Dave 
Obey. I don't know who he is irritating, but he'll do a good 
job.
    One other introduction, Mr. Secretary, is Hank Moore, who 
has taken over as clerk of the subcommittee. Hank, we're sure 
glad to have you here, and you come with a lot of background 
and knowledge.
    Mr. Secretary, as you know, this subcommittee has a long 
tradition of working on a bipartisan basis because the programs 
that you operate benefit every American every day of their 
lives. And our chairman has made it clear he wants us to 
proceed as quickly as possible with this important legislation.
    I would like to turn to Ms. Kaptur for any words that she 
may have, and then turn the floor over to Secretary Glickman 
for his opening remarks.
    Ms. Kaptur. Mr. Secretary, we want to welcome you today for 
a reappearance before our committee. Also, all of your 
associates, Mr. Rominger, Mr. Collins, and certainly Mr. 
Dewhurst. I saw our dear colleague, Jay Johnson, former 
colleague, a little bit earlier, glad to see him. And we look 
forward to working with you.
    The only comment that I wish to place on the record at this 
point is to say that I think our membership is in unison in 
being extremely concerned about what is happening in rural 
America; with the level of prices; the continuing attrition of 
small farms in this country; what is happening in other places 
around the world that make it more difficult for us to expand 
exports. And we really look forward to your presentation 
because there are millions of people across this country in 
rural America who want to know if there is some way that we can 
be a full partner with them in trying to preserve the 
production levels and sophistication that this country has come 
to expect in the agricultural sector.
    So, Mr. Secretary, we welcome you and look forward to your 
words.
    Mr. Skeen. Thank you, Ms. Kaptur. Mr. Secretary, it's all 
yours.

                       Statement of the Secretary

    Secretary Glickman. Thank you, Mr. Chairman, Marcy, Jo Ann. 
It's a real pleasure for me to be here. You already introduced 
my colleagues, my partner, Rich Rominger and the two finest 
career employees in Government----
    Mr. Skeen. We're proud to have them.
    Secretary Glickman [continuing]. And I won't say that 
again, but I'm sure it's music to their ears. If I might, I've 
got a complete written statement, which I will include in the 
record. And I would like to make some oral remarks.
    First of all, we are in a strange situation. We have the 
strongest general economy this country has had in a generation, 
if not two generations. You look at the aggregate figures. I 
don't have to tell you this. You hear it all the time, low 
interest rates, the lowest unemployment, highest home 
ownership, lowest inflation, highest job creation, and it tends 
to be national. The fact is that it's not just in one State 
versus another. I mean there are pockets of problem areas, but 
overall this country is enjoying extraordinary prosperity. So 
we acknowledge that.
    Then we look at agriculture, the farm side of the picture. 
And it's not just agriculture. There are some sectors that are 
suffering: oil and gas, minerals, metals, a lot of things that 
come out of the ground are having problems. In your State, Mr. 
Chairman, like my State, the state of minerals is not good.

                              Farm Economy

    But the fact is that the farm economy is under some stress. 
Exports are down over $9 billion from the '96 peak to $50.5 
billion forecasted in this year. And that's largely due to 
weakness in Asia and the currency problems. Net cash farm 
income is down from $59 billion in 1998 to $55.5 billion in 
1999.
    And it would be lower if it were not for the general 
assistance this Congress provided as part of the emergency aid 
package in our farm program. Many producers have faced both low 
prices and adverse weather, a double hit. We've had some of the 
strangest weather ever, whether you live in the northern plains 
or you live in the southwest. It has either been the wettest of 
the wet or the driest of the dry. And so it has made it almost 
impossible for a lot of folks.
    Today, we issued the crop report and commodity supply and 
demand estimates. We issue them once a month. Mr. Collins' shop 
heads this up. I would have to tell you I'm looking through the 
reports for wheat, rice, corn, soybeans, soybean related 
products, cotton, and quite frankly, there's large production, 
lower exports in many cases than projected, and so the price 
situation does not look the way I would like it to look. You 
know, the first few years I was Secretary, things were much 
better than they are now.
    There have been changes in meat production: hog, cattle, 
poultry, which largely indicate that things are on course. But 
change has not been as rapid as we would like to see, which 
means that price improvement may not be as fast as what we 
would hope to see. The irony is that even though the general 
economy is doing so extraordinarily well, the farm economy has 
got a lot of very serious problems. We need to be honest about 
that and then we need to look for ways to try to work on it, to 
fix it.

                          Emergency Assistance

    Now, this Congress provided nearly $6 billion in emergency 
assistance in 1999 as part of the budget bill. You may recall 
there was some discussion. The President thought we needed more 
than an initial $4 billion. There was a veto of the bill, and 
we ended up with $6 billion. That has been a God-send to a lot 
of farmers out there. Half of that money is going out in what's 
called the extra AMTA payments, and the other half is going out 
to farmers who have suffered natural disasters all over the 
country.
    We have increased loan deficiency payments by $2 billion. 
These are payments that two or three years ago we never thought 
would be triggered at all. These were the bottom tier payments 
that were based upon prices falling rather significantly. Two 
years ago I think we had zero LDP. Last year we made 400,000 of 
these payments. This year we project 1.3 million Loan 
Deficiency Payments. These are individual payments. An 
individual farmer has to go in to an office or contact an 
office to get the payment. And, if prices continue flat, or in 
some cases lower, LDP's will continue. Thank goodness we have 
that particular program.
    We have also made direct payments to pork producers. It is 
a small program. It is basically all that I could do under the 
law in terms of making direct payments to pork producers, but 
we've also been buying a lot of pork for our commodity 
assistance programs.
    The President's food and initiative will provide over five 
million metric tons of food assistance, and the total level of 
farm assistance in 1999 from the United States Government is 
projected at about $18 billion. And without that assistance, I 
will have to tell you a lot of farmers and ranchers would not 
be able to make it. The stress out there will entail a very 
heavy workload effort by the department to deliver the 
assistance because what we're doing is providing emergency 
assistance on top of the normal servicing in our offices, which 
include the LDP's. A lot of folks, including some members of 
this committee have called me and said, ``There are lines 
around the offices. We've got LDP's that have to be serviced. 
We have disasters.'' And a variety of things over and above the 
normal workload that need to be taken care of.
    I've talked about the LDP volume being high, and we're 
looking at our salaries and expenses to see if there are better 
ways to handle this workload. The bottom line on all of this is 
if it hadn't been the work of this committee and this Congress, 
an awful lot of people would have faced even more catastrophic 
consequences.

                         Farm Bill Shortcomings

    But I do believe the 1996 farm bill has serious 
shortcomings in dealing with low prices and disaster related 
events. When we passed this bill, prices were high and the 
world economy was in pretty good shape. Exports were strong. 
The economies of Asia and Latin America looked promising, but 
the fact of the matter is that the economic cycles are 
unstoppable. We are in a cycle of history when it comes to 
agriculture which is not so good, and the farm bill is not as 
suitable during those counter-cyclical times when things are 
bad.
    We're not trying to micro-manage farmers or to do the kinds 
of things that would make life impossible for producers or to 
go back to the way things were in the '30's or '40's or '50's. 
But we do have a role to help farmers weather tough times and 
adjust to adverse economics.
    Some of it you can do in this committee. Some of it has to 
be done by the authorizing committees in terms of looking at 
the 1996 farm bill and filling in the safety net where it is 
inadequate. And, again, I want to thank this committee for what 
you've done on the disaster side of the picture because without 
that, things would be very, very difficult.

                             Crop insurance

    If I may talk about a few other things. One is crop 
insurance. The President said in his State of the Union address 
we need to find a bipartisan way to improve the farm safety net 
by reforming crop insurance. Last year's supplemental, $6 
billion, indicates that we need a longer term fix. Ad hoc 
disaster assistance is undependable and too costly. And my 
belief is that the weather patterns of the next several years 
are going to be just as unpredictable as they have been in the 
past and we will have just as expensive disasters year after 
year after year. Maybe not every year, but they're going to be 
out there. We have to have a crop insurance system that can 
better protect people so that they don't have to come to the 
Congress or to the administration every year for a large ad hoc 
program. We don't have that now in many cases.
    We made a $400 million down payment as the first step to 
improving risk management by taking that out of the $6 billion 
appropriation. What we did is we have reduced the cost of crop 
insurance premiums by 30 percent for producers buying crop 
insurance this year. So out of the $6 billion we took a piece 
of it and reduced their premiums to try to get more farmers 
into the crop insurance program.
    We also issued a white paper on principles and proposals 
for crop insurance reform. It will be a very expensive 
undertaking. But either we do it this way or we do it with 
expensive emergency programs nearly every single year. We're 
going to hold three regional forums to discuss the issue. We 
want to try to achieve bipartisan agreement with Congress on 
crop insurance reform this year. This is a very high priority 
for us and hopefully working together we can try to deal with 
this problem.

                              Farm Credit

    The second issue I would like to talk about is credit. The 
budget this year provides $3 billion in credit for farmloans 
and guarantees. But, I would add with a subsidy cost of $52 million 
less than last year due to the lowest interest rates in a generation. 
The low interest rates have actually allowed us to increase the amount 
of credit and doing it at a lower cost. However, because of a poor farm 
economy in many parts of the country, because of lower commodity 
prices, more and more USDA, as the lender of last resort, is being used 
as the prime lender for farmers. So our farm credit programs are facing 
an increased demand this year, and we will run out of money fairly soon 
for those programs. We are now in the process of looking at 
specifically what we're going to need for the purposes of a 
supplemental request. But the fact of the matter is we're not going to 
be able to continue to make loans too much longer because of the 
dramatically increasing demands on both direct and guarantee credit.
    I would also say on the credit area that the Department and 
the Justice Department settled a major civil rights class 
action case filed against USDA, hopefully putting to an end 
many, many years, if not decades, of problems that have existed 
dealing with civil rights and the Department of Agriculture. I 
would be glad to talk about that more if the members would like 
to ask about it.

                          agricultural exports

    In the area of exports, we know that exports, strong export 
markets are a critical component of the farm safety net. Market 
disruptions, however, have occurred in Asia, Latin America, 
Russia, Eastern Europe and elsewhere. We increased the 
programming of export credit guarantees to Asian markets and 
sales registrations under our GSM-102 were up 40 percent last 
year over the previous year.
    Strong efforts are also being taken on a trade policy 
front, including preparations for the new round of multi-
lateral trade negotiations. The budget provides $6.5 billion in 
total for our international programs this year, including $4.5 
billion for our CCC export guarantee programs. But, we will use 
more than that, if necessary, to move the products overseas.
    Exports are a critical part of the safety net, but when 
times go bad in the world, they cannot be the only part of the 
safety net. They, along with domestic programs, have together 
be considered as part of the safety net. We've learned that not 
always is the world the way we want it to be.

                      domestic marketing programs

    In the area of marketing, I would like to talk a little bit 
about our domestic marketing programs, which are also important 
to the economic health of U.S. agriculture. We have very 
serious continuing concerns about market concentration. Ms. 
Kaptur and I talked about that for a moment beforehand as well. 
We are strengthening enforcement against anti-competitive 
practices, particularly in livestock markets. We've asked for 
some increased funding for our enforcement of the Packers and 
Stockyards Act, our grain inspection, packers and stockyards 
administration. We are also conducting a lot of reviews and 
examinations on the hog price decline, and the Cargill-
Continental merger. These issues of concentration in 
agriculture are ones that we tend to be confronted with when 
we're out in the countryside as much as any others, and I'm 
sure you're hit with the same ones.

                            pest management

    We have asked for budget increases for pest detection, 
disease prevention and border inspections, given that fruits 
and vegetables are coming in from all parts of the world. We 
have to make sure that we have adequate resources to protect 
American producers. We are asking for budget increases for our 
organic certification program. The most comments this 
Department has had maybe since the Second World War on any 
issue was on organic agriculture. And, they all came from Sam 
Farr's district I think. But, we are in the process of coming 
up with some certification rules for standardizing and 
certifying organic agriculture. I'm hopeful we can get it done 
this year. We've moved on some meat products, but there are 
other areas. Also, budget increases are provided under the 
Pesticide Data Program in conjunction with the Food Quality 
Protection Act requirements. We need to have that as well.

                           rural development

    In the area of rural development. The rural development 
budget will support about $11 billion in loans, loan 
guarantees, grants, and technical assistance. Here's an 
interesting fact, that's $800 million more than last year. But, 
due to low interest rates, the cost to taxpayers will be $400 
million lower than last year. So we're able to get $800 million 
in authority for water, sewers, housing, electricity, 
telecommunications, and job opportunities, and the cost is $400 
million less. We think that is remarkable. This will also 
include funds for the President's Water 2000 Initiative and 
single-family housing needs in rural America, as well.

                         agricultural research

    In the area of research, this budget proposes an increase 
of nearly 10 percent for research from the comparable 1999 
level. This is the first substantial inflation adjusted 
increase for these programs since 1992. Our research focuses on 
a broad variety of areas from preserving our natural resources, 
conservation research, food safety, as well as farm 
productivity. I think that this obviously is the seed corn for 
the future of American agriculture.

                         food safety initiative

    I would like to talk for a moment about several other 
issues: one is food safety, one is nutrition, and one is 
conservation. In the area of food safety, we've asked for an 
additional $67 million, almost two-thirds of the Government-
wide increase of $107 million for food safety activities aimed 
at reducing micro-biological contamination of foods. These 
increases are directed to the President's Food Safety 
Initiative and inspection modernization activities of FSIS.
    This is the first year anniversary of the Hazard Analysis 
Critical Control Point implementation in large meat and poultry 
plants. We go on line now with the smaller-size plants this 
year and the very small plants next year. Recent studies 
indicate that there has been a significant reduction in the 
prevalence of salmonella due to the implementation of HACCP. 
Some studies show it has been as much as a 50 percent reduction 
in salmonella in poultry plants as a result of those that have 
complied and are participating in the HACCP program. All I'm 
saying is there are no miracles to food safety, but the 
programs do seem to be working in terms of getting all the 
plants on line and doing what they ought to be doing to deal 
with these problems.
    We are also working to meet the goals of the Food Quality 
Protection Act in dealing with environmental and public health 
risks associated with pesticides.

                        food assistance programs

    In the area of nutrition, the budget reflects full funding 
for food stamps, for child nutrition and the Women, Infant and 
Children program. The budget restores food stamp eligibility to 
15,000 elderly legal immigrants. The funds are also provided to 
improve program integrity, evaluate the efforts of auniversal 
free school breakfast pilot project, which I personally believe can be 
instrumental in helping to improve the education of an awful lot of 
kids in this country, We also want to expand the WIC Farmer's Market 
program.

                       gleaning and food recovery

    The budget includes a new $15.8 million gleaning and food 
recovery initiative. This is something I worked on with Bill 
Emerson. Through his efforts, we created the Bill Emerson Good 
Samaritan Act, which immunizes people from liability in most 
cases who donate food that would otherwise be thrown away. We 
throw away 99 billion pounds of food in the garbage every 
single year in this country. It is disgraceful. Much of that 
food can be eaten. Hospitals, hotels, cafeterias, you name it, 
throw food away. This program is to provide community-based 
grants to help neighborhood organizations recover edible food 
and use it to alleviate hunger.

                         conservation programs

    In the area of conservation, this mission has dramatically 
expanded as a result of the '96 farm bill. The budget protects 
and strengthens the core conservation technical assistance and 
watershed work that NRCS carries out. It supports 
implementation of the administration's Clean Water Action Plan 
to protect rivers and streams. It increases funding for the 
EQIP Program, the Environmental Quality Incentives Program, to 
$300 million. The budget also funds the Lands Legacy Initiative 
which will help USDA address the serious problem of prime 
farmland loss. The Farmland Protection Program would be 
reauthorized for this purpose. There are also other 
initiatives: the CRP, the Wetlands Reserve Program, and the 
budget supports the administration's Global Climate Change 
Initiative.

                 customer service and program delivery

    Let me just finally close with a point about customer 
service and program delivery. Improving customer service and 
program delivery are a high priority. And let me tell you it's 
tough with an agency that has 22,000 fewer employees today than 
we did in 1993. We also have significantly fewer offices. We 
have downsized to about 2,700 service center offices, and so 
with the increased workload, the Loan Deficiency Payments, the 
disaster programs, and a significant reduction in the numbers 
of people, I would have to tell you it is a challenge to 
provide that high priority service, and that particularly goes 
for smaller farmers, minority farmers who have been 
traditionally under-served by our farm and rural development 
activities. Streamlining and co-locating the county-based 
agencies in one-stop USDA service centers is a prime focus. We 
are also working to administratively converge the 
administrative support functions of county-based agencies and 
provide a common computing environment as well.
    I would have to tell you that our workload in customer 
service requirements, particularly in the farm program area 
right now, is quite high and there have been delays. A lot of 
it has to do with the fact that it is difficult to provide as 
timely a service as I would like given the enormous workload, 
particularly as a result of the Loan Deficiency Payments, which 
are coming in by the millions now. But we will continue to do 
our best.
    Mr. Chairman, that concludes a summary statement. And, 
again, I appreciate your thoughtfulness.
    [The prepared statement and biographies of Dan Glickman, 
Richard E. Rominger, Keith J. Collins, and Stephen B. Dewhurst 
follow:]
    [Clerk's note.--Mr. Collins' prepared statement appears on 
page 969 of this volume.]

[The official Committee record contains additional information here.]


    Mr. Skeen. Well, thank you very much, Mr. Secretary. And 
let me say it's not a pretty picture out there, but what we've 
concentrated on and your report concentrates on are the things 
that we can do rather than what we can't do. And it's too late 
to assess where the problems started. We're going to have to 
deal with them because it is a tremendous problem. And we would 
like to share the effort of trying to get ourselves over this 
hump. And I think you've made a great outline of what kind of 
help is available to us, but we've got to put the wherewithal 
together to make it work. We appreciate that very much.
    I would like to say right now to Mr. Obey to recognize that 
we've not choked you down. We had ordered more room for the 
dais and it hasn't gotten here yet. So if you fall off the end 
over there, help is on the way. [Laughter.]
    Ms. Kaptur.

                        Statement of Ms. Kaptur

    Ms. Kaptur. Thank you, Mr. Chairman. I just wanted to 
acknowledge now that our membership is here. I just have to say 
what a marvelous subcommittee this really is, and on both sides 
of the aisle, we have many new members joining us. And I wanted 
to say how thrilled we are that I think every one of our 
members now represents both production agriculture, as well as 
some metropolitan areas. This is just a marvelous, marvelous 
opportunity. And I want to welcome my new colleagues certainly 
on this side of the aisle but also on the other. And there will 
be no more harder working subcommittee in this Congress than 
this one. And, frankly, the country needs it right now in this 
arena.

                      supplemental appropriations

    Mr. Secretary, I noted in your testimony that you were a 
bit unclear on your intention as to whether you would send a 
supplemental. Could you discuss that in a little more detail? 
We have information from a number of our members about the lack 
of operating loans, the Farm Service Agency backups across the 
country. We have severe problems in some of our industry, such 
as pork, cattle, and others. Could you clarify a bit what the 
administration's intention on a supplemental is this Spring 
please?
    Secretary Glickman. Well, we haven't made a formal request 
to OMB yet for a supplemental. However, it is my judgment that 
there are a couple of pressing needs that will require a 
supplemental. So my belief is one will be sent up, but I don't 
have anything formal to offer you right now except to tell you 
that there are several areas that we are looking at. The big 
one is in farm loans. While the funding for farm loans 
increased from $2 billion last fiscal year, or Fiscal Year '98 
to $2.8 billion in '99, to $3 billion this year, the demand is 
just out-running it, largely because people are coming to us, 
particularly on the guarantee side because the banks want the 
guarantee because the farm economy is not quite as stable. On 
the direct side, because we are the lender of last resort, 
we're getting more attention than ever. My belief is we're 
going to need as much as about a billion dollars in additional 
loan authority. The budget cost for that would be about $100 
million under standard practices. My belief is that a request 
at some point hopefully soon will be sent up along that line.
    We also have some needs in emergency conservation, 
watershed, and rural development work related to disasters, in 
Puerto Rico and elsewhere. But most of these are natural 
disaster related. They kind of follow previous supplementals. 
We are also reviewing the salaries and expense needs of both 
the Farm Service Agency and NRCS. You know, we're talking about 
well over a million, maybe getting close to two million LDP 
applications, projection of zero two, three years ago; and we 
also have technical assistance needs under the conservation 
reserve programs and conservation reserve enhancement programs. 
There may be a need for additional salaries and expenses. But 
that, again, I would say no final decisions have been made. 
Clearly, farm loans is the one area that would be the most 
immediate pressing need.

                       emergency feeding programs

    Ms. Kaptur. Thank you for that clarification. Mr. 
Secretary, I would also encourage you I think your present 
budget request includes some additional funds for TEFAP 
foremergency feeding programs. And I would also in order to relieve 
some of the over-supply in the market, urge you to look closely at all 
of our feeding as well as our programs that deal with the export of our 
food to other countries. We have an incredible surplus. And I know that 
you have increased some of your purchases to school lunches and so 
forth for the pork industry I believe. It's a small amount in view of 
what's out there, but I think we could do better.
    I have a question I'll submit for the record if I don't 
have time to ask it on our Welfare to Work program and the 
backup at many of our domestic feeding kitchens, which is 
unbelievable. And so it seems to me that we can do a lot 
through this budget to both help our farmers and the current 
market situation, as well as meet social purposes.

                             pork situation

    I wanted to concentrate for a moment, if I might, on the 
pork situation. I don't think I'm the only one xenophobic on 
this coming from Ohio. But without question people are 
producing below the cost of production, and they can't get 
their money out of this market. On the other hand, companies 
like IBP where many of our producers have to drive their 
products, drive their animals, reported that their fourth 
quarter earnings jumped to $92 million, more than four times 
the $22 million posted a year earlier. So at the same time hog 
prices were at depression levels, the retail prices remained 
level. And the processors, of which there are very, very few at 
this point, certainly in our part of the country, seem to be 
doing quite well.
    Mr. Secretary, I wanted to ask you what is the Department 
doing to assure that the retail prices more accurately reflect 
the prices paid to farmers, the production price? What has 
happened to the administration's initiatives on concentration 
in that particular industry?
    Secretary Glickman. Well, first of all I would say that 
when pork prices got as low as 8 or 9 cents a pound in 
December, and in real terms that put them below depression era 
prices, we did the things that we could do under the law. I 
bought a lot of pork for the school lunch program, for other 
commodity programs. We added pork to our export programs. I 
created a pork task force. We targeted USDA purchases to hogs 
slaughtered on weekends to increase the number of hogs 
slaughtered because the demand for pork was up. It's not as if 
there is lower demand either at home or on the export side. A 
lot of it has to do with a constriction because we did not have 
enough slaughter capacity. It has created a dislocation. We 
also accelerated the voluntary pseudo-rabies eradication 
program, which is a disease that hogs can get and it was going 
to take us several years to do it. Now, we're going to do it in 
six months to get rid of all of these hogs that might be 
infected with this disease which would also take hogs off the 
market and help us on our export side of the picture.
    I also I announced a $50 million program to aid hog 
producers by providing direct payments to hog producers 
targeted to small producers.
    The market for hogs is now up to 25, 30 cents a pound, 
roughly. It's still not at a break even point, but it's up. The 
market has gone from about 8 cents to about 30 cents a pound. 
The future's market looks better than that. But, that is still 
a long ways away.
    I continue to have great concerns about the structure of 
agriculture, particularly in the livestock industry, 
particularly poultry, hogs, and cattle. The cattle industry is 
little different than poultry and hogs in terms of the nature 
of marketing arrangements. We have asked for some additional 
money for us to do work under our Packers and Stockyards Act 
enforcement. There's a lot of interest for the Justice 
Department to become much more actively involved in terms of 
enforcing antitrust laws. But, clearly, this is an area where 
to date we have not, as a matter of Government policy, been 
able to stop the movement toward concentration and 
consolidation in all of agriculture, but particularly livestock 
agriculture. Now there are many reasons for this. It's a 
complicated situation. But I'm also very concerned about it 
because what I think happens is it increases volatility. So 
when markets move down, they move down much faster, and they 
don't tend to move up faster, but they do tend to move down 
faster.
    With respect to the retail price spread, I have met with 
the retailers. We've done some jawboning in this area. There 
have been some efforts, some successful efforts by some 
retailers, but the spread is not as great as one would like to 
see. All I can say is that in the Department this remains a 
very high priority for all of us, and we're still looking at 
it. I may have some announcements in the next few weeks on 
other things that we can do in this area.

                          market concentration

    Ms. Kaptur. I want to give other members a chance to ask 
questions, but I did just want to comment, and then I'll let 
others ask. And I'll wait for a second round. In my part of the 
country, we have all the industries you've just ticked off. All 
the livestock, certainly the poultry. And what has tended to 
happen is the total disappearance of all slaughter facilities, 
other than the large ones, the really big ones, not even in our 
State any more. And then what appears to happen is with the 
retail stores, the disappearance on the shelves of any locally 
produced products, the latest being eggs. When AgriGeneral, 
Kroger Company stopped purchasing Hertsfeld eggs and Zwyer 
eggs, some of our local producers used to have those as well as 
the poultry that went on the shelves.
    I can understand the retail stores desire to have a uniform 
product, and the more they can purchase, you know if they can 
purchase a million eggs from a big industrial poultry company, 
they probably want to do that. But it seems to me that there 
ought to be concomitant efforts on the part of the Department 
to provide ways to help organize farmers institutionally.
    We've talked to Under Secretary Jill Long-Thompson about 
this, on the cooperative side, that if they're producing hogs 
and you've got a group of farmers that can bring 5,000 hogs in 
a given period of time to market, that there ought to be a way 
for them to have their own slaughter facility to pledge some of 
the assets that they have because it seems in a way you can't 
fight that battle. Hopefully the Justice Department will get 
into it, but what I don't sense is within the Department the 
same kind of attention and budgetary sense to help those that 
do want to work together to try to provide product who are 
literally being excluded from market having the kind of 
developmental assistance, the kind of business assistance that 
one really needs and it is desperately needed in our part of 
the country.
    So I just wanted to put that on the record, and I will pay 
particular attention to the Under Secretary's budget and to see 
what's there, there's greater sensitivity there. I see in the 
Farmer's Market here a proposal, a little bit extra attention 
so these people still have some place to bring product to 
market.
    And, again, Mr. Secretary, I would just encourage you in 
the nutrition programs, which consume 60 percent of your 
budget, to even increase your efforts to see how the purchasing 
practices, which are generally just given to the State to do 
whatever they wish with Federal dollars, to be more focused on 
purchasing product from those that produce, not just from those 
that supply product. And this has been a long-term struggle.
    Secretary Glickman. Actually, I would like to just tell you 
that we are encouraging our schools and our other programs to 
buy locally produced product. That's actually a fairly new 
program that is moving into much higher gear now than we've had 
for some time.
    Ms. Kaptur. I thank you very much.
    Mr. Skeen. Thank you. Mr. Secretary, I would also like to 
have you put on your list sheep, lambs, and wool. I don't know 
why I would ask you to do that, but we're having a terrible 
time with them.
    At this time, I would like to go out of the ordinary 
regimen that we use in recognition and recognize Mrs. Emerson, 
who is a new member of our panel. I have this extraordinary 
privilege of welcoming you here. You may ask your questions.

                       Statement of Mrs. Emerson

    Mrs. Emerson. Thank you, Mr. Chairman. First of all, thank 
you very, very much for giving me the honor of serving on this 
subcommittee. I really look forward to working with you and Ms. 
Kaptur on issues that you have both done remarkably--have taken 
remarkably strong leadership roles on. And so I thank you very 
much for having me be here.
    And, Mr. Secretary, thank you for all that you do and all 
that we hope you will do, and for coming today.

                     emergency loans at fsa office

    Mr. Secretary, this morning I learned that farmers in my 
district can no longer get EM loans at their FSA office. This 
loan account has been depleted. And according to my 
information, we've got about 222 loans in the pipeline. Only 35 
of our EM loans have been funded, which I guess that means 
about 85 percent of the EM loans are going to go unfunded. Now, 
obviously, this is an emergency situation that absolutely needs 
to be tended to immediately. Will your supplemental request 
include more EM loan funding as well?
    Secretary Glickman. Yes.

                            trade sanctions

    Mrs. Emerson. Okay. I appreciate that because it's really 
very important. I want to move on to the issue of trade just 
for a second, particularly with regard to trade sanctions. It's 
my understanding that we've got trade sanctions, agriculture 
food trade sanctions, on about 120 countries right now. In the 
past, I thought it was about 61, but we've been told by the 
Farm Bureau that it's about 120 trade sanctions, more than half 
of which have been implemented in the last four years. Do you 
know or do you have estimates as to how much these sanctions 
may cost our farmers in lost sales?
    Secretary Glickman. Well, first of all, I think the actual 
number is closer to about a half-dozen countries, including 
North Korea, Cuba, Libya. I am told by our people that it 
reduces our exports by about $500 million out of a number in 
excess of $50 billion.
    Now that doesn't mean that we shouldn't be evaluating our 
sanctions policy, and we did last year with respect to Pakistan 
and India. But the fact of the matter is that we are not 
prohibited from selling agricultural commodities except in 
about a half-dozen countries.
    Mrs. Emerson. Okay. Well, then the Farm Bureau must have 
its information wrong, but they do, in fact, suggest that there 
are about 120. Can you then, for those----
    Secretary Glickman. By the way, some of that may be 
sanitary or phytosanitary measures. You know, there may be 
problems, for example, we can't get our wheat into China 
because of the TCK problem, which we think is wrong on their 
part. I don't know if they count that or not, but the sanctions 
affect about a half-dozen countries.
    Mrs. Emerson. Can we ask them, because it is, obviously, 
income--any lost income to our agricultural sector is terribly 
critical right now. I'd like to ask you to become an advocate 
on this issue to try to get these sanctions removed. Certainly, 
food has not proven to be a good foreign policy tool. We 
learned that from the Soviet grain embargo in 1980.
    Secretary Glickman. Generally speaking, I agree that food 
should not be used as a weapon. But with respect to a lot of 
these countries, like Cuba, Iraq, Iran, North Korea, these are 
political decisions made by administrations and Congresses as 
to who we want to sell food to and who should be barred from 
getting food. Some of these decisions are made beyond my pay 
grade.
    But, at the same time, I recognize that, as a general 
proposition, food is in the humanitarian category, and we ought 
to do what we can to see that food not be restricted.

                           p.l. 480, title i

    Mrs. Emerson. Okay, just one other quick question about 
trade in general. I noticed that you all proposed to cut to 
some extent the EEP program, as well as P.L. 480, Title I, in 
the Fiscal Year 2000 budget, at least according to my review of 
it. Given the importance of trade, I wonder why those have been 
cut.
    Secretary Glickman. Perhaps Mr. Dewhurst may want to talk a 
little bit about it, and then I would mention it after he is 
finished.
    Mr. Dewhurst. Well, you are correct; the P.L. 480 budget 
and the section 416(b) budget are both down a bit in the year 
2000. There are two reasons for that. One is because we are 
running very large programs in Fiscal Year 1999. The 
administration has added $850 million to the P.L. 480 program 
level because of our assistance for Russia. So it makes the 
2000 cut look steeper.
    But the program does come down a bit in 2000, 
notwithstanding that factor. It's largely a question of what 
can we fit inside the discretionary budget target.
    Mrs. Emerson. Well, considering that you all are adding 
$268 million for the Land Legacy Initiative and another $100 
million for the Global Climate Change Initiative, it seems to 
me our priorities ought to be our priorities, and that is to 
help our farmers' bottom line.
    Anyway, let me move on to something that is real specific 
to my district, and Dan and I have talked about this.
    Secretary Glickman. The one and a half million tons of 
wheat for Russia was in addition to all the P.L. 480 numbers 
that we talked about as well. That program is going ahead right 
now. It isnot reflected in those numbers that you have said.

                    cotton loan deficiency payments

    Mrs. Emerson. Okay. Let me just ask you about a specific 
situation in my district, LDP's to cotton producers. At the 
local levels, I've mentioned to you, and at the State level, 
the FSA employees believe that mistakes were made and have made 
an official request to provide relief to our producers.
    I guess it is hard for me to understand how the Department 
can discount the recommendations of the State and local FSA 
offices as to why you wouldn't fulfill the request that we made 
with regard to LDP's. We have probably got several thousand 
appeals that are going to be made to the Department because of 
this, and I wondered if you could tell me if you know the 
status of those.
    Secretary Glickman. I don't have anything more to tell you 
other than to say that this was a new program that started two 
years ago that we expected nobody to take advantage of. We are 
mailing well over a million payments. So I can't tell you that 
it has been done absolutely perfectly and smoothly during this 
time period. We are looking at the Missouri problem, and I 
don't have any more to tell you about the matter.
    Mrs. Emerson. Okay.
    Mr. Skeen. I would like to call a halt right here. Let us 
recess. We had the second bell on the vote. Let's all go over 
and vote and come back as quickly as we possibly can. With your 
indulgence, Mr. Secretary, we would appreciate it very much.
    [Recess.]
    Mr. Skeen. Mr. Secretary, we were trying to stay with the 
five-minute rule, but in this case we are going to let Jo Ann 
ask one more question; then we are moving on.
    Mrs. Emerson. I believe I was in the middle of just simply 
asking you to have your office let me know about that.
    [The information follows:]

                    Cotton Loan Deficiency Payments

    There seems to be a great deal of misunderstanding 
concerning those producers in MO who requested LDPs in advance 
based on the date that the cotton would be ginned. These 
producers signed form CCC-709 that clearly states that the LDP 
will be based on the date of ginning for cotton, and that 
producers may revise of terminate the agreement at any time 
before the subject cotton is ginned. Producers also have the 
option of designating a specific amount of cotton (or all 
production) to be covered by the agreement. Unlike other 
commodities, LDP's have been available for cotton since 1986, 
so LDP procedure is not new to cotton producers or to FSA 
county offices in cotton producing areas.
    We are currently working with the state and county office 
staff to get a clear understanding of this situation and are 
reviewing a request for relief from the Missouri FSA State 
Commmittee. We will give the request thorough consideration 
within our legal constraints. We expect to answer this request 
within three weeks.

                       limited set aside program

    Mrs. Emerson. The last question I had was to ask if you 
might be willing to support a limited set aside for farm 
program commodities----
    Secretary Glickman. For grain?
    Mrs. Emerson. Yes.
    Secretary Glickman. I do not have that authority under the 
current law.
    Mrs. Emerson. No, I understand, but would you be supportive 
of such an idea?
    Secretary Glickman. I would say this: I am not going to 
prejudge it, but that would be a monumental change from the 
1996 farm bill; there is no question about it. We need to sit 
down and talk about ways that we can improve the safety net.
    For the United States to unilaterally reduce production, 
unless the rest of the world goes along with us, we may not be 
able to accomplish very much in that kind of scenario. I have 
been thinking about this. I am looking at the crop reports and 
the situation doesn't look very bright in terms of stocks-to-
use ratios. In years past, we would have had a setaside under 
these circumstances, but we have, for example, in the area of 
corn, Argentina; China; and other countries coming into the 
market in a very, very big way. So if we set aside acreable and 
they don't, it doesn't affect the price, for all practical 
purposes.
    So I don't want to necessarily prejudge what we would do. 
We have kind of done it the other way, by trying to get more 
humanitarian assistance to the Russians, which we have done in 
the multimillion-ton area for needy countries.
    I do think there are some other things we can do. For 
example, I favor providing loans for on-farm storage. I don't 
think that farmers should be forced to market their crop just 
because they don't have any facilities to store their crop. I 
think we have encouraged farmers to dump their commodity 
because we no longer provide those kinds of resources.
    So I am willing to talk about a lot of different things, 
but just unilaterally setting up setaside programs, I don't 
think right now is a very good idea.
    Mrs. Emerson. Thank you.
    [The prepared statement of Congresswoman Emerson follows:]

[The official Committee record contains additional information here.]


    Mr. Skeen. Thank you. Mrs. DeLauro.

                        Statement of Ms. DeLauro

    Ms. DeLauro. Thank you, Mr. Chairman, and if you are 
responsible for the pistachios in my lunch, I say thank you 
very much. They are very good.
    Mr. Skeen. The tip was on me also. [Laughter.]
    Ms. DeLauro. Welcome. Welcome, Mr. Secretary. It is a 
delight to have you, all of you, with us today.

                              Food Safety

    This is a food safety question I am going to ask in this 
area today, but a little bit more topical. On an NPR report 
that I listened to early this morning I heard about a listeria 
outbreak at Bilmar Foods in Zealand, Michigan. Listeria, as I 
understand it, causes meningitis, serious and sometimes fatal 
infections in people with weakened immune systems, such as 
children and the elderly, and miscarriages and still births 
among pregnant women.
    In December, Bilmar recalled many of its hot dogs and 
luncheon meat sold to institutions. A month later, FSIS 
announced that additional Bilmar brands had been added to the 
list of contaminated products because it had been discovered 
that Bilmar had sold its products to supermarkets and retail 
stores as well.
    A couple of questions with regard to this, and, again, in 
general, surrounding the whole food safety issue is, why the 
gap between the two recalls? What can be done to prevent such 
gaps in the process in the future? Why did it take so long to 
decide to close the Michigan plant?
    Secretary Glickman. I don't know the answers to the 
specifics. I do know that today FSIS is holding a hearing on 
listeria. We have had a lot of attention on E. coli and 
salmonella.
    Ms. DeLauro. This is worse, as I understand it.
    Secretary Glickman. Well, certainly, we are seeing a lot 
more outbreaks of it, and particularly in smoked meats and in 
cured meats, the things that you would not have thoughtwould be 
the case. So they are holding a public hearing today.
    I would note that I do not have mandatory recall authority. 
I have to rely on the voluntary compliance of the companies. In 
most cases they do it fine. In some cases they, I think, need 
prodding. After all, the government can recall toys or it can 
recall electronic devices that are dangerous, and I don't have 
that authority. I think that would probably help. But I do not 
know enough to tell you about that particular case.
    Ms. DeLauro. If you can, I would like to know about that 
because there, again, apparently, this has been ongoing for a 
while with this particular company, which is a subsidiary of 
Sara Lee. We all know that Sara Lee is a name that people do 
trust, et cetera. There are lots of pieces here which get at 
the very heart of how we are trying to protect people. I don't 
have to tell you; your kids are eating and you just feel safe 
and secure with what you are doing, and then, in fact, the 
company can continue on while it is being investigated, thereby 
putting people in jeopardy.
    Secretary Glickman. We will get you a report by the end of 
this week as to what happened with respect to those recalls, so 
you at least know the time sequence.
    Ms. DeLauro. Thank you. Thank you, Mr. Secretary.
    [The information follows:]

                     Mulistate Listerioris Outbreak

    The Food Safety and Inspection Service (FSIS) pursued an 
aggressive approach to controlling the Bil-Mar listeriosis 
outbreak in order to contain foodborne illness. Working 
cooperatively with the Centers for Disease Control and 
Prevention (CDC), FSIS began its investigation on December 15, 
1998, upon receipt of information from CDC. This action led to 
an early recall by Bil-Mar on December 22, 1998, 2 weeks before 
contamination was confirmed on January 5, 1999. FSIS continued 
its inquiry and, as indicated by its investigation of another 
product unrelated to the original recall, the Under Secretary 
for Food Safety met to discuss these matters with industry 
officials on Tuesday, February 9, 1999, and the public on 
Wednesday, February 10, 1999.
    The recent listeriosis outbreak is a case where a 
relatively small percentage of the population was vulnerable 
and product was distributed quite widely. A new technology 
supporting this outbreak investigation is the FoodNet active 
surveillance system for foodborne disease, which is a joint 
effort of CDC, FSIS, the Food and Drug Administration, and the 
States. Through the 1998 President's Food Safety Initiative, 
FoodNet was expanded and this system allows the agencies to 
detect and respond more quickly to outbreaks of foodborne 
illness, and better identify trends in foodborne disease. In 
addition to FoodNet, we now have PulseNet, a computer network 
linking Federal and State agencies, which captures the 
molecular fingerprints of pathogens in a national database. 
Molecular subtyping of pathogens isolated from both humans and 
foods is important in helping public health agencies link 
specific products to specific human illnesses. Throughout the 
listeriosis investigation, our reliance on FoodNet and PulseNet 
resulted in an effective response to the outbreak.
    Following is a detailed chronology of events concerning the 
outbreak.


[The official Committee record contains additional information here.]

                    Small and disadvantaged farmers

    Ms. DeLauro. Another area, in your testimony you talk about 
how the administration is, ``also working hard to expand 
opportunities for small farmers and others who have been 
traditionally underserved in our farm program.'' If you could 
just briefly describe some of the programs that are available 
for small farmers and the benefits and assistance that they 
provide?
    Secretary Glickman. Okay. Let me, first, say that we 
created a National Commission on Small Farms to try to deal 
with a whole assortment of areas, from marketing to production. 
After one year, they gave us what I would say, is a passing, 
but mediocre grade, based upon our work to date. But the truth 
of the matter is that we are increasing our loans to small 
farms, and our technical assistance. We have created an Office 
of Outreach that deals with small farms. Certain areas like 
farmers' markets, organic agriculture, are areas where we are 
requesting increased funding because they are particularly 
useful for direct marketing, which smaller farmers deal with. 
Our technical assistance and our conservation programs are 
becoming in many respects much more small and medium-sized farm 
operations-oriented.
    I would tell you that, with respect to the entire 
Department of Agriculture, we have tried to instill in all the 
mission area leadership that smaller and medium-sized 
agriculture has to be a priority to them. This Department does 
a million different things--from loans to grants, to everything 
else within our jurisdiction. So I think we are ahead of the 
game from where we were last year.
    Let me also say this: We settled a very large case 
involving minority farmers.
    Ms. DeLauro. Right.
    Secretary Glickman. That settlement was the culmination of 
many, many years of people who felt that the Department in some 
areas had engaged in insidious discrimination. We are also 
making, in this context, a significant effort to try to help 
minority farmers get back into agriculture as well.
    Ms. DeLauro. What kind of marketing within the small 
farming community or getting the word out on those programs is 
going on, so that they know they can avail themselves of these 
kinds of new efforts?
    Mr. Rominger. As part of following up on the 
recommendations of the Small Farms Commission, we have a Small 
Farms Council now within USDA which is composed from people 
from all the mission areas, and every mission area has 
designated a Small Farms Coordinator, so that we can coordinate 
the programs. Those coordinators are working with the programs 
that their mission area delivers to get the message out. So we 
are working with places like the Center for Rural Studies, 
which is involved in giving us our report card.
    But that has all been part of the process, because when the 
Secretary set up the Small Farms Commission, we invited our 
critics to be involved and we put them on that Commission, so 
that they could give us their ideas. That is what we are 
following up on.
    Ms. DeLauro. This may be good information that Members can 
take because everyone is dealing with getting the word out--you 
know, newsletters, whatever it is that they do, to be able to 
be specific to people about what is available to them and help 
to carry that word, so that we are, in fact, getting people to 
avail themselves of some new efforts as well.
    A final question, if I can--if I don't have time, you just 
tell me, Mr. Chairman.
    Mr. Skeen. A quick one?
    Ms. DeLauro. Yes, it is just a quick one. Okay, thank you. 
You are wonderful.

                    Housing for migrant farm workers

    Migrant farm laborers often have inadequate health safety. 
We need to have clean housing, safe housing for folks. The 
statement was Rural Housing Service administers farm labor 
housing programs. Are we looking at really improving the 
housing provided to agricultural workers?
    Secretary Glickman. Actually, I took a trip withSecretary 
Herman to Florida, near Homestead, where USDA has built some migrant 
farm housing. It is some of the best in the country. Most of the 
migrant farm housing that is built is built by USDA, not by any other 
agency of government.
    I don't know what the dollar amounts we have asked for--
there is an increase, right?
    Mr. Dewhurst. Right. All of our farm labor housing loans 
and grants programs are increased under the budget for the 
Rural Housing Service.
    Ms. DeLauro. Okay, thank you very much. Thank you, Mr. 
Chairman.
    Secretary Glickman. And we have a coordinator of these 
programs within our Small Farms operation, Migrant Farm Worker 
Coordinator.
    Ms. DeLauro. Thank you very much.
    Mr. Skeen. And from the coordinator, we go to Mr. Walsh.

                         Statement of Mr. Walsh

    Mr. Walsh. Thank you, Mr. Chairman. I look forward to 
serving with you for another two years on this subcommittee, 
and Ms. Kaptur I think is certainly one of my favorites. These 
are important issues that affect all Americans. It is a great 
committee.
    We have got some nice additions to the committee. I would 
like to welcome Sam Farr, another returned Peace Corps 
volunteer. We're now up to two on the subcommittee. Sam, it is 
great to have you.
    Mr. Skeen. We are saved. [Laughter.]
    Mr. Walsh. There we go; still doing the Lord's work, so to 
speak.
    Welcome, Mr. Secretary, and all your capable staff. It is 
good to see you again. Mr. Dewhurst I am sure will be here 
many, many times this year. We welcome him also.
    I would just like to ask a couple of questions on dairy, 
and depending on how quickly they go, I will try one more.

                     federal milk marketing orders

    Last year, as you know, Mr. Secretary, the Congress 
extended the time for you to announce a reorganization of the 
Federal milk marketing orders. That decision is coming up 
pretty quick, between February and April. As you know, just to 
sort of frame the question, most of the Members of Congress, 41 
States, were in favor of option 1, but we did get the feeling 
that that wasn't your favorite. The intelligence or the rumor 
mill, whichever you want to call it, says that we may not get 
either one, but it will probably be a lot closer to option 1(b) 
than 1(a). I would just like to get your feeling on that, 
knowing what you know, that most of the country would be harmed 
by the 1(b) sort of option.
    Secretary Glickman. Well, as you know, we are in the midst 
of this process, so I am somewhat restrained on what I can say 
publicly. We haven't made a decision yet. We will meet the 
statutory guideline, which is April 4th. We have received 
extensive comments on this issue, and, quite frankly, they go 
all the way from support for option 1(a) without change to 
option 1(b) without change, to a lot of things in between and 
things outside those options.
    I worry about the fact that this decision will have an 
economic impact on people around the country. So we are going 
to try to be as fair as we possibly can, but then Congress will 
have a fairly extensive period of time to take a look at it 
after we are done. I think you will find that we have been 
fair.
    Mr. Walsh. Well, I think that is the key. The hope is that 
no one loses in this deal. But the concern is that there is a 
lot more losers under option 1(b) than option 1(a), and so we 
would ask you to consider that in your calculus on this issue.

                        northeast dairy compact

    Secondly, as you may know, New York State recently voted to 
enter the Northeast Dairy Compact. New York State is sort of a 
key State, in that a number of other States are then free to 
join, once New York does. As you also are aware, the South has 
voiced very strong support for a compact in that part of the 
country. So I would just like to get your thoughts on this new 
trend in dairy.
    Secretary Glickman. Well, of course, once the milk 
marketing order process is finished, the Northeast Dairy 
Compact terminates. Congress can decide to reauthorize the 
compact. All things being equal, I think we are better off 
having national policies involving dairy and wheat and corn, 
and everything else, rather than regional policies.
    I suppose one could also make the argument that milk 
marketing orders, in a sense, create a kind of minor compacts 
themselves, although the structure is not quite as rigid as a 
compact would be. I would hope that you would be satisfied, 
that people would be satisfied enough with what we have come up 
with, that you would not feel compelled to have to go to a 
whole series of national compacts, but that is an issue--
obviously. I approved the Northeast Dairy Compact as part of 
the 1996 farm bill on a trial basis, but the idea was that, 
hopefully, you will be satisfied enough with what we do in this 
milk marketing order reform, that you won't feel the need to do 
it again. We shall see.

                         national dairy policy

    Mr. Walsh. Well, I have been working on agriculture issues 
now for 10 years--the first 4 on the Agriculture Committee and 
now on Appropriations. National dairy policy is elusive at 
best. I see a lot of heads shaking around the room. It is a 
tough nut to crack.
    In New York, we are losing 10 percent of our farmers every 
year. A lot of that is economics; some of it is lifestyle, but 
a lot of it is the pressures on the price and on the land, the 
inputs. It is a difficult business at best. So they are looking 
for ways, and as good legislators, we are trying to respond to 
their needs.
    One other question off dairy for a second, it is on food 
safety. Do I have time for another one, Mr. Chairman?
    Mr. Skeen. Go ahead.

                            irradiated meat

    Mr. Walsh. The FDA passed judgment on irradiation of red 
meat over a year ago. We just talked about E. coli and 
salmonella and listeria. It seems to be in the news quite a 
lot. FSTS has not issued a rule defining labeling and 
operational requirements for irradiated meat. So question No. 1 
is: When will that happen? And No. 2 question is: What, other 
than stating of a policy of zero tolerance and doing product 
recalls, are we doing about these outbreaks?
    Secretary Glickman. Well, okay, first of all, we are 
supposed to be publishing the rule in The Federal Register. I 
can't tell you exactly when it is going to be, but I would say 
within 30 days maximum, hopefully, sooner.
    Mr. Walsh. That is in the record now.
    Secretary Glickman. just as I have said.
    Mr. Walsh. Okay.
    Secretary Glickman. I can't tell you exactly what it says, 
but it will be in conformity with FDA's rules. As I said 
before, I don't think there is any one cure-all for food 
safety, but irradiation is one of many things that can help.So 
that rule will be published fairly soon.
    There is a whole bunch of things being done. One is using 
good science and genetic mapping to be able to track illnesses, 
so that we can pinpoint a food safety problem instantaneously, 
before it becomes a national outbreak by doing genetic 
fingerprinting and mapping of, let's say, E. coli or listeria 
or salmonella. That is now being done all over the country. It 
is very expensive to do.
    In fact, I was at the University of Washington, which is 
one of the leaders in the country in doing this, and there are 
several universities that are part of a network, along with the 
Centers for Disease Control and USDA laboratories--the kind of 
reporting mechanism, tracking mechanism, that's a big part of 
the President's food safety initiative. It has kept some of 
these outbreaks from spreading like wildfire, and allows us to 
be able to identify the problems very early on.
    Our research budget is growing in the food safety area. One 
of the things that our scientists discovered was a spray that 
was used on young baby chicks within three days of their birth 
that could provide a 98 percent protection against salmonella 
at later stages of their life, maybe even higher, 99 percent. I 
think it is going to work. I think it could be a monumental 
effort to deal with this problem.
    I mean, our whole HACCP proposal, while it has been 
controversial--we have talked about this many times in the 
past--we are doing our best to work with these plants, and it 
is beginning to work. We are seeing some quantifiable evidence 
that there is a reduction in pathogens occurring.

                             haccp program

    Mr. Walsh. The irony is that there has been so much news 
about listeria, especially recently, at the same time that all 
the major plants are up online on HACCP now.
    Secretary Glickman. I have asked that question also: Why 
the increase in listeria? What is there with listeria that has 
created the increase? Because in listeria we are dealing with a 
lot of cooked products or precooked products, smoked products. 
As I said, FSIS today is having a public meeting on this 
subject.
    So, all I can tell you is that this is a broad 
governmentwide inquiry, but cooperative with industry. We are 
not fighting with industry as much as perhaps we did early on. 
I met recently with some of the major restaurant chains, and 
discussed how they are participating in the HACCP program. So I 
think it is a new day in terms of food safety.
    Mr. Walsh. Thank you, Mr. Secretary. Thank you, Mr. 
Chairman.
    Mr. Skeen. Thank you. Mr. Obey.

                         Statement of Mr. Obey

    Mr. Obey. Thank you, Mr. Chairman.
    Mr. Secretary, I don't so much have a question as just a 
number of brief comments. Then if you want to respond when I am 
over, I would be happy to hear what you have to say.

                           regional compacts

    Let me simply say, with respect to regional compacts, I was 
pleased to hear your comments. I find it ironic that some of 
the same forces in this country who tell us every day that we 
ought to be singing hosannas to the idea of open international 
markets are some of the same folks who are saying that within 
our country we ought to be erecting what, in essence, are trade 
barriers. I find that logic interesting and quaint, but not 
persuasive. I was happy to hear your comments on that.

                        cost-of-production data

    I would also note, I would like to thank you for how 
rapidly you implemented the publishing of cost-of-production 
data. My farmers have been frustrated for years that everybody 
knows what farmers get every month, but they don't have any 
idea what it costs them to produce that same product. And I 
appreciate the fact that you were quick in getting that out, 
once we included that in the appropriations bill.

                         milk marketing orders

    Thirdly, I would simply say, with respect to milk marketing 
orders, I have a great deal of respect for my friend from New 
York; he's a fine Member of Congress, but occasionally he is 
wrong on an issue. [Laughter.]
    I think he is on this one.
    Let me simply say, April 4, you mentioned that is the 
deadline for reporting the milk marketing orders. That happens 
to be the anniversary of my 30th year in Congress. So I hope 
you don't give me a lousy birthday present. [Laughter.]
    Secretary Glickman. Unfair. [Laughter.]
    We could do it the 3rd. [Laughter.]
    Mr. Obey. I guess what I would simply say is this: And I 
don't want you to comment on this because I know that you are 
in the middle of having to make these decisions, and it is not 
proper for you to comment. But we can, nonetheless, sound-off 
in public, I guess.
    I would simply say that in Wisconsin we could lose up to 40 
percent of our farmers within the next decade, if we have to 
compete against a rigged market price. In the Freedom to Farm 
bill, the idea was we would all move to free markets. God bless 
them, I hope that works, but I have great fear of moving into 
an era with no safety net.
    But if we are going to move into a free market, I think 
dairy farmers feel that is one thing. But if my farmers move to 
what is called a free market, but is really a rigged market, 
that, to my mind, is not rational. I would simply note that, 
when you did issue your initial regs for comment, I would note 
that this committee first tried to dictate a legislative 
outcome--by ``this committee,'' I mean the Appropriations 
Committee--and then when that failed, they did pass the six-
month provision, which, in essence, delayed your ability to act 
for six months. I believe that was a political act. The 
supporters of the status quo tried to send you a political 
message that, if you moved very much, they would shoot your 
tail feathers off and reverse you.
    I would simply say that I hope that the result of the 
rulemaking process will not demonstrate that they have totally 
won that ballgame. That is all I will say about it, given your 
situation.

                         safety net for farmers

    I would like to talk just a moment about two other things. 
I see a lot of headlines and I see a lot of people talking 
about the need to restore some kind of safety net for farmers. 
I hope that, if that comes to pass, that dairy farmers will be 
included in that proposition.
    The reason I say that is because, as you know, dairy 
farmers have been for a few moments getting record price for 
their milk, but that is changing very fast. The cheese market 
has fallen substantially, and people are talking about seeing 
prices in my area, for instance, that could drop by as much as 
$5 or $6 a hundredweight over a two-to-three-month period. That 
would be about a $750 million pay cut for America's dairy 
farmers. I think that we need to remember that they have 
already, in real dollar terms, since 1980,lost about half of 
their income, between 40 and 50 percent, depending upon whose numbers 
you use.
    I would simply note that and ask that dairy be included in 
any repair job, if we come to our senses and recognize that 
there needs to be some effort to take volatility out of all of 
the farm markets.

                  emergency funding for dairy farmers

    Then I would simply say, with respect to the $200 million 
that I was able to get in the budget last year for dairy 
farmers, I would hope that that money can be gotten out as 
quickly as possible, and that it will be targeted as much as 
possible to small- and middle-sized operators. I think the 
National Milk Producers made a good-faith effort to compromise 
with their suggestions, but, in my view, I would still prefer 
to see that targeting be somewhat more focused on low- and 
middle-income farmers and small farmers.
    That is about all I wanted to say. Feel free to comment on 
anything that you want to. I recognize you don't want to 
comment on the milk marketing order situation.
    Secretary Glickman. I would just make one quick comment on 
the $200 million program which you put in the appropriation. We 
are in the process of coming up with some solutions, and it 
needs to be done fairly soon, because prices are dropping.
    Mr. Obey. Right.
    Secretary Glickman. I think folks need to know those monies 
are going to be out there as quickly as possible. I would say 
that when we made the $50 million hog payment program, we did 
target that payment based upon size of operations. In fact, I 
was criticized because there were a lot of farmers outside of 
it, but we made the decision that we had a limited amount of 
money and it needed to go to small- and medium-sized 
operations. My belief is there is going to be some targeting in 
this program.
    Mr. Obey. I would hope so.
    I thank you, Mr. Secretary. I appreciate it. Thank you, Mr. 
Chairman.
    Mr. Skeen. Thank you, sir. Mr. Nethercutt.

                      Statement of Mr. Nethercutt

    Mr. Nethercutt. Thank you, Mr. Chairman.
    Welcome, Mr. Secretary and gentlemen.

                    export sanctions and free trade

    I want to follow up a little bit on your comments in your 
opening statement, Mr. Secretary, and also, Representative 
Emerson's comments about sanctions and free trade, and so on. I 
have a bill that I have introduced, H.R. 212, that lists 
sanctions for agriculture and medicine, subject to the 
imposition of a waiver or the imposition of the sanctions as 
designated by waiver by the President, if lifting those 
sanctions on agricultural products and medicine is a threat to 
national security. Whether it is 12 or 160, at least in my 
State, which exports 90 percent of our agricultural products. 
This bill would be a great assistance in attempting to get back 
the markets that we historically had an opportunity to access. 
Cuba, for example, we used to sell a lot of peas to Cuba, and 
Canada now does that. Iran is another country that we would 
sell wheat to in a minute.
    Again, I would hope that your Department would look 
carefully at that policy and be a champion for it, because I 
think, if you look at Freedom to Farm as I look at it, part of 
the structure of the Freedom to Farm approach to free market 
agriculture was that farmers would have markets to sell their 
products. I think this is a way to assist in that regard.
    The same with the TCK smut issue that you mentioned, I have 
been here for four years and I think I have asked you questions 
about this issue every single year. We don't seem to get any 
relief from China, either through our Trade Representative or 
because of their intransigence, probably a little of both, but 
I think your Department should take a lead to the extent that 
it can further push the opening of the China market at least on 
that issue.

                       wheat deficiency payments

    The third thing I want to mention is certainly club wheat 
issue that Jo Ann mentioned for her commodities in her State. 
Our State kind of got the short end of the stick on the club 
wheat, loan Deficiency Payment issue. The policy changed in 
August of last year, and our farmers had already sold and they 
are entitled to get some relief. I have received a letter back 
from your legal department basically saying, legally, we can't 
do it. So I am putting in a bill to see if we can't give 
affected producers some relief, along with Jo Ann's farmers as 
well.

                         agricultural research

    But I primarily want to mention to you, and get your 
response to, the issue of agricultural research, which is 
another killer of the success of the Freedom to Farm Act. I 
notice in the budget--and I haven't studied it extensively yet, 
but I have been studying it some--have seen that there seems to 
me a movement of agricultural research dollars to the 
nonproductive agriculture research as opposed to the production 
agriculture research sector. Some of the special grants that 
are criticized by some in my own party, who don't like that 
designation--I can justify it on the basis that Washington 
State is different than Iowa and they have different crop 
problems and disease problems. Therefore, special research 
grants, I think, are fully justified to meet the needs of the 
particular geographic areas of our country.
    Unless I am mistaken, $35 million has gone over to the 
national programs of significance, the global warming/carbon 
cycle studies, and that sort of thing. I would like your 
reaction to my argument, at least my premise under which I 
raised the question.
    Certainty of agricultural research for farmers and 
researchers is extremely important. I know it is a year-to-year 
budget that we go through, but there has got to be some 
certainty for the researchers to know that they are going to be 
in a location dealing with a five-year solution to an 
agricultural research problem.
    We fought the battle with you on the Prosser Research 
Station. The budget--and I don't blame necessarily all of you--
but the Office of Management and Budget knocked it out, and the 
same with Mandan, North Dakota, that affects Congressman 
Pomeroy. We put them back in. That allows some sustainability 
of research and attracts researchers in a day that we need 
experienced scientists to continue their research efforts to 
combat disease and improve yield.
    I don't know if it is your doing or if it is directed by 
the White House or the Vice President, or who ever it is, but 
$35 million of research for global warming, although it is 
important and there are other agencies of government that do 
that, takes away $35 million, as I see it, from the production 
agriculture side of research that really is felt by our 
farmers.
    So I would appreciate your comments.
    Secretary Glickman. Well, I think it is a good question. 
First of all, let's say we have an increase of about 8 to 10 
percent this year. We have a real increase overall in 
agricultural research dollars for the first time in--I don't 
know how many years but we have a real increase. Ithas been 
nearly 10 years. Most of those monies do go in the basic research 
programs.
    I would say that I do agree with you; we have moved some 
money from the Formula programs into competitive grant type of 
programs. That is always a bit of controversy. I am sure you 
will fight that battle here. It is not just this 
administration; others have done it.
    I would also say this: There are priorities that every 
administration focuses on when they get a little extra money. 
This administration has some priorities in the area. You may 
have differences of opinion on some of those priorities. I know 
that there is a lot of discussion about global warming, for 
example, and what should be the role, of our soil conservation 
experts to try to do the kinds of things to prevent carbon 
emissions in the atmosphere, those kinds of things.
    The best I can tell you is that we were able to get a 
fairly healthy increase overall, and most of the funding is 
going to be in areas that you are going to support. I think 
that research has been underfunded for many years, as a general 
proposition. I mean, we have a lot of advocates. The Deputy has 
been pushing a lot of these programs. A lot of the research 
programs do have specialty natures: methyl bromide 
alternatives. There is Mr. Farr's panel. How to comply with the 
FQPA--some of this is regulatory; some of this is research. 
Human nutrition is somewhat controversial, but, by and large, 
it is something the public is very interested in us providing 
monies for research on how to make foods more nutritious, get 
more vitamin absorption in order to help hungry people.
    You are going to have different priorities from different 
people on what you should do, but, by and large, I am hopeful 
that our program is general enough to allow us to do the basic 
type of research that we have been doing over the years that 
makes us so productive.
    Mr. Nethercutt. Well, I hope so, too, because it sends a 
bad signal if the Department of Agriculture indicates that 
agricultural research is expendable. I don't think it is 
expendable in today's world of trying to have the farmer be 
more independent.

                             food gleaning

    It gets to the food gleaning issue that you mentioned. I 
remember asking you the question a year ago on that subject, as 
to whether the development of this new program would be 
administration-heavy, and I remember your testimony was that 
``it is grants. It is all grants'', I think was what you said; 
at least the record indicates that.
    Now I understand that you have had communication with our 
chairman that there will be some special administrative costs 
totaling $890,000. I am wondering if that--again, then, that 
sends a signal back out that we want to use this food, and not 
waste it, but, yet, that we are creating a new bureaucracy that 
some of us feared a year ago, when we were sitting here. I know 
$890,000 is not $16 million, which is the roughly program cost. 
Yet, we don't want to see the administrative coats get bigger 
and bigger and bigger. My sense was we were going to 
administrative costs within existing resources. Is that the 
case or has this changed?
    Secretary Glickman. The goal of that program is to create 
community food security, so that towns like Spokane or Wichita 
or others can have the kind of resources to use their hunger 
infrastructure more effectively, either through gleaning or 
dehydration of food or other kinds of things.
    I cannot speak specifically about the $890,000, what it is. 
Steve, can you talk about that?
    Mr. Dewhurst. Well, the funding for that organization is 
now in the Research and Extension part of the budget. In fact, 
there was a piece of it that was in the Food and Nutrition 
Service. It shifts from one part of the Department to another; 
it is not really an increase over what we had in the past.
    Secretary Glickman. Part of it, to be honest with you, is 
that we consider this an Extension function as much as we 
consider it a Food and Nutrition function. We have the finest 
Extension network in the world. What they do is to get 
information out to people, and that is one of the reasons why 
we put the funding there.
    Mr. Nethercutt. All right, my time, I am sure, has expired. 
I thank you for your testimony and for your work. Thank you 
very much.
    Mr. Skeen. Thank you.

                            dairy assistance

    Mr. Secretary, on that $200 million you have in dairy 
assistance, I hope that it should be nondiscriminatory as far 
as size of operation. Is that pretty much the litany that we 
have been going by or not?
    Secretary Glickman. Well, that is part of the discussion, 
as to whether the $200 million applies to every animal produced 
everywhere in every part of the country on an absolutely equal 
basis, or whether we try to target those funds. The only thing 
I can tell you, Mr. Chairman, is when it came to the hog 
situation, we had about $50 million that, if we made it 
applicable to every hog in America, we would probably end up at 
10 cents a hog. I mean, it wouldn't have made sense--I don't 
remember what the exact amounts would be.
    But, anyway, the amount of money probably means that we 
have got to at least try to do what we can for those farmers 
who seem to be the most vulnerable.
    Mr. Skeen. You have gotten to the point where you use good 
discretion in your judgment, and that is what you have to do. I 
understand that.
    Of course, also, we had a word with you on the dairy order 
reform, on the dairy program which is option 1(a). I think we 
sent that message to you.
    Secretary Glickman. Yes.
    Mr. Skeen. Yes, sir? Received?
    Secretary Glickman. Received.
    Mr. Skeen. Fine.
    Mr. Hinchey.

                        Statement of Mr. Hinchey

    Mr. Hinchey. Thank you very much, Mr. Chairman.
    Secretary Glickman, it is a pleasure to see you. I want to 
join others who have congratulated you on the work that you 
have done during your tenure as Secretary. I think most of us 
admire it very greatly.
    Secretary Glickman. Thank you.

                            global problems

    Mr. Hinchey. Your tenure has also coincided with two 
serious global problems: one, economic, and the other climatic 
or environmental. I think that these two circumstances impact 
directly on the future of American agriculture and make the 
agricultural industry, which is always fragile, even more so.
    Are there any long-term programs that the Department has 
engaged in, or any long-term recommendations that you are 
making to the Congress and this committee, with regard to the 
anticipated impacts of the continuing economic crisis, which 
has now touched this hemisphere? Similarly, how are you 
planning to address the environmental crisis, which is 
causingthe disruption in weather patterns which you spoke about in your 
opening statement?
    Is there anything that we can do, anticipating these quirky 
global weather changes brought on by global warming, over the 
course of the next several years?

                         global change research

    Secretary Glickman. Well, there is an increase of about $35 
million for global change research. I recognize that this is 
controversial in some sectors in agriculture, and there are 
some people who do not believe that this is a real problem. I 
disagree with them. I think it is a real problem. I think it is 
worth doing the research necessary to do the prediction and 
interpretation, to understand what changes in climate, if they 
are, in fact real, will cause with respect to drought, pest 
infestation, productivity of crop.
    Today there was a report which says that we may be seeing a 
situation fairly soon where yields will be moving up in the 
northern part of the United States and moving down in the 
southern part of the United States, because of just very, very 
minor temperature changes. Whether it is part of a big pattern 
of a thousand years or something shorter, whether it is 
something we caused because of too many cars, or whether it is 
just part of the natural order of things, we need to know about 
it. Agriculture is more affected by the changes in the climate 
than any other part of the American economy. This is like, 
frankly, a fairly small amount, when you consider the potential 
impact on the world.

                             biotechnology

    Let me just mention another thing, and that has to do with 
biotechnology. A lot of our research is in the area of using 
biotechnology. By and large, I believe that biotechnology gives 
us a way to feed a hungry world using less pesticide, less 
insecticide, less water. It also involves technology that must 
be used very carefully; otherwise, we could get into a 
situation where, through patent rights, one person owns it all. 
We have to ensure that there is some equity of ownership in the 
process.
    But biotechnology offers another way for agriculture to 
cope in a world where there are major climate or ecological or 
environmental changes. We should not be shy to continue to do 
that kind of research as well.

                         economic dislocations

    The third thing is the economic dislocations. You know, all 
I can tell you is that you have got to have farm programs that 
shield people during times of major economic dislocations. I 
think we thought the 1996 farm bill was written when we were 
going to be dealing with a world that would be growing forever, 
and it is growing, but there are some problems associated with 
it.
    Mr. Hinchey. I would agree with you. I think that these are 
probably the two largest problems faced by agriculture today, 
and both were unanticipated by the 1996 Farm Act, certainly. 
They are impacting our agricultural production system very 
heavily, and give every indication that they will continue to 
do so for the forseeable future.

                             crop insurance

    Secretary Glickman. That is another reason why crop 
insurance is so critical. The Deputy just mentioned to me--and 
he is right--that agriculture is the most uninsured part of the 
American economy. Interestingly, livestock is the most 
uninsured part of agriculture. You really can't buy insurance 
for this area, for all practical purposes.
    How do you cope with changing weather problems on a year-
to-year basis? Really, that is something that we have got to 
work together on to try to address, and it is going to be 
expensive. It cannot be done on the cheap, but I think it can 
be done cheaper than a $6-billion-a-year disaster program.
    Mr. Hinchey. Well, it certainly can be done cheaper if we 
move now to anticipate it and take actions to be ready for 
these things than if we just let events take their course and 
be caught unaware and off guard. I think that is the real 
danger, and therein lies the real expense as well. It is going 
to cost us a whole lot more in the long term if we don't take 
some prospective action now, anticipating these problems, 
because they are right in front of us.
    Ms. Kaptur. Will the gentleman yield?
    Mr. Hinchey. Yes, I will.
    Ms. Kaptur. I just want to apologize to my colleague, but I 
just wanted to add a little addendum here on the crop insurance 
issue or risk insurance. Probably one of the more interesting 
people I have talked to in my life on that question is the 
Chairman of the Federal Reserve, Mr. Greenspan, whom you would 
think would not have thought in his life at all about crop 
insurance, but began his career in the Chicago futures market.
    So I would just say to the Secretary, if you are looking 
for an interesting lunch sometime--[laughter]--why don't you 
call him up? Believe me, it will be worth your time.

                         agricultural research

    Mr. Hinchey. The issue of research is one that I think is 
very important. I noted in your testimony, and in response to a 
number of questions, you said that you are asking for an 8 and 
10 percent above last year's budget, but that, for some period 
of time in the past, there has been no increase in research. 
That area of the budget has been in suspended animation.
    First of all, I wonder if 8 to 10 percent is enough and if 
we ought to be doing more in that particular area. I can't 
think of any area that is more important, perhaps except for 
the ones we just mentioned, with regard to the future of 
agriculture.
    Secretary Glickman. I have to live by the budget we 
presented, and my own personal view is that we underfund 
research generally in this country, not simply agricultural 
research.
    Mr. Hinchey. But is it 8 or 10 percent that we are 
anticipating?
    Mr. Dewhurst. We have used both numbers. [Laughter.]
    It is 8 percent increase from Fiscal Year 1999. We got a 
one-time appropriation in Fiscal Year 1999 for some anti-drug 
work in the Agriculture Research, about $27 million. If you 
take that out of the equation, because it was a one-time 
appropriation, it increases about 10 percent in everything 
else. So in the real world it is a 10 percent increase in our 
ongoing research program.
    Mr. Hinchey. I hope that we can at least provide that 
amount in the budget for you.
    If I may, Mr. Chairman, just one other thing--the issue of 
food safety has been addressed. I am wondering to what extent 
the issue of food safety boils down to the question of visual 
and manual inspection on the line in theseagricultural 
production facilities. I am thinking particularly of meat production 
facilities.

                              food safety

    My recollection is that we have been moving from a system 
where FDA inspectors were out there on the line to assist the 
processors, to one, where inspectors employed by the entity and 
conducting the operation are doing more and more of the 
inspection.
    My first question is: Is that true? And if it is, is that 
something we ought to be encouraging?
    Secretary Glickman. Okay, no, it is not actually true. 
First of all, the inspectors are part of FSIS, Food Safety 
Inspection Service. The FDA does not inspect meat and poultry; 
we do.
    Second, since the Federal Meat Act was enacted, we have 
done what is called carcass-by-carcass inspections. The product 
goes across the line and inspectors look at the product, make a 
visual inspection, and use their senses to make sure that the 
product looks okay.
    Mr. Hinchey. Are they government employees?
    Secretary Glickman. They are government employees. What we 
have found is that in some countries they do not use government 
employees. We do use government employees. We are not talking 
about using industry's, own employees do the inspection on the 
site.
    However, with the HACCP program, we are going to more of a 
science-based system, where they will do more testing. Some of 
that testing may be done by the companies with FSIS review of 
the test results, but we will still have our inspectors there 
doing the inspections, and much of that will still be carcass-
by-carcass inspection. But some of these pathogens can't be 
seen by the naked eye. Some of them can be.
    Quite frankly, we have had some labor-management problems 
within the organization because of this, but I have tried to 
make it clear that this is not an effort to reduce the number 
of inspectors at all. We need everybody we have got in order to 
be there. They may be, in some cases, doing different things 
than they did before.
    Mr. Hinchey. Thank you, Mr. Chairman.
    Mr. Skeen. Thank you, sir. Mr. Bonilla.

                        Statement of Mr. Bonilla

    Mr. Bonilla. Secretary, once again, welcome. It is as 
always been a pleasure to work with you over the years. We 
wonder sometimes, as I asked you earlier, if you miss us 
sometimes, but I doubt you do. [Laughter.]
    Secretary Glickman. The last three months I haven't missed 
it at all. [Laughter.]
    Mr. Bonilla. We have a lot of tough issues to deal with, 
and I just want to mention--I don't want to really get into 
crop insurance right now, but you alluded to it a minute ago. 
That is going to be a big problem we all have to deal with, and 
we will talk more about that later.

                      livestock assistance program

    I wanted to start out asking about the Livestock Assistance 
Program. Last year, as you know, as we were getting an 
emergency bill together there wasn't a lot of money in that 
bill at first for livestock assistance. I worked very closely 
at the time with not only Joe Skeen, but Chairman Smith at the 
time, to get that number up to $200 million.
    We appreciate how the Department has streamlined and 
simplified this program to get people signed up. Of course, the 
problem is that the deadline for signup keeps getting extended 
over and over again, and those who signed up earlier are still 
waiting and wondering when the deadline is going to be a true 
deadline, and they can start getting some of the money, because 
these folks have been hurting for a long time now.
    So my question is: When will the deadline be a true 
deadline to sign up, so they can start seeing some of the 
money?
    Secretary Glickman. The signup started in November. I am 
not sure we have any plans to extend the signup. We have not 
cut it off, however. It is still going on.
    As you know, there is $200 million in funding for emergency 
feed assistance. The end of the signup has not been announced 
because the regulations are still in clearance. We think that 
we should have close to the amount needed to meet claims at 
traditional payment rates of between 25 and 50 percent. This is 
what we have done in this program before, but we have not 
announced the payment rate yet because we haven't seen what the 
total signup is.
    Mr. Bonilla. That is what I am referring to----
    Secretary Glickman. Yes.
    Mr. Bonilla [continuing]. Because that cutoff deadline, 
apparently, you are waiting for that to be implemented.
    Secretary Glickman. I understand the Farm Service Agency 
reports that claims at the end of January totaled $437 million, 
with additional claims expected. The program covers 1998 
calendar year losses, mostly for drought losses from the South. 
Texas accounts for $160 million so far of the gross claims.
    The best I can do is to try to get back to you and tell you 
when we think this will close.
    Mr. Bonilla. Can you get me the final dollar figure?
    Secretary Glickman. The final dollar figure. It may be 
that, if we have more in claims, then those allocations are 
going to have to come down some, in which case this is 
something you may want to consider in terms of----
    Mr. Bonilla. A supplemental?
    Secretary Glickman [continuing]. A supplemental or 
something.
    Mr. Bonilla. We will be happy to do that, but at some point 
some of these folks----
    Secretary Glickman. You need to have more information.
    Mr. Bonilla. We need money out there.
    Secretary Glickman. You need to know where you are.
    [The information follows:]

                      Livestock Assistance Program

    Sign up for the Livestock Assistance Program opened 
November 23, 1998. The end of the signup period has been 
extended pending publication of regulations for the program. 
USDA expects to publish final rules early in March and close 
signup by the end of the month. The current estimate of loss 
claims totals about $800 million. Current funding of $200 
million would be sufficient to reimburse producers with a 25 
percent payment rate, less than the payment rate of 50 percent 
used in the Livestosk Feed Program until 1996, or the 30 
percent factor generally used in livestock assistance programs 
since 1996. Based on the current estimate of loss claims, 
additional funding of $40 million would be needed to provide 
payments at the 30 percent factor.

                       Wool and Mohair Producers

    Mr. Bonilla. Also, related to that, my wool and mohair 
people, I am glad Joe Skeen mentioned them earlier, because, 
along with the pork people, they are in bad shape. They haven't 
sold any product in three years now. We had the recourse loans 
that were extended to them last year in the Omnious Bill. We 
have been checking with your office regularly to find out when 
the folks can sign up for the loan. We understand that the pork 
prices took a lot of manpower out of USDA, but we feel that, if 
we could just give them a tenth of the attention that the pork 
producers have received, we could get these loans in their 
hands as well.
    To compound their problem out there--and I know this is a 
different area--the oil crisis in many of these areas in west 
Texas has pretty much broken a lot of the communities. So they 
could really use the help.
    Secretary Glickman. Actually, I am scheduled to meet with 
the American Sheep Industry Association this afternoon. I am 
sure this will be part of the discussion.
    Mr. Bonilla. Well, we don't want to hold you up, then. 
[Laughter.]
    Mr. Skeen. No, he can go now. [Laughter.]
    Secretary Glickman. My paper says our best guess is the 
rules are in simultaneous clearance, and they have been 
virtually cleared. OMB will have a month to clear the rules, 
but they have been provided with an advanced copy and will 
likely clear the package quickly. My best guess is that in the 
next two or three weeks these will go to The Federal Register.

                         AGRICULTURAL EDUCATION

    Mr. Bonilla. Okay, and I am glad you are having that 
meeting today because they will probably be asking you some of 
the same things I am asking you right now.
    I want to move now to the area of education. The disaster 
package was passed to keep farmers farming and our ranchers 
ranching, it was an investment in the future of agriculture. I 
am interested in what kind of efforts and commitment USDA has 
put into the long-term future of agriculture, specifically 
education. We have about 800,000 students sitting down in 
classrooms across the country every day trying to get involved 
in this profession. Someday they may want to be working for 
USDA and pushing some of these initiatives.
    With all of the information and technology that you have, I 
want to know what you are doing to get this information in the 
hands of instructors out there. What contributions has USDA 
made to school-based agriculture education? I believe a report 
on this matter was requested in our last bill, and the 
Department of Education is waiting for some of this information 
to move into their hands.
    Secretary Glickman. Of course, it starts all the way from 
the bottom. We have an Ag in the Classroom Program, and the 
States have been involved in helping fund that particular 
effort. But, largely, this is done through the land grant 
schools and our Extension system. In addition, we have put some 
money in our rural development budget into distance learning, 
telecommunications, in order to allow rural areas to be served 
by the information superhighway and to be able to allow 
teleconferencing, distance learning, and telemedicine 
techniques to be done in rural areas, small towns, just as much 
as urban areas.
    Now I may not be quite answering your question. What other 
kinds of things are you talking about?
    Mr. Bonilla. We are talking more about at the high school 
level versus the college level. That is what the report 
language asked for, a little summary about any initiatives in 
this area.
    Mr. Dewhurst. What has happened is that the Department has 
been working with the Department of Education to create 
guidelines for high-school-level agricultural education grants. 
The work is about done. There is a request for proposals, which 
will invite proposals from schools and from teachers who engage 
in these activities. We expect to publish that request for 
proposals in the early spring; that is, in the next month or 
two, for implementation next year.
    So the activities that the report had in mind are 
happening, but I think what we need to do is provide you with a 
much more complete report on where all this stands.
    Mr. Bonilla. So can you do that fairly soon, do you think?
    Mr. Dewhurst. Yes, sir.
    [The information follows:]

[The official Committee record contains additional information here.]


                         FSA PAPERWORK PROBLEMS

    Mr. Bonilla. Okay, another question I have, Secretary, 
deals with FSA. Some of the ranchers have been calling, when 
they are applying for loans, and so forth, and talking about 
the paperwork and the requirements sometimes. They are asking 
for, for example, the birth weight, weaning weight, and selling 
weight of calves. I know they have to answer a lot of these 
questions, but, as you know, when a calf is born, they are not 
waiting there with a scale to see what it weighs, and 
sometimes, if they don't have this information, this can tie up 
the business they have with FSA. Have you heard about this?
    Secretary Glickman. I haven't heard about this particular 
issue. I have heard about other paperwork problems. Over the 
years, the Farm Service Agency and its predecessor, ASCS, has 
been a very top-down, paperwork-oriented type of agency, you 
know, proven yields, historical acreage requirements, etc. We 
are trying to get away from that the best way we can and give 
our county offices and our State offices a lot more flexibility 
in some of this. But I have not heard about that particular 
case.
    Mr. Bonilla. I would appreciate it if maybe we can 
communicate with you about that, to eliminate some of these 
silly things that might hold up some of the loans.
    Do I have remaining time, Chairman? Can I just make a 
closing statement?
    Mr. Skeen. Go ahead.

                   AMERICAN HERITAGE RIVER INITIATIVE

    Mr. Bonilla. I am going to, I guess, put into writing some 
questions I have about the American Heritage River Initiative. 
We talked about that last time. I know it is not your idea, but 
I know that USDA has started to get involved in that. My 
questions will center on how much money is budgeted exactly, 
how much in last Fiscal Year, how much in the upcoming Fiscal 
Year, and things along that line, because I am really trying to 
track this.
    A lot of my farmers and ranchers are very concerned about 
whether or not this initiative might infringe on property 
rights, as you know. So we just want to keep an eye on that.
    Thank you, Secretary.
    Secretary Glickman. Thank you.
    Mr. Skeen. Mr. Farr.

                         Statement of Mr. Farr

    Mr. Farr. Thank you, Mr. Chairman. I am really excited to 
be on this committee, and I want to thank you and Marcy Kaptur 
for your leadership. I moved over from the Agriculture 
Committee, and I learned there that agriculture is people, and 
that all agricultural politics is local politics, because 
everybody represents something different in agriculture around 
this great country.
    This budget, as I have been reading it--and I love having 
these explanations; we don't get that in the policy 
committees--I find it very exciting, it gives us an opportunity 
to really do a lot more with existing money. As I read it, I 
see from my experiences at the State and local level that there 
is a lot more coordination/collaboration that we could do, and 
I look forward to working.
    I have three questions really with the time that is 
allotted me: one on disaster, one on research, and one on rural 
housing.
    The disaster question--and I think we have got a really 
talented group here. It's rare that you have a former Member of 
Congress and a former Director of Agriculture of the biggest, 
most diverse agricultural State in the Union, as Rich Rominger. 
I think it is exciting to have them interact with us as we go 
through this exciting opportunity.

                          DISASTER ASSISTANCE

    The disaster assistance is really--what is the status of 
the implementation of last year's disaster bill, and is there 
really enough money there to get to the farmers? Do you think 
it has responded to the needs which came about in this last 
disaster that we had?
    And while I am on that, there has been a question that, the 
disaster law relates to the day and moment of the disaster. 
That disaster happened in 1998, but the fruit that was on the 
tree, particularly for citrus, Valencia oranges, summer lemons, 
grapefruit, and so on, those trees will be harvested in 1999.
    Is there ability to provide assistance to those crops if we 
find that they are going to have a disaster at time of market?
    Secretary Glickman. Okay, well, first of all, I want to 
make the following comments: One is the appropriations bill had 
about $6 billion in budget authority for disaster. Out of that, 
the market loss payments, basically, what I call the 
supplemental payments, of $2.8 billion were distributed within 
three weeks after passage of the bill. So there were several 
hundred thousand payments that went out almost instantaneously. 
These were the people who were already getting payments, and 
they got about a 50 percent increase in their payments. That 
was done before Thanksgiving.
    The rest of it is about $2.4 billion, and the signup began 
on February 1 for the disaster program, and then, out of that 
$2.4 billion, $400 million is being reserved to reduce crop 
insurance premiums.
    So would that mean we would have about $2 billion for 
disaster payments? The assistance you mentioned would be 
handled within that figure.

                             CROP INSURANCE

    Mr. Farr. What is your experience of the percentage of the 
industry that is in the crop insurance program? A lot of these 
specialty crops don't get into it.
    Secretary Glickman. More and more are getting into it. 
Perhaps the Deputy might know--one of the goals of our 
proposals is to try to get an additional group of people into 
crop insurance who were not otherwise there.
    Mr. Farr. And then the NAP Program, which allows for those 
who aren't in the program, there are caps on that that 
virtually exclude growers in California from being able to 
participate.
    Secretary Glickman. That is correct. Let me just say that 
in connection with the California crop, much of the California 
crop under the freeze is covered under that 1998 bill. Some of 
it is not; most is. The Deputy has been out there and is more 
familiar with that than I am.
    But we are operating within the guidelines that Congress 
provided when they passed the bill.
    Mr. Farr. Perhaps what, I guess, it gets down to--and my 
staff can work with you--we need to tell the citrus industry of 
1999 what might be available, left over from 1998, that still 
applies to them, because these are usually measured, you know, 
like crop losses, what is your income from last year versus 
your income from this year, and market variation, and all that.

                        METHYL BROMIDE RESEARCH

    The second question is a research one, and it goes to 
methyl bromide. An always controversial issue. We have been 
appropriating about $14-plus million a year for methyl bromide 
research. The farmers are more and more frustrated that they 
see that money or hear about the money, but never have it 
trickle down. I am going to really be watching closely how much 
the Department has been really working to get that into the 
field for pre-harvest and post-harvest, rather than, as I 
understand, a lot of it went to structural alternatives for 
fumigation of houses and things like that. That is not the 
direction Congress intended this move to be used.

                            ORGANIC RESEARCH

    My third question is in regards to organic agriculture. You 
mentioned the number, the 285,000 comments that you received, 
but what I understand, you have got $131,000 in this budget for 
one staff year to continue to implement the proposed rule. It 
seems to me that that is a one-day job. You have the comments; 
you had all the rules; you knew which parts of the rules were 
controversial. Why don't you just eliminate the ones that were 
controversial, bring the whole package back, and get it done? 
Why is it going to take so much time to do it? And in the 
process of getting it done, then you have got to go through OMB 
again.
    Is there an ability to squeeze this? I mean, we have been 
there. We don't have to reinvent the wheel on this rule.
    Secretary Glickman. Well, the problem is that there were 
controversial parts of this rule: whether genetically-
engineered organisms should be included, whether sludge should 
be in there--and other issues. There are dozens and dozens and 
dozens of conflicts that still remain on certification, who 
does it; who pays for it; what is the role of the States; what 
is the role of the Federal Government? I wish we could get this 
thing solved overnight. I think we are going to get it done.
    Mr. Farr. Well, if those rules had been adopted and the 
comments weren't there, those are the same issues you would 
have had to implement them.
    Secretary Glickman. We would have had them anyway, but they 
were, frankly, pushed in the background by some of these high-
profile issues. Quite honestly, if I had it to do all over 
again, I wouldn't have put them in the rule; we asked for 
comments on them. The fact that we asked for comment on them 
led people tobelieve that they were going to be in the rule.
    But my belief is that we will have an organic rule out--I 
have told our folks--this year. At least we will have a rule 
proposed this year that will go to OMB, and hopefully, we will 
have something done this year. I can't guarantee you that, but 
that is my goal.
    Mr. Farr. Can you get OMB involved in this dialog ahead of 
time? They were part of the problem last time.
    Secretary Glickman. Yes.
    Mr. Farr. And it seems to me we just go back and reinvent 
the problem. You take another year; you edit it; then you go 
back to OMB, and then they come back to you, like they did last 
time--I mean, the law was adopted in 1990 and we are still 
waiting for implementation.
    Secretary Glickman. I voted for that act.
    Mr. Farr [continuing]. And we don't even have a rule yet.
    Secretary Glickman. I had hair when I voted for that. 
[Laughter.]
    Mr. Farr. This industry is growing. It is a $4 billion 
industry, and it is growing at 20 percent a year. I mean, this 
is just taking off, and we don't have any way of having a rule. 
It is ridiculous.
    Secretary Glickman. Hey, I just recorded your comments, and 
we are going to take them back to our people. I mean, the truth 
of the matter is that we ought to be able to get this rule out. 
I can't tell you it is going to be tomorrow, but we ought to be 
able to get this rule out this year. It can be done.
    Mr. Farr. Well, I am going to make sure that that $131,000 
is really going to get that rule out, because that is a lot of 
money for something we have not been able to accomplish in the 
last nine years.

                             Rural Housing

    The last question, rural housing: Would you please examine, 
have your staff examine, the law that puts the caps on this 
rural housing? It seems to me that there are caps saying that 
it can only go to what rural cities are. Rural cities are small 
cities, and right now what is happening, particularly in States 
like California, where you are trying to protect agricultural 
land, you are trying to encourage people to live in cities, and 
therefore, those cities are growing bigger, and some of them 
exceed the caps of, I think, 20,000 population for a rural 
city. We now have farming communities that are a hundred 
thousand people.

                          Farm Worker Housing

    Also, examine--I think the regulations limit it to farm 
workers per se, and most of the specialty crops cannot get to 
market without going through canneries or processors. What you 
will find is that the same people who are harvesting the 
fields, there are thousands that are working in the canneries. 
They are still farm workers, but they are not called that in 
Federal law. Therefore, they are precluded from living in 
housing which is much needed.
    So I would ask your Department to look into the caps that 
are on this and see what kind of coordination you can also have 
with HUD. I think it is ridiculous that USDA goes out there and 
builds standalone housing. I don't think there is any other 
agency that does that anymore, except the military.
    All housing is being built with collaboratives, and you 
have HUD out there trying to do housing, except they don't do 
rural housing and they don't do agricultural housing. Yet, 
housing is housing is housing, and the people that live in it 
have to depend on all the other services that we provide. It 
seems to me, I think we can get a better bang for the buck if 
we could team up with HUD. They're putting these economic--you 
know, the same communities that would qualify for farm worker 
housing often qualify for Rural Economic Enterprise Zones. So 
there are other Federal dollars in there doing a lot of other 
things.
    This is an area, you heard Rosa DeLauro talk about it. I am 
very interested in it. I think most of the members of this 
committee have people who are in agriculture who need places to 
live, and the cost of living in these communities is too high 
for them to afford housing. So they are on the streets, 
sleeping in their cars.
    Secretary Glickman. Can I just ask you a question? Are you 
referring to farm worker housing? Or are you referring more 
generally to rural housing programs?

                      Migrant Farm Worker Housing

    Mr. Farr. Well, I think, frankly, it is very difficult to 
just put people in a category, and we have done that, saying, 
your housing--as I understand it, for migrant--part of it is a 
migratory policy, and you only live in the housing so many 
months of the year and then you have got to leave, which is 
ridiculous. You shut down much-needed housing during the 
wintertime. So these people have to find someplace else to 
live.
    I just met a man who has triplets born in a labor camp in 
California, raised in a labor camp. They are all American 
citizens. They all got scholarships. He is a farm worker. He 
doesn't speak English. He had to go back to Mexico during the 
time that the labor camp was closed, and he had to leave his 
daughters, with relatives, so that they didn't have to go back. 
These are incredible, remarkable kids that have grown up their 
entire life in labor camps, beautiful people.
    But some of these policies we have developed just don't 
make sense for humanitarian and for economic reasons. So I am 
suggesting that, if we could look at farm labor housing, the 
housing that you are authorized to build, and look at some of 
the caps and restrictions on there, and see if we might be able 
to have this committee remove some of those, or give you more 
flexibility, so we can get a better bang for the limited buck--
--
    Secretary Glickman. I think that is very appropriate. We 
will look at the issue of the caps, as well as on the farm 
worker housing issue. I did make a trip down to Homestead, 
Florida to visit a pretty good piece of housing that we built 
for migrants, but it is, frankly, disgraceful that so few have 
been built around the United States. And the regulatory 
requirement may be one of the reasons.
    Mr. Farr. Well, I think you could get more collaborative 
building, and you wouldn't have to just do it yourself.
    Thank you very much, Mr. Chairman.
    Mr. Skeen. Thank you. Mr. Kingston.

                       Statement of Mr. Kingston

    Mr. Kingston. Thank you, Mr. Chairman.
    Mr. Secretary, you gave a speech to a group, January 12. I 
can't remember who it was, but I have read the speech three 
times and I think it was a good speech. So I commend you on 
that.
    Secretary Glickman. Do you know who it was to, Mr. 
Kingston? [Laughter.]
    Mr. Kingston. I think it was the Farm Bureau. In good 
congressional fashion, I cited you in the first speech; the 
second speech said ``someone,'' and the third speech I prefaced 
the remark with ``I've always said'' the following. [Laughter.]
    But it was a good speech. You touched base on a lot of 
topics.

                          Long-term Financing

    I want to move to long-term financing. Monday I was with a 
mom and dad and a 30-year-old son who was hoping to inherit the 
farm, and they missed their E&M. I don't know why they did, but 
they missed it, the deadline, and if they don't get some long-
term money, they are gone. They have been farming since 1959. 
Ironically, I got in my car after meeting with them and got on 
the phone to a large farmer who had called me, and he had the 
same story.
    What are we going to do about long-term financing for 
farmers? I realize it is nothing that you haven't done; it is 
something that we collectively haven't been able to figure out 
where we need to go.
    Secretary Glickman. Well, you're talking about farm 
ownership loans, farm operating loans?
    Mr. Kingston. Yes.
    Secretary Glickman. To be perfectly honest with you, 
Congress has been pretty responsive in providing us the dollars 
that we have requested over the years. The problem we have had 
is the agricultural economy has been shaky, and so the use of 
the traditional lending mechanisms have not been as effective, 
and so they have come to us to either guarantee these loans or 
to provide direct loans. It has exhausted our funds.
    One of the reasons probably that this particular family was 
late was because they just probably assumed that we would have 
the money, and we didn't. We ran out of money, and the deadline 
took place.
    So, in terms of financing in agriculture, it has got to be 
based on profitability. That is one of the reasons why we 
talked today about the farm safety net. For a lot of the people 
who have survived, it is important for them to have a lot more 
predictability of income than they have had before. The 
government can't guarantee that, but we can provide some 
options.
    Just for example--it is a little bit off your question--but 
farmers' markets, have grown exponentially in the last 25 
years. We have found that farmers' markets can provide a 
powerful source of income for people who live reasonably close 
to suburban or urban areas, and are able to market their 
products directly. But they have to be encouraged. A lot of 
them need to know how to do it, and our Extension office has 
been involved in this kind of thing. We have had a lot of cases 
of people who have been on the verge of going out of business, 
who have been able to stay in business by direct marketing.
    You talked about use of cooperatives. We do have increased 
funding for that.
    Somehow we have to provide a higher base income level for 
producers in order, then, to justify the lending for long-term 
financing.
    Mr. Kingston. Well, you know, you already here have pointed 
out, when the price of a tractor has gone up from $20,000 to 
$90,000, and the corn has fallen, and soybeans have fallen, 
and, of course, hogs are at the lowest in three decades--you 
feel sorry for these guys, but you don't know where to turn, 
because it is not necessarily profitable. But I sure hate 
losing all the mom-and-dad farmers.

                          Palmer Drought Index

    One thing that came up in Georgia during the drought was 
the Palmer drought index. It seems to be inconsistent and not 
adequate for the needs of our farmers. We had written a letter 
to Kenneth Ackerman at Risk Management about it. We need 
somebody to help us get some answers on that. Can I work with 
somebody in your office?
    Secretary Glickman. Yes. Did you not get a response yet?
    Mr. Kingston. We have not. December 17, and we are still 
waiting. There is a big problem----
    Secretary Glickman. We will get you a response. I don't 
know enough about the details.
    [The information follows:]

[The official Committee record contains additional information here.]


    Mr. Kingston. Yes, and we had areas that did not get any 
rain, but, according to the Palmer drought index, they did not 
have a problem. So it seemed to just be universal amongst our 
Georgia farmers that it is a huge problem; yet, in other States 
it wasn't.

                             Crop Insurance

    Also, crop insurance, I know you touched on that. We are 
all united, I think, on some sort of crop insurance reform.
    In the past, the USDA, I believe, has had some tax credits 
for irrigation equipment. I think in the disaster bill we tried 
to put something in there. I don't know if anybody remembers 
that.
    Maybe we could look at that, plus, surface water 
assistance, so we could help with the construction of ponds. 
What is happening on that bill? Or what can we do, again, 
together, to make something happen?
    Secretary Glickman. Well, I don't know; the Deputy reminds 
me that the Energy Department had a program----
    Mr. Kingston. To help with more efficient equipment?
    Secretary Glickman. More efficient irrigation equipment.
    The NRCS is involved in a variety of activities involing 
both capital construction and technical assistance on some of 
these areas. Perhaps we could send somebody over to your office 
to talk specifically about what we intend to do.
    Mr. Kingston. That would be great, because we would like to 
look at irrigation equipment, but we would also like to look at 
surface water retention, pond construction, and also farming 
equipment, because we think that that would help a lot.
    You also mentioned hogs. I appreciate the $50 million. It 
wasn't enough. We need, I guess, to all be aware of that.

                         Surplus Food Recovery

    We passed the Emerson bill in 1996, which you supported, in 
terms of surplus food going to food shelters. Now I understand 
that we may need to go back to the Emerson bill and expand it, 
increase participation more. Have you heard from many of 
homeless shelters or food banks about that?
    Secretary Glickman. Well, I do know that the demands on 
food shelters are the highest they have ever been. Second 
Harvest, which is the largest, tells me that a lot of these 
places are running out of food.
    The Emerson bill has helped. There are other options. Some 
people have said that the tax laws don't encourage the donation 
of surplus food. We are trying to maybe examine other things 
that we can do to help people contribute surplus food. But it 
has done a remarkable amount of good, getting food banks food 
they wouldn't otherwise get.
    Mr. Kingston. Well, I think you guys have been proactive in 
it also.
    I have some other questions, but they may have already been 
asked. So I would like to submit them for the record. Thanks a 
lot.
    Secretary Glickman. I thought you would ask me about sugar. 
I didn't hear anything.
    Mr. Kingston. You know, I have been kicked and torn and 
ripped on sugar, and I am going to let it pass for right now. 
[Laughter.]
    Mr. Skeen. Safe on first. [Laughter.]
    Mr. Boyd.

                         Statement of Mr. Boyd

    Mr. Boyd. Thank you very much, Mr. Chairman. I want to tell 
you how deeply honored I am to serve on your committee and with 
Ms. Kaptur and the other members. I guess one of the reasons I 
am honored is because I have spent all of my life, in 
agriculture.
    Mr. Secretary, I don't envy your job. I am very pleased 
that you all are here today.
    Mr. Rominger and I have had an opportunity to visit on my 
farm, and I am grateful for him coming out and listening to my 
constituents and their problems.
    Mr. Secretary, I know it is a very difficult time for you 
to preside over an agency that has jurisdiction over a sector 
of our economy which is in the tank, at a time when the rest of 
the economy is doing very well. That is why I don't envy your 
job and I know it is a difficult one. Having sat through my 
first meeting of this subcommittee, I recognize now even more 
how difficult your job must be.
    I feel kind of like a kid in a candy store right now, 
having this opportunity to ask you questions. So, Mr. Chairman, 
I have got four questions I want to ask. They will be very 
short questions that can be answered relatively quickly.

                             citrus canker

    The first one, Mr. Secretary, has to do with the fact that 
you may know that we have an outbreak of citrus canker in 
Florida. I have a copy of a letter that I want to deliver to 
you. The majority and minority staff also have a copy of this 
letter. So I would like to make it part of the record.
    [The information follows:]

[The official Committee record contains additional information here.]


    Mr. Boyd. It basically outlines our problem with canker and 
how it has spread significantly over the last few months.
    My question simply to you today is: Do we have the capacity 
within our supplemental appropriations bill to assist the State 
of Florida in stopping the spread of this canker before it 
totally destroys the citrus industry in Florida?
    Secretary Glickman. Well, let me just say that, obviously, 
if you put the money in here, we are going to work with you and 
cooperatively with States to deal with this infestation, which 
is potentially a catastrophic problem.
    We provided some money and technical assistance, and then 
the State had a lawsuit with the Department on a past 
cooperative program. But if you put the money in here, we are 
going to work with you cooperatively.
    By the way, I would also suggest that we get some 
participation from the private sector as well. I think they 
have an obligation to participate, too.
    Mr. Boyd. Those are good points. The State of Florida, as 
you know, has spent--we have spent $20 million in this Fiscal 
Year trying to prevent the spread of this disease. As you know, 
this evidence indicates canker was carried through a plant 
which was brought in from Central America. Of course, that came 
through our Customs inspectors or through our APHIS inspectors, 
and APHIS is the jurisdiction of your agency. So I think that 
is why it is appropriate that we would ask for the assistance 
of the Federal Government.

                             tobacco issue

    The second question has to do with an issue that President 
Clinton addressed in his State of the Union, and that is the 
tobacco issue. He stated that the Justice Department would be 
going after the tobacco manufacturers, but the second part of 
his statement said he would assist the tobacco farmers. I have 
not read anywhere how he plans to assist farmers. I wonder if 
you might expand on what the Administrations plan for that is.
    Secretary Glickman. I don't have anything more, other than 
the President has always said that one of the foundations of 
any settlement with the tobacco industry would have to be a 
monetary settlement with tobacco farmers; that there would be 
no settlement of the either actual or potential litigation 
without providing a fund there.
    I also see that some of the States, of course, are working 
on a settlement situation right now with some of the tobacco 
farmers, but, yes, the President has repeatedly said that you 
have to get the farmers into the settlement or else it won't 
fly. So that is all I can tell you now.
    Mr. Boyd. Thank you very much. I know that Mr. Schumacher 
brought that message to us over a year ago in Florida, and the 
President has stated that again in his State of the Union, and 
we want to make sure that we know that you all will honor that.

                              food safety

    The third question--and there has been a lot of discussion 
here today about food safety. So I won't rehash all that, but 
there is one thing that I would like to get your thoughts on, 
and that is the inspection service now is mostly done at the 
retail level, the way I understand it, for some of these----
    Secretary Glickman. Not USDA. Our inspection is done 
primarily at the packer level and the plants.
    Mr. Boyd. Okay. Well, the listeria that was discovered, 
wasn't it found at the retail level?
    Secretary Glickman. The listeria may have been picked up at 
the retail level. We do do some sampling at the retail level, 
yes.
    Mr. Boyd. Well, maybe that is the specific area of your 
inspection service that we ought to talk about, because of its 
detection at the retail level.
    Secretary Glickman. But then we traced it back to the 
plant, and the plant was ultimately closed because we found it.
    Mr. Boyd. The issue that I believe we need to discuss--you 
are more of an expert on this than I am--is the issue of 
whether it better to conduct inspections at the wholesale level 
or retail level. Because once you inspect and find it at the 
retail level, it usually has been purchased by other consumers 
and often consumed. By then its too late.
    Secretary Glickman. It really takes what we call a farm-to-
table approach. In fact, everybody has to be cooperative, from 
the producers all the way through the system. But what you 
often find is that when the animal comes into the actual 
packing facility, it comes in dirty and carries with it organic 
material; it has to be cleaned. That is where most of the 
disease comes from, is organic material. That is where you 
spend most of your resources, but it doesn't mean that you 
can't have problems all the way into somebody's house, where 
they don't wash their hands. After all, we estimate that about 
50 percent of all food-borne illnesses can be solved by just 
people doing the necessary, effective, appropriate hygiene 
techniques. So it is an across-the-board problem.
    Mr. Boyd. Okay. Well, I will set up an appointment with 
some of your folks to talk more specifically about this, if 
that would be okay with you.
    Secretary Glickman. Sure.
    Mr. Boyd. Mr. Chairman, do I have time for one more?
    Mr. Skeen. Certainly.

                             crop insurance

    Mr. Boyd. This has to do with a subject near and dear to my 
heart, and that is the 1996 farm bill. Prior to my coming to 
Congress, I traveled to Washington and talked to my delegation 
(Florida) about his legislation. I expressed to my delegation 
that I believed the 1996 farm bill was the wrong thing to do. 
Now many of the fears, many of the things that I feared would 
happen have happened.
    I notice that you stated in your opening remarks--and I 
will try to paraphrase--that when we passed the 1996 farm bill, 
the economy was good; world markets were good. You also said ad 
hoc disaster assistance is unworkable long term; and that we 
must develop an insurance program that addresses long-term 
stability. Again, that is a paraphrase, but I believe that is 
basically your statement.
    Exports cannot serve as the only safety net. Domestic 
Federal programs also have to be in place to serve as a safety 
net.
    I believed we had a Federal domestic ag policy which served 
this country well for many, many, years and was, within the big 
budget picture affordable. As a matter of fact, the new program 
cost more in the first two years than the old program would 
have cost under the existing scenario.
    We all recognize that we are going to have weather 
problems; we are going to have pest problems; we are going to 
have yield problems, and we have the technology skills and know 
we can survive and compete in the long term dealing with these 
factors. Where we can't compete is with a Federal policy, or a 
lack of a Federal policy, that puts us at a disadvantage in 
competing in the world market.
    I want to continue to have a dialog with you as we develop 
a crop insurance program, and encourage the solution not to be 
centered around insuring revenue or we insure yield. I mean, 
all of those things, our farmers can come up with innovative 
ways to deal with those factors. The financing, you know, that 
Mr. Kingston referred to is easy if we are making a profit. At 
that point, there will be lots of people that will want to lend 
us money.
    What we can't deal with is a world market that drops the 
price of a bushel of wheat to such a level that a Kansas wheat 
farmer makes a record crop and still loses $100 an acre. Those 
are the things that we can't insure against.
    Maybe if you would like to comment briefly, and then I 
would like to have a discuss with you at some future time.
    Secretary Glickman. Well, let me just say that the old farm 
bill also cost a lot of money in some years. When prices were 
down, it cost money, because it protected farmers for a drop in 
the price of wheat. I guess in the late 1980's, we spent $26 
billion one year on the farm program. That is a lot of money, 
which is more than the $18 billion we expect to spend in 1999.
    But I do agree with you that the current scenario doesn't 
work very well when you do not have the kind of basic floor 
that protects the more vulnerable. The well-capitalized can 
survive a lot better than the more vulnerable, especially 
farmers who are heavily leveraged up. It is a problem that 
particularly affects small and medium-sized farmers who are 
going out of business at a far faster rate.
    Now the trick is to find something that is reasonably 
affordable. Americans have the best bargain in the world on 
food. We spend a pittance compared to what the rest of the 
world does. Also, how do you find something that doesn't 
unnecessarily interfere in the marketplace, because the natural 
forces of the markets are still going to determine prices, but 
what you want to do is to help people deal with the peaks and 
valleys. I just don't think that in the current situation, the 
farm bill works as well as it should.
    Maybe some sort of revenue insurance should be considered, 
I wouldn't discount that. If you can get somebody to go out and 
buy an insurance policy that protects their revenue based on 
what they made over the last five years. We are doing some 
pilots now out in Iowa and Illinois and Nebraska that may work 
pretty well. I don't think there is a remedy that is totally 
inexpensive, but I think there are some options out there; they 
can do a better job than what we are currently doing.
    Mr. Boyd. Mr. Chairman, that really is my last question, 
but, as a follow-up comment, you know, in the Southeast we are 
probably going to do all right, because we have got some 
specialty crops which are doing o.k. It's your Midwest farmers 
that are in trouble.
    I would submit to you that if you see corn stay at $1.75 
for four or five years and wheat at $2.00 or $2.50, whatever it 
is, I don't care how well-capitalized you are; you are not 
going to be farming. I just think that over long term that our 
ag economy, is in deep trouble, if we continue to have a 
national ag policy that doesn't deal with this.
    Secretary Glickman. Let me just say that based on our 
latest crop report for this crop year we are projecting the 
1998-1999 crop for corn at between $1.80 and $2.10 a bushel. 
That is the range. So the point estimate is $1.95. That is not 
very good.
    We are projecting wheat at about $2.70 a bushel, and rice 
at about $8.50 a hundredweight, and soybeans about $5.20 a 
bushel. These are tough prices. You are right; I don't want to 
preside over a Department in which farmers are being hit with 
prices like this.
    Then you look at the livestock side of the picture; it is 
going to get better, but, still, the livestock side is also not 
as strong as I would like it to be.
    That is why historically, since the 1930's, we have said to 
people in this country, you need a farm policy that helps when 
times are bad and prices are low, and then triggers out when 
times are good. That is what we really don't have right now, 
and I think that is what we have to really seriously talk 
about.
    Mr. Skeen. Thank you.
    Mr. Latham.

                        Statement of Mr. Latham

    Mr. Latham. Thank you, Mr. Chairman, and I look forward 
another two glorious years on your committee, under your 
leadership.
    Welcome, Mr. Secretary. It is good to see you.
    Secretary Glickman. Thank you.
    Mr. Skeen. You have about two years' worth here already. 
[Laughter.]
    Mr. Latham. Apparently, we are not going to get a second 
round here. [Laughter.]
    Mr. Skeen. Well, we will try.

                               embargoes

    Mr. Latham. Okay. Well, I am not going to get into a debate 
on the farm bill, but there was a commitment made to give 
support for exports to be against embargoes, and Ms. Emerson 
brought up that, to give tax relief, to give regulatory relief, 
and we applaud the administration on everyarea through this. It 
would be as if you set down a policy to try and fail, and if you go 
through support for exports, what we have done in our markets overseas, 
it is unbelievable.
    The Commission, the Glickman Commission, I just see this 
press release here. ``The Agriculture Department hasn't made 
enough progress in its efforts to help small farmers, say 
several members of the USDA-appointed Commission . . . agency 
rated a `D' for its efforts to ensure fair market access for 
those farmers.'' I think that is maybe somewhat indicative of 
some of the problems we have. I don't want to get into all that 
right now.

                          livestock assistance

    But, as you know, Mr. Secretary, we have a real disaster 
going on in the livestock arena. I just find it absolutely 
incredible that the administration would go out, take $50 
million out of the School Lunch Program, food for children; 
give it to farmers, and then come back with a budget that has 
$504 million of new taxes that is going to come right out of 
the hides of the livestock producers in the form of user fees. 
I mean, do you have any credibility when you come with a budget 
like that? It is simply beyond any kind of decency, as far as 
respect for the livestock producer out there today. I mean, 
these people are dying, and you are going to take another half 
billion dollars out of their hides out there.
    Secretary Glickman. Do you want me to respond?
    Mr. Latham. Yes.
    Secretary Glickman. Well, first of all, look, the problems 
of agriculture are worldwide, Tom. It is not just in the United 
States. Hog producers in Canada, beef producers in Argentina, 
grain and soybean producers in Australia--I mean, we have a 
worldwide problem in agriculture. So I think we need to be 
fair. I am sure that we in the administration have some 
responsibility for the problems in the world, and I accept it. 
But I don't think it is fair to characterize the world economic 
conditions as caused by me or President Clinton, or anybody 
else. These are tough problems. The world changed pretty 
quickly. I think that is important.
    Now on the pork program, these people are having tough 
times. Prices went from $60 a hundredweight to $10 a 
hundredweight in four months. I had to do something. I 
increased pork purchases significantly. I have a $100 million 
section 32 reserve fund. The section 32 statute also gives me 
authority to make direct payments to farmers for almost any 
reason. I don't think we have done it anytime in the last 30 or 
40 years. I decided to take $50 million out of that $100 
million to use it for this, when it was going to be in a 
reserve account anyway. I wish it could have been $500 million, 
but it is all the money that I had. I did it the best way that 
I possibly could. It may help a few people. It may not help a 
lot, but it is better than nothing.

                               user fees

    On the user fees, that money has been in the budget since 
Ronald Reagan was President. It has been presented--Reagan, 
Bush; I don't know if Carter put it in there or not. Then in 
this year's budget Congress has--it does amount to about 1 cent 
a pound. We think you see those kinds of user fees with the 
FAA, the Securities and Exchange Commission, other kinds of 
industries. But I am not naive. I am probably going to probably 
believe that you all have different ideas than we do on that. 
[Laughter.]
    Mr. Latham. Did you even send up a bill last year?
    Secretary Glickman. Pardon?
    Mr. Latham. Did you even send up a bill for user fees last 
year?
    Secretary Glickman. Yes.
    Mr. Dewhurst. Yes, sir, we did, in July.
    Mr. Latham. Who? Who had it?
    Secretary Glickman. I don't know. It probably was the 
Agriculture Committee, I would guess, the authorizing 
committee.
    Mr. Latham. Okay.
    Secretary Glickman. I am going to guess.
    Mr. Latham. And you are going to send it up again this 
year?
    Mr. Dewhurst. Yes. We have been told that the 
administration will submit a single budget bill that has all 
these proposals in it, and the target date for that is by mid-
March.

                   supplemental livestock assistance

    Mr. Latham. You know, back in the worst of the hog crisis--
what?--$130 million, $150 million a week that producers were 
losing? In the supplemental you are talking about--do you have 
any kind of a cost estimate? I guess, in a followup, do you 
have a position as far as direct payments to livestock 
producers?
    Secretary Glickman. Well, of course, we open the door by 
providing $50 million in direct payments. I think this would 
ultimately be a congressional decision, whether you all would 
want to.
    Mr. Latham. Do you have a position?
    Secretary Glickman. I don't have a position on it.
    Mr. Latham. Okay.
    Secretary Glickman. The fact is that if Congress passed a 
program of providing direct payments, I am sure that we would 
probably support it. But we would like to have a role in 
structuring it with you. I don't know how much it would cost. I 
don't know how the livestock industry wouldrespond to it, 
because, in fact, a lot of the pork producers were not happy when we 
set up the program in the first place.
    Mr. Latham. That is because most of them couldn't qualify 
for it.
    You have got the accelerated pseudo-rabies eradication 
program. In light of the problems we have with the packer 
facilities running the full capacity and the rendering houses 
packed, how do you propose that you do all this in--what?--six 
months, you are talking about? How are you going to kill them 
and where are you going to put them?
    Secretary Glickman. I think they are going to rendering 
facilities, not to packing facilities.

                       packer/rendering capacity

    Mr. Latham. Well, they have a backlog also. I don't know if 
you are going to build new ones or if you are going to put a 
bunch of new staff out there to kill hogs or what. I don't know 
how you are going to do that.
    Secretary Glickman. The best I can do is try to get back to 
you on that. We believe that there is capacity at some 
rendering facilities around the country, and that's one of the 
reasons why we decided to do it in this way, where there wasn't 
capacity at slaughter facilities. There may be some that goes 
to local community food banks as well for rendering.
    [The information follows:]

                              Pseudorabies

    For each State, APHIS worked with the official State 
Pseudorabies epidemiologist, the State Veterinarian, and the 
State Pseudorabies Advisory committee to develop plans to 
euthanize and remove animals from premises. Pseudorabies 
infected herds are concentrated in some areas, with multiple 
farms and many hogs infected. In other locations, the herds are 
dispersed over a wide area. Due to this dichotomy, separate 
plans for euthanasia and disposal were considered because of 
the different needs and resources available.
    In areas with less than 100 infected small herds, the young 
and adult hogs are euthanized on the farm using cost effective, 
humane methods such as a penetrating captive bolt gun followed 
by pithing. Carbon dioxide is used for very small pigs and 
chemical euthansia for piglets. The euthanized hogs are then 
loaded into rendering trucks on the farm in most cases. Burial 
in some circumstances is considered.
    In areas where a large number of pigs from a large area are 
infected, a centrally located facility is organized for the 
humane euthanasia. In general, the site allows for easy access 
for several loading options, has limited access for safety and 
biosecurity reasons, is secluded because of the sensitivity of 
the activity, and has an office area with customary equipment. 
The site is near a rendering plant and the pseudorabies 
infected premises. In some areas, packing facilities are being 
used to humanely euthanize the pigs. After the animals are 
humanely euthanized, they are transported to a rendering 
facility.
    Some rendering firms have changed their position on payment 
for rendering the carcasses. As they have processed the 
carcasses, the prices of their products have declined and they 
now wish to charge USDA for the service. APHIS has considered 
incinerating or burying the carcasses in some cases rather than 
pay for this. Some packing facilities used for euthrnization 
and certain rendering firms are operating at full capacity. 
Services connected with the accelerated program at these firms 
are being performed during off-hours, at additional cost. 
Despite these obstacles, the accelerated program continues to 
reduce the number of known pseudorabies infected herds.

    Mr. Latham. But how are you going to--who is going to 
slaughter them?
    Secretary Glickman. The renderer would do the slaughtering, 
if it went to rendering facilities. That would be in most cases 
what would happen.
    Mr. Latham. You are going to send the hogs to the rendering 
service to have them slaughtered to go to the food----
    Secretary Glickman. No, I am sorry; those are two separate 
things. In some cases they might go to a packing plant for 
slaughtering for food banks, but in most cases they would go to 
rendering facilities.
    Mr. Latham. But you understand the whole problem pricewise 
was that the packers have extra hogs out there right now.
    Secretary Glickman. I understand that, and that is why they 
are going to the rendering facilities. There are some packers 
who indicated there is a small amount of space available for 
local food bank type of operations.
    Mr. Collins wants to comment.
    Mr. Collins. One comment about the capacity of packing 
plants. In December we were slaughtering nearly 400,000 hogs a 
day and 200,000 on Saturdays. The most recent data showed that 
we are down to about 375,000 or so per day. We are down to 
about 375,000 per day during the week, and last Saturday we did 
about 80,000, which is well below what we were doing in 
December. So I think there is some capacity starting to emerge 
now.

                         wetlands conservation

    Mr. Latham. As you are well aware, that is maybe one of the 
reasons why we are back up to $28 now, and if you dump a bunch 
of hogs in that system, you are probably going to take it back 
to $8 again. It could very well happen.
    One thing, we have a tremendous problem in Iowa, and it has 
come to my attention that the NRCS has doubled the required 
wetlands mitigation acreage for prior converted acres. As you 
are maybe aware, we have a tremendous problem with agricultural 
drainage wells in the center of my district. These are holes 
punched through the bedrock to go directly into the aquifer, 
back 90, 100 years ago. We are trying to cap them because this 
is in the center of a lot of these concentrated livestock 
facilities, so that we don't destroy the aquifer down there.
    The drainage districts say that, since they have made 
application, you have doubled the number of acres required for 
mitigation. I am just wondering how you can go----
    Secretary Glickman. As far as you know, is this an Iowa-
based requirement only?
    Mr. Latham. No, it is for NRCS.
    Secretary Glickman. But done by the Stateconservationists 
in Iowa? I wonder, is it a national rule? Because I am unfamiliar with 
it.
    Mr. Latham. I don't know. They are having to deal with this 
from the NRCS.
    Secretary Glickman. Okay, I will get to the bottom of this 
and give you an answer by the end of the week.
    [The information follows:]

[The official Committee record contains additional information here.]


    Mr. Latham. We have a pending environmental disaster here 
with the Ogalala Aquifer if we don't do something----
    Secretary Glickman. Do you have something to give me, or 
your staff can give me, so that I can take it back?
    Mr. Latham. Yes, sir, absolutely. If you could handle that, 
we will have Pocohontas here, Pocohontas County folks come and 
pay homage at your feet. They have been fighting this for three 
years with four different Federal agencies to try to get it 
accomplished. Now the rules have changed right at the moment of 
trying to do something about it.

                             crop insurance

    I am very encouraged, I am, to see in the budget you talk 
about crop insurance, and this is going to be a big subject. I 
think we can let the market operate if we do have a viable crop 
insurance program available, and we need to work together with 
it. I mean, your statement here, if I can quote you, ``It can't 
be done on the cheap'' is very, very true. It is troubling 
there is no money in your budget for it.
    Secretary Glickman. Well, except the $400 million that we 
have for the buydown of this year's program.
    Mr. Latham. But there is no new money for a new program.
    Secretary Glickman. That is correct, and the fact is that 
to do it right will cost anywhere between a half billion 
dollars and maybe $3 or $4 billion. We were criticized for not 
putting a specific dollar amount in, and I just basically said 
I didn't know until we could work on a legislative package what 
it would cost. But, you know working together, we came up with 
several billion dollars in a disaster program last year, and I 
have to believe that, working together, we can find the money, 
if we are able to get a legislative package together.
    Mr. Latham. Well, we want to work very, very closely. I 
know we have the same goal on that, and I think that's the No. 
1 thing we need to do this year, is to have that available and 
have it available to anyone, different crops throughout the 
country, and livestock. It certainly would be a great help. I 
think revenue insurance is the way to go because, then, at 
least you guarantee banker a level of income at least, and it 
has to be affordable and a consistent number of dollars 
available.
    I don't know; how are we doing on time, Mr. Chairman?
    Mr. Skeen. You are just about right.
    Mr. Latham. Thank you, sir. I appreciate it. I have been 
told that.

                        basic research programs

    If I could just have--there is in your budget proposal to 
cut basic research programs by about $27 million to the land 
grant universities under the formula basically. This certainly 
would be a huge blow to them and really hurts them as far as 
maintaining, and I think George and several other people 
mentioned about this problem. There is $100 million going into 
new grants to nontraditional colleges.
    My question is: Is this additional new money, the $100 
million, is that going to go to the priorities of the 
administration in the budget as far as climate change and 
sustainable ecosystems? I mean, the money, basically, you are 
taking out of the traditional research going into the new 
global warming initiative.
    Secretary Glickman. Perhaps Steve may add to that. Steve 
will answer the question better than I.
    Mr. Dewhurst. You're right, the money for formula funds is 
down and the money for competitive funds is up. Frankly, that 
is not totally unusual in the Executive Branch budget. When you 
look at the allocation of that money, it is for a variety of 
topics. There is money for the Small Farms Initiative. There is 
money for water quality, for food safety, for some work on food 
quality protection and pesticide impact assessments, which is 
part of our work with farmers. I have not quite totaled all the 
money up by these categories, but the money goes for a variety 
of purposes. It is competitive money. We would assume that the 
land grants would win the competition for a lot of that money. 
They traditionally get about two-thirds of our competitive 
money.
    Mr. Latham. But there are also major cuts as far as 
research stations, directly at those, and I am very, very 
concerned about it.
    Thank you, Mr. Chairman.
    Mr. Skeen. Thank you. Mr. Dickey, to wind up the first go-
round, and then we will talk about the second.

                        statement of mr. dickey

    Mr. Dickey. Mr. Secretary, glad to see you.
    I have had a visit with about seven farmers Monday. If I 
didn't see them grow up, they saw me grow up. These are people 
who I have lived with in my home town of Pine Bluff all my life 
and all their lives, basically, except for the ones who are 
older. We had a very frank conversation. It was devoid of any 
politics. It was devoid of any of the typical farmers' type of 
comments about, oh, woe is me, and everything else. They were 
very much open and honest with me. When we didn't know what was 
going on, we said that. We went through the whole process.
    What I want to do--and I know you have answered some of 
these questions, but I wasn't here, and I just want to ask some 
of these questions, and then I want to take the answers back to 
them, if I could. Before I do it, though, I want you to know 
that I feel very good about your being where you are. But I 
think it is going to be the most critical period in the time 
since I have observed farming. I just wish for you the clearest 
of minds and the most cooperation from everybody, because it is 
going to take that. I think it is that serious.

                        improving export markets

    Some of these questions are going to seem frivolous, but I 
want to just pass them on. What can we do to improve our 
markets abroad specifically?
    Secretary Glickman. Well, Congress has given us a lot of 
authority to use. The main thing we need to do is to have 
markets in which people can be commercial customers. So we need 
to be energetic in engaging our current and future customers, 
whether that is Egypt or Indonesia--I just mention those two as 
a possibility--and to use all the credit programs that we have 
at our disposal in order to supply them the food products they 
need. They have also got to be economically sound enough to buy 
things from us, and that is why we have worked so hard for IMF 
assistance and other mechanisms to try to strengthen them.
    In addition to that, as you know, the President has 
dramatically increased food aid this year. We were going to 
provide to the Russians--Ms. Kaptur and I have talked a lot 
about this--a significant amount of food aid, over and above 
traditional food aid we have provided under other authorities.
    So we have a lot of product out there, and we need to sell 
as much as we can and we need to provide humanitarian 
assistance for those who need it. We have a foreign agriculture 
staff around the world; their job is to move product, help move 
product.
    Mr. Dickey. We have mentioned some of the nations that we 
don't sell to for political reasons----
    Secretary Glickman. Right.
    Mr. Dickey [continuing]. Like North Korea and Iran and 
Iraq.
    Secretary Glickman. Well, actually, we have been shipping a 
little--we have been participating with the World Food Program 
in donations to North Korea and also we have been, I guess, in 
Iraq as well, right? Commercial sales under the U.N. program to 
Iraq. I mean, Iran, Libya, Cuba, Sudan, North Korea, 
basically--there are about a half-dozen countries that are 
affected.
    Mr. Dickey. But you testified that wouldn't help us that 
much.
    Secretary Glickman. Well, it would provide, we have said, 
about 1 percent--it will affect about 1 percent of our export 
sales. So it is helpful, but the big problems in export 
barriers are more in sanitary and phytosanitary battles we face 
with the Chinese, let's say, or the Japanese on occasion or 
Europeans certainly, with the beef hormone issue, which is a 
very, very big problem, and one that could result in a 
monumental blowup, if it is not resolved.
    Mr. Dickey. That would be through the WTO--it is just 
attacking the integrity of the WTO?
    Secretary Glickman. That is correct. I mean, we believethat 
the WTO processes have ruled in our favor, and we expect them to honor 
that.
    Mr. Dickey. Well, here is one of the things they said: They 
said, ``Are you in Congress doing anything to stop our markets 
from being developed?'' And embargo would be one, I guess, the 
embargoes; we would be participating in that. Are we doing 
anything else as a body to prevent markets from being available 
to agricultural products?
    Secretary Glickman. You know, Jay, I have to tell you, I 
really don't think so. I know there is a lot of rhetoric out 
there, but last year we approved 8 million tons in food aid. 
Our credit guarantee use was over $4 billion on sales of 
agricultural commodities in 1998. I have been to Japan and 
Korea and all over Europe, and the Deputy has been in Latin 
America and other parts of the world, trying to get these 
markets open. They are competitive. Other countries are 
producing a lot of food. We are in there working as much as 
possible to build these markets.
    We also have a market access program. We have foreign 
market development programs.
    Mr. Dickey. Are they all working?
    Secretary Glickman. I think so.
    Mr. Dickey. Are any of these things not working that we 
could improve?
    Secretary Glickman. Chris Goldthwait, who is generally 
responsible for export sales, just said our market share has 
maintained itself; it is just the value of the commodities has 
come way down----
    Mr. Dickey. I see, I see.
    Secretary Glickman [continuing]. Because they are just not 
worth as much as they used to be.

                          fast track authority

    Mr. Dickey. Okay, now tell me--I know you have probably 
done it, but Fast Track--I just went with Larry Combest to 
South America, and Fast Track is very important. Are we going 
to pass Fast Track this year?
    Secretary Glickman. All I can tell you is, based upon what 
I have heard the President say, he is going to push for Fast 
Track, but I don't have any current information on that.
    Mr. Dickey. But do you think it is important?
    Secretary Glickman. I do.

                             freeze prices

    Mr. Dickey. Okay, I thought so. Now is there any way to 
freeze prices? You mentioned revenue assurances. Is there any 
way to freeze prices? I am not saying I would even vote for it, 
but I just wanted to know, can you say to the cotton farmer and 
to the grain farmer and soybeans, and so forth, and rice, 
``This is how much you are going to make this year.''?
    Secretary Glickman. Well, I suppose you can, but I am not 
sure how practical it would be. I suppose you could have some 
emergency type of program to guarantee somebody a price for 
their product, but I think, unless you had massive supply 
management programs with it, what you would do is you would 
encourage massive production. I mean, we could raise the loan 
rates significantly for various products, which would guarantee 
a price. But I can't do that, I'm sorry.
    Mr. Collins. You could use CCC funds to buy commodities in 
surplus, but then you wouldn't be able to dispose of it.
    Mr. Dickey. I see; they would just be in storage?
    Mr. Collins. Right.
    Secretary Glickman. There is no magic answer to deal with 
this. That is why the insurance subject gets a lot of interest. 
If you could insure your revenue based on a prior year history 
and buy a policy, the government would probably be involved in 
sharing the premium costs; that might be a way to protect 
people against the vagaries of the marketplace.
    We do have a floor, LDP provides a floor for people right 
now.
    Mr. Dickey. And you are getting more demands now than we 
have money; is that right?
    Secretary Glickman. We will have the money to do it. 
Whatever the LDP Program needs, we will have the money.
    Mr. Dickey. Okay. Is there any way--and I know I would vote 
against this thing, but is there any way that you could freeze 
the prices of the equipment and the supplies and the 
fertilizers and the chemicals, and everything else? What they 
are seeing is that they are limited and their costs are going 
up. Now is there any way to do that? Has it ever been done, do 
you know?
    Secretary Glickman. Well, I think back in the 1970's 
President Nixon tried with wage and price controls; it gave 
lawyers a lot of work to do, but it didn't seem to work very 
well. People always found a way around it.
    Mr. Dickey. They want to know----
    Secretary Glickman. I am getting lots of ideas behind me. 
[Laughter.]
    Mr. Dickey. And I am glad of that, that you are getting 
advice.
    Secretary Glickman. The advice back here is that you are 
getting fairly close to what they have had in Eastern Europe 
for a long time. [Laughter.]
    Mr. Dickey. Oh, all right. We don't want that.
    Mr. Kingston. Keep in mind, these are the kinds of people 
that Jay said he grew up with. [Laughter.]
    Mr. Dickey. I used to be a Democrat. [Laughter.]

                            improved markets

    Dan, they are saying, all we are going to do is wait for a 
bailout at the end of this year, and if it doesn't come, we are 
going under. They have taken their money now, and they have 
gone back and paid back what they have owed--and I mean people 
who I thought were substantial farmers, and are tremendous 
farmers, and do everything right and work hard, and are not 
lazy.
    What criteria is going to--what is the scenario this coming 
fall if the markets don't come up? What is going to happen?
    Secretary Glickman. I would say one option is for you and 
I, together, to make some decisions on farm policy that will 
provide additional resources. I don't call it another 
``bailout.'' I just say we provide additional resources through 
some form of emergency-type program. That is always a 
possibility.
    In the interim--and we also are working through our credit 
programs. During the hog crisis, for example, we changed the 
way we collateralized hogs, so we collateralized them on 
futures prices, rather than on current cash prices. We 
encouraged banks to do the same thing, and most of them began 
to do that. So that was also helpful.
    There are a lot of things that we can do like that. We are 
going to continue to explore our international programs 
aggressively, both the sales programs and the humanitarian 
programs, and if those need to be augmented, we are going to 
increase them, because there still is an awful lot of hungry 
people in the world as well.
    I wonder if our Chief Economist has any other ideas?
    Mr. Collins. One thing I would say, we do have the built-in 
stabilizer of the loan deficiency payments. Right now, we think 
that for the 1999 crops, the ones that are harvested next fall, 
we are talking about payments approaching $4 billion. So that 
is extraordinary.
    Mr. Dickey. In all the commodities?
    Mr. Collins. For the 1999 crops alone.
    Mr. Dickey. Have we got that budgeted?
    Mr. Collins. That will be CCC outlays.
    Secretary Glickman. It is mandatory spending.
    Mr. Collins. Yes.
    Mr. Dickey. And it is going directly to the farmers?
    Mr. Collins. It goes directly to the farmers.
    Mr. Dickey. Now this is an aside: One or two of them were 
talking, and the others were nodding along; they say it is 
awfully demoralizing to have to get your profit from the green 
checks, whatever they are talking about. I guess that means 
that they have worked this hard; they go to the market; they 
fail, and then someone comes in and pays it out. That is going 
to happen this next year; is that right?
    Secretary Glickman. There certainly are going to be 
additional checks coming from the government. The AMTA checks 
are going to come, and some disaster checks are going to be 
there, and some LDP checks. Listen, these things also turn 
around. We have more and more people; the population is going 
up; people are hungry. The economics of the world will change--
I am beginning to see some turn in Asia. Nobody hopes for bad 
weather, particularly in somebody else's back yard, but it 
happens on occasion, and weather can change the economics of 
world agriculture overnight.
    Mr. Dickey. Thank you for your answers.

                     subsidizing foreign economies

    Now IMF funding, other than that, do we have any programs 
that go and subsidize the economies of buying countries or 
buying markets?
    Secretary Glickman. When we send food aid over to other 
countries, they will use that food and they will sell it and 
monetize it, then, to buy other things. That is fairly common.
    Mr. Dickey. Is that our money being used?
    Secretary Glickman. Well, it is funded through P.L. 480.
    Mr. Dickey. In addition to our product?
    Secretary Glickman. Basically, our product has been sold.
    Mr. Dickey. It is on consignment of some sort?
    Secretary Glickman. Well, it is monetized. Why don't you 
explain it? This is Chris Goldthwait.
    Mr. Goldthwait. Congressman, we donate the commodity to the 
foreign country. Oftentimes, it has been sold within that 
country, and either to the government or in some cases the 
private sector entities. They, then, have the use of that 
money.
    Mr. Dickey. That country does?
    Mr. Goldthwait [continuing]. For other needs, developmental 
purposes, buying additional food----
    Mr. Dickey. So that subsidizing of that market doesn't help 
us directly. Is there any time that we guarantee the payments 
from other countries?
    Mr. Goldthwait. Yes, through our Credit Guarantee Program. 
That is our prime program.
    Mr. Dickey. Is that fully funded? And is that in place?
    Secretary Glickman. It is. It is a CCC program. It is a 
mandatory program. Last year we used about $4.5 billion--$4.2 
billion worth of credit guarantees.

                           congressional help

    Mr. Dickey. Dan, what can we do to help? If you just had a 
magic wand and you could say, okay, I want Congress to do this 
to help the farmers--all right, and then I have another 
question after that.
    Secretary Glickman. Well, I would want to work with you to 
develop a risk management program that provides protection 
against natural disasters and also to provide some protection 
against wild, volatile price fluctuations. I think we can do 
that. I think it is going to cost a lot of money. Of course, we 
are going to have to come up with the money, but I think we can 
do that. That would certainly be the No. 1 thing I would do.
    There are some changes I would make in the 1996 farm bill 
that are perhaps less fundamental, but changes that I think we 
can come up with.
    The third thing I would do is to make sure that we have the 
resources, we and the Justice Department, to enforce our 
antitrust and anti-concentration laws, to make sure that people 
are being treated fairly out there in the marketplace.
    And the fourth is to give us the resources we need to move 
our products overseas.
    Make sure that we have the dollars available in all of our 
credit programs and everything else, and you have done that. 
But I am just saying those are the kinds of things that we are 
going to need to do.
    Anybody here have any other ideas?
    Mr. Collins. Risk management education is needed, so that 
producers will take advantage of the risk management program 
that you design.
    Secretary Glickman. There are a lot of techniques out there 
that really benefit our farmers, through our Extension 
service--there are conservation techniques; there are risk 
management techniques that can reduce costs and provide help to 
people. We can also do a better job of getting that information 
out.

                              family farm

    Mr. Dickey. Okay, this will be my last subject. This was 
awfully difficult to talk to them about, and they brought it up 
in a way. If the family farm doesn't make it, what is going to 
happen to the agricultural industry? Are we still going to 
produce the product? If so, who is going to do it? Do we have 
any plans for that eventuality?
    Secretary Glickman. First of all, we have seen the number 
of farms decline fairly steadily since 1900. Half of Americans 
lived on farms in 1900; today there are 1.9 million farms 
according to the census.
    I think we are still going to have family farms; they are 
just going to get larger and larger; and there will be fewer 
and fewer of them. I don't think there is one overwhelming, 
catastrophic result. I think the big impact is going to be on 
rural communities around this country. You will see an out-
migration of people and you will see a decline in basic 
services. I don't thinkthat is, obviously, healthy for rural 
America.
    I think what we need to be doing is finding all sorts of 
alternatives and options to help people stay in business in 
nontraditional ways----
    Mr. Dickey. Okay.
    Secretary Glickman [continuing). As well as doing our 
regular farm programs.
    Mr. Dickey. I think that would be drastic, particularly 
from my area. But, now, what I am saying, will we still have 
the same prices? Will we still be able to get the same prices 
at the grocery store? When we finally get where very few people 
are competing for the market share, let's say, 15 corporate 
farmers in America, what is the perception?
    Secretary Glickman. All I can tell you is fewer competitors 
generally mean less price competition.
    Mr. Dickey. Will we still be able to get the same prices at 
the grocery store? When we finally get where very few people 
are competing for the market share--let's say 15 corporate 
farmers in America--what is the perception?
    Secretary Glickman. All I can tell you is fewer competitors 
generally mean less price competition.
    Mr. Dickey. And higher prices.
    Secretary Glickman. It may mean higher prices. It certainly 
means more controlled prices.
    Now I don't know if in production agriculture we will ever 
get to a point where that will be a problem. Where it may 
become a problem is in the processing and marketing and 
transportation side of agriculture. It also depends on the 
structure of agriculture. The poultry industry has become a lot 
more integrated--the relationship has become a lot more 
employer-employee, so to speak. That is not yet true in the 
cattle industry per se. It is perhaps becoming more true in the 
hog industry. That may affect the price situation as well.
    Mr. Dickey. I know the answer to this, but is there a 
predisposition that you have against the family farmer--no, 
that USDA has against the family farmer?
    Secretary Glickman. Absolutely not.
    Mr. Dickey. Is it the other way around?
    Secretary Glickman. Absolutely.
    Mr. Dickey. Okay. And that is to preserve the rural way of 
life as an alternative?
    Secretary Glickman. It is for a rural way of life, for 
social structure, as well as I think it is healthy for the 
entire fabric of the country to have a healthy rural structure.

                      supplemental appropriations

    Mr. Dickey. Do you have any estimate--and this is my last 
question--have any estimate of how much the supplemental would 
be or the emergency supplemental would be this year?
    Secretary Glickman. You mean from the agricultural side.
    Mr. Dickey. That is correct.
    Secretary Glickman. Well, the farm loan issue, if we asked 
for a billion dollars' worth of authority, would be about $100 
million in costs. Then we have at least tentatively talked 
about some emergency program dealing with disasters. A lot of 
this has been watershed, conservation, rural development. A lot 
of this relates to Puerto Rico. That could be somewhere in the 
neighborhood of another $100 million or so.
    Mr. Dickey. So how much is the total?
    Secretary Glickman. It is somewhere in the neighborhood of 
a couple hundred million.
    Mr. Dickey. That is all?
    Secretary Glickman. Well, that is if we limit it to those 
things. Now if we decided to add a farm program component to 
it, then you are talking about much bigger money. Or if we 
added any salaries and expenses to it, it would add more money.
    Mr. Dewhurst. One thing to understand is, the way we do the 
budget, $100 million appropriated for farm credit programs 
generates a billion dollars in new loans. So the actual results 
of a $100 million appropriation would be a lot larger than it 
looks.
    Mr. Dickey. That is confusing to me.
    Mr. Dewhurst. Yes, it is the way that government does it.
    Mr. Dickey. Yes. Thank you.
    Mr. Skeen. There has been some question about a second 
round, and I say this with all sincerity: We have sat here now 
for about four hours, and at your pay grade that is a lot of 
time that you may not be getting paid for.
    Secretary Glickman. It is up to you, Mr. Chairman.
    Mr. Skeen. What we will do is initiate a second round that 
is very quick, and we will start with Ms. Kaptur.
    Ms. Kaptur. Thank you, Mr. Chairman, and, Mr. Secretary, 
for your forbearance.

                     civil rights class action suit

    I just wanted to say on the record commendations to the 
Department for your leadership in trying to reach a resolution 
on the recent civil rights class action suit before the 
Department. Do you anticipate that we will be talking about 
this issue again next year.
    Secretary Glickman. Well, I hope not. The suit is over--we 
have reached a settlement. The judge actually has to finally 
rule on it, I think in March. There is what is called a 
fairness hearing there.
    But there are still pending claims against the Department, 
and we are working our best to resolve those. I will have to 
tell you that we have a first-class capable civil rights 
director at the Department, somebody with a tremendous amount 
of experience. We are in much better shape than we have ever 
been before in terms of handling the problems.

                            farmers' markets

    Ms. Kaptur. I also want to thank you for the initiatives 
that you have taken on the farmers' markets. I referenced that 
a little bit earlier. I think it is making a difference. One 
has to keep persevering in that area, but that, along with your 
gleaning program, has been welcome from this particular Member, 
and I just want to urge you to continue.
    On the movement that is going to happen under WIC program, 
the administration of those dollars moving to another part of 
the agency, could someone perhaps explain to me how that is 
going to work? I think it is moving from $15 million to $20 
million.
    Mr. Dewhurst. I think we are confusing two subjects. The 
WIC farmers' market program is being increased from $15 to $20 
million, and it stays within the Food and Nutrition Service.
    Ms. Kaptur. It does? All right.
    Mr. Dewhurst. There is a separate gleaning program which 
happens also to be $15 million. It has been moved from the Food 
and Nutrition Service to the Extension Service, because the 
Secretary believes it is much more an Extension program. It 
involves outreach to these community groups, the kinds of 
things that Extension does very well.
    Ms. Kaptur. So what are you calling that program now?
    Mr. Dewhurst. Food recovery and gleaning.
    Secretary Glickman. Community food security basic program.
    Ms. Kaptur. Bear with me one second.
    Now what I have in my notes is that, under the WIC program, 
you have proposed to transfer the farmers' market program to 
the commodity assistance program. Is that correct?
    Mr. Dewhurst. Yes. I am sorry. I misunderstood your 
question. The Farmers' Market program is still within the Food 
and Nutrition Service, but it is reflected in a different 
appropriations account. We believe that the farmers' market 
program should be funded on a permanent basis within the 
commodity assistance program. In the past it was funded within 
the WIC program, and it was dependent on having leftover money 
in the WIC program. The administration doesn't think that is 
what should happen. We think we should have a specifically-
budgeted farmers' market program, part of our overall commodity 
assistance program with the Food and Nutrition Service.
    I am sorry, I did not understand your question.
    Ms. Kaptur. All right. Maybe I didn't understand it either, 
but I just want to get these numbers straight, because this is 
a very important program to this Member.
    The gleaning program that you referenced, that is something 
else?
    Mr. Dewhurst. Yes. It is a food recovery and gleaning 
program. It involves grants to local sponsors to help encourage 
and develop gleaning programs throughout the country, not 
necessarily farmers' markets, but gleaning----
    Ms. Kaptur. All right. So that has no relation directly to 
the farmers' market. Okay. All right, thank you for that 
clarification. I will have to study exactly what that means 
with the commodity assistance program, but so long as it 
strengthens the farmers' market program, but doesn't weaken it, 
it would be a welcome change to this Member.

                         Risk Management Issue

    I just wanted to say, Mr. Secretary, on the risk management 
issue, it was sort of a joke before about talking to Alan 
Greenspan, but I don't think it is a joke. I think it is worth 
a lunch, because we talked at length about the issue of risk 
management and who assumes the risk. Generally, as you talk on 
this committee or the authorizing committee, it comes down to, 
well, the producer assumes the risk. Mr. Greenspan had a 
broader construct of how one assigns risk in any type of risk 
management system and which actors, apart from the Government 
of the United States, should be involved in the assumption of 
that risk. I would merely encourage that conversation. Perhaps 
it has happened on the authorizing committee. Not being on that 
committee, I am unaware of it. But it was probably one of the 
most constructive conversations I ever had on the risk 
assessment and risk management issue. I think he has something 
to say with a lot of experience in the agricultural futures 
markets. So I merely commend that to you, and you are welcome 
to use my name, if you want. I still remember that discussion. 
It was so impressive.

                             Rural America

    The other thing I wanted to ask you, because you didn't say 
it--Jay Dickey was worried about what is going to happen to the 
small farmer, what is happening in rural America. One of the 
issues you didn't mention, if you look at what is happening to 
world markets, we have overcapacity of production in some 
places, with an inability for other places to purchase. When 
the overcapacity happens, we end up, because of the nature of 
our markets, being the place where product comes in. It has 
been happening fairly consistently, and it has had a 
detrimental effect on our own producers.

                          Market Dislocations

    Within the structure of the World Trade Organization or 
other entities that might be out there, as you thought about 
this problem, it seems to me that we can take certain 
complaints to international forums. In agriculture or other 
trade areas, we seem to not have the ability to get beyond the 
duty tariff issue and to deal with the larger question of 
capacity and what is happening with dislocations in the market.
    If you had to place such an instrument somewhere in the 
world trading system, have you thought about where that might 
be located, so you could at least engage in the discussion?
    Secretary Glickman. Actually, we do it with some 
commodities. Sugar is perhaps one of the examples where we do 
actually have an international program that is, in a sense, 
regulated in terms of imports. But let me mention a couple of 
things.
    Ms. Kaptur. Are you saying that is because of legislation?
    Secretary Glickman. It is because it was agreed to in our 
last trade agreement. The largest problem we have in 
agriculture is the inequitable treatment on pest management, 
and scientific issues involving fruits and vegetables from the 
South or other products coming in. We need to get some 
international rules where everybody plays by a similar set of 
rules. It doesn't address your question directly, but the 
sanitary and phytosanitary differences that we have to deal 
with are perhaps the most difficult problem that we have to 
deal with.
    The other thing I would have to tell you is that we do have 
a lot of countries in the world that still have extensive 
export subsidies. It is difficult to compete in a world where 
some countries are maybe subsidizing half the value of their 
commodities and other countries are not. We tend not to 
subsidize our exports. We will provide credit guarantees, but 
these are commercial transactions. We tend not to subsidize 
exports.
    From the standpoint of agriculture, a most serious problem 
for the long term is what to do when we face, significant 
oversupplies, or undersupplies. Right now the Europeans are 
sitting on very significant carryover stocks. They are 
beginning to look at this export subsidy issue much more 
aggressively. It troubles us. If they engage in export 
subsidies, we will respond in kind, but you would like to have 
a world where that didn't happen.
    Now where do you handle these disputes usually? Well, that 
is what the WTO was set up to deal with. We won a couple cases. 
We won one on bananas. We won one on beef hormones. Now we are 
having trouble getting them implemented. We have lost some, 
too. We have lost on Canadian dairy and poultry, and I am not 
sure what else, but we just maybe won an initial decision on 
the Canadian dairy as well.
    I think the WTO can work pretty well, provided that the 
standards are clear, science-based, and people honor the rules. 
Still, not everybody is playing by the same set of rules.

                           Agricultural Trade

    Ms. Kaptur. As I look at the trade figures over the last 25 
years, if you look at the exports going out from this country 
elsewhere, we averaged about $23 billion out--and taking out 
the highs and lows--during the decade of the 1980's.
    On imports coming in, we were at about $6.6 billion overall 
during that decade. If you come up to the current decade, our 
level of exports out has somewhat diminished. There were high 
years and low years, but we are at about $21 billion out. But 
the level of imports continues to come--it is about $8 
billion----
    Secretary Glickman. Is this agriculture you are talking 
about?
    Ms. Kaptur. Yes. Agricultural products; the livestock is 
separately. I am going to deal with the livestock separately.
    What I am saying, on average, if you look at what has been 
happening, though some years we exported more in terms of 
agricultural products, overall in the last 25 years there has 
been a diminishment in the actual--I am talking about dollars. 
Now I think Chris may be talking about volume.
    Secretary Glickman. You are talking net. Twenty-one billion 
is a net. It is a net when you subtract exports and imports. 
Surplus is what you are talking about. It must be. It is down.
    And you are correct, but what I am saying, our exports are 
in the $50 billion range and our imports are in the $30 billion 
range. So you are talking about a net figure there.
    Ms. Kaptur. Yes. If you look at the difference, the 
balance. So I guess what I am saying, not dealing with 
livestock yet, what you see happening, though, is that the 
imports into our marketplace are becoming more significant 
overall, if you look at the actual balance compared to our 
exports out, and that is reflected in dislocations inside this 
market.
    For example, Sam mentioned to me the other day, Congressman 
Farr, that the tomato industry in his region was relocating to 
Mexico. If we look at livestock--and I have got those numbers--
it is absolutely painful, what has been happening over the last 
20 years in this country. It hasn't been in one year, but 
successively we have moved from a position in the 1970's where, 
okay, we weren't necessarily in the black, every year we were 
in the red, but it has now gotten to a hemorrhage stage, where 
you almost have twice--you do have more than twice as many 
imports coming in here than exports going out--net.
    So at the same time as we have a problem here at home, and 
in global markets with overcapacity, you are getting more 
imports into this marketplace. So my question really is: It 
seems to me that we don't have the capability as a sovereign 
nation to help our own people as these dislocations occur.
    I would just ask you, for example, in hogs, in cattle, in 
dairy, it just seems to me that the Department of Agriculture 
has to work harder to have groups, working groups, inside this 
country that help inform the debate here and help us to respond 
more effectively to the sectors that are being hurt. We can't 
control the international market, but, by golly, we ought to be 
able to figure out some way to at least not have this kind of 
slow deaths occurring around our country.

                           Agricultural Trade

    We seem to have a lot of rhetoric here in Washington, but 
it is extremely troubling to look at these numbers and realize 
the thousands and thousands and thousands of families that they 
represent. I wanted to put that on the record. I have plenty of 
charts, and so forth, I can share with you, at least from the 
data that I have. But I don't see us as--some sectors, some 
people in some sectors may be doing well, but overall there has 
been an enormous amount of hurt, that we are almost in a sense 
of denial about as a country, unless you are directly involved 
in that given industry, in that given farm or wherever.
    Mr. Dickey. Would you yield a minute?
    Ms. Kaptur. Yes.
    Mr. Dickey. This denial business, Mr. Secretary, I am 
talking to you.
    Secretary Glickman. I am sorry. Yes, sir?
    Mr. Dickey. Go ahead.
    Secretary Glickman. No, no, no.
    Mr. Dickey. I was just kidding you.
    Secretary Glickman. Okay, we are fine. I was just trying to 
figure out your numbers.
    Ms. Kaptur. It was from the U.S. Bureau of Census.
    Secretary Glickman. Okay. We need to make sure we are 
talking from a comparable set of numbers.
    Mr. Skeen. Mr. Secretary, would you entertain a motion for 
about a 10-minute recess?
    Secretary Glickman. I would be glad to, Mr. Chairman.
    Mr. Skeen. Then it is so done. We are going to recess.
    Secretary Glickman. Okay.
    Mr. Skeen. We are going to recess, I think, for about 10 
minutes.
    Secretary Glickman. Okay.
    Mr. Skeen. Look at the numbers while we are gone.
    [Recess.]
    Mr. Skeen. I offer my apologies for cutting you off, Marcy, 
but I think maybe we were getting to a stretch point. 
[Laughter.]
    I understand the Secretary has a commitment at 5:00 and we 
need to get him out of here before that time.
    Go ahead.
    Ms. Kaptur. Thank you, Mr. Chairman.
    I just wanted to raise this trade issue with you, Mr. 
Secretary. We can share our numbers. We can discuss them. We 
can take a look at outflows and inflows, but I can tell you 
that there is plenty of information about where there have been 
dislocations inside this economy. USDA shouldn't always be 
following the curve; it should at least be at the curve, 
working with our producers when these dislocations are 
imminent. We would like to continue that conversation.

                          Conservation Program

    I wanted to tell you, on the conservation program that you 
mentioned in your budget, for new environmental initiatives, 
including farmland protection, this Member has a very strong 
and positive interest.
    Secretary Glickman. Yes.
    Ms. Kaptur. And you will have my support in your efforts to 
try to move those initiatives forward.

                             Welfare Reform

    Also, I was very happy to hear what you said about the 
impact of welfare reform, your knowledge of what is happening 
with our feeding kitchens across the country, and the 
relationship to our food donations.
    On the record, I did want to say something about the 
commodity sales to Russia. I want to thank the Secretary and 
members of your staff for working with us diligently on that. 
My concern continues to be the possibilities for graft, of 
which there have been other instances in past years. But, 
equally important, the issue of how our food aid is used to 
develop partners in other places that can ultimately be trading 
partners with us in the agricultural sector. To the extent that 
these aid programs can contribute to the development of a 
reformed, privatized agriculture, then that is absolutely the 
direction that we should be moving, not merely food donations.
    I continue to express my deepest concern about our own 
State Department not being able to spell the word 
``agriculture.'' Even AID, having less than 100 personnel on 
its staff who know anything about rural development, when half 
of the people of the world live in rural communities on very 
small holder plots, and we have a lack of focus at the highest 
levels of our government on the situation that most people who 
are poor in this world live in.
    So I just wanted to thank you, Mr. Secretary. This is not a 
battle you can win alone, but, rather, we can help be voices on 
this committee for agricultural development where we form full 
partners, which will ultimately benefit the people of this 
country, our producers, our processing firms, et cetera. But, 
right now, we are not able to meet anyone halfway in most of 
these other places.
    So I just wanted to stress the importance of these 
shipments. We are going to be watching them very closely. I 
will be a voice in this committee this year for additional 
inspection, both here and abroad, particularly with regard to 
the Russian shipments. If the situation weren't so critical 
there now, I probably wouldn't favor the amount of aid that is 
going to be forthcoming from our country, because I continue to 
have the deepest concerns about how it is going to be 
distributed and in whose hands it is ultimately going to get 
into, and what they are going to do with it.
    I am pleased to see the fact that you have put your 
shipments in a schedule, so that if there is graft that is 
significant, the rest will not flow. So I think some of the 
checks that have been placed in this current proposal are most 
welcome, and we appreciate your cooperation on that.
    Secretary Glickman. The record should reflect that 
Congresswoman Kaptur has had a great deal to do with 
significant increased oversight on food aid to Russia. I was 
over there; her name is well-known. In some circles she is 
thought of with great fear. [Laughter.]
    Ms. Kaptur. Good, good. I hope it is the right one. 
[Laughter.]
    Secretary Glickman. But it has made a very big difference 
that there is congressional interest in this oversight.
    Ms. Kaptur. Thank you, Mr. Secretary.

                            Contract Growing

    The final point is that, when Assistant Secretary Baker 
from GIPSA came out to Ohio almost a year ago, one of the 
issues he came out on had to do with contract growing. My only 
comment to you is that at that time we discussed with him the 
possibility of USDA having a website on which would be placed a 
uniform contract or contracting standards--whether it is 
poultry, whether it is hogs--so that our producers who are 
getting locked into these legal agreements, sometimes without 
the proper kind of advice prior to signing those agreements 
across this country, would have a source of information that 
local attorneys could use and others that are working with 
them. I don't know whether that has been set up by Mr. Baker. I 
am not saying you have to put the real contract on there, but 
attorneys could extract from that at the Department and provide 
very useful information to growers out there in a most 
complicated and concentrated industry now. I don't think that 
has been done yet, to my knowledge, and it was a very simple 
request and one that could at least provide information to 
farmers. So I just wanted to put that on the record.
    Secretary Glickman. We will follow up on that immediately. 
I am not aware of the specific request, but it is the kind of 
thing we can do.
    [The information follows:]

    The Grain Inspection, Packers and Stockyards Administration 
established a website on January 7, 1999 at the following 
address: http://www.usda.gov/gipsa/progser/p&s/
pltcontract.html.

    Ms. Kaptur. Right. It would be like uniform contracting 
standards--what to look for, what to ask. These are some of the 
experiences. Some of the farmers that are out there in the 
country may even be willing to put their contract up there on 
the website, but this kind of information could be very, very 
important, certainly in places like Ohio, but I have a hunch 
many other places in the country.
    Again, we will submit other questions for the record, and 
we thank you for your excellent testimony this afternoon. We 
look forward to working with you.
    Ms. Kaptur. Thank you, Mr. Chairman.
    Mr. Skeen. I thank the gentlelady. Mr. Boyd.
    Mr. Boyd. Thank you, Mr. Chairman.
    I want to thank my friend, Jay Dickey, for giving me his 
time. I heard him say earlier that he used to be a Democrat. 
I'm glad he found a group that he is comfortable with. 
[Laughter.]

                         crop insurance program

    Mr. Secretary, there has been a lot of talk, as we look for 
new ways to solve some of the difficulties that we are in, 
about reforming crop insurance. My question is very simple and 
straightforward. I farmed for 30 years, and I can't remember a 
year where we weren't at least allowed to go the ASCS office to 
sign up for some sort of ad hoc disaster program. I can tell 
you, from my experience, that the money wasn't very well spent 
in many cases. We had some fraud problems and other kinds of 
problems.
    If we return to that kind of scenario with the crop 
insurance program, what kind of rules or safeguards do we put 
in place to make sure that the money is properly spent? Because 
you know that this Congress, nor the American people, will 
stand for a program that wastes money.
    Secretary Glickman. You are talking about if we go to a 
pooled crop insurance system.
    Mr. Boyd. Yes, a crop insurance system.
    Secretary Glickman. Yes. Well, as you know, the GAO and our 
own Inspector General have looked very closely at the operation 
of the crop insurance program. In fact, there was quite an 
expose about how much administrative costs crop insurance 
companies were taking and what they were using their 
administrative costs for.
    One of the concerns is to make sure that our USDA and our 
Farm Service Agency still has a major role in the sale of those 
crop insurance policies, so it is not run totally by the 
companies.
    I guarantee you that, if we go to a vastly expanded crop 
insurance scenario, it will require a great deal of oversight 
from us and the General Accounting Office and our Inspector 
General, because you have a third party involved there; you 
have got the company.
    Mr. Boyd. Right. The issue I want to address, though, and I 
will try to illustrate with an example. If we go to a full crop 
insurance program, where part of the formula that we are 
insuring is yield, how do we keep fraud out of the system in 
terms of insuring that yield? How do we keep people from 
farming the system, if you will? How do we keep people from 
just planting seed and then do nothing to make the crop 
productive and then coming along and saying, oh, you know, I 
have a disaster. And they do have a disaster, but much of it 
was their own creation. That is the kind of situation I am 
talking about.
    Secretary Glickman. Mr. Collins.
    Mr. Collins. I might say that people in the insurance 
business have a nice phrase for that kind of behavior. They 
call it ``moral hazard.'' People who design insurance policies, 
including USDA, spend a lot of time trying to figure out the 
right rate that we are going to set, so we don't encourage 
people in areas that maybe shouldn't be producing a certain 
kind of crop to get into that crop. Secondly, we have 
requirements that require people to perform in, what is called, 
a ``workman-like'' way. As you say, they can't go out and 
spread seed by airplane into the soil somewhere when there is 
zero prospect of it growing.
    So I think those are things that the people who are in the 
risk management agency try to focus on, and we talk a lot about 
things that might create moral hazards. So it is a good point. 
You can't necessarily insure 100 percent zero moral hazard, but 
you can certainly, in the design of the insurance policies, 
make it less likely that that kind of fraud will occur.
    Secretary Glickman. But this is also a reason why you have 
to have, I think, some government role, the Farm Service 
Agency, in management or oversight of this. If you leave this 
strictly between the policyholder and a company, then I think 
you do create an environment of greater potential fraud.
    Mr. Boyd. Thank you, Mr. Chairman.
    Mr. Skeen. Mr. Dickey.
    Mr. Dickey. I was going to mention something to you, Dan, 
about denial, and I think there is quite a bit of denial on the 
part of the farmers as far as the fact that things are going to 
get better and that they are not as bad as they appear.

                             trade surplus

    But there is also a denial, I think, nationally in this 
way, and I don't know if it is a correct use of the word 
``denial,'' but our farmers do not think that there is enough 
appreciation for the trade surplus that agriculture presents, 
or gives us year after year after year. And they felt a little 
frustrated in that that story isn't getting out. One person 
said, well, I guess the only way for it to get out is for the 
agricultural industry just to fail and for us to not have 
agricultural products in any one given year or lesser ones.
    Is there anything being done to explain that surplus? Is 
there any marketing of the value of agriculture to America that 
is being done?
    Secretary Glickman. Well, you have the Ag Council of 
America, and you have other private organizations that do this 
all the time. Of course, private companies like ADM that 
advertise ``supermarket to the world'' do it as well. Butthe 
fact of the matter is that agriculture is, if not the largest, almost 
the largest single contributor to our balance-of-payment surplus year 
after year after year. Most people in economic circles know that. I am 
sure Mr. Greenspan knows that for sure. A big part of our budget, 
concerns our effort to try to keep that going.
    Maybe we ought to be talking more about it. We have 
cooperator programs with, look, the wheat growers, rice 
growers, corn growers. And they are all out there--a lot of 
them, we helped finance their programs overseas to make sure 
that they continue to do the work that they are doing. So most 
of the farm organizations understand this.
    But it is just a constant battle. You know, if you don't 
repeat something over and over and over again, they will forget 
it.
    Mr. Dickey. Well, they were concerned about the urban 
Members of Congress who might hear it and it didn't register 
with them that we do have an effect.

               farm bill contribution to balancing budget

    Do we have any way of quantitating the part that Freedom to 
Farm has played in balancing the budget? Or has?
    Mr. Collins. Well, it has a role, in that our export 
programs are authorized under that Act. And to the extent that 
our export programs have been successful in promoting exports, 
then--pardon me; maybe I misunderstood you. You said balancing 
the budget or balancing the trade deficit?
    Mr. Dickey. Balancing the budget.
    Mr. Collins. Oh, balancing the budget. Well, to the extent 
that they generate economic activity in agriculture, people pay 
taxes. There was a time 10 years ago when the net taxes paid by 
agriculture as a whole was negative, but it is not the case 
anymore. Today farmers are positive contributors to taxes to 
the Federal treasury.
    To the extent that things like AMTA payments or loan 
deficiency payments keep production up and generate incomes for 
producers, and they pay taxes on that, then that contributes to 
balancing the Federal budget deficit.
    Mr. Dickey. You see, they were striving to find other ways 
that they were helping. I don't know whether that is a true 
picture of how the individual farmer thinks across America, but 
I know I got an honest picture, and it wasn't very funny.
    Secretary Glickman. Jay, if I may just say one other 
thing--I'm sorry for eating a pistachio.
    Mr. Dickey. I am doing the same thing. [Laughter.]
    Secretary Glickman. It is one of the reasons why it is so 
important that this committee has both urban and rural members 
on it. A lot of people make fun of some of these things, like 
farmland protection or even global climate change, but the 
truth of the matter is that 98 percent of the people don't live 
on farm country, and they do need to see a relationship between 
what we do and their lives.
    For example, 70 percent of the land in this country is in 
private hands; 30 percent is in public hands. Most people would 
think it would be the reverse. They think of all the signs of 
the Forest Service and the Park Service and other agencies. In 
truth, the quality of their lives in matters ranging from water 
quality to recreation is more influenced by what happens in 
that vast private lands area than it is in the public lands 
area. A lot of our programs are in things that some people may 
say sound a little fringey, but these programs may, in fact, 
protect the quality of life of people who live in urban areas.
    An example is the water supply of New York City. We went 
and did a conservation program up in New York to basically 
protect the streambeds of some of the feeder streams that feed 
the water supply up in the Catskills. That water supply in New 
York is the most pure of any major water supply serving any 
major city in the entire world, and it is virtually unfiltered 
except for natural phenomenon.
    Okay, how does that happen? That happens because we have 
conservation programs. Farmers do a good job of protecting 
their land base, and everything else, and it is just a 
remarkable type of phenomena. Here you have the city of New 
York that depends on basically unfiltered water from upstate 
New York?
    And one of the things that has always struck me is that 
sometimes we get into little arguments between urban and rural 
Congressmen and other people about, well, that is global 
climate change; that stuff is crazy. Well, you know what? A lot 
of folks who live in urban areas care about this. They want to 
make sure that their air is clean and their water is clean, and 
farmers do, too, you know.
    One of the things that strikes me is that it would help 
production agriculture to understand their role in making the 
whole country a better place.
    Mr. Dickey. I think they know. They don't believe other 
people know.
    Secretary Glickman. Yes. Well, when we were up in New York 
and we did that water system, they knew. We made a big deal. 
The people of New York--I mean, I don't know how much they 
think about it--that they got clean water because the farmers 
in upstate New York were doing their work----
    Mr. Dickey. You mean, we don't need to try to trade Serrano 
off this--he is still on this--so we did it? [Laughter.]
    You know, I got to asking him how many crops were growing 
in his district. But he has cleaner water because of that. That 
is a crop because it lasts forever.
    Thank you. Thank you, Mr. Chairman.
    Mr. Skeen. Thank you. If you have any more questions, we 
will take them for the record.

                              Adjournment

    Mr. Skeen. Mr. Secretary, it is right up there about two 
minutes to 5:00 and you need to get running.
    Secretary Glickman. Thank you.
    Mr. Skeen. We thank you so very much.
    Let me give you the whole answer to this agricultural 
problem. That is, any kind of business you are in, where 
everything you buy, you buy retail, and everything you sell, 
you sell wholesale, you are in very deep trouble, and that is 
agriculture.
    Secretary Glickman. Yes, I know.
    Mr. Skeen. And I have been in there all my life. I just 
worry about the future, who is going to take over one of these 
days, because a lot of these folks kind of figured out from the 
start, you can't make a living very easily in agriculture. It 
is very shaky. You hear that all the time.
    But thank you for your help and thank you for that great 
staff you have and the time that you have given us.
    We are adjourned.

[The official Committee record contains additional information here.]


                                          Thursday, March 18, 1999.

                      DEPARTMENTAL ADMINISTRATION

                               WITNESSES

SALLY THOMPSON, ACTING ASSISTANT SECRETARY FOR ADMINISTRATION AND CHIEF 
    FINANCIAL OFFICER
ANNE F. THOMSON REED, CHIEF INFORMATION OFFICER
ROSALIND GRAY, DIRECTOR, OFFICE OF CIVIL RIGHTS
CONSTANCE D. GILLAM, BUDGET OFFICER, OFFICE OF THE CHIEF FINANCIAL 
    OFFICER
STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

                       Introduction of Witnesses

    Mr. Skeen [presiding]. I want to say good morning to you. 
Today we take up the Fiscal Year 2000 budget request for the 
Departmental Administration, the Chief Financial Officer, the 
Chief Information Officer, and the Office of Civil Rights. That 
is an awful lot of offices.
    Ms. Sally Thompson is here as both the Acting Assistant 
Secretary for Administration and Chief Financial Officer and 
Ms. Anne Reed is the Chief Information Officer and Ms. Rosalind 
Gray is the Director of the Office of Civil Rights. I 
understand that all three witnesses have separate summaries to 
present but before that, I will ask Ms. Kaptur if she has an 
opening statement.
    Ms. Kaptur. No, Mr. Chairman. I just want to welcome our 
witnesses today. This is our last panel from the Department and 
we have had quite a set of hearings this year. They have been 
very cordial and very informative and we look forward to----
    Mr. Skeen. We are good listeners.
    Ms. Kaptur. We are. We are good questioners, too. And we 
look forward to your testimony today. Thank you for coming.
    Mr. Skeen. I think Ms. Thompson is going to lead off.

                   Opening Remarks of the Acting ASA

    Ms. Thompson. Thank you, Mr. Chairman.
    Mr. Skeen. You are welcome, Ms. Thompson.
    Ms. Thompson. Thank you, Mr. Chairman.
    I have submitted for the record and for the Committee 
members my written testimony. I realize that this is your last 
of the hearings in this session and it has been six long weeks 
so I am going to be very brief.
    When I appeared before you last year, Mr. Chairman, I had 
been CFO for three days. So, I am back today to tell you what I 
have accomplished.
    Let me back up for just a minute and say that when I came 
here to Washington, I had been State Treasurer of Kansas for 
seven years, and before that I came out of the private sector--
banking executive and a CPA with two hats for many years. This 
is part of why I came into Government, to bring effectiveness 
and efficiency of sound business practices and principles into 
the Federal Government. And so, I would like to tell you today 
as CFO what I have accomplished and to request the tools I need 
to complete the job I need to get done and then secondly to 
discuss with you--or probably firstly--my new role as the 
Acting Assistant Secretary of Administration.
    As you probably know, the Department of Administration is 
kind of the centralized function for the Department. We have 
human resources there, government ethics, policies and 
procedures for procurement, property management, facilities 
construction and operation. In addition to that, we have the 
Small and Disadvantaged Business program. We have Program and 
Administration Outreach programs as well as administrative law 
and hazardous waste management. We also have the civil rights 
program but I brought with us today our Director of Civil 
Rights, and she is going to cover that area for you.

                             CENTRALIZATION

    As the centralized administration function for the 
Department, we provide leadership, policy, oversight and 
operations. We appreciate this committee's support of all of 
the things that we have been able to accomplish this past year.
    We have implemented an Office of Ethics that is monitoring 
the ethics throughout the Department and putting integrity into 
that. We have had successes in Welfare To Work programs. We 
have set up a conflict prevention and resolution staff to try 
to prevent some of our equal employment opportunity issues that 
we have been addressing. This morning, I just came from the 
National Black Business Council in town of which we are 
providing one-on-one counselling to them through our Small and 
Disadvantaged Business Utilization Program.

                        CONTINUITY OF OPERATIONS

    Now, we are working on some other things. We are working on 
our continuity of operations programs, which is an emergency 
preparedness program, both in looking at the front end on 
prevention and tightening up our security and at the back end 
on how we would be able to respond instantly ifa disaster hit 
the Department.

                         RESOURCE REQUIREMENTS

    What I would like to talk to you today about is resource 
needs in four different areas in Departmental Administration. 
In the Departmental Administration, direct appropriations, we 
are requesting about $3.9 million--a million of that in 
mandatory pay increases. We have 650 employees in the offices 
that are managing all of the things that I just mentioned in 
the leadership policy role as well as oversight and operations.
    In that increase of $3.9 million, I will talk to you about 
a request for $900,000 in the administration of our outreach 
program and then Ms. Rosalind Gray will talk to you about $1.6 
million in civil rights.

                            OUTREACH EFFORTS

    As you probably know, the history of USDA has been a very 
decentralized organization. In this day and age, that just 
doesn't work and so the Secretary this past year has 
centralized the administration and the oversight of outreach 
programs. As you probably know, most other programs that the 
USDA provides serve the underprivileged and the underserved, 
whether it is in the food and nutrition area, in a rural 
development area, or in farm service areas and on down the 
line. But what we needed as a Department is an administration 
of pulling all this together--centralizing it--and then having 
a Department that would negotiate the cooperative agreements 
and then provide the compliance and oversight to make sure that 
these programs that are being carried out are reaching the 
people that they were intended to reach.
    Now, this was just a little different than the program 
itself. What it does is identify those people that are falling 
through the cracks in the way that we are administering the 
program and how we can do something about that. Of course, we 
have worked with a lot of that on a centralized basis but we 
have also worked on an individualized basis, where we have 
partnered with community-based organizations. The Secretary has 
given me the job as the new Acting Assistant Secretary to put 
together that Departmentwide plan, and I am asking today for 
additional resources of $900,000 for staff to be able to carry 
out that whole program.
    In addition to that, we are requesting $7 million in grant 
money that would go out throughout all of the States and 
counties. We have $3 million this year. We have been able to 
touch the lives of over 100,000 disadvantaged people, giving 
them technical assistance and training and it goes from very 
uniqueness of helping a 68-year-old farmer in Kentucky keep the 
land that had been in his family for generations down to 
helping young farmers in Florida test out their skills. We have 
also helped farmers find a market for the new seedless 
watermelon. And so, there are success stories all over about 
347 counties, I believe, and 22 States that we have reached 
with the $3 million that you gave us last year. We certainly 
would like an additional $7 million to expand that program 
significantly.

                       SOUTH BUILDING RENOVATION

    The other major area that I need to talk to you today about 
is the request for additional funding for a program, Mr. 
Chairman, that I believe you were involved with about four 
years ago when you approved the renovation of our South 
Building on Independence Avenue, about 2 million square feet 
that was built with WPA money in the 1930's.
    I probably don't need to tell you about the health and 
safety issues of that building, whether we are talking about 
the air quality, the heating, the lighting, the plumbing, or 
the electricity. It doesn't meet code, it is not accessible, 
and that project is a 10-year project.
    I am pleased to tell you in our list of accomplishments 
that, by the end of this fiscal year, we will have nearly 
completed phase one of an eight-phase project. In other words, 
we have broken down the building into eight phases which pretty 
much relate to the wings of the building, and we will have 
nearly completed one of those wings by this October.
    We had funds leftover from prior years that we have used 
this year to finish the construction of that first wing which 
is going to cost us about $26 million this year. What we are 
requesting for next year is an additional $21 million. You gave 
us $5 million for Fiscal Year 1999. We are requesting another 
$21 million because the planning is all done, and we would like 
to continue the construction on the next wing. Again, that will 
cost us about $26 million.
    As you know, with any kind of a construction project, if 
you stop in the middle of it, it costs you more money and so 
this is very important that the Department continue with this 
project. So, we would again request the additional monies to 
continue on that project, and we would love to have you come 
over and see the construction project, if you have time later 
on in the year when things slow down a little bit.

                       HAZARDOUS WASTE MANAGEMENT

    In the fourth area, before I start to wrap up my remarks, 
we have the Hazardous Waste Management Program in Departmental 
Administration. We are requesting an additional $7 million in 
funding, bringing it up to $22.7 million in fiscal year 2000.
    We are under a statute, of course, to complete the cleanup, 
and we are subject to liability under the natural resource 
conservation and recovery laws. We have finished the inventory, 
and we are now ready to start into what is the more complex and 
more costly responsibility in the area of cleanup. This last 
year, we have been able to leverage funding from responsible 
parties to take the $15 million that you gave us this last year 
and leverage another $30 million out of responsible parties.
    Of course, as you would know, that would take additional 
legal resources to be able to go after the responsible parties 
and to make them also help pay for the cleanup. This is one of 
those ``you either pay now or you are going to pay more later'' 
situations. I would request the $7 million in additional 
funding for that.

                              cfo remarks

    And with that, I am going to end my remarks on the 
Departmental Administration, but certainly would be available 
for any questions later. And I think my next remarks are as 
CFO, if I could next talk about the CFO. Is that on your 
schedule today?
    Mr. Skeen. Just go ahead and finish with the CFO.
    Ms. Thompson. Okay. Thank you very much.
    When I was here last year, as I said, I had been onboard 
for three days but I made some promises to you.
    Mr. Skeen. You are a very versatile woman. [Laughter.]

                             y2k compliant

    Ms. Thompson. I can wear many hats, you know. Pink ones, 
purple ones, red ones, whatever.
    I told you, for one thing, that I would make sure that our 
National Finance Center--that is in New Orleans and has an 
employee base of about 1,800 employees, processes the payroll 
for a fifth of the Federal Government, and also processes the 
Thrift Savings Plan for 2.3 million Federal employees, as well 
as doing other services for 60 other Federal agencies--would be 
Y2K compliant.
    I am very pleased to be able to come back to you today to 
say that we have accomplished that. We set a self-imposed 
deadline of June 30 to have 23 million lines of code reviewed 
and make them compliant. We did that and then we set the next 
deadline of December 31 to make sure that we put all of those 
changes in those systems through a time machine that forced the 
dates forward to test out not only the year 2000 but 2001, 
2002, 2003, and 2004. They are all compliant, they are all 
working, and we are ready for the next millennium. So, I am 
very pleased with the Center for having accomplished that.

                     computer system implementation

    In addition to that, I promised you that I would also bring 
in an experienced project team to take over the computer system 
implementation to get us compliant with standard general ledger 
in the CFO Act.
    I did that. I brought in a team of five people that had not 
only the systems experience of having brought it up in another 
Federal agency just like our system but also had very strong 
skills in financial management as well. They are onboard, and 
have put a new project plan together. We are in the middle of 
the implementation, and it is working well. We will bring up 
the rest of the Forest Service--the other two-thirds--on 
October 1. We will also bring up another major agency--our Food 
Safety and Inspection Service. We have a 5-year plan to get 
everything done, and to get the old systems out of there. 
Everything is moving along very nicely, and I am very pleased 
with that.
    But, as we went through the plan, we found out that it 
isn't just bringing up a new system that solves the problem of 
data integrity and credibility of our financial information. It 
also involves changing the business processes within the 
agencies. And so, today, I am here to ask you for about $2 
million of additional resources for CFO. We have not had an 
increase in the CFO's office since 1990 when it was first born. 
These resources are needed not to bring the new system up but, 
again, to provide that leadership, that policy, that oversight 
in the Department in working with all of the other program 
managers and the other agencies to review their business 
processes--to clean up their data--so that clean data in means 
clean data coming out of a system.
    In addition to that, I can promise you that that will move 
us along to getting a clean audit opinion for the Department 
which means more credibility and more reliance that you can 
have on the data that is coming out of the USDA and, probably 
most importantly, will give our program managers better 
information in which to make decisions and use the tax dollars 
that you allocate to us more efficiently and more effectively.
    We need that, as well, to help guide that project through 
the Department, as well as the accountability reports, as well 
as making sure that the data--that we are going to use to 
measure the performance goals and the results of what we are 
doing--is credible and that you can rely upon that.

             resources to provide leadership and oversight

    We have, as you know, $100 billion loan portfolio, which is 
the largest of all the Federal agencies put together. That is 
one that is mostly of use in rural America. People think a lot 
of it is the farm loans but we have housing loans--a bigger 
portfolio than HUD because they are direct loans--we have 
utility loans, and we have communication loans, community 
development loans, small business loans in that area. USDA is 
charged with the development of rural America.
    Again, we need the leadership and the resources to provide 
that leadership because that is one of the biggest issues, 
keeping the Department from getting a clean opinion. I have 
made a promise to the Vice President to whom I am giving 
quarterly reports through OMB on what we are going to do to 
assure that we can get a clean opinion on our loan portfolio 
because that issue of loans could keep the Federal Government 
from getting a clean opinion.

                       closing remarks of the cfo

    So, there, again, it is my office that leads the charge, if 
you would, and provides the leadership, guidance, policies, and 
the oversight function to make sure that all of this gets done. 
And that is why I am requesting the funding for the CFO's 
office. I would certainly appreciate it, if I can thank you for 
all the help that you have given. I appreciate my five plus 
five minutes in the sun here. I made promises to you last year 
and I kept those promises. I can make this promise again this 
year--that if you give me the resources that I have asked for 
to be used for the good of the Department, I will come back and 
tell you next year, that I have again kept my promises. Thank 
you very much.
    [The prepared statements and biography of Sally Thompson 
follow:]

[The official Committee record contains additional information here.]


    Mr. Skeen. I appreciate it.
    Ms. Reed.

                         opening remarks of cio

    Ms. Reed. Thank you. And, with your permission, I also will 
submit remarks for the record but I do have a few comments that 
I would like to make here.
    Mr. Skeen. That is fine. You can just go right ahead.
    Ms. Reed. Good. Thank you.
    It is indeed an honor to serve as the Department's Chief 
Information Officer, to work with Secretary Dan Glickman and 
Deputy Secretary Richard Rominger--who continue to be extremely 
supportive of the work we are doing in the information 
management arena of the Department.

                          year 2000 conversion

    As you know, our top priority for the last several years 
has been preparing ourselves for the Year 2000. We now have 
about 288 days left before January 1, and 13 days left before 
our compliance deadline set by the President for our mission 
critical systems. As of March 12 we were over 80 percent 
compliant. It is my expectation that we will be well over 90 
percent compliant by the end of March. Most of those systems 
are well into testing now.
    We will, however, continue testing right up until January 
1. We want to make sure that everything is connected and we 
will continue to be able to deliver programs. Whether or not 
our systems work, we know we have many partners that we have to 
work with. The Food and Nutrition Service is working with the 
States on food stamps, on women, infants and children, on child 
nutrition programs, and the Rural Utilities Service is working 
with the rural utilities to assure that there is a continuity 
of service there. So, we have extensive outreach.

                year 2000 impact on nation's food supply

    We have also begun to, over the last months, assess the 
impact of Year 2000 on the food supply. As part of the 
President's Council on Year 2000 Conversion, we established a 
committee to look at the Y2K impact on the food supply. We 
published a report fairly recently on that, and I believe we 
provided a copy to you. The bottom line is that all the 
information that we have today indicates that we should not 
expect any major disruption to the Nation's food supply as a 
result of the Year 2000.

                          year 2000 awareness

    There are issues that we continue to watch very closely, 
most particularly small companies--this plays out, whether it 
is food sector or any other sector. Small organizations have 
been less engaged in Y2K preparedness than the large companies. 
So, we will be actively participating in a Y2K small business 
action week at the end of this month. The Department is playing 
a leadership role in drawing upon our resources in rural 
America to bring people to a satellite video conference where 
we can share with them tools and techniques, make sure that 
they understand what the issue is, and try to generally raise 
the level of awareness in small businesses in rural America.

                     year 2000 international impact

    The other area that we will continue to watch very closely 
is in the international arena--what the impact is of other 
countries' preparedness on our abilities to import and export 
food. So, I assure you that those things will continue to 
command a significant amount of attention, not just from myself 
but from the entire leadership of the Department.

                    farmer and low income safety net

    Turning to the information technology budget at the 
Department, the President's budget seeks to strengthen the 
safety net for farmers and low-income populations, to provide 
economic opportunities for rural Americans, and to protect our 
natural resources, and further improve the safety of the food 
supply. Our current farm prices have given us some significant 
challenges in this arena. I know that has been a subject of 
much conversation. But we are firmly of the belief that our 
information technology infrastructure is critical to our long-
term ability to help serve the customer in a better way. We do 
believe that we have made progress. We know we have a 
significant way to go.

                       internet program delivery

    In the last year, various parts of the Department have 
really begun to use the Internet in very wonderful ways to 
reach out--agricultural marketing service disseminates 
commodity information to markets within hours of collection via 
the Internet. The Farm Service Agency has a new electronic bid 
system so that $1.2 billion in purchases of food for 
humanitarian assistance can be opened and awarded in a matter 
of hours. So, there are areas where we have made progress. It 
gives us a glimpse of what we can do in the future. The Common 
Computing Environment for the farm service community is a 
critical initiative for us to help us to provide that service 
in the future.

                   usda information technology budget

    Our overall budget request for information technology in 
the Department is just over $1.2 billion this year. We 
requested in the past year just a little less than $1.2 
billion, but have received also almost $40 million in Y2K 
supplemental money to help that. About 30 percent of the 
resources that we are requesting across the Department for 
information technology is for modernization and enhancement 
initiatives. About 70 percent is for the operations and support 
of our existing ongoing systems. It also includes the salaries 
of employees that we have working on information technology.

                    food and nutrition pass through

    I should point out, again, that of that $1.2 billion, about 
$280 million is money that is passed from Food and Nutrition 
Service to the States to support their efforts in the technical 
infrastructure for food stamps. So, that is part of our budget.

                      common computing environment

    Again, probably the most significant increase that we are 
requesting within the total information technology budget is 
for the Common Computing Environment--an additional $40 
million. The total program value that we are projecting is 
about $90 million but much of that is covered through 
reallocations that we have made internal to the Department, as 
well as some request of use of CCC funds. So, that leaves about 
a $40 million increase.

                              role of cio

    As Chief Information Officer, my job is much like that of 
the Assistant Secretary's and the CFO's in that we assure that 
we are approaching our programs in a way that is most efficient 
and most effective. Information technology, as you can tell, is 
a very significant investment for the Department so it is 
important to me that we use that investment in the wisest way 
possible.

                         ocio fy 2000 increase

    For my own office, I am requesting an increase of 
$2,447,000 over our Fiscal Year 1999 appropriation. The total 
request, just under $8 million, is really two-thirds of a 
percent of the Department's total IT budget. So, for really a 
fairly nominal sum compared to what our overall investment is, 
we believe that we can be far more effective and more efficient 
in using our information technology.

                       common computing oversight

    We have made some real strides in the last year. A portion 
of my increase is requested to pursue my oversight 
responsibilities with respect to the Common Computing 
Environment. Over the last year, we have just about completed a 
nationwide telecommunications infrastructure forthe service 
center community and, within a matter of weeks, we will for the first 
time be deploying computers to the service centers which are common. 
They will have the same word processing packages. Each one will be 
loaded with core information that could be used for Rural Development, 
NRCS, and the Farm Service Agency. This is the first time that they 
will actually have equipment that is interchangeable, so that will 
improve their ability to deliver service. It also is more effective 
from a maintenance perspective.

                    CLINGER-COHEN ACT IMPLEMENTATION

    To implement the Clinger-Cohen Act, also known as the 
Information Technology Management Reform Act, I have a number 
of requirements that are placed upon me. I am requesting from 
you some additional resources to help me in that effort: 
$500,000 to help develop our information technology capital 
investment planning process; $500,000 for our information 
technology architecture, which helps us to be able to share 
information across the agencies; $300,000 to improve our 
project management capacity.

                         IT PROJECT MANAGEMENT

    So often when we make these investments, we forget that 
what is critical is the people who are managing the project, 
and it is absolutely imperative that they have appropriate 
skills. You heard earlier of our success in bringing in an 
experienced project management team for the financial system. 
We need to further develop that capability within the 
Department to avoid any likelihood that projects will be ill-
managed because the people aren't well-trained.

                         IT WORKFORCE PLANNING

    And, we have requested $200,000 to support our workforce 
planning. We in the Federal Government, are in a workforce 
crisis in information technology. We are competing with the 
private sector for talent. With just a little bit of resources 
I believe that we develop programs that will increase the 
likelihood that we can attract and retain talent within the 
Department. But it is a very, very competitive environment.

                NEW ASSOCIATE CIO FOR TELECOMMUNICATIONS

    Also, I am pleased to tell you we have recently hired a new 
Associate Chief Information Officer for Telecommunications 
Services and Operation. Keith Jackson will be focusing on an 
enterprise network for the entire Department. He also is 
playing a leadership role as we transition the Department to 
the FTS 2001 telecommunications contract.

                          INFORMATION SECURITY

    I seek also your support in information security. It is no 
secret that, as we move more and more into an information 
society, we are increasingly vulnerable to the abuse and misuse 
of that information. We need to strengthen our security 
management within the Department. I have requested $500,000 to 
aid in that effort.
    One of my concerns is that when we look at how much we have 
invested in security across the Department in the past, it is 
less than one-half of one percent of our information technology 
investment. The industry standard now is five to eight percent. 
We desperately need to put more focus and attention on securing 
our information and assuring the privacy of that information. 
So that the people we serve are respected, and the information 
is managed in a way that we are cognizant of its security.

                         CLOSING REMARKS OF CIO

    As you can tell, we have a very full plate. I want to close 
by just thanking you for the support that I have had from you 
and from your staff in the past and I look forward to working 
with you on accomplishing these important initiatives. Thank 
you.
    [The prepared statement and biography of Anne F. Thomson 
Reed follows:]

[The official Committee record contains additional information here.]


    Mr. Skeen. Thank you, Ms. Reed.
    Ms. Gray.

         INTRODUCTORY STATEMENT OF THE DIRECTOR OF CIVIL RIGHTS

    Ms. Gray. Mr. Chairman, and members of the committee, I am 
pleased to appear before you today to report on the 
accomplishments of the Office of Civil Rights for Fiscal Year 
1998 and to submit and present the 2000 budget request.
    I was appointed Director of the Office of Civil Rights in 
July 1998. Last year, the Acting Assistant Secretary for 
Administration reported on civil rights accomplishments since 
the CRAT report was issued. It is the Civil Rights Action 
Team's report on the conditions of civil rights at the 
Department, and was followed by the CRIT implementation report.

                           CIVIL RIGHTS GOALS

    As you know, the Department's overall civil rights goal is 
to treat every customer and employee fairly and equitably, and 
with dignity and respect. To that end, the Department has 
developed and initiated more than two dozen policies and 
procedures over the last two years. Each year, we train each 
employee in the Department on civil rights--focusing on 
different issues in different years--and we train managers to 
ensure that they have the skills to develop a diverse 
workforce. We also are concentrating our efforts on increasing 
diversity at the Department.

                    PROGRAM AND EMPLOYEE COMPLAINTS

    One of the major concerns of the CRAT reports certainly was 
that there were both program and employee complaints that had 
been delayed in processing at the Department. We would like to 
report to you today that last October--after having made some 
progress--the Secretary convened a task force for the program 
complaints. And, of the 1,088 backlogged program complaints, I 
would like to report today that only about 20 of those cases 
are unresolved. They are mostly food stamp cases that we will 
have completed by the end of March.

                           BACKLOG COMPLAINTS

    Also as part of that backlog of complaints, there were 
approximately 164 African-American farmers' unresolved 
complaints which are part of the much-publicized consent decree 
in the Pigford v. Glickman litigation. Those cases will be 
processed pursuant to the terms of that decree. As you know, on 
January 5, 1999, the Department did enter into a consent decree 
that was negotiated by the Department of Justice that provides 
a process for resolving the complaints filed by African-
American farmers.
    In the backlog process, we resolved cases that had been 
filed by persons other than African-American farmers. Out of 
that process, we closed the remaining cases and we made 53 
offers of settlements. Forty-two of those offers were accepted. 
In some of the 11 that were not accepted, the person made 
counteroffers that we did not accept or they did not accept our 
offer.
    On the employment side in the backlog, there were more than 
2,000 employee complaints backlogged. As of March 3, more than 
1,500 of those employee complaints had been resolved. However, 
I must tell you that also during Fiscal Year 1998, more than 
900 new employee complaints were filed so, while we made a lot 
of progress, we still have about 1,600 active employee 
complaints. On the program side, after the backlog process, we 
would have had approximately 240 remaining cases but, with the 
passage of the statute of limitations and the publicity 
surrounding the consent decree, more than 1,200 new program 
complaints have been filed.
    To resolve these cases requires a lot of work. In many 
instances, we find the Department does not have jurisdiction 
over these cases but to reach that point it requires review of 
the compliant, it requires processing, it requires appropriate 
and accurate determinations to be made. We are requesting 
additional assistance in this area.

                       STATUTE OF LIMITATIONS ACT

    Last fall, Congress passed the Waiver of the Statute of 
Limitations Act. By December 5, 1998, we had published 
regulations to implement that waiver. We have now reviewed all 
of our cases to determine if statute of limitations issues were 
involved in those cases. We identified more than 170 cases in 
our active case load that had statute of limitations issues.
    We met the March 1 deadline of sending letters to each of 
those 170 persons. Forty of those persons have now asked for 
their cases to be processed under the statute of limitations 
waiver and 20 of those persons have requested hearing on the 
record. Our regular process for complaints do not provide for 
hearing on the record so we had to create arrangements to 
provide for those hearings. We have requested that 
administrative judges be provided through the Office of 
Personnel Management and that also has increased the need for 
additional resources.

                         ACCOUNTABILITY SYSTEM

    One of the problems and one of the continuing concerns of 
the Department is that, along with educating employees and 
managers, we have to ensure that people are held accountable 
for their actions. To that end, the Department has implemented 
in headquarters an evaluation system where agency heads and 
managers are, as part of their annual performance evaluations, 
evaluated on their implementation of the civil rights plans 
that they developed for their agencies. We must work with each 
of the agencies, however, to ensure that not only managers in 
headquarters but employees and managers around the country are 
held accountable for their actions.
    We need additional resources to do compliance reviews, both 
program and employment, to make sure that our employees and our 
customers are treated fairly and to implement a disciplinary 
policy so that where there are infractions and where there are 
violations of individuals' civil rights, those employees and 
those managers are appropriately disciplined.
    Much of our focus in the next year in implementing the 
accountability system will be to ensure that employees are held 
accountable for their actions. To do that, we also have to 
assist the managers. Instead of just processing a complaint or 
doing a disciplinary action, we want to make sure that managers 
are aware of the appropriate standards. We have to do 
compliance reviews. We have to advise managers about 
appropriate procedures so that they have support to make sure 
that everyone is treated fairly.
    Within the amounts requested by the Departmental 
Administration for Fiscal Year 2000 is a budget request of $14 
million for the Office of Civil Rights--$2,041,000 above the 
Fiscal Year 1999 level. It includes $802,000 to improve our 
employment complaint processing and compliance reviews and to 
enhance our tracking systems for employment complaints. It also 
includes $837,000 to prepare and process the additional cases 
under the statute of limitations waiver which will require 
providing administrative hearings and it includes mandatory pay 
cost increases of $402,000.

                            CLOSING REMARKS

    We have made good progress, but we do have a lot of work to 
do so that we can ensure equitable treatment of all employees 
and customers. I appreciate the support of this committee and I 
welcome any questions that you might have.
    [The prepared statement and biography of Rosalind Gray 
follow:]

[The official Committee record contains additional information here.]


    Mr. Skeen. Thank you, Ms. Gray.

                       fy 2000 increase for ocfo

    Let us start with the Financial Officer. Ms. Thompson, you 
are requesting a $2 million increase in Fiscal Year 2000?
    Ms. Thompson. Yes.

                          financial statements

    Mr. Skeen. As you are aware, the Inspector General has been 
unable to audit the working capital fund's financial statements 
due to lack of supporting documentation. Specifically, how 
would the additional funding you are seeking be used to address 
the outstanding concerns of the Inspector General of having an 
unauditable financial statement?
    Ms. Thompson. We are expecting to have an auditable 
financial statement this year. We have been providing and will 
apply additional resources of leadership and policy to the 
working capital fund. As you know, that is a fee for service 
fund and it also will be part of the new financial management 
system.
    And that is part of the problem with the whole Department 
getting a disclaimer. Our old accounting system is not 
compliant with the standard general ledger and doesn't have the 
audit trail that the Inspector General needs to be able to 
track the information through the system. And so, it is going 
to be a partnership, between the CFO's office providing the 
leadership and the staffing, the new project team providing the 
system capabilities that they are bringing up, and the Working 
Capital Fund staff changing their processes--again, those 
business reengineering processes--to meet the new system.

                       availability of technology

    Mr. Skeen. I appreciate that answer. It has been apparent 
to me that when the technology was available that so many 
agencies throughout the Government have been lagging and being 
left behind because the technology has been evolving so fast. 
But, I want to tell you that I have visited the financial 
center in New Orleans. It is one of the most efficient centers.
    Also, in your testimony today, you hit on a nerve that has 
always jarred me because we have the technology but, a lot of 
times, these various agencies just let it go and don't use it 
to its fullest capacity. You certainly are doing it and you are 
doing it well. You are applying for additional help in that 
area because it is evolving so fast----
    Ms. Thompson. So very quickly.

                                  y2k

    Mr. Skeen. You are one of the first to say ``Y2K, no big 
deal'' because you are going to take care of it. And it always 
amazes me when somebody says, ``Y2K is going to do this or do 
that or do the other.'' So, I want to commend you on that----
    Ms. Thompson. Thank you, Mr. Skeen.
    Mr. Skeen [continuing]. And we will try to put the money 
together----
    Ms. Thompson. I appreciate that.
    Mr. Skeen [continuing]. That you have asked for because I 
think that you certainly use it well.
    Ms. Thompson. Thank you.
    Mr. Skeen. And for the Chief Information Officer----
    Ms. Reed. Yes, sir.

                        status of y2k conversion

    Mr. Skeen. Ms. Reed, we're 288 days away from January 1, 
2000 and I know that you mentioned something about this. Would 
you give us your assessment of USDA's Y2K readiness?
    Ms. Reed. Yes, sir.
    Mr. Skeen. Tell us why it's no big deal, that you're 
getting it done? We'll pass the information along to some of 
the other agencies.
    Ms. Reed. Well, I cannot tell you that it's not a big deal. 
It's a very big deal.
    Mr. Skeen. It is a big deal.
    Ms. Reed. I will say, however, that there are many, many 
employees across the Department of Agriculture who have been 
working very hard to make sure that they will be able to 
continue to deliver a program after January 1st. We've made 
significant investment in terms of dollars, in terms of talent, 
and in terms of leadership. As of last Friday, over 80 percent 
of our mission-critical systems are compliant. I expect we will 
be well over 90 percent by the end of this month, and see no 
problems whatsoever in being completely ready by January 1st. 
Having said that, given the extent and complexity of the issue, 
I shouldn't be surprised if there aren't minor glitches. And 
given that, we are investing significantly in contingency 
planning. We're trying to think through what all the things are 
that we don't have control over. For example, what might happen 
and what is it that we need to have in place to make sure that 
the people we serve continue to be served? So we're taking it 
very, very seriously.

                     y2k readiness in rural america

    Mr. Skeen. Also, would you give us your assessment of 
USDA's readiness as it relates to the domestic and 
international food supply and how it relates to rural America? 
You mentioned it, I know, in your testimony.
    Ms. Reed. Yes, I think the concern that we have in rural 
America is predominately with the small and medium size 
organizations. That, by the way, is not unique to rural 
America. It's true in urban America as well. There is a lot of 
evidence that suggests that smaller organizations are not as 
well engaged, and what we are trying within the Department to 
do is use the outreach mechanisms that we have. Sally Thompson 
spoke earlier of the number of loans that we have with very 
small businesses or small communities. We're contacting them to 
make sure that they understand what needs to be done. So, we're 
using the resources at our disposal.

                           food supply in y2k

    Food supply, generally the biggest area of concern that we 
have in this country is public panic. There is no indication 
that there will be any widespread, catastrophic disruption of 
food. It is possible that there will be intermittent kinds of 
disruptions unique to a particular product or a particular 
place. But there is no reason for panic. Our concern, as the 
media attention rises to this, is that people need to have more 
concrete evidence. We think at the Federal government level 
we're now able to provide the broad picture. We're hopeful that 
companies and local communities will now take the steps they 
need to take to be able to assure the population in their 
communities of their status of readiness.

                        support services bureau

    Mr. Skeen. The administration is requesting $74 million in 
appropriated funds for a new function and service center 
modernization initiative. I think you mentioned that?
    Ms. Reed. Yes.
    Mr. Skeen. That is a lot of money in what probably will not 
be a very good budget environment. Will there be any savings 
associated with this initiative in Fiscal Year 2000?
    Ms. Reed. I don't think we can project immediate savings in 
Fiscal year 2000. We'll get whatever figures we have on that 
for the record.
    [The information follows:]


[The official Committee record contains additional information here.]

    Mr. Skeen. We would appreciate having those.
    Ms. Reed. But let me just say we clearly anticipate that 
managing in a common administrative infrastructure across that 
community makes all kinds of sense. We will be able to manage 
more efficiently and more effectively. And over the long-term, 
we clearly do expect that there will be savings.
    Mr. Skeen. Well, I think also there's been a lack of being 
able to have real interchange or innovation.
    Ms. Reed. That's absolutely correct.
    Mr. Skeen. And that has irked me ever since I've been at 
this thing because the Government has been an isolated island, 
technologically----
    Ms. Reed. Right.
    Mr. Skeen. We're in the age now where you've got to know 
what everybody else is doing and how well they're doing it. We 
also need to provide the technology--I think the finance center 
is a good example.
    Ms. Reed. Yes, I think this is--I'm a very, very strong 
proponent of the Service Center Bureau. I think it will bring 
the right kind of integrated management that we need in this 
area.
    Mr. Skeen. Well, if you are sure--then the harp that I've 
been playing over here, you have sure helped me find the 
strings. [Laughter.]
    Ms. Reed. Thank you.

                  civil rights performance evaluations

    Mr. Skeen. Ms. Gray, your testimony says that you and the 
Assistant Secretary for Administration rated agencies and their 
administrators on their civil rights performance. Could we have 
a copy of that report for the record, and can you tell us some 
of the most important findings?
    Ms. Gray. The ratings were part of the evaluations for the 
agency heads and administrators for last fiscal year. And we 
certainly do have quarterly assessment reports for each of 
those agencies, including the annual one. We will provide you a 
copy of those reports.
    Mr. Skeen. That will include the civil rights----
    Ms. Gray. That would include only the civil rights----
    Mr. Skeen. Oh, only civil rights.
    Ms. Gray [continuing]. Initiative. Basically, what we found 
based on the development of policies and plans in the various 
agencies that most people met that criteria. There were 
certainly certain agencies where there were a large number of 
complaints filed, and there were also some agencies that 
engaged in early resolution for the employment complaints and 
they had a small number of complaints. So, generally, I would 
say that 80 percent of the agencies met most of their 
objectives. There certainly is room for improvement in the 
other 20 percent. For this Fiscal Year, they have changed their 
objectives and their plans, and we will evaluate them 
accordingly. But, yes, we will get you a copy of those reports.
    Mr. Skeen. Once again, I think that is your good 
leadership. That is what the problem is and you've got a 
solution for working on it. I certainly appreciate that.
    [The information follows:]

    [Clerk's note.--Subsequent to the hearing, the U.S. 
Department of Agriculture's Office of General Counsel 
determined that the information could not be provided because 
of privacy regulations.]

                     investing management resources

    Mr. Skeen. Ms. Gray, this committee has put some additional 
money in civil rights over the past few years and you note some 
progress in your testimony. But GAO, the USDA's own inspector 
general, and the comments of minority farmers in the press 
indicate that there are many problems that remain. Is USDA 
investing the management resources as well as the money needed 
to address these problems?
    Ms. Gray. Yes, we are. One of the achievements since both 
of those reports were released is that the Department has 
issued Departmental Regulations for employment and program 
complaint processing. We are finalizing the operational 
procedures for those regulations. Both of those reports note 
that the Department had been without regulations for processing 
civil rights complaints for a number of years. We have 
developed those regulations.
    We are, with the new staff we're adding on, providing those 
processes. For those tasks where there was no staff to perform 
them, we will be covering them this fiscal year and will carry 
out additional aspects of the work that needs to be done in the 
next fiscal year.
    We're having to and will complete the implementation of a 
new tracking system for our program complaints so that we can 
have current up-to-date information on the status of every 
program complaint in the office. That new system for programs 
will be complete before the end of May.
    Later in the summer, we will start to develop a new 
tracking system for employment complaints. The tracking system 
that we have now for employment complaints is an EMOS system. 
It's outdated and it's overloaded. We will start the 
development of that new system and that will be finished next 
year which is one of the areas for which we requested 
additional funds.
    I cannot say that as of today, we respond to all of the 
complaints within 180 days, which is what EEOC and our own 
regulations require. We have reduced the amount of time that it 
requires to respond to and finalize complaints. Our conflict 
management resolution programs and our ADR programs help with 
the resolution of those cases because people are able to elect 
mediation if they choose not to go through the complaints 
process.
    We hope that next year we will report that, based on our 
new regulations and our new processes being in place, we will 
be resolving all of our program and employee complaints within 
180 days which is the requirement.

                          building renovation

    Mr. Skeen. That sounds good. That's a very good goal to be 
working on and we appreciate that.
    Let me ask you about building renovation.
    Ms. Thompson. Yes?
    Mr. Skeen. How many years have we been working on that 
project?
    Ms. Thompson. Well, I believe that you approved that in 
1995. It took a while before we could start to do some planning 
on it.
    Mr. Skeen. We've gone Y2K backwards. [Laughter.]
    Ms. Thompson. Yes.
    Mr. Skeen. That's been a horrible situation to take care 
of.
    Ms. Thompson. It has but you know we've worked through all 
of the issues. This has been a good year. It's a good year for 
me to take over because I'm reaping the results of some 
successes there. We got tangled up with GSA, and then we got 
tangled up in the courts with a contractor because they weren't 
selected, but we got through all those issues this year. And, 
as I said, I am so delighted that phase one will be done next 
January.
    Mr. Skeen. Well, we're glad to hear that too.
    Ms. Thompson. So are our employees let me tell you. And one 
of the things I didn't mention, as a financial officer, I 
always look for return on investments, as you know. When you 
looked at this project in 1995, we no longer are paying GSA the 
$30 million worth of rent that we were paying on that building. 
Part of the thought was that most funds would go into our 
budget to provide for the construction. So, in a way, the 
project kind of pays for itself. Assuming, of course, that you 
allocated those resources to us. More importantly, when this 
project is finished, we are currently spending about $35 
million in rent for the space----
    Mr. Skeen. That's in the private sector?
    Ms. Thompson. Pardon me?
    Mr. Skeen. Are you renting from private individuals?
    Ms. Thompson. Yes.
    Mr. Skeen. Or are you not?
    Ms. Thompson. Yes, we are. It's a contract with GSA but 
they in turn are renting from private sources. We'll be able to 
release some of that space as we go along. That will then save 
another $35 million a year in rental costs.
    Mr. Skeen. Well, we might even have GSA get up-to-date on 
their process in time. Of course, that's out of our 
jurisdiction, but we can at least throw a snowball over the 
window.
    Ms. Thompson. There you go.
    Mr. Skeen. Ms. Kaptur? Thank you.

                           food for farm aid

    Ms. Kaptur. Thank you, Mr. Chairman. This has been an 
extremely interesting panel this morning. And I just wanted to 
point out, I don't mean to pick on Ms. Reed, but in her 
testimony, she restates the goals of the Department of 
Agriculture. I've said this to many panels that have come up 
here this year, that really could be I suppose a mission goal 
for the Department of Commerce because the word farmer isn't in 
there. It was very surprising to me that the way in which we 
shape our thinking about programs in the Department of 
Agriculture doesn't include that particular focus. It tells me 
why we have some problems in the country today. The word 
``agricultural producer'' is used. But I suppose you can say in 
a way I have an agricultural producer in my district that makes 
Cheerio's. They use an agricultural product and they process 
it. But I think if you went out to most farmers in my district, 
they wouldn't call themselves a producer. You can't do anything 
about that alone, but when you get in these inter-departmental 
meetings at USDA, you can certainly be a voice. I think the 
absence of that word has an impact on every single function the 
Department does, including the way you collect data. And who is 
able to access your information and who you pay attention to.
    I wanted to ask you, Ms. Reed, on page 3 of your testimony 
you talk about something I don't understand, where you say that 
one of the accomplishments of your efforts has been the Farm 
Service Agency electronic bid entry system so that bids for 
some $1.2 billion ``food for farm aid can be open.'' Now I 
don't quite understand what program that is?
    Ms. Reed. This is work of the Commodity Credit Corporation 
in Kansas City in sending food aid overseas; how we contract 
for and the distribution of that. It's that system that is 
referred to there.

                       farmer access to computer

    Ms. Kaptur. All right. Well, one of the issues I want to 
point out to you I had GIPSA staff out in our district, a 
couple of weeks ago because we have a huge crisis, as you know, 
all across rural America, in our area particularly in hogs and 
low grain prices. And after the meeting, a farmer came up to me 
and would have been eligible for one of the USDA programs that 
dealt with a payment to those producers who owned under 1,000 
or produced under a 1,000 head. This particular producer had 
buried his animals. And I said, ``Sir, you were exactly the 
kind of person that USDA was trying to reach.'' And he wrote me 
a letter after that.
    But I guess I just wanted to say I would bet that whoever 
is coming in on this electronic bid entry system are people who 
can afford the computer, follow it, et cetera. And a lot of 
these farmers, many, many, many of them, do not. Only about 2 
percent of our farmers actually hedge in the markets in 
Chicago. So when you look at what is really going on down 
there, I think you ought to think very hard, seeing as how the 
word ``farmer'' is missing from much of the testimony that was 
presented today, for that very discreet group of Americans that 
we can identify, how you find them. And make some of this 
incredible information available to them. And I think it's a 
problem, It's a problem across this country. And there's 
nothing you can answer that except that maybe you'll be more 
thoughtful about ways in which your programs can be----

                       common computing equipment

    Ms. Reed. Well, I will share with you that I gave a 
presentation yesterday at a technology convention downtown, and 
I talked about the things that we were doing in the Department 
and things that we were trying to do. I spoke a lot about what 
we're trying to do with the Common Computing Environment. And, 
what I was speaking to was the plight of the farmers. And 
afterwards a woman came up to me, and I will tell you I was 
very pleasantly surprised to learn that she was a farmer. She 
has farms in several counties, and right now she has to go to 
several different county offices because of the way in which 
our information is collected and managed. You can't transact 
your business in one place if your farm is in a different 
place.
    The vision that we have is a technology environmentwhich 
will give her the capacity to do that. Just that simple step, which I 
say is a simple step, it's actually complex--given the scope of it. It 
takes a lot for us to be able to do that. But it resonated with her as 
a farmer.
    So I regret that there's any lack of sensitivity to this in 
my testimony today. It's very much a part of when I speak about 
what we're doing in the Department and how we're trying to help 
the people that we serve, farmers included.

                       access to usda information

    Ms. Kaptur. Well, I'll tell you what. I've got 6,500 
surplus hogs in my district right now in four different 
counties. Those farmers want to sell those hogs somewhere. And 
I would bet you a dime to a doughnut that when that electronic 
bid entry system is put up there by the Farm Service Agency, 
their stuff won't get bought. And so I just present that to you 
as the challenge across this country, particularly to 
independent farmers, to the co-ops that are out there trying to 
move product, that perhaps you really look at that subset of 
interests that access information in your Department as one 
group that by golly is going to be on the system.
    I was very surprised, I was up in Delmarva the other day 
because of the difficulties in the poultry industry. And 
talking to people who are organized, in much of the country 
they're disorganized, but there they were organized to try to 
make a difference. And I said, ``Have you looked at the new 
GIPSA website dealing with contract farming? Excellent 
information on there.'' They didn't. They had never seen it. 
And these are people who are involved in court cases. And I'm 
thinking, oh, my gosh.
    So I'm just telling you there's a problem out there. And 
maybe there's something you can think about over the next year 
that would make a difference for these folks.

                 outreach to the underserved community

    As I read about the $7 million increase for socially-
disadvantaged farmers, I'm interested in how those funds would 
be used? Ms. Thompson, could you?
    Ms. Thompson. Thank you because I wanted an opportunity to 
respond to the question that you were asking Ms. Reed about in 
how do you reach those farmers that don't have the technology 
that you were talking about? And that's exactly what that 
outreach program is to do. It provides the training, the 
technical assistance, the financial counseling, if you would, 
to help them get access. A lot of those funds are administered 
through the universities and through the agriculture 
departments, particularly the 1890 colleges and universities 
and the 1994 schools, which are the Native American colleges. 
The universities know where to reach the minority and other 
specially disadvantaged clientele. So often, a lot of the 
farmers that you're talking about are the minority or the 
socially-disadvantaged that don't have access to all of the 
modern technology. They aren't clued in to the system of all 
the technical literature that's out there like the websites and 
that sort of thing. The whole purpose of outreach is to reach 
out to identify the types of people that you're talking about 
that aren't being reached by the normal system. The program is 
set up to reach them and identify who they are and then set up 
a program or a process to be able to reach out to those 
farmers. That's exactly what the outreach program is all about.
    They do that through the community-based organizations that 
are out there as well as the university system. We also work 
with other types of organizations that are set up specifically 
to deal with this problem. For instance, this week I met with 
the NAACP. They've got a network of 22,000 offices out around 
the country. They met with us to get our literature, to 
understand our programs, and for us to train their people to be 
able to reach out to their constituency with all of the 
different programs that USDA has. This includes programs for 
development of rural America and all of our farm programs.

                            hot-line system

    Ms. Kaptur. Well, I was sitting here thinking about all 
those records you have on file down there in New Orleans. I'm 
thinking there's got to be a website. There's got to be a way 
of having every farmer in our country on some kind of a hot-
link system. If they don't have a computer, then they get a 
mailing. But when there is the opportunity to get an indemnity 
payment and they don't even know. And every single system we 
have in place, the Farm Service Agency, the co-op extension, 
the land grants, the minority outreach program there's got to 
be a direct link to the family farmer. I wouldn't depend on the 
States to do it. You've got the technology to do it. And you 
ought to get them up there. There's less than a million of them 
now, am I right? From when we had those people testify from the 
library--yes?
    Ms. Thompson. One of the things that we did was to publish 
an 800 number and then we had staff on the phone for 24 hours 
straight for days when we were trying to get some of that 
emergency funding out there. Again, however, you have to depend 
upon the individual either hearing it on the radio or in the 
newspaper or something like that.
    Ms. Kaptur. That's why I think if you had their names up 
there or their addresses or whatever, then that hot-link goes 
out, either on the computer or by letter or something so that 
they know what they're eligible for.
    One of the questions I had on the socially-disadvantaged 
program again is where we've been trying to build our farmers--
rebuild our farmers' markets around the country. Are you 
coordinating with other offices within USDA so that if you 
identify people, they can find a way to market? We're putting a 
lot more emphasis in our WIC program, in the regular programs 
of USDA, the commodity program, to try to increase the farmers' 
market access. Will you link to those?
    Ms. Thompson. Absolutely. Yes, we have done a lot of that. 
It's one of those programs that builds momentum and we're 
working very hard in that particular area of farmers' markets 
all over the country. We have a very successful one that goes 
on every Thursday right down at USDA. We clear out our parking 
lots.

                         building modernization

    Ms. Kaptur. That brings me to my next question which has to 
do with your building modernization.
    Ms. Thompson. Yes?
    Ms. Kaptur. In thinking about the future of the mall in the 
next century, I know that you have to retro-fit your building 
internally and so forth, but if you think about agriculture in 
this society and whether we're going to have it in the 21st 
century or whether we're merely going to process food that is 
raised somewhere else and imported in here--and that is a 
legitimate question based on technology today--then it seems to 
me that we have a job to do to tell the story of agriculture 
when less than 2 percent of the population is engaged in an 
activity than anyone else understands, our young people, our 
tourists, everybody else, has to understand that this has a 
place in the U.S. economy and it shouldn't be taken for 
granted. I'm wondering as you look at your modernization plans 
and the monies that will bespent, not insignificant, a quarter 
of a billion dollars or more, have you given any thought to how you 
tell the story of agriculture to the general public at the same time as 
we house those in the employment of the Government of the United States 
who try to administer the various farm programs of this country?

                          story of agriculture

    Ms. Thompson. That's a very, very good question. For those 
visitors to the mall, which is a very small part of the 
question you just asked, we've got a wonderful Visitor's Center 
right there on the main floor right off the mall that tells the 
story and has absolutely gorgeous brochures of agriculture in 
America.
    I guess I would say that the new building will house about 
6,000-6,500 employees and probably every one of them is a voice 
in some way for agriculture and rural America. It's a 
combination of both. We always look at the Department of 
Agriculture as the Department of Agriculture ``and Farmers,'' 
and they are very, very important and a very big part of the 
mission of USDA even if the word isn't in there. Steve Dewhurst 
and I will certainly look at that. Since I am the CFO, I'm in 
charge of the strategic plan. You can bet we're going to see 
that that gets incorporated.
    The same thing applies whether we're talking about rural 
America, housing, water and sewers, communications, utilities, 
and that sort of thing. All of those people are involved in 
getting the program out to the people in rural America and all 
over the world now because our farmers are just as dependent 
upon our export market as they are in producing the product. 
I've got farmers calling me everyday from Kansas, for instance, 
and saying, ``We need to get this wheat out of these silos and 
get it shipped over there to Russia,'' or wherever we're trying 
to get it exported to.
    I think you're absolutely right. We need to continue to put 
a major focus on the communication, through outreach, as to 
what is available and what we're doing, and the coordination. 
Again, it comes back to that role that not only I, but the 
whole Department has to play in leadership, policy, and 
oversight to make sure that the funds that you appropriate 
actually obtain the results that you're looking for.
    Ms. Kaptur. Well, I appreciate your sensitivity on that. 
Let me just say that as the Department begins to expend almost 
a quarter of a billion plus on a building, you ought to think 
very hard about how you compete with NASA right up the street, 
with the Air and Space Museum, and the gift shop that is right 
next to it. I know you are an administrative building and they 
are not. However, in the way that that farmers' market is 
operated outside on your courtyard, some of the changes that 
are going to be made to internal space, the way you handle 
visuals, I really think you ought to give some thought to how 
you better tell the story with who you're competing against 
along that mall.
    And I personally do not think that agriculture in America 
tells its story here in Washington. We have been in touch with 
the Smithsonian because there is a wing in the Museum of 
American History, and I've talked again about this before with 
other--Mr. Dewhurst has heard this lecture, but if you were a 
young person in America today going to the Museum of American 
History, you would absolutely never go into agriculture. Number 
one, you wouldn't understand it after you looked at the 
exhibit. If you did look at it, you decide that isn't for you. 
And the exhibits that are there for computers and others will 
draw our children to what they think is interesting. 
Unfortunately, within the Smithsonian itself, the exhibit truly 
is not interesting to the majority of visitors who come in 
there, especially children.
    And so one of my questions again here to you, at the same 
time as you're pursuing this modernization, have you ever in 
your capacity, any of you, visited the Museum of American 
History and taken a good hard look at the agriculture exhibit?
    Ms. Thompson. I'll have to tell you I have not, but I can 
tell you I will.
    Ms. Kaptur. That's an honest answer. But now while you're 
doing this renovation, you might think about it.
    Ms. Thompson. We will.
    Ms. Kaptur. Because there is a connection and there is a 
movement of people along that mall. And so what story is it 
that we want to tell. There are ways of dealing with that in 
terms of your renovation. I will make you this promise, I will 
not support this money until the Department can tell me how you 
are going to better tell the story of the importance of 
agriculture in America as you begin to expend this significant 
amount of money and how you are going to cooperate with the 
Smithsonian in trying to upgrade those exhibits.
    Ms. Thompson. And, I can promise you that one of the first 
things I do next week is to go over there and see that exhibit. 
We've got some very creative people on our staff. I will see 
that they get over there too, and we will get right on that.

                          volume of complaints

    Ms. Kaptur. I think you're on the right track with the 
farmer's market. It may not even be in the right location, but 
you're beginning to tell your story and really America's story. 
There is so much more to tell. Before I leave Washington, 
something is going to be done about that.
    So I know the chairman is kind enough to let me say these 
things without cutting me off.
    I wanted to just ask Ms. Gray one other question. In terms 
of the volume of complaints that you expect to receive as a 
result of extending--the statute of limitation was extended as 
a result of last year's appropriation, what type of volume 
increase do you expect as a result of that?
    Ms. Gray. We have since October, between October and the 
present day, received approximately 1,300 new filings. We did 
send out a number of brochures and we did do advertising 
relative to the statute of limitations because of the limited 
time frame. So far, we have about 300 to 400 new cases that 
we're processing. We only have accepted, as real statute of 
limitations cases, 40 cases. So we're getting a lot of new 
filings. What I can't say to you is that we have a lot of new 
statute of limitation cases. But, we do have to process the 
filings.
    A number of the letters that did come in came in because 
when we closed the cases in the backlog, if there was a finding 
of no discrimination, we told the people that if they had a 
statute of limitations issue, they had the opportunity to have 
that processed under the statute of limitations regulations.
    Right now it's very difficult to tell. March 1st was the 
deadline to send out the hundreds of letters that we did to 
people who had potential issues in their cases that we knew 
about. I would expect, just based on the activity to date, that 
we will have by the end of this fiscal year, 250 to 300 cases 
under the statute of limitations. And the majority of the 
people who file for processing under the statute of limitations 
will probably ask for a hearing on the record.

         turnover rate in the director of civil rights position

    Ms. Kaptur. Ms. Gray, we're very happy to see you in your 
position. There have been many predecessors in your position. 
Can you explain why the turnover has been so high? I know it's 
a hard job?
    Ms. Gray. That's a difficult question to answer, but it is 
a very difficult job. Beyond that, I don't know why the 
turnover rate has been what it has been, and I'm sure the 
reason might vary from individual to individual, but it is a 
very difficult job.
    Ms. Kaptur. Do you think that the addressing of the backlog 
may result in a greater tenure for an individual in your 
position?
    Ms. Gray. That's another difficult question to answer, but 
I'll ask the Secretary.
    Ms. Kaptur. Thank you. Thank you, Mr. Chairman.
    Mr. Skeen. Mr. Latham. Thank you, Ms. Kaptur.

                        core business processes

    Mr. Latham. Thank you, Mr. Chairman. I welcome the panel 
here. And Anne probably knows where I'll go here, but we've 
been struggling for a long time to get the Department to 
develop an information and technology system that functions as 
one, obviously. And we've discussed this several times and I 
appreciate all your efforts. And I hope you're getting the 
authority to do things rather than as was the case in the past. 
It appears we're scratching the surface anyway, but we're still 
doing it in fragments in different agencies with their own 
systems. I understand there's the core business process 
program. Can you tell me about that and what the status is?
    Ms. Reed. One of the things that you do when you try and 
establish a common architecture across the Department, a common 
profile, is you look at what it is that your business is. And 
so one of the very first things that we did was to look and do 
a careful examination across each of the agencies. Asking what 
are the core business processes that that agency is engaged in 
to deliver its services? The next thing you begin to do is look 
for commonality in terms of the customer served, or in terms of 
the process in which you're engaged. And when you do that, you 
can then begin to look and see is there a new way to do 
business in that arena?
    We have identified the core business processes. We have 
taken action most aggressively in the service center 
environment where we have that common customer in the farmer 
and the producers and residents in rural America. So that has 
helped shape the business methodologies and the supporting 
technical infrastructure.
    The CFO and I are in discussions now about a common 
financial architecture across the Department, not just the 
administrative financial architecture, but as she mentioned 
earlier, we have a very significant role to play in loan 
making. Many agencies across the Department have a role to play 
in making loans, though sometimes with different types of 
customers. So part of our discussion now is how can we think 
about moving towards more common processes in loan management 
and servicing and what kind of a technical infrastructure would 
be most supportive.
    I'm giving you a long answer to your question about core 
business processes, but core business methodology is the 
starting point for building a more cohesive information 
environment.

                        schedule for one system

    Mr. Latham. Is there any kind of schedule at all? You've 
got the common computing environment, which is three out of the 
what 29 agencies over there that are trying to get finally get 
on one system I guess? Are we ever going to get to the point 
where--or I should say, when are we going to get to the point 
where we have one system over there, that you're not agency by 
agency? Is there any benchmark or time set out to actually do 
this?
    Ms. Reed. Not in toto. But we're looking at the different 
processes. Clearly, the service center environment takes us a 
large step forward. It's actuallyfive to seven agencies 
depending on how you count, in that environment. So that is a 
significant part of the Department. Another key part of the Department, 
in terms of just sheer volume, is the Forest Service. And we have made 
great efforts to assure there's an appropriate integration in geo-
spatial information technology, which cuts across those arenas that 
they're working together. Those are in more programmatic areas.
    In an administrative sense, I'm working with Ms. Thompson 
as the Acting Assistant Secretary for Administration on common 
administrative systems, particularly human resources 
management. We have a pilot project now that is underway in the 
service center arena that is being very carefully watched by 
the Office of Human Resources at the Department level and by 
the agencies to see if that is HR process that would be of 
value to the entire Department.
    In the financial system, of course, we're well underway to 
having a common core financial system. Sally, do you want to 
speak to that?

                      common core financial system

    Ms. Thompson. Yes, if that's all right, I would like to do 
that. Almost all of the information over the next couple of 
years will feed through a financial system. If you think about 
looking at how we're going to measure the programs and tie 
those results to budgets and appropriations, we're going to 
have to be able to measure all of that. And putting in the new 
financial system is driving a lot of what you're trying to get 
to is that common technology and that architectural plan.
    While we've decided that one system to capture every 
program that we do and every piece of data that goes through 
there, whether it's human resources, is probably not the right 
answer. But, what is the right answer is a common technology 
and perhaps a warehouse technology or structure--architectural 
structure that all of the systems could talk to. And then you 
could sort the data to get whatever information you want out.
    So the first part is the financial system. The second part 
will be a consolidated financial statement that brings in say, 
for instance, the loan system. And then other pieces that will 
be driving the architectural structure over the next few years 
will be, again, the program data that has to come in that we're 
trying to measure that.
    And so we have put together the framework, if you would, of 
that architectural plan. We now have vendors helping us put the 
details behind that common technology.
    The other thing that that financial system is driving is 
the common telecommunications system. So that everybody can 
talk to each other through the PC. And, so as each agency comes 
up, they need, in this financial system, to upgrade the power 
of their PC to be able to talk with say the National Finance 
Center where the data is flowing through. And so we are then 
able to drive that common technology and common standards, if 
you would, of the architecture system that we're trying to 
implement.
    The pieces are there. We're working on them. Rather than 
trying to do everything at once, we've got it laid out that 
we're going to do this by October 1, 1999, this by October 1 of 
2000, and it takes us out over October 1, 2003. And we will 
have that common architecture of technology that I think you're 
looking for.

                           segmented approach

    Ms. Reed. So the bottom line answer is we're approaching 
this in segments. Each segment has a project plan with a time 
frame but there is no overall grand design.

                             use of e-mail

    Mr. Latham. You're scaring me, Anne. It sounds hopeful 
though, at least now it sounds like maybe we'll be able--the 
north building will talk to the south building by e-mail?
    Ms. Reed. That's right. We can do that now.
    Mr. Latham. Right, right. Haven't other agencies done this? 
It seems like there's something just inherent in USDA that you 
just don't get the cooperation in agencies? Do you still have 
the turf wars and little dynasties?
    Ms. Reed. Any large organization has its challenges in that 
respect. I certainly don't think that we are very different 
from most other large Federal departments.
    Mr. Latham. That's encouraging.

                    support of information community

    Ms. Reed. However, I think we have made some progress. And, 
in fact, over the last year or so, many of my colleagues have 
begun to come to talk to me to figure out: ``Okay, how did you 
get this far? And how can we model what we're doing after what 
you have managed to accomplish?'' I think there's no question 
but what the moratorium I put on acquisition for computers when 
I first came in had a huge impact in helping to just change the 
people's understanding of what we were driving for and how 
seriously we took it. I also will tell you that the information 
community, across the agencies, has been very supportive. They 
would like us to be able to move much faster because they 
recognize the needs for sharing information and their capacity 
to support the technical infrastructure is much better if we're 
better integrated. They understand that. It is resource 
intensive. And we do need to stay focused on how we allocate 
those resources to get the most bang for the buck.
    Mr. Latham. I'm surprised you have any hair left in your 
head. I would think you would pull out all your hair by now.
    Ms. Reed. It's quite a bit grayer. I'll tell you that.
    Mr. Latham. Thank you, Mr. Chairman.

                            closing remarks

    Mr. Skeen. Thank you, Mr. Latham. And I want to say to you 
folks, these are trying times for Agriculture. There's no 
question about it, they represent 2 percent of our population 
and they feedeverybody in the world. Farmers and ranchers are 
living through a nightmare that's going on. Like Ted Turner says the 
whole world should limit itself to three children per family and things 
of that kind. He has a lot of operations going on. And I'm not using 
him as a bad example. But he's quit, no cattle or anything else, he's 
raising buffalo, so we're going to bring the buffalo back.
    I appreciate the work that you folks have done because it's 
not easy to get a communication system that covers all the 
problems. And we've had technology that we've depended on but 
there is a scarcity of it amongst some of the people that could 
use it the best. And, in many cases, they have it but they 
don't know how to use it.
    And I think Ms. Kaptur had a good round of questioning. And 
I'll yield to you.
    Ms. Kaptur. Thank you, Mr. Chairman. You know this marks 
the last hearing for us?
    Mr. Skeen. Yes, it does.
    Ms. Kaptur. At the subcommittee level. At least in terms of 
our witnesses this year.
    Mr. Skeen. I think we've worn them out.
    Ms. Kaptur. I think we have worn some of them out. And we 
wanted to express to the people who are here with us today, 
thank you so very much. I wanted to say, Mr. Chairman, thank 
you to you on behalf of all of the members of our committee, 
some of whom have come this morning, some of whom have 
participated in other hearings, because I want the people from 
the Department, I'm sure they already know this, we couldn't 
have a better subcommittee Chair on Appropriations than Joe 
Skeen of New Mexico. And it's kind of hard to know how to thank 
him for his leadership. He's a very peppery character, you 
know. [Laughter.]
    Mr. Skeen. I thought I was more salty. [Laughter.]
    Ms. Kaptur. A little salty, well, maybe a little bit of 
both, but he keeps us all going on both sides of the aisle. 
There couldn't be a better, better Chair anywhere in this 
Congress whose heart is with the people who are actually doing 
the work in the fields across this country. It has just been a 
joy to be a part of these hearings this year. Mr. Chairman, we 
have just a little way of saying ``Thank you,'' to kind of 
spice up this room like we hope we will be able to spice up the 
Department of Agriculture a bit.
    Mr. Skeen. Now you've got me worried. [Laughter.]
    Ms. Kaptur. So we would like to make a presentation from 
our side of the aisle to you, however, it is from your home 
State as a way of saying ``Thank you for 1999.''
    Mr. Skeen. Well, thank you. Ms. Kaptur, thank you so very, 
very much because the chili growers in New Mexico are world-
renowned. I'll eat half of one, if you'll eat half of one. 
[Laughter.]
    Thank you so much. Thank you to all of you. You're the kind 
of people we like to work with.
    And we will adjourn.
    [The following questions were received for the record:]


[The official Committee record contains additional information here.]



                           W I T N E S S E S

                              ----------                              
                                                                   Page
Collins, Keith...................................................   287
Dewhurst, S. B..............................................1, 287, 649
Ebbitt, J. R.....................................................     1
Gillam, C. D.....................................................   649
Glickman, Hon. Dan...............................................   287
Gray, Rosalind...................................................   649
Reed, A. F. T....................................................   649
Rominger, Richard................................................   287
Seybold, G. S....................................................     1
Thompson, Sally..................................................   649
Thornsbury, D. R.................................................     1
Viadero, R. C....................................................     1


                               I N D E X

                              ----------                              

                      Office of Inspector General

                                                                   Page
1998 Audit and Investigations Results............................    87
AARCC Evaluation.................................................    91
ADP Equipment and Software Increase..............................    94
Advisory and Assistance Services.................................    96
Agriculture Marketing Transition Act Payments....................   101
AMERICORP........................................................    55
Asset Forfeiture:
    Department of the Treasury Forfeiture Fund...................    92
    DOJ Assets Forfeiture Fund...................................    92
    Forfeiture Proceedings.......................................    91
    Petition for Remission or Mitigation.........................    92
Biographies:
    Roger C. Viadero.............................................    46
    Gregory S. Seybold...........................................    47
Budget Request...................................................    88
Child and Adult Care Feeding Program--Unspent Funds..............    99
Child and Adult Food Investigations..............................    73
Commodity Credit Corporation:
    Agreement....................................................    71
    Financial Audits.............................................    83
    Reimbursement Increase.......................................    94
Confidential Funds...............................................    49
Confidential Funds Operational Activities........................    85
Contraband.......................................................    64
Electronic Benefits Transfer.....................................    66
Electronic Benefits Transfer:
    Fraud........................................................    57
    Processor Operations.........................................    79
Evaluation of the Office of Civil Rights' Efforts to Implement 
  Civil Rights Settlements.......................................   247
Explanatory Notes................................................   208
Farm Credit Program..............................................    58
Federal Crop Insurance Program...................................    61
Federal Food Inspection Process--Streamlining....................   206
Financial Statement Audits.......................................    81
Fines, Restitution, Other Recoveries and Penalties...............    50
Food Safety......................................................    65
Food Safety:
    Food Imports Responsibilities................................    70
    Violations...................................................   101
Food Stamp Cases.................................................    79
Fraud and Abuse in USDA Programs.................................   205
Forest Service...................................................    61
Forest Service Opinions..........................................    84
Hazard Analysis Critical Control Point (HACCP):
    Audits.......................................................   207
    Program......................................................    75
Hazardous Waste Management Program...............................    98
Hotline:
    Complaints...................................................    86
    Responses....................................................    86
Indictments, Convictions, and Suits..............................    87
Information Technology...........................................    75
Law Enforcement Increase to Protect the Nation's Food Supply.....    92
Loan Deficiency Payments.........................................60, 69
Medflies.........................................................    63
Milk Promotion...................................................    68
Minority Enterprise Financial Acquisition Corporation............    98
Object Class Increases:
    Equipment....................................................    97
    Medical Care.................................................    96
    Specialized Training and ADP Contracts.......................    96
    Supplies and Materials.......................................    96
    Travel Costs.................................................    95
OCFO/NFC Reimbursement Increase..................................    95
OIG:
    Field Auditors and Supervisors...............................    91
    Firearms.....................................................    88
Opening Remarks..................................................     1
Operation Talon..................................................    48
Outside Public Accountants.......................................    85
Pay Raise Increase...............................................   100
Questions Submitted for the Record:
    Chairman Skeen...............................................    78
    Ms. Kaptur...................................................   101
    Ms. Delauro..................................................   205
Reimbursements...................................................    83
Resources Used to Monitor the Food Stamp Program.................    78
Risk Management Agency:
    Recommendations..............................................   102
    Reimbursement Increase.......................................    95
Rural Utilities Service:
    Misused Funds................................................    97
    Reimbursement Increase.......................................    95
Russia:
    Agreement between the Government of the United States of 
      America and the Government of the Russian Federation:
        Donation of Agricultural Commodities under Sec. 416(b)...   104
        Monitoring Russian Compliance with Commitments Made Under 
          the Fiscal Year 1999, P.L. 480, Title I and Sec. 416(b)   177
        Sales of Agricultural Commodities........................   148
        Supply of Agricultural Commodities Under the Food for 
          Progress Act...........................................   122
    Food Aid.....................................................    53
    Food Aid Agreement...........................................   103
Service Center Initiative Review.................................    78
Smuggling........................................................    56
Specialized Equipment............................................    94
State Mediation Program..........................................    80
Status of Program................................................   220
Use of Investigations and Audit Resources by Agency for Fiscal 
  Year 1998......................................................   881
Vehicles:
    Commercially Leased..........................................    97
    GSA Leased...................................................    97
Women, Infants, and Children (WIC) Program.......................    83
Written Statement of the Inspector General.......................     7
Year 2000:
    Conversion Funding...........................................    94
    Update.......................................................    81

                        Secretary of Agriculture

Adjournment......................................................   439
Administrative Conversion........................................   539
Advisory Committees..............................................   467
Agricultural Education.........................................374, 376
Americorps.......................................................   454
American River Heritage Initiative...............................   377
Animal Feeding Operation Strategy................................   537
Beginning and Socially Disadvantaged Farmers:
    Funding......................................................   359
    Farm Credit Loans............................................   475
Biographies:
    Secretary Glickman...........................................   339
    Mr. Rominger.................................................   341
    Mr. Collins..................................................   342
    Mr. Dewhurst.................................................   343
Biodiesel........................................................   580
Biotechnology....................................................   370
Cattle Imports from Mexico and Canada............................   579
Citrus Canker.............................................386, 387, 559
Civil Rights:
    Class Action Suit............................................   429
    Discrimination Case Backlog..................................   557
    OIG Evaluation Report........................................   247
    Settlement...................................................   557
Codex Alimentarius...............................................   479
Comments on 1999 Congressional Action............................   488
Commodity Credit Corporation (CCC)...............................   302
    Projections..................................................   558
    Proposed Legislation.........................................   549
Computers:
    Legislative Cap Impact on Service Center Initiatives.........   549
    Proposed Funding Legislation...............................480, 549
Conservation:
    Grants to Local Groups.......................................   556
    Programs...................................................294, 434
Conservation Reserve Program (CRP):
    Program Costs................................................   471
    Technical Assistance Costs...................................   560
Contract Growing.................................................   435
Contracting Out..................................................   558
Cotton:
    Crop Insurance Coverage......................................   576
    Loan Deficiency Payments..............................349, 350, 573
    Industry...................................................568, 570
    Price Problems...............................................   568
Crop Insurance..............290, 370, 378, 385, 390, 421, 436, 550, 585
Customer Service and Program Delivery............................   294
Dairy:
    Assistance...................................................   368
    Cost-of-Production Data......................................   363
    Emergency Funding for Farmers................................   365
    Federal Milk Marketing Orders..............................361, 364
    Options Pilot Program........................................   475
    Northeast Compact............................................   361
    National Policy..............................................   362
    Regional Compacts............................................   363
Debt for Nature..................................................   539
Departmental Management Activities...............................   325
Disaster Assistance..............................................   378
Diversity:
    Employment...................................................   587
    Procurement..................................................   586
Domestic Marketing Programs......................................   292
Economic Assumptions and Impacts.................................   483
Economic Dislocation.............................................   370
Embargoes........................................................   392
Emergency:
    Assistance...................................................   289
    Feeding Program..............................................   345
Explanatory Notes................................................   616
Export Enhancement Program.......................................   480
Exports:
    Agricultural.................................................   291
    Sanctions and Free Trade.....................................   365
    Subsidy Reduction Commitments................................   475
Export Programs................................................306, 422
    Improving Markets..........................................422, 425
    Fast Track...................................................   424
Farmers Markets..................................................   429
Family Farm......................................................   427
Farm Bill:
    Contribution to Balancing the Budget.........................   438
    Shortcomings.................................................   290
Farm Credit......................................................   291
Farm Economy.....................................................   288
Farm and Foreign Agricultural Services...........................   394
Farmers:
    Emergency Funding for Dairy..................................   365
    Family Farms.................................................   427
    Markets......................................................   429
    Safety Net...................................................   364
    Small and Disadvantaged......................................   357
Farm Loan Program:
    Delinquent Million Dollar Loans..............................   449
    For Beginning/Socially Disadvantaged Farmers.................   475
    Farm Loans.................................................300, 449
     Farm Ownership and Operating Loans..........................   489
    FR Final Rule on Streamlining Guaranteed Loans...............   556
    Long-Term Financing..........................................   382
    Processing Applications......................................   450
Farm Prices:
    Congressional Help...........................................   427
    Freeze.......................................................   424
    Impact of Decline............................................   554
    Posted County Prices (PCP's).................................   573
Farm Service Agency:
    Funding Agency Staffing......................................   479
    Paperwork Problems...........................................   377
    Salaries and Expenses Budget Projections.....................   557
Field Office Service Centers.....................................   478
    Cap on Computer Purchases....................................   549
    Unspent SCI Funds............................................   543
Streamlining Guaranteed Loan Program:
    Federal Register Publication of Final Rule...................   489
Florida:
    Citrus Canker.........................................386, 387, 559
    Foreign Plant, Animal Pest and Disease Costs.................   647
    Four-Year Impact.............................................   648
Food:
    Assistance...................................................   293
    Gleaning...................................................293, 368
    Recovery...................................................293, 385
    Program Studies..............................................   488
    Quality Protection Act Implementation......................566, 574
Food Pyramid:
    Children.....................................................   572
    Peer Review and Other Food Guides............................   572
Food Safety:
    Initiative.............................293, 319, 355, 371, 389, 583
    Hazard Analysis and Critical Control Point System (HACCPS).293, 363
    Multistate Listerioris Outbreak..............................   356
    Multistate Listerioris Outbreak Timeline.....................   357
Food Nutrition and Consumer Services.............................   314
Food Stamp:
    Benefits Provided by EBT.....................................   463
    Participation Growth in a Good Economy.......................   484
Fund For Rural America....................................472, 477, 619
Global Problems..................................................   369
Housing:
    Farm Worker..................................................   380
    Migrant Farm Workers.......................................360, 381
    Rural Rental.................................................   558
Independent Study:
    On FSA, NRCS, and RD County-Based Agencies...................   553
    Copy and Cost of Study.......................................   554
International Trade and Export Programs........................306, 422
Irradiated Meat..................................................   362
Karnal Bunt......................................................   472
Legislative Proposals:
    Commodity Credit Corporation.................................   480
    Budget Related...............................................   484
Limited Set Aside Program........................................   350
Livestock Assistance Program...................................372, 373
    Supplemental Request.......................................393, 394
    Pseudorabies Eradication Program...........................394, 395
    Packer/Rendering Capacity....................................   394
Loan Deficiency Payments:
    Cotton................................................349, 350, 576
    Club Wheat...................................................   366
Marketing and Regulatory Programs................................   332
Market Concentration.............................................   346
Market Dislocations..............................................   431
National Commission on Small Farms...............................   551
National Research Initiative...................................322, 573
Natural Resources Conservation Service:
    Monitoring Work Costs........................................   556
Nutrition Education..............................................   540
Office of the Inspector General..................................   338
Opening Remarks..................................................   287
Organic Standards................................................   543
Packers and Stockyards Restructuring.............................   556
Palmer-Drought Index...........................................383, 384
Pest Management..................................................   292
PL-480 Program.................................................349, 558
Pork Situation...................................................   345
Posted County Prices.............................................   573
Pseudorabies.....................................................   395
Questions Submitted for the Record:
    Chairman Skeen..............................................440-565
    Mr. Dickey..................................................566-571
    Mr. Bonilla..................................................   572
    Mr. Latham..................................................573-574
    Mrs. Emerson................................................575-581
    Ms. DeLauro.................................................582-583
    Mr. Obey.....................................................   584
    Mr. Gilman...................................................   585
    Mrs. Roybal-Allard..........................................586-589
Research, Education and Economics................................   325
Research:
    Agriculture......................................292, 366, 371, 421
    Global Climate Change......................................369, 577
    Methyl Bromide...............................................   379
    Organic......................................................   379
    Proposed Project Terminations................................   481
Risk Management Agency:
    Budget Amendment.............................................   480
    Budget Increase, FY 2000.....................................   554
    Education and Cotton Coverage................................   576
    Issues................................................304, 430, 480
Rural America....................................................   431
    Fund for..............................................472, 477, 619
Rural Business-Cooperative Service...............................   314
Rural Development:
    Closing the Stevens Point, WI Office.........................   580
    Direct and Guaranteed Loans Program Summary..................   482
    FR Final Rule on Streamlining Guaranteed Loans...............   556
    Programs...................................................292, 309
    Rattlesnake Ridge, KY Project Update.........................   484
Rural Housing..................................................313, 380
Rural Utilities Service..........................................   311
Safety Net for Farmers...........................................   364
Section 11:
    CCC Cap......................................................   543
    Expenditures by Agency.......................................   544
    Funded Activities............................................   565
    Transfers and Reimbursements.................................   561
School Breakfast Pilot Study Costs...............................   555
Staffing:
    Congressional Relations......................................   444
    OSEC Staffing................................................   455
    Outside Legal Counsel Hired..................................   469
    Public Affairs Activities....................................   440
    Reductions...................................................   473
Statement of:
    Dan Glickman, Secretary of Agriculture.....................288, 295
    Keith Collins, Chief Economist...............................   969
Subsidizing Foreign Economies....................................   426
Supplemental Appropriations...............................344, 428, 479
Support Services Bureau........................................488, 565
Timber Sales on the Mark Twain National Forest...................   580
Trade:
    Agricultural...............................................432, 551
    Embargoes....................................................   392
    Fast Track Authority.........................................   424
    Sanctions.............................................348, 365, 575
    Surplus......................................................   437
    Negotiations.................................................   574
    Policy.......................................................   479
Tobacco:
    Issue........................................................   389
    Administrative Expenses......................................   451
User Fees.................................................393, 537, 557
Welfare Reform...................................................   434
Wetlands Conservation Mitigation Requirements..................396, 397
    Iowa Drainage District 176 Specifies.........................   397
Wool and Mohair Producers........................................   373
Women, Infant, and Children (WIC):
    Dietary Habits...............................................   582
    Eligibility and Participation Rates..........................   463
    Estimating Basis.............................................   487
    Key Indicators of Success....................................   582
    Monthly Reporting Data.......................................   465
    46 Percent of Infants Receive................................   573
Year 2000 Conversion Costs.......................................   477

                     Office of the Chief Economist

Activities in Stoneville, Mississippi............................   598
    Position Transfers...........................................   598
Asian and Russian Financial Situation............................   599
Biofuels and New Uses............................................   597
Biography of Keith Collins, Chief Economist......................   342
Climate Issues--Responsibility...................................   597
Commission on 21st Century Production Agriculture:
    Commission...................................................   595
    Object Class Table...........................................   595
    Salary Costs.................................................   596
Explanatory Notes................................................   624
Exports:
    Asia and Latin America.......................................   596
    Southern Africa..............................................   597
Food Safety Initiative...........................................   600
Hearings Participation...........................................   590
Impact of Welfare Reform on Farm Labor...........................   596
Milk Powder Availability.........................................   599
ORACBA Newsletter................................................   600
Questions Submitted for the Record:
    Mr. Skeen...................................................590-600
Railcar Situation................................................   599
Risk Assessment:
    Risk and Benefit-Cost Analyses Differences...................   595
    Rule Making..................................................   592
Statement of Keith Collins, Chief Economist......................   969
Sustainable Agriculture..........................................   590

                 Office of Budget and Program Analysis

Biography of Stephen Dewhurst....................................   343
Breakout of Resources of OBPA's Responsibility...................   601
Buyouts in 1998..................................................   603
Code of Federal Regulations......................................   603
Explanatory Notes..........................................603, 609-646
Information Technology...........................................   608
Internet Availability of Budget Materials........................   608
Legislative:
    Proposals....................................................   603
    Report.......................................................   608
Organization...................................................601, 603
Question Submitted for the Record:
    Chairman Skeen..............................................601-608
Staff Year Reductions in the 1996 Farm Bill......................   607
USDA Budget Summary..............................................   603

                      Departmental Administration

Advisory Committees:
    Funded From Other Accounts...................................   758
    Staff Costs..................................................   758
    Commission on 21st Century Production Agriculture............   760
    Contingency Reserve..........................................   760
    Explanatory Notes.........................................1079-1096
Agriculture Acquisition Regulations..............................   739
Agriculture Buildings and Facilities:
    Beltsville Office Facility...................................   755
    Beltsville Occupancy........................................756-757
    Building Renovation.........................................719-720
    Building Modernization.......................................   724
    Explanatory Notes.........................................1058-1068
    Legal Challenges for South Building Construction.............   745
    Strategic Space Plan........................................754-755
Biography of:
    Rosalind Gray, Director of Civil Rights......................   712
    Sally Thompson, Acting Assistant Secretary for Administration   670
Changing USDA Culture............................................   743
Civil Rights:
    Accountability.............................................703, 718
    Backlog......................................................   702
    Complaint Tracking System....................................   744
    Cost of:
    Resolving Program Discrimination Complaints..................   731
        Settlements..............................................   731
    Farm Service Agency Review...................................   731
    Foreclosures.................................................   731
    Investing Management Resources...............................   719
    Number of Complaints.......................................725, 733
        Equal Employment Opportunity (EEO).....................734, 744
    On-site Reviews.............................................732-733
    Opening Remarks.............................................702-704
    Processing Complaints........................................   734
        Statute of Limitations...................................   703
    Performance Evaluations......................................   718
    Turnover Rate in the Director of Civil Rights Position.......   726
Credit Cards:
    Number Issued................................................   739
    Savings....................................................739, 740
Explanatory Notes.............................................1029-1057
Hazardous Waste Management:
    Agency Support...............................................   767
    CCC Grain Storage Site Status................................   773
    Compliance Docket...........................................773-776
    Compliance with State Laws..................................764-765
    Cost of Forest Service Site cleanup.........................778-779
    Explanatory Notes.........................................1069-1078
    Foreclosures Requiring cleanup..............................767-768
    Forest Service Funding.......................................   779
    Funding for CERCLA, RCRA, and Pollution Prevention...........   763
    Performance Goals...........................................761-762
    Salaries and Benefits.......................................765-766
    Salaries/Benefits and Cleanup Costs..........................   766
    Sites to be Funded in Fiscal Years 1999-2000.................   778
    Typical Cleanup Efforts.....................................776-778
    USDA Site Cleanups..........................................768-776
    Underground Storage Tanks....................................   764
Modernization of Administrative Processes (MAP)..................   736
Office of Ethics.................................................   744
Opening Remarks of Sally Thompson...............................649-652
Personnel:
    Alternative Discipline Plan..................................   735
    Celebration of Excellence Ceremony Costs.....................   737
    Conversion of Non-Federal to Federal Status..................   743
    Early Out and Buyout Options, Plans.........................738-739
    Employees and Disabilities..................................740-741
    Proposed Paperless Personnel Request System..................   737
    Summer Interns...............................................   742
Procurement Reform Status.......................................736-737
Questions Submitted for the Record..............................731-782
Rental Payments:
    GSA Bills vs. GSA Budget.....................................   745
    $5 Million Reserve...........................................   745
    Headquarters Complex Rental Charges.........................755-756
    Rental Payments and GSA Repair Costs.........................   757
Section 933, FAIR Act Property Transfers.........................   743
Service Centers:
    Field Service Centers.......................................734-735
    On Indian Tribal Lands.......................................   732
    Modernization................................................   735
    Satellite Offices...........................................731-732
    Status of Collocation of Kansas City and Davis...............   740
Socially Disadvantaged Farmers and Ranchers:
    Audits of 2501 Program.......................................   748
    Award Process for Grants.....................................   748
    Expenditures for the Outreach Program.......................746-747
    Grants Award in Fiscal years 1996-1998......................748-753
    Outreach to the Underserved Community.......................722-725
Story of Agriculture............................................724-725
Universities and Colleges:
    Competitive Grants Process..................................742-743
    Historically Black Colleges and Universities................781-782
    USDA/1890 National Scholars program..........................   780
USDA Streamlining or Reorganization............................735, 738
Vehicles:
    Purchasing vs Leasing........................................   741
    Distribution of Motor Vehicles..............................741-742
    Distribution of Aircraft.....................................   742
Witness Statements:
    Rosalind Gray, Director of Civil Rights.....................675-669
    Sally Thompson, Acting Assistant Secretary for 
      Administration, Office of the Chief Financial Officer.....655-661
Availability of Technology.......................................   713
CCC Reporting Process Improvements...............................   795
CFO Act of 1990:
    Cost to Implement............................................   788
    Requirements................................................788-791
Common Core Financial System.....................................   728
    Segmented Approach...........................................   728
Explanatory Notes.............................................1097-1113
Financial Information System Vision and Strategy (FISVIS):
    Cost.........................................................   787
    Status of Consolidation of Financial Information Systems in 
      USDA.......................................................   787
Financial Statements, Audit Capabilities.........................   713
Foundation Financial Information System (FFIS):
    Agencies Now In Production Operation.........................   786
     Costs.......................................................   798
    Replacement of Systems.......................................   787
    Target Dates and Status......................................   797
GAO and OIG Audits..............................................795-797
National Finance Center:
    Benefits Providing Payroll Services to Non-Federal FSA County 
      Office Employees...........................................   785
    Costs of Contract with American Management Systems..........787-788
    Cross Servicing.............................................792-794
    Direct Deposit/Electronic Funds Transfer Participation......794-795
    Payroll/Personnel System...............................799, 802-805
    Products and Services Provided...............................   804
    Staffing, Pay, and Non-Pay Costs............................799-802
    Staff Year Utilization.......................................   791
    Thrift Savings Plan.........................................797-798
Opening Remarks of Sally Thompson...............................652-654
Questions Submitted for the Record..............................783-805
Stove Piping Among USDA Agencies.................................   783
USDA Information:
    Access to USDA Information...................................   722
    Hot-Line System..............................................   723
USDA Travel Cost.................................................   786
Witness Statement of Sally Thompson, Chief Financial Officer....662-669
Working Capital Fund:
    Amounts Paid by Agency......................................783-784
    Documentation to Support an OIG Audit........................   906
    Explanatory Notes.........................................1114-1139
    Operating Costs..............................................   785
    Purchase of Computer Equipment and Services..................   785
Y2K..............................................................   713

                Office of the Chief Information Officer

A-11 IT Exhibit 42..............................................874-886
    Action on OIG and GAO Audit Findings........................862-865
    Additional Funds for Fiscal Year 2000........................   899
    Assessing the Costs and Benefits of Using the Internet.......   901
    Biography of Anne F. Thomson Reed, CIO......................700-701
    Capital Planning and Investment Control Guide................   806
Clinger-Cohen Act Implementation.................................   673
Common Computing Environment:
    Equipment..............................................673, 721-722
    Oversight....................................................   673
    Schedule for One System......................................   727
    Workstations................................................905-906
Contractor Support Services in FY 1998 and 1999.................820-830
Core Business Process:
    Status......................................................726-727
    Schedule for One System.....................................727-728
    Segmented Approach...........................................   728
CPIC Goals, Objectives, Results..................................   889
Earned Value Management System...................................   865
Executive Information Technology Investment Review Board, FY 2000 
  Review.........................................................   806
Explanatory Notes.............................................1140-1159
Farmer Access to Computer and USDA Information.................721, 722
Fixed Asset Plan and Justification for FY 2000 Projects..........   831
Food for Farm Aid...............................................720-721
GAO Recommendations:
    Hold CIO Accountable for SCMI................................   894
    Redundant and Unnecessary Telecommunications Services.......894-895
Information Technology (IT):
    Budget and Contractor Support................................   889
    FY 2000 Appropriated and CCC Funding Request................807-819
        FNS Passthrough..........................................   672
        USDA Total Planned 2000 IT Expenditures..................   888
    Improving Network Security, Data Management.................891-892
    Moratorium...................................................   839
    Project Management...........................................   674
    Total Cost of USDA Year 2000 Effort..........................   899
        Number and Costs by Agency FTE's........................888-889
    Unified System of Management................................890-891
    Workforce Planning...........................................   674
LAN/WAN/Voice:
    USDA Service Center LAN/WAN/VOICE Installations..............   839
    Installation Costs..........................................839-840
    Installations................................................   735
Latest CCC Quarterly Report (September 30, 1998)................831-838
Object Class 25.0, Other Services Breakdown.....................904-905
Object Class 31.0, Equipment Breakdown...........................   905
Opening Remarks of Anne Reed, CIO...............................671-674
Responsibility and Coordination of CIO..........................907-908
    New Associate CIO for Telecommunications.....................   674
Return on Investment Methodology.................................   806
Security of E-Business Transactions and Mission Critical IT 
  Systems........................................................   901
Sharing Telecommunications Resources With Department of the 
  Interior......................................................895-898
Strengthening the Knowledge, Skills, and Ability of USDA IT Staf806-807
Support of Information Community.................................   729
Support Services Bureau (SSB):
    Business Process Reengineering..............................841-859
    Contractor Support and Job Elimination.......................   904
    Employees Transferring to SSB................................   904
    Establishing the Office.....................................892-893
    FY 2000 Service Center Modernization Initiative Funding.....902-904
    Ongoing and Planned Activities by Agency.....................   903
    Performance Measures.........................................   892
    Planned Expenditures and FTE's..............................892-893
    Savings from Service Center Implementation..................715-718
    USDA Employees Working on the Service Center Implementation.860-861
        FSIS and APHIS Employees Working in the SCI..............   862
Timeframe and Milestones for USDA Capital Planning and IT 
  Architecture..................................................889-890
USDA Cost Savings from Sharing Telecommunications with USDOI.....   898
USDA Plans to Develop or Support Electronic-Based Services and 
  Program Delivery...............................................   902
USDA Programs Delivered Through the Internet....................899-901
USDA Request for CCC Increase....................................   894
USDA Restructuring Progress......................................   887
Use of E-Mail..................................................729, 901
Witness Statement of Anne Reed, CIO.............................675-699
Y2K:
    Additional Funds Needed in FY 2000..........................840-841
    Agencies Not Y2K Compliant...................................   841
    Food Supply in Y2K...........................................   715
    Impact on USDA Programs......................................   840
    Increase in Y2K Repair costs................................898-899
    International Impact.........................................   672
    Status of Y2K Conversion.....................................   714
    Total Cost...................................................   889
    USDA Year 2000 Compliance Program...........................865-873
    USDA Year 2000 Plan..........................................   840
        Readiness in Rural America...............................   714

                        Office of Communications

Biography of Tom Amontree, Director..............................   990
Budget Request..................................................916-917
Capability for Public Access Through the Internet................   918
Computer Matching and Privacy Act of 1988........................   916
Conversion of Photographic Library...............................   916
Cost to Produce Agriculture Fact Book............................   917
Credit Alert Interactive Voice Response System...................   916
Explanatory Notes.............................................1160-1174
Media Services...................................................   914
Object Classes 25.2, Other Services, 26.0 Supplies and Materials 
  and 31.0, Equipment...........................................917-918
Public Affairs Activity.........................................909-912
Reimbursements from Other USDA Agencies.........................914-915
Resources and Staff Levels.......................................   913
Survey of Knowledge of USDA Services.............................   917
USDA Visitor Center..............................................   916
Waiver to Allow Field Offices to Procure Print Jobs..............   918
Written Statement of Director of Communications.................986-989

                     Office of the General Counsel

Amex International, Inc..........................................   956
Attorney:
    Hours by Agency..............................................   923
    Hours Worked.................................................   921
    Locations....................................................   924
Benefits Former Personnel........................................   957
Cases:
    Before EEO Commission........................................   956
    Civil and Criminal...........................................   925
Civil Rights Action Team.........................................   919
Equipment Procurement Plans......................................   958
Examples of Recent Progress......................................   937
    Explanatory Notes............................................  1175
FY 2000 Budget Request Breakout..................................   936
Hazardous Waste Management.......................................   956
Law Library......................................................   935
Loan Resolution Task Force.......................................   955
New Authorities..................................................   926
Object Class Breakout............................................   957
OGC Priorities...................................................   955
Private Counsel..................................................   923
Regulations......................................................   919
Staffing:
    Appropriated and Reimbursable................................   921
    Maintain Staff...............................................   958
    Staff Requirements...........................................   958
Statement of the General Counsel.................................   991
User Fee:
    Hours by Agency..............................................   920
    Programs.....................................................   920
Year 2000 Compliance.............................................   959

                       National Appeals Division

Appeals:
    Assistance in Process........................................   968
    Cost and Average Length......................................   966
    List of Appeals Pending Resolution..........................960-965
    Number of:
        Active Appeals...........................................   966
        Director Appeals.........................................   967
Biography of Norman G. Cooper, Director NAD......................  1028
Cost of Phase II Tracking System.................................   967
Customer Survey..................................................   967
Description of Hearing and Director Review.......................   967
Explanatory Notes.............................................1216-1222
Final Rules and Regulations......................................   966
If You Disagree Brochure......................................1025-1027
Management and Financial Accountability Control Plan............967-968
NAD's Role in Discrimination Cases...............................   968
Questions Submitted for the Record...............................   960
Training:
    Costs........................................................   960
    Increase in Budget...........................................   968
    List of Courses..............................................   960
Waivers and Extensions...........................................   967
Witness Statement of Director, NAD............................1022-1024

                                
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