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

     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 3

                            CONSERVATION PROGRAMS AND
                        MARKETING AND REGULATORY PROGRAMS
                                                                       Page
     Natural Resources Conservation Service...........................    1
     Marketing and Regulatory Programs................................  359
       Animal and Plant Health Inspection Service

       Agricultural Marketing Service

       Grain Inspection, Packers and Stockyards

       Administration

                                    ________
             Printed for the use of the Committee on Appropriations
                                    ________
                         U.S. GOVERNMENT PRINTING OFFICE
     56-251 O                   WASHINGTON : 1999

                               COMMITTEE ON APPROPRIATIONS

                       C. W. BILL YOUNG, Florida, Chairman

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

                     James W. Dyer, Clerk and Staff Director

                                      (ii)

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

                                  ----------

                                          Wednesday, February 24, 1999.

                     NATURAL RESOURCES AND THE ENVIRONMENT

                                   WITNESSES

    JAMES R. LYONS, UNDER SECRETARY, NATURAL RESOURCES AND ENVIRONMENT
    PEARLIE S. REED, CHIEF, NATURAL RESOURCES CONSERVATION SERVICE
    DANNY R. SELLS, ASSOCIATE CHIEF, NATURAL RESOURCES CONSERVATION SERVICE
    ANNE M. DUBEY, DIRECTOR, BUDGET PLANNING AND ANALYSIS DIVISION, NATURAL
        RESOURCES CONSERVATION SERVICE
    DENNIS KAPLAN, OFFICE OF BUDGET AND POLICY ANALYSIS, DEPARTMENT OF
        AGRICULTURE
        Mr. Skeen. Good afternoon. Today we have with us the
    Natural Resources Conservation Service, as led by Chief Pearlie
    Reed and Mr. Jim Lyons, the Under Secretary for Natural
    Resources and the Environment.
        This subcommittee appreciates the work that NRCS
    accomplishes in preserving and maintaining the health of our
    Nation's soil, and you are under a lot of pressure by a budget
    request that seeks significant funding increases and adds new
    programs, while at the same time proposes significant staffing
    decreases.
        We have read your prepared statement. So we would ask that
    you include possibly the highlights. Your written statements
    will be appreciated and will be printed in full for the record.
    I would like for you now to go ahead and introduce your panel.

                    Opening Remarks by Undersecretary Lyons

        Mr. Lyons. Thank you very much, Mr. Chairman. It is a
    pleasure to be here today.
        Mr. Skeen. It is a pleasure having you. Sorry we were
    holding you up.
        Mr. Lyons. Not a problem at all.
        I want to thank you for this opportunity to be here, and I
    want to apologize in advance for a cold that is beating me in
    this battle, but we will do the best we can today.
        We have with us today, of course, Pearlie Reed, Chief of
    NRCS; Danny Sells, Associate Chief, Anne Dubey, who heads up
    our budget shop, and Dennis Kaplan from the Office of Budget
    and Program Analysis in USDA. It is a pleasure for all of us to
    be here today.
        One other thing I want to do, Mr. Chairman, before I get
    started, I wanted to send regards from an old colleague and
    mutual friend, Jack Ward Thomas, who I saw last week. He wanted
    me to say ``hello'' to you as a fellow Aggie.
        Let me start, Mr. Chairman, by saying that, first off, I
    have been up here now six years making these presentations to--
    --
        Mr. Skeen. Has it been that long?
        Mr. Lyons. It has been that long, Mr. Chairman.
        But I dare say that a great deal has changed in that period
    of time. I think one of the things I am most proud of during my
    tenure in office, having worked first with Paul Johnson and now
    with Pearlie Reed, is the outstanding work that NRCS has done
    to advance the conservation mission of USDA; and, also, I
    think, to distinguish itself as the central Federal agency for
    conservation on America's private lands. The private land
    conservation challenge is a tremendous one, and I think NRCS,
    in partnership with conservation districts, does an outstanding
    job in promoting good land stewardship across the American
    landscape. I am very proud of the work they do.
        Farmers, ranchers, and communities across the Nation can
    turn to NRCS and receive assistance on a wide spectrum of
    conservation efforts, encompassing things like nutrient and
    pesticide management, wetlands conservation, watershed
    planning, flood prevention, water quality improvement,
    developing and maintaining wildlife habitat, and, of course,
    soil conservation, the ``bread and butter'' of the agency.
        To meet that demand, NRCS delivers a wide variety of
    financial and technical resources to its customers. But I want
    to emphasize, Mr. Chairman, of course, the core of NRCS has
    been, and continues to be, its people, who are outstanding and
    doing a tremendous job in working in partnership with
    landowners across the Nation. It is the NRCS delivery system in
    the field that makes all this work happen, and I can you tell
    you, from many meetings with colleagues in other departments
    and agencies, that it is the envy of those Federal agencies. It
    is the field conservationists who have earned the trust of
    farmers and ranchers across the Nation through the sound advice
    and technical assistance they provide.
        What I would like to do is just take a moment and provide a
    little more detail on how the NRCS field delivery system
    provides conservation technical assistance to meet the agency's
    mission. As I noted, more than 70 percent of the land in the
    contiguous United States is privately owned, including
    virtually all of the Nation's farm and rangelands. NRCS is the
    only Federal agency whose major purpose is to provide
    conservation technical assistance to private landowners across
    the country. The agency's focus is on helping landowners and
    users achieve natural resource and environmental goals while
    maintaining productive and profitable operations--operations
    that, of course, are vital to rural communities across the
    Nation, as you know very well from New Mexico.
        Conservation Operations is the foundation for most of the
    agency's activities. Conservation Operations represents a
    longstanding and historical partnership of interests, all
    working together in a concerted way toward a sustainable,
    productive Nation. Within that Conservation Operations budget,
    there are certainly activities and functions that I want to
    highlight.
        Conservation technical assistance, of course, is the
    cornerstone for most agency activities, and our Fiscal Year
    2000 budget request is $585 million, a small increase of only
    $37 million for technical assistance. Conservationists on the
    ground are under increasing demand for their services, as they
    tackle new responsibilities while retaining the commitment to
    the community for providing basic assistance to landowners.
        Throughout the Nation, NRCS conservationists facilitateand
    enable local action. Technical assistance funding ensures the presence
    of these individuals and promotes voluntary conservation activities.
        With respect to workload, one area of particular concern is
    the issue of water quality problems associated with animal
    feeding operations. I believe you are aware, Mr. Chairman, that
    in September 1998, as called for in the administration's Clean
    Water Action Plan, USDA, working with the Environmental
    Protection Agency, jointly released for public comment a draft
    Animal Feeding Operation--AFO--strategy that establishes
    national performance expectations for all animal feeding
    operation owners and operators. The strategy presents a series
    of actions that USDA and EPA will take to minimize water
    quality and public health impacts of the nearly 450,000 AFO's
    in the United States.
        The Fiscal Year 2000 budget proposes to increase
    conservation technical assistance available to AFO operators by
    $20 million, and we all recognize that is not going to quite do
    the job, but it is an investment we begin to make as we try to
    refine and complete the AFO strategy--a strategy, I would
    emphasize, which is focused really on voluntary approaches to
    dealing with water quality problems, as opposed to the stick
    approach that EPA has used so often. I think we have made a
    great deal of progress in demonstrating that a voluntary
    approach is the way to get the job done, and we want to be able
    to demonstrate that as we move forward.
        Additional support for the Clean Water Action Plan in the
    budget includes $20 million for competitive partnership grants
    that will be used to strengthen the leadership of locally-based
    organizations, such as conservation districts and watershed
    councils, to enable them to provide coordination of locally-
    initiated conservation efforts. Finally, a further increase of
    $3 million would be used by NRCS for additional monitoring to
    help target resources and document baseline conditions and
    performance.
        Another issue of concern is the issue of global climate
    change. We want to learn more about global climate change, and
    the conservation technical assistance increase includes $12
    million for soil studies and inventories to provide baseline
    soil data to assess the impacts of Federal programs on soil
    carbon stocks. There is also $3 million proposed to fund
    demonstration and pilot projects to test various carbon
    sequestration methods.
        The increases are partially offset, though, by a decrease
    of $31 million for a transfer of base funding to the proposed
    Support Services Bureau, which will essentially fund the
    administrative support services common to county-based
    agencies. As you are aware, Mr. Chairman, from meetings that we
    all had with the Secretary, we are doing our best to come up
    with the most cost-efficient and effective approach to
    providing administrative services for our field-based agencies,
    and that involves NRCS, FSA, and the Rural Development
    Agencies. Earlier this month, Secretary Glickman gave us
    direction to move forward with implementation of this strategy,
    and this is an investment in that central support service.
        Some other activities encompassed by conservation technical
    assistance include continuing work on highly-erodible land
    conservation. Although the 1985 Farm Bill provided basic
    direction for conservation compliance, it is important to
    remember that that work continues. Our experience has shown
    that approximately 20 percent of producers will change their
    conservation systems each year, requiring NRCS technical
    assistance.
        In the area of wetland determinations and certifications,
    NRCS is involved in determining areas subject to Swampbuster
    and response to requests from farmers who plan activities that
    may adversely impact wetland. NRCS certifies wetland
    determinations only upon request, when clients propose to alter
    the hydrology within a wetland. In Fiscal Years 1997 and 1998,
    landowners requested about 40,000 such certifications, and we
    expect that number to increase annually.
        I also want to mention the Grazing Lands Conservation
    Initiative briefly. You and I have talked about this many
    times. It is a very successful program that is really
    grassroots-driven, and has helped NRCS better define the
    resource needs and benefits generated when grazing lands are
    improved. In Fiscal Year 1999, NRCS was able to continue to
    support grazing lands conservation coordinators in each State,
    and we think it is critical to continue that investment.
        I will briefly mention, also, in a timely way, since Ms.
    Kaptur is with us, the work we are doing in the urban
    conservation arena, another area that we have focused on as
    work has increased in the urban and suburban areas. Natural
    resources don't recognize urban and suburban boundaries, as you
    know, Mr. Chairman, and to ignore their interaction within a
    watershed wouldn't do either justice. The watershed approach to
    resource conservation has been widely acclaimed and highly
    successful, and I am proud to say that we have taken the lead
    in working across the landscape in rural, suburban, and urban
    areas to begin to examine ways in which we can rehabilitate the
    health of watersheds and address all those factors that
    contribute to the decline of water resources.
        We continue our work in areas such as soil surveys and
    plant material centers. And I would make one note, Mr.
    Chairman, since the Forest Service is the other agency I deal
    with. We expect a pretty severe fire season this year, and the
    plant material centers have been instrumental in providing
    information and guidance and seedstock to help regenerate areas
    that are severely impacted by fire. I hesitate to say this, but
    we expect the fire season to start in the Southwest any day
    now.
        Other appropriated discretionary accounts in our budget are
    the Watershed Surveys and Planning, Watershed and Flood
    Prevention Operations, and a new program, Debt for Nature, for
    which we are going to seek authorization this year. The budget
    includes $5 million to implement this program. Really what this
    program is intended to do is provide technical and financial
    assistance to USDA borrowers with cashflow problems who also
    have lands that require conservation treatment. In exchange for
    debt forgiveness on their lands, program participants, on a
    voluntary basis, could agree to enroll environmentally-
    sensitive lands into the conservation easements. This was a
    recommendation that came directly out of USDA's Civil Rights
    Action Team report regarding establishment of a Small Farm
    Commission, which was chaired by a former colleague of yours,
    Harold Volkmer. He did an excellent job.
        We continue our support to the RC&D's, the Resource,
    Conservation, and Development organizations, which, of course,
    have done a tremendous job as well.
        NRCS also administers, on behalf of the Commodity Credit
    Corporation, several cost-share programs, including those set
    forth in the 1996 farm bill. We also provide
    technicalassistance to individuals and groups participating in the CRP
    program, which, of course, is administered by the Farm Service Agency.
        The Environmental Quality Incentives Program, or EQIP,
    provides a single voluntary program of flexible technical,
    financial, and educational assistance to farmers and ranchers
    who face serious threats to soil, water, and related natural
    resources on their agricultural lands. Assistance is provided
    in a manner that maximizes environmental benefits per dollar
    expended while assisting producers with issues such as local
    environmental laws or community-identified environmental needs.
        In Fiscal Year 1999, we received $174 million in the EQIP
    program, just under the $200 million that was authorized. We
    had requested $300 million, and, again, have included in our
    budget a request to increase the authorization to provide $300
    million for this extremely valuable program. The program has
    been extremely successful. We received nearly 55 thousand
    applications in Fiscal Year 1998 for the program, and we expect
    the demand to grow considerably for use of this program.
        I should also mention the Wildlife Habitat Incentive
    Program, authored by your colleague, Senator Cochran, provides
    for implementing wildlife habitat practices to develop upland
    wildlife habitat, wetland wildlife habitat and work dealing
    with threatened and endangered species. This program, too, has
    been extremely successful, and we are going to seek additional
    funds for the program in Fiscal Year 2000.
        Finally, I want to mention the Farmland Protection Program.
    On Sunday, Secretary Glickman and I had a chance to visit with
    the Natural Resources Committee of the National Governors
    Association to address issues associated with livability and
    protection of open space. To be quite candid, Mr. Chairman, I
    was amazed at the bipartisan interest and support in securing
    funds to provide for the protection of open space and to reduce
    the impacts of urban encroachment on prime agricultural land.
    Speaking for the governors, Governor Christine Todd Whitman
    from New Jersey, in whose State taxpayers recently passed a
    billion dollar initiative to provide $100 million a year to
    provide for farmland and forestland protection, governors from
    Oregon, Washington, Wyoming, and other States, all spoke to the
    important need to invest in farmland protection at the
    Governor's conference.
        The Fiscal Year 2000 budget that we have submitted includes
    a total of $77.5 million for farmland protection in two
    components: $50 million in the new discretionary fund that
    would come out of the Land and Water Conservation Fund, part of
    what we are calling our Lands Legacy Initiative, and $27.5
    million in CCC funding under proposed legislation that we will
    submit to the committee.
        We also administer, of course, the WRP program, the Wetland
    Reserve Program, which has been extremely successful. In Fiscal
    Year 2000, we are going to propose to enroll almost 200,000
    acres and essentially reach the 975,000-acre cap that was
    called for in the program. Technical assistance funding needed
    for the larger enrollment effort would be about $18 million
    this Fiscal Year.
        Let me close, Mr. Chairman, by pointing out something that
    I know you recognize, but I want to highlight as well. Through
    the 1985, 1990, and 1996 Farm Bills, working in partnership
    with the Congress, I think we have developed a tremendous
    toolkit for conservation--tools or programs that can be
    extremely useful in achieving individual landowner or community
    or national conservation goals. They run the gamut from land
    retirement programs, like CRP and WRP, to the technical
    assistance we provide through conservation technical assistance
    or the work of RC&D's, to cost-share programs, like those we
    administer through EQIP and WHIP.
        We have the tools we need to get the job done, Mr.
    Chairman, but I think the key to conservation is partnership,
    and the key to partnership is having people on the ground to be
    able to work with landowners and communities and other agencies
    and entities to get the job done.
        I started out by saying the key to success of NRCS has been
    its people. I think it is critical that we have the people to
    do the job and using these tools to apply conservation on the
    landscape. I want to share with you my concern that we have a
    tendency to invest in programs as a Nation, but are less
    willing or less anxious to invest in people, who are really the
    key to delivering and implementing those programs. There are
    some gaps in our budget, that I am sure the Chief can help you
    understand, that may limit our ability to put people on the
    ground, to put in place those conservation tools.
        I think it is critical that we make that investment. Mr.
    Chairman, as you know from your history and your professional
    experience, that knowledge and expertise is critical to helping
    landowners understand how to achieve their long-term
    conservation goals. We need to have the people out there to get
    that job done, as well as the program dollars to put those
    conservation practices in place.
        So we look forward to working with you as always in trying
    to put together a budget that achieves those long-term
    conservation goals, but I would implore you that this year we
    take a hard look at what it is going to take to invest in the
    people who are going to apply those tools and work in
    partnership with landowners and conservation districts and
    others across the Nation to ensure that we have put in place
    the kind of conservation legacy of which we are all proud.
        Thank you.
        Mr. Skeen. Thank you.
        Mr. Reed.

                          Opening Remarks by Mr. Reed

        Mr. Reed. Thank you, Mr. Chairman. As you indicated
    earlier, you have my statement, but I do have a few comments I
    would like to make.
        Mr. Skeen. Well, we will just take them right on
    straightaway from you.
        Mr. Reed. Thank you.
        Mr. Skeen. We appreciate it.
        Mr. Reed. Mr. Chairman, members of the committee, thank you
    for the opportunity to appear before you today. I am pleased to
    be here representing the men and women of the NRCS and our
    conservation partners. Our people in the field, working with
    farmers and ranchers, are the NRCS. Our employees, including
    conservation district employees, are some of the most capable
    and dedicated employees you will find anywhere.
        Mr. Chairman, I do have one major concern, and that concern
    is we, the NRCS, are being asked to do too much. In addition to
    the basic soil and water conservation work on cropland,
    rangeland, pastureland, the policymakers in this country are
    putting more on our plate; namely, the massive livestock waste
    issue, global climate change, and a host of emerging water
    quality problems. Simply put, we are being overcommitted.
        The reason so much is being asked of the NRCS is because so
    much is being asked of our farmers and ranchers here in
    America, and we, the NRCS, have a reputation of getting the job
    done. But I would like to assure you that we will, whatever we
    are asked to do, we will, in the most efficient and effective
    way possible, do all that we can do.
        Again, thank you for the opportunity to be here with you
    today.
        [The prepared statements and biographies of James R. Lyons
    and Pearlie S. Reed and biography of Danny D. Sells follow:]

    [Pages 8-40 -- The official Committee Record contains additional
        material here]

        Mr. Skeen. Thank you. I think what I will do is start with
    this questioning, and then I will go to Ms. Kaptur for her
    introductory statement. Go ahead and make that, Marcy. Go
    ahead.
        Ms. Kaptur. Thank you. Thank you, Mr. Chairman. I just
    wanted to welcome our witnesses today, and thank Mr. Lyons and
    Mr. Reed, and all of your associates from NRCS, for the fine
    work that you and your colleagues do, not just here in
    Washington, but all over the country. I will agree with Mr.
    Reed on that.
        I have some questions, and I apologize for being about
    eight minutes late. I was involved in a meeting on, of all
    things, poultry waste management, with some of our fellow
    colleagues, and the problems we are having in the State of
    Maryland. So I apologize. I think NRCS may be the solution, at
    least part of the solution, to that.
        So I do have some questions, Mr. Chairman. I will withhold
    those for the moment.

                                staff reductions

        Mr. Skeen. Thank you, Ms. Kaptur.
        Let me start with, Under Secretary Lyons, the President's
    budget proposes a significant funding increase for NRCS; yet,
    the staffing level has declined by a thousand people. How will
    this staffing reduction affect the current conservation
    programs? And, also, what types of personnel actions have to be
    considered to reduce the staff by a thousand people? Your
    program does not require them or----
        Mr. Lyons. Well, let me take a shot at that, Mr. Chairman,
    and then I will yield to the Chief, who can, I think, offer
    more detail.
        Mr. Skeen. Well, I want to know what he is going to do with
    those thousand people he is losing?
        Mr. Lyons. Well, I am concerned about the loss of those
    people. In large measure, that loss would be associated with
    the lack of reimbursements for programs we implement through
    the CCC. Part of the problem lies with a cap on the amount of
    reimbursement that can be provided from funds in the Commodity
    Credit Corporation, and that impacts our ability to do
    everything from provide technical assistance for the CRP
    program to other programs as well. I honestly believe we need
    to address that and work together to find a way in which to do
    so. It is an issue that we have to address, Mr. Chairman. If we
    don't, we face loss of FTE's, and FTE's translate to
    conservationists on the ground doing the job that we want them
    to do.

                            conservation philosophy

        Mr. Skeen. Mr. Reed, OMB has laid out some pretty ambitious
    goals for your agency, but you are the Chief, and we recognize
    you as such. So we would like to hear from you on two matters.
    We want your comments on how well you believe the Federal
    Government is doing in meeting the mission on private lands
    conservation and your philosophy on conservation in general.
        Mr. Reed. With your permission, I would like to do the
    latter first.
        Mr. Skeen. You can take it any way you want to. We
    appreciate it.
        Mr. Reed. My philosophy as it relates to conservation is
    that soil and water conservation are as important to our
    country, in my opinion, as education, healthcare, and national
    defense. I think that every acre of land in this country and
    every bucket of water must be used wisely. I think it is good
    public policy in this country for us to ensure that we maintain
    our conservation infrastructure that we have out in the
    countryside with State conservation agencies and conservation
    districts, so that we have this basic safety net that is needed
    to provide the appropriate science and technology in the form
    of technical assistance to our Nation's farmers and ranchers
    and other land users.
        As it relates to how well we are doing, I think we are
    doing exceptionally well, but we could do better. The men and
    women that we have out in the countryside I alluded to earlier
    are the most dedicated and capable people you will find any
    place. There is one thing, though, that really bothers me, and
    that is, our people, most of them out in the countryside, work
    uncompensated 10, 12, 16 hours a day, Saturdays, Sundays,
    holidays. When I tell some folks this,they tell me that you
    need to tell them to go home, and if they don't go home, you need to
    take the appropriate action. And my reply to that, is that you take
    action against folks who don't want to work, not against those that do.
        So, again, getting back to my agency and our people being
    asked to do a lot, we don't mind it at all, but we want some
    help to get the job done.
        Mr. Skeen. Well, I understand. That is why I am very
    surprised that we are offering a thousand reduction in
    personnel. I come from the old school, too, that I think it is
    those people on the ground out there that are doing the Lord's
    work as far as the philosophy of what we can do to maintain our
    status as a world producer of food--because we take care of our
    soil and we take care of our water, and conservation is
    absolutely essential. So I am a little concerned about the loss
    of that thousand people, but I understand why you are doing it.
        I will second your philosophy on conservation. It is the
    folks on the ground out there who take it as their life's work
    to make sure that we conserve our resources, particularly our
    water and land resources. That is the best base we have.
        Thank you very much.
        Ms. Kaptur.

                              loss of arable lands

        Ms. Kaptur. Yes, Mr. Chairman, I wanted to ask either Mr.
    Lyons or Mr. Reed, should the American people be concerned with
    the diminishment of arable lands in this country?
        Mr. Lyons. I think to some degree we should be, Ms. Kaptur.
    I think a number of factors come into play, and one is the loss
    of prime farmlands because of growth. The other is because of
    poor management, because of the inability to invest in proper
    stewardship, the loss of our lands in portions of the Southwest
    and other parts of the country, where additional investments I
    think would pay off.
        A large concern raised by the American Farmland Trust and
    others is the fact that prime farmland in and near urban areas
    is disappearing at an alarming rate, which is going to result
    in increased costs associated with production, and I think
    could ultimately have a big impact on our capacity to meet the
    Nation's needs, as well as protect the quality of life that we
    have all come to associate with areas such as your district and
    Mr. Skeen's and others. We need to tackle that issue.
        Ms. Kaptur. How would you answer this: People might say,
    well, you know, we are really moving into an area; we will lose
    a third of those who produce pork in this country perhaps over
    the next year, if Congress doesn't act; we have lost much of
    our sheep production, lamb production, in this country; we have
    cattle people in trouble; our grain prices are at historic
    lows, but really we are moving into an age where we are going
    to industrialize agriculture, so all Ohio eggs will come out of
    one major producer now with over a million laying hens. We will
    just have a few companies producing chickens, poultry, for
    market, and we will aggregate into only a few feedlots the
    majority of meat that will be raised for consumption in this
    country, and we will basically shut down rural life as we known
    it. So why should we bother?
        We won't see fish in the sea anymore. We will really have
    these fish farms that we build all over the country. We are now
    into an era of industrializing agriculture. So why should we
    care about arable lands? Why should we care about the
    fundamental resource base that provided the wealth that built
    this country in its first two centuries? How would you explain
    to the American people that arable lands are important, if they
    are?
        Mr. Reed. Mr. Secretary, let me take a shot at that. I am a
    student of history. If you take a look at what has happened to
    those civilizations that did not take care of the land, those
    civilizations no longer exist. What is being projected for the
    future may, in fact, come to pass. But, from my perspective,
    when I take a look at what is happening to the land, the fact
    that once we lose arable land, you can't replace it; if you
    take a look at the increases in population in this country, and
    you think about the issue of basic food security, I think at
    this point in time it would be unwise for us to speculate on
    whether or not we will need our good agricultural lands in the
    future.
        Ms. Kaptur. You don't think we can import all our food, Mr.
    Reed?
        Mr. Reed. I would not want to go to bed at night thinking
    about that as being a reality.
        Ms. Kaptur. It is happening.
        Mr. Lyons. Ms. Kaptur, if I could just make one point--I
    think not only should there be concern about the loss of arable
    land, but there should be concern about the impact that has on
    our society. We began as an agrarian nation. Consolidation and
    efficiency is a double-edged sword. Consolidation in
    agriculture certainly has had a big impact on certain
    industries, and the Secretary, of course, launched a review of
    the impacts of consolidation on the meat packing industry and
    other industries, and I know he is personally concerned about
    that.
        I share that concern, but I also would emphasize that the
    loss of small to medium-sized farms, family farms, across the
    American landscape can have a tremendous impact on America as a
    society and in those rural communities that we have, I think,
    all come to enjoy, and some of us grew up in. It would be a
    tremendous loss to see American society change so dramatically,
    if we fail to invest in, or at least recognize ways in which we
    may, in fact, be accelerating the demise of small to medium-
    sized farms.
        That is one reason that the Secretary called for the
    creation of the Small Farms Commission, which former
    Congressman Volkmer chaired. Many of the recommendations--in
    fact, most of the recommendations--that the Commission
    generated are being implemented under the guidance of Deputy
    Secretary Rominger. So we take this issue very seriously, and
    are very concerned not only about impacts on arable land, but
    impacts on the social fabric of this Nation.

                         backyard conservation program

        Ms. Kaptur. Mr. Reed, I wanted to ask you about the
    Backyard Conservation Program that NRCS launched. I was very
    happy to be a part of that last year. I am wondering what has
    happened as a result of that.
        Mr. Reed. Well, the Backyard Conservation Program has been
    a resounding success. We have had requests for the publication,
    as well as requests throughout the countryside for conservation
    education, assistance in areas in which we haven't had that
    kind of assistance before. We see an enormous increase in the
    awareness and importance of conservation, not only what the
    urban folks can do in their own backyards, but what is also
    being done out in rural America as it relates to conservation.
    So it has been a great educational tool, and I think it has
    done a lot toadvance the importance of soil and water
    conservation in this country.

                           aging watershed structures

        Ms. Kaptur. I notice in your testimony, Mr. Reed, you
    reference that 350,000 nutrient management plans will be
    required for operators of livestock operations, and 450,000
    AFO's that will be required to be addressed by the Clean Water
    Action Plan. An additional 11,000 small watershed dams
    constructed under two authorities will reach the end of their
    design life. You made your comments to this committee a few
    moments ago about not having enough resources to do the job. Is
    this the area in which you feel that your local service people
    will be over stressed?
        Mr. Reed. Yes, absolutely. As it relates to the animal
    feeding operations issue, we are, as we speak, putting together
    some options for Mr. Lyons and Deputy Secretary Rominger that
    will lay out, based on our current estimates, what the workload
    is; what is the legitimate USDA/NRCS-type investment; what
    should the investment of the conservation partners be; what
    should the private sector do. Once we pull all that together,
    we will be in a much better position to talk about how we could
    break that workload down and deal with it.
        But when you take a look at the basic work that we have
    agreed with others that are engaged with us on this, the
    workload is in itself massive for us, and we have some figures
    on that that we would be happy to follow up and provide for you
    on the record.
        [The information follows:]
                       Animal Feeding Operations Workload
        NRCS is developing an Animal Feeding Operation Implementation Plan
    and will have the plan completed by May 1999. Based on the October 1998
    Partnership Workload Analysis, NRCS estimates that about 331,000 animal
    feeding operations with less than 1,000 animal units will need
    assistance in installing a waste storage system and adopting a nutrient
    management plan. The infrastructure investment needed to control water
    pollution from animal feeding operations is enormous and NRCS is
    committed to helping minimize the financial stress on family farmers.
    If all 331,000 animal feeding operations installed a waste storage
    system, the financial assistance costs could range as high as $13.6
    billion over a ten-year implementation period. Even with this financial
    assistance, the producer costs could amount to as much as $4.5 billion.
    Depending on the role of state, local, and conservation district
    employees as well as the private sector in assisting farmers, NRCS
    could require an additional $2.5 billion dollars in funds to support
    technical assistance over a ten-year period. These figures may change
    as the 1997 Agricultural Census data becomes available and as new
    workload data is collected. In addition to the financial and technical
    assistance provided through NRCS, other agencies in USDA have important
    contributions to make in addressing the water quality problems related
    to animal feeding operations. Examples of contributions from other
    agencies include: producer education and research through the
    Cooperative State Research, Education, and Extension Service, research
    by the Agricultural Research Service, and loans administered by the
    Farm Services Agency.

        Mr. Reed. Regarding the issue centered around these 10,000
    dams, up until about 1960, under the Public Law 534 and 566
    programs, we built about 10,000 dams all across America, but
    concentrated in some States more so than others. The primary
    purpose was to control flooding. but also erosion control and
    municipal water supplies, the whole nine yards.
        But the bottom line is that, prior to 1960, all the dams
    that we built were designed to function for 50 years, and they
    are becoming 50 years old. Now, since 1960, we have been
    designing and building dams to last 100 years. So we don't have
    a problem just yet with them, but what is happening is that
    these dams have done what they were designed to do, and now
    they are filling up with sediment. We are finding all kinds of
    stuff in this sediment--some of the old pesticides that we used
    in cotton back 20, 30, 40 years ago, and the list goes on and
    on and on.
        But, more importantly than that, from my perspective, I see
    this as a potential major public health/public safety issue,
    because in the floodplain below a lot of these dams we have a
    lot of urban development. The roads and bridges were designed
    and built based on the hydrology in these watersheds with these
    structures fully functioning. We also have public water
    supplies, sewage treatment plants that are located beneath some
    of these structures. I believe that if we don't do what is
    needed to address the problem, then it is just a matter of time
    before we start to have some major, major safety/health
    problems out in the countryside.
        About four weeks or so ago, Mr. Lyons and I met with the
    Secretary and Mr. Witt from FEMA, and this issue was raised
    there. We are following up with him and the appropriate others
    to make sure that we capture the problem and lay it on the
    table for the public policy folks to take a look at and help us
    decide what needs to be done.

                             ADDITIONAL ASSISTANCE

        Ms. Kaptur. My final question on this round: What is the
    relationship between those needs we have just discussed on that
    page of your testimony and the $866 million appropriations
    request for this next Fiscal Year? Are you asking for
    additional assistance for that in this budget or is that
    exclusive of this request?
        Mr. Reed. It is exclusive of the budget, with the exception
    that there is a million dollars in the request, under Public
    Law 566, for educational assistance relative to the aging
    watershed infrastructure problem.
        Ms. Kaptur. All right. Thank you very much for that
    clarification.
        Mr. Lyons, could you tell me, in your original
    administration budget request that went up to OMB, did you ask
    for $866 million for the year 2000?
        Mr. Lyons. I believe we asked for a little bit more than
    that, Ms. Kaptur.
        Ms. Kaptur. How much did you ask for?
        Mr. Lyons. I am sure someone has that number.
        Mr. Reed. Can we send it up to you?
        Ms. Kaptur. Just ballpark, was it----
        Mr. Reed. It was, for Conservation Operations, it was
    $287,000 more than what the budget shows--no, $287 million.
    [Laughter.]
        Two hundred and eighty-seven million more than what the
    budget shows. That is for conservation technical assistance.
        Ms. Kaptur. All right.
        Mr. Reed. The only other one that I remember that comes to
    mind is, for the aging watershed infrastructure, based on what
    we knew back in July, when we made our initial Department
    estimates, we asked for $250 million to address the aging
    watershed infrastructure problem.
        Ms. Kaptur. All right. I thank you. Any additional
    budgetary information you wish to give us, I would appreciate,
    based on your original submission to OMB.
        Mr. Lyons. We can provide you that table.
        [The information follows:]

    [Page 47 -- The official Committee Record contains additional
        material here]

        Ms. Kaptur. Thank you. Thanks, Mr. Chairman.
        Mr. Skeen. Mrs. Emerson.

                         STAFF REDUCTIONS IN THE FIELD

        Mrs. Emerson. Thank you, Mr. Chairman.
        Mr. Reed, first of all, let me say, I have very much
    respect for all of the NRCS personnel with whom I work and my
    staff works in my district in southern Missouri. So my hat is
    off to you. It is a special team of people that you all have.
        But let me just ask for a clarification. When you and the
    chairman were discussing staffing reductions, and the figure
    1,000 was mentioned, are those 1,000 people in the field or are
    they here in D.C.?
        Mr. Reed. In the field.
        Mrs. Emerson. Okay.
        Mr. Reed. Can I respond to that a little further?
        Mrs. Emerson. You may. Please.
        Mr. Reed. The reason it would be mostly in the field is
    that, as you know, since 1993, we have gone through substantial
    streamlining, downsizing. Mr. Lyons and Paul Johnson, and when
    I worked with the two of them before Mr. Johnson left, we put
    at the top of our priority list taking everything that we
    possibly could out of everything above the field first. We have
    done that, and we will continue to take whatever we possibly
    can above the field. But there is nothing left, and the only
    place where we can make cuts wouldbe at the field level.
        Mrs. Emerson. This is probably an unfair question to ask,
    but has NRCS staff been reduced more proportionately than some
    of the other offices within the USDA?
        Mr. Reed. When you take a look at the importance of our
    work, yes. [Laughter.]

                                  AFO STRATEGY

        Mrs. Emerson. That is a pretty good political answer. All
    right. Well, thank you. That was pretty good. We should run you
    for office. [Laughter.]
        All right, Mr. Lyons, this question goes to you, please:
    You make a comment on page 9 of your testimony--hold on; I have
    to put my glasses back on here--that says, with regard to
    animal feeding operations, specifically, that you can never
    fully meet the workload, if you will, about providing technical
    assistance to producers as they try to comply with your animal
    feeding operation strategy. Now if you all can't commit to
    providing the necessary technical assistance, then how are our
    producers--how can we expect them to comply properly?
        Mr. Lyons. Well, as you may be aware, the AFO strategy that
    we have developed, and floated for public comment, and
    discussed across the Nation, is primarily focused on and
    emphasizes voluntary approaches. We firmly believe that is the
    way to get the job done. I think producers would agree. They
    would rather have that option than the regulatory option.
        But, as is often the case in Washington, good policy and
    the budget to implement it don't always go hand-in-hand. I
    think part of what we are asking here today is that you help
    work to recognize and address what could be a deficit in terms
    of the resources needed to help these producers.
        It really is a relatively small handful of the 450,000
    producers who are of sufficient size that they may actually
    fall under the regulatory framework of EPA, at least in
    accordance with the strategy we have devised. I think many
    producers, particularly working together in common watersheds,
    can address these water quality concerns collectively in a way
    that will avoid their having to worry about Clean Water Act
    compliance issues. But we are going to need additional
    resources.
        Mrs. Emerson. So do you think maybe we ought to delay the
    rules until NRCS can supply the assistance necessary? Would you
    be supportive of that?
        Mr. Lyons. No, I don't know that I would be supportive of
    that, Congresswoman, because I believe that we do have clean
    water concerns across the Nation that need to be addressed. I
    think we need to work together, the administration and the
    Congress, to generate the resources. We are looking at phasing
    this in over time. We know current resources are inadequate,
    and we believe we do need additional resources. But I think we
    have an obligation, and I have yet to meet a producer, with few
    exceptions, who doesn't want to help ensure that these good
    landowners are good land stewards and that they are able to
    meet those goals. That is why we have used the delivery
    mechanism we have, the voluntary approach, to get there.

                        ECONOMIC ANALYSIS OF AFO IMPACT

        Mrs. Emerson. Is there any kind of an economic analysis as
    to how the rules might impact producers economically?
        Mr. Lyons. I don't know that I have that information in
    hand.
        Mrs. Emerson. If you have done one, then may I ask that you
    provide it?
        Mr. Lyons. Sure, we can provide that for you.
        [The information follows:]
                       Economic Analysis of AFO Strategy
        Since the Unified National Strategy for Animal Feeding Operations
    (UNSAFO) is not regulatory in nature, it does not require an economic
    analysis. Nevertheless, the Strategy calls for EPA and USDA to
    collaborate on evaluating the overall costs and benefits of the
    Strategy. In addition, if EPA promulgates a rule expanding its
    authority under the Clean Water Act to regulate animal feeding
    operations, an economic analysis will have to be prepared by EPA
    because of laws and executive orders governing the need to assess the
    economic impact of regulations on the private sector.
        On the voluntary side, NRCS is developing an Animal Feeding
    Operation Action Plan that complements the Strategy. A Draft
    Implementation Plan is scheduled to be completed in May 1999. Although
    no definitive economic analysis of the Implementation Plan has been
    made to date, preliminary national estimates of the financial and
    technical assistance needs have been made. Based on the October 1998
    National Partnership Field Workload Analysis, NRCS estimates that about
    331,000 animal feeding operations with less than 1,000 animal units
    will need assistance in installing a waste storage system and adopting
    a nutrient management plan. The infrastructure investment needed to
    control water pollution from animal feeding operations could be
    substantial and NRCS is committed to helping minimize the financial
    stress on family farmers. If all 331,000 animal feeding operations
    installed a waste storage system, the financial assistance costs could
    reach $13.6 billion over a ten-year implementation period. Even with
    this level of financial assistance, producer costs could amount to at
    least $4.5 billion. Depending on the role of state, local, and
    conservation district employees as well as the private sector in
    assisting farmers, NRCS could require an additional $2.5 billion
    dollars in funds to support technical assistance over a 10 year period.
    These cost estimates may change as new data on AFO numbers and workload
    becomes available through the 1997 Agricultural Census and the 2000
    National Partnership Field Workload Analysis. In addition to the
    financial and technical assistance provided through NRCS, other
    agencies in USDA could have important contributions to make in
    addressing the water quality problems related to animal feeding
    operations. Examples of contributions from other agencies include:
    producer education and research through the Cooperative State Research,
    Education, and Extension Service; research by the Agricultural Research
    Service; and loans administered by the Farm Service Agency.

                        AFO STRATEGY LISTENING SESSIONS

        Mrs. Emerson. Because I know there were some meetings held
    around the country, bringing the stakeholders in, have your
    folks actually gone out to ranches and farms and talked to
    people? It is just that I haven't gotten any specific feedback
    from my people that they have been approached or this issue has
    been discussed with them?
        Mr. Lyons. Yes. In fact, we held a dozen listening sessions
    across the country and invited producers to come in and speak.
    I attended a number of those. My colleagues at EPA--Glenda
    Humiston here, who is my Deputy for Conservation, participated.
    I think we got a healthy helping of farm reality in the
    discussions we had.
        I should point out that what we are issuing is a strategy.
    We are not issuing specific rules. EPA would be responsible for
    issuing any rules to comply with the Clean Water Action Plan.
    So I don't think there has been an economic or cost-benefit
    analysis on rules yet, but I will talk to my colleagues and
    make sure whatever information we have on potential economic
    impacts we provide you.

                        IMPACT OF GLOBAL CLIMATE CHANGE

        Mrs. Emerson. Well, that would be very helpful because
    oftentimes that is the last thing that is thought about when
    new rules and regulations are imposed on producers, small
    business people, et cetera.
        Let me just move very quickly--I have a question with
    regard to global climate change, and specifically, I want to
    refer to a study that was recently completed by the Sparks
    Company, on behalf of the corngrowers, the Farm Bureau, and
    other producer organizations, that predicts about a 50 percent
    decline in farm income, doubling of production costs, et
    cetera, et cetera. In fact, Mr. Chairman, I would like to
    submit that study for the record, if I might.
        [The information follows:]

    [Pages 51-53 -- The official Committee Record contains additional
        material here]

        Mrs. Emerson. But, anyway, let me ask you--I think the
    Department has been asked on numerous occasions also about any
    kind of economic analysis that you all might have done with
    regard to climate change and how it would impact agriculture.
    Do you know if that has been done yet?
        Mr. Lyons. I can't answer that. I will have to check with
    Keith Collins, who is our Chief Economist, and provide you
    whatever information.
        Mrs. Emerson. Okay. I would be very grateful if you could,
    in fact, do that.
        [The information follows:]
                  Economic Analysis for Global Climate Change
        Global climate change has been a topic of growing concerns to USDA
    as well as many other Federal departments. The work you are asking
    about is being handled by the Global Climate Change program that is
    attached to the Office of the Chief Economist. We understand that the
    Economic Research Service is assisting in this effort. We would
    encourage the committee to contact the Global Climate Change program
    office for any specific information that is desired.
        From a weather variability standpoint, the following is drawn from
    the March 2nd testimony presented by the Chief Economist to the Senate
    Committee on Appropriations, Subcommittee on Agriculture, Rural
    Development and Related Agencies:

        ``Weather and agricultural production. Last year's heavy rain and
    flooding in California and drier than normal conditions in the Southern
    Plans and South highlighted the role of weather in crop production and
    farm financial conditions. The current La Nina weather event is having
    a limited effect on U.S. agriculture, with the possible exception of
    the December freeze in California that severely reduced citrus
    production. La Nina is not expected to be a major factor affecting
    global or U.S. crop production this year. However, weather forecasting
    remains imprecise and the possibility remains that adverse weather
    could cause a major shortfall in world crop production and a strong
    increase in prices from current levels.''

        Mrs. Emerson. That is all. Thank you very much, Mr.
    Chairman.
        Mr. Skeen. Five-and-a-half years waiting to ask this
    question--Mr. Farr.
        Mr. Farr. Mr. Chairman, you knew my desire to be here at
    this moment. I have been in Congress five-and-a-half years, and
    I have been waiting for this moment. I have more questions than
    this book is thick [indicating]. [Laughter.]
        But I am delighted to be here.
        I wanted to share with the committee what hit me. I fly
    every week out of Dulles Airport to San Francisco Airport. I
    get on a United flight, and then the flight attendants tell us
    we are going to go 2,419 miles. I look out there and I see the
    great Mississippi Basin and the Great Plains and fly over the
    Rockies and the Grand Canyon and into the West, into the
    incredible resources of the Sierra Nevadas, Yosemite National
    Park, come through the great agricultural basin of the San
    Joaquin Valley into the coastal zone of California. It hit me,
    as I look out that window, that all of the discussions about
    land in the United States--our park system, our national forest
    system, nothing compares to the power that this committee has
    on land use in America.
        This is really our land use committee. What we are talking
    about in this subject matter is proper management of the land,
    proper best management practices, and how we incorporate that
    into user practices, so that the soils don't erode; so that the
    water doesn't become polluted. I think it is a bigger picture
    than that. It is also about sustainable agriculture. You can't
    have just land preserved, if you can't make a buck off what you
    are trying to do with the land.
        But the way we make bucks off land in California,
    unfortunately, is just urban sprawl. We cover over our
    agricultural lands to build boxstores like the Costcos and Wal-
    Marts. The land that we have just killed grows products that
    are grown in America that we export abroad, and the stores that
    we build import products made somewhere else. So we are not
    only killing our land, productive land; we are killing our
    productive labor force with importing things that are made. So
    this committee and this issue about how we use our land is to
    me just the most important thing we can be dealing with in
    Congress.
        My question essentially goes to the point, I started in
    politics as a county supervisor dealing with land use. Then I
    was in the State legislature, and I sat on a natural resources
    committee and carried a lot of education. I came to Congress,
    and not until I arrived here had I ever heard of the Natural
    Resources Conservation Service. I know you are doing all these
    things, but I don't know if a lot of people really who make the
    daily decisions know about them.
        My question goes to, do you have any model ordinances that
    you have gotten adopted by counties and local governments
    regarding best-use practices?

                    ADOPTED ORDINANCES OF BEST-USE PRACTICES

        Mr. Reed. The answer to that is no, and the reason the
    answer is no is that we have worked with local units of
    government, and, basically, did most of the work as it relates
    to soil and water conservation, but we never took credit for
    it.
        Mr. Farr. But the suggestion is--and I think it goes to all
    the questions here about, why should we be doing all this sort
    of heavy parrotting of the land without teaching the land users
    how to do it themselves? Why aren't we teaching local
    governments how to fish? I mean, how to care for the land
    themselves. I don't know why we need to buy out land that
    should not be farmed; it should be zoned that way. We don't
    allow people to build or tear down riparian corridors just
    because they privately own it. Local government says, no.
    Private ownership doesn't allow you to destroy valuable soils.
    Private ownership doesn't allow you to pollute. Just because
    you own the land, you can't dump toxics there.
        So we, obviously, have this sense in America, and I think
    in the private sector that owns all this land that I am talking
    about, that it is cared for, but the policing of that has to be
    done at the local level. We can't do that from Washington.
        Mr. Reed. Mr. Farr, virtually all of the work of the NRCS
    is really working with the farmers and the ranchers and other
    decisionmakers, providing them with the appropriate technical
    advice, counsel, and in some cases financial assistance, so
    that they can make the decisions out on the land. Virtually
    everything that we do is done in a voluntary mode in support of
    State and local governments.

                          FARMLAND PROTECTION EFFORTS

        Mr. Farr. Why should we be giving aid to the farmer
    directly; why should we be giving aid to the local county
    government, if they aren't incorporating within their
    management practice sort of a building code of best practices?
    Why don't we insist that they put land management plans in the
    law in order to get the benefit? There has got to be a carrot
    and a reward here.
        Mr. Reed. Most of the farmland protection programs, most of
    the land use zoning ordinances, laws, and regulations out in
    the countryside are based on the NRCS technical guide,
    technical rules, technical specifications that we have
    developed in a voluntary mode, and these local units of
    government adopt those as the basis for making those decisions.
        Mr. Farr. I would hope you are right, Mr. Reed, because if
    you are, then we don't need to do all this stuff, because it
    would be done at the local level. Once we have been there, we
    never have to go back. It is going to be taken care of.
        Let me just switch because, obviously, if we had done it
    all, we wouldn't need the Farmland Protection Program, and I
    was very pleased to hear Mr. Lyons talk about going to the
    Governors Conference and having that incredible reception. What
    was it like? They really want us to participate in it, don't
    they?
        Mr. Lyons. There is tremendous enthusiasm for protecting
    open space and farmland protection. As you know from your own
    State, the Federal Farmland Protection Program which we
    administer is oversubscribed manyfold.
        Mr. Farr. Can I ask you some questions about it? First of
    all, I want to commend the President for putting money in. At
    the same time, I want to wonder why it is such a measly amount.
    Seventy-seven point five million comes out to $1.5 million per
    State, and California, in my Salinas Valley, it is $20,000 an
    acre. So all the money we give to California buys sixty acres
    of land. That is not farmland protection.
        Mr. Lyons. Well, I would certainly wish we could put more
    in the account, Congressman, but I would point out that that
    money leverages additional resources. Our goal isreally to be
    able to partner with States that have put money into programs, with
    communities that have put money into programs, so as to amplify the
    benefit of that Federal investment. It is really seed money to make
    those things happen.

                        requests for farmland protection

        Mr. Farr. What are the requests you have in hand right now
    from the States asking for the farm? Do you know that?
        Mr. Lyons. I am sure we do.
        Mr. Farr. Do you know how much they are requesting?
        Mr. Lyons. Do you have those numbers [speaking to his
    staff]?
        Mr. Farr. Well, you can get those for me.
        Mr. Lyons. We can provide those for the record, if that
    would help.
        [The information follows:]

                          Farmland Protection Program

        Through fiscal year 1998, twenty states had requested
    $198.3 million to FPP funding. NRCS committed $33.4 million in
    Federal funds to 19 States for farmland protection efforts.

                                                  [Dollars in millions]
    ----------------------------------------------------------------------------------------------------------------
                                                                   FPP funds     Proposed    FPP funds      Acres
                             Fiscal year                           requested     acreage     available     expected
    ----------------------------------------------------------------------------------------------------------------
    1996........................................................       $130.6      176,000        $14.3       76,756
    1997........................................................          6.5       10,000          1.9        4,969
    1998........................................................         61.2       99,000         17.2       45,658
                                                                 ---------------------------------------------------
          Total.................................................        198.3      285,000         33.4      127,383
    ----------------------------------------------------------------------------------------------------------------

                    conservation reserve enhancement program

        Mr. Farr. I hear the bells going off.
        One is: How many States have approved conservation reserve
    enhancement programs?
        Mr. Lyons. I believe it is a half dozen, six.
        Mr. Farr. That is all?
        Mr. Lyons. That is right.
        Mr. Farr. How many acres have enrolled in these programs
    across the country?
        Mr. Lyons. We are conferring.
        Mr. Farr. Well, we are spending millions of dollars, and we
    have got six programs. Do you know how many----
        Mr. Lyons. I don't know that I can tell you the acres. We
    will get that information for you, the acres that have enrolled
    through the CRP program.
        [The information follows:]

                    Conservation Reserve Enhancement Program

        Currently, seven states have approved Conservation Reserve
    Enhancement Programs (CREP). They are Maryland, Minnesota,
    Illinois, New York, Oregon, Washington, and, as of March 1,
    1999, North Carolina. Secretary Glickman and Governor Hunt of
    North Carolina signed the North Carolina Memorandum of
    Agreement on March 1. Conservation Reserve Enhancement Programs
    are voluntary and must address environmental problems of
    Federal and or State significance caused by agricultural
    activities. States must request to enter into a Memorandum of
    Agreement, for a CREP proposal, with the U.S. Department of
    Agriculture to address these environmental problems.
        To date, approximately 811 contracts, covering 13,494 acres
    have been enrolled in CREP programs across the country.

                            buffer strip initiative

        Mr. Farr. Can you also give me how many acres have been
    enrolled nationwide in the Buffer Strip Initiative?
        Mr. Lyons. Yes, we can provide that easily.
        [The information follows:]
                      Buffer Strip Initiative Enrollments
        Approximately 930,000 acres of buffers--265,000 miles--have been
    enrolled nationwide in the Buffer Strip Intiative.

                            release of afo strategy

        Mr. Farr. And do you know when the animal feeding operation
    strategy will be released?
        Mr. Lyons. We hope shortly. We have actually completed the
    work that we need to do, and we are working with EPA to resolve
    some remaining differences on the strategy, but we hope very
    shortly.
        Mr. Farr. And have USDA and EPA done an estimate on the
    funds necessary to meet the current demand for the EQIP program
    as well as the expected increase in demand that may occur as a
    result of the Clean Water Action and the AFO strategy?
        Mr. Lyons. I can provide you that information for the
    record. It is going to be substantially more than what I think
    we are requesting right now. The $100 million increase in EQIP
    certainly will help in terms of our efforts to address clean
    water strategy.
        [The information follows:]
                      EQIP Funding Needs To Carry Out CWAP
        NRCS has done some preliminary estimates on the funds needed to
    meet the current demand for EQIP. We have identified the demand to be
    about 3 times the available EQIP funds since the beginning of the
    program. In FY 1997, there were over 57,000 applications from farmers
    and ranchers requesting $552 million in financial assistance; about
    $175 million of this demand was met by EQIP contracts. In FY 1998,
    about 55,000 applications were received for $490 million in financial
    assistance; about $154 million of this demand was met by EQIP
    contracts.
        The demand comes from producers who are indicating they are
    prepared to invest some of their own funds, change some of their
    farming techniques and apply conservation practices to improve natural
    resource conditions on land they control. Not all of these producers
    would be considered as high priority; some may be ineligible. But on
    the whole, this gives a good perspective of the demand. As the program
    becomes better known, we expect the demand to increase.
        Considering this demand, and without considering the impact of the
    Clean Water Action Plan and the Animal Feeding Operations Strategy,
    NRCS believes that an annual funding level of $400 million would be
    justified. To suggest higher at this time would be unrealistic
    considering the current capacity for NRCS to adequately implement the
    program with a greater workload. The Administration's $300 million
    budget request is a good first step to meet the demand while being able
    to implement the program in an exceptional manner with current staff
    resources.
        Successful implementation of the Unified National Strategy for
    Animal Feeding Operations (AFOs) owners and operators could require the
    delivery of technical and financial assistance to more that 331,000
    AFOs nationwide by the year 2009. Delivery of this technical and
    financial assistance through voluntary conservation programs; primarily
    EQIP, will need to be greatly accelerated to achieve this goal,
    especially considering that NRCS is only able to assist roughly 10,000
    AFOs per year through on-going programs.
        If our conservation partners and private sector vendors are not
    able or willing to substantially increase the technical and financial
    resources they can devote to the effort, USDA will need to increase
    annually by at least 3 times its technical assistance funding and by at
    least 10 times its financial assistance funding over the FY 2000
    requested funding levels to meet the potential demand.

        Mr. Farr. And will you also send me how much out of the
    EQIP program of USDA's resources are going to the Colorado
    River Salinity Control Program?
        Mr. Lyons. We would be pleased to do that.
        [The information follows:]
          EQIP Funding of the Colorado River Salinity Control Program
        The following EQIP funds were used in Colorado, Utah, and Wyoming
    to reduce the salinity in the Colorado River. The FY 1997 and 1998
    funds were actually obligated, and the FY 1999 funds have been
    allocated for use in the basin.

    ----------------------------------------------------------------------------------------------------------------
                                                         Financial       Education       Technical
                       Fiscal year                      assistance      assistance      assistance         Total
    ----------------------------------------------------------------------------------------------------------------
    1997 (obligated)................................      $2,812,000        $ 26,000        $315,000      $3,153,000
    1998 (obligated)................................       2,808,000         113,000         685,000       3,606,000
    1999 (allocated)................................       3,029,000         114,000         737,000       3,880,000
    ----------------------------------------------------------------------------------------------------------------

        Mr. Farr. Thank you. Thank you, Mr. Chairman. I wish you
    would give me two days, because I love this.
        Mr. Skeen. Well, we will see if we can't work out
    something. [Laughter.]
        We will suspend now and take this vote, and be right back.
    I think this is the last vote for today, hopefully.
        [Recess.]
        Mr. Skeen. The committee will come to order.
        Mr. Bonilla.

                      american heritage rivers initiative

        Mr. Bonilla. Thank you, Chairman.
        Good afternoon, everyone.
        I am anxious to get into discussion about the shortage of
    manpower and the expansion of programs in just a second. But,
    first, I want to ask a question, Mr. Lyons, the request--for a
    report we included last year in our report language to ask for
    the activities of the USDA on the American Heritage Rivers
    Initiative, and the report did request that the AHRI report
    come in to the Committee by December of 1998. Do you know when
    we can expect to receive this report, Mr. Lyons?
        Mr. Lyons. That report is currently in clearance,
    Congressman, and we expect to get it up to you shortly. We
    apologize for the delay.
        Mr. Bonilla. So you think in a matter of weeks perhaps, 30
    days, something like that?
        Mr. Lyons. I certainly hope so. It shouldn't take very
    long.
        Mr. Bonilla. I would appreciate that. I appreciate your
    attention to that.
        Also, in light of that and in light of what we have heard
    here today, especially with Mr. Reed saying, appropriately so--
    I wrote down that his quote was, ``Being asked to do much with
    too little.'' In light of the fact that there is a request for
    an additional $204,000 for the American Heritage Rivers
    Initiative in Fiscal Year 2000, I am concerned where this money
    might be coming from. In other words, is there a possibility
    that something that you are already working on that is very
    important is going to get shortchanged. Initially the
    administration stated that there would be no new funds for the
    AHRI program. So where is this money going to come from, and
    what program could get shortchanged?
        Mr. Lyons. Well, I will take a shot at that, Congressman.
    The investments we have made in the American Heritage Rivers,
    which I believe come out of Conservation Operations, by and
    large, are, in my mind, minimal. The potential payoff is
    tremendous. We have only allocated a few FTE's to this effort.
        The reason I think it is a wise investment is because
    Ithink it affords us an opportunity to coordinate water quality and
    watershed activities along designated rivers and really to amplify the
    benefit of working with other agencies and their resources to work with
    those communities to realize their conservation goals along those
    waterways.
        One could argue that $200,000-or-so could be invested
    elsewhere, but I would tell you that I am a firm believer in
    working with communities who have a desire and seek the
    assistance that government can provide them. I think that is an
    important and appropriate role. I think through American
    Heritage Rivers, we are going to learn a lot about how we can
    work with communities to encourage their collaboration with
    adjacent communities, with other agencies, and I think there is
    going to be tremendous payoff that we may use in other places.
        Mr. Bonilla. So, again, could you tell me where that money
    would come from?
        Mr. Lyons. I believe it comes out of the Conservation
    Operations account. The estimates I have before me,
    Congressman, were----
        Mr. Bonilla. In other words, who is going to get
    shortchanged by this amount of money? I realize in the big
    scheme of things it is minuscule, but you are talking a couple
    of employees that you could have somewhere else.
        Mr. Lyons. Well, I can't point to a specific place they are
    going to come from, but I think we are going to try to ensure
    that the impact on any program is going to be minimized. I
    think we can guarantee that.
        Mr. Bonilla. As you know from last year--we had a talk
    about this as well at the hearing, and I was concerned about
    it. Let's take, for example, I cover 29 counties in south and
    west Texas, but I live in San Antonio. If any of you have been
    there, you know that we have developed a River Walk very
    nicely, a conservation program, environmental assessments, the
    whole nine yards. The community is very happy with it. It was
    done, believe it or not, without American Heritage Rivers
    Initiative involvement. There are countless other projects
    around the country that are environmentally sound. They have
    been done efficiently. They have been partnered with Federal
    Government programs and have worked very well.
        Yes, I have had a problem with American Heritage Rivers
    Initiative because I see these things that have occurred
    already, and I don't understand, for the life of me, why we
    need another layer of bureaucracy that involves not just USDA,
    but 12 other Federal agencies. Just so you know where I am
    coming from on this.
        Mr. Lyons. Well, let me respond, if I could, and just say I
    think the San Antonio situation is a good example of what other
    communities would like to mimic in terms of the investments
    they would like to make in their waterfronts. Unfortunately,
    many communities don't have the resources or wherewithal to
    attract the private investment, such as San Antonio did, that
    really, as you know, rejuvenated downtown and really has become
    a tourist attraction and brings a lot of resources into the
    community and a lot of tax dollars into local government.
        I think we would like to use that example to try to help,
    with a minimal investment of Federal resources, other
    communities realize the goals that they seek. I think in the
    rivers that we have identified there is tremendous opportunity
    to do that, and, ultimately, hopefully, shift the financial
    responsibility over to the private sector. We are certainly
    looking for ways in which private dollars can amplify the
    minimal investment that we will make through Federal resources.
        Mr. Bonilla. And a final note on that, and then we will
    move on. That was, in fact, the result of a great initiative by
    former Mayor Henry Cisneros with the business community, and it
    was done very nicely. It is something that we hold in high
    regard, and we are very proud of back home, but it was, again,
    that local initiative. It is not a wealthy area at all, but it
    was just the initiative and thepersistence of those who wanted
    to make it happen in the right way that prevailed in the end. That was
    even before American Heritage Rivers Initiative was even discussed.

                                regional offices

        I want to move on now to something else. The NRCS regional
    offices. Are the regional offices vitally needed to effectively
    deliver programs and accomplish the mission or NRCS in
    assisting landowners with their conservation needs? Again, this
    is tied into some of the frustrations that are being expressed
    here today about manpower.
        On page 17-7 of this year's budget, the note states that it
    is one of the things that regional offices were intended to do,
    is to, quote, ``reduce operating costs.'' How does the creation
    of an additional layer of bureaucracy, if you will, reduce
    operating costs and help you with your personnel problems?
        Mr. Reed. Mr. Bonilla, I am, as we speak, reevaluating our
    situation with regional offices, but I need to go back and tell
    you why we established those, going back four or five years
    ago, and the intent. The intent of the regional offices was, in
    fact, to help us be more efficient and effective, in addition
    to providing the appropriate focus that is needed at the
    regional level on issues, resource issues, that cross State
    boundaries.
        But, initially, at these regional offices, what we did was
    we took the 56 or so business offices that we had in this
    country, where we had anywhere from 15 to 42 people, abolished
    all of those, established six of those with approximately 17
    people, and that was an integral part of our streamlining plan
    for reducing the administrative support. We figured that we
    could do it out of 6 locations far more efficiently than we
    could out of 56. So that was one component of the regional
    offices.
        Mr. Bonilla. What was your net reduction, then, on
    manpower?
        Mr. Reed. That was a part of our overall agencywide
    initiative to cut our administrative staff by 50 percent. We
    are about to reach, although we are going into the
    administrative convergence, which is another issue. But that
    was one.
        The next thing that Chief Johnson, Jim, and I wanted to do
    was that, at that point in time, we had a lot of oversight
    reports and criticism coming from the Inspector General, coming
    from other places--and we can produce those reports for you--
    basically saying that we were not providing cross-State,
    regional kind of oversight in dealing with issues. Some of the
    Inspector General--IG--reports, as an example, showed that,
    when you crossed a river, one county to the next, they found a
    different set of standard specifications, those kinds of
    things, and that land on one side of a State line was being
    treated different in terms of wetlands kinds of issues. So we
    recognized the need to beef up our oversight and evaluation-
    type activities. So we ended up putting about four or five
    people in each of the regional offices to do that.
        Then the other thing that we did there is that in each and
    every State we had a State administrative officer; we had a
    deputy and/or an assistant State conservationist; we had three
    or four program managers. We felt at the time--and we still
    feel this way--that those functions we did not have to have in
    each and every State. Again, that was a part of our efforts to
    try to cut the total number of folks we were investing in that
    kind of work by approximately 50 percent. So those folks ended
    up in the regional office. That, coupled with a regional
    conservationist, is what the regional offices were about.
        I can tell you that right now some of the functions that
    are at the regional offices are functions that we are going to
    have to carry out irrespective of where it is carried at. I
    think as USDA deals with the administrative convergence issue,
    then we have to decide what we can or what is appropriate for
    us to do in addressing the regional office issue.
        Mr. Bonilla. Thank you, Mr. Reed. Mr. Lyons.
        Mr. Lyons. If I could just point out, just to set the
    record straight in terms of how our staffing levels play out,
    under the 1999 budget, we currently have 139 individuals in
    regional offices, which compares to 9,274 in the field and
    other areas. So we have a very small staff that is helping try
    to coordinate and improve the efficiencies Pearlie addressed of
    work by addressing these issues at the regional level.
        I also want to note, in part responding to a question that
    Mrs. Emerson raised earlier, NRCS has cut its total number of
    employees by about 18.8 percent since 1993. The Washington
    office was reduced by 40 percent. So we have made an extra
    effort to try to make sure we kept people on the ground and
    took disproportionate number of cuts in the Washington staff,
    so as to make sure we had people on the ground who could do the
    job and try to minimize the administrative overhead that
    exists.

                           epa budget request for afo

        Mr. Bonilla. I have a different area I want to cover now,
    Mr. Lyons. A program here that was brought up a little earlier
    that we touched on, I understand your concerns about the
    exponential expansion of your workload which could occur due to
    the implementation of the animal feeding operation strategy for
    the regulation of livestock operations. We see that there are
    some additional monies directed toward this effort in the
    Administration's budget. Do you know if any of the money was
    included in the EPA budget for the implementation of these
    requirements which are being imposed by EPA? I am trying to
    find out if EPA is being totally responsible for these costs,
    since they are coming up with these regulations.
        I know you may not have that in front of you, but I am
    raising this issue.
        Mr. Lyons. Well, I don't have those numbers in front of me.
    I want to point out again, though, we are working on the
    strategy in our regulations, just as a point of clarification;
    these are not rules that we are issuing. I know that EPA has
    some funds built into their Fiscal Year 2000 request. I would
    have to get the details for you and submit it for the record,
    if I could.
        Mr. Bonilla. I would appreciate that.
        [The information follows:]
                          EPA Budget Requests for AFO
        The President's FY 2000 budget includes funding for EPA programs
    that can be used to implement the Animal Feeding Operation (AFO)
    Strategy. In FY 1999, as part of the Clean Water Action Plan (CWAP),
    the Administration requested and Congress provided almost a doubling of
    funding for EPA's section 319 Nonpoint Source grant program, for a
    total of $200 million. for FY 2000, the Administration has again
    requested $200 million for section 319 grants to help implement the
    CWAP, including the AFO Strategy. Another available program is the
    Clean Water State Revolving Funds (CWSRF), which can provide below-
    market-rate loans to nonpoint source management projects, consistent
    with a state's nonpoint source management plan. The FY 2000 request for
    the CWSRF is $800 million. For FY 2000, the Administration has also
    submitted a legislative proposal, as part of its budget request, to
    allow states to use up to 20 percent of their CWSRF capitalization
    grant to provide grants for implementation of nonpoint source and
    estuary management projects. This proposal could provide as much as
    $157 million for these grants in FY 2000, if legislation is enacted.
    AFO nonpoint source management projects are eligible for funding from
    these programs. Each state chooses which projects receive funding under
    both section 319 grants and the CWSRF.

                               new funding areas

        Mr. Bonilla. I guess one final thing, Mr. Chairman, if I
    could: In light of the reductions you just talked about and the
    workloads that the NRCS has, in asking for these new
    conservation technical assistance funding areas, such as $31
    million for the Clean Water Action Plan--and I won't get into
    all the details here--$15 million for soil carbon sequestration
    research, and reduction of greenhouse gases. I know that there
    is an indication that this is a mandate that you have to comply
    with, but I think that is in question. Three million dollars of
    this would be for the Climate Change Technology Initiative; $5
    million to fund 20 full-time equivalents, FTEs, staff for
    Community-Federal Information Partnerships, which is part of
    something called the Livability Initiative.
        All these things sound great, and I understand that
    sometimes decisions are made at a higher paygrade about what
    the priorities ought to be, but in light of the fact that you
    all are stretched so thin already, I wonder if this is
    troubling to you that all of these programs I just cited here
    add up to $51 million. Does it trouble you to see all these
    things thrown at you?
        Mr. Lyons. Well, I will try to answer that and tell you
    that, frankly, I don't view all those things as being thrown at
    me. Maybe I am volunteering to accept some of these
    initiatives, in part because I think one of our jobs is to
    promote innovation and identify new ways in which we can
    improve our delivery systems and tackle challenges that we
    face.
        The investments we are making in global climate change and
    livability are, granted, minimal. I wish we had more resources
    to make those investments, as well as cover our base programs.
    But I think we can learn a great deal through the research and
    the evaluations we do on the global climate change, as well as
    I think we can do a great deal to help communities plan for
    their future through the investments we make in the Livability
    Initiative. These are largely minimal investments, but the
    potential payoff that comes of learning from these investments
    I think makes them worthwhile. That is really why we are trying
    to make those investments.
        We don't have a big budget. These are not significant
    investments, but I think they are important.
        Mrs. Emerson. Would the gentleman yield?
        Mr. Bonilla. I would be happy to yield, Ms. Emerson.
        Mrs. Emerson. Mr. Lyons, except for the fact that, if you
    add all those up, together it adds up to the salaries of the
    thousand people that you all have to let go in the field who
    still have projects that they haven't continued or must
    continue to improve upon, or that they have just begun in other
    areas. So I guess what I am saying is you are starting a bunch
    of new programs at the expense of a thousand people who provide
    a very valuable service at the ground level. You all have also
    said that you were going to have to do a lot more with a lot
    fewer people.
        Mr. Lyons. That is fair criticism, Congresswoman. I would
    suggest, though, from my point of view, we ought to get fair
    reimbursement for the work we already do through the CRP
    program and CREP and related programs, and that is why we have
    asked for a lifting of the section 11 cap on CCC-supported
    funds, so that we get what we deserve there. So I don't see
    that as an expansion of programs. I think it is just
    reimbursement for the work we do and an opportunity to make
    some minimal investments to see if there aren't other ways in
    which we can improve our delivery systems and the effectiveness
    of our programs. That is just a different point of view.
        Mr. Bonilla. Just a final comment, Mr. Chairman, I know I
    am a little over my time here. I am one of those unusual people
    that came straight out of the private sector into this job a
    little over six years ago. In a dream world you can think of
    all these initiatives that sound wonderful, and you want to try
    to fund them all, but in real life, generally, you have budgets
    and you have to make priorities. Say, if you have 10 items, you
    have got to pick the top 8. Maybe you don't have any money for
    that beyond eight.
        I am trying to suggest here is for us to look at what is
    really the most important thing that we need to do here and be
    realistic about the dollars that we have in the budget. That is
    where I am coming from.
        Thank you, gentlemen, very much.
        Mr. Skeen. Mr. Boyd.

                    technical assistance versus enforcement

        Mr. Boyd. Thank you very much, Mr. Chairman, and, Secretary
    Lyons and Mr. Reed, and your staff, for being here.
        I am a new member of the committee, and I think it is fair
    for you to know a little bit about where we are coming from. I,
    like Congressman Farr, have been looking forward to this
    meeting today. The reason I have been looking forward to it is
    because I spent most of my professional life dealing with the
    old Soil Conservation Service, now called the NRCS. Probably in
    the area that I come from in north Florida, most of the farms
    there would not be viable agricultural entities if it wasn't
    for the work that has been done hand-in-glove with the old Soil
    Conservation Service to make those parcels of land productive.
    I know that is certainly true on the farm that I was raised on.
    So I have a deep appreciation for the work that has been done
    in the old SCS and now the NRCS.
        But the problem that I have--and I have had this discussion
    many times with people up and down your chain of command,
    including Niles Glasgow in Florida, and some of the people that
    work for him--is that, up until 10 or 12 years ago, the Soil
    Conservation Service was viewed by the farming community, the
    ag community, as a technical assistance agency in helping them
    solve conservation problems. That view of the agency has
    totally shifted now in my part of the world from a technical
    agency which is there to help farmers to an enforcement agency,
    which many times comes and bangs on us about things that we
    have to do.
        I took note of your statement, Mr. Reed, about staffing
    problems, and I agree; I know you have great problems in this
    area and they are not all of your own doing; much of them were
    brought on by funding problems.
        But I wanted, Mr. Lyons to address the issue, if you could,
    regarding the agency changing from being a technical assistance
    agency to an enforcement the agency.
        Mr. Lyons, you made a statement in your written
    presentation that says this: ``The NRCS cooperative team
    structure''--it is on page 5--``is an established and practical
    example of how Federal programs can be managed with local
    guidance at the local level.''
        I would take issue with that because our people have a
    tremendous amount of difficulty getting response, a timely
    response, to their applications and their needs. You know, you
    might look at the FSA as a practical example of how
    localguidance at the local level works, because of the county committee
    structure. The NRCS doesn't have a county committee. It is really
    managed from the top down.
        I didn't come here today to beat on you about what is in
    your budget or not in your budget, but rather talk about how we
    can work together to make the agency work more efficiently and
    be more customer-friendly and serve the people that it is
    intended to serve.
        If you would comment on those two things: technical
    assistance versus enforcement and top-down management versus
    bottom-up control, where you actually have more community
    input?
        Mr. Lyons. Let me first address the technical assistance
    versus enforcement issue, Congressman. I appreciate the
    opportunity to do that.
        I am sure you are aware that the agency's mission and
    legislative mandate has changed some over the last almost two
    decades, going back to the 1985 farm bill. New programs,
    placing new requirements on producers, were put in place, and
    then Soil Conservation Service was given the responsibility to
    implement those: programs like Conservation Compliance and
    Swampbuster and Sodbuster.
        That defined a new role for the Soil Conservation Service,
    and I dare say it made a lot of people uncomfortable; it made a
    lot of producers question whether they had a friend or an
    enforcer to deal with. We have tried to work our way through
    those issues over time and demonstrate that, through voluntary
    approaches to dealing with larger conservation issues, that we
    can, in fact, be both a friend to the farmer and help farmers
    meet their obligations to protect clean water and wildlife
    habitat, and the like.
        I think we have accomplished a great deal there, and I am
    sure there are still places where there is concern and question
    about NRCS' role in whether or not we are being as helpful to
    producers as we could be. We are doing everything we can to
    provide that in a user-friendly way. I think we have
    accomplished a great deal there.
        I guess your other questions with regard to top-down versus
    local initiative, we do a great deal of our work through local
    conservation districts. That is really where conservation hits
    the ground and that is where we develop a great deal of the
    priorities that we implement, working directly with those
    entities.
        We are making more and more effort to try to ensure that
    those locally-led efforts really drive how we set priorities,
    how we deliver programs to the ground. We established,
    actually, under the 1990 Farm Bill, updated in the 1996 Farm
    Bill, State technical committees that would help agencies at
    the State level pull together information, collaborate and
    coordinate to better deliver programs to meet priorities on a
    State-by-State level, and really try and move program delivery
    out to the State and local level. So we are striving to achieve
    that, and I think accomplishing a great deal in that regard.
        If there is a distinction that I would draw between the
    Soil Conservation Service of old and the NRCS of today, maybe
    it is not a fair distinction, but I would offer this
    observation: We are really placing a great deal of emphasis on
    conservation and trying to demonstrate NRCS' capacity to
    address clean water, wildlife, and offsite impacts of
    agriculture in a way that is not going to threaten the
    profitability and viability of farm operations. So, in many
    respects, we have stepped up to the plate more than we did
    perhaps in previous decades to try to tackle those issues and
    demonstrate that we can help landowners meet those obligations
    and achieve their conservation goals in that way.

                             fip release in florida

        Mr. Boyd. Well, thank you, Secretary Lyons. I just believe
    that most of the problem could be solved with a restructuring.
    I notice that one of the things that you did a year or so ago
    was the creation of the regional office, which you have already
    addressed, which may be a half-step in the right direction. If
    you move to a process where the decisions can be made at the
    local level within the guidelines that are established at USDA,
    then that works. It works for the FSA. And I want to expound
    further on that point, and I will turn to you, Mr. Reed, for
    this question, and just give you an example of what I am
    talking about.
        As it relates to the FIP program, we have all talked and
    heard a lot today about the expansion of--your
    responsibilities, and Mr. Bonilla has talked a little bit about
    you going out of the realm of where we thought we ought to be
    initially. I tend to agree with him, that we are trying to do
    too much with too little, and as a result, we don't do much
    with anything.
        But the FIP program is a good example. The FIP program used
    to be under the FSA, and now it is under, I guess, according to
    the 1996 law, you have authority for administering that.
        Let me just ask this question: The non-add on FIP money was
    released by USDA to the State NRCS in Florida on January the
    11th. Five-and-a-half weeks later, on February the 18th, was
    the first time an application was approved with money. Now, in
    Florida, I don't know if you know, but in north Florida, if you
    don't have trees planted in the ground by the 1st of March, you
    don't do it; you wait until next winter. So this is a kind of
    example--this is an example of the kind of thing I am talking
    about.
        Can you explain how we could improve our delivery system or
    comment on that, Mr. Reed?
        Mr. Reed. I can't explain it, and I don't know enough about
    the specifics to really respond intelligently, but I will
    follow up with Niles Glasgow, our State conservationist there,
    and get you a better answer than I can give you today.
        [The information follows:]
                              Release of FIP Funds
        The base funding you are referring to was released to Florida on
    January 11, 1999. Applications were accepted and prioritized starting
    in December 1998. The base allocation of funds was obligated and
    applications approved by February 19, 1999. These funds were available
    before the end of the planting season. Applications were accepted,
    however, not enough seedlings were available for planting in fiscal
    year 1999. Those remaining applications will be considered for planting
    in fiscal year 2000.

        Mr. Boyd. Okay. I want both of you to know, all of you to
    know, that this is an important agency to folks in agriculture,
    and there are many of us, many of our constituents that, like I
    said, wouldn't be farming if it wasn't for a technical
    assistance agency that could provide those kind of services to
    protect our resources. We recognize how important that is, and
    we want to work with you. That is going to be my role here, is
    try to make something that works better to serve the farmer and
    the consumer.
        Thank you.
        Mr. Skeen. Mr. Latham.

                               ag drainage wells

        Mr. Latham. Thank you, Mr. Chairman. Welcome to our guests
    here today.
        As you are well aware, in Iowa we have a real problem with
    the ag drainage wells and trying to cap those and protect the
    aquifer that we all drink out of, I drink water from one on my
    farm, and my family uses the water. We have a real concern
    about the pollution from the confinement feeding facilities
    that are in the area, manure going directly into the aquifer,
    obviously.
        It has come to my attention, as you are probably well
    aware, we have had problems for years trying to get permits and
    trying to solve the problem. Locally, everyone has worked very
    well together. They have been fighting for Federal agencies
    that all claim jurisdiction over farm wetlands. It is like
    pushing on a balloon: Push on one side and it comes out some
    other place, in another agency, or they change the rules, like
    you did.
        This last January, it has come to my attention that you
    doubled the requirement for mitigation acreage for prior
    converted lands in Iowa. Unfortunately, the change was
    announced and implemented retroactively. The Iowa Drainage
    District Association was attempting to meet a deadline to close
    an ag drainage well in Pocohontas County, and in their effort
    they had to submit mitigation plans by September, using what
    were the rules then. And the change in the rule, obviously,
    cost them a great deal of money and time, and forced them to
    have to alter their budget and delayed once again the permit
    that they have been trying to get for several years now to fix
    the potential environmental disaster there.
        Well, is it the policy of the NRCS to enforce new
    conservation rules, even though organizations or individuals
    have submitted the mitigation plans to your agency months
    earlier and prior to the alterations and using what were then
    acceptable conservation formulas?
        Mr. Reed. Mr. Latham, I am not prepared to respond to that,
    but I will look into it and get back to you with a specific
    answer to your question.
        Mr. Latham. I would ask, you don't know what the policy is?
        Mr. Reed. I don't know that I fully understand the question
    either.
        Mr. Latham. Well, NRCS retroactively changed the rules as
    far as mitigation, after the Iowa Drainage District had gone
    through tremendous expense and time and tried to get a permit
    now for about four years to stave off an environmental
    disaster. Which is going to pollute the Ogalaga Aquifer if we
    don't get something done sometime. We talked about this last
    year, and it continues to be a real thorn for a lot of people.
        Mr. Lyons. Congressman, let me just attempt to address this
    briefly. In that, I understand what happened was the Army Corps
    of Engineers decided that a 404 permit was required and had to
    be issued in order to take this action. So I don't believe that
    NRCS----
        Mr. Latham. Yes, you changed the rules in January
    retroactively.
        Mr. Lyons. Well, I am going to have to look into that,
    Congressman, because I don't know that we did, but I will
    certainly find out.
        Mr. Latham. Okay.
        [The information follows:]
                           Ag Drainage Wells in Iowa
        The Trustees of Drainage District 176 plan to close several
    drainage wells and connect the drainage project to a new underground
    tile system to protect ground water quality. NRCS has been working with
    the District since their initial proposal. However, after the Trustees
    of the Drainage District filed a request with the Corps of Engineers
    (Corps) to seek a determination of jurisdictional wetlands, the Corps
    determined that proposed action for this project would require a 404
    permit under the Clean Water Act.
        Since the Corps is the lead federal agency for determining
    mitigation requirements and ratios for this proposed project, NRCS has
    not been involved with specific mitigation decisions. However, NRCS in
    Iowa has been assisting the Trustees of Drainage District 176 and the
    farmers in the watershed with wetland functional assessments so that
    their mitigation plan will be acceptable for obtaining the 404 permit
    from the Corps.
        The Trustees of the Drainage District wanted to proceed so that the
    farmers in the watershed could continue to be in compliance with the
    wetland conservation provisions of the 1985 Food Security Act in order
    to maintain USDA program eligibility. The 1985 Food Security Act
    wetland conservation provisions provide that an exemption to program
    ineligibility may be granted if an action is authorized by a permit
    issued under section 404 of the Clean Water Act.
        NRCS has worked closely with Drainage District 176 and the local
    farmers to ensure that neither easements nor 404 permit conditions will
    be placed on agricultural lands by the Corps. To provide for this, NRCS
    did not assign any wetland value to areas that farmers may desire to
    install additional drainage or intensify cropping after the 404 permit
    is issued.
        In summary, the Corps established the specific wetland mitigation
    requirements and ratios for the drainage well closure project proposed
    by Drainage District 176, Pocohontas County, Iowa in order to issue a
    404 permit under the Clean Water Act. The 404 permit requirements will
    also satisfy wetland conservation provisions of the 1985 Food Security
    Act administered by USDA.

                           cwap and ag drainage wells

        Mr. Latham. Are these ag drainage wells--capping them and
    trying to solve this problem--any part of the President's Clean
    Water Action Plan?
        Mr. Lyons. In terms of dealing with the abandoned well
    sites?
        Mr. Latham. They are not abandoned. They are ag drainage
    wells.
        Mr. Lyons. They are ag drainage wells.
        Mr. Latham. Although we wish they were abandoned.
        Mr. Lyons. You know, I don't recall if we have a specific
    action item related to that, but certainly it is an issue that
    has been raised many times in Iowa. I believe resources are
    being allocated to attempt to address some of those concerns.
        I would have to give you some specific information on that,
    refer to some stuff from the Clean Water Action Plan, to try to
    give you a better answer on that. I can't point to a specific
    program we have geared toward that, Congressman.
        [The information follows:]

                      Capping of Ag Drainage Well in CWAP

        There is no specific action item in the Clearn Water Action
    Plan related to the capping of agriculture drainage wells.

                              afo responsibilities

        Mr. Latham. It would seem that that would be something that
    could be part of that--I mean, since we are talking about
    polluting an entire aquifer here, and that several hundred
    thousands of people drink out of it.
        Apparently, you have had some questions about the animal
    feeding operation strategy. I was just wondering, is the EPA
    expecting you to carry all the water on this, to do all the
    work on it? Or, are we going to have EPA folks out in the
    field, too? Who has responsibility?
        Mr. Lyons. Well, as far as the voluntary portions of the
    plan or the strategy go, and the development of comprehensive
    nutrient management plans, that would be a function that NRCS,
    conservation districts, and others would carry out.
        We are maintaining a clear distinction between any
    regulatory functions that might be implemented, which EPA would
    be responsible for, as opposed to those voluntary actions
    called for in the strategy, which NRCS would implement.
        Mr. Latham. The strategy is pretty arbitrary as to whether
    it is voluntary or mandatory, from my understanding in reading
    the proposal. I mean, you can arbitrarily make the
    determination.
        I just wondered, how much time--you have limited staff out
    there, and they are overworked as it is. If EPA has real
    concerns, you would think that they would carry some of the
    responsibility. On the other hand, I don't want EPA folks
    running around every farm in Iowa, either, but I don't think
    that is a good use of their time. But you don't know what their
    involvement is going to be in enforcement?
        Mr. Lyons. Well, they would certainly have responsibility
    for dealing with certain operators, larger operators, and the
    like, who fail to come into compliance. But, by and large, the
    strategy focuses on attempting to put in place, through these
    comprehensive nutrient management plans, practices that would
    minimize the impact of most operators on water quality. I think
    our estimates are that only 5 percent of all AFO's might come
    under a regulatory requirement through the strategy.
        Mr. Latham. Is an NRCS person and an EPA person going to be
    driving around together?
        Mr. Lyons. Not that I anticipate, no.
        Mr. Reed. No.
        Mr. Latham. So who is it going to be?
        Mr. Reed. The way things are planned right now--and, Mr.
    Latham, I know you know the answer to this question is the
    NRCS----
        Mr. Latham. Well, surprise me. [Laughter.]
        Mr. Reed [continuing]. With our conservation partners out
    in the countryside, we are expected to carry the load with
    respect to providing the technical assistance associated with
    implementing the Unified Animal Feeding Strategy.

                                debt for nature

        Mr. Latham. Okay. There is $5 million in the Debt for
    Nature program for producers with cashflow problems and land
    that needs conservation treatments. Are those cash-poor farmers
    going to have to follow the same, shall we say, unclear rules
    and somewhat convoluted rules under CRP, or what kind of rules
    are we going to follow to make land available? What
    requirements? How many hoops are they going to have to jump
    through, if they are broke anyway, to qualify?
        Mr. Reed. Well, on this one, the rules are yet to be
    defined.
        Mr. Latham. Oh.
        Mr. Reed. So we have an opportunity to avoid some of the
    pitfalls you just outlined.

                               agency priorities

        Mr. Latham. Okay. That would be very much appreciated.
        I guess I have some concern about priorities. There is $12
    million for studies and inventories for a baseline on soil
    carbon data and $3 million for carbon sequestration--easy for
    me to say. And I just wonder about priorities with the soil
    surveys, which are extraordinarily important and need to be
    done. I know there is a small increase as far as surveys are
    concerned. But I guess whichis a priority? This whole idea, I
    think--we are seeing in general, and if you followed any of the
    questioning and testimony here, just a tremendous diversion of
    resources from traditional agricultural research, from traditional farm
    programs, to export assistance, into the global warming/climate area. I
    just wondered, the survey part of it is extraordinarily important, and
    I would rather see the priority there. Do you have a priority? I mean,
    where did this come from? Is this your idea, Mr. Reed? [Laughter.]
        Mr. Reed. No, sir, it is not.
        Mr. Latham. Is it Mr. Lyons, then, apparently?
        Mr. Lyons. It must be my idea. [Laughter.]
        Mr. Latham. It must be.
        Mr. Lyons. I will respond to that, Congressman----
        Mr. Latham. Okay.
        Mr. Lyons [continuing]. Since you baited me so well.
        Mr. Latham. Okay.
        Mr. Lyons. You know----
        Mr. Latham. I don't mean to bait you.
        Mr. Lyons. No, you know what I mean.
        Mr. Latham. Yes.
        Mr. Lyons. No, I think, to be honest--and we discussed this
    a little bit before--these are small investments out of a total
    budget. If I had my way, we would put a lot more money into
    conservation and not in other areas in the Federal budget
    overall. We don't have that luxury. It is unfortunate that we
    have to scrape dollars together to make investments in what I
    think are some of the most critical issues--in fact, issues
    affecting national security this Nation has in conservation.
        These are small investments really intended to learn some
    things that, hopefully, can help us address some larger
    problems. The minimal investment in global climate change and
    soil sequestration, et cetera, is intended to address what many
    scholars believe is a global problem, and trying to understand
    how agricultural producers can attribute to addressing the
    problem, hopefully, in ways that are cost-effective for them.
    So I think that is the view that we would offer in terms of why
    those are in the budget.
        Mr. Latham. And you are well aware that, like in the CRP
    program, things like that, which there are--what?--about 5, 6
    million acres that should be in the program that are not, the
    soil mapping surveys are a very important part of that as far
    as preserving these very fragile soils. Obviously, we have been
    through various discussions as far as implementation of CRP,
    but why we would not put our priorities in things that we know
    work, and we have money and we have authority available to
    implement things that save real soil, conserve soil, and then
    go off and put money in other things that are unproven, is a
    little bit--I shouldn't say, ``a little bit''--it is very, very
    disturbing.
        Mr. Skeen. Will the gentleman yield?
        Mr. Latham. Yes, sir. It is time.
        Mr. Skeen. Ms. DeLauro has a time-crunch problem.
        Mr. Latham. And get one response and I am done, sir.
        Mr. Skeen. All right, sir. Thank you.
        Mr. Lyons. I will just respond very quickly, Mr. Chairman,
    and just say that, in many respects, you can equate those
    investments with kinds of research and development investments
    that the private sector would make. We are experimenting with
    new approaches to deal with what we think are some significant
    national and international issues.
        We are, however, placing priority on some significant
    additional investments in other conservation programs like
    EQIP, where we are asking for $300 million. That is a proven
    program that has a track record that demonstrates the value of
    technical assistance and cost-share assistance. That is where
    we would like to see our priorities set.
        Mr. Skeen. Thank you. We will come back to you.
        Ms. DeLauro.

                               section eleven cap

        Ms. DeLauro. Thank you very much, Mr. Chairman. I apologize
    to my colleague. I have to give a speech in about 12 minutes.
    So, I am going to submit most of my questions for the record,
    but I wanted to ask a couple of questions. And it is good to
    see you all here.
        Mr. Reed, let me congratulate the agency on its work
    through the CCC on conservation programs. Let me take a moment
    to talk about my district, which is the third district of
    Connecticut. We have CCC efforts like WHIP and CRP ongoing in
    Wallingford, North Branford, Hamden, and Orange. I understand
    that the cap that has been placed on reimbursements from the
    CCC for conservation programs that NRCS administers has created
    some difficulties within the agency's ability to provide
    technical assistance, in order to carry them out in Fiscal Year
    1999. Can you explain the problem and suggest how it can be
    addressed?
        Mr. Reed. Yes. The problem is a complex, but yet at the
    same time a simple one. Based on the amount of money that is
    available to fund the technical assistance work that is carried
    out by the NRCS for the Conservation Reserve Program, we
    estimate that we are at least $25 to $28 million short of what
    is needed in order to do what has to be done this year.
        Ms. DeLauro. This year?
        Mr. Reed. And I know that Secretary Lyons here is working
    with the Secretary and with our Budget Office developing
    options to deal with it. The options, as I understand it, range
    from determining whether or not the cap is really an issue or
    can it be resolved either through actions of the Secretary or
    legislatively, or whether or not a supplemental appropriations
    would be needed this year to help us through the situation.
    But, as of this moment, based on our best estimates, on or
    about the 15th of May, we will no longer--well, we will have
    earned all of the reimbursements that there are to be earned
    for the CRP program this year.
        Ms. DeLauro. What is your prognosis? Are we going to get
    some sort of resolve?
        Mr. Reed. I don't have a prognosis, but I have a prayer.
        Ms. DeLauro. Well, that is often more powerful. [Laughter.]
        Mr. Reed. But Mr. Lyons may want to weigh-in now and give
    his perspective on it.
        Ms. DeLauro. Mr. Lyons? What happens if Mr. Reed's prayer
    isn't answered?
        Mr. Lyons. We are in trouble. We are in trouble in terms of
    our ability to provide that technical assistance, and that is
    why the Secretary and I are working to try to reach resolution.
    We may address this in the emergency supplemental request or we
    may have to seek some other approach. We talked a little bit to
    the chairman and others about the need to deal with this. It is
    a clear problem we have to address.
        Ms. DeLauro. Quickly, if you are cutoff, what is the
    downside on that? I mean, what happens? No technical
    assistance; what happens? What is the state of play where is it
    needed?
        Mr. Reed. Well, two things: One is that, if we aren't able
    to provide the technical assistance, then the farmers hurt.
        Ms. DeLauro. Okay.
        Mr. Reed. Secondly, as a part of options to deal with the
    funding shortfall problem, I am developing options to advance
    to Mr. Lyons to furlough our people. So those are two.
        Ms. DeLauro. Okay. Well, you will keep in touch with us on
    what is happening?
        Mr. Reed. Through my Under Secretary.

                               workload analysis

        Ms. DeLauro. Yes, you will? Okay.
        The second question, NRCS is reportedly finalizing the
    results of a conservation workload analysis that looks at the
    gap between technical assistance resources needed at the field
    level to carry out the basic conservation mission, as well as
    initiatives such as the Clean Water Action Plan and the recent
    animal feeding operations strategy, and the amount of resources
    available to actually get conservation practices applied on the
    Nation's private lands. It looks like the gap is around $300
    million. Is this accurate?
        Mr. Reed. Let me tell you what that is.
        Ms. DeLauro. Yes.
        Mr. Reed. I mentioned earlier that virtually everything
    that we do is done in partnership with local conservation
    districts and State conservation agencies. To satisfy some of
    the accountability issues, we have developed, as a part of our
    new accountability system, a workload analysis, and we are
    calling it a partnership workload analysis. As we work that
    thing from the bottom-up, we determine how much money is
    appropriate in terms of the investment for the infrastructure
    out in the countryside from the USDA, as well as from the
    partners. Based on that workload analysis and the core work
    products associated with that, that figure would come out to be
    approximately $300 million. That is what we have worked with
    the conservation partnership on.
        That is focused primarily on making sure that we have
    captured in the system at the local level the minimum
    infrastructure that is needed, so that we can provide the
    appropriate technical assistance to farmers and ranchers and
    others.
        Ms. DeLauro. Okay. Thank you very much. Thank you, Mr.
    Chairman.
        Mr. Skeen. Thank you, Ms. DeLauro.
        Mr. Nethercutt.
        Mr. Nethercutt. Thank you, Mr. Chairman.

                             land legacy initiative

        Gentleman and ladies, welcome. I am sorry that I have been
    delayed. I had another hearing, and it is the story of our
    lives, I think.
        Mr. Lyons, I want to ask you, sir, the administration has
    proposed a $1 billion Land Legacy Program to acquire new land.
    I am familiar with the Conservation Reserve Program, as you
    are, and the Wetlands Reserve Program. I am wondering why these
    programs weren't considered for expansion as part of the Land
    Legacy proposal. Would you explain to the committee the
    thinking behind that?
        Mr. Lyons. Certainly, Mr. Nethercutt. The Land Legacy
    Program would be funded from OCS lease revenues, Outer
    Continental Shelf lease revenues. Approximately $900 million
    would come out of the Land and Water Conservation Fund.
        As you know, CCC provides the funding base for CRP and WRP.
    So I think that is the distinction that is drawn there.
        Mr. Nethercutt. Well, the latter two are good programs, and
    it seems to me, what do we have, 36-some-odd million acres in
    CRP? In terms of conservation and preservation and management,
    it seems to me that those are good models, it seems to me, for
    conservation legacies.
        I appreciate Ms. DeLauro's comments about CRP. Chief Reed,
    it has been very important in our district to have a good CRP
    program finally, and thanks for getting that all worked out
    relative to the 16th signup.
        Leonard Jordan has been out in our district and has
    jurisdiction, and has really done a nice job. I want to pass
    that onto you publicly as well as privately. He has worked very
    hard to run a good shop and deal with farmers and try to have
    good communications.

                            eqip listening sessions

        I know that there was a series of listening sessions that
    went on relative to the Environmental Quality Incentives
    Program, the EQIP program. I am wondering what you all can
    report as to what was heard from farmers and ranchers relative
    to EQIP? And whatever you learned, I am wondering what you do
    with it. How do you implement whatever recommendations you
    might have gotten?
        Mr. Reed. What I would like to do, Mr. Nethercutt, is to
    provide you with a copy of the summary report from that round
    of listening sessions.
        [The information follows:]

    [Pages 75-77 -- The official Committee Record contains additional
        material here]

        Mr. Reed. I have three or four things I would like to share
    with you today.
        One is that we were told that we need to try and make the
    EQIP program more locally-friendly. Another one was centered
    around the need to address the problem with EQIP in that it is
    a technical problem, in that funds that are obligated in the
    current year, if those contracts fall out in outyears, then
    that money goes back to the Treasury and is not available to do
    conservation work. So that is another one.
        And the third and last thing I will mention was a budget-
    type issue, and that is that there is just not enough EQIP
    dollars available to satisfy the needs. So, as we get into the
    priority-setting, naturally, there is a large, large segment of
    our customer base that is left out.

                                 wetland policy

        Mr. Nethercutt. Along that line, I am wondering with regard
    to the problems relative to wetlands policy and Federal
    agencies, what do you perceive to be the problems with regard
    to wetland policy? What is NRCS going to do relative to looking
    at all those lands and reviewing policy and determining what is
    what? Can you help the committee understand a little more what
    the intentions are and what the problems are that you face
    relative to consideration of wetlands policy?
        Mr. Reed. Well, I have talked to some of yourcolleagues
    over on the House Agriculture Committee and elsewhere, and they have
    told me--and I agree--that it is probably appropriate for the Congress
    to have some oversight-type activities, so that we can get some of
    these issues on the table, so that they can be scrutinized. I think,
    from that process, we will be better able to, in an objective way, deal
    with the issues you mention, plus similar-type issues that are tough
    for us.
        I need to let you know that one of the toughest things that
    I am dealing with right now is the conflicting messages that
    our own people get out on the countryside, not necessarily from
    NRCS, but from all of the folks we have to work with inside and
    outside of USDA on what is right, what is doable.
        So I would come back and say we need some help from you on
    this one.

                       conservation reserve program cover

        Mr. Nethercutt. I understand, and we wish we all had more
    money and a perfect world. That is the hard part for us, to try
    to deal with limited resources, but lots of need out there,
    especially as it relates to agriculture.
        In the 16th signup and the 15th signup in CRP, issues have
    been raised--and maybe this isn't specifically within your
    jurisdiction; maybe you have some thoughts--about the rules and
    regulations that have been implemented regarding cover, kinds
    of cover, the cost of seed, the cost of cover, relative to what
    is existing today or prior to the 16th signup.
        Can you update the committee on relative to those
    conflicts, those problems that came up in the signups that have
    occurred, but, are yet to be fully implemented by the farmer,
    that cost-and-bid relationship problem?
        Mr. Reed. Mr. Nethercutt, I am just simply not prepared to
    deal with that one today.
        Mr. Nethercutt. Okay. That is all right. We have dealt with
    it out our way, and there is some uncertainty relative to the
    availability of the kinds of cover that are needed. If it is
    convenient for you, if you could maybe provide something for
    the record, that would be very helpful.
        [The information follows:]
                          Conservation Reserve Program
        The National Resources Conservation Service (NRCS) understands that
    certain cover existing on expired and expiring contracts may provide
    some benefits to wildlife. However, according to wildlife experts with
    the U.S. Fish and Wildlife Service and public and private environmental
    and wildlife agencies, covers of monoculture grasses do not provide the
    level of wildlife and wildlife habitat benefits that can be achieved
    from a mixture of grasses (including forbs and legumes) native to the
    area. Consequently, acreage planted to one type of grass is not as
    likely to be accepted as acreage that will be devoted to a cover with a
    mixture of grass providing greater diversity and wildlife habitat.
        Seeding mixtures developed by NRCS for CRP are reviewed and
    approved by State Technical Committees. In addition, USDA has provided
    producer flexibility in the establishment of enhanced cover. Producers
    may take up to two years to establish their enhanced cover where the
    recommended grass seed is unavailable or where seed costs will create
    an adverse economic hardship on the producer. Native forbs and legumes
    may be substituted with introduced species that will achieve the same
    wildlife or conservation purpose. Also, approved methods of
    establishing enhanced covers such as interseeding, planting in strips,
    or planting a little over half of a CRP field to the prescribed cover
    will not require the complete destruction of the present cover in most
    cases while controlling soil erosion.

        Mr. Nethercutt. I just want you all to know that there is
    that problem for the farmer versus the bid that was proffered,
    and then the consequent cost of meeting the needs, the rules
    and regulations for providing cover and making sure the CRP
    program is right.
        I think after-discovery determinations have been tough on
    farmers, and they are trying to figure out what the
    requirements and rule and regs are. It is not easy. So I would
    thank you for any response you could provide.
        Thank you, Mr. Chairman.
        Mr. Skeen. Ms. Kaptur.
        Ms. Kaptur. Thank you, Mr. Chairman.
        I wanted to ask a few questions. I will submit others for
    the record.

                            learning more about nrcs

        Ms. Kaptur. Mr. Farr pursued an interesting line of
    questioning for me, and that relates to how well the
    information you produce is able to be used by State and local
    officials. I know, from my own experience many years ago, the
    opinion of local zoning and subdivision officials was that
    agricultural land is a residual. It is only there unless you
    can use the land for something else. Therefore, it was not
    zoned; it was not regarded highly as a national resource or an
    international resource.
        Even though the Soil Conservation Service in those days
    went around doing some mapping in the countryside, the
    influence of that over local land decisions and State land
    decisions I would say was very minimal. I have struggled with
    this for years in my own mind, as to what is proper to do
    regarding that.
        We did change some subdivision regulations back in our home
    State to give agriculture its own primacy, its own place within
    those laws, as a very important natural resource, in the same
    way as we might specially map the Great Lakes as freshwater
    resources that we had a special responsibility for. We never
    really did that in Ohio, I am only speaking of now, and I doubt
    other States did, either, from what Mr. Farr said today.
        I guess one of the questions I have of you, Mr. Lyons and
    Mr. Reed, if I look at the very detailed budgetsubmission that
    was submitted here today, on pages 17-21, you talk about a request for
    geospatial data, trying to present information in a different way. I
    would ask you the question, based on the information you have available
    to you now before this request, if I were to say to you, do you have
    the ability within USDA to come up to us, before this committee, let's
    say, and have a series of transparencies that would be superimposed
    over one another that would tell us the story of what your division of
    USDA has done over the years, that would show the prime lands, the most
    productive lands, the soils that are truly in the national interest,
    where those would be located? And you would overlay various other
    important features that would be important for this committee to know
    about.
        For example, wildlife habitat, we have been talking about
    some of those programs. Mr. Nethercutt was talking about the
    enrollments in the Conservation Reserve Program. There are many
    other--some States have instituted farmland protection
    programs. Mr. Boyd talked about the Forestry Incentive Program.
        Is there a way of you, in a more visual and meaningful way
    to this committee, helping us to understand the full range of
    programs that you administer, and how those impact on our
    natural resource base? I think it is really hard, especially
    for the new members, and certainly for returning members like
    myself, to really grasp the enormity of what your Department is
    being asked to do.
        I think part of that difficulty stems from the fact that we
    are presented with a lot of words and budget numbers, but some
    of the mapping that could be essential to our understanding is
    not submitted along with the budget. Is that impossible for you
    to do today?
        Mr. Lyons. Today ``today,'' yes. But we could clearly
    provide you with those overlays that show where we are applying
    CRP, those farms where EQIP is being used as a conservation
    tool, critical wildlife habitat, areas of water quality
    concern, et cetera. We have that capacity, and we certainly
    could spell that out.
        [The information follows:]

        NRCS is developing a briefing presentation under advisement of the
    Ranking Member. The information is in electronic/multi-media form, not
    for print. It will be presented to the Subcommittee at the earliest
    agreeable date.

        Mr. Lyons. You raise a very interesting point, though, Ms.
    Kaptur, and this is, I think, kind of the nexus for us, the
    next challenge in terms of how we apply conservation on the
    landscape. I just throw this out for you to think about.
        We constantly struggle as an agency--I think all agencies
    do this--in implementing programs. We have CRP signup one day,
    and then we will have WRP signup the next day, et cetera, et
    cetera. I think our real challenge is to apply conservation
    across the landscape and to use those tools to the maximum
    efficiency to achieve the conservation goals that we have.
        We are starting to experiment with that now--for example,
    continuous signup of CRP for buffer strips, to protect those
    critically-important riparian areas which are important, high
    value for wildlife habitat, important or water quality, et
    cetera; trying to use the EQIP program and target it to high-
    priority landscapes where there is sensitive soils,
    environmentally-sensitive resources that we need to address. We
    are using the State technical committees to do that.
        We have the capacity to begin to lay that picture out for
    you, and if it would be helpful, we would be glad to come up
    and brief you on how we would provide conservation services on
    the landscape, whether it is the landscape in Ohio or in New
    Mexico, and what role we play in trying to achieve goals, not
    only related to conservation, as maybe the public thinks about,
    but to preserving clean water, to improving forage production,
    to maintaining or promoting timber supply, et cetera, all of
    those things that fall under our purview.
        In fact, I would argue that is the great conservation
    challenge of the next century. Most of the investment we make--
    and I know you know this because you have to deal with
    allocations between subcommittees--still are in public lands.
    We continue to invest a tremendous amount of money and time and
    energy and anguish over public land debates, which, of course,
    the Chairman gets to do over in his Interior Subcommittee. Yet,
    two-thirds of the American landscape is privately-owned. Most
    of the water that falls, most of the rainfall that runs through
    those watersheds runs through private land. Yet, we really
    invest a very, very small amount of money in the conservation
    and stewardship of that important element of landscape.
        I think if we laid that out for you, you could see how
    critical that investment is and, of course, how critical your
    decisions are to assuring good conservation across that
    landscape.
        Ms. Kaptur. I would just ask the chairman's indulgence on
    this, and some of the staff. I personally, and I think several
    of our members on our side here, would be veryinterested in
    learning more about each others' regions of the country. Rather than
    just traveling to people's districts, I think it could be very helpful
    if there were a way of you going back and thinking about how to help us
    educate ourselves about the different experiences we have in our
    regions of the country.
        I can tell you, in traveling to our esteemed Chairman's
    region of the country, when we flew over the Colorado River and
    I looked at some of the irrigated patches, that was such a
    weird experience to me, coming from our part of the country. I
    thought, you know, I shouldn't have had to travel--but then
    there are these issues with Mr. Farr with snowfall over in
    Colorado, and does the water drain over into his part of the
    country?
        You know, I really think that that kind of generalized
    briefing could be extremely interesting for us and help for us
    to understand, also, the interrelationship of programs. Now
    this may happen over on the authorizing committee; I don't
    know. But I would just say to the chairman, maybe not during
    this budget cycle, but maybe after we get through this bill, to
    have that kind of informational session for our members I think
    would be extremely interesting. If you are able to do it--I
    didn't know whether you were, and whether your program officers
    even talked to one another over there at USDA. With the number
    of programs we get thrown at us, sometimes we wonder.
        But I would make that request, and just ask if maybe the
    committee might not be willing to consider it at some point
    this year? Members like to learn. I ask myself, as I look at
    page 17-25, which deals with your conservation operations, and
    I look at Mississippi--and I don't mean just to pick on
    Mississippi, but, my goodness, why does Mississippi have 298
    staff-years? Why doesn't Mississippi--what does it have
    compared to California----
        Mr. Skeen. Probably a chairman. [Laughter.]
        Ms. Kaptur [continuing]. 173 years? I am thinking, well,
    maybe it's the river drains down there, you know; we have got
    watershed problems.
        But I do ask myself. So you look at the way in which we
    spend our dollars. My goodness, I have served in the Congress--
    this is the beginning of my 17th year, Mr. Chairman. Sometimes
    I don't necessarily understand the relationship of these
    numbers. I look at the watershed and flood prevention
    operations on page 17-38, and I look at Ohio. I mean, gee, why
    does Ohio--I am glad we get all that, but why? And here my
    district is flooded. So what is going on there? Why don't we
    qualify for a couple of the watershed operation program up in
    our corner of the State?
        I think if we could have that kind of briefing down the
    road, it could be very, very helpful. So I just wanted to put
    that on the record. So that is not so much in the way of a
    question, but a request.
        Mr. Lyons. We welcome that request, Ms. Kaptur, and we
    would love to do it before you finish this bill, as opposed to
    after you finish the bill.
        Ms. Kaptur. I will leave that to the discretion of the
    Chairman. We have a lot of new members on our side of the
    aisle, and I just think it would be awfully interesting.
        Mr. Skeen. Well, we will take--Mr. Farr? I agree with you.
    I agree; I think with the technology that you have today, that
    you are capable of doing this thing, and we can discuss that.
        Mr. Farr, if he would like to ask another question.
        Mr. Farr. Well, I am sorry I missed part of it. I really
    enjoy this discussion. Perhaps I have been a little
    philosophical in wanting to--but I think you ought to take the
    look at how you can work yourselves out of a job. If, indeed,
    you are going to teach land use management practices, then you
    ought to get them incorporated. That idea, the concept of a
    building code I think is absolutely essential.
        You know what the best management practices are. When I
    talk to farmers who say, ``You know, the problem with dealing
    with government is that there are too many of them out
    there''--it is not that there is too much government; there are
    too many governments, too many governmental organizations. We
    can't just go to one and say, okay, we are going to do all of
    these things you suggest, and that is all we have to deal with,
    because along comes the State and says, well, we knew nothing
    about that; we are not working in conjunction with that, and we
    have our own other issues. Then along comes the county--in
    California, counties are very powerful, and they are
    sophisticated. They have money, and they will hire the
    professionals who may even work for you. They come along with
    their thing. So these poor farmers are saying, ``Which
    government do we have to work with, because we get a different
    message from each one of them?''
        What we have tried to do in our area--and I applaud you for
    it; it has been some of your staff, and they ought to get the
    highest award in America for it. Because I went to my farmers
    on this watershed issue, wetlands issue. They had a roomful of
    people like this, and the farmers, essentially, said--and there
    was probably as many people working for government as there is
    in this room, working for all these different agencies--and the
    farmers said, ``Okay, which one of the people in this room do I
    deal with?'' I asked the question, ``Which one is it?'' And
    about five of them raised their hands, and they were all from
    different levels government.
        They said, ``Well, we can't deal with that. We can't make
    any commitment.''
        So we said, ``Okay, Governmental Folk, you get on the same
    page.'' I thought they would take a month. It took them two-
    and-a-half years. We got a single-stop, thanks to an employee
    of yours, one-stop shopping.
        The Coastal Commission buys it--all of the regulatory and
    planning, county planning departments, all of them. And do you
    know what they do? They go out with the farmer right now and
    they work with each farmer and they say, ``This is what we
    think you ought to do,'' and the farmer says, ``Fine. I'll do
    it with my own money, my own time. That is all I wanted to
    know. Thank you very much. I appreciate all your professional
    help. Come back in, monitor me, and tell me what I am doing
    right.'' And it is working.
        I don't know why we can't start doing that. We spend all of
    this money and all of this time, and, yet, we haven't gotten it
    infused. I mean, if this were your children, they would still
    be in the first grade, and you would wonder, at 16, they would
    look a little awkward there.
        So I want to see if we can start moving all of these
    programs. I have been working on a watershed survey for five-
    and-a-half years here. I have been talking to the wrong people.
    I didn't know you did that. I thought the Corps of Engineers
    did it.
        So there are things here that you really do, and I would
    like to try to get some more of one-stop, one-page. I thinkif
    we do that, government is better served. The criticisms that you get
    from people who think that the best way to solve the problem is just
    sort of put a meat axe to it, just cut government--if you cut it, it
    ought to get better, because there is too much of it. I don't think
    that is the way to do it. I think you finetune it and make it work
    better.
        You are in a position where so much of the land in this
    country is dependent upon whether we in the next couple of
    years learn how to make that land maximize its production
    ability and minimize the adverse impacts of that production,
    through minimizing pesticide use, runoff, erosion, and so on. I
    can't think of an agency in America that will have more impact
    on the future of our country, and how it will look and how it
    will produce, than the people sitting at this hearing and your
    successors.
        So I am very excited about working with you. I would urge
    that you think about ways to get the best management practices
    together with local and State government, get to the one-step,
    and then get the local governments to buy it in. The people
    will push them to do it, because they will be so glad that they
    only have to work with one government.
        And I will support you. I just encourage you to think that
    way, think outside the Federal box.
        Thank you, Mr. Chairman.
        Mr. Skeen. Thank you.
        Folks, I think it is about time to wrap it up, but I want
    to tell you this: how much we appreciate you, what you do. As
    one who practiced in this field at one time and understands
    why, some of the reasons why, you do the way you do today--
    because for a long time it was a matter of bringing technology
    into the fields, but the persons who either graduated from the
    universities, or whatever, in those particular fields today
    that technology has gone way beyond that. We relied on it a
    great deal, and it is not as person-oriented as it is a
    technological orientation. You folks, I think, are responding
    to that.
        I think Ms. Kaptur has an excellent idea. I think, with the
    technology we do have today, that you can make comparisons. I
    think that we ought to educate this group, because those of us
    who come from the soil production area, making a living with
    it, into this place that we call the country's legislative
    body, we spend a lot of our time explaining what we do. And
    they ask, ``Have you ever been a farmer or a ranch operator?''
    Very few of those folks come to Washington. The East doesn't
    know what the West is doing, and the West doesn't know what the
    East is doing. I think that we have an opportunity to educate
    at least this group of folks over here. Sometimes I think we
    are uneducatable, but we will try. I think it is a good
    request, Marcy. I think it makes a lot of good sense.
        You folks who would know how to put it together, we would
    like to get some response from you.
        We want to thank you for what you do, how well you do it,
    and those people who back you up in the back there. We have
    spent two-and-a-half or three hours on this stuff today. There
    is an avid interest in what you are doing, and we know we are
    supposed to put the dollars to it, but that is not the end of
    the game. What kind of results do you get?
        Mr. Lyons. That is right.
        Mr. Skeen. Well, thank you for all that you do.
        If we have any other questions, we will submit them.
        Mr. Skeen. We are adjourned.
        [The following questions were submitted to be answered for
    the Record:]

    [Pages 85-358 -- The official Committee Record contains additional
        material here]

                                              Wednesday, March 3, 1999.

                       MARKETING AND REGULATORY PROGRAMS

                                   WITNESSES

    MICHAEL V. DUNN, UNDER SECRETARY, MARKETING AND REGULATORY PROGRAMS
    CRAIG A. REED, ADMINISTRATOR, ANIMAL AND PLANT HEALTH INSPECTION
        SERVICE
    ENRIQUE FIGUEROA, ADMINISTRATOR, AGRICULTURAL MARKETING SERVICE
    JAMES R. BAKER, ADMINISTRATOR, GRAIN INSPECTION, PACKERS AND STOCKYARDS
        ADMINISTRATION
    STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE
        Mr. Skeen. I want to say good afternoon, and today we have
    with us the Marketing and Regulatory Programs of the Department
    of Agriculture, and Under Secretary Dunn--and that does sound
    better than Assistant Secretary, does it not?
        Mr. Dunn. Thank you very much for your assistance, Mr.
    Chairman, on that.
        Mr. Skeen. You have done yourself proud.
        We are leaving it up to you to present a brief opening
    statement, and I would ask that Mr. Reed, the APHIS
    administrator, Dr. Figueroa, the administrator of AMS, and
    GIPSA administrator, Mr. Baker, will follow your lead.
        Your prepared statements will be printed in full for the
    record. Now it is all yours, if you will introduce your group,
    and we will launch this little boat.
        Mr. Dunn. Thank you very much, Mr. Chairman.
        Mr. Skeen. Thank you, sir.

                           Introduction of Witnesses

        Mr. Dunn. Today, I have with me Mr. Baker, the
    administrator, Grain Inspection, Packers and Stockyards, Dr.
    Figueroa, who is the administrator of Ag Marketing Service, and
    Dr. Reed, who is the administrator of Animal Plant Health
    Inspection Services, and Mr. Steve Dewhurst, who is director of
    the OBP&A for the United States Department of Agriculture.

                               Opening Statement

        Mr. Chairman, I will give a brief oral statement, with my
    written testimony being submitted as part of the record.
        Mr. Skeen. Thank you.
        Mr. Dunn. Thank you, sir.
        I think it comes as no surprise to folks that the
    Department has been under so much stress this year because our
    producers have been under stress. The farmers and ranchers, the
    folks that we all work for, your constituencies have been under
    stress. This has been a very, very tough year for us as we look
    at the outlook for what may happen in the future, and it is
    especially important for Marketing and Regulatory Programs.
        With the advent of the 1996 Farm Bill, we see more and more
    of the responsibilities for marketing to come under the
    Marketing and Regulatory Programs' umbrella. Certainly, Mr.
    Chairman, these agencies need to be able to respond to the
    conditions of the future.
        We had devastating news for pork producers this year. In
    December, we reached an all-time low, about 8 cents per pound
    for pork producers. This translates into real agony for the men
    and women that are involved in agriculture out in the
    countryside, your constituents, our constituents.
        In Marketing and Regulatory Programs, we looked to see what
    could we do to assist these pork producers. Under Ag Marketing
    Services, the one thing we could do is purchase additional pork
    products to get into the school lunch program, to get into
    nutrition programs. What we did, Mr. Chairman, is we reached
    our legislative cap that we could have for pork purchases.
    Under the law, we can go to 25 percent of Section 32 for any
    single commodity. We did that for the pork producers.
        More importantly, when we did that, we told the packers
    what we wanted them to do was to have a part of that portion to
    come from overtime work, kills that were going on over the
    weekend and on second shifts. Because what we were told by pork
    producers, that the kill capacities just simply was not out
    there to take care of the demand that they had for pork
    slaughter.
        In GIPSA, we went in to look at what transpires out there
    in the marketplace, and we had a study in 1996. And what we
    found in that study was that primarily smaller pork producers,
    those that market less, did not realize higher prices that some
    of the other contract larger producers might get. And we took
    that information to Ag Marketing Service and asked them to take
    a look at that and to report what is actually happening out
    there in the marketplace so producers have a better
    understanding of what the price for pork might be. In the
    beginning of this year, they did change how they reported pork
    prices out there.
        But, Mr. Chairman, probably the most help that we could for
    family farmers at this time was really through Animal and Plant
    Health Inspection Services. What we did there was go to an
    emergency situation using $80 million from CCC monies and began
    an indemnification program to eradicate pseudorabies. This was
    a win-win situation for us.
        What we were able to do was take approximately 1.17 to 1.9
    million head of pork out of production, sending it to slaughter
    to rendering plants, indemnify the producers for that, and thus
    free up this kill capacity of the slaughter plants. That is the
    way that we see Marketing and Regulatory Programs needing to
    operate in the future to respond to these types of situations
    that we have in the marketplace.

                             fy 2000 budget request

        Well, let me get down to business, Mr. Chairman, on what we
    are asking for in our funding request. We are proposing $825
    million of program activities. Under current law, taxpayers
    would fund $458 million, and beneficiaries of service will pay
    $367 million. Marketing and Regulatory Programs administer over
    50 percent of the Department user fee programs at the present
    time.
        Under Grain Inspection, Packers and Stockyards, Mr.
    Chairman, at these times when producers are getting low prices,
    they come to us and they say is there something going on out
    there? Is the marketplace being constricted because of
    monopolies out there? What is going on? And they are asking us
    to take a hard look at what is going on out there and give them
    information about what is taking place.
        So what we are proposing to do is to enhance our monitoring
    and analysis of packer competition in the industry structure.
        Second, we are looking at broadening the size and scope of
    the poultry compliance investigation. The Baltimore paper has
    just finished up a series of reports about what can be done to
    assist poultry operators out there.
        Mr. Chairman, we desperately need those additional funds
    that we requested to give us the research and personnel needs
    and probably some more teeth in Packers and Stockyards
    legislation to be able to do something to assist these
    producers out there.
        We need to establish an electronic filing procedure, a
    method in which we can get rapidly, almost on a real-time
    basis, the information of what is going on out there in the
    packing industry so that we can analyze that to see if there is
    any funny business going on. That electronic filing system
    would be the single best factor that we could have to give us a
    better understanding of what is happening in the packing
    industry.
        And we need to identify the emerging grain-testing
    techniques and to develop analytical techniques for identifying
    generic differences in grain varieties. We are going to be
    seeing greater and greater requests for identity preserved on
    grains, and we need to develop an automated procedure for
    testing for mycotoxins, all of that under Grain Inspection,
    Packers and Stockyards.
        Under Ag Marketing Service, we are currently finishing up
    with our milk marketing order reforms. As this committee has
    asked us to do, we will publish that by the 4th of April, but
    it will not be implemented until the end of October. What we
    will try to do, Mr. Chairman, is ensure that we publish those
    milk marketing order reforms before you go on spring break that
    will give us an opportunity to come up and brief you and your
    staff, so that when you go back out to the countryside, you
    will not be caught off-guard and having us do it on the 4th of
    April, for instance.
        Another major area that Ag Marketing Service is working on
    is putting together the organic standards. We should have those
    out this year. It has been a major undertaking by the
    Department to be able to put that together.
        The AMS is putting a high priority on the demands of
    meeting the pesticide residue data that is needed for EPA to
    implement the Food Quality Protection Act. For 2000, a rapid
    response capability will be established that will enable EPA to
    complete risk assessments, evaluation of pesticides affecting
    multiple commodities in a more timely fashion. AMS will modify
    existing methodologies to test meat, poultry, eggs and drinking
    water for pesticide residue.
        Export markets are of tremendous concern to our producers
    out there, and they are asking us to give them more
    information. If they are to be in a global marketplace, they
    need to know what is happening in that global marketplace. So
    for greater demand for that market news, AMS is proposing to
    incorporate reports from major export markets into the existing
    market news and information. We will also be establishing a
    market news and information for organic crops, which is really,
    we see, as a major thrust of assisting small, family-size farm
    operations that primarily are in the organic industry at this
    time.
        We will identify alternative marketing strategies for small
    and medium farmers as well and disseminate that information in
    a series of meetings across the Nation.
        And, finally, Mr. Chairman, for Animal and Plant Health
    Inspection Services, APHIS has a 2000 budget request of $10
    million above the level appropriated for 1999, but we have made
    significant changes in what our priorities are for APHIS.
        The increased budget priorities involve $14.2 million for
    the detection and exclusion of pest and disease, $6.3 million
    for more timely and accurate surveillance information on plant
    and animals, including funds for emergency preparedness against
    acts of bio-terrorism, $3.8 million for emerging plant pest and
    invasive species, and $2.6 million for data gathering and risk
    analysis.
        Mr. Chairman, it is important, if we are going to be in a
    global marketplace, if family farmers are reliant upon that
    export market, and some of the reasons why we are in a
    situation today of low prices is because of our precipitive
    drop in our export marketplace. APHIS needs to take the lead to
    reduce those sanitary-phytosanitary barriers that are out there
    to open up those marketplaces for us.
        Simultaneously, the greatest threat that we have is for
    those foreign pest and disease to come into this United States.
    Classic swine fever, which we know is right off our shores on
    the Hispaniola Island could come in and continue to devastate
    the pork markets that we have here in the United States today.
    So we have to have that type of vigilance, as well as opening
    up those marketplaces.
        We recently have found a new invasive species that is
    coming in, something called the long-horned beetle, Asian long-
    horned beetle. And in New York and Chicago, this beetle is
    wreaking havoc with our hardwood trees. We are losing maple
    trees. We are going into the City of Chicago and the City of
    New York, and we are cutting down trees because it is the only
    way we know how to get rid of these invasive insects at this
    time.
        We must, Mr. Chairman, ensure that we protect our shores
    from these. I am very proud of what APHIS did. In a short span
    of 32 days, they promulgated regulations to exclude solid wood
    packing material from China, which was the origin of this
    beetle. And we have over 70-percent compliance at this time
    from China sending goods into the United States.
        Mr. Chairman, with that, I will conclude and open it for
    questions or to hear from the administrators.
        [The prepared statements and biographies of Michael Dunn,
    Enrique E. Figuerora, Craig A. Reed, and James R. Baker
    follow:]

    [Pages 364-453 -- The official Committee Record contains additional
        material here]

        Mr. Skeen. Thank you, Mr. Dunn. Let us hope that they do
    not make the beetle an endangered species. [Laughter.]
        We have got enough of those.
        Mr. Dunn. We would like to eliminate it in the United
    States.

                               WILDLIFE SERVICES

        Mr. Skeen. Hopefully. Your testimony and that of Dr. Reed
    make a good case for the importance of Wildlife Services'
    programs, and I agree.
        Last year, we defeated a floor amendment to cut the budget,
    and now you are proposing to cut both operations and methods
    development. Why is this?
        Dr. Reed. Mr. Chairman, the proposed cut in Wildlife
    Services is serious and relates to priorities. Both within the
    Agency and at the Department, there are more demands for
    services than available resources. We have a list of services
    that we need to be providing, and we are running out of money
    in Wisconsin and Minnesota for wolf control.
        The people in Wildlife Services are doing a wonderful job
    keeping up with service demands in the face of additional
    costs.
        Mr. Skeen. Well, how does it reflect back on the operation
    itself?
        Dr. Reed. I can give you some basic figures.
        Mr. Skeen. We can have those inserted in the record, if you
    would like.
        Mr. Reed. Yes, we will do that.
        [The information follows:]

        Our budget requests a $1.8 million reduction for operations
    and asks that cooperators assume a larger share of program
    costs.

        Mr. Skeen. Last year at your request we added some
    additional money to APHIS for aviation safety. What is the
    status of that program, and what are your plans for the next
    fiscal year?
        Dr. Reed. Last year, as you know, Mr. Chairman, we had some
    serious problems with air safety. We had some----
        Mr. Skeen. Birds around airfields.
        Mr. Reed. We had some bird strikes around airports. There
    is always room for doing additional work there. We are working
    with major airports in this area to make sure that the flights
    out have a wildlife biologist on site at both National and
    Dulles Airports.
        So we are using that money to make sure that we control
    geese and other birds that will be giving a problem to the jet
    traffic in and out of the area.
        [Subsequent to the hearing the following information was
    provided:]

        With regard to the accidents I mentioned and the $1.2
    million provided in 1999, APHIS has embarked on a multi-year
    process of upgrading aircraft, flight crew training, air
    worthiness safety and certification to comply with the
    recommendations of the aerial safety review.

        Mr. Skeen. That is going to be an ingenious effort. For
    doing as much flying as we do around here, we surely do not
    need them going through engines.
        Mr. Dunn. Mr. Chairman, last year I called a moratorium on
    Wildlife Services from using aircraft because of exceedingly
    high accident rates and concern over the safety of our Wildlife
    Services employees in the aircraft.
        We did a complete review of that. We were able to get
    people back up in the air in certain types of aircraft. I am
    happy to say we now have one full-time safety officer in
    Wildlife Services and will have a second one soon. We are
    making great strides in improving the safety of our employees
    to be able to perform their mission.
        Mr. Skeen. A nonaviation exercise?
        Mr. Dunn. Yes.

                                  KARNAL BUNT

        Mr. Skeen. I understand where you are going.
        The Arizona Department of Agriculture has said that the
    filters that were used to check for Karnal bunt spores were
    mislabeled by USDA, which resulted in the contamination problem
    that we now have. Is this the case and, if so, what is being
    done about it?
        Dr. Reed. Again, Mr. Chairman, let me respond to that. We
    know that there were some problems at a contract lab that APHIS
    does not operate, but oversees, in Arizona. There are two
    screens that APHIS provides to the lab to detect Karnal bunt
    spores. We found out that the screens were in the wrong place
    allowing spores to go undetected.
        A review team is beingassembled right now to review quality
    control at that lab to make sure it never happens again.
        Mr. Skeen. Well, sir, that is great news to the people that
    have been impacted by this Karnal bunt situation, which
    happened in New Mexico and Arizona. All of the efforts that one
    goes through in cleansing the equipment that is used to handle
    it have been very tough.

                             Organic Certification

        Dr. Figueroa, I realize that we may sound like a scratched
    record album here, but the 1990 Farm Bill authorized the
    development of nationwide standards for organic certification.
    I went back to March 1996 and found statements from AMS
    testimony regarding the proposed and final rule on organic
    standards and its implementation.
        I am not going to read them to you, but I am sure that they
    would sound familiar to you. Nine years and $3.2 million later
    there is still no final rule. And according to the budgets, you
    are planning to spend $923 thousand this fiscal year and
    another $1.7 million in fiscal year 2000 on this program,
    bringing the total to $5.8 million.
        What are the reasons for the latest delay in getting the
    final rules published and submitted?
        Mr. Figueroa. Good afternoon, Mr. Chairman, and members of
    the committee.
        Mr. Skeen. Excuse me for not being more amenable, but----
        Mr. Figueroa. You are not the first, Mr. Chairman.
        Mr. Skeen. And probably will not be the last either.
    [Laughter.]
        Thank you, Dr. Figueroa. Go ahead.
        Mr. Figueroa. We received, as you may know, a record number
    of comments on our proposed rule that we proposed in December
    of 1997--275,000. It is the most comments for any rule
    published in the USDA. Just the sheer volume of comments to go
    through, certainly required a good amount of time. In addition,
    there were three controversial issues within the proposed rule:
    irradiation, bioengineered products and the use of sewage
    sludge that the Secretary announced in May that we no longer
    include in the reproposed rule.
        Secondly, the industry came to AMS to request the issuance
    of three current thinking papers, which we issued in the latter
    part of last year. In those discussions, I mentioned and put
    forth to the industry that if we did those, it would prolong
    the issuance of the final rule. They felt it was better, in the
    long run, to have the issuance of these three current thinking
    papers, even if it prolonged the final rule coming out.
        Mr. Skeen. Finalizing the rule?
        Mr. Figueroa. We were going to finalize the rule in 1999
    and our goal is to try to have a final rule in 1999, yes, sir.
        Mr. Skeen. 1999. That is the reason for the delay?
        Mr. Figueroa. It was the volume of comments, sir, and as
    well as that, the issuance of three current thinking papers
    that required a comment period, and we had to focus on those
    three current thinking papers.
        Mr. Skeen. Well, you covered the whole gambit of problems
    dealing with it, and that is what is holding up the rule.
        Mr. Figueroa. The three current thinking papers were on
    three issues that were very important to the industry, that
    they felt they needed some additional comments on, yes, sir.
        Mr. Skeen. Very good.
        The organic industry is valued today at about $3.5 billion
    and growing at the rate of 22 percent per year. Why do we need
    a National Organic Standards Rule at all?
        Mr. Figueroa. The industry, as you know, came to Congress
    in 1990 because they felt that national standards would
    accomplish two things, and we concur with that. One is that
    national standards will assure all consumers in this country
    that when they buy a product that is labeled organically grown,
    handled and processed or produced, that they know that a
    minimum set of standards have been adhered to in the production
    and processing of that product.
        In addition, the industry felt, and we concur, that having
    this minimum national set of standards would indeed facilitate
    the growth of the industry. Clearly, the industry has grown in
    its current system of either State-based or private
    certification systems, but we feel, and I think the industry
    feels as well, that national sets of standards will expand the
    domestic industry.
        Finally, the entrance of organically produced products in
    the international markets we feel will also be facilitated by
    having a national set of organic standards, particularly in the
    European Union.
        Mr. Skeen. How is the term ``organic'' defined? And will
    the final rule on organic standards alter that definition in
    any way?
        Mr. Figueroa. There are currently 42 different
    certification entities in the country. Some are State-based
    programs, others are private- or quasi-private-based programs.
        Mr. Skeen. How are you going to split it?
        Mr. Figueroa. Each of those have fairly similar definitions
    of what constitutes organic production. We will likely be very
    consistent with the prevailing industry definition of organic
    production with our national standards, yes, sir.
        Mr. Skeen. Thank you. Thank you for your responses.
        [Clerk's note.--Subsequent to the conclusion of hearings on
    the fiscal year 2000 budget request for the Department of
    Agriculture, the Agricultural Marketing Service published a
    final decision on consolidating the 31 Federal milk marketing
    orders into 11 orders as mandated by the 1996 Farm Bill. The
    entire three-part final decision documents are on file with the
    Subcommittee. The following is a summary of the final decision
    as proposed by the Secretary of Agriculture:]

    [Pages 458-469 -- The official Committee Record contains additional
        material here]

        Ms. Kaptur.

                            asian longhorned beetle

        Ms. Kaptur. Thank you, Mr. Chairman. Welcome, gentlemen. I
    am so happy to have you here. I just love this group. I am glad
    they are here today. Enjoyed your testimony, Mr. Dunn.
    [Laughter.]
        I know the good work that they try to do and do.
        Dr. Reed, I wanted to start with you, if I might. On the
    issue of the Asian long-horned beetle, did you actually
    determine the origin of that?
        Dr. Reed. Yes.
        Ms. Kaptur. How did you do that?
        Dr. Reed. We inspected solid wood packing materials,
    crating materials for airfreight, and other freight arriving
    from China, and actually found larva and insects in the wood
    packing material. We then inspected a lot of wood packing
    material from several countries because this kind of damage
    occurs in wood crates and pallets where the lower grades of
    wood are used. It was in the wood packing material where we
    found the larva.
        Ms. Kaptur. Now, do you receive that material through U.S.
    Customs or do you have your own inspectors at certain ports of
    entry? How is it that you got the actual material?
        Dr. Reed. Customs looks at it first and then we get it.
        Ms. Kaptur. For how long had that been coming into the
    United States, do you estimate, before you actually got the
    sample?
        Dr. Reed. We detected the pest in New York a couple of
    years ago. Earlier last year, we found tree damage very close
    to O'Hare Airport in Chicago and through additional surveys,
    found the larva in the trees. The larva actually killed the
    trees after a couple of years. So it is not like it is a
    situation where you can live with this particular pest.
        Ms. Kaptur. I read in your testimony that you say that in
    New York, and you do not cover Illinois I do not think here, it
    has cost $5 million so far to remove the trees; is that true?
        Dr. Reed. The State of New York and the Federal government
    have spent $5 million in removing 2,500 trees.
        Ms. Kaptur. Have we really gotten a hold of this, do you
    think? Have we removed all of the trees? We do not know, those
    beetles could be out there.
        Dr. Reed. We conduct surveys to determine if there is
    damage or additional areas of infestation, but our main
    emphasis is preventing entry through wood packing material. We
    instituted an emergency rule last year and began implementing
    it the beginning of this year. We told China what was going on
    and what they had to do. So far we have had very good
    compliance.
        Ms. Kaptur. How much money has this already cost the State
    of New York, the Federal Government, the State of Illinois, the
    City of Chicago, or whoever is having to remediate?
        Dr. Reed. Let me get those figures for you, Congresswoman.
        Ms. Kaptur. What responsibility do the Chinese have for
    paying that bill? What portion of it have they paid and what
    mechanism do we have to get recovery--costs recovery?
        Dr. Reed. I do not know if we have a mechanism for
    recovering from the Chinese.
        Ms. Kaptur. Well, you have hit one of my favorite areas of
    inquiry. [Laughter.]
        I would very much appreciate it if you would try to get me
    figures on what these States and the Feds have spent thus far
    in remediation, and include in that any of your own research
    costs and other costs where you have had to do analysis and so
    forth to really figure out--include your administrative costs
    in that, and your projection for the next year; what you have
    spent to date and what your projection is over the next year.
        [Subsequent to the hearing, the following additional
    information was provided.]

        We estimate that about $9 million has been spent in this
    cooperative effort through this year. We estimate spending the
    requested $2.1 million for next year.

        Mr. Dunn. Ms. Kaptur, there are a couple of things. We try
    to do inspection of about 2 percent of everything that comes
    into the United States. APHIS looks at items that may have a
    pest or disease that would affect our agricultural interests.
    We were not always looking at solid wood packing material until
    after we had found a pest in it. Now we understand that wood
    packing material is a source of the pest. This is the reason
    why that infestation may have been here for four or five years
    before we discovered it.
        In Chicago, for instance, somebody found one of the
    insects, compared it to information on our Web site, and
    determined that they had the pest. So as you indicate, we need
    to do a much better job of getting the information out, so that
    we have more eyes and ears out there across the Nation to see
    if this pest is in other parts of the Nation.
        Normally, when we get an infestation, or some country gets
    an infestation, it is from a product that was brought in; it is
    the buyer beware. So, there really is not any legal recourse to
    say, ``All right, You have caused this disease, You have to pay
    for it.'' It is the receiving country's responsibility that
    incurs the pest to be on the alert. This is why having our
    first line of defenses are so important in APHIS, to keep these
    pests and diseases out and to have surveillance teams examining
    all the possibilities.
        Ms. Kaptur. Well, Under Secretary, I do not mean to
    disagree with you, but one of the problems with our trade
    agreements is we do not accommodate environmental issues. If I
    look at what happened with Gypsy moths, and we have had a
    little experience with that in our part of the country, having
    migrated from the East Coast, and we know just the amount of
    money this is going to--I really do believe that those
    responsible, including the shipping company and whomever, the
    freight forwarders, they are all responsible. It is not just
    the poor little taxpayer sitting in Chicago or New York that is
    responsible to pay this.
        So I am not saying you have not done a good job. I am just
    trying to, I guess, as the attorneys do, assess blame here and
    restitution, and this is an area that interests me a great
    deal, and I doubt that this is going to go away. I have a hunch
    these little beetles are going to propagate, and we are going
    to have to rip down more trees.
        Dr. Reed, what could they devastate? Let us say it is like
    the Gypsy moths, and we just cannot get control of it because
    there is no natural predator, what is it that they destroy?
        Dr. Reed. The preferred host is soft hardwood trees, like
    maples and elms. We are very fearful of the beetle migrating to
    our maple forests. Of course, everybody loves their big maple
    trees in their back yard so it is devastating for residential
    growers as well.

                           screwworm facility--mexico

        Ms. Kaptur. I thank you very much for your frank replies to
    that.
        Dr. Figueroa, I wanted to welcome you and ask you last year
    we discussed the APHIS facility in Chiappas, Mexico, that is
    scheduled to be closed in 2004. And we had talked about, yes,
    we have done a great job at eliminating screwworm on the
    continent and so forth, and that facility employed like 600
    people or something who are Mexican citizens.
        I had asked if the Department might talk to the State
    Department in the interim and see, knowing the conditions in
    that part of Mexico, if there was some other way which we could
    transform that facility. We talked a little bit about tropical
    fruits, about coffee, et cetera. Have you done any follow-up on
    that?
        Mr. Figueroa. Unfortunately, Congresswoman Kaptur, I have
    not done much follow-up on that specific issue.
        Ms. Kaptur. Mr. Dunn.
        Mr. Dunn. Congresswoman, I have traveled to Mexico, met
    with my counterpart, Sub-Secretary Gurria, as well as Minister
    of Agriculture Arroyo, to talk about this very issue. I talked
    to our ambassador in Mexico. He and I had planned a trip down
    to Chiapas to take a firsthand look, but have not been able to
    do that, to date, because our schedules have conflicted. But
    that is something that is very high on his list of things to do
    as well.
        Ms. Kaptur. I am really glad to hear that.
        I asked Dr. Figueroa because he had made a practical
    suggestion to me last year. So that is why I was interested in
    hearing what he had to say. But I am extremely interested in
    that, as you know, and we do not need to do anything to further
    destabilize that part of our continent.

                                 concentration

        I wanted to thank Mr. Baker and your colleagues for
    conducting one of your listening sessions in the Midwest, in
    our part of the Midwest. We had, as you know, over 140
    producers. Your fine staff members who are sitting in the
    audience were there. They did a good job. Could you enlighten
    the committee a bit on what you learned from speaking to
    producers around the country and what you plan to do as a
    follow-up to those meetings.
        Mr. Baker. Yes. This was basically a whole rollout of our
    information. We did an investigation of the upper Midwest hog
    slaughter procurement, and we took our findings to the people
    to provide information. We found that the smaller producers may
    not have been producing the higher quality hogs like the larger
    producers were. Smaller producers were not taking contracts
    like the larger producers and maybe did not have access to the
    contract availability that the larger producers did.
        We heard it loud and clear in some meetings that contracts
    were available, but they did not want to make these kind of
    commitments that you have to make to get into the contract
    business.
        I think, from what we learned, that the price being
    reported on hogs was not the actual price of what hogs were
    trading for. Hogs were trading at a higher figure than the base
    price being reported. This was significant. Since this has been
    pointed out, Ag Marketing Services started reporting a higher
    base hog price. As I traveled the last two years, I heard
    people say, ``We sold our hogs for $4 over the top''. You do
    not sell hogs $4 over the top. You sell them for $4 over the
    reported top. So, let USDA get the information out there, get
    it all reported and let people know where they fall in the
    price structure.
        We saw hogs quoted and sold for as high as $7 over the top.
    Our focus is in packer procurement in the hog complexes in the
    Midwest, and we hope to do a lot more work there with your help
    in our budget.
        And, the roll-out has been beneficial. The producers that
    we have talked to, by and large, are very appreciative of
    ourlooking at this. We conducted an investigation in 1996, but the
    rollout fell at a time when there were depressed prices in the hog
    industry. The biggest complaint we heard was that our information was
    not timely, and that was a valid complaint. The investigation happened
    two years before we rolled out the findings.
        But because we were there at a time when the prices were
    depressed, we could address, along with the other agencies that
    went with us, concerns farmers had about price and market power
    and being able to get into the market.
        Ms. Kaptur. Do you intend, Mr. Baker, to have a final
    report that then shows which policies you are going to
    implement within the Department or what types of initiatives
    you are going to have as a result of those meetings?
        Mr. Baker. Yes, we have a report. A final report has been
    made, our initiatives are moving forward, and we have an
    additional investigation underway. Also, out of this, we
    undertook three additional investigations that we are pursuing
    in the pork complex.
        Ms. Kaptur. To the extent you can provide your summary
    report to the record----
        Mr. Baker. Yes, I can.
        Ms. Kaptur [continuing]. Could you do that, please?
        Mr. Baker. Yes, I can.
        Ms. Kaptur. I would be very, very interested in that.
        While your people were in Ohio, what was interesting was
    that we had people in that room who were burying animals at the
    very same time that our feeding kitchens in our adjacent cities
    needed food.
        And so as I look at the Agricultural Marketing Service and
    I think about what you can do as an Agency, as a Department, I
    hope that, as you think about procurement, and you think about
    ways of marketing and how you reach people, that--and I was
    just talking with Mr. Nethercutt about this--how we are able to
    focus our purchases on farmers.
        How can we do a better job of targeting some of those
    people that ended up in those rooms and without doing too much
    damage to the pricing system overall? And if there are any
    actions we can take this year, I know from the emergency bill
    last year, some of those payments are going to be going out,
    but as we sit here today, they are burying animals. That just
    does not seem like the best solution, certainly for the farmer
    and certainly for those in need in our country.
        Any insights you might have from those hearings where you
    could give us advice as we proceed through the first
    supplemental we will be having and maybe a second supplemental
    and whatever our appropriation bill will be for this year, I,
    for one, would be very grateful.
        I know others want to ask questions.
        Mr. Baker. We will submit it for the record.
        [The information follows:]

    [Pages 475-508 -- The official Committee Record contains additional
        material here]

        Ms. Kaptur. Thank you very much.
        Thanks, Mr. Chairman.
        Mr. Skeen. Mr. Bonilla.

                               Australian Cattle

        Mr. Bonilla. Thank you, Chairman.
        Dr. Reed, I would like to start with you, if I could. We
    have had a concern since last fall, when there was an effort to
    move some Australian cattle through Mexico, and, as a result of
    that, we put some language in the conference report asking you
    to establish some protocols on verification procedures, to
    establish permanent country-of-origin marking requirements for
    each county or region requesting to export livestock to the
    U.S. We have not seen those protocols yet, and I am wondering
    when those might be available. We are getting a lot of calls
    from ranchers back home.
        Dr. Reed. We are working on those protocols with Mexico,
    and we expect to have a North American protocol, with Canada,
    the U.S., and Mexico all having the identical standard.
        Right now, there are some protocol differences between the
    U.S. and Mexico when cattle originate in North America, but
    this does not fully address situations like the cattle coming
    in from Australia. We did not anticipate thatMexico or other
    countries would broker cattle coming through to the U.S. There are some
    additional controls that need to be worked out so that all three of the
    North American countries are the same.
        Mr. Bonilla. There is no attempt to move any more cattle
    from Australia? You have not heard anything about that, have
    you?
        Dr. Reed. No. We would receive a request for an export
    permit from Mexico. And we would know it is a third party. But
    we have not received such a request.

                               Wildlife Services

        Mr. Bonilla. I want to move now, Dr. Reed, to the animal
    damage control program. I have a lot of sheep and goat
    ranchers, as you probably know, in my congressional district.
    The pilot gunner positions were lost, which shut down the
    fixed-wing operations in that part of the State, and
    specifically right around the area of Fort Stockton, Texas.
        My understanding is that you still have the aircraft
    available, but are just short of the manpower to fly the plane.
    Is that true? And is there any way that we can work with you to
    get this up and running again?
        Dr. Reed. Let me ask my expert, Bob Acort.
        I have just been informed that that should not be a
    problem. We will see what is transpiring there and try to get
    those folks back in the air.

                                  Tick Riders

        Mr. Bonilla. I appreciate that very much.
        I want to move now to another issue that may be somewhat
    unique to my area, and that is the tick riders that watch for
    the fever ticks to prevent them from coming across the Mexican
    border. They are almost out of the old days. They ride for days
    out in the brush country in some dangerous conditions with very
    limited resources. One of my staff from district office, my
    district director, has actually spent some time riding out with
    them to see what they face. I think they, quite frankly, are
    overlooked sometimes. They are at the end of the country
    logistically, and they are doing something that really does not
    have a lot of interest beyond the area along the Mexican
    border.
        I am wondering if you are aware that this program is
    inadequately funded and these guys are really struggling out
    there to make sure that we are not infected with some disease
    coming across the border. It is very important, especially, I
    would hope, in light of the administration's concern about
    spreading disease coming from other parts of the world.
        Dr. Reed. Congressman, we know that those tick riders are
    truly the last of a breed. We have maintained their funding in
    the fiscal year 2000 budget request. We know that it is the
    only way we can maintain surveillance in that area. Nobody has
    figured out a better way of performing this valuable inspection
    work. We plan to maintain current funding levels for this
    activity.
        Mr. Bonilla. But more specifically, not only do we want to
    maintain them, but the people out there are struggling just to
    keep their nose above water because of the lack of resources. I
    also may want to discuss their pay grades, separately at a
    later date. My understanding is that they have been operating
    at a pay level lower than a lot of their counterparts who are
    doing similar work in other Federal agencies policing borders.
        This is more my concern. I wonder if you are aware that
    they have been, frankly, only maintained and really not given
    what they need to do their job well.
        Dr. Reed. I was not aware of the inspectors' pay and grade
    inequity issues. I will review the situation and set up a
    meeting to discuss it with you.
        Mr. Bonilla. I would really like to do that.
        Mr. Dunn. Usually, when we do this, we call it a desk
    audit, but I guess in this case it would be a saddle audit----
        Mr. Bonilla. That is right.
        Mr. Dunn. I would like to take a moment to talk about the
    many fine men and women that we have in all of Marketing and
    Regulatory Programs. They are on the front line, putting
    themselves in extreme danger, as the tick riders do. I am sorry
    to report a couple of fire bombings of some of our Wildlife
    Services offices. This gives us a great deal of concern. We
    look favorably to working very closely with the committee to
    improve the well-being of those individuals that serve all of
    us so well.
        Mr. Bonilla. My understanding is they need spray dip
    machines and treated corn to feed wildlife. There is probably
    not a real long list. It is not a big-budget item, but it is
    extremely important down there, and I am looking forward to
    working with you on this particular issue, Dr. Reed.

                                   Screwworm

        I am going to move now to a screwworm issue. As you noted
    in your testimony earlier, a screwworm larva was collected from
    a goat in Edwards County, which is also right in the heart of
    my district. This gave many of my producers a real scare, and I
    want to commend you, first of all, for quickly responding and
    doing what you had to do to deal with the situation. I also
    agree that this does clearly demonstrate the need for constant
    vigilance because you never know when something is going to pop
    up.
        What was the final assessment of this incident in Edwards
    County, and do you know how the goat contracted the screwworm,
    and have you continued surveillance in this region to see if
    there are any other problems out there?
        Dr. Reed. Let me start by answering your last question
    first. We are continuing surveillance efforts. It gave us a
    real scare to find a single screwworm anywhere in the United
    States. We have performed all of the epidemiologic tests to
    determine how this screwworm got to Edwards County. It was the
    only incident around. We inspected all of the surrounding farms
    and found no additional cases. We are exploring how the actual
    screwworm larva was submitted to the lab. There were some
    questions about an old screwworm bottle and things like that.
    So we are still looking into it, but the bottom line is we are
    maintaining surveillance of nearby premises and have not found
    any additional screwworm cases.
        Mr. Bonilla. I appreciate that. We are going to be keeping
    an eye on that situation as well.

                                  boll weevil

        My last question has to do with the boll weevil eradication
    program. The fiscal year 2000 budget proposes a $12 million cut
    to this program. It has been a very successful program. It is
    very important with new eradication zones entering the program
    every year the budget be maintained. The program stretches all
    across the South into Texas and New Mexico now.
        The cost share provided by APHIS is about 4 percent of the
    total program. I understand that about $4 million of the
    current $16 million is USDA overhead. The growers have
    expressed a strong desire for USDA to continue to be involved
    in the program and, in turn, have shown their strong financial
    support.
        Other parts of USDA's budget emphasizes a desire to reduce
    pesticide usage and develop pest management systems for crops
    that are more IPM-based. This is the goal of boll weevil
    eradication. It has been successful in accomplishing this goal
    in many States, such as Georgia and South Carolina.
        Why would APHIS look to cut funding at this critical time
    just as the program is expanding and has proven to be a
    successful program?
        Dr. Reed. Let me answer you two ways. Boll weevil
    eradication is a successful program and APHIS funds are
    currently passed through to growers. Loans are available to
    people who grow cotton, but who also enjoy the benefit, when
    there are no weevils. The payback is $12 dollars for every
    dollar spent on the program.
        We have, basically, a good system of providing technical
    assistance which has been proven throughout the Southeast and
    will be used through Louisiana, Texas, and into New Mexico. We
    see to it that programs that are currently involved in
    eradication efforts or that have voted to begin an eradication
    program--and they must have a positive vote to begin an
    eradication program--are going to continue to be successful,
    and APHIS will continue to support them.
        But the loan program--the obvious answer is not that APHIS
    is trying to get out of it. We pass most of the money through
    any way. We do have the right kind of knowledge to make active
    eradication programs successful. We will continue to provide
    technical assistance to make eradication possible.
        Mr. Bonilla. This is another area I really want to work
    closely with you on. It seems like all of my questions fall
    under your jurisdiction, and have a direct impact on my
    constituents. So I look forward to working with you on some of
    these issues we have discussed here today.
        Thank you for your time today, Dr. Reed, gentlemen.
        Mr. Skeen. Mr. Boyd.
        Mr. Boyd. Thank you very much, Mr. Chairman. I am so
    excited, I do not know where to start here with these
    gentlemen. [Laughter.]
        Let me start by saying to Mr. Dunn thank you for working
    with our folks on the citrus canker issue. The meeting that you
    held last week was very helpful in helping us understand what
    could be done and what needed to be done. I wanted to thank you
    for that.
        And also to Dr. Figueroa I wanted to say I apologize for
    missing our meeting in the office today. You know how it works
    up here when they call a vote.
        Ms. Kaptur. Will the gentleman yield?
        Mr. Boyd. Yes.
        Ms. Kaptur. I just thought, perhaps, for some of the
    members who may not represent citrus companies and some of the
    members of the audience, you could explain how serious that
    problem is.
        Mr. Boyd. Thank you very much, Ms. Kaptur. I will in my
    questioning.

                                  boll weevil

        But before I do that, I want to turn to Dr. Reed and
    follow-up on the question of my friend from Texas, Mr. Bonilla,
    as he walks out the door, to let you know that there is a
    member sitting on the other side of the chairman that has a
    keen and long interest in the boll weevil eradication program.
        Probably most of my work with your shop over my
    professional career has been with APHIS because of my
    involvement when you expanded that program into Georgia,
    Florida and Southeast Alabama in the eighties. You remember we
    had some cotton in Florida, too. We had 25,000 acres back in
    1985 when we started that program, and now we are running about
    200,000 acres as a result of your program's success.
        I just wanted to relate to you, and to the other members of
    this panel and to the members of this audience what that has
    meant to us.
        Prior to the eradication of the boll weevil, when we had to
    fight that pest on a regular basis, I had constituent farmers
    that sprayed their cotton an average of 18 times a year. Now, I
    want you to think about this in terms of costs; that is, dollar
    cost and environmental cost--18 times a year. Currently, our
    average spraying in the area that I represent probably is two
    times a year. So we have reduced it to almost 10 percent.
        Two other things happened. One, is the increase in the
    yield that is inherent when you eliminate a pest. The other
    thing that is important to us is to think about is all of those
    organophosphates and other chemicals that we were using on our
    land and in the atmosphere, to fight that pest.
        I want you to do, whatever you have to do, to make sure
    that we do not allow that kind of pest or that particular pest
    to return to attack our cotton crops. It is just imperative
    that we continue to fund this successful program.
        I know you have got a 70/30 share program or used to have,
    at least when I was first involved with it. I do not know what
    it is now. It looks like it may be 3/97 share based on the
    budget proposal. But I have strong feelings about that small
    figure in the budget proposal and would like, Mr. Chairman, to
    make sure that we restore funding because that is a serious
    issue for us.
        I want to ask you, Dr. Reed that what I hearyou saying is
    that it's just an issue of reallocating dollars. We still have got
    containment and maintenance costs, and we are still expanding the
    program. We are still moving the program into new areas, but you are
    just going to ask the States and the growers to pick up more of the
    costs; is that what I hear you saying?
        Dr. Reed. That is basically it, and we still want to do
    surveillance and trapping to make sure that this is not a
    problem that comes back and the goal of eradication gets away
    from us.
        Mr. Boyd. Well, I want you to know that I am with you in
    making sure that we have adequate dollars needed to control
    that pest.

                                  brucellosis

        Secondly, on brucellosis, I notice there is a cutback on
    your brucellosis program. But I read the narrative that you had
    presented, and basically it appears that that is a cutback
    because we are winning that war. Is that a fair assessment?
        Dr. Reed. That is a fair assessment. We have got five herds
    left in the U.S. under quarantine, and we plan to have zero
    herds by the end of the summer, so that is a war we are
    winning. Again, just like boll weevil, we have to be vigilant
    and watch for reinfection to avoid a problem that hurts our
    farmers and keeps us from moving their livestock freely.

                                 foreign pests

        Mr. Boyd. Now, I want to turn to--and maybe, Mr. Dunn, I
    will try to paraphrase from the comments that you made--because
    I want to turn to the issue of citrus canker and not only that
    pest, but others that come in through our ports because of our
    very, very aggressive trade policy that we have. Your words
    were, and I paraphrase, it is important, if we are going to be
    in a global market, and then you went on to explain about
    exotic pests, phytosanitary issues, all of those issues, and
    that we devote adequate resources in these areas, and we have
    not done that. I want the staff, if you will, to pass out a
    chart that I have for the record, Mr. Chairman, to you and to
    the members of the panel, and I want to read a few items from
    it.
        These are pests that have impacted Florida agriculture just
    over the last four years: foreign pests, citrus canker, Medfly,
    thrips palmi--that affects bell peppers--brown citrus aphid,
    citrus leafminer, Oriental fruit fly, sweet potato white fly,
    pine-shoot beetle, leather leaf fern anthracnose, equine
    piroplasmosis--excuse me. I am not good on these scientific
    names here--hard water disease, and tropical soda apple.
        The State of Florida, in the last four years has spent
    about $32 million fighting to control these pests. The
    University of Florida has spent about $15 million on research
    to combat these pests. We estimate the industry costs for
    control to be about $100 million, and we estimate the impact on
    sales to be in the neighborhood of about two-thirds of a
    billion dollars.
        The highlight of that is the citrus canker issue, no doubt
    about it, because those are where the big dollars are. That is
    where the industry has been significantly harmed. We got a
    problem in Florida that started within 100 yards of the Miami
    Airport, came in on a plant from overseas, through Customs, got
    right by your people, (APHIS inspectors) and now we have a
    serious problem that threatens our entire citrus industry.

                       agricultural quarantine inspection

        I have two questions relative to that. One is, on page 3,
    Dr. Reed, in your testimony, the 1998 APHIS officers inspected
    an all-time high of 76 million international air, maritime, and
    land border passengers. Now what percentage of the total
    passengers that came into this country is 76 million?
        Dr. Reed. These are just from the international flights.
        Mr. Boyd. Right.
        Mr. Dunn. That would be 100 percent.
        Mr. Boyd. That is 100 percent.
        Mr. Dunn. Yes, 76 million.
        Mr. Boyd. The other question then is to educate me how does
    this work. Does Customs receive the passenger first, and then
    if there is a problem, refer the passenger to your inspectors
    or how does that work and how can we improve it to make sure we
    are not introducing these pests on a daily basis?
        Dr. Reed. Actually, passengers go through Customs first,
    and then Customs refers them to APHIS based on the declaration
    card that is completed upon arrival into this country.
        We are working with Customs to make the clearing process
    better because we know that people remark to us that they were
    on a farm or that they have agricultural products in their
    possession and nothing ever happened. Nobody ever asked them
    any questions. So we have got to do a better job of getting
    Customs to refer travelers to APHIS so we can ask the right
    questions and then examine the agricultural products.
        Mr. Boyd. So it is a matter of educating Customs folks
    better. Is that what I hear you saying?
        Dr. Reed. Well, that is partially true. We also are
    experiencing significant growth of international airports so we
    have increased staffing issues to ensure we have the right
    numbers of people there to examine the flights.

                                 citrus canker

        If you would permit me to comment on citrus canker. This
    bacterial disease is easy to spread, whether from plant
    material, clothing, or equipment. We are particularly worried
    that it is going to get away from us, and we may not be able to
    do anything about it unless we get the commitment to go after
    it aggressively.
        Mr. Boyd. You are not nearly as worried as some of the
    folks back home that are feeding their families with the income
    generated by those citrus trees, I can tell you.
        Dr. Reed. Well, I know it will impact producers enormously
    because not only is it going to destroy trees, but will also
    restrict the movement of fruit out of an area, and the fresh
    fruit market could possibly be eliminated.
        Mr. Boyd. For the members of the panel, for the members of
    the committee and the audience, when you get citrus canker
    introduced into a grove, first of all, it comes under
    quarantine by USDA officials to prevent the spread of it, and
    your export markets are immediately closed because the other
    countries will not have anything to do with you if you have
    citrus canker.
        Secondly, the only way to cure it is to push the tree and
    burn it and leave the land idle for two years, and we do that
    with a buffer zone circle around it of clean trees. We have
    been through this in Florida in the late eighties, and it is
    not a pretty sight. I just want you guys to know whatever this
    member of the committee can do to help you guys assist us, we
    have to fight the spread of this disease. It is a very, very
    serious thing, and that is why I want to thank you forhelping
    us figure out how we solve this problem.
        Thank you, Mr. Chairman.
        Mr. Skeen. Mr. Nethercutt.
        Mr. Nethercutt. Thank you, Mr. Chairman.
        Welcome, gentlemen.

                                    tck smut

        The last four years that I have been on this subcommittee I
    believe every time I have asked you about the issue of TCK Smut
    relative to China and why that market seems to be resistant to
    the export of our wheat from my State of Washington? In fact,
    last year I had a response from Mr. Medley with regard to this
    subject and he answered in response to a question I made about
    TCK Smut and the Brazil analysis and then how that relates to
    China, and he says, we should be able to export to China
    without presenting a significant risk. We will be carrying the
    same message as we continue these discussions with China. This
    action should help us, the Brazil determination, and enhance
    our chances of establishing scientifically-based criteria in
    China as well.
        My question is where are we one year later, several years
    later, as far as I am concerned and are we any closer to being
    able to deal with China on this particular issue of TCK Smut?
        Mr. Dunn. I am delighted to report that I was in Brazil
    last year where we signed the agreement which Brazil dropped
    their objections on TCK. It was a very big day for me and one
    that I felt very proud of the men and women in APHIS and being
    able to sign the agreement.
        We are continuing to work with China. You can imagine their
    concern when I told them about problems with their solid-wood
    packing material.
        Mr. Nethercutt. Right.
        Mr. Dunn. They immediately put up a quid pro quo on TCK. We
    have members of USTR and State Department even as we speak in
    negotiations with China. We are getting closer to an agreement.
        Mr. Nethercutt. How do you quantify that for me, Mr. Dunn?
    And I appreciate the difficulty of dealing in international
    relations but what do we need to do here? What will grant us
    the breakthrough or, in all honesty, is there not going to be a
    breakthrough? Is China just resistant, they do not want to do
    it, and, you know, we are sort of having to say, we accept
    that? What is it?
        Mr. Dunn. Mr. Nethercutt, we have done everything we can on
    it, technician-to-technician, scientist-to-scientist basis, to
    point out that this is merely a quality concern, it is not a
    major disease. It is at a policy level. We have USTR and State
    working as hard as they can right now to resolve this matter.
        We will continue working technician-to-technician,
    scientist-to-scientist, giving them every bit of information
    that they ask for, conducting tours, showing them what we have
    here in the United States, and why we do not see it as a
    problem. Ultimately, it is going to be a policy decision.
        Mr. Nethercutt. Are you optimistic or are you resigned to
    the idea that this is a very tough issue to try to break
    through and we should not get our hopes up?
        What more can you say? It may not be a fair question to
    you.
        Mr. Dunn. I am guardedly optimistic that we are making
    progress.
        Mr. Nethercutt. Are you communicating with State and USTR
    on a regular basis?
        Mr. Dunn. Yes, we are. When Ambassador Barshefsky went to
    negotiate, we provided a great deal of information to her. Our
    people, as well as the ORN-AG service people are meeting with
    them, as well as the Secretary. So, yes, we are working
    extremely close on this issue. This is well coordinated within
    the United States.
        Mr. Nethercutt. Would you kindly, to the extent you are
    able, provide this committee with an update on the current
    status of activity with State and USTR as it relates to your
    offices or USDA in general?
        Mr. Dunn. We will do that.
        [The information follows:]

        The Office of the U.S. Trade Representative (USTR) is the
    lead agency on any trade issue. For example, if a serious SPS-
    related trade issue comes to the attention of the
    Administration, we must work with the USTR before any SPS issue
    is taken to the World Trade Organization's Dispute Settlement
    Body (DSB). The USTR also chairs the Trade Policy Staff
    Committee, comprised of many interested government agencies,
    which decides which issues go before the Dispute Settlement
    Body. All USDA Agencies work together before submitting an
    issue to the USTR and the Trade Policy Staff Committee. Once an
    issue is presented to the DSB, APHIS provides the technical
    information which is the basis for the U.S. argument.
        The Department of State would always be involved in any
    sensitive issue related to foreign policy matters. Since State
    is also a member of the Trade Policy Staff Committee, they must
    also understand the SPS issues and approve any decision to take
    an issue to the WTO.

                                 alar residues

        Mr. Nethercutt. That would be great.
        I just have one more question, Mr. Chairman, I do not want
    to abuse my time here.
        You, I am sure, gentlemen, have seen the latest salvo, I
    guess, that has been thrown relative to the safety of our foods
    and vegetables. It is sort of the 10 year anniversary of Alar.
    And I have seen recently some consumer groups coming out and
    saying our food is not safe to eat and our children should not
    eat vegetables and fruits.
        What are you doing to combat this? I think this is a huge
    red herring. I think it is a misinformation campaign as best I
    can tell and if I am wrong on that you tell me, since this is
    your business.
        My sense is it is unfair to the consuming public. I hope
    that your agency or someone in USDA deems it appropriate to
    respond to whatever junk science might be out there relative to
    this argument that there is some great danger if we eat fruits
    and vegetables in America.
        If I am over-stating it, tell me that, too.
        Mr. Figueroa. Mr. Nethercutt, the two reports that you are
    referring to--Consumer Reports issued a report and then that
    was followed by the Environmental Working Group that followed-
    up within days or weeks. First of all, we were surprised in the
    sense that generally in the past we have gotten a lot of press
    calls, at least in the Agricultural Marketing Service. It was
    very quiet vis-a-vis some other things that have happened in
    the past.
        So, that is, I think, some good news in the sense that
    other media did not, at least, inquire at our agency to follow-
    up on this story.
        Both reports relied on our pesticide data program data. It
    is our position that we are generating data and other
    individuals or entities it is for them to interpret the data
    that we report.
        Thirdly, a number of the research and promotion boards have
    implemented some programs to react to some of these scares, if
    you will, that I think have been very effective. And I think
    that those plans are in place specifically for these purposes,
    so, that when and if they get inquiries about some of these
    issues being raised they have the materials prepared to respond
    accordingly. And I think that they have been effective, at
    least in this case.
        Mr. Nethercutt. Your agencies, I assume, are satisfied that
    there is not a safety risk, that the consumer does not have to
    be reacting to these kinds of reports, that there is safety in
    our--notwithstanding the development under the PDP--that the
    consuming public is safe, is that a fair statement?
        Mr. Figueroa. As you know, Mr. Nethercutt, we have another
    agency within the USDA that is entirely responsible for the
    safety of food. And it is not our position nor is it in our
    mission statement but it is clearly within AMS' role to
    facilitate the marketing of wholesome foods and I think we are,
    indeed, meeting that mission responsibility.
        Mr. Nethercutt. All right.
        Thank you, Mr. Chairman.
        Mr. Skeen. Mr. Dickey.
        Mr. Dickey. I want to thank Mr. Farr for allowing me to do
    this and I want him to know that our relationship now has a
    chance to get started. [Laughter.]

                               fish eating birds

        Mr. Dickey. I just want you to know that. I have two
    questions.
        It is about cormorants and egrets and other fish-eating
    birds that are just taking us by storm in Arkansas. We seem to
    be breeding these birds by feeding them with our fish. Here is
    my question: How much success has Wildlife Services had
    studying fish-eating birds in an effort to control their impact
    on the aquaculture and sports-fishing industry?
        Dr. Reed. Congressman, we know that cormorants are a
    problem in your State and in others because they can devastate
    both bait fish and farm-raised fish. We have gained some
    knowledge in developing control management plans, but it is a
    difficult problem that continues to move on us.
        Wildlife Services is committed to helping all the
    industries associated with these kinds of bird problems with
    fish.
        Mr. Dickey. I think we have done everything we know to do
    to scare them away and we have used shotguns and then we have
    these automatic sound devices. They are actually landing on
    these things now. [Laughter.]
        So, what I am saying to you that it is just unbelievable
    and the birds are getting bigger and bigger, you see, because
    they are eating the fish in our ponds.
        Mr. Dunn. We have, in Wildlife Services, a group in our
    Starkville, Mississippi, area that studies habitat
    manipulation. We also have a tremendous problem with black
    birds that are consuming rice in your part of the world and
    sunflower seeds up in the Northern Plains. The Atlantic
    migratory bird flyway area seems to be a growing problem where
    we must consider both non-lethal and lethal means of
    assistance.
        Mr. Dickey. One last question. In the budget do you have
    more or less money or the same for whatever studies you are
    making on this?
        Dr. Reed. I am assured that we have the same amount.
        Mr. Dickey. Then I have one more question. If you got
    additional funds, what could you do to help with this problem?
        Dr. Reed. This problem requires good, sound research to
    find other methods of controlling these bird populations and
    predations. The National Wildlife Research Center conducts this
    type of research and would be allocated additional funding if
    it were provided.
        Mr. Dickey. Thank you.
        Mr. Chairman, thank you for taking me out of order and Mr.
    Farr.
        Mr. Skeen. Have you tried chili on those birds? [Laughter.]
        Mr. Dickey. That is a country in South America, is it not?
        Mr. Skeen. No, it is a Southwestern dish.
        Mr. Farr.

                                argentine citrus

        Mr. Farr. Thank you, Mr. Chairman.
        I want to thank my colleague from Florida for giving us the
    best reason to buy California oranges. But I want to follow-up
    on an issue that is of interest to everybody in this
    subcommittee and it regards APHIS' issue with Argentine citrus.
    I understand that APHIS is using funds in this next fiscal year
    to consider a rule which will permit fruit that admittedly is
    carrying one or moreplant diseases to enter the U.S.?
        Dr. Reed. APHIS does not have a rule that would permit
    quarantinable diseases to come into the U.S.
        Mr. Farr. Do we allow fruits in now under the 1912 Plant
    Quarantine Act that have any kind of diseases whether
    quarantine or not?
        Dr. Reed. Nothing of quarantine significance.
        Mr. Farr. What does that mean?
        Dr. Reed. Certain conditions would be permitted that are
    quality-related or that will not pose a problem to any of our
    producers here.
        Mr. Farr. So, you do not have a policy that allows a
    diseased fruit to enter the U.S.?
        Dr. Reed. No, APHIS does not.
        Mr. Farr. And are you planning to allow diseased plants and
    vegetables to enter the U.S.?
        Dr. Reed. I am not aware that we would allow diseased
    plants and vegetables to enter the U.S. either.
        Mr. Farr. Our office has been told that there is a problem
    with what you are allowing to come into the U.S. now with the
    Argentine citrus, are you aware of that problem?
        Dr. Reed. I am aware of the request from Argentina to
    permit citrus under certain conditions to enter this country.
    There has been a pest risk analysis conducted by the U.S. on
    that commodity that would come from Argentina that has been
    made public. We recently concluded the comment period on a
    proposed rule.
        Mr. Farr. And then after that, what happens? Can the
    imports then come in?
        Dr. Reed. I am not sure if this is something we can
    discuss. Once completed, we would be glad to discuss it with
    you, Congressman. [Laughter.]
        Mr. Dunn. The Administrator's concern is, are we in ex-
    parte because we are in the process of making a rule and we
    usually do not discuss it until we have actually finished a
    rule. But we can talk about process in that very general
    manner, Congressman Farr.
        There is a desire for us to have trade. Just as we are
    asking Argentina to accept citrus from Florida, and we can
    certify to them that it is from an area free from citrus canker
    or an area free from Medfly, and they would accept our
    regionalization rule. We would accept their regionalization
    rule. If we have done a pest risk analysis and they have proven
    to our scientists that they have protocols in place, that would
    assure us that diseased fruits and vegetables would not enter,
    then we should allow entry. This procedure follows WTO rules.
        Mr. Farr. As you can tell from Mr. Boyd's questioning, this
    is an issue that States with citrus growers are very concerned
    about. One of the difficulties we have is how to keep American
    growers viable and that is in the best interest of the national
    economy.
        We are very concerned about the possibility of adopting
    rules that would allow citrus into the U.S. with more than just
    the citrus, but also the problems that have been spoken about.

                                 animal welfare

        Let me shift to another area and we can talk a little more
    about citrus at a later date. In the animal care and animal
    welfare area, Congress adopted in 1966, the Animal Welfare Act.
    I understand that under this law you have to inspect
    approximately 10,000 regulated facilities, is that correct?
        Mr. Dunn. That is correct.
        Mr. Farr. And that your budget for these inspections has
    been level funded for several years?
        Mr. Dunn. It has been approximately $9 million since 1991.
        Mr. Farr. How many field inspectors do you have to cover
    the 10,000 facilities?
        Dr. Reed. About 70.
        Mr. Farr. How often are the required facilities inspected?
        Dr. Reed. We average about one inspection per facility per
    year. Some facilities get inspected more than others based on a
    risk assessment and their potential problems. Others who have a
    good track record do not get inspected as often.
        Mr. Farr. I have a letter here from the American Veterinary
    Medical Association and it is signed by 480 entities. It is a
    broad coalition of veterinary, research and animal welfare
    groups. They are urging that the budget be increased to $13
    million to adequately address this problem. 10,000 required
    facilities with 70 inspectors is just not enough.
        Also there are some concerns about problems with airline
    shipment of animals. Are the field inspectors not the same
    inspectors that have to do the airline shipments?
        Dr. Reed. Yes, our inspectors who review facilities also
    inspect animals being shipped on airlines.
        Mr. Farr. The problem with a lack of inspectors is
    increasing because we are carrying more animals on airlines.
    And would you get back to us on exactly what funding you need
    to do an adequate job on this? I am going to be seeking an
    increase in the budget for this amount to improve the
    efficiency and credibility of your inspections.

                                horse protection

        Lastly, I would like to ask you about an area surrounding
    the controversy on the new strategic plan for the enforcement
    of the Horse Protection Act. Can you tell me how many horse
    shows APHIS inspectors attend?
        Dr. Reed. Yes, our inspectors attend about 40 to 50 shows a
    year.
        Mr. Farr. And what is that as a representative of the
    whole, about 10 percent of the problem, less than 10 percent?
        Dr. Reed. Yes, it is probably less than 10 percent.
        Mr. Farr. How many inspectors are involved in this program?
        Dr. Reed. About 35.
        Mr. Farr. And what do you do when inspectors are not there?
        Dr. Reed. There is usually a horse industry official that
    is also responsible for inspecting horses for soring. Our
    veterinary inspectors monitor those officials to make sure they
    properly identify a sore horse.
        Mr. Farr. So you are sort of turning it over, you are
    ceding authority to the industry?
        To inspect itself?
        Dr. Reed. I guess I would not characterize it quite that
    way. I would say that the industry has taken responsibility to
    make sure they do not permit sore horses in shows. They enforce
    the soring and scarring rules under the Horse Protection Act.
    There has not always been consistent interpretation of how
    these standards apply in all cases. We have a horse inspection
    operating plan out there and we do try to work with these
    industry officials to make sure that offenders are put out of
    the horse show business.
        Mr. Farr. Well, Congress has authorized the expenditure of
    $500,000 in this arena, and I do not know, what is your
    appropriation now?
        Dr. Reed. About $361,000.
        Mr. Farr. Do you think that you need more?
        Dr. Reed. We know there are many horse shows and we know
    expectations go beyond our current resource levels. We have
    people dedicated to attending horse shows to make sure rules
    are enforced and sore horses are not shown. The way to make
    progress is to bring some of these bad offenders up on legal
    charges and get them out of the horse show business.
        Mr. Farr. Have we been doing that?
        Dr. Reed. Yes, we have.
        Mr. Farr. And you have been monitoring the industry
    inspectors?
        The designated qualified person program?
        Dr. Reed. Yes, We monitor them, we make sure that we are
    consistent. Dr. DeHaven and his staff have gone to Tennessee
    and surrounding areas numerous times throughout the last year.
        There is agreement that, when a horse is sore, everyone is
    in agreement. There have been some initial disputes over the
    amount of scarring needed to disqualify a horse. We are working
    through issues such as these. Some of the discussions appear to
    seem subjective depending on individuals familiarity with the
    horse show industry.
        The objective is making sure that sore horses are not shown
    or sold. The trainers, owners, or others responsible for using
    unlawful methods such as hot mustard or pressure-shoeing to
    sore horses, should be forced out of the horse show business.
        Mr. Farr. If more money was appropriated, how would you use
    it?
        Dr. Reed. We would be able to attend more horse shows by
    having more inspectors able to examine show horses.
        Mr. Farr. Okay. Thank you very much.
        No further questions, Mr. Chairman.
        Mr. Skeen. Mrs. Emerson.

                            contract poultry growers

        Mrs. Emerson. Thanks, Mr. Chairman
        Mr. Baker, tell me what the status is of GIPSA's rule on
    contract poultry growers and the contract poultry industry,
    please?
        Mr. Baker. The proposed rule on feed weighing in the
    contract?
        Mrs. Emerson. Yes. I want to know what the status is and
    also perhaps what you learned from the comments that you all
    received under the proposed rule-making
        Mr. Baker. We proposed rule-making on feed weighing to
    ensure integrity in the feed weighing system where feed becomes
    part of the contract settlement.
        That has cleared the Department and it has been moved to
    the OMB. As soon as they get it back to us we will initiate the
    rule-making but it is in OMB at this time.
        Mrs. Emerson. And I am kind of curious--
        Mr. Baker. That went this week.
        Mrs. Emerson. This week
        Mr. Baker. Yes, this week.
        Mrs. Emerson. All right.
        In the original announcement, the advanced notice of
    proposed rule-making, one of the things that was included and
    one of the things that my contract poultry growers are real
    concerned about has to do with the procedures related to the
    weighing of the live birds delivered to the processors.
        And, so, that was included in this original announcement?
        Mr. Baker. There were three original ones that were
    included.
        Mrs. Emerson. Right. Can you just tell me why you decided
    not to address that particular issue in the proposed rule?
        Mr. Baker. It would be addressed in a separate proposed
    rule if we felt it was necessary. We are doing an investigation
    in the industry today to determine if it is necessary that we
    move forward on that one.
        Mrs. Emerson. Do you have any idea when that investigation
    might be concluded
        Mr. Baker. I am told that that investigation has just
    recently been concluded. We are examining the data on the
    weighing issue.
        Mrs. Emerson. And how soon might some information be
    available to us?
        Mr. Baker. It should be forthcoming within 60 days.
        Mrs. Emerson. Within 60 days
        Mr. Baker. Yes.
        Mrs. Emerson. Okay. I would appreciate receiving whatever
    report you all put out as soon as possible on that because my
    growers are real concerned.

                             poultry concentration

        Can you talk to me a little bit more about your personal
    concern about the level of concentration in the
    poultryindustry? Just, for example, in my district we only have one
    processor offering contracts right now and this is a huge concern to my
    folks, many of whom left grain production, for example, and row
    cropping for chickens, because they thought that they would make a
    little more money I suppose. But, needless to say, it is not turning
    out that way and they have made huge investments and are in big trouble
    right now.
        Mr. Baker. The top four firms control about 50 percent of
    the production. The top 8 or 10 firms probably account for
    about 95 percent of the production. So, it has become highly
    concentrated and there is a problem when there is only one firm
    that a grower has a choice to produce for. There are no other
    options.
        We look at poultry concentration constantly because it is
    happening throughout the Southeast. For the past four years we
    have asked for this additional money to conduct poultry
    investigations. We are asking again and I would appreciate
    strong consideration for providing the money for the poultry
    investigation area.
        Mrs. Emerson. Well, you have a little passion in your voice
    so I take it that means you are concerned about this.
        Mr. Baker. I am most concerned about it.
        Mrs. Emerson. Okay, thank you.
        I wanted you to tell me you were most concerned about it
    so, therefore----
        Mr. Baker. If you had said that earlier I would have got on
    it right quick. [Laughter.]
        Instead of beating around the bush like I have done.
        Mrs. Emerson. Yes.
        Mr. Baker. But I am most concerned with it. People with
    poultry growing contracts are selling a service. People's
    livelihoods depend on that service. You are not selling a
    product. Our people are gearing up--we are hiring and teaching
    our personnel to work with people that are selling a service
    instead of a product. But, we will need the money to get
    involved. We cannot get there with the present system.
        Mrs. Emerson. So, how much more do you need?
        Mr. Baker. $750,000 to start.
        Mrs. Emerson. And what will that do? What will you do with
    that $750,000?
        Mr. Baker. I will hire people with the expertise to get
    right in the middle of the investigations of the poultry
    companies. Those companies are large and complex and the
    investigations will take an extensive period of time. But first
    we need people that have the expertise to carry out those
    investigations.
        Mrs. Emerson. Thank you very much.
        Mr. Baker. And we have already reorganized our offices in
    Atlanta. We need to gear up that office. That money will be
    focused strictly in the poultry.
        Mrs. Emerson. I appreciate that.
        Thank you.
        And if you would like I would be glad to meet with you
    further on this because this is really a big concern to me. We
    will holler back at you.

                           mandatory price reporting

        Dr. Figueroa, I share your grave concern and that of other
    members of the committee about the high level of concentration
    in the livestock industry. And I note that you highlighted in
    your testimony the request for additional money to expand price
    reporting programs. According to your proposal, how would this
    pricing information be made available to producers and how
    timely would it be made available?
        Dr. Figueroa. Congresswoman, as you may be aware, we report
    market news on a daily basis on a number of commodities whether
    they are livestock products or fruit and vegetable products.
    The additional money that we are requesting will expand not
    only the number of reports but the size and types of reports on
    the meat products, whether they are boxed beef products along
    different parts of the market channel.
        As you also are aware, these are strictly a voluntary
    basis. We obtain this information voluntarily from the various
    entities in the market place. So, we would increase our
    outreach efforts to make sure that they would volunteer more of
    this information.
        In addition, we are interested in developing perhaps new
    methodologies on how to interpret some of the price data so
    that we can make it more user-friendly, if you will, to the
    producer of the product and he or she can use it expeditiously
    that particular day or the next day.
        Mrs. Emerson. So, it would be made available say on the
    Internet on a website or something like that?
        Dr. Figueroa. Yes, Ma'am.
        Mrs. Emerson. Okay.
        To follow-up with that, what are your feelings about making
    price reporting mandatory?
        Dr. Figueroa. The issue of mandatory price reporting is an
    issue that the Administration is supporting. I believe that the
    concentration issue, as Secretary Dunn indicated a little
    earlier, he was the chair of the Pork Crisis Task Force. I also
    served on that task force and I became directly aware of the
    crisis that was faced by all the farmers, the hog farmers in
    this country. It is a serious issue. And I think mandatory
    price reporting will address part of that problem.
        Mrs. Emerson. Well, I appreciate that having been an
    original co-sponsor of legislation to make that happen. Because
    our livestock producers are hurting big time and I think that
    is the only way to go.
        So, I appreciate that. I came in late, Mr. Dunn, so I am
    sorry I did not hear all of your testimony. Now, I have got one
    other question that I have to ask on behalf of many of my
    constituents and this goes directly to Dr. Reed.

                             invasive alien species

        This has to do with alien species. The first time I heard
    this, I really thought my constituents were joking when they
    asked me about the Executive Order. They said they were
    concerned about the fact that the President was going to sign
    an Executive Order with regard to alien species. There are a
    couple of questions I want to ask, one of which is an
    explanation of what this national management plan is that you
    all have.
        First of all, can you tell me why you all did not pursue
    this legislatively rather than through an Executive Order? And
    then I want you to tell me more about the details of this.
        Dr. Reed. I do not have an answer for you on why it was
    pursued one way versus the other. The Executive Order was
    signed on February 3, 1999. We have major concerns about pests
    that are coming into this country and need to get a handle on
    them before they get worse. Not the least of which is the brown
    tree snake, for example, that is a terrible problem in Guam. We
    are also concerned about it entering Hawaii and are conducting
    research toensure we keep it out.
        Overall this is something that we are just getting into and
    are trying to get more and more of a handle on to make sure
    that we do not have another Kudzu or another similar invasive
    species.
        Mrs. Emerson. I understand that but this national
    management plan that you all are going to be a part of--because
    I guess there are 20 Federal agencies or something involved--is
    that something that will be created that you all are in the
    design stage of?
        Dr. Reed. Yes.
        Mr. Dunn. And Congresswoman, in addition to not granting
    new authority, the Executive Order was used because there are
    so many Federal agencies that would be involved in the effort.
    It ranges from the Department of Interior, Environmental
    Protection Agency as well as USDA, and the Forest Service
    within USDA as well as APHIS. So, we see it as a major problem.
        Over the centuries there have been many alien species that
    have been introduced in the United States and it is time to
    shut the door on any new incursions.
        Mrs. Emerson. And you can understand that people are afraid
    that the Federal Government is going to come in and take over
    their private property which is understandable from their point
    of view, but I guess my big problem is that suddenly you all
    are asking for money and for us to give you all money for
    something that we have not authorized, and I just have a
    philosophical problem with that.
        Dr. Reed. If I could add, APHIS' mission is to keep foreign
    pests and diseases out, and we do it all the time for animal
    and a variety of plant pests and diseases now. We consider
    plant and animal pest and disease exclusion as one of our prime
    directives already and this continues with new pests and
    disease incursions.
        Whenever we eradicate a disease from this country, whether
    it is avian influenza or hog cholera, it then becomes an alien
    species that could enter again and devastate our producers. We
    do not want that to happen.
        Mrs. Emerson. Sure. No, and I do not have a problem with
    that. It is just the process by which this all came up.
        Thanks very much.
        Mr. Farr. Will the gentlelady yield?
        Mrs. Emerson. Yes, sir.
        Mr. Farr. Last year's research bill allowed for research
    dollars to be used for eradication of invasive species. But the
    protocol to do that requires consent by the landowner and a
    program has to be locally based. There is a concern that this
    is some kind of top-down process. It is actually just the
    opposite. A lot of communities have invasive species, not just
    affecting crops and animals but invasive species that are
    affecting the forests and the wild-lands. Partnerships now are
    being developed between local, State and the Federal Government
    to form a plan of attack. But that always requires consent of
    the landowner, whether it be a local government, a State
    government, the Federal Government or private ownership.
        Mrs. Emerson. I think your friends in California probably
    do a little bit better job doing that than in Missouri as far
    as getting the locals involved because somehow we usually find
    out about it afterwards.
        But, thank you.
        Mr. Skeen. Mr. Hinchey.
        Mr. Hinchey. Thank you, Mr. Chairman.
        Thank you, gentlemen, it has been very interesting
    listening to the testimony and your answers to these questions.
        The issue of these invasive or exotic pests seems to be one
    that is getting more and more severe as time goes on. Is that
    true in your experience?
        Dr. Reed. The jeopardy for agriculture producers is
    certainly increasing.
        Mr. Hinchey. The jeopardy is increasing?
        Dr. Reed. The jeopardy to our own producers is having a
    pest or disease that would not only close an export market, but
    would devastate an individual's production capability. They
    would not be able to grow plants or animals for some period,
    severely impacting their ability to produce revenue. These are
    some of the things we worry about. Whether it is citrus canker,
    hog cholera, or Medfly, we are interested in making sure that
    these pests and diseases are excluded and not present here.
        Production areas free of pests and diseases help us in a
    variety of ways. It helps us move agricultural products within
    the States, it helps us move products out of the country, and
    it is advantageous for us to tell other countries about how we
    control and regulate pest and disease situations. They then
    adopt a system that is similar to ours.
        Mr. Hinchey. In other words, having a program is effective
    in marketing produce?
        Dr. Reed. Absolutely.
        Mr. Hinchey. Because you can point to that program and say,
    because we have this program you are less likely to have these
    invasive pests coming into your jurisdiction?
        Dr. Reed. Yes, that can be the case, but also, we can
    certify when products leave the country that they are free of a
    pest or disease. It makes it easier to move agricultural
    products out of the country.

                            asian long-horned beetle

        Mr. Hinchey. How serious a problem is the Asian long-horn
    beetle?
        Dr. Reed. It is really a serious problem. We are glad to
    have found it but we wish it was found sooner because of the
    tree devastation. We are conducting extensive surveys to
    determine the scope and area of problem.
        Cutting down nice-sized trees is heartbreaking for
    residents, as well as for others involved. We must, however,
    grind those trees to ensure that all larva is destroyed.
        We want to eliminate the pest as soon as possible so that
    we do not have to spend more money cutting trees and then
    replacing them.
        Mr. Hinchey. Where does it come from?
        What is its origin?
        Dr. Reed. We know it came from Asia. We have found the
    larva in packing materials that came from China.

                                 import/export

        Mr. Hinchey. Who has responsibility for examination and
    certifying the standard of feed that is fed to cattle or other
    meat producers?
        Dr. Reed. Generally, the Food and Drug Administration.
        Mr. Hinchey. Are you involved in that at all?
        Dr. Reed. We get involved if we suspect a tampering
    incident, along with FDA or if we suspect terrorist activity or
    an attempt to spread foreign matter or material through feed.
        Mr. Hinchey. Oh, okay, but not on a routine basis?
        Dr. Reed. No, not on a routine basis.
        Mr. Hinchey. Are you familiar with Exotic Newcastle
    disease?
        Dr. Reed. I am, indeed.
        Mr. Hinchey. And is it true that France is free of it?
        Dr. Reed. Yes, the French are free of Exotic Newcastle
    disease.
        Mr. Hinchey. Well, you recently certified foie gras from
    France for export to the United States and the reason that it
    had not been certified previously, as I understand it, is that
    there was some question about the existence of Exotic Newcastle
    disease in France. And, so, I am assuming that since you have
    recently allowed French foie gras to come into the country,
    that Exotic Newcastle disease is no longer a problem.
        Dr. Reed. Yes, that would be the criteria. Whether it is
    French foie gras or some other product, we do not want
    Newcastle in the U.S. We had a small outbreak in California not
    too long ago and we quickly eliminated it.
        Mr. Hinchey. Right. I understand that. I understand you do
    not want it and you are not going to bring it in here. But you
    recently certified French foie gras and I am just wondering
    what the basis for that decision was?
        Dr. Reed. We will receive a petition to permit the entry of
    an animal product into the U.S. Before APHIS will allow that
    product to enter, certain conditions must be met. One of the
    conditions is that the exporting country must be free of many
    diseases not in the U.S. If we are permitting foie gras, since
    it is basically an uncooked product, I can assure you that we
    are not allowing entry from France if they have Newcastle
    disease. We know there is some Newcastle over in Europe,
    though.
        Mr. Hinchey. Right.
        Can you just, not now but at some point, let me know how
    this decision came about or what the status of it is? I would
    appreciate it.
        [The information follows:]

        On November 14, 1997 we proposed a rule to amend
    regulations to declare a number of countries free of exotic
    Newcastle include France. We proposed these actions in response
    to a request submitted in July 1997 by the European
    Commission's Directorate General for Agriculture. We solicited
    comments concerning our proposed rule for 60 days ending
    January 13, 1998. We received one comment by that date. The
    comment was from a veterinary association and fully supported
    the proposed rule. Therefore, based on the rationale set forth
    in the proposed rule, we adopted the provisions of the proposal
    as a final rule without change effective December 23, 1998.

        Mr. Hinchey. In the context of a decision to allow a
    restricted product into the country, you do not take into
    consideration the effect of that decision on domestic markets.
    Is that within your jurisdiction?
        Dr. Reed. We look at it from a disease prevention
    standpoint. If product entry would cause undue risk for
    American producers, that would be reason enough for us to deny
    issuing an entry permit.
        Mr. Hinchey. Yes, okay, I understand that. But you would
    not take into consideration the fact that you are now lifting a
    ban. Say, for example, as a result of the eradication of this
    Exotic Newcastle disease, you are lifting that ban on Frech
    foie gras, therefore, allowing this product to come into our
    country. In such a case, you would not consider the effect of
    the decision on existing markets here? That is not something
    that you would examine, correct?
        Dr. Reed. APHIS would look at the economic aspect of those
    markets, but bases its decision to modify import restrictions
    on assessment of risk of exotic disease entry.
        Mr. Hinchey. Do you consult with the Commerce Department or
    anyone who would be interested in the impact on domestic
    markets when you make a decision like that or is that something
    that is done in isolation?
        Dr. Reed. Well, we usually solve the technical disease
    issues first and then the trade issues get resolved by Foreign
    Agricultural Service and USTR.
        Mr. Hinchey. But you do not consult with them with regard
    to your lifting a particular ban, say, for example?
        Dr. Reed. We do talk to the Commerce Department about
    certain policies that we put in place.
        Mr. Hinchey. I know that, but on a routine basis is it your
    policy to consult with the Commerce Department before you lift
    a ban so that you are more aware of the impact that lifting the
    ban will have on the domestic market for that particular
    product?
        Dr. Reed. In general we do consult with them.
        Mr. Hinchey. In general you do but you do not have that as
    a policy?
        Dr. Reed. We do not have a written policy to consult with
    them for agricultural trade. We do consult with USTR and other
    parts of the USDA like the Foreign Agricultural Service.
        Mr. Hinchey. Okay.
        So, when you give me that information on foie gras and
    Exotic Newcastle disease, would you tell me to what extent
    Commerce was consulted before that ban was lifted?
        Dr. Reed. Yes. We will get it for you.
        [The information follows:]

        We rarely talk to the Commerce Department about
    agricultural trade promotion. On occasion, we may work with
    them on things like the solid wood packaging rule which affects
    trade in industrial products from China. We did not consult
    with Commerce before we lifted the exotic Newcastle disease
    restriction on France.

        Mr. Hinchey. Thank you.

                                     rabies

        The situation with rabies is one that is, I think, either
    stable or becoming more serious. It depends on what part of the
    country you are looking at. But I think in the Southeast,
    generally, and running up the Atlantic Seaboard the problem of
    rabies is a problem that is increasing.
        Dr. Reed. Yes, it is becoming more serious.
        Mr. Hinchey. I understand that your budget calls for a
    decrease in oral vaccination for rabies, is that true?
        Dr. Reed. Yes, there is a slight reduction for rabies work
    in Wildlife Services operations.
        Mr. Hinchey. How do we justify that?
        Dr. Reed. We work with States to cost-share programs such
    as rabies eradication. We agree that the Eastern Seaboard is
    being plagued by increased incidents of rabies. It is moving
    Westward as well. It is becoming a very alarming problem.
        Mr. Hinchey. Well, I am just wondering since that is the
    case, based upon your testimony and my knowledge, why we would
    be reducing the amount of money that will be expended in the
    next fiscal year to control this problem when it is a problem
    that is increasing, and it is, obviously, a serious problem. It
    is one that we want to keep under control.
        I think that the budget cuts something like $1 million or
    something of that nature, $1.-something.
        Mr. Walsh. $1.8 million.
        Mr. Hinchey. Thanks.
        Dr. Reed. Congressman, it is a matter of priorities and we
    have got compelling priorities in predator control and aerial
    safety demands to protect our own people. We will continue to
    provide technical assistance in the rabies effort.
        Mr. Hinchey. Well, this is something that I suppose this
    committee might want to take a look at because our experience
    is that this is a growing problem and one that needs to be
    addressed thoroughly and completely.
        Thanks very much.
        Mr. Skeen. Mr. Kingston?
        Mr. Kingston. Thank you, Mr. Chairman.

                                  wild horses

        Dr. Reed, I noticed that on your APHIS study of horses, do
    you do anything with wild horses?
        Dr. Reed. We recently signed an agreement with the
    Department of Interior to give them veterinary advice on wild
    horses.
        Mr. Kingston. Sometimes the Department of Interior and the
    National Park Service gets undue pressure from the
    environmental community about wild horses, particularly ones
    that they want to get rid of in a National Park that as not
    being indigenous to the area or something like that.
        And some of the studies can actually be tainted. Are you in
    a position to, if we request you to, to go in and look at horse
    populations, horse health and so forth in a National Park?
        Dr. Reed. Our new agreement with Interior allows us to
    examine horse health, populations, and problems associated with
    diseases. The West is becoming saturated with wild horses
    causing their movement east.
        Mr. Kingston. And would you feel that you would be a little
    more scientifically neutral?
        Dr. Reed. I feel I can be neutral. [Laughter]
        Mr. Kingston. Because so often it is very frustrating that
    horse politics seems to be, you know, almost void of science.

                                     frogs

        All right. The next question: You are aware or you have
    heard about this worldwide amphibian disappearance problem. Are
    you aware of that?
        Dr. Reed. Of the frog numbers decreasing?
        Mr. Kingston. Right.
        Dr. Reed. Yes, I am aware of the situation.
        Mr. Kingston. But I do not think it is just frogs, I think
    it is all amphibians.
        Dr. Reed. Yes, but frogs are a sentinel.
        Mr. Kingston. Does that fit in at all to your wildlife? I
    know you are studying gray foxes, you are studying raccoons,
    you are studying coyotes, a lot of it has to do because they
    are predators. But in the food chain it is possible that if
    amphibians are disappearing it could be because of pesticides
    or fertilizers, we have no idea of knowing, but does that fit
    into APHIS' game plan since there could be an agricultural link
    and the reason why I am interested in that.
        I think you guys, if there is something between fertilizer
    and pesticides and amphibian disappearance, that you need to be
    involved in it now rather than have groups that are inherently
    anti-agriculture involved in it.
        Dr. Reed. We have wildlife biologists that look at the
    bigger picture but only to a minor degree right now.
        Mr. Kingston. What would be your involvement in the minor
    degree?
        Dr. Reed. When we study wildlife, whether it is endangered
    species or predator controls, if one of their food sources
    would be amphibians, for example, that would play into a method
    of how we might control that problem.
        Mr. Kingston. Would you follow-up with our office on that
    and let me know?
        Dr. Reed. Sure.

                               poultry processing

        Mr. Kingston. Because it is something that I am interested
    in and I am ultimately very concerned about, you know, what it
    means in the world picture but also how it could impact
    agriculture and so forth.
        And, again, feel like you might be a little more
    scientifically neutral on it.
        All right. Now, poultry process and meat and poultry
    inspections. As you know from the past we have a number of
    poultry processors in Georgia and at any given time I could
    just park my car in their parking lots, all of them, and walk
    in and see the CEO or the Vice President and I can listen to
    two hours about how they are scared to death of the inspectors
    and what they can and cannot do to them and close them down and
    so forth.
        And I do not see it getting better from the times that you
    and I have dealt with this in the past. What is your view on
    it?
        Dr. Reed. I am no longer associated with the Food Safety
    and Inspection Service. FSIS is feeling a lot of pressure from
    both producers and processors. I am sure there is nervousness
    because they have instituted all these new approaches and there
    is a great deal of uncertainly about how they will turn out.
        I really would not want to comment further in my current
    position.
        Mr. Kingston. Anybody want to say anything?
        Mr. Dunn. You should probably save that for Dr. Wotecki
    when she is here.
        Mr. Kingston. Okay.
        I will. Let me ask you one other thing, though, Dr. Reed.
    If they want to complain--their big gripe is if they complain
    then vengeance will--they will pay the price down the road. If
    you have any secret--well, you do not want to share it with
    this group, I understand--but if there is any way they can
    complain without their fingerprints being on it, let me know.
        Dr. Reed. We will let you know.
        Mr. Kingston. Okay.
        Now, one other question. Having just talked to you about
    frogs, screwworms, gypsy moths, Medflies, fruit flies, long-
    horned beetles and now Jack Russells trained to find brown tree
    snakes. Whoever is interested in these items, I hope that they
    are proactive because as one committee member and I can
    probably speak for all, we are sick and tired of this committee
    taking hits in Reader's Digest and in all these little reports
    where people apparently can get by without worrying about a
    good, safe food supply, who laugh and ridicule all these
    studies.
        And I hope that you tell the various networks that you work
    with, as I am doing it right now--if there are any little ears
    in the audience--they had better get off their rear ends and
    get proactive in explaining to the public why we need to be
    doing these things.
        Because frankly I think maybe it is time for us to explore
    skipping funding some of these things. You know, you have had a
    lot of success in the Medfly. Maybe we should just stop funding
    it and see what the private sector does in a year and see what
    happens.
        Or the fruit fly. You know, frankly, my folks are not real
    worried about the brown tree snake but they are going to laugh
    when they find out that you are training, with our tax dollars,
    14 Jack Russells to identify these snakes. What if they confuse
    it with a king snake, you know? That is going to be a great
    article.
        And I do not know, Mr. Chairman, I think maybe we should
    talk about skipping funding the gypsy moth every now and then
    and just see what the private sector does, see if they pick up
    the slack and if they do, good. Or boll weevil eradication
    which is very important to Georgia. But I know also that the
    State legislature is doing a lot, such as claiming credit for
    all the eradication.
        So, yes, I just think that, you know, here in the
    agricultural family, Mr. Chairman, it might be time that we
    consider stopping some of this funding for a while and just see
    what happens.
        Thank you.
        Mr. Hinchey. I see a lot of brown tree snakes in our
    future. [Laughter.]
        Mr. Skeen. Mr. Walsh?
        Mr. Walsh. I think we ought to begin with peanut pest
    research. [Laughter.]
        Mr. Kingston. Throw it on the table.
        Mr. Walsh. That was facetious. I would not do anything to
    harm peanuts.
        Thank you, Mr. Chairman.

                                     Rabies

        First of all, let me begin by associating myself with the
    remarks from my colleague from New York, Mr. Hinchey, regarding
    rabies. As I understand it, the President's budget would
    eliminate a little over $1.8 million in wildlife services under
    APHIS and the most severe impact would fall upon rabies.
        We have had to add money back each year the last two years
    for rabies eradication. During the summer almost every week
    there are reports on local television regarding rabies and
    rabies warnings and so forth. So, it is a real concern and I
    just wanted to register that.

                               Pesticide Residue

        A lot of my farmers believe that later this year EPA will
    move to cancel effective pesticides which the farmers consider
    safe, which EPA apparently does not.
        They think that the EPA will exaggerate their risks to
    justify canceling these pesticides. And the loss of some of
    these pesticides would raise the cost of production to many
    farmers and make worse the current squeeze on farm income. Have
    you discussed lately with EPA officials the need for science-
    based decision making for the Food Quality Protection Act, Dr.
    Dunn?
        Mr. Dunn. What we do is provide information on pesticide
    residue, through 10 different states. And what we try to
    provide is unbiased information for employees at Ag Marketing
    Service glean that information and they make it public. It is
    information that EPA uses when they go to reauthorize a
    pesticide. It is what the chemical companies also use when they
    justify the need for that pesticide, that there is not an
    excess amount of it.
        What we try to do is remain impartial in that so that there
    is a place where people can go and get genuine scientific
    information.
        Mr. Walsh. Can you assure us that USDA takes its role
    serious enough to challenge EPA if they disagree with their
    determinations on certain pesticides?
        Mr. Dunn. Again, the determination on pesticide is an EPA
    determination. What we do is simply supply them the
    information. If they have concerns about the validity of our
    information, we will discuss that with them.
        Mr. Walsh. We have pretty much eliminated all chlorinated
    hydrocarbon pesticides, right?
        Mr. Dunn. Yes.
        Mr. Walsh. And it looks like organophosphates are soon to
    follow?
        Dr. Reed. There are still a fair amount of organophosphates
    that are used.
        Mr. Walsh. Well, obviously, any time you mention pesticides
    people cringe. They get concerned about them. But the fact is
    that there are major economic impacts to farmers, especially
    with special use pesticides that cannot be replaced. I know in
    upstate New York along the lake plain there is a lot of organic
    soils where they grow vegetables.
        There are certain pesticides that work in organic soil
    situations. In some cases, there is only one pesticide
    available to deal with a certain pest. And if you eliminate
    that pesticide, you eliminate that farmer's livelihood, because
    they may be growing onions at that time of year and the only
    way to treat a certain pest is with this chemical.
        And I remember it happened several years ago but it was a
    New York State DEC decision and we went to them and worked with
    them. We said, there is huge economic impacts on this, can we
    work through this? Because it was not a real strong
    recommendation that they made. They said, well, this has got to
    go because we believe such and such.
        It would seem to me that, obviously, the public and the
    public health have to be held in the highest regard. There is
    no question about that. But a lot of these pesticides have been
    licensed and used for many, many years in a safe and effective
    way. And I would just urge you in your consultatory role with
    EPA to protect that interest of the farmer, of the producer and
    ultimately the consumer. I do not think they are in opposition
    to each other but a balance has to be struck. And if you
    eliminate a whole family of pesticides, you better have
    something to replace them.
        Could you explain how the pesticide data program works?

                             Pesticide Data Program

        Mr. Figueroa. Gladly, Mr. Congressman. We have
    approximately 10 States in the program that we have entered
    into cooperative agreements for the State labs to do the
    testing of the products that we develop a protocol for. Those
    10 States represent a scientifically-defensible cross-section
    of produce.
        Produce is collected at either wholesale distribution
    centers or supermarket warehouse distribution centers. Random
    samples are selected. We test for pesticides that the EPA, FDA,
    and we arrive at; a set of pesticides that are in need of being
    tested for. The data is submitted to our central offices here
    in Washington and compiled and we issue an annual report.
        Mr. Walsh. What is the objective?
        Mr. Figueroa. The objective of the PDP program is to have a
    scientific, statistically-defensible sample of what is actually
    on this basket of produce--in addition it includes milk and
    grains and some other products--over time. So that anyone that
    is interested in making a determination of what is actually in
    the marketplace, we have that data available for them to make
    that determination.
        Mr. Walsh. How many States participate?
        Mr. Figueroa. There are currently 10 States in the program.
        Mr. Walsh. What do we need to do to get everyone involved?
        Mr. Figueroa. I could not give you a dollar figure on that,
    Congressman. I am willing to----
        Mr. Walsh. Is it a question of funding?
        Mr. Figueroa. The 10 States that are currently in the
    program are representative of the national basket, if you will.
    There is enough product tested in enough diverse areas that we
    feel that it is a representative sample of what actually is
    transpiring across the country.
        Mr. Walsh. And the agricultural practices are equally
    accepted in all those areas? In other words, what apple growers
    use in Washington State is what apple growers use in New York
    State?
        Mr. Figueroa. We are testing when the product is already in
    the marketplace. So that we are actually trying to get a sample
    of what actually the consumer is going to consume. In fact,
    when we do the testing of apples, for example, the apples are
    washed because we are assuming that most consumers will wash
    their apples. Then we do the grinding and the testing for the
    pesticides.
        Mr. Walsh. What role does this data play in EPA's pesticide
    registration program?
        Mr. Figueroa. The role that it plays is that they will have
    direct data on exposure. They can use the pesticide data and
    infer that an average consumer consumes X number of pounds of
    apples. The data program provides how much pesticides are
    available in that apple or on that apple, and they can then
    develop the kind of exposure and risk assessment with regards
    to the various commodities and pesticides.
        Mr. Walsh. That was my next question. Is this data then put
    to use in developing risk assessment?
        Mr. Figueroa. Yes, it is. I might add, Congressman, that we
    do random samples so that we capture both domestic product as
    well as imported product.
        Mr. Walsh. And you can identify both?
        Mr. Figueroa. Yes, we can.
        Mr. Walsh. As domestic or foreign?
        Mr. Figueroa. Yes, sir.

                 farm animal identification and records program

        Mr. Walsh. My last questions are for APHIS. Over the last
    several years I have worked fairly closely with dairy and
    livestock groups to provide funding for a farm animal
    identification and records program, FAIR they call it. It is a
    plan that is designed to lead to the creation of a unified
    system of animal identification to serve the needs of animal
    health and disease control, food safety, herd management, breed
    production, genetic advancement.
        How much progress is being made toward the creation of a
    national livestock identification system, and when do you
    envision such a system being fully operational?
        Dr. Reed. We have a report--you may have the same report--
    on the need to have a national system. A method of national
    identification in the past has been brucellosis ear tags. With
    less need for brucellosis vaccinations in many States, this is
    no longer a viable identification.
        All of the people involved in the livestock industry
    support the need for livestock identification to isolate a pest
    or disease problem, trace it back, and eliminate it rather than
    using a less effective and efficient shotgun approach. We can
    obtain animal health information based on a sound national ID
    system.
        We are getting closer, but we are not there yet. We are
    exploring several ideas from livestock producers on the best
    way to establish permanent identification.
        Mr. Walsh. So there are sort of competing proposals on how
    to approach this?
        Dr. Reed. There are a variety of ideas on the table.
    Everybody agrees that there is a compelling need for animal
    identification, especially if we have a pest or disease
    outbreak. We can then respond positively to questions from
    other countries about a disease outbreak and know it is limited
    to a certain area.
        Mr. Walsh. Thank you. Thank you all.
        Thank you, Mr. Chairman.
        Mr. Skeen. Thank you.
        Ms. Kaptur, we are going to go--this is only the start of
    the second round. Let's keep it to about two questions.
        Ms. Kaptur. Mr. Chairman, I was going to ask our guests if
    they wanted to stand up just for a two-minute break.
        Mr. Skeen. I am afraid they might fall over, they have been
    sitting there so long. We appreciate your endurance.
        Ms. Kaptur. Are you doing all right out there?
        Mr. Skeen. Ms. Kaptur.

                                strategic goals

        Ms. Kaptur. Thank you. Under Secretary Dunn, I just wanted
    to point out to you something I mentioned to the
    representatives from Agricultural Research Service yesterday.
    That is as I look at your strategic goals for marketing and
    regulatory programs, what continues to surprise me in many of
    the agency divisions' descriptions of their strategic goals
    there are many priorities, consumers, workforces, customers.
    But the word that is always missing is farmers.
        You use--the term in here is producer, which is an
    interesting word. But I hope that does not--sometimes words
    really do tell us where people's minds are. So I just point
    that, to me, glaring omission out to you, in hopes that as you
    go back and talk about what it is you actually do, that farmers
    might get some attention in the most high-level goals that you
    establish as a part of USDA.
        Mr. Dunn. Congresswoman, you have a good point in that we
    sometimes fail to realize why we are here. It is for family
    farmers throughout this Nation. That is one of the primary
    reasons why we are here, why we have a Department of
    Agriculture.
        In our annual workplan, all three agencies have stressed
    this year, because Secretary Glickman has asked us to, family
    farmers. The Secretary had a commission on family farmers. In
    each agencies' annual workplan, special segments explain how
    they relate to family-size operators, and how we can assist in
    keeping them in business. We need to rededicate ourselves to
    helping family farmers every day.
        Ms. Kaptur. Do you have any explanation of why even the
    words are missing from your strategic goals?
        That is a hard question. I really put you on the spot
    there. You do not have to answer it. I made my point.

                  sanitary phytosanitary standards management

        I wanted to ask Dr. Reed, if I might. We talked a lot about
    the import of pests and bacterium into this country from other
    nations. As you look at what we are accused of globally, is the
    level of concern as great among our trading partners with what
    is exported out of here? Or would you say that the level of
    concern is greater based on what comes in here?
        Dr. Reed. I would characterize the concern it as about the
    same. People who receive our exports are very cautious, whether
    it is pork going to Japan, or wheat going to Italy. There are a
    variety of pest and disease concerns on both sides so we must
    make sure that what we certify is what we deliver and vice
    versa.
        Ms. Kaptur. Is that generally true, that what we certify
    is--what we deliver has been certified and that we do not
    create the same kind of problems elsewhere, our exports, as
    imports coming in here? I know the level of concern is the
    same, but I am saying in fact with what happens with the
    deliverables, how well do we present ourselves in the countries
    in which we sell our product?
        Dr. Reed. We do an excellent job because we know that if
    they find a pest or disease problem, they are going to close
    the export market for us.
        Ms. Kaptur. Have we exported citrus canker anywhere?
        Dr. Reed. I doubt it, because we have been containing
    spread through regulatory actions and surveying for it in
    commercial groves to prove free status before we export the
    citrus.

                                  karnal bunt

        Ms. Kaptur. What about Karnal bunt?
        Dr. Reed. We always have been worried about Karnal bunt. We
    do not want Karnal bunt to spread to free areas.Countries that
    receive our wheat are testing and examining for spores. That is why we
    look so hard here, to ensure we deliver a product that is disease free.
    If we do not, we are going to lose foreign markets for our agricultural
    products.
        Ms. Kaptur. On the Karnal bunt problem we had a couple
    years ago, was that not the first time that had been detected
    within our borders?
        Mr. Dunn. Correct.
        We had never had it before.
        Dr. Reed. Arizona was the first time it was detected in the
    U.S.
        Ms. Kaptur. It was the first. That is what I thought. On
    page 1417 of the budget that you submitted in the large budget
    book there is a line item for Karnal bunt CCC $16.273 million
    in 1998, and there is a carryover through that year, and there
    are no additional--it says, available for 1999, $2.9 million.
    Could you kind of summarize where we are on the Karnal bunt? I
    thought we had closed that down? Are we still expending funds
    to remediate that?
        Dr. Reed. We still have survey and control programs for
    Karnal bunt restricted areas in four States. We are proposing a
    new regulation that we expect to be out this coming week to
    inform producers of the remaining regulated areas.
        Ms. Kaptur. From which nation did we trace that Karnal bunt
    appearance in our country?
        Mr. Dunn. We did not.
        Dr. Reed. We do not have any specific information.
        Ms. Kaptur. Was it windborne?
        Dr. Reed. We believe it was from Mexico, but can not be
    sure.
        Mr. Skeen. New Mexico has a quarantine in the southwest
    corner. The premise is that it came out of Mexico through
    Arizona and into New Mexico.
        Ms. Kaptur. As I asked on the beetle issue, could you
    present us with the total amount that we have spent in trying
    to eradicate and remediate against the Karnal bunt? Just
    ballpark. If you could submit that for the record I would
    appreciate it. And I take it that we have not discussed this
    with the government of Mexico, have we? Maybe they are
    remediating along their northern border. Do you know that,
    Secretary Dunn?
        Mr. Dunn. We have not discussed any funding with Mexico on
    Karnal bunt. They have Karnal bunt in Mexico and have
    established quarantines similar to ours. Since 1996, we
    estimate spending about $67 million on Karnal bunt through this
    year.
        We distributed about $33 million of the $67 million
    compensate to producers for losses that they have incurred
    because of the existence of Karnal bunt. We still are incurring
    costs to maintain quarantine areas. We then are able to assure
    our trading partners that when they buy wheat from the United
    States, we can provide a phytosanitary certificate that
    indicates this wheat comes from an area free of Karnal bunt.
        Ms. Kaptur. So our sales are--it has been all right?
        Mr. Dunn. We have retained 98 percent of our sales that we
    had before our find of Karnal bunt here in the United States.
        Ms. Kaptur. I think that was due to your quick action as a
    department also. I want to compliment you on what was done
    there. That was really a terrible development.
        Mr. Dunn. It was many fine men and women in APHIS, but
    State Governments as well worked very, very closely with us on
    that.
        Ms. Kaptur. Very good. I am glad to hear that wheat sales
    are okay. I had not been given that figure before so I
    appreciate that for the record.

                        sanitary phytosanitary standards

        On page five of Dr. Reed's testimony you talk about
    American agricultural producers last year shipping over $55
    billion worth of products to overseas markets. Do you also have
    the number of--I know you are not the Economic Research
    Service, but the amount of imports now coming in here and the
    rate at which those are increasing, which affects your life
    very much?
        Dr. Reed. I can get the exact figures for you, but we still
    maintain an overall balance of around the $10 billion to $15
    billion mark of getting a product out more than we take it in.
        [The information follows:]

        In 1998, we imported about $37 billion worth of
    agricultural products so we still maintain an overall balance
    of around $17 billion. In 1996, the balance was more favorable,
    about $28 billion, but a combination of weaker exports and
    increased imports has reduced the balance today.

        Ms. Kaptur. That is true. But of course, the rate of growth
    is what is very significant in both those lines. I would just
    commend that to your attention. And there seems to be some
    aversion--I do not know why this is. In our country, we
    always--in every single Administration document that comes up
    here, we always talk about the export side of the equation. I
    am all for that.
        But it is just a glaring hole that we also do not report on
    the imports. And in the area of agriculture, this is very, very
    important. In some ways, it would support your arguments for
    more funding to do some of what you need to do. But those
    dollars are never reported. Those quantities are never
    reported.
        We follow them pretty regularly up here because of our
    interest in our national interest. But it is always interesting
    to me to look at testimony and to see what is in and what is
    not in. So I just wanted to make that observation.

                              PACKER CONCENTRATION

        I wanted to ask for further clarification, either verbally
    or for the record, of Mr. Baker on how your budget addresses
    the concerns regarding concentration that others on this
    committee also talked about today, and is anything being done
    to expand your investigatory ability in the budget submission?
        Mr. Baker. The budget asked for additional funds to address
    concentration; specifically concentration. We are sending
    forward a bill to amend the Packers and Stockyards Act to cover
    poultry under our administrative authority. We feel that we
    need to have administrative authority for poultry. It is pretty
    hard to have the responsibility and not the authority.
        So we are asking for administrative authority that would
    place poultry under the same authority that the other meats
    have, and our budget is structured around that.
        Ms. Kaptur. All right, I thank you for that.
        Secretary Dunn.
        Mr. Dunn. Congresswoman, I think we and the Nation owe this
    committee a vote of thanks for the $2.5 million that was made
    available last year as a one-time cost to restructure packers
    and stockyards, to allow us to get more people out in the
    countryside to actually do the business, to look at
    concentration issues out there. We went from having 72 percent
    of the people in the field to 80 percent of the people in the
    field. We now have three regional offices set up, one
    specializing in poultry, one specializing in swine, and one
    specializing in beef and lamb. So that we are getting the
    expertise where we need to have it.
        We do have requests for looking at competition, and
    requests for poultry. Again I reiterated what I said in my
    opening statements, the single biggest factor that could help
    us is having that money available for the electronic filing of
    information so that we can get that information from packers.
    It will not be a burden on them if we can do it electronically.
    They can tally up at the end of the day and let us have that.
    That would give us the type of information we need to be able
    to tell the world what is happening out there.
        Ms. Kaptur. You certainly have my support on that. You
    reminded me, I wanted to compliment Mr. Baker. After he
    traipsed through northwestern Ohio last year I asked his
    assistance in another area, which was to try to get up on a web
    site at USDA in the area of contract farming, helpful questions
    for farmers. I do not know who did that. Congratulations. It is
    a fine, fine, fine job.
        Farmers can really benefit by reading through that, and you
    give them other references. Where you cannot put a sample
    contract, for example on there, you refer them to Iowa and
    other places. But honestly, it was just excellent.
        Mr. Baker. There was a need for that.
        Ms. Kaptur. We thank you very much for that, and we hope we
    save a few of them out there by just access to better
    information.

                                DIRECT MARKETING

        I wanted to ask Dr. Figueroa, I have been a long supporter
    of farmers' markets, and the Secretary has been really helpful
    on that. I wanted to ask you, if you could comment, how well
    you work with the rural development part of your department,
    particularly Under Secretary Long-Thompson, to find other ways,
    economic ways for farmers to arrange their own production or
    their own marketing of product, to find outlets to market.
        I was listening to Mr. Baker when he was talking here about
    people bidding so much on animals, $7 or $5 or $3 or whatever
    it was and how the transparency was not necessarily there in
    the marketplace for the farmer. But as I recall hearings in my
    area people were saying, hey, we can produce a quality product,
    but the auction barns and the market does not request quality;
    does not respect our quality. That is what they were saying to
    us.
        Our problem is getting to the market. Our problem is how we
    organize ourselves as groups of smaller producers to reach the
    market. And when they have a very little narrow, eye of a
    needle to pass through to get to the market, it is very
    difficult for them.
        So my question really goes, to what extent is the marketing
    service looking at ways for farmers to bond together or to work
    together, whether it is through a marketing co-op or through
    the credit support for an expanding small slaughter facilities
    that might be out there to permit them to actually bring
    product? It is the same problem we have now if we are going to
    buy extra product to try to relieve the surplus that is out
    there in the low prices, who are we going to go to to buy those
    hogs or buy those cattle, and how do we reach them as the
    Government of the United States? Who is going to end up being
    the seller?
        So I am curious as to how much work you are really doing to
    try to find ways to help lead these farmers to market in non-
    traditional channels.
        Mr. Figueroa. Congresswoman Kaptur, I will make available
    to your office a copy of a direct marketing action plan, or a
    strategic plan that was developed under the leadership of Under
    Secretary Dunn and my staff in marketing and transportation.
    You will see in the plan where it includes a number of
    initiatives that we want to pursue to address not only farmers'
    markets but other channels of direct marketing. It establishes
    there a council, if you will, that includes individuals such as
    you mentioned, Jill Long-Thompson.
        So that there is more of a coordinated effort within the
    USDA to try to develop more comprehensive approaches to
    innovative solutions for direct marketing venues and
    opportunities for farmers in this country.
        Ms. Kaptur. I am very, very glad to hear that. To the
    extent you can provide any of that information for the record I
    would very much appreciate that.
        Mr. Figueroa. We will do that.
        [The information follows:]

    [Pages 541-558 -- The official Committee Record contains additional
        material here]

                                 concentration

        Ms. Kaptur. Mr. Baker, I wanted to ask you, the Baltimore
    Sun has been running a series on contract farming in our
    country and I am wondering, you had talked about the additional
    authority that you need and I am very sympathetic toward that.
    Do you think--we know in the hog area and in the poultry area
    people are heavily impacted by this. Do you see other areas
    coming on stream, even though they may not be under your
    authority, that are also going to be impacted in a like manner?
        Mr. Baker. Not really. We have the authority in other areas
    already. We do not have the authority in poultry. That is a
    limiting factor.
        Ms. Kaptur. But in fruits and vegetables, you do not see
    the same----
        Mr. Baker. I see grains and fruits and vegetables and all
    being more of a concentrated effort, grown under contract. I
    think we will see----
        Ms. Kaptur. Dairy?
        Mr. Baker. I doubt that the dairy will follow as fast as
    the grains because the grain industry is shifting to the source
    of the GMOs, and they are going to want to control that, the
    GMO. So there is going to be more contract farming in the
    grains. But it presents a problem when you are dealing with
    contracts versus open market, and a tremendous problem in
    regulating it when you have got a contract versus open market
    bidders.
        It is difficult for us, but what we are really interested
    in right now is the poultry authority because we have it in the
    livestock, cattle, pork, and sheep areas.
        Ms. Kaptur. You reminded me of something. Ohio is now the
    largest egg producer in the country because of Buckeye Foods.
    It used to be called, I think, AgriGeneral, a company out of
    Germany. What has happened in Ohio, and I am sure this is
    happening in other places, Kroger, which is one of our largest
    retail chain supermarkets, used to buy eggs and chicken from
    many of our local producers. Now what has happened is, all
    those locals have disappeared off the shelves and you are
    seeing the very large, industrial firms, like Buckeye Foods,
    supply the majority of eggs on the shelves in communities like
    ours.
        If you think about marketing, Dr. Figueroa, and some of the
    other initiatives that you are involved in, I hope you will
    give a serious talk to some of the retail chains and find a way
    to help some of our smaller producers find their way to market.
    Because truly, they are not on the shelves any more.
        Mr. Dunn. Congresswoman, Secretary Glickman has asked us to
    put together an agency-wide task force to look at the
    concentration of various issues. And it is all the way from
    transportation issues to concerns that Mr. Baker had
    articulated.
        What we are finding is that there are some things within
    our jurisdiction and some things that are not within our
    jurisdiction. For instance, on the Cargill proposed takeover
    for Continental on the grain industry, that was one that maybe
    FTC or Justice should have authority over. So we had spent a
    great deal of time talking to those two agencies about what we
    have spotted out there, to share the information with them.
        When you get into the retail sector, this is an area which
    FTC has jurisdiction over. So we can take it up through perhaps
    the wholesale side, but when we get into the retail side then
    we lose jurisdiction over that. But certainly, there are a lot
    of concerns that we hear from many people about slotting fees,
    et cetera, that they have to pay in order to shelf space. And
    if you do not have the shelf space, you cannot sell.
        Ms. Kaptur. All right. I thank you very much and I
    appreciate your advice there. I also appreciate the indulgence
    of my colleagues.
        Mr. Skeen. Mr. Boyd.

                              International Trade

        Mr. Boyd. Thank you, Mr. Chairman. Just a couple of quick
    questions. First, I want to follow up on the line of
    questioning and the comments by my friend from Ohio regarding
    the import versus export balance, the trade balance, the
    agricultural balance, which traditionally in this country has
    been the major industry that has softened the deficit in our
    trade balance. I recently read a summary of Secretary
    Glickman's speech that he gave sometime in the last week where
    he was predicting that that trade balance in agriculture would
    be narrowing.
        In other words, the surplus in that balance would be
    getting smaller. Does anybody care to address that, maybe Mr.
    Dunn or----
        Mr. Dunn. That was, I believe, Congressman Boyd, the
    Secretary's speech at the Outlook conference that took place a
    week ago. And he talked about what has happened here as some of
    our trade partners, primarily the Asian market we have seen a
    tremendous collapse. Two years ago we had about $60 billion of
    international trade. This year we may be down below $50 billion
    in international trade, and that gives us a great deal of
    concern.
        There is also a weakening of some of our trade partners in
    South America that will not be able to purchase some of the
    commodities that we had sold to them in the past. That is of a
    great deal of concern to the Secretary, and something that he
    is asking us to take a hard look at and see if we can get back
    on track.
        Now I think there are some silver linings in there. I was
    over to Asia not too long ago, the beginning of the year, and
    what I was told was that our share of the market there has
    grown, but the overall market has shrunk. The pie has not
    gotten bigger, but our slice of the pie has gotten bigger. So
    hopefully when that Asian economy comes back we will be in
    place to be able to get back to where we were before.
        But there is really a very--I do not want to say
    pessimistic, but it is going to take us a while to get back to
    where we were a short two years ago.
        Mr. Boyd. Pessimistic, I agree with that. What we all fail
    to talk about is our exports, that the export side--and this
    is, I think, the point Ms. Kaptur was trying to make. The
    imports continue to grow, our exports do not, and that creates
    significant problems for our producers. Not only economic
    problems, but problems for some of your activities too.

                                   screwworm

        Now Mr. Bonilla asked a question earlier that I really did
    not catch the whole gist of. But as a person who maybe, besides
    Chairman Skeen, the only person in this room that ever treated
    screwworms in livestock. I want you to clarify: We are not at
    any risk in our livestock industry of this pest now, are we?
        Dr. Reed. We are always maintaining vigilance for it. We do
    not have screwworm here. We had a find in the one goat that we
    eliminated very quickly. We know there are screwworms in
    Central America. We have a program there to eliminate the past
    and keep moving its presence southward so it is not an
    immediate threat for U.S. producers.
        Mr. Dunn. Mr. Boyd, we are at risk. We have also had a
    screwworm find in a dog brought back from Panama. We also had
    an individual that had visited Brazil and had a screwworm
    imbedded in his scalp. So we are at risk. We cannot afford to
    drop our guard.
        We need to finish the eradication program going to Panama
    in the next two years to build a sterile rearing facility there
    so that we can have the barrier at the isthmus of Panama. I
    would hope that our friends on the subcontinent would also take
    a look at what they can do to get that out of our hemisphere
    altogether.
        Mr. Boyd. Thank you. As the chairman I am sure can attest,
    the screwworm an ugly, ugly pest. For everyone involved, since
    we eradicated it--35 years ago, there has been all kinds of
    pluses. Not only for the livestock industry, but for the
    wildlife industry. We have a resurgence of wildlife population,
    I know at least in the southeast and I am sure all over this
    country, particularly among the deer population that has
    created a whole new industry in itself. So this thing is
    broader than just cows, and sheep, and goats, and hogs. I just
    wanted to make sure that everybody understood that.

                                 hog production

        One final question, and maybe Mr. Baker you can answer
    this, or either Dr. Figueroa. Regarding Hog production in this
    country, are we quickly going to the same production model that
    exists now in poultry where it is going to be integrated and
    all controlled by--just a few large companies. They are all
    produced for--and I do not want to name names, but we know who
    they are, three or four large poultry guys. I mean, do we have
    numbers? Do you all have statistics that show that we are
    moving in that direction with our hog production also?
        Mr. Baker. The statistics will show that it is getting to
    be more contract growing of hogs in this country, yes. Contract
    growing similar to what the poultry industry is doing where a
    supplier furnishes you with a product, your management and
    facilities are at risk.
        Mr. Boyd. Has the Department taken any position about the
    development of that concept and whether it is good, bad, or
    indifferent? I know, again, it is a private sector matter, but
    nevertheless, it is--I mean, this Government has a history of
    maintaining or making sure that we maintain a strong economy.
    Do you have any thoughts on that, or does the Department have
    any thoughts on it or any position?
        Mr. Dunn. I think, Mr. Boyd, that is of grave concern to us
    of who is going to be out there and who is producing. A few
    years ago people used to say, we keep this way we are going to
    end up with only one farmer out there and one processor, and
    they did it very jokingly. But if you look at the situation
    with Murphy Farms, if there were 18 Murphy Farms out there,
    they would cover that whole commodity, and that is all you
    would need.
        So it is something of a great deal of concern. It is
    something the Secretary has asked us to look at, and it is one
    of the reasons why we think we need the additional funding for
    packers and stockyards so that we have the economists and the
    statisticians there to enter into this next millennium with the
    resources that we need to find out what is happening before it
    happens.
        Mr. Boyd. Mr. Chairman, you know the way it is in my area
    of the country where we used to have small hog producers all
    over the countryside, for many of them, that is their sole
    income, and others, supplements their income. It just does not
    exist any more. I want you to know, Mr. Chairman, and members
    of the panel, that I am somewhat concerned about that trend in
    our pork production.
        Thank you.
        Ms. Kaptur. Will the gentleman yield? I did not quite
    understand your point, Secretary Dunn, on the 18 to one ratio.
    Could you clarify that?
        Mr. Dunn. What I said is that if there were 18 Murphy Farms
    out there, they would be able to supply our entire need for
    that commodity. When we used to have 2 million farmers out
    there--in my part of the country in Iowa where we used to have
    what they called the mortgage burners, the hog operations out
    there. What used to be a large operation, any more is a small
    operation. And what used to be considered a mega-operation is
    now a family-size farm. So there is a definite trend.
        Mr. Skeen. Mr. Farr.
        Mr. Farr. Thank you very much, Mr. Chairman. I know it is
    getting late and I appreciate your indulgence. There is an
    interesting theme that is developing here and I want to comment
    on it and ask some questions. Jim Walsh started it and Ms.
    Kaptur picked up on it.

                                export promotion

        It seems what we are doing in America is providing a lot of
    resources to regulate agriculture in this country, to regulate
    the management and restriction of herbicides and pesticides, to
    inspect etc. Yet we allow countries to import goods that do not
    face the level of regulation that domestic goods face. If we
    keep going this way we are going to end up not growing any food
    in this country, we are just going to import it all, because
    the cost of doing business is going to be too great in America.
        One of the things that I am really concerned about is
    health and safety. We all support the idea that we ought to be
    better informed and use smarter and safer products and support
    the registration process. But at the same time, we give the
    determining authority to another agency, EPA. I have often
    found that they do not have any deadlines. They can do more and
    more studies while avoiding the need to come to a conclusion.
        When I was in California what we did is we put limits of
    time, saying that if you did not do something within a
    reasonable amount of time--then it was deemed approved. And
    that really started moving things.
        I think that your department needs to come back and suggest
    to this committee that we may need to have some of those
    timelines in the extra-regulatory agencies whodo not really
    have to make it a high priority within their budget process to get
    these things done.
        In order for us to get our product abroad and market our
    product, obviously we have got to sell--we only have 3 percent
    of the world population and we grow most of the world's food.
    We cannot consume it all. We have got to export.
        We lend money through the export promotion to do
    advertising. But we need more than that. We need technical
    hustlers. Ms. Kaptur talked about the idea of getting farmers
    more access to market information. I think that we could do
    that on computer.
        I know the California World Trade Commission has given
    California farmers essentially a laptop software marketing
    strategy. So if you grow strawberries and you want to wake up
    in the morning and say, who in the world wants to buy my
    strawberries today, you can look up every country in the world
    that buys them and what the protocol is for getting them to
    market. And then find what the price is and make your decision
    of whether you want to sell domestically or to foreign buyers
    that day. We need to do more of that in America to give our
    farmers access.

                       sanitary phyto sanitary standards

        What proportion of the APHIS budget is allocated to working
    on projects where U.S. industries are asking APHIS for
    assisting in working with foreign governments to open up new
    export markets?
        Dr. Reed. I will have to get those numbers for you,
    Congressman.
        [The information follows:]

        Almost 4 percent or about $16 million is spend directly on
    export--related SPS issues. This includes issuance and review
    of export certifications, bilateral negotiations with trading
    partners, risk assessments, and participation in international
    trade and SPS standard-setting organizations.

        Mr. Farr. How do you allocate staff resources to this?
        Dr. Reed. On the import sides, we have a number of
    countries that petition to ship us products. Of course, we will
    examine these products to determine their eligiblity for
    import. There is some staff time that goes to determine pest or
    disease risks.
        On export, we do the same thing. We work on behalf of a
    commodity producer or an exporter. When there is an interest in
    a foreign market and there is a technical issue, a sanitary or
    phytosanitary issue, then APHIS ensures that we can meet SPS
    needs of the importing country. So there is effort both ways.
        It depends on the product to be exported. APHIS does not
    promote exporting products that people do not have an interest
    in exporting. By the same token, when a producer asks for help,
    we assist in resolving any SPS issues.
        Mr. Dunn. Mr. Farr, In the past, a GAO report indicated
    that we do not do enough coordination of sanitary,
    phytosanitary issues between the Department of Agriculture,
    USTR, and other entities.
        So we met with USTR and developed thresholds to determine
    our involvement in sanitary and phytosanitary issues. USTR
    published a list of these thresholds about two or three months
    ago. The whole world knows our involvement regarding SPS
    managment issues.
        But one of the primary drivers is that is the industries'
    requests.
        Mr. Farr. How many export projects are currently in the
    pipeline?
        Dr. Reed. There are about 56.
        Mr. Farr. Is the time allocated to assisting U.S.
    industries more or less or equal to the amount of time that is
    devoted to assisting foreign governments who wish to import, or
    wish to export to us?
        Dr. Reed. I do not have a good answer for you on that one.
    But what I would submit would be that if there is producer
    interest, whether it takes a little time or a lot of time, we
    are going to support that producer request to move product into
    a foreign market.
        [Subsequent to the hearing, the agency provided the
    following:]

        I estimate the time we spend on export work is four times
    greater than the time we spent on import work.

        Mr. Farr. What do you do when you have got to determine
    where to put these resources? Do you put resources into making
    sure that we are not losing export markets? For example, when
    there has been an infestation of flies or other pests
    identified in the United States, how do you calculate the
    resources assigned to work with foreign governments so that
    they understand the nature of the problem in the U.S. and do
    not overreact to such a pest problem?
        Dr. Reed. We have two mechanisms. If we have a reportable
    pest, we must notify the country receiving our product about
    the pest discovery. And, many times, we can also tell them that
    we have quarantined and delimited an area and that only certain
    products will come out of that area so we can keep that expert
    market open.
        Mr. Farr. Do you dedicate staff to making sure that market
    share is not lost, that a niche is not lost?
        Dr. Reed. Oh, yes. We will get you the numbers on that.
        [The Information follows:]

        We have over 200 staff years devoted to risk assessments
    and bilateral negotiations with trading partners to maintain
    markets.

        Mr. Dunn. Mr. Farr, the Karnal bunt that we talked about
    earlier is probably a good example of maintaining wheat
    exports.
        Mr. Farr. That is a good example because it is a huge
    export market.
        Mr. Dunn. It is a huge export market. In the case of Karnal
    bunt APHIS' International Services employees stationed
    worldwide began talking to scientists and technicians in other
    countries so that they understood our situation. Using our
    protocols, we established quarantines and conducted a
    nationwide survey to ensure that bunted kernels did not get
    into shipments that went outside the United States.
        Then we also used our Foreign Agricultural Service
    employees located in all of the embassies to ensure that the
    ambassadors and their staffs were well aware of what actions we
    were taking, so that it was a dual approach. We went to the
    scientists, we went to the technicians, and then we went to the
    policy people as well.
        Mr. Skeen. Could I ask the gentleman to----
        Mr. Farr. Yes, this is concluding.
        Mr. Skeen. Thank you.
        Mr. Farr. Wheat is huge. I understand APHIS sent a letter
    to the minister of agriculture in Japan almost a year ago
    concerning the phytosanitary standards for lettuce and
    requesting changes to the restrictions. Has there been any
    response to your letter?
        That is a year ago. This is why I am asking about
    dedication of personnel to follow through with these things.
        Dr. Reed. We are continuing to follow that issue closely.
    We are engaging in bilateral talks on that commodity.
        Mr. Farr. It takes over a year on one commodity just to
    answer some questions?
        Dr. Reed. Sometimes it takes many years.
        Mr. Farr. Are you going to more forward on any action in
    the WTO if they do not respond?
        Mr. Dunn. That is one of those decisions above our pay
    grade, unfortunately. I was over in Japan early last spring and
    we talked about this very issue; this as well as tomatoes,
    various varieties of tomatoes. At that time, the Japanese did
    not have enough time, enough personnel to work on lettuce
    because they were fighting us on varietal issues on apples that
    were going in there.
        We are now seeing Japan going back to the table and sitting
    down and talking to us about the phytosanitary issues on
    scientist to scientist, technician to technician basis. But
    again, they lack resources, both human and fiscal, the same as
    we might.
        Mr. Farr. Yes or no answer. Do you support origin labeling?
        Mr. Dunn. Me personally?
        Mr. Farr. The Secretary.
        Mr. Dunn. There are a number of issues involved with that.
    If it comes down to a consumer's right to know, I personally
    would support it.
        Mr. Farr. Thank you.

                                  karnal bunt

        Mr. Skeen. Thank the gentleman. I think that it is time to
    wrap this up and I would just like to ask one question. Has the
    Karnal bunt moratorium on planting wheat in the quarantine
    zones in southern New Mexico been lifted as of March 1, Dr.
    Reed?
        Dr. Reed. It is not going to be entirely lifted. We are
    going to have to go field by field.
        Mr. Skeen. I understand that you are going to do the
    inspection. Thank you very much.
        I want to thank all of you for your responses, and thank
    you for the time and all of the effort. If you want to worry
    about the flies we used to have so much trouble with, you will
    never eat rice pudding again. [Laughter.]
        With that wonderful thought, I will leave it to you. Thank
    you all very much. We have questions we would like to give you,
    Mr. Dewhurst, to respond for the record. Thank all of you very
    much.
        [The following questions were submitted to be answered for
    the record:]

    [Pages 567-987 -- The official Committee Record contains additional
        material here]

                               W I T N E S S E S

                                  ----------
                                                                       Page
    Baker, J. R......................................................   359
    Dewhurst, S. B...................................................   359
    Dubey, A. M......................................................     1
    Dunn, M. V.......................................................   359
    Figueroa, Enrique................................................   359
    Kaplan, Dennis...................................................     1
    Lyons, J. R......................................................     1
    Reed, C. A.......................................................   359
    Reed, P. S.......................................................     1
    Sells, D. R......................................................     1

                                   I N D E X

                                  ----------                              5--
    --------

                     Natural Resources Conservation Service

                                                                       Page
    Additional Assistance............................................    45
    Administrative Service Estimates.................................   160
    Administrative Tasks Minimization................................   142
    Adopted Ordinances of Best-Use Practices.........................    55
    Ag Drainage Wells:
        Capping of Ag Drainage Well in Clean Water Action Plan (CWAP)    69
        CWAP and Ag Drainage Wells...................................    69
        Drainage Wells in Iowa......................................67, 183
    Agency Priorities................................................    70
    Aging Watershed Structures.................................44, 173, 189
    Air Quality Compliance...........................................   157
    American Heritage Rivers Initiative:
        Funding for FY 1998 and FY 1999..............................   121
        Initiative...................................................    59
    Animal Agriculture and Production Concern........................   122
    Animal Feeding Operations:
        Economic Analysis............................................    49
        EPA Budget Request...........................................    62
        Listening Sessions...........................................    50
        Release of Strategy..........................................    57
        Responsibilities.............................................    69
        Status of Joint Strategy (with EPA)........................180, 189
        Strategy.....................................................    48
        Technical Assistance.........................................   135
        Workload.....................................................    45
    Biographies:
        Undersecretary Jim Lyons.....................................    38
        Chief Pearlie S. Reed........................................    39
        Associate Chief Danny D. Sells...............................    40
    Backyard Conservation Program...................................44, 139
    Buffer Strips Initiative:
        Enrollments..................................................    57
    Carbon Sequestration...........................................175, 184
    Common Computing Environment Purchases...........................   116
    Competitive Partnership Grants...................................   131
    Concern for the Family Farm versus Conservation..................   176
    Conservation Compliance and Conservation Operations..............    87
    Conservation Farm Option (CFO) Program:
        Funding......................................................   116
        Participating States.........................................   111
    Conservation on Private Lands....................................   167
    Conservation Philosophy of Mr. Reed..............................    41
    Conservation Reserve Enhancement Program (CREP)..................    57
    Conservation Reserve Program (CRP):
        Additional Funding...........................................   164
        Caps.........................................................   164
        CCC Reimbursement............................................   125
        Cover crops..................................................    78
        Demand.......................................................   164
        Enrollment.................................................135, 164
        Environmental Benefits Index (EBI)...........................   124
        Technical Assistance.........................................   134
    Debt For Nature..................................................    70
    Demonstration Project Language...................................   142
    Digital Soils Database...........................................   118
    Earth Team Volunteers............................................   111
    Emergency Watershed Protection Program (EWP):
        Commitments versus Obligations...............................   157
        Flood Plain Easements........................................   157
        History of Appropriations....................................   100
        Unobligated Emergency Supplemental Balances..................   153
    Endangered Species...............................................   136
    Environmental Monitoring and Research............................   131
    Environmental Quality Incentives Program (EQIP):
        Allocations for FY 1998......................................   123
        Allocations for FY 1999......................................   112
        Change in allocation process (FY 1998 versus FY 1999)........   122
        Eligible Acreage versus allocation...........................   123
        Funding of the Colorado River Salinity Control Program.......    58
        Funding Priority Areas in FY 1998............................   120
        Funding Needs for Clear Water Action Plan (CWAP).............    58
        Legitimacy of EQIP Contracts.................................   181
        Listening Sessions.....................................74, 165, 178
        Priority Areas...............................................   182
        Program Level for FY 2000....................................   112
    Erosion Rates....................................................   132
    Explanatory Notes................................................   192
    Farmland Protection Program (FPP):
        Acres Propsoed for Conversion................................   163
        Demand.......................................................   160
        Efforts......................................................    55
        Loss of Prime Farmland.......................................   133
        Requests.....................................................    56
    Federal and Non-Federal Obligations Sources......................   103
    Field Conservationists Needs.....................................   175
    Fiscal Year 2000 Budget History Table...........................47, 110
    Fiscal Year 2000 Compliance......................................   117
    Flood Plain Easements............................................    97
    Forestry Incentives Program (FIP):
        FIP and SIP Appropriations Comparison........................   111
        FIP Allocation Release in Florida............................    66
        Supplemental Funding Allocation for FY 1999..................   138
    Global Climate Change:
        Economic Analysis............................................    54
        Impact.......................................................    50
        Kyoto Protocol...............................................    51
        Kyoto Global Climate Change Treaty Economic Impact Assessment   181
        Research.....................................................   162
    Grazing Lands:
        Earmark Allocations for FY 1999..............................   121
        Funding for FY 1998 and FY 1999..............................   140
        Grazing Lands Assistance.....................................   108
        Grazing Lands Conservation Initiative (GLCI).................   108
        Grazing Lands Specialists....................................   108
        National Grazing Lands Technology Institute..................   109
        Training In Grazing Science..................................   109
    Hydrologic Unit Areas..........................................105, 158
    Kyoto Protocol...................................................    51
    Improving Accountability of NRCS Funds...........................   159
    International Activities.......................................107, 116
    Land Legacy Initiative...........................................    73
    Learning More About NRCS.........................................    79
    Loss of Prime Farmland...........................................   133
    Loss of Arable Lands.............................................    42
    Mitigation Banking...............................................    85
    National Resources Inventory.....................................   116
    National Soil Information System.................................    91
    New Funding Areas................................................    63
    Non-Federal Watershed and Rangeland Coordinators.................   103
    Non-Profit and Community Action Cooperatives.....................   117
    Northwest Salmon Recovery Initiative.............................   120
    Object Class Breakouts...........................................   144
    Opening Remarks:
        Undersecretary Lyons.........................................     1
        Mr. Reed.....................................................     7
    Passenger Motor Vehicles.........................................   125
    Plant Materials Centers:
        Alderson, West Virginia's Plant Materials Center.............    96
        Funding......................................................   119
        New Plant Releases...........................................    93
        Operating Costs..............................................    93
        Royalty Collections for New Plant Releases...................    96
    Private Lands Enrolled in Conservation Programs..................   138
    Program Evaluation Studies.......................................    97
    Questions Submitted for the Record:
        Chairman Skeen...............................................    85
        Ms. Kaptur...................................................   162
        Mr. Walsh....................................................   164
        Mr. Bonilla..................................................   178
        Mr. Latham...................................................   183
        Ms. DeLauro..................................................   184
    Reimbursements:
        Non-Federal Reimbursements...................................   126
        Other Federal Reimbursements.................................   125
    Resource Conservation and Development (RC&D) Program:
        Authorizations for FY 1999...................................   120
        Federal and Non-Federal Assistance...........................   102
        Outstanding RC&D Loan Borrowers..............................   104
        Projects Planned, Adopted, and Completed.....................   103
    Regional Offices.................................................    61
    Rural Abandoned Mine Program.....................................   158
    Section 11 Cap:
        Impact on CRP................................................   177
        Section 11 Cap..............................................72, 134
    Soil Surveys:
        Digitizing and Orthophotography Cost Contributions...........    91
        Digital Soils Database.......................................   118
        National Soil Information system.............................    91
        Funding and Staffing Levels..................................   118
        Reimbursements...............................................    91
        Soil Surveys Published.......................................    91
    Staffing:
        Conservation Technical Assistance Staffing Levels............   113
        Headquarter versus Field.....................................    88
        Proposed Reductions..........................................   159
        Reductions...................................................41, 88
        Reductions in the Field......................................    48
        Staff Year Summary (FY 1995-1999)............................   111
    State and Local Contributions....................................    90
    Technical Service Centers and Regional Offices and Institutes....    89
    Technical Assistance:
        For All Conservation Programs................................    90
        For Conservation Reserve Program.............................   134
        For Wetlands Reserve Program.................................   134
        Technical Assistance versus Enforcement......................    64
    Total Cost and Accountability System.............................   142
    Transfer of Watershed Accounts to Conservation Operations........   133
    Unified Watershed Assessment.....................................   126
    Urban Conservation...............................................   141
    Urban Resources Partnership (URP) Program:
        Cumulative Support through 1998..............................   114
        Funding for FY 1998 and FY 1999..............................   120
        Update of Activities.........................................   113
    Watershed Planning Activities:
        Program Evaluations..........................................    97
        State and Local Funding......................................    96
    Watershed and Flood Prevention Operations (WFPO):
        Description..................................................    98
        Funding Proposal versus Aging Watershed Structures...........   141
        Recreational Projects........................................   100
        Small Watershed Projects.....................................   101
        Status of Authorized P.L. 534 Projects.......................    97
        Watershed Project Status Review..............................   102
    Watershed Restoration Strategies.................................   131
    Water Quality Incentives:
        Demonstration Projects.......................................   106
        Funding for the Presidential Water Quality Initiative........   105
        Hydrologic Unit Areas......................................105, 158
        Hypoxia in the Gulf of Mexico................................   107
        Regional Project Allocations.................................   105
        Regional Projects............................................   106
        Water Quality Incentives.....................................   104
    Wetland Delineations.............................................    86
    Wetland Determinations...............................118, 140, 173, 189
    Wetland Policy.............................................78, 167, 184
    Wetlands Reserve Program:
        Additional Funding...........................................   164
        Applications and Enrollments................................85, 141
        Current Unobligated Balance..................................    87
        Enrollment Caps..............................................   164
        Enrollmemt Status............................................   164
        Demand.......................................................   164
        Salary and Total Costs.......................................    86
        Staff Years and Costs for FY 1998............................    86
        Technical Assistance.......................................134, 159
        Technical Assistance Reimbursements..........................    87
    Wildlife Habitat Incentives Program:
        Funding Allocations..........................................   114
        Geographic Breakdowns........................................   115
        Update.......................................................   114
    Workload:
        Analysis.....................................................    73
        Increasing Workload..........................................   139
    Written Testimony:
        Statement of James R. Lyons..................................     8
        Statement of Pearlie S. Reed.................................    33

                       Marketing and Regulatory Programs

    Opening Statement, Under Secretary, Michael V. Dunn..............   359
    Biography, Under Secretary, Michael V. Dunn......................   450
    FY 2000 Budget Request...........................................   361
    Strategic Goals..................................................   535
    Written Statement, Under Secretary, Michael V. Dunn..............   364

                   Animal and Plant Health Inspection Service

    Agricultural Quarantine Inspection:
        Agricultural Quarantine Inspection..........514, 653, 659, 666, 667
        Fee Schedule by Activity.....................................   591
        Funding and FTE's by Airport.................................   589
        Number of Staff Years Funded.................................   588
    Animal Care:
        Animal Care, general.......................................569, 573
        Animal Welfare.............................................520, 567
        Doris Day Animal League Petition...........................653, 664
        Breeders of Cats and Dogs, Regulatory Change(s)..............   673
        Stolen Dogs..................................................   569
    Animal Health Emergency Management...............................   663
    Animal Import Centers..........................................627, 655
    Animal and Plant Health Regulatory Enforcement.................645, 662
    Aquaculture......................................................   611
    Argentine Citrus...............................................518, 668
    Asian gypsy moth/European gypsy moth.............................   613
    Asian Longhorned Beetle.........................470, 526, 611, 663, 678
    Australian Cattle................................................   509
    Automated Cargo System...........................................   592
    Automatic Targeting System.......................................   592
    Aviation Safety................................................454, 675
    Biography, Administrator, Craig A. Reed..........................   452
    Biotechnology:
        International Harmonization..................................   666
        Staffing and Funding.........................................   632
        User Fees....................................................   665
    Bioterrorism.....................................................   678
    Boll Weevil..........................................511, 583, 654, 664
    Bovine Spongiform Encephalopathy--BSE............................   612
    Brown Citrus Aphid...............................................   642
    Brown Tree Snake.................................................   610
    Brucellosis..........................................513, 574, 575, 664
    Brucellosis Quarantine Facility..................................   655
    Budget Request, History..........................................   636
    Buildings and Facilities.........................................   603
    Carryover Funds..................................................   651
    Cattle Tick Program............................................509, 594
    Centers of Excellence............................................   633
    Citrus Canker..................................................515, 612
    Contingency Fund...............................................626, 653
    Country-of-Origin Marking Requirements...........................   509
    Detector Dog Training............................................   667
    Doris Day Animal League Petition...............................653, 664
    Electronic Poultry Certification.................................   647
    Emergency Funding..............................................611, 616
    Equine Infectious Anemia Program.................................   643
    Exotic Newcastle Disease.........................................   527
    Explanatory Notes................................................   855
    Farm Animal Identification and Records Program...................   534
    Federal/Non-Federal Dollars......................................   623
    Fish-eating Birds................................................   518
    Foot-and-Mouth Disease...........................................   576
    Foreign Pests....................................................   513
    Frogs............................................................   530
    Fruit Fly Exclusion and Detection................................   660
    General Accounting Office Reports/OIG Audits.....................   637
    Genetically Engineered Products..................................   665
    Golden Nematode..................................................   647
    Gypsy Moth.......................................................   613
    Harry S Truman Animal Import Center..............................   669
    Horse Protection...............................................520, 665
    Horse Study, NAHMS...............................................   603
    Import/Export..................................................527, 661
    Import/Export Veterinary Diagnostic User Fees....................   629
    Imported Fire Ant..............................................608, 652
    Infestation, definition..........................................   669
    Integrated Systems Acquisition Project (ISAP)....................   586
    International Cooperation in Animal Biologics....................   649
    International Cooperative Administrative Support System..........   631
    International Programs.........................................635, 645
    International Trade..............................................   560
    Invasive Alien Species...........................................   524
    Johne's Disease..................................................   662
    Karnal Bunt................................455, 536, 565, 601, 613, 679
    Kudzu............................................................   654
    Livestock Protection Collar......................................   600
    ``Living with Wildlife'' Campaign................................   598
    Mediterranean Fruit Fly........................................577, 614
    Mexican Fruit Fly................................................   614
    National Animal Health Monitoring System.........................   602
    National Center for Import/Export................................   655
    National Monitoring and Residue Analysis Laboratory..............   645
    National Germplasm Quarantine Center.............................   606
    National Poultry Improvement Plan................................   647
    National Wildlife Research Center................................   605
    Noxious Weeds..................................................581, 583
    Object Class Data................................................   660
    Oriental Fruit Fly...............................................   614
    Overseas Locations...............................................   621
    Overtime, AQI Program............................................   659
    Pine Shoot Beetle..............................................644, 647
    Pink Bollworm....................................................   625
    Pink Hibiscus Mealybug.........................................614, 655
    Plant Methods Development Activities.............................   632
    Plum Island Animal Disease Center Modernization................606, 654
    Poultry Inspections..............................................   530
    Predator Control Program.........................................   656
    Pseudorabies..............................................578, 659, 677
    Quarantine Fumigations.........................................670, 682
    Questions Submitted for the Record:
        Chairman Skeen...............................................   567
        Mr. Kingston.................................................   682
        Mr. Bonilla..................................................   675
        Mr. Latham...................................................   677
        Mr. Pastor...................................................   679
    Rabies...............................................529, 532, 644, 675
    Regulatory Enforcement and Animal Care...........................   571
    Saltcedar Tree.................................................651, 669
    Sanitary and Phytosanitary Standards Management......536, 537, 563, 661
    Scrapie..........................................................   655
    Screwworm Eradication................................510, 561, 576, 658
    Shared Administrative Costs......................................   660
    Silverleaf Whitefly............................................628, 654
    Stolen Dogs......................................................   569
    ``Swim with the Dolphins'' Program...............................   669
    Swine Brucellosis................................................   575
    TCK Smut.........................................................   515
    Texas Oral Rabies Vaccination Program............................   675
    Transportation of Animals Through Airports.......................   659
    Trap Testing.....................................................   657
    Trichinae Pilot Certification Project............................   643
    Tropical Bont Tick...............................................   620
    Tuberculosis, Bovine.............................................   585
    Tuberculosis in Cervidae.........................................   615
    User Fees:
        AQI User Fees..............................................591, 666
        Import-Export User Fees......................................   629
        Veterinary Diagnostics User Fees.............................   629
    Vesicular Stomatitis.............................................   615
    Veterinary Diagnostics User Fees.................................   629
    Wild Horses......................................................   529
    Wildlife Services:
        General...............................................454, 509, 594
        Aerial Safety..............................................454, 675
        Aircraft Operations..........................................   652
        Budget Proposal..............................................   671
        Employee and Property Safety.................................   670
        Methods Development........................................518, 666
        Texas Oral Rabies Vaccination Program........................   675
    Witchweed........................................................   581
    Wolf Damage Control..............................................   615
    Written Statement, Administrator, Craig A. Reed..................   402

                         Agricultural Marketing Service

    Administrative Expenses Limitation...............................   711
    ADP Purchases....................................................   715
    AMS Homepage.....................................................   716
    Biography, Administrator, Enrique Figueroa.......................   451
    Business Process Reengineering...................................   692
    Certifying Agriculture Processing Equipment......................   752
    Class I Pricing..................................................   716
    Direct Marketing:
        Farmers Direct Marketing Action Plan.........................   541
        Program Information..........................................   539
    Export Promotion.................................................   562
    Explanatory Notes................................................   786
    Federal Seed Act.................................................   698
    Federal-State Marketing Improvement Program:
        Payments to States and Possessions--1998 Grants............699, 719
        Payments to States and Possessions--1998 Locations...........   701
    Food Quality Protection Act Implementation.......................   744
    Free Trade with Mexico...........................................   698
    Grading:
        Cotton and Tobacco Reimbursement.............................   715
        Grading Activity Employee Totals.............................   691
        Grading Fees.................................................   691
        Qualified Through Verification Program.......................   720
    International Trade Price and Volume Reporting...................   741
    Marketing News:
        Budget Request...............................................   684
        Mandatory Price Reporting....................................   523
        Market Transparency..........................................   757
        Reporting on Organically-Grown Fruits & Vegetables...........   734
        Reports Status...............................................   692
        Object Class--Market News....................................   734
        Object Class--Organically-Grown Fruits and Vegetables........   735
    Marketing Agreements and Orders:
        Federal Milk Marketing Order Reform Final Decision...........   459
        Northeast Interstate Dairy Compact...........................   716
        Peanut Non-Signer Program....................................   714
        Pistachio Marketing Order....................................   716
    Marketing Services Object Class 2500 Breakout....................   715
    Microbiological Data Program:
        Budget Request.............................................686, 755
        Object Classes...............................................   750
    National Laboratory Accreditation Program........................   694
    Organic Certification:
        Budget Request Breakout......................................   689
        Definition...................................................   735
        Final Rule Publication.......................................   684
        Implementation...............................................   455
        National Organic Standards Final Rule........................   740
        Nutrient Management Program..................................   736
        Program Information--Spending and Staff Years................   718
        Program Table................................................   687
    Perishable Agricultural Commodities Act..........................   709
    Pesticide Data Program:
        Adherence to Committee Guidelines............................   749
        Alar Residues................................................   517
        Budget Request for PDP.......................................   712
        Consumer's Union Report......................................   741
        Coordination with EPA........................................   759
        Crop Protection Products.....................................   749
        EPA Coordination.............................................   753
        Federal Funds................................................   718
        Funding Table................................................   753
        Integrated Pest Management and Related Programs..............   743
        Microbiological Initiative...................................   686
        Participating States--Pesticide Data Program.................   533
        Program Information..........................................   717
        Rapid Response...............................................   741
        Registration and EPA.........................................   712
        Reimbursement to GIPSA.......................................   718
        USDA and EPA Relationship....................................   750
        Requirements of Food Quality Protection Act................532, 759
    Pesticide Recordkeeping Program..................................   730
    Pesticide Use--Spending..........................................   742
    Plant Variety Protection Act.....................................   716
    President's Year 2000 Working Group..............................   740
    Questions Submitted for the Record:
        Chairman Skeen...............................................   567
        Mr. Latham...................................................   757
    Reports:
        OIG Report Findings..........................................   722
        Status of OIG and GAO Reports................................   729
    Research and Promotion:
        Assistance to Pork Producers.................................   736
        Funding Received from FAS....................................   697
        New Programs.................................................   732
        OGC Legal Services...........................................   696
        Mandated Agriculture Promotion Programs......................   758
        Referendum Schedule..........................................   698
    Research Cooperative Agreements..................................   732
    Screwworm Facility--Mexico.......................................   472
    Section 32:
        Commodity Purchases..........................................   705
        Surplus Removal..............................................   708
        Disaster Relief..............................................   703
        Emergency Surplus Removal....................................   703
        Export Purchases.............................................   704
        Table--Financing.............................................   708
    Standardization Program..........................................   689
    Tobacco Funding..................................................   690
    Transportation Services:
        Missouri River Project.......................................   733
        Regulatory Actions...........................................   713
        River Infrastructure.........................................   758
        Surface Transportation Board.................................   730
    Vertical Integration.............................................   757
    Wholesale Market Development:
        Budget Request--Small Farms..................................   751
        Projects Status..............................................   694
    Written Statement, Administrator, Enrique Figueroa...............   386
    Y2K Emergency Funding............................................   732

            Grain Inspection, Packers and Stockyards Administration

    ADP Hardware/Software Purchases..................................   776
    Aflatoxin Inspections............................................   764
    Anticompetitive Practices........................................   780
    Auction Market Failures..........................................   766
    Biography of Administrator, James R. Baker.......................   453
    Commodity Contracting Guidelines.................................   782
    Complaints From Livestock Producers..............................   761
    Concentration.............................................472, 559, 757
    Contract Poultry Growers.........................................   521
    Custodial Account Compliance Audits..............................   769
    Dealer Failures..................................................   772
    Dealer/Order Buyer Financial Failures............................   765
    Economic/Statistical Analysis--Investigations....................   771
    Emerging Grain Testing Needs Increase............................   777
    Explanatory Notes................................................   951
    Exported Grain Complaints........................................   763
    Four Firm Concentration..........................................   765
    Funds Spent on Competition, Fair Trade Practices, Financial
      Protection.....................................................   769
    FY 2000 Budget Request...........................................   770
    Generic Sample-Lot Inspection Certificate........................   769
    GIPSA Electronic Network.........................................   775
    Grain Dust Explosions............................................   763
    Grain Facilities.................................................   761
    Grain Inspected and/or Weighed...................................   762
    Grain Transportation Issue.......................................   783
    Heavy Metal Testing..............................................   764
    Hot Production...................................................   561
    International Monitoring Program.................................   773
    Livestock Procurement Investigations.............................   774
    Livestock Slaughter..............................................   767
    New User Fees....................................................   781
    Oat Standards....................................................   772
    Other Services...................................................   770
    Packers & Stockyards Reorganization............................771, 781
    Packer Concentration...........................................538, 784
    Packer Competition and Industry Structure........................   779
    Pesticide Data Program...........................................   773
    Poultry Compliance...............................................   780
    Poultry Compliance Complaints....................................   764
    Poultry Compliance Investigations................................   780
    Poultry Concentration............................................   522
    Poultry Grower Complaints........................................   780
    Proposed Regulations--Grower Contracts...........................   774
    Proposed Rule--Feed Weighing.....................................   782
    Questions Submitted for the Record:
        Chairman Skeen...............................................   761
        Mr. Latham...................................................   784
    Select Elements in Grains772.....................................
    Slaughters/Processors Subject to the P & S Act...................   768
    Specific Grain Variety Testing...................................   778
    Streamlining.....................................................   779
    Unrecovered Losses...............................................   772
    U.S. Standards for Rye...........................................   777
    Vertical Integration.............................................   784
    Violation Cases--Grain...........................................   773
    Violation Reports................................................   764
    Western Cornbelt Hog Procurement Investigation Report............   475
    Written Testimony of Administrator, James R. Baker...............   429
    Y2K Compliance...................................................   776