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

         AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION,

                  AND RELATED AGENCIES APPROPRIATIONS FOR 2001

                      AGRICULTURE, RURAL DEVELOPMENT, FOOD

                      AND DRUG ADMINISTRATION, AND RELATED

                        AGENCIES APPROPRIATIONS FOR 2001

    _______________________________________________________________________

                                    HEARINGS

                                    BEFORE A

                               SUBCOMMITTEE OF THE

                           COMMITTEE ON APPROPRIATIONS

                             HOUSE OF REPRESENTATIVES

                           ONE HUNDRED SIXTH CONGRESS
                                 SECOND SESSION
                                    ________

         SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG
                      ADMINISTRATION, AND RELATED AGENCIES

                         JOE SKEEN, New Mexico, Chairman

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

     NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full
    Committee, and Mr. Obey, as Ranking Minority Member of the Full
    Committee, are authorized to sit as Members of all Subcommittees.

      Henry E. Moore, John J. Ziolkowski, Martin P. Delgado, and Joanne L.
                           Orndorff, Staff Assistants
                                    ________

                                     PART 1
                                                                       Page
     Office of the Inspector General..................................    1
     Secretary of Agriculture.........................................  151
     Office of the Chief Information Officer..........................  703
     Other:
         Office of Budget and Program Analysis........................  901
         Office of the Chief Economist................................  921
         Office of the General Counsel................................  937
         National Appeals Division.................................... 1062
         Departmental Administration.................................. 1093
         Office of the Chief Financial Officer........................ 1238
         Office of Communications..................................... 1317
         General Provisions........................................... 1337
                                    ________

             Printed for the use of the Committee on Appropriations

                                    ________

                         U.S. GOVERNMENT PRINTING OFFICE
     63-637                     WASHINGTON : 2000

                            COMMITTEE ON APPROPRIATIONS

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

                     James W. Dyer, Clerk and Staff Director

                                      (ii)

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
                    RELATED AGENCIES APPROPRIATIONS FOR 2001

                                  ----------

                                           Thursday, February 17, 2000.

                        OFFICE OF THE INSPECTOR GENERAL

                                   WITNESSES

    ROGER C. VIADERO, INSPECTOR GENERAL, OFFICE OF THE INSPECTOR GENERAL
    JAMES R. EBBITT, ASSISTANT INSPECTOR GENERAL FOR AUDIT, OFFICE OF THE
        INSPECTOR GENERAL
    GREGORY S. SEYBOLD, ASSISTANT INSPECTOR GENERAL FOR INVESTIGATION,
        OFFICE OF THE INSPECTOR GENERAL
    DELMAS R. THORNSBURY, DIRECTOR, RESOURCES MANAGEMENT DIVISION, OFFICE
        OF THE INSPECTOR GENERAL
    DENNIS KAPLAN, BUDGET OFFICE, DEPARTMENT OF AGRICULTURE

                                Opening Remarks

        Mr. Skeen. I want to say good morning to you today. We have
    with us USDA's Inspector General. I want to welcome you, Roger,
    and your staff. It is good to see you.
        Mr. Viadero. Likewise, Mr. Chairman. Thank you.
        Mr. Skeen. In this business it is difficult to fund all the
    priorities that are out there. It is one thing to propose a
    budget, it is an entirely different thing to act on it. We
    appreciate the work you do and we are fully aware of your
    presence out there to make sure USDA programs are running the
    way they were intended to run. We will do our best to make sure
    you have adequate resources to do your job.
        We had a marathon session yesterday with your boss, and
    even though our boss gave us the day off today, we made a
    commitment to you to be here. Again, we welcome you and if you
    will hold off a minute, we will let Ms. Kaptur have a few
    words, and then we will speed this one down the road.
        Ms. Kaptur. Thank you, Mr. Chairman, very much. We welcome
    Mr. Viadero and your superb staff. I look forward to your
    testimony. Don't be deceived if there are only two members up
    here. We will make a difference. We will proceed forward and we
    really are very impressed with the work that you do, and if I
    have a general concern, it is how to get you, for your own
    operating budget, more of the funds that you actually recover
    through your work. I will be asking questions about that during
    the time allotted for that. So please proceed and thank you,
    Mr. Chairman.
        Mr. Skeen. Thank you.
        Roger, I want to begin with you giving your opening
    remarks.
        Mr. Viadero. Well, Mr. Chairman, this is my sixth
    presentation before you since I was put in this position.
        Mr. Skeen. Some of us are getting older as we go along with
    this, but we are steady.
        Mr. Viadero. Like a good wine, we age better, but you will
    be happy to hear I have a five-minute statement this year.
        Mr. Skeen. We are very happy to hear that.
        Mr. Viadero. I am sure you would be. To that end, Mr.
    Chairman, I would like to say good morning to you and Ms.
    Kaptur and other members of the committee as they arrive. I am
    pleased to have the opportunity to visit with you today to
    discuss the activities of the Office of Inspector General. I
    know the committee's time is limited, so with your permission,
    I will briefly provide you some short comments on OIG's
    activities and then respond to your questions.

                           Introduction of Witnesses

        I would like to introduce members of the staff that are
    with me here today. I would like to introduce to my left, Jim
    Ebbitt, the Assistant Inspector General for Audit; to my right,
    Greg Seybold, the Assistant Inspector General for
    Investigations; and of course the real anchor of the team, Mr.
    Del Thornsbury, the Director of Resources Management Division.
    I am sure you will join me in also welcoming Mr. Dennis Kaplan
    from the Office of Budget and Program Analysis.
        Mr. Skeen. We are very familiar with the gentleman. He does
    good work.

                               Opening Statement

        Mr. Viadero. I want to thank the committee for its support
    during the nearly five and a half years since my appointment as
    Inspector General. We have tried to work closely with you and I
    hope that we have been able to address some of your concerns.
        In fiscal year 2000, our primary concerns continue to be in
    the areas of food safety, public health and consumer
    protection. In the food safety arena, we continue to identify
    contaminated food, misbranded products, uninspected meat or
    other products or items smuggled into the United States
    containing unwanted and unsafe pests and diseases.
        We also are focusing our efforts on the department's
    financial information systems which process literally billions
    of dollars in payments and extraordinary amounts of sensitive
    data.
        Before I continue, I would like to take a minute to address
    an issue that has me deeply troubled. I want to speak to you of
    the special agents and auditors, the men and women who carry
    out the mission work of this agency. These dedicated
    individuals have literally saved the lives of large numbers of
    our citizens, especially children and the elderly.
        They have saved our precious tax dollars, worked with USDA
    agencies to restore integrity to our programs and protected
    American agriculture. I am immensely proud of them and
    sincerely hope that you are as well.
        While I have reported to you some of their accomplishments,
    I have not told you how they have been stretched beyond the
    breaking point. Our responsibilities have increased
    significantly since my arrival, but our staff and resources
    have continually diminished. For instance, in January 1993, we
    had 875 employees on board. Now we have only 665 or 210 less,
    which represents a 24 percent loss. Yet 665 people means little
    until we consider that the Department's budget, including loan
    authority, currently is $177 billion with a personnel staff of
    approximately 110,000 people for fiscal year 2000. In addition,
    the operations and actions of millions of companies, plants and
    individuals, are regulated by USDA. When we compare OIG
    staffing to the Department's programs and personnel, we find
    that each auditor must ensure the integrity of approximately
    $635 million in program activity. Each special agent is
    responsible for investigating allcrimes involving nearly $840
    million of USDA funds and any crimes committed by the Department's
    employees such as embezzlement, theft, bribery or extortion. While I
    recognize that funding is limited, I believe OIG cannot continue to
    provide sufficient service and assistance to you and to other USDA
    agencies without adequate resources, and I request that our proposed
    funding level be approved.
        Mr. Chairman, at this time, I would like to briefly touch
    on just three of our high profile audit and investigative
    areas. First, last year the Inspector General's Office began an
    antismuggling campaign to interdict foreign agriculture
    products that are being illegally brought into this country.
    Such products can contain pests and diseases that could be
    catastrophic to U.S. plant and animal populations. These
    ongoing investigations have uncovered sophisticated smuggling
    conspiracies that are bringing in large quantities of
    agricultural products, all of which could harbor pests and
    diseases that could devastate the U.S. agriculture sector. For
    example, there is heightened concern as we speak in California
    because of the fruit fly quarantine imposed as a result of
    these pests being introduced. OIG must do proactive work to
    ensure these destructive pests are not being smuggled into the
    country to infest our plants and crops, thereby destroying
    local economies. Second, at last year's budget hearings, I
    reiterated our continuing commitment to placing a high priority
    on food safety and consumer protection issues. During the last
    few months, criminal investigations have necessitated the
    immediate deployment of special agents to several cities in the
    United States to protect the health and safety of consumers.
    These cases, some of which are still ongoing, have involved
    real or threatened adulteration of meat with the E-coli and
    Listeria Monocytogenes bacteria from unsanitary production
    methods intentionally neglected by the processor, such as
    sewing needles placed in commercial meat product packages at
    the supermarket to injure and possibly kill unsuspecting
    consumers, and substances such as soy or water added by the
    processor for pure economic gain. To address these serious
    threats and illegal acts against the public's well-being, we
    are pursuing joint activities with other Federal, State, and
    local agencies to share intelligence and conduct undercover
    operations. Doing so will help us better target criminal
    enterprise in general and the threat to the food supply in
    packing plants and other facilities in particular.
        Third, Mr. Chairman, our current investigation in New York
    City epitomizes the agency's work involving public corruption.
    Thus far, this ongoing investigation has yielded nine AMS,
    Agriculture Marketing Service graders which have pled guilty to
    charges of accepting bribes for downgrading the quality of
    fruit and vegetables at the Hunts Point Terminal Market in the
    Bronx. In addition, 15 produce wholesalers have been indicted
    on charges of paying bribes to these graders. In this scheme,
    the wholesalers used the lower grades to negotiate the price
    they paid the grower for the produce downward, which resulted
    in the growers being cheated out of the true value of their
    produce.
        The picture we brought with us, Mr. Chairman, is an aerial
    view of the Hunts Point Terminal Market in the Bronx where we
    arrested eight of the nine AMS graders. I believe this picture
    gives you a good perspective of the size of the market. We are
    told that it is the largest fruit and produce market in the
    world. It is absolutely an astonishing place.
        This concludes my oral presentation, Mr. Chairman, and I
    would be pleased to respond to any questions you may have.
        [The statement of Mr. Viadero follows:]

                      URBAN RESOURCES PARTNERSHIP PROGRAM

        Mr. Skeen. Thank you, and I want to begin by focusing on an
    evaluation report that your office has conducted on the Urban
    Resources Partnership Program. The report states that 131
    awards, in four cities, valued at $3.4 million did not meet the
    purposes of the statutes, from which the award was funded. More
    striking is the fact that prescribed process for implementing
    over $20 million in Federal financial assistance was not
    followed for the Urban Resources Partnership Program. Again,
    the program from your perspective, how does a program like this
    continue for 6 years without regulations being promulgated in
    the Federal registry?
        Mr. Viadero. We came up with the same question, Mr.
    Chairman.
        Mr. Skeen. No answer?
        Mr. Viadero. Not definitive at this time. We found the
    response that we received somewhat lacking, and we are still
    working with the mission area to get a more responsive answer.
        Mr. Skeen. Your report states that the Department did not
    select cities to participate in the Urban Resource Partnership
    Program on a consensus basis. From an Inspector General's
    viewpoint, is this the best way to run a program of this type?
        Mr. Viadero. No, sir. I think across the country,
    competition is the fairest and safest way to present these
    public funds.
        Mr. Skeen. You state in your report that Urban Resources
    Partnership Projects, components of projects were funded that
    did not fall within the authorities of the Forest Service or
    NRCS. Could you discuss in some detail what these projects or
    components of projects were.
        Mr. Viadero. Yes, sir. First of all, during our audit, we
    looked at approximately $18,700,000, which was given to the
    Urban Resource Planning Group, or URP, if you will, from '94 to
    '97. We went in and sampled $4.4 million and questioned $3.4
    million or 75 percent of that. Now, the URP money had to be
    spent on erosion-related projects. What we found, were projects
    that did not meet this criteria. For instance, in one city we
    found a wall mural had been painted, with absolutely no message
    attached to it about erosion or conservation. In another city,
    we found monies being given to a local law office to raze or
    demolish derelict properties, again, with no impact on erosion.
    And we have several other examples.
        Mr. Skeen. Your report indicates that the Forest Service--
    according to your letter that was dated November 22, 1999, to
    the Under Secretary, you stated that you needed additional
    information as set forth in the recommendation section of the
    evaluation report by December 31, 1999. Have you received that
    information and are you satisfied that management decisions
    will address the problems in this program?
        Mr. Viadero. Yes. We got a response on February 3 from the
    Under Secretary. We reviewed it and we are still working with
    the Under Secretary on that because we cannot reconcile a
    management decision on his response.
        Mr. Skeen. Ms. Kaptur.

                                MONETARY RESULTS

        Ms. Kaptur. Thank you, Mr. Chairman. I want to thank Mr.
    Viadero for his excellent testimony. I am very interested in
    the budget issues that you raise, and the diminishing level of
    staff that have characterized your particular division for
    several years now. I am interested in knowing, if you could
    walk us through, or if you could submit for the record how many
    dollars you actually recovered through the various
    investigations that your staff and you have done over the last
    3 or 4 years. Could you give us an idea whether those
    recoverables have been increasing, flat, decreasing, and then
    could you tell me whether there is any other department in the
    government of the United States where the IG's recoverables
    have been returned to that department? Or are you essentially
    in the same position as every other cabinet level department in
    the United States in not being able to use the assets that you
    recover?
        Mr. Viadero. In response to the last portion of your
    question, we are prohibited from using the amount that we
    recover. We are like everybody else there. It all goes back to
    the General Fund in the Treasury Department. All parts of
    recovery get recovered by the court system, and they go back
    through the court system and into the General Fund. Relating to
    any monies that we gather through assets forfeiture, which you
    folks were more than kind to us and allowed us to recover,
    right now we participate with the Department of Justice fund.
    Of the monies that we collect, we get approximately 3 percent,
    or 3 cents on a dollar back on that.
        Ms. Kaptur. I read in one of your notes here you got back
    $940,000 last year?
        Mr. Viadero. That is right. We seized more than $27 million
    in assets.

                              FINES AND RECOVERIES

        Ms. Kaptur. This is really troubling to me. This has been
    nagging at us for several years now. I have been wondering
    whether we could do one of two things. In the supplemental that
    is coming up, or in other legislation, could we permit the
    department or any department to recover back some of the assets
    and the dollars that you actually recover through fines and so
    forth, perhaps setting a baseline at some level. Some of it
    would go back to DOJ and some of it would filter back to you. I
    wonder how you would think through that issue.
        As you know, if you take money from DOJ, it goes into the
    General Fund or wherever it seems like it would get spent, so
    you would spend the money as well, but you recover more dollar
    for dollar. I want to know what the arguments are we could use
    in either case, if we were to try to present this legislatively
    this year as part of the supplemental or the regular
    appropriation.
        Mr. Viadero. That is an interesting point you brought up,
    Ms. Kaptur, so far as supplementals. One thing that would be
    very helpful to us and very beneficial is that, on any
    supplemental appropriation that this committee comes out with
    for the Department, we be given, let's say a half a percent of
    that appropriation earmarked specifically for oversight of the
    monies appropriated. That would be a big, big benefit to us.
    One point of clarification on the forfeiture money, please
    understand that we don't get to use much of the forfeiture
    money for routine funding needs. What we do with some of the
    forfeiture money is when we have joint operations with other
    state and local organizations, we can reimburse them for their
    overtime and special equipment that they need. So we don't
    receive all of that forfeiture money for ourselves.
        Ms. Kaptur. It would seem to me that is a disincentive to
    the IG to do a good job, because you are stuck in a regular
    budget process, whether you recover $27 million or $2 million.
    So explain to me what is the rationale for not permitting your
    department to be reimbursed for monies that you actually
    recover?
        Mr. Viadero. I believe, ma'am, it goes back many years ago,
    and nobody wants to be accused of going out and, pardon the
    expression, ``head hunting'' for fines and recoveries, and that
    is what has been raised. If an agency goes out and just does
    fines and recoveries, it is only for what? It is only so they
    can bolster their own budget. We don't get any benefit out of
    it. That is the easier response. The vast majority of the money
    that we bring in goes back to the Treasury. But, Ms. Kaptur, we
    do concur with you that we see a need and perhaps we can work
    with you and the staff and see if we can present or develop a
    plan that would be amenable to all parties.
        Ms. Kaptur. What I was thinking about is that you state in
    your prepared testimony that thousands of prosecutable cases
    are in the file.
        Mr. Viadero. Yes, ma'am.
        Ms. Kaptur. But due to diminishing resources, you can't
    move them forward. If you were given an increase in funding
    over your request, or if you were permitted to retain more of
    what you actually recover, I am wondering if you would be
    inclined to use these funds on expanding efforts which then
    might recover more funds. So maybe we could figure out a way to
    put some language in a bill that wouldn't take away all the
    Department of Justice funds, but would give you some share of
    the increased cases that you would be able to prosecute.
        Mr. Viadero. Ms. Kaptur, you just echoed my sentiments. You
    are my hero for today.
        Ms. Kaptur. I need that today.
        Mr. Viadero. Given more, we can do more. That is simple. I
    think we have increased our productivity so far as the cases
    that we are targeting and the audits that we do. We are doing
    larger audits, more intensive audits on some very significant
    areas. We are doing larger proactive investigations in areas
    where they are needed. But we have literally thousands of cases
    that remain unaddressed because we just can't get to them. It
    is sort of a pick-and-choose operation. You try and maximize
    your resources to have the maximum effect. Before I forget, one
    of your questions was, do any other inspector generals have a
    reimbursement agreement such as you are mentioning, and it was
    brought to my attention that the HHS IG has that type of
    reimbursement. But again, we would be happy to work with you
    and the staff, all the staff, to see if we can develop a plan
    and maybe take some remedial action with this.
        Ms. Kaptur. I think we should really probe this. I know I
    am over time here, and I will have some followup questions.
    This makes eminent sense for us to get into as a committee. It
    is good for the public. It is good for your operations. From a
    budgeting standpoint, it doesn't make any difference in terms
    of the combined accounts of the government of the United
    States. So in ending, could you--you said--you recovered $27
    million this past year?
        Mr. Viadero. That was just in estimated forfeiture assets
    seized. That is just forfeiture. In fines and recoveries----
        Ms. Kaptur. Could you give us the recoveries for the last 3
    years?
        Mr. Viadero. I will supply a list for the record for you
    for the last 3 years.
        Ms. Kaptur. All right. And if you could break it down.
        Mr. Viadero. We will break it down by category.
        Ms. Kaptur. Thank you so much.
        Mr. Viadero. Thank you, ma'am.
        [The information follows:]

        Mr. Skeen. Mr. Boyd.
        Mr. Boyd. Thank you very much, Mr. Chairman.
        And Mr. Viadero, thank you for being here today.
        Mr. Viadero. Yes, sir.
        Mr. Boyd. I have several questions. Mr. Chairman, I assume
    we will have a couple of rounds.
        Mr. Skeen. Your assumption is well taken. If you are quick.

                        HUNTS POINT MARKET INVESTIGATION

         Mr. Boyd. Mr. Viadero, I know that you and your agency do
    a lot of very important work, and in the process, find a lot of
    folks that are doing illegal things. I guess one of the most
    troubling to all of us, and I am sure to you, is to find
    corruption within the Federal government. It certainly
    undermines the confidence that the public, in this case, our
    produce producers, have in the agency which we pay our tax
    dollars to protect us. You briefed many of the members of this
    committee individually on the situation at Hunts Point. I
    understand that last week there were some plea bargain
    agreements entered into with USDA employees on the Hunts Point
    inspection facility. Up until now, the USDA has been unable to
    discuss with producers any details of the situation and
    particularly what it intends to do to right the wrong that was
    done by Federal employees to these producers. Can you update us
    now on what the agency will be doing to proceed in that
    direction?
        Mr. Viadero. Yes, sir, but by way of background, in your
    folders which we supplied to all the members, on the left side
    we have a copy of a printout of our Web page, and this is
    relating to the bribery charges at the Hunts Point Market in
    the Bronx, and therein name the inspectors and the wholesalers
    which were indicted. All of the graders/inspectors have pled
    guilty to bribery charges. They did that last week. They were
    indicted on probably the single most serious charge of the
    Criminal Code in the United States short of treason and
    sabotage, they were indicted on racketeering. It was a
    racketeering-influenced, corrupt organization and enterprise
    that they had formed amongst themselves. And this enterprise
    had impact coast-to-coast, border-to-border, Canada to Mexico,
    California right out to Boston. It is just unbelievable. Every
    one here, every one, all the members, if you have agriculture
    in your districts, your producers, your growers, your packers,
    your shippers were impacted by this operation. This is strictly
    based on greed. These men sold themselves for $50 to $100 a
    truckload to what we call ``knock the load''--downgrade the
    produce. My office wanted to say, what else is going on here,
    how far-reaching is this, how extensive is this. We put this
    out on the Web site. It is interactive. Folks here, you can
    scan it at your leisure.
        What we are looking for is documentation from the growers,
    the packers, the shippers, to come forward and tell us. Well,
    they are.
        I have been in contact with the Florida Fruit and Vegetable
    Growers Association. I am going down in a few weeks to make a
    presentation to them. We are going down to meet with the folks
    from Georgia. And I am addressing the National Fruit and
    Produce Association in Phoenix next weekend and, yes, we will
    share with them because they are part of it. They are the
    victims here. Actually, the victims are in the room. We are all
    the victims. This is a tax that these people have basically
    said, ``I need for myself.'' Corruption is a tax upon the
    public. What I have tried to do here at the Office of Inspector
    General is keep the process as transparent as possible so that
    you, our clients, our members here, understand what we are
    doing. We are trying to get the affected parties, the growers,
    the producers, the packers, the shippers involved, to let us
    know what has been going on here.
        We have received several calls from AMS. We are working
    with AMS which is developing a program. They stated they were
    going to go out and show a videotape and require all of their
    graders to have ethics training. I think that is a first step.
    I don't know how far that has proceeded, how many markets it
    has gone out to but we continue to look.
        Mr. Boyd. I know my time has expired, but I understand your
    answer to be that you are trying to gather the information
    necessary to determine how widely this has affected producers?
    You will then turn that information over to your superiors at
    the Department, and that decision will be left in their hands?
        Mr. Viadero. We are going to take a look at it, and where
    there is evidence of criminality, present it to the local
    United States attorney concerned to see if we are going to get
    a prosecutive opinion on that.
        Mr. Boyd. I understand that, the prosecution side. But the
    other side is at some point in time, we have to deal with the
    producers who have been cheated.
        Mr. Viadero. Well, we have asked--as part of the agreement
    here, we have asked the producers to respond because there
    might be money. I am not qualified to state this, but there
    might be some funds under PACA, Perishable Agricultural
    Commodities Act. We also asked Justice to look at an antitrust
    restraint of trade in which the antitrust division of the
    Department of Justice is looking at it against the wholesalers,
    and maybe they will receive some remuneration that they can
    pass back to the victims here.
        Mr. Boyd. Thank you very much.
        Ms. Kaptur. Would the gentleman yield on that. I just
    wanted to ask what type of information are you looking for from
    the local producers, packers, and distributors in local--let's
    say the Midwest. What would you be looking for?
        Mr. Viadero. We would be looking for the date they shipped
    produce, where they shipped it to, what the grade was when it
    left, what it was regraded at--if it was regraded, and what it
    was regraded at at the market. All the shipping detail, Ms.
    Kaptur, is right on this form that we provided. It is on the
    Web site. If I can, I got a call last week from a producer down
    south. This individual had a truckload of 1,500 cartons of
    green peppers. And the value of those green peppers, they tell
    me, was $10 a carton. So $15,000 for the truck. He went to a
    market, which unfortunately, I cannot tell you which market he
    went to. The peppers left as grade A fancy. They came out as
    grade C. Basically the truck driver, a contractor shipper,
    called them and said, listen, it is only costing you $3,200 to
    ship this product because it is a worthless load. The grader
    had said there were so many red peppers. Now it was worthless.
        So this man was exposed to a loss. And this is a small
    producer. This is a farmer. He was exposed to a loss of about
    $20,000. He was going to get nothing. So I said, ``what did you
    do?'' He said well, I called another wholesaler that I have
    been dealing with in the area. It took him five cartons to
    makeup the 1,500 cartons. Five cartons. Now, we are looking at this one
    because I think it will probably get presented to the United States
    attorney. But this is one example. Here's a loss to the farmer of about
    $20,000. So you give the grader $50 or $100. The question is, where
    does the bulk of the $20,000 go? It goes to the wholesaler. I can't see
    $20,000 worth of savings being passed on to the consumer on that load.
        Basically this is the first time that the Inspector General
    of the Department of Agriculture, who historically has been
    harangued for being a nemesis of the farmer, to come out and
    say we want to help you, and I think we are helping them. Based
    upon the responses we are getting, again, coast-to-coast,
    border-to-border, I just don't think we can do much more with
    what we have, and I think we are doing pretty good.
        Mr. Skeen. Mrs. Emerson.

                                OPERATION TALON

        Mrs. Emerson. Thank you, Mr. Viadero. I commend you for all
    that you are doing and hopefully will continue to do if we
    provide you the necessary funds to do it.
        Can we talk a little bit about Operation Talon? I am
    impressed with the work that you all have done and the success
    rate that you have had in getting these fugitive felons off the
    streets, if you will, and bringing some semblance of
    responsibility back to the Department by eliminating waste,
    fraud, and abuse of food stamps, et cetera.
        Can you elaborate a little bit about Operation Talon and
    tell us about some of your recent accomplishments in this area?
        Mr. Viadero. Yes, ma'am. Thank you. Ladies and gentlemen,
    also in the folder we have included this picture of a wonderful
    eagle, our national symbol, which is also our symbol for a
    project called Operation Talon. We began this operation as a
    result of the first welfare reform hearings which were
    conducted in the Longworth House Office Building on February 5
    of 1995. And I recall it vividly, because it was my first
    hearing, and it went 5\1/2\ hours without a break. From that we
    got legislation which allows us to look at outstanding fugitive
    warrants. So we looked at fugitive felons. We are looking at
    the worst of the fugitives. We take those warrants and compare
    them against, for lack of a better term, because they are
    called different things in different states, the social
    services records on food stamps, because what we have found is
    that the bad guys do not give the police, the arresting agency,
    or the courts their proper address. But they give their right
    address to the people that are giving the money out and food
    stamps are cash equivalents. It is a secondary currency, if you
    will. We are rapidly approaching 6,000 fugitive felons arrested
    under Operation Talon, and I think that is just one heck of a
    great number. More than just the number are the type of people
    we are apprehending. Murderers, rapists, and, the plague upon
    society of all-time, child molesters. For instance, in New
    Jersey alone, we have arrested three child molesters, and we
    have two convicted under the State's Megan law, and one we just
    arrested last week. So he is still pending.
        Also in that state we have arrested three murderers,
    including one contract murderer who was wanted for 10 years and
    was still operating. To maximize the resources that we have
    here, I put together this idea that we are going to run it
    nationally and we do. We could run this in every town and
    village and hamlet in the country and come up with statistics.
    Unfortunately, our travel money is slim. That all goes into our
    personnel costs. I have limited Operation Talon to where we
    have regional offices or large suboffices to reduce the costs.
    But what we end up with here are, in essence, Federal agents,
    my agents from the Office of Inspector General dealing with the
    State agencies, the State police, the sheriffs' offices at the
    county level and the individual police departments, towns and
    villages, boroughs and hamlets across the country.
        And by the way, this has taken everybody and is putting
    them shoulder to shoulder on the same side of the street. That
    is when you have an impact. There are no jurisdictional
    problems. There are no turf issues here. The goal is to lock
    the bad guy up and put the crooks in jail. And after 32 years
    in this business, I tell you that is still a satisfying
    thought, when you lock the bad guy up, put the crook in jail.
    Last week alone, we had a press conference in Beltsville,
    Maryland, right up the street here and we successfully arrested
    726 fugitive felons from Prince George's and Montgomery
    Counties, and Washington, DC.
        Also last week, Mr. Seybold attended a press conference for
    me out in Portland, Oregon, and we arrested 205 felons there.
    And those were only the most serious ones. Again, I don't have
    enough money to go out and get them all, nor do the locals. We
    are looking at the personal crime--person-to-person crimes, the
    really violent ones. That is what we are targeting. If we had
    more money, we would arrest more criminals for more types of
    crimes.
        We would divest ourselves of the real bad ones and go after
    everyone else. The point is, and this gets back to your point,
    Ms. Kaptur, to what we do with the asset forfeiture money. This
    money that we receive we enter into agreements with the states
    and the locals. We can refund the amount that these local
    agencies spend on overtime, and if they need specialized
    equipment such as if we run a sting and we need a magnetometer
    to ensure the safety of all the parties, we can get that for
    them.
        So this is an immediate return to these communities. Number
    one, instantaneous, is the safety of the citizenry. We get the
    bad guy off the street. That is terrific. That is very
    rewarding. Number two, we get to help out the State and locals
    who, in essence, help us, but it is not free. They also have
    budget constraints--so we can help them through reimbursing
    their overtime. It is just a great operation.
        Mrs. Emerson. It seems to be--and I appreciate your taking
    the time. I have another question, Mr. Chairman, but since I am
    out of time, I guess I will----
        Mr. Skeen. We will let you have one more question.
        Mrs. Emerson. I appreciate that. Thank you very much.
        Mr. Skeen. We are generous.

                           NATIONAL APPEALS DIVISION

        Mrs. Emerson. Thank you, and perhaps I can catch my plane
    before I get snowed in.
        Mr. Viadero, yesterday, and I don't know if you were here
    during the time period in which I asked the Secretary some
    questions, but there was one specifically having to do with the
    National Appeals Division, and I put into the record this
    article about farmers court, if you will. We are concerned
    about the fact that 86 percent of the producers, after
    receiving a favorable appeal on the regional level, are
    overruled in Washington and I was curious about the kind of
    authority your office might have in this kind of situation, if
    it does have anyauthority, and if so, would it be within the
    purview of your office to do an investigation in this particular
    situation?
        Mr. Viadero. Mrs. Emerson, I am going to ask Mr. Ebbitt to
    join me in response to you. We presented an evaluation report
    back in 1997. That was the last review of NAD that we did. I am
    going to ask Mr. Ebbitt to give you a response.
        Mr. Ebbitt. Thank you very much. We shared some of your
    concerns, Mrs. Emerson, and also although I cannot--I just read
    this yesterday--I can't vouch for the figures that are in here,
    we raised a number of concerns about how the National Appeals
    Division was operating back in March of '97 when we issued our
    report. However, one of the issues that we raised in our audit
    report, which I will be happy to send up for all the members,
    concerned the decisions made by the field hearing officers. In
    other words, we saw some evidence that the hearing officers at
    the field level were making decisions outside the rules and
    regulations of the Farm Service Agency. In other words, they
    were making them based on gut feelings, on personal decisions,
    as opposed to following the rules of FSA. We saw some of both.
    Don't get me wrong, we saw some on both sides, but we did raise
    that as an issue back in 1997.
        I did talk to FSA very quickly yesterday afternoon. They
    handle, in FSA, about 200,000 appeals on an annual basis. Now,
    the majority of those are handled at the county committee and
    State committee level. That is where the decisions are made.
    Only about 1 percent of that 200,000 actually goes to the
    National Appeals Division. So roughly, they are dealing with
    some 2,000 on an annual basis. I don't know how many of those
    2,000 break out in favor of farmers, if you will, versus
    sustaining the decision of the government. I don't have that
    number.
        Mrs. Emerson. In this article, it says that of the 189
    cases that USDA lost to the farmer, the NAD reversed 86.7
    percent. Even though perhaps you have got 2,000 cases that
    finally make it, the impact isn't necessarily just on those
    2,000 people, but rather on many other producers who may be in
    similar circumstances who are waiting to have their appeal
    determined one way or the other, based on the original one that
    was perhaps overturned. And so there is obviously concern that
    it seems tremendously biased. I mean, a 50/50 ratio, that would
    be a little more understandable.
        Mr. Ebbitt. One of the things we did recommend, we
    recommended more training because what is clear here is the
    deciding official has got to follow the rules set down by the
    agency. They don't have the authority to make a decision
    outside those rules. So whichever way it goes, it has to be
    within that rule.
        Mrs. Emerson. I would think, though, that if the agents are
    making determinations outside the rules of the agency, then it
    should not be the fault of the producer, or the producer should
    not have to bear the expense or be responsible if, in fact,
    they have been told by a ``government official,'' that these
    are the rules, and then all of a sudden those rules are
    different. Should the producer be penalized in that case?
        Mr. Ebbitt. Absolutely not. What I am referring to is when
    the hearing officer has all that information before the hearing
    officer, and if, the producer has been given a direction which,
    through no fault of the producer, results in his not following
    the rules, then obviously that has to be taken into
    consideration by the appeals officer. I am talking in terms of
    where the producer has, in fact, been given all the correct
    information, and then the decision of the appeals officer still
    is outside the bounds of the rules. That is what I am referring
    to. You have to bring that back in.
        Mrs. Emerson. I would appreciate seeing that report from
    1997. Thanks very much.
        Thank you, Mr. Chairman, for letting me go overtime.
        Mr. Skeen. Mr. Farr.

                                 OIG EMPLOYEES

        Mr. Farr. Thank you very much, Mr. Chairman. Inspector
    General, I am reading your report here. How many employees do
    you now have on board?
        Mr. Viadero. 665.
        Mr. Farr. And how many of those employees are peace
    officers?
        Mr. Viadero. 215, sir.
        Mr. Farr. And how many are women?
        Mr. Viadero. On the agent side?
        Mr. Farr. Yes.
        Mr. Viadero. We are going to have the answer for you. On a
    percentage basis, sir, we lead all other Federal agencies for
    women.
        Mr. Farr. Do you know how many are bilingual?
        Mr. Viadero. At last count, sir, I had 31 Spanish speaking
    agents.
        Mr. Farr. Spanish is the only language?
        Mr. Viadero. We have a native Ukranian speaker, and we have
    Chinese, both dialects of Chinese.
        Mr. Farr. As I read the report--Catonese and Mandarin. With
    215 officers, you can't do all of these seizures alone. You are
    indicating that you are having investigations going all along
    the Canadian border, U.S./Canadian, Mexican/U.S. Border and
    points of entry. You have to work collaboratively with all the
    other agencies.
        Mr. Viadero. Yes, sir.
        Mr. Farr. When somebody comes across the border as I have
    done several times, there are people in uniform, customs as we
    usually call them, but you have Immigration and Customs folks.
    They are the office of first instance, and then they would
    discover something like the cases here where you indicated
    there were illegal fruits being smuggled and they call you in?
    How does that work?
        Mr. Viadero. As a general rule, sir, I will take a place
    that we are probably all familiar with, Dulles Airport. If you
    fly into Dulles Airport, generally the first person that greets
    you is Immigration, and they just want to check citizenship.
    For us it is easy, U.S. passport, you go right back. The next
    one will be a Customs declaration form, and also in line with
    that is the APHIS form, Animal and Plant Health Inspection
    Service, and we cannot say from my organization too many good
    things about the men and women of APHIS.
        Mr. Farr. Do you have an officer there also?
        Mr. Viadero. No, sir.
        Mr. Farr. You are called in when they discover something
    out of whack?
        Mr. Viadero. Of a criminal nature, yes, sir.
        Mr. Farr. Is it prosecuted in the Federal court or
    statecourt?
        Mr. Viadero. Generally in a Federal court.
        Mr. Farr. Generally in a Federal court?
        Mr. Viadero. Yes, sir.

                           FOOD STAMP INVESTIGATIONS

        Mr. Farr. Even if it means these other--where you have this
    bust in Ohio. This was the food stamp program that was
    investigated by the Cleveland Food Stamp Task Force which had
    OIG, Secret Service, FBI, I.R.S., U.S. Customs, Cleveland
    Police Department and the Ohio Department of Public Safety.
    Would that be a case that would be tried in Federal court?
        Mr. Viadero. That would be a case--I will ask Mr. Seybold.
    He is in charge of investigation.
        Mr. Farr. Food stamp violation which is a federal program.
        Mr. Seybold. Normally these task force investigations also
    include a various assortment of other criminal violations in
    addition to the food stamp trafficking, so this is the cause
    and effect of those agencies that are predominantly involved
    with the enforcement of, say, drug laws, because food stamps
    can be associated with the purchase of drugs and paraphernalia.

                                 FOREST SERVICE

        Mr. Farr. You looked into a number of Forest Service land
    exchanges. I am surprised the Forest Service doesn't do that
    itself, would that be a peace officer that would do that or
    just somebody--one of the other employees?
        Mr. Viadero. I try to maximize my resources the best I can.
    We will generally start by having the audit side of the house,
    Mr. Ebbitt's people, go in and do a review of the records and
    bring it up to a point and then the regional Inspector General
    for Audit will meet with his counterpart, the Special Agent-in-
    Charge for that region. They will discuss it and see if it
    rises to a criminal level and if it does, they will present it
    to the United States attorney. But I don't have the resources
    to just let an agent go out on each one.

                                   SMUGGLING

        Mr. Farr. Exactly. That is what I was trying to get at,
    that some of these are paper reviews that probably don't need a
    peace officer to do the paper review.
        I am curious. As we chatted yesterday, I was down in Mexico
    last month with Congressman Cass Ballenger. We met with
    President Zedillo of Mexico. The border between the United
    States and Mexico is the biggest commercial border in the world
    because you have essentially the number one ranking country in
    the world, the United States, next to the number 12 ranking
    country in GNP, Mexico. You have a million and a half people
    across the border each way every day. You have the biggest
    commercial truckload traffic. It is humongous. It is also the
    border where most of the illicit smuggling into the United
    States, particularly drugs, and I would imagine you might argue
    there is some food substance. We have developed a technology
    which enables us to determine the molecular component in
    vehicles essentially.
        We could be running them through a radar screen and a truck
    going 40 miles per hour and put out a list just like you would
    get at the Safeway store when you get a list of what you
    bought. That equipment is expensive, but it seems to me, and
    the question I have is this: The direction we ought to be
    going, and really replacing expensive people with expensive
    equipment to be able to do a better job?
        Mr. Viadero. Well, sir, APHIS will be handling that type of
    equipment for us, APHIS and Customs. Can we replace the people?
    No. Can't replace all the people.
        Mr. Farr. I didn't ask that.
        Mr. Viadero. Again, it is sort of a labor-intensive
    activity, but do I concur with that? Absolutely.
        Mr. Farr. The question that I think our committee, the
    Congress has posed as we move into the era of technology and
    the demand--we have to make tough choices like we have to do in
    the military. You put the money into procurement, or you put it
    into hiring more people, employing more people. We try to do
    both and balance. But here is an area it seems to me in law
    enforcement that we ought to be putting some money into
    technology as well as into trying to more professionalize the
    forces.
        Thank you, Mr. Chairman.
        Mr. Skeen. Mr. Hinchey.

                           HUNTS POINT INVESTIGATION

        Mr. Hinchey. Thank you very much, Mr. Chairman. Inspector
    General, good to see you. I was interested in your discussion
    about Hunts Point and the work that you did there. For years
    that operation was controlled by organized crime in the City of
    New York. Did your investigation and prosecution involve any
    major organized crime figures?
        Mr. Viadero. Not that we have been made aware of at this
    time, sir.
        Mr. Hinchey. Essentially what was it then?
        Mr. Viadero. It was organized in the sense it was a
    continuing enterprise. That was the organization. Now, to say
    whether it was one of the five- or seven traditional organized
    crime families in the greater five boroughs of New York, I am
    not qualified to say at this time. There have been no links
    back. However, please know we have also done that investigation
    jointly with the FBI.
        Mr. Hinchey. Is there an investigation that is ongoing with
    regard to those markets or has it been completed?
        Mr. Viadero. I think it is safe to say it is ongoing.
        Mr. Hinchey. It is?
        Mr. Viadero. Yes, sir.

                             FOOD STAMP FRAUD--EBT

        Mr. Hinchey. The food stamp activity in the State of New
    York, in your report, indicates there was something like $63
    million of fraudulent activity involving operators within New
    York City, including bank personnel.
        Mr. Viadero. That was just one case, one case. We had two
    $15 million cases down in Philadelphia. But if I can answer
    your question and relate it back to Congressman Farr's request
    on technology, EBT, electronic benefits transfer, the cards,
    came out. It is this office, it is these people at this table
    who wrote the controls on the EBT program because everybody was
    going to just send the program out nationally with no controls
    on it. EBT has allowed us to work a lot smarter because we are
    using the machines. The machines don't get sick leave. They
    don't get annual leave. They work when it snows and the
    machines just keep regurgitating figures for us on high
    redeemers. Because of limited resources, we are still only
    looking at people that are redeeming food stamp benefits which
    are 300 to 500 percent of their food sales. This particular
    case that you bring up, Mr. Hinchey, involved two or three
    officials of a major bank in New York City as well as two
    ethnic groups. We actually found a crossover from one group who
    received the stamps and washed them, laundered them through
    another ethnic group in another borough. I mean, usually, if
    you cross the street in New York City, you could be continents
    away. This activity not only crossed the street, this crossed
    the borough, so in essence, it was continents away, and what we
    found there was a willful, systemic problem within the food
    stamp business for laundering these benefits. The average was,
    at that point, 70 cents on the dollar.
        So the bad guy got 70 cents for every dollar they put in.
    We are working closely with the state police up there, Jimmy
    McMahon, superintendent. We work with NYPD, and the people at
    Human Resource Development who handle the stamps. We are
    working out protocols because the city just recently came on
    EBT. It is going statewide at the end of this year so now we
    will be better able to focus and target various locations.
        Mr. Hinchey. You said it is going statewide. For New York
    State alone statewide?
        Mr. Viadero. Yes, sir.
        Mr. Hinchey. It is in a number of other states already.
        Mr. Viadero. Approximately 33.
        Mr. Hinchey. And the State of New York will be up and
    running completely sometime later this year?
        Mr. Viadero. Yes, sir, that is my understanding.
        Mr. Hinchey. The EBT program has allowed you to monitor
    this activity on an ongoing basis much more efficiently.
        Mr. Viadero. Absolutely.
        Mr. Hinchey. You have gotten to the point now where you are
    aware of substantial fraud in the industry, or at least you
    have evidence to indicate there may be substantial fraud in the
    industry. However, you are able only to investigate in a
    comprehensive way those cases which indicate a fivefold
    increase between the stamps redeemed and the actual food sales
    of the commercial establishment.
        Mr. Viadero. Yes, sir. If I had more agents and more
    auditors, we could get more cases done. The prosecutors like
    these cases because of the paper trail, the audit trail, if you
    will, of the electronic benefits transfer.
        Mr. Hinchey. And they like it because it is easy to make
    the case because you can present the evidence that is indicated
    in the transfer.
        Mr. Viadero. I dare say we have very few people right now
    that go to trial anymore. When the defendant and their counsel
    are presented with this evidence, which is overwhelming, they
    take a plea.
        Mr. Hinchey. Do you have any estimates as to the level of
    fraud in the food stamp program and whether that fraud is, in
    any way, an organized activity that for example would be an
    organized crime conspiracy of some kind?
        Mr. Viadero. Yes, but again, not the traditional organized
    crime. There is so much money that is out there in food stamps
    and food stamp benefits. Each group will have their own. It
    just goes from neighborhood to neighborhood, if you will, town
    to town. For instance, we did one back in 1995 in Albany.
        Mr. Hinchey. I am trying to get an idea the level of extent
    of this activity across the country and in New York.
        Mr. Viadero. If we took an average in white collar crime,
    which the FBI publishes--and that is what this is--of about a
    10 to 15 percent loss, and if we take food stamp benefits for
    $22 billion a year, we are looking at between $2 and $3 billion
    in losses. I think that is conservative.
        Mr. Hinchey. $2 and $3 billion a year?
        Mr. Viadero. Yes, sir.
        Mr. Hinchey. Thank you very much.
        Mr. Viadero. Yes, sir.
        Mr. Skeen. Ms. DeLauro.

                              RESOURCE PRIORITIES

        Ms. DeLauro. Thank you very much, Mr. Chairman. Good to see
    you, Mr. Viadero. Just to pursue or try to get some sense of a
    couple of questions about your resources and resources
    determining priorities. How do you determine the priorities of
    what you do? Dealing in a lot of areas, workplace violence,
    food safety, developers of rural housing who are ripping people
    off, and crop disaster loss, food stamps, what determines the
    priorities of the agency?
        Mr. Viadero. My management staff and I meet twice a week.
    Our priority list, as I am sure everybody's here is also, is in
    flux all the time. Where are we going to maximize our efforts?
    For instance, if you took the northeast, sort of isolated, we
    have ten states covered by that region, and I have got 17
    special agents to cover 10 states and the bulk of our operation
    is within New York City involving the public corruption at the
    market because the market is there and the food stamps, because
    that is the bulk of the food stamp activity. I have got two
    agents that are up in Syracuse and two agents just outside of
    Boston. Really not a heck of a lot of resources to cover that
    area, as you mentioned, as well as the other work we do such as
    workplace violence. We had a threat against the Secretary. We
    had some person who is incarcerated now in a mental
    institution, because he made death threats against the
    Secretary. And when we entered the premise, the individual had
    a whole sackful of ammunition.
        Ms. DeLauro. What I am trying to get at, and let me just
    probe a little further, again, is it the market, is it food
    stamps, is it crop loss, is it corruption? Are you dealing with
    the market because that is where the greatest opportunity is
    for fraud in your view? Is food stamps the greatest opportunity
    for fraud?
        If you could, and I notice that the Forest Service not
    under your jurisdiction, but you are responsible for
    investigating the Forest Service. One of my questions is how
    much time, effort, percentage of what you do, is dealing with
    the Forest Service versus some of these other areas?
        I am trying to just figure out where the balances are, what
    we are not finding out in some of these areas in terms of
    losses. I am not making myself terribly clear here, I think.
        I am trying to figure out if you overemphasize one piece to
    the detriment of the government, if you will, of other pieces?
    I don't know how those priorities get fixed. Do we give you any
    advice as to where to go to look at things? Does the Secretary
    give you advice about where to look for these pieces in terms
    of where you deal with your limited resources? Again, I would
    like an answer to theForest Service piece, because I think that
    this bears on what your capability is in terms of the other parts of
    the portfolio you are charged with.
        Mr. Viadero. We do on average about 7 percent of our time
    in the Forest Service, dealing in Forest Service issues. Again,
    we have gone over and asked people in the Interior
    subcommittee, since you are funding the Forest Service, would
    you give us a hand and give us some money. They say you are
    funded, Mr. Inspector General, from the Department of
    Agriculture, and the Forest Service is in the Department of
    Agriculture, so go back to your Appropriations Committee and
    have them fund for all of Agriculture.
        So there is a large deficit. By the way, the Forest Service
    has about 40,000 employees that we cover.
        In answer to how we set the priorities, the priorities
    basically stand on a regional basis, because each region has
    their own specialty, if you will. We are not going to find food
    stamp fraud cases as large and as prevalent in Iowa and
    Nebraska as we do in major cities because of population
    density.
        Again, our number one priority issue, above all else, and I
    don't care where we are, we drop it and go to it, is health and
    safety. If we have a meat case--and we are coming up with more
    and more meat cases--health and safety issues are handled
    immediately.
        Ms. DeLauro. My time is up. Are you not spending the kind
    of time that you need to at food safety because you are
    spending more time at food stamps or more time at crop loss?
        What is getting short shrift? It seems like a lot of the
    effort is on the food stamps, the market and market issues. I
    am sorry, Mr. Chairman, I am going over time.
        Mr. Skeen. You are doing very, very well. I have been
    reading your hands.
        Mr. Viadero. All areas, all of them are being shortchanged,
    but understand, when there is a health and safety issue,
    everything else goes by the wayside. So then what? Then we are
    neglectful of the other programs, for example, the crop
    insurance issues. We can't get in and look at those. We can't
    look at the smuggling issue because we are looking at health
    and safety. We have done a lot of health and safety cases.
        This one we have a picture of in the testimony, we had some
    yahoo out there putting needles in packaged meat. That is
    either going to hurt somebody or kill them. But understand
    this, please, everyone here, understand, there is no higher
    priority for us than health and safety issues. We drop
    everything else we are doing and have a concerted effort to
    open health and safety issues.
        We had that other case just down in Florida where they were
    adding sanitizer to the food. They took product manufactured in
    1994 and sold it, distributed this product in 1997 and 1998.
    Some was rancid. Its average fat content of this product was 36
    percent. It was so bad that even the Bureau of Prisons refused
    the product.
        Ms. DeLauro. Even the Bureau of Prisons?
        Mr. Viadero. Yes. But yet this product went to some of our
    troops and it went to the National School Lunch Program, and it
    took us a while to get that product back, ma'am. Thank you.
        Ms. DeLauro. Thank you very much.
        Mr. Skeen. Ms. Kaptur.

                                MONETARY RESULTS

        Ms. Kaptur. Yes, Mr. Chairman. Following on Ms. DeLauro's
    questions about the priorities, I want to get back to the money
    issues, the budget issue, and try to get a complete
    understanding here. The administration is requesting $70.2
    million for this next fiscal year for your operations, Mr.
    Viadero. As I understand it, based on the testimony you have
    submitted, this past fiscal year you collected $68 million in
    fines, restitution and other resources and penalties. All those
    dollars went to the Department of Justice; is that correct?
        Mr. Viadero. This is just investigations, ma'am. That $68
    million was recovered on the investigative side. We also had
    some funds that we recommended, total monetary assets resulting
    from audits, of some $376 million.
        Ms. Kaptur. Now, you have to help us a little bit too,
    because we need to get these numbers clear in our minds if we
    are going to try to help you. And we need to see over the last
    3 years what those numbers have been.
        It is very hard to piece together from the budget
    submission and from the testimony that has been given to us. So
    if we have to go in and do battle with some of the other
    subcommittees here, we need to understand. It isn't clear to
    me, quite frankly, on the $68 million how much of that actually
    was in monetary form that was transacted and actually became
    the property of the government of the United States.
        Mr. Viadero. All of this money, ma'am. It is all hard
    money.
        Ms. Kaptur. It was all hard money. What about on the
    investigations side?
        Mr. Viadero. This is the investigations side.
        Ms. Kaptur. What is the other side?
        Mr. Viadero. Audits.
        Ms. Kaptur. What was the number? $300-and-some-odd million?
        Mr. Viadero. Of the $376 million that we recommended to the
    department as part of the audits, we feel that they can recover
    $55 million.
        Ms. Kaptur. We need to have a clearer understanding of
    this, so we understand what was actually booked at the
    Department of Justice, and what dollars you have been
    recovering for the people of the United States, and then we
    have to have a relationship of that to your budget. That would
    help us a great deal in our efforts here. Do you understand our
    need for clarity here?
        Mr. Viadero. Yes, ma'am. Yes, ma'am. We will be happy to
    work with you. Again, we have had all of this in our semiannual
    reports, but I think it is better if we put it on one
    spreadsheet for you and then we can do an analysis, percentage
    year-to-year.
        Ms. Kaptur. We need to argue your cause, and we need this.
        Mr. Viadero. Let me just say that the fines and
    restitutions money goes to the Justice Department. The Justice
    Department serves as a conduit. Everybody's money ends up in
    the Treasury.
        Ms. Kaptur. In your testimony you refer to the $940,000
    transfer. But then you stated this morning that isn't really to
    the Department of Agriculture. It goes to your local and state
    partners.
        Mr. Viadero. Yes, ma'am. Part of it does.
        Ms. Kaptur. That money doesn't really accrue to your
    budget. This sort of clarification from a budgetary standpoint
    is important to us.
        Mr. Viadero. Absolutely, ma'am. In terms of the Department
    of Health and Human Services, Mr. Seybold was saying they have
    some different relationship on this.
        Any information you could provide us on how that works----
        Mr. Seybold. We can do that.

                            RUSSIAN FOOD AID PROGRAM

        Ms. Kaptur. It would be helpful to us. All right. On pages
    25 and 26 you discuss in your testimony the Russian food aid
    program, which I will personally thank you for assisting us in
    attempting to get better accounting of those funds. I will
    continue to disagree with the administration and its emphasis
    on putting those funds into the Russian pension fund, simply
    because we do not have the ability to audit the Russian pension
    fund and what they do with those dollars.
        It has been reported that the administration is seeking
    funds to adequately monitor trade agreements as opposed to
    commodity shipments. Some of those funds for monitoring trade
    agreements are destined for the Foreign Agriculture Service.
        My question to you is, given that the Secretary is
    requesting funds to monitor trade agreements, wouldn't it be
    equally prudent to establish a fund to monitor the provision of
    food aid and seeing as how the Commodity Credit Corporation
    quadrupled sales last year, either through your office or
    through the Foreign Agricultural Service, could you conceive of
    some sort of initiative where one could monitor those sales?
        Mr. Viadero. Yes, ma'am, I think we will have to sit down
    with the people from foreign agriculture service and come to
    some form of an agreement as to oversight on that.
        Ms. Kaptur. It is a significant amount of money.
        Mr. Viadero. Yes, ma'am.
        Ms. Kaptur. And there are many sole source contracts that
    are involved in some of the provision of that assistance, and I
    can't tell you how many. I haven't spent my life over there.
    But the Commodity Credit Corporation has over $30 billion worth
    of authority, and very little oversight within the Congress of
    the United States.
        Mr. Viadero. Ms. Kaptur, this is an ideal opportunity to
    reinforce that half percent issue.
        Ms. Kaptur. Yes.
        Mr. Viadero. That would go a long way, because this
    oversight is costly.
        Ms. Kaptur. Would you give us legislative language on that?
        Mr. Viadero. I would be happy to.
        Ms. Kaptur. All right. Did I use my time up? All right.
        Mr. Skeen. Go ahead.

                       CHILD AND ADULT CARE FOOD PROGRAM

        Ms. Kaptur. I had one final question, Mr. Chairman, and
    that relates to the child and adult care food program, which we
    didn't talk a lot about this year. But you have identified a
    lot of problems in that program, and many of the people have
    gone to jail.
        Do you know what the Food and Nutrition Services is doing
    to fix the program based on what you have learned?
        Mr. Viadero. Well, Ms. Kaptur, we continue the saga of
    working with FNS to develop more meaningful recommendations and
    controls on the program. Now, at our last meeting the former
    administrator was recommending that the amount of
    administrative costs that could be recovered by the sponsor
    should be raised from 30 to 40 percent. It has taken us quite a
    while just to get FNS, through the administrator of FNS, to
    understand that that would be a more reasonable figure. I think
    they are down to what, 10 percent now----
        Mr. Ebbitt. 15 percent.
        Mr. Viadero. 15 percent. We continue the dialogue of
    working with FNS to get a handle on the rascals that are in
    their programs out there.
        Ms. Kaptur. Do you sense we have just scratched the surface
    there?
        Mr. Viadero. Absolutely. We just had one conviction, if I
    can, which stemmed from an audit and led to the criminal side;
    we had one child adult care feeding program sponsor that was
    found guilty of some $27 million fraud in the program. It is
    highlighted in the testimony.
        Ms. Kaptur. That wasn't the case in Detroit, was it?
        Mr. Viadero. Yes, ma'am, it was the case in Detroit.
        Ms. Kaptur. I was going to ask you if you could give us
    more details surrounding that incident. That will be my final
    question.
        Mr. Viadero. Thank you. I will be happy to.
        Ms. Kaptur. Thank you, Mr. Chairman.
        Mr. Skeen. Thank you. Mr. Boyd.

                                RADIO TECHNOLOGY

        Mr. Boyd. Thank you, Mr. Chairman. I have several issues I
    want to pursue. For the benefit of the committee and I know Mr.
    Farr brought up the issue of technology, one of the things that
    you all are dealing with is expanded technology in some the
    agencies that helps you do your job. I think you referred to
    the EBT food stamp program earlier. But I also noticed that in
    your justifications of increases and decreases for your own
    technology needs the only thing you addressed was radios. I
    understand your radios are still analog radios and you are
    trying to move to digital. I am sure all the bad guys have
    digital.
        Mr. Viadero. We have a Federal mandate from the Federal
    Communications Commission to move that way, and that has to be
    done by 2002. It is about a $3 million conversion cost for us.
        Mr. Boyd. I assume that would greatly enhance your capacity
    to do your job?
        Mr. Viadero. Absolutely, sir.

                             INVESTIGATIVE PROCESS

        Mr. Boyd. I spent a little time yesterday reading your
    justifications for the increases and decreases, and your
    investigation accomplishments. Operation Talon, food stamp
    program, child and adult care programs, WIC, FSA, Rural
    Housing, Food Safety Inspection Service, AFS, NRCS, employee
    integrity, and we go right on down the line. I am sure you
    probably could spend all of your usual resources in one of
    those agencies. I know the one I am most familiar with is
    probably FSA, and I know with all of the myriad of programs
    delivered through FSA, there exists a great opportunity for
    fraud and abuse. I know you have spent a lot of time on that.
        Mr. Viadero, when you were here last year, we talked a
    little bit about an FSA investigation that was just completed
    at that time in Florida. I want to make sure I understand the
    process.
        You do the investigation and then you turn all the
    information over to the U.S. Attorney's office and they make
    the decision about what happens from that point forward?
        Mr. Viadero. Yes, sir. They make a decision. It is their
    job to tell us whether they are going to prosecute or not
    prosecute it.
        Mr. Boyd. I want to offer a compliment in this case to one
    of your counterparts sitting at the desk with you, Mr. Seybold.
    He has been very helpful to our office in helping us wade
    through an issue in north Florida that was very emotionally
    charged. It is an issue where you presented your investigation
    to the U.S. Attorney's Office, and the U.S. Attorney's Office
    did not get a conviction. Obviously that caused a great deal of
    bad feelings among a lot of folks in the area that I represent
    towards your agency and the U.S. Attorney's Office.
        But Mr. Seybold has been very helpful to us in helping us
    wade through some of those things. I wanted to pass that on to
    you.
        Mr. Viadero. Thanks for the feedback. I very much
    appreciate it.

                          INVASIVE PEST INVESTIGATIONS

        Mr. Boyd. Another thing I wanted to say in relation to
    that, I know there is a lot to be done, and I am not sure all
    the blame goes to OIG. Maybe some of it goes to the U.S.
    Attorney's Office for going down a path that led us nowhere.
    But I am sure you are on top of those issues also.
        We spent a good bit of time yesterday, Mr. Viadero, on the
    invasive pest issue when the Secretary was here. We consider
    that a very serious problem in States like Florida and
    California and others. We have an $8.5 billion citrus industry
    in Florida; and it is threatened because of Asiatic citrus
    canker.
        I notice that you spent some time in your testimony on
    APHIS and the invasive pest issue. Can you outline again for
    the committee the different responsibilities of your
    organization and APHIS on this issue? I know some of the
    invasive pests are intentional, which reflect a criminal act,
    and others are sort of unknowingly brought in.
        Mr. Viadero. Yes, sir. APHIS, again, they are on the
    ground, they are in the field, and they are checking these
    things as they come in internationally. APHIS, however, does
    not check items that are going interstate. So for instance we
    have one case we are working on for fruit that, comes in sealed
    containers. It is transhipped into Canada. Canada has little
    concern about fruit flies. Any frost will kill fruit flies. I
    am sure here in the District and Virginia, few care about fruit
    flies. We had a frost.
        However, your State and the border States, the southern
    States, are most impacted by this fruit fly and the citrus
    canker. We have begun a program, with your State Department of
    Agriculture, the enforcement people, and we have given them
    some of that forfeiture money. We have been able to develop
    software programs with them and supply some hardware needs, and
    we are profiling every truck that goes in there. So every truck
    that enters the state of Florida, that goes through the
    agricultural enforcement checkpoint, goes into the database.
    This is the incipient stage of intelligence gathering so we can
    target this.
        Historically, we have never looked at this. It has never
    been that much of a problem. Again, technology lends itself
    that now it is a tool that is available to us. So we find these
    rascals taking it from Canada, shipping it down here and going
    into Florida, into Georgia, et cetera, et cetera, and it
    impacts on the local producer, and, in general, the community.
        For instance, in your State, as I understand it, in the
    last 3 years, the State has spent approximately $165 million-
    plus in eradication, treatment, whatever you want to call it,
    and that includes general spraying of malathion in large areas.
        I would like to offer, if we get in and get some
    intelligence work, I am not going to be naive enough to make a
    statement before any committee that says we can stop produce
    smuggling. No. But I think we can put a good dent in it.
        If we don't do anything, it is business as usual. What I am
    offering is this as one of the initiatives we would like to
    talk about, and this is some of the things if we get more
    money, we can do more things with.
        We can help give a return, not only to the community, but
    to the farmer, the grower, and ultimately I am assuming, to the
    community. I would make that statement based on from not having
    to use all of the pesticides on everything.
        Mr. Boyd. Thank you, Mr. Viadero.
        Mr. Chairman, just if I might, just one brief second, I
    want to read something. This is part of the record, but I hope
    that all of the members of this committee and all the members
    of Congress understand what is in this OIG budget justification
    that they submitted to us. I read, ``OIG is greatly concerned
    about the APHIS inspection and quarantine activities at U.S.
    ports of entry to prevent the introduction of exotic animal and
    plant diseases and pests. Our recent review at two Florida
    ports of entry found that inspection practices caused
    vulnerabilities and weaknesses which increased the risk of
    prohibited or infected products entering the U.S., including
    regulated garbage coming in on aircraft and ships.''
        So, Mr. Chairman, I will continue to talk about this issue
    as we go through our hearings.
        Mr. Skeen. Mr. Hinchey.

                                TRADE AGREEMENTS

        Mr. Hinchey. Thank you, Mr. Chairman. The issue that Mr.
    Boyd raises is one that is of increasing concern to all of us,
    even those who live above the frost belt, because I eat an
    orange or a grapefruit occasionally from Florida. So the
    infestation of pests is really a serious matter, and it seems
    to me that it is an increasingly serious matter in light of our
    trade agreements, the proliferation of international trade, and
    the fact that imported fruits and plants in great numbers are
    crossing international borders into our country.
        To what extent have you seen an increase in pest
    infestations? Has the increase been dramatic since the
    implementation of these new trade agreements?
        Mr. Viadero. Well, we are operating 26 smuggling cases.
    Historically we have only a few a year. But in recent years we
    have been made aware of more attempts to bring products in.
        For instance, we had one individual cross in from Canada,
    went to the State of Washington, and basically was caught four
    times with their car full of prohibited fruits that
    historically and notoriously are known to be infested with
    fruit flies. I don't know whether they are Mexican, Guatemalan,
    or Mediterranean, but they are fruit flies.
        Mr. Hinchey. You didn't check the passports?
        Mr. Viadero. I didn't know we had that many types. There
    are more than 50 types of fruit flies out there. After the
    fourth time, the judge sentenced the individual to 2 days. Wow.
    You get more if you don't pay your parking summonses, 5 parking
    summonses here in the District.
        What we would like to do is work with the committee and go
    to the Judiciary Committee and propose that this offense, which
    is basically only a misdemeanor, be raised to the felony level.
    If we take the DEA's example of either quantity that the person
    would have, right, or weight that the person would have, we
    would like to come out with some methodology that it would be
    staggered going up or down. We don't want to arrest a
    grandmother for coming in from Canada with an orange.

                SMUGGLING, FOOD STAMP FRAUD, AND CROP INSURANCE

        Mr. Hinchey. No, and of course we don't want you to do
    that. But we want the most egregious cases dealt with
    expeditiously and aggressively. There are a number of other
    exotic pests coming into the country that affect plants in the
    northeast, and the northern part of the country as well. The
    Asian Longhorn Beetle, for example, could have a serious impact
    on the availability of maple syrup, because this pest attacks
    maple trees. This puts in jeopardy the livelihood of farmers
    who produce the syrup in the northeast.
        This a serious problem and I would like to cooperate with
    you, and I am sure the Chairman would. Perhaps we can find ways
    in which to be helpful more so than we have.
        The other thing that I am fascinated with, is the $2
    billion figure that you mentioned in response to the question
    with regard to food stamp fraud in the country, and the fact
    that you are able only to put a small dent in that.
        This is, again, probably an area that I would suggest that
    we try to work with you to increase law enforcement, because I
    know that the level of food stamp fraud, both by organized
    crime and by start-up criminal companies, if you will, is
    really astonishing. The amount of taxpayer money we are losing
    is something we really ought to deal with.
        My final question has to do with crop insurance and the
    fact that crop insurance is increasingly costly, costing us
    more than $2 billion a year. You note in your testimony and in
    your report as well that the number of limited resource farmers
    with catastrophic policies declined by about 78 percent from
    1997 to 1998, during the time the insurance companies assumed
    sole delivery of the program.
        I am wondering if this is something we ought to be
    concerned about. Superficially, it seems to be, in light of the
    fact we are spending so much money on the crop insurance
    program. With so much money going to the insurance companies,
    and so little of it going to farmers, I am troubled that as the
    price of the products goes up, the amount of participants is
    going down.
        This is somewhat of an anomalistic situation that I would
    imagine needs to be addressed. If you could shed some light on
    that, I would appreciate it.
        Mr. Viadero. The quick answer to your question is yes, we
    think there needs to be fixes, changes, and yes, there are
    problems. To that end, I would ask Mr. Ebbitt to give you a
    little more definition on it.
        Mr. Ebbitt. Mr. Hinchey, we issued a report the middle of
    last year that tried to put on the table some of these issues,
    you know, how much insurance companies are paid for delivering
    the product versus what farmers get as a result of the
    insurance.
        The specific group we talked about in the testimony, those
    under the catastrophic insurance program, actually don't buy
    insurance. It is available to them for a catastrophic loss.
    However, they have to be signed into the program.
        FSA staff used to sign these folks up. In, I forget the
    exact year, about 2 years ago, that duty was transferred to the
    reinsurance industry, the private sector folks. That is when
    you saw the big dropoff occur.
        There is not a big benefit for the insurance company to go
    out and get these folks to sign into the program. They don't
    get a premium directly from the insured that they are bringing
    in. As a result, it is going down.
        Now, you will hear RMA people come and tell you their
    reasons for this drop. They believe it is simply because the
    benefit isn't there to the farmer either. That the program is
    designed, the return to the farmer is so low that at that
    catastrophic loss level, they are just not interested in the
    program.
        So we put these issues on the table, suggesting that the
    program really needs to be looked at, as far as benefits go,
    from all ends of the spectrum of the farm producer, versus how
    much they have to pay, versus how much insurance companies are
    paid for delivering the program.
        It is a very complex issue, certainly deserving of some
    more discussion.
        Mr. Hinchey. Thank you very much. Thank you, Mr. Chairman.
        Mr. Skeen. Mr. Nethercutt.

                                   SMUGGLING

        Mr. Nethercutt. Thank you, Mr. Chairman.
        Gentlemen, welcome. Nice to have you here. I am sorry I
    missed your testimony. I had another hearing across the Capitol
    on appropriations I could not miss.
        I am wanting to follow up a little bit, Roger, on your
    comment about the fruit fly incident in Washington State, four
    incidents, apparently the same person. What was the purpose of
    that person bringing that fruit into the country? Was it for
    contamination purposes, was it just for personal use that
    happened to have infestation in it? Do you recall the
    circumstances?
        Mr. Viadero. It was in excess of 400 pounds, Mr.
    Nethercutt, so the assumption would be for distribution. I am
    not trying to say distribution for the purposes of destroying
    crops, but it happened to be one of those Asian fruits that the
    community, the Asian community, wanted from the old country,
    and they just transhipped them in through Canada.

                                  BIOTERRORISM

        Mr. Nethercutt. Which then brings me to the issue of
    bioterrorism, and what, if any, steps you might be taking, to
    what extent are you involved in trying to find out what people
    are trying to destroy, crops that are grown, ARF facilities and
    otherwise in connection with your work?
        Mr. Viadero. We have an ongoing initiative within USDA and
    the requisite agencies, and I think it would probably be best
    served if we briefed you in private on that.
        Mr. Nethercutt. That would be fine. It is receiving your
    attention?
        Mr. Viadero. Oh, yes, sir.

                            CIVIL RIGHTS SETTLEMENTS

        Mr. Nethercutt. I am glad to hear. Another thing I
    mentioned to you privately earlier was the issue of the
    settlement process going on with respect to the black farmers
    who received discrimination over the years. My sense is that
    there may be some problems with the claims processing, that
    there are some people within the credit side of USDA who are
    concerned that others are being brought in that might be
    impacting somehow the legitimacy of the claims, acknowledging
    where there has been discrimination, this Congress, this
    committee, you, everybody wants to be sure that those
    legitimate claims are paid, but there seems to be a question
    that has been raised as to whether all claims are legitimate,
    and to what extent USDA is monitoring the legitimacy side in
    the process of analyzing those claims.
        Would you care to comment?
        Mr. Viadero. Yes. Under the decision, which is the class,
    the Department of Justice is handling all aspects of that, both
    handling the settlement and the investigations. I couldn't see
    a bifurcated effort to remain as independent and not having the
    requisite resources to address the problem. We refer all of
    these allegations to the FBI.
        I will give you an example of one. We had information of an
    individual that was going door-to-door to solicit people to
    sign up. We had another referral where we had an individual
    whose father was a farmer and had a number of siblings, and the
    sibling that remained on the farm was turned down for the
    money, but the sibling who was a postal carrier in a large city
    got the $50,000.
        Our concern, I think everybody here shares the same
    concern, is what we are doing here by casting this aspersion
    upon everyone and holding up the payment to the people who have
    been harmed.
        To that end we briefed the Secretary yesterday on Part 7 of
    our Civil Rights Report, on the program side. That will be
    released shortly, and every member in Congress, both Chambers
    of this great institution, will receive a copy, as usual.
        Mr. Nethercutt. Are you satisfied that the Department of
    Agriculture is paying adequate attention to the issue of
    misprocessing, or improper processing or allegations of the
    same as it relates to this settlement effort that is being
    undertaken?
        Mr. Viadero. I am in fairly regular contact with Charlie
    Rawls, the General Counsel, and he and I have gone over and met
    with people at the FBI, because it is up to them now to
    investigate this. We take all the referrals and ship them over.
    It has actually become a fairly smooth process now for the
    Bureau to open up the cases on this.
        Mr. Nethercutt. Nevertheless, it is your testimony that
    USDA is sensitive to the potential problems that exist, that
    are being referred and investigated by other Federal agencies?
        Mr. Viadero. Yes, sir. I speak for myself, and I think I
    can also speak for the Secretary and the General Counsel, all
    of us are concerned that the right thing is being done. To that
    end, that is why we refer cases, and any other allegations that
    arise in that, over to Justice.
        Mr. Nethercutt. I understand. Thank you very much. Thank
    you, Mr. Chairman.
        Mr. Skeen. Miss. Kaptur.

                            SWISS GOVERNMENT REPORT

        Ms. Kaptur. Mr. Viadero, I wanted to ask you whether or not
    your division of USDA is involved in any way on an
    investigation of the Swiss government's report that it found
    DES hormone in two samples of beef that had been imported from
    the United States? That is a hormone that has been banned in
    this country for many, many years. Are you involved in that?
        Mr. Viadero. No, ma'am. I understand the Under Secretary in
    charge of food safety inspection, Dr. Wotecki, is handling
    that.

                           HUNTS POINT INVESTIGATION

        Ms. Kaptur. All right. My final question, on the Hunts
    Point market investigation, from what you know already, what
    would it take if organized crime, as other members have
    referenced, is heavily involved in that market? What kind of
    resources would it take to do a thorough investigation of
    thefunction of that market?
        Mr. Viadero. I have to be honest, Ms. Kaptur, that question
    is a bit mind boggling, so far as being able to immediately
    supply a finite answer. But we are working these aspects
    jointly with the FBI, which is charged with organized crime,
    ferreting out and prosecuting organized crime. So we are
    working closely with them.
        At a minimum in that market, I would have to double my
    resources though. That is a conservative estimate.
        Ms. Kaptur. You say double your resources as the IG, or
    double your resources devoted to the investigation that has
    been ongoing in that market?
        Mr. Viadero. Double my investigative resources, and I have
    had approximately 20 agents working that case in the market. I
    would have to double that, just for that market.
        Ms. Kaptur. Thank you.
        Mr. Viadero. Only again because it is such an expansive
    market. If we look out the window here, we see these trains
    that pass by the window here. Two of those, 110-car freight
    trains, end up in the Hunts Point market every day. That is how
    much fruit juice just goes into that city.
        Ms. Kaptur. Thank you.
        Mr. Viadero. Thank you, ma'am.
        Mr. Skeen. Mr. Viadero, we go back many years, and I am
    always amazed at the enthusiasm that you carry forward. You
    have not aged one iota.
        Mr. Viadero. Neither have you, Mr. Chairman.

                      URBAN RESOURCES PARTNERSHIP PROGRAM

        Mr. Skeen. Thank you. It has been a very enlightening
    exchange today, and we appreciate what you folks do. We are
    also concerned about the Urban Resources Partnership Programs,
    because we constantly hear there is not enough money at the
    USDA to pay employees' salaries, yet something like this has
    been going on for 6 years. Whether the amount is $3.4 million
    or $20 million, we need to make sure this does not continue. We
    will continue to review this issue as we proceed and we will
    have a few more questions for the record. You have done a great
    job over a lot of years, and we really appreciate what you have
    done.
        Mr. Viadero. Likewise, for your support. Everybody that is
    here, we appreciate your support.
        Mr. Skeen. You have an expanded team. I remember you and
    one or two other folks started this thing.
        Mr. Viadero. We have come a long way, and I am honestly and
    truly proud.
        Mr. Skeen. You haven't dulled your enthusiasm one bit.
        Mr. Viadero. This one is going to get me in trouble, but if
    I could line up all 665 OIG rascals, I would give each one a
    hug. They work doggedly.
        Mr. Skeen. In this case, I guess one fellow doesn't mind
    another fellow giving him a big hug.
        Mr. Viadero. No. Thanks a bunch.
        Mr. Skeen. We will finish and go catch an airplane. Thank
    you all.

                                          Wednesday, February 16, 2000.

                         U.S. DEPARTMENT OF AGRICULTURE

                                   WITNESSES

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

                                Opening Remarks

        Mr. Skeen. First of all, I want to say good afternoon. This
    is the first of 11 hearings on the Administration's budget
    request for fiscal year 2001 and for the Department of
    Agriculture and the Food and Drug Administration.
        As is customary, we are beginning with the Secretary of
    Agriculture, the Honorable Dan Glickman. Dan, good to see you
    here. When I first came to this place, he was my next-door
    neighbor, and you have been a true friend ever since. Thank
    you.
        Mr. Secretary, we are all looking forward to your
    testimony, but before you begin with your statement, I would
    like to ask my good friend, the distinguished young lady from
    Ohio, Ms. Kaptur, if she has any opening remarks.
        Ms. Kaptur. Mr. Chairman, I just wanted to echo your warm
    welcome to this able Secretary and to thank him for being a
    voice for rural America when she has really needed you. It has
    been a pleasure to work with you and your entire team that you
    brought with you today, and I will reserve most of my comments
    until after your formal testimony. But I think that the farm
    communities of this country could not have a better friend than
    Secretary Glickman, and we receive you openly here today.
        Mr. Skeen. Thank you.
        Chairman Young, do you have remarks that you would like to
    make?
        Mr. Young. Mr. Chairman, thank you very much. I would just
    like to welcome the Secretary. I think this is probably the
    first time we have been officially together since I chaired the
    Intelligence Committee. He did such an excellent job there, and
    I look forward to your testimony. I am not going to be able to
    stay for the entire hearing. I am trying to get the
    supplemental ready quickly. But anyway, Dan, welcome. It is
    good to see you.
        Secretary Glickman. Thank you.
        Mr. Skeen. Mr. Secretary, we will let you have the whole
    floor. We are delighted to have you here again. Agriculture is
    going to be better off when we get through with this meeting
    because I am sure we have all of the answers.

                           Statement of the Secretary

        Secretary Glickman. Thank you. Mr. Chairman, thank you very
    much. It is a great honor to appear before you and Chairman
    Young and the Ranking Member Kaptur and the rest of the members
    of this committee who have been friends of mine for a very long
    time. This may be the last time I will appear, certainly at
    this kind of hearing, and I have enjoyed the last five years. I
    will have been in this job five years this coming March. Of
    course, my days in the House are still the highlight of my
    professional life and always will be, but this has been a great
    opportunity. I think that we have established a relationship
    between this committee, and your staff and the people at USDA
    that, hopefully, my successors, whoever they may be, will be
    able to preserve and continue the great cooperation and
    partnership that we have had.
        I am joined here by Deputy Secretary Rominger, who is, of
    course, distinguished in his own right, as head of the
    California Department of Agriculture before he came here, and
    our perennial expert, Steve Dewhurst, who may be the longest
    running budget officer of any agency in Government and
    certainly the most respected, and our long-term chief
    economist, Keith Collins. I think it is fitting to note that
    here we have the two political leaders of the Government, not
    of the Government, of the Department----
        [Laughter.]
        Secretary Glickman. I am not running for anything. Trust
    me. [Laughter.]
        And then we have two key dedicated career employees of USDA
    who have served in Republican and in Democratic
    administrations, and we are really honored that they are here
    because they offer, I think, a help to us to try to implement
    our policy in the best way possible.
        Of course, we have, in addition to that, our under
    secretary for Farm and Foreign Agricultural Services, Mr.
    Schumacher, and his team who are here to talk about a lot of
    program issues.
        I would ask that my entire statement appear in the record,
    and I will make just some summary comments.

                             America's Farm Economy

        It is clear that America's farmers and ranchers are facing
    difficult economic conditions. I do not have to tell you that
    in terms of farm prices, exports, and net farm income, these
    numbers do not look very good. While I think they will turn, I
    am not telling you that it will happen any time in the near
    future, and I think there will need to be continued help from
    the Congress. The trade numbers have come down. I suspect they
    will go back up again. But the fact is you need a strong
    domestic farm safety net, in addition to overseas trade to deal
    with these issues.
        I must tell you that the Administration is strongly
    committed to the approval of permanent normal trade relations
    with China. When it comes to agriculture, this issue is an
    absolute win-win. Virtually every agricultural product that we
    would sell to China would have its tariffs reduced
    significantly. In fact, agricultural tariffs, by and large,
    would be at rates equal to or lower than those currently
    charged by our allies in Europe and in other parts of the
    world. So normal trade with China offers a significant
    opportunity for the future of world trade.
        But the fact of the matter is that things have been
    difficult for farmers. Government payments totalled nearly $23
    billion in calendar year 1999 and are projected at over $17
    billion in 2000 and that, to some extent, reflects the
    emergency appropriations, which Congress provided when things
    got very, very bad.

                                FARM SAFETY NET

        As the President said in the State of the Union message, we
    need to work in a bipartisan way to strengthen the safety net
    until a new farm bill is enacted in 2002. The 1996 farm bill
    will continue to provide assistance, but it is likely not to be
    enough. As you know, the Agricultural Marketing Transition Act
    (AMTA) payments drop a half billion dollars this year and
    another billion in 2001 under the 1996 farm bill.
        In the last two years, Congress has responded near the end
    of each fiscal year by enacting an emergency aid package,
    usually led by natural disasters. This has been the tail that
    has wagged the dog for obtaining a total emergency package to
    strengthen the farm safety net. For FY 2001, we have proposed
    in the President's budget an $11.5 billion package to begin the
    debate on what the add-ons should be to the 1996 farm bill to
    help strengthen that safety net package. It is fully paid for
    in the context of a balanced budget. This is not emergency
    spending; therefore, it is not off budget. The plan provides
    three basic parts:
        One, there would be countercyclical supplementary income
    assistance over and above the current farm bill payments to
    help farmers deal with low prices and revenues, dairy price
    supports would be extended, loan rates would be frozen and a
    new on-farm storage program would be started.
        The second part of this $11.5 billion package would be
    increasing environmental benefits by treating land as a
    valuable commodity and not just the commodities grown on the
    land. A new conservation security payment, a direct payment,
    would be established. Payments to farmers would not have to be
    cost shared. In addition a whole group of other conservation
    programs would be enhanced.
        Third, we would provide improved risk management by
    reforming the crop insurance program to develop new insurance
    policies, expanding coverage to livestock and specialty crops
    and replacing the areawide trigger for assistance for
    noninsured crops with normal disaster declarations. We would
    also extend the premium buy-down so as to provide about a 30-
    percent reduction in premiums for next year's crops.

                   EMPOWERMENT ZONES/ENTERPRISES COMMUNITIES

        Finally, we would expand the number of Empowerment Zones
    and Enterprise Communities, we would provide financing to
    cooperatives for livestock processing and other value-added
    facilities and we would implement a new bio-fuels program.
        What we are trying to do with this program is to say the
    following: We know there is going to be some form of
    supplemental plan for farmers beyond the 1996 farm bill. We
    hope it is just not doubling AMTA payments again at the last
    minute of the fiscal year. We recognize that we have an
    obligation, too, to do more than just complain, but to come up
    with some specific proposal. We have done that here. It is a
    targeted proposal, it is national in scope and provides a
    bridge to a new farm bill. I recognize that because it is on
    budget and not emergency spending, some people have said it is
    not enough. But I would point out it is on budget, and it is
    done in the context of all of the President's budget
    priorities, and we want to work with Congress on ways to
    implement this in its form as much as possible, and we will
    work with you on these issues.

                                     TRADE

        Let me move on to the issue of exports. Last year, the
    Department programmed nearly 8 million metric tons of food aid
    for countries around the world, the highest level in 25 years.
    Sales under our Commodity Credit Corporation (CCC) export
    credit guarantee programs exceeded $3 billion. It is clear that
    trade and export growth is an essential component of our farm
    safety net. As I mentioned, strong efforts will continue to be
    made on the trade policy front. Last year's agreement with
    China on bringing China into the World Trade Organization (WTO)
    should have a significant impact on trade. We estimate, within
    four or five years, about $2 billion a year in additional
    exports could go to China.
        The budget provides nearly $5.8 billion for international
    programs, including $3.8 billion for the CCC export credit
    guarantee programs, which can be increased, if necessary.
        We are also requesting, for the third year in a row,
    authority to use unspent Export Enhancement Program (EEP) funds
    for food assistance and market development purposes. Rather
    than have these funds lapse, we would like them to be used in
    other export programs. The budget also supports three new
    agricultural trade offices.

                                  FARM CREDIT

        In the area of farm credit, as you know, emergency
    supplemental appropriations have been provided the last two
    years through the good work of your committee. For the year
    2001, a continued need for additional farm credit is expected.
    While the 2001 budget includes a $4.6 billion number for farm
    credit, we will have to closely monitor the farm credit needs
    to ensure that adequate credit is available until the farm
    crisis situation abates.

                            MARKETING AND INSPECTION

        In the area of marketing and inspection, I hear more and
    more that these issues are front and center out in the country,
    and I hear it for myself in my own visits. Let me talk about
    two issues: One is the issue of concentration in agriculture,
    particularly in livestock and poultry. That continues to be a
    top priority and requires additional funding.
        The Congress passed authority for us to move ahead on
    mandatory price reporting for livestock. That was begun in the
    year 2000 with emergency funding and will be continued through
    the use of appropriated funding. That is a high priority of
    Congress. It is a high priority for us as well.
        I must tell you the whole issue of concentration and
    agriculture is one that requires, I think, additional resources
    both within USDA, as well as within the Justice Department. You
    may be interested to know that they have hired a full-time
    person at Justice in the Antitrust Division to deal with
    agricultural issues, and that person just came on board within
    the last couple of months.
        A couple of other issues: One has to do with the inspection
    of plant and animal species coming in to the country that are
    affected by citrus canker, Asian long-horned beetle, Med-fly,
    Mex-fly, hog cholera, etc. We have added about 300 additional
    persons in our budget to Animal Plant Health Inspection Service
    (APHIS) on the quarantine and inspection side of the picture.
    We have been using CCC emergency spending to deal with these
    programs but, we have asked to convert this emergency spending
    to appropriated spending in the budget for 2001.
        I think this is an issue which requires a lot more
    attention, both from USDA, as well as from the Congress, to
    figure out how we can deal with this very large and growing
    problem of pests and invasive species coming in to the country.
        We also have to deal with the issue of biotechnology. We
    have proposals in our budget for developing testing methods for
    biotech crops, as well as dealing with threats to agriculture
    from bioterrorism.

                               Rural Development

        In the area of Rural Development, obviously, there is more
    to agriculture than just the farm programs themselves. We have
    to make sure that the rural infrastructure is kept up-to-date
    so that jobs can be created, there is adequate housing and
    access to water, electricity, telecommunications and the
    Internet. The Rural Development budget will support over $12
    billion in loans, loan guarantees, grants and assistance, which
    is $1.3 billion more than the year 2000. That includes $5
    billion in direct and guaranteed loans for single-family
    housing, which is $650 million more than the year 2000, as well
    as increased funding for multi-family housing and rental
    assistance. There is increased funding for water and waste
    disposal programs, continued support for rural electric,
    telecommunication, distance learning and telemedicine to help
    close the ``digital divide,'' and nearly $1.3 billion in
    guaranteed loans and $50 million in direct loans to help rural
    businesses.

                       Research, Education, and Economics

        Obviously, the research budget is critical. It has been
    critical for you, Mr. Chairman. The budget proposes an increase
    of 3 percent for research, education, and economics. The entire
    mission area is funded at over $2 billion.
        In the area of food safety, the budget provides increases
    aimed at reducing microbial contamination of foods. Safe food
    sells. Public confidence is the key to all of that, and the
    purpose of these programs is to ensure that people have
    confidence that our food supply is safe, which I believe it is.
    The increases in this part of the budget are dedicated to the
    President's Food Safety Initiative and enhanced implementation
    of the Hazard Analysis Critical Control Point (HACCP) program.
    Additional inspectors are being hired in 2000 to ensure that
    the demand for inspection services can be met without
    disruption to the industry.
        HACCP has been fully implemented in all meat and poultry
    establishments, with a 96-percent compliance rate. You should
    be interested to know that the prevalence of salmonella on
    broilers has been reduced by 50 percent since the HACCP program
    has come into effect.
        One thing that will give the public more confidence that
    their food supply is safe is that there has been the dramatic
    reduction of salmonella on poultry, largely as the result of
    implementing a science-based system. The rate of illnesses
    caused by campylobactor has also declined as well.

                                   Nutrition

        In the area of nutrition, despite unprecedented national
    prosperity, there are still too many families, particularly
    with children, who do not know where their next meal is coming
    from. The budget provides for full funding for food stamps,
    child nutrition and Women, Infant and Children (WIC). Based on
    proposed legislation, which we have or will be sending up, food
    stamp eligibility would be restored to over 200,000 eligibles,
    and there would be better access to reliable transportation for
    the working poor. As you may know, the automobile allowance
    under the Food Stamp Program has basically been at the same
    level for over 25 years, with just a very minor increase. We
    propose raising that allowance for eligibility because the
    working poor need to have a vehicle at reasonable value to go
    to work. We think that is very important.
        Additional funds are requested to improve and protect
    program integrity and efficiency, evaluate the effects of a
    universal free school breakfast program, increase nutrition
    education and expand Farmers' Markets program.

                               Natural Resources

        In the area of natural resources, as you know, the largest
    part of the Department of Agriculture in this area is the
    Forest Service, which is not part of this particular budget
    request. The part of the budget under jurisdiction of this
    committee basically private lands conservation in the Natural
    Resource Conservation Service (NRCS). This part of the budget
    supports the Administration's farm safety net through the
    Conservation Security Program, enhancements to the Conservation
    Reserve Program (CRP), the Wetland Reserve Program (WRP) and
    other programs that are mentioned in my statement. It also
    provides for a 50-percent increase in funding to promote bio-
    based products and bio energy.

                                  Civil Rights

        In addition, if I might just end with some other issues on
    customer service and program integrity. We have been dealing
    with the problems of civil rights in the Department of
    Agriculture for some time. Sometimes it feels like two steps
    forward and one step back, sometimes like two steps back and
    one step forward. But the fact is we are currently paying out
    significant compensation to farmers under the Pickford
    decision, the Federal court decision. We are also working to
    help socially disadvantaged farmers. We have asked for $10
    million for the 2501 outreach program. We are trying to improve
    the administration of our customer service by streamlining and
    restructuring the county offices to provide one-stop USDA
    service centers.

                    Centralized County Office Administration

        Mr. Chairman, in last year's appropriations bill there was
    language which prevented us from setting up a centralized
    administration of our county office system through the Support
    Services Bureau. I can tell you, after having run this
    Department for five years, this is the most uncorporate
    structure probably in the history of our Government. It was set
    up to be run as separate and almost sovereign units, each
    agency within the Department. Whether it is the Farm Service
    Agency, the NRCS, Rural Development, APHIS, it is very
    difficult to manage a bunch of different agencies who really do
    not operate within a corporate system for personnel, for
    information technology for travel.
        One of the reasons we ask for the Support Services Bureau
    is to have some competent corporate management over the
    programs that serve our farmers. Because farmers really do not
    care so much about the acronym of the agency they go to rather
    they care more about service provided.
        I would ask you to take a look at the restrictive language
    that was put in last year on the Supports Services Bureau and
    help us as we try to move the Department's management into the
    modern world. We will talk to you more about this. I know that
    most of you and your staffs are familiar with a lot of the
    management problems within USDA. For a lot of historical
    reasons, we do not have the corporate management that other
    departments of our Government have in a lot of different areas,
    and I think we need some help. We have made some progress, by
    the way, but I think we need some continual help to try to meet
    some of those challenges.
        So, again, I thank you for allowing me to come here today.
    I realize I have talked in a summary form, but I would be glad
    to answer any of the questions that you have.
        [The prepared statement of Dan Glickman, Secretary of
    Agriculture, follows:]

        Mr. Skeen. Mr. Secretary, we appreciate your being here.
    You did a fine job, as usual.
        I am going to start off with this: We are going to try hard
    to use the five-minute rule in this hearing, and in all of the
    hearings henceforth. But we will also continue as many rounds
    as members like, but try to limit it to five minutes. And I
    will start and obey my own ruling.

                           1996 Farm Bill Legislation

        Mr. Secretary, have you submitted the legislation for
    enhancement of the 1996 farm bill to Congress and what are its
    impacts on fiscal year 2001?
        Secretary Glickman. It has not been submitted yet. We are
    trying to get it done by the end of the month. It is not there
    yet.
        Mr. Skeen. Very good. So it has not been submitted.
        Secretary Glickman. No.

                          FY 2000 supplemental Request

        Mr. Skeen. Let me talk about the supplemental request for
    fiscal year 2000. The President's budget request for fiscal
    year 2001 made no supplemental request for USDA for fiscal year
    2000, but we have been told that something is in the works, and
    we would appreciate any light that you might shed on this.
        Secretary Glickman. Mr. Dewhurst.
        Mr. Dewhurst. The Administration is preparing a
    supplemental for further assistance to the victims of Hurricane
    Floyd. I understand it involves more than just the Department
    of Agriculture. It involves a number of departments. There will
    be agricultural items in that proposal. The Office of
    Management and Budget (OMB) told me that they expect to submit
    to the Congress within the next two weeks.
        Mr. Skeen. Well, last November there was considerable
    pressure on us from OMB to add $81 million for agricultural
    cooperatives in North Carolina for losses related to Hurricane
    Floyd, as well as funding for replacements of destroyed farm
    structures. Hurricane Floyd was quite some time ago, and surely
    better information is now available. We would appreciate any
    information that you can provide as justification of any
    funding for these purposes.
        Mr. Dewhurst. We will do that. The Administration's
    proposal will renew that request.
        Mr. Skeen. Thank you.
        Ms. Kaptur.
        Ms. Kaptur. Mr. Chairman, I do not think you used your five
    minutes.
        Mr. Skeen. I tried not to. I set a good example.
    [Laughter.]
        For me, that is hard to do.

                            Statement of Ms. Kaptur

        Ms. Kaptur. Let me thank the Secretary very much for your
    testimony and to say that I am deeply interested in your
    proposals that would target agricultural assistance better to
    losses that have actually been experienced, rather than using
    formulas that have no relationship to anything, except that
    maybe you registered at your Farm Service Agency five years ago
    or six years ago. So I will welcome those.

                               Farm Credit System

        There are studies that are coming out now that are showing
    how the AMTA payments have been distributed. I suppose the best
    thing you can say about what has been done is that we were able
    to hold the Farm Credit System together as a result. We have
    pushed up real estate prices all over the country with this
    system. But I really welcome your fresh look at that.

                             Trade/Food Assistance

        I also wanted to compliment you. At the same time as we try
    to hold our rural sector here together at home, one of the key
    components in doing that is moving product. And the Commodity
    Credit Corporation, the work that you have put into moving
    product around the world, I cannot compliment you enough. And
    one of my concerns, however, is that USDA, in some way, seems
    to be hampered in its efforts to do that and to actually
    achieve some of our foreign policy objectives abroad by USDA
    being caught up in some of these interagency working groups.
    And one of them I wanted to ask you about is something called
    the Food Assistance Policy Council. And, apparently, many times
    our ability to use our storehouse of grain as a vital tool in
    our Nation's foreign policy interests have been held up.
        Back in 1990, in the farm bill, the other body actually was
    very critical of such interagency working groups. And I am
    curious as to whether this new group is merely a follow-on on
    the old one. Can you tell us who the members of that group are
    and who chairs the committee?
        Secretary Glickman. Well, I would ask Under Secretary
    Schumacher to comment on the specific workings. Let me just say
    this: I suppose it would be nice if I had complete power and
    control of deciding all of the issues as to where food
    assistance should go. But it does involve a lot of issues. For
    example, it involves the purchase of commodities in the open
    market, which becomes a budget question. It used to be we had
    large surpluses in storage. CCC owned the commodities. Now, we
    do not. So we have to go out and buy them. So that has budget
    implications to it.
        I sometimes get frustrated with this process myself, that
    it does not work fast enough. But we did announce a 3-million
    ton allocation just last week. I hope the country-by-country
    allocations can be announced soon. I would say it works
    reasonably well. In fact, it is interesting. The head of OMB,
    Jack Lew, when he worked for Tip O'Neill, helped to write some
    of the CCC provisions dealing with food assistance. So I think
    he is sympathetic to these ideas. Theprocess does sometimes get
    bogged down, but I cannot tell you that it does not work. I think it
    does work. It is slower than I would like, but it does work.
        Mr. Schumacher, you might want to comment.
        Ms. Kaptur. Mr. Schumacher, who are the members and who
    chairs the committee?
        Mr. Schumacher. I chair the Food Assistance Policy Council
    that is meeting very regularly, especially the last 15 months.
    Members of that are the Office of Management and Budget, AID,
    State, and USDA. We do invite other members to advise us from
    the National Security Council, National Economic Council, and
    Treasury. We meet regularly. It is under that arrangement that
    we worked out the 3-million tons of additional food aid.
        Ms. Kaptur. Mr. Secretary, on the shipments abroad, do you
    expect the level this year to equal last year's level?
        Secretary Glickman. I think it will be close to last year's
    level. I think some of it depends on additional needs during
    the year. Right now I think we are a little short of last
    year's level, but we may reach it if the needs are there. My
    theory is that we have a lot of food in this world and a lot of
    food in this country, and there is a tremendous amount of need
    out there. So we should not be stingy with providing food to
    needy people.
        Ms. Kaptur. I just will say, Mr. Chairman, in my last 30
    seconds in closing here, I hope, Mr. Secretary, that in follow-
    up questions that I will ask and documentation from the Agency,
    often what happens when our food commodities go abroad and they
    are used for different purposes, they do not contribute to
    infrastructure development in agriculture, whether it be
    Russia, whether it be the Middle East or whatever. And I have
    been very disappointed that USDA has been cut out, with AID
    many times handling these programs ineffectively in many places
    in the world.
        And I would look to work with you, if we could, to
    reestablish USDA's role in extension and technical assistance
    and development in some of these far corners of the globe. For
    whatever reason, I do not quite understand what happens with
    interagency transfers of money, but I wanted to highlight that
    issue. And I know my time is up, and I thank you.
        Mr. Skeen. Mr. Walsh.
        Mr. Walsh. Thank you, Mr. Chairman. Welcome back.
        Mr. Skeen. Thank you.

                             STATEMENT OF MR. WALSH

        Mr. Walsh. Mr. Secretary and all of your staff. Coming from
    the Northeast, as I do, we are always looking for harbingers of
    spring. With two feet of snow in my front yard, clearly, the
    Secretary appearing before the Ag Subcommittee is a harbinger
    of spring.
        [Laughter.]

                                 DAIRY PRICING

        Mr. Walsh. It is the only one I have seen so far.
        Also, coming from the Northeast, as I do, I am reminded of
    last fall's battle over dairy pricing. I could never really
    understand why the Administration and USDA supported a policy
    that was really punitive to most of the country. Fortunately,
    it was resolved, I think, to the benefit of the vast majority
    of dairy farmers in the country, at least the pricing portion
    of it.
        The other portion of that discussion, as you probably
    remember, was the compact. This is an idea that has gained
    broad support throughout the East, the Southeast and in many
    other regions in the country. So that is an issue that remains
    a high priority for my farmers. You couple that with the
    supplemental package that was provided last year for
    agriculture, $9-billion-plus dollars--with only $125 million
    for dairy market loss payment out of $9 billion for agriculture
    around the country. And I said in the supplemental that I have
    a great deal to learn from my Midwestern colleagues and their
    ability to help their farmers because, clearly, we were not
    successful. We are losing hundreds, if not thousands, of dairy
    farmers every year all across the country, and the Northeast is
    especially hard hit because of land prices, taxes and so forth.
        But the compact is one of the few areas of hope that our
    dairy farmers have. And when you compare what the Federal
    Government did with the market loss payments of about $125
    million, that came, on the average size dairy farm in the
    Northeast, it came to about just a little under $2,000 of
    relief. Whereas, in the six New England states and the portion
    of my state that borders New England that sells into the New
    England compact, their compact payments amounted to $18,000 to
    $20,000 per farm. Now, that is a dramatic difference over what
    dairy farmers received from between the dairy market loss
    payments. This is something that consumers, producers,
    processors and governments within that area have agreed to. The
    consumers support it. It helps the industry. It is probably the
    only life buoy out there for them, given the fact that prices,
    again, are at a 22-year low.
        So I would just like to get your thoughts on why the
    Agriculture Department has continued to oppose this and what
    would be your position. It might save you some money, in the
    long term.
        Secretary Glickman. Well, first of all, I approved the
    Northeast Dairy Compact. So the only step I have taken since I
    have been Secretary has been to authorize the compact.
        Now, the compact was to expire last fall when the milk
    marketing order system went into effect. Obviously, we went
    through a battle on that. I would, by the way, point out that
    Mr. Collins' office produced a document last fall which
    indicates that virtually every region of the country would have
    actually benefitted by our milk marketing order reform, but I
    do not think anybody believed what he said, not because of him,
    but it was too late in the game. But in any event, that battle
    has passed us now, and we are implementing the order changes
    that Congress has put into effect.
        I would like to just mention one other thing before I get
    to that.
        Mr. Walsh. Sure.
        Secretary Glickman. You do make an interesting point,
    however. The fact of the matter is last year's disaster
    assistance program was started because of the drought that
    occurred in the Northeast in the Mid-Atlantic Region. It was
    the tail that wagged the dog that produced the $9 billion.
        Mr. Walsh. We got the drought; North Carolina got the
    money.
        Secretary Glickman. Well, they also had a big problem too.

                                 DAIRY PRICING

        Mr. Walsh. They do. They do. They will be back.
        Secretary Glickman. It is an interesting perspective to
    note that we have calculated almost 220,000 farmers from
    Virginia up through the northeast states to Maine. Those states
    have almost as many farmers as you have in the central
    heartland region of the country. Whileagriculture is different
    all over the country, the fact of the matter is that our agricultural
    programs have tended to be very, very regional over the years, since
    the second World War, and we ought to look at ways where we can deal
    with farmers on a national basis.
        It is one of the reasons why we proposed some changes in
    our crop insurance program. Getting rid of the areawide trigger
    in the non-insured assistance program will help specialty
    crops. Direct conservation payments will be paid to farmers all
    over the country, and they will not be limited just to program
    crops. These are things to make the program more available to
    your farmers rather than focused on what you call traditional
    row crops. I am not prejudicing those crops. I am just saying
    that our policies tend not to be national in scope.
        Now, on the compact issue, we have not taken a position on
    the compact as an Administration. There is no question the
    compact has produced some positive results for producers in the
    Northeast. It is a cartel, however. It is a regional cartel,
    where dairy producers get together and basically fix the price
    of a certain type of milk in a certain region of the country.
    So you would not necessarily call it a market-oriented reform
    to agriculture. However, not everything in agriculture is done
    in a pure market. Dairy policy has not been one, historically,
    that has been pure-market-oriented over the years.
        I am willing to have an open mind. I will have to tell you
    there are a couple of issues. These compacts can tend to
    produce price fluctuations which can disproportionately hurt
    the poor and programs that serve the poor. For example, the
    compact has had to make payments to USDA under the WIC program
    because it has raised the price of milk. So you have got to
    make sure that the compacts are designed in a way that do not
    hurt the lower income folks.
        If you produce too much milk in one region of the country
    as a result of a compact, the Government either has to buy the
    milk or it goes to other regions, where it can have a negative
    effect on the pricing of milk.
        Mr. Walsh. If I can interrupt just for a second.
        Secretary Glickman. Yes.
        Mr. Walsh. The situation now is that the West is producing
    so much milk for so few customers that it is driving up stores
    of cheese and nonfat dry, and it has deflated the price. So it
    is happening to us.
        Secretary Glickman. I understand the effect on milk
    production. I was just out in the Central Valley of California,
    and one company is talking about operating a dairy farm with
    47,000 cows. I do not know how many you have in your district,
    but that is a lot of cows.
        Mr. Walsh. More than that.
        Secretary Glickman. The third thing is that, in order to
    have a national policy, I think the Secretary, whoever is
    occupying this job, ought to have some powers to modify or
    revise or oversee the compact while it is in effect. These are
    just some of the thoughts that I have on the matter.
        Mr. Skeen. I appreciate that. That brings me to this point.
        Secretary Glickman. Yes.
        Mr. Skeen. Mr. Dickey.
        Secretary Glickman. Okay. But, anyway, what I am saying
    is----
        [Laughter.]
        Mr. Walsh. To be continued.
        Secretary Glickman. To be continued. It is something to
    talk about.
        Mr. Skeen. Go ahead and finish your thought.
        Secretary Glickman. Sorry about my long answer.
        Mr. Skeen. Good answer.
        Mr. Dickey.
        Mr. Dickey. Hello, Mr. Secretary. How are you?
        Secretary Glickman. Fine, sir.

                            STATEMENT OF MR. DICKEY

        Mr. Dickey. Four things, all have to do with Arkansas. Do
    you know how to pronounce that?
        Secretary Glickman. I know how to pronounce the last six
    letters of Arkansas, not the first two letters.
        [Laughter.]
        Mr. Dickey. I would like to restore my time.
        [Laughter.]
        Mr. Dickey. Chicken farmers, black farmers, civil rights
    discrimination and something called TMDL. On January 27th, we
    had an ice and snowstorm that collapsed hundreds of chicken
    farm houses. Chickens were let loose everywhere, millions of
    them. They died because of the weather. They could not be fed.
    The buildings were collapsed that were there on-site. Nothing
    could happen. Folks who have not had----
        Are you listening to me, Mr. Secretary?
        I am just kidding you. Keep talking. I know you can do two
    things at once.
        [Laughter.]

                                CHICKEN FARMERS

        Mr. Dickey. The chicken farmers, the contract growers are
    working on a slim margin anyway, and all of these things
    started coming down. They do not have money to bury the
    chickens, they do not have money to get rid of the debris, they
    do not have money to even borrow the money back to start again,
    and even if they do, the specifications now are going up on
    them. It is just a collision of bad events for them. And it is
    hurting our economy. It is going to have a great deal of effect
    on land values, and taxes and everything else.
        The President, as I understand, has been doing something in
    this regard. The regulations are woefully inapplicable. What is
    being done to help them and how soon can help come?
        Secretary Glickman. I have a couple of comments. One is
    that NRCS, our soil conservation people, are making some
    payments in this area, but not to compensate for buildings, I
    do not think, but for disposal purposes, they are involved.
        We have got an assessment team looking at this. We had the
    same problem in North Carolina, where the emergency loan
    authority would not go for construction of facilities. And what
    we are doing is is that if, in fact, because this is a big
    problem everywhere, we are trying to see if there is a way to
    deal with it under our Emergency Farm Loan Program. If there is
    not, and you need to change the law to give us that authority,
    we need to give you that information as quickly as possible. I
    would like to do it if I have the legal authority.

                                 BLACK FARMERS

        Mr. Dickey. Good. The black farmers, they are caught
    between the court with a consent decree, the adjudicator, the
    monitor, the facilitator, the inspector general and allegations
    of fraud, and abuse. And the net result is they are not getting
    any help. They feel like that justice is being denied by delay.
    And I have experienced some of itmyself, as I have tried to
    help in their circumstance.
        It is intolerable what is being done since the Court has
    issued its decree. Is there anything that you can offer today
    that will help, in that regard, these black farmers?
        Secretary Glickman. Well, first of all, I think it is
    important to note that we have issued checks, as of today, to
    1,839 farmers, for a total of $92 million in payments under the
    settlement agreement. In fact, 200 people will soon receive
    checks for about $10 million. I am going to try to expedite the
    process. But there have been over 20,000 claims filed, about
    half have been reviewed. Sixty percent have been approved to
    date. Of those that have been reviewed, 40 percent have been
    disapproved.
        I will tell you this is a third-party process. We do not
    adjudicate the claims. As you know, under the consent
    agreement, there is an adjudicator who reviews these claims,
    and then a monitor who reviews them to make sure that they are
    fair. That is very important for me because some people have
    gone through a lot of history in being denied the claims.
        But I also would point out this is not an entitlement for
    producers. Producers must come in and prove their claims to get
    the money. Otherwise I am not in a position to pay the claim.
        Mr. Dickey. But the consent decree, the problem--excuse me,
    Mr. Secretary--is that everybody is pointing to everybody else
    and saying, ``If you cannot do this, and you have got to go do
    this, and go back to court,'' but the procedure is pretty well
    set out in the consent decree, as I understand it.
        Secretary Glickman. That is correct.
        Mr. Dickey. It says, ``Attempting to farm,'' and if you
    have written to a member of Congress or if you have got any
    kind of justification for that----
        Secretary Glickman. That is right.
        Mr. Dickey. But they have been told time and time again
    that somebody else was going to make the decision.
        Secretary Glickman. Let me tell you that I cannot decide
    that question. Under the consent decree, the adjudicator has to
    decide the question because we are the ``offending party,''
    historically--the Department of Agriculture. What I am saying
    is that, as of today, we have paid over $90 million to about
    1,850 farmers, and only about half the claims have been
    reviewed. Tomorrow, there is another conference with Judge
    Friedman, who is the judge who is handling this case, and we
    are committed to try to move things along as quickly as
    possible.
        Mr. Dickey. Let us talk some more about that.
        Secretary Glickman. Yes.

                          CIVIL RIGHTS DISCRIMINATION

        Mr. Dickey. Civil rights discrimination, I sent you a list
    of over 1,000 petitioners saying that a particular office in my
    district was discriminating, and we cannot get the--you all
    have had an investigator down there, and we cannot get a
    report. Can you tell me--
        Secretary Glickman. I will have to get back to you on that
    one, Jay.
        Mr. Skeen. That is the end of the time.
        Ms. DeLauro.
        Mr. Dickey. Thank you, sir.

                            STATEMENT OF MS. DELAURO

        Ms. DeLauro. Thank you, Mr. Chairman. And welcome, Mr.
    Secretary.
        Secretary Glickman. Thank you.
        Ms. DeLauro. It is a delight to see you here. If you are
    not going to come back in this capacity, I hope you will think
    of coming back and joining us in the House again. It would be
    terrific.
        Secretary Glickman. Thank you.

                                 DAIRY COMPACT

        Ms. DeLauro. Let me first associate quickly with the
    comments of my colleague from New York, Mr. Walsh, in support
    of the dairy compact.
        In terms of the Food Safety Initiative, I am delighted to
    see that we are looking at efforts to promote the adoption of
    National Uniform Laboratory Standards by Federal, State and
    local Governments for testing meat and poultry.

                           FEDERAL FOOD SAFETY AGENCY

        As you know, Congressman Latham and myself last year
    introduced the Safe Food Act, which would create one, single
    Federal Food Safety Agency to try to streamline and make
    effective this process. As the Administration is taking more
    and more steps to streamline the food safety responsibilities,
    what obstacles do you see in the way of creating one agency
    that deals with all of this--with our food safety?
        Secretary Glickman. Well, right now, we are trying to deal
    with this problem by breaking down turf battles and bureaucracy
    between USDA, Food and Drug Administration, Centers for Disease
    Control.
        Ms. DeLauro. Like Commerce does for shell fish.
        Secretary Glickman. Yes. I think it is working reasonably
    well. The President established a Food Safety Council that
    deals with all of the issues from new regulations, to
    impediments to enforcement, to making sure that the research
    budgets are being properly coordinated. There is a very
    significant enhancement of the research budget here.
        As of today, the Administration has not endorsed a single
    Food Safety Agency. It may be something at some point in time
    that may be looked at. I really do not think right now,
    however, that moving boxes around in the Government will have a
    profound effect on providing safe food for consumers;
    certainly, not in the short term because we have got to work on
    these issues of epidemics of disease, pathogen reduction, all
    of the other kinds of things.
        But at some point, it may be worthwhile looking at a more
    fundamental structural change. But right now, I think we have
    our hands full just to deal with the problems of making sure
    that people do not get food-borne illnesses. The HACCP program
    is working. It is, by and large, working pretty well.
        Ms. DeLauro. A comment on that, and I know that there has
    not been an endorsement of one agency. There are a number of us
    who are going to continue to pursue that.
        Secretary Glickman. Right.
        Ms. DeLauro. I think you are correct in talking about
    breaking down some of the barriers. But I think that ought to
    be the direction in which we go so that this is in one place,
    and so that we can try to deal with this in an efficient and an
    effective manner.

                                  FOOD SAFETY

        The salmonella threat, how big is the threat? You talked
    about the 50 percent that we have, 50 percent in chickens. Is
    this, in your sense, where we are in this process of cutting
    down on the threat?
        Secretary Glickman. Well, salmonella, I think is the most
    common food-borne illness, if I am not mistaken. It is
    prevalent, I do not know about all meat products, but it is
    more prevalent in poultry products,If you follow the proper
    HACCP procedures and there is proper cooking, and proper food handling,
    you are able to contain the problem. That is what we are trying to do.
    It need not be a problem, if the processes and procedures are followed
    correctly.
        Ms. DeLauro. A quick question. If closing, the plants where
    we discovered the outbreaks was mandatory instead of voluntary,
    would this move us in a direction of better and more efficient
    handling of the problem?
        Secretary Glickman. Well, perhaps, but let me make a couple
    of points here.
        I think the more critical problem, to be honest with you,
    is that I do not have recall authority under current law. I
    cannot recall a product. Now, I can ask a company to recall a
    product, and they will do it, under most circumstances, because
    I have the authority to withdraw the stamp of the inspection,
    the USDA stamp. But I do not have the authority to recall a
    meat product, which I think is--by the way, a major shortcoming
    in the law given that the Consumer Product Safety Commission
    has authority to recall defective consumer products.
        Ms. DeLauro. Right. Exactly.
        Secretary Glickman. But I cannot recall defective meat or
    poultry. I can only hope that I get the cooperation of
    industry, and by and large, they give it. So I think that is a
    more pressing issue, however, for us to deal with.
        The one thing about salmonella, is that it is a pretty good
    indicator. If you find salmonella in a plant, it may be
    indicative of other problems. That is why the salmonella
    standard has been so important to us.

                         FREE SCHOOL BREAKFAST PROGRAM

        Ms. DeLauro. I would like to talk about the
    Administration's $5 million to complete the Universal Free
    School Breakfast Demonstration Program--8.7 million breakfasts
    are served in my state of Connecticut. What are the plans after
    the research is completed?
        Secretary Glickman. Well, I think the idea is to look at
    these pilot programs and to see how well they work and then
    decide whether we want to develop more comprehensive
    legislation is that correct?
        Mr. Dewhurst. That is correct. There will be an evaluation,
    which will be submitted to the Congress, and then the decisions
    will have to be made.
        Secretary Glickman. We will have to make a decision.
        Ms. DeLauro. Timing on?
        Mr. Dewhurst. As I recall, the pilot program is a three-
    year program so the evaluation would proceed after the pilot is
    done.
        Ms. DeLauro. Mr. Chairman, I just have one comment. I saw
    the red peppers there, hanging. And if they are available for
    members to take, there is a great Italian dish. It is spaghetti
    al olio, garlic and oil, con peperoncini. That is the
    peperoncini. I would like to take some home with me, if I can.
    [Laughter.]
        I will be happy to make the pasta for the committee.
        Mr. Skeen. Let me tell you this: Those have been varnished.
    [Laughter.]
        Ms. DeLauro. Thank you. Thank you.
        Mr. Skeen. They are very gummy. Would you excuse us, Mr.
    Secretary, and we will go and have this vote, get it out of the
    way and be right back.
        Secretary Glickman. Sure.
        Mr. Skeen. Thank you for your patience.
        [Recess.]
        Mr. Skeen. Before we start, I just want to warn everybody
    that we have changed the timing device so that it will be beep
    when the five minutes have expired. I did not want anybody to
    be startled.
        Mr. Kingston?

                           STATEMENT OF MR. KINGSTON

        Mr. Kingston. Thank you, Mr. Chairman. I think you may have
    also rigged it to three minutes for mine.
        Mr. Secretary, it is always a great pleasure to have you
    and your professional staff with us.

                             FOOD SAFETY INSPECTION

        Let me ask, first off, I had a very good, a very
    satisfactory meeting with the Food Safety Inspection people the
    other day, Katherine Wotecki, and the issue of inspectors came
    up. And I know last year you requested I think $545 million, or
    thereabouts, and got it, and hired 70 new inspectors I believe
    she told me. You have something like 7,000, including
    veterinarians right now. The numbers are less relevant than----
        She said one of the problems you are experiencing is a 5-
    percent growth in the industry, and it is hard for the Food
    Safety Inspection Service to keep up with it. And so realizing
    that it is a problem for you all, it is a problem for the
    consumers, it is a problem for the industries, how are we going
    to adequately address that in this year's budget?
        Secretary Glickman. How many additional inspectors are we
    talking about in this year's budget?
        Mr. Kingston. I think 70.
        Mr. Dewhurst. I think we are hiring about 170 additional
    inspectors in FY 2000.
        Mr. Kingston. But I do not get the impression that that is
    going to handle it. I might be wrong.
        Secretary Glickman. We also asked for a supplemental, I
    think, did we not, for more inspectors for this year?
        Mr. Dewhurst. No.
        Mr. Dewhurst. The problem is that the growth in the
    industry tends to outstrip our estimates. At the time we do the
    budget, the number is right because it is based on the best
    estimates we have, and then the industry growth is bigger than
    we anticipate. These dollars, of course, come out of the
    budget, and it is very hard to foresee in advance.
        And the Agency, of course, has a rigorous training program
    for inspectors, and they cannot just bring them online.
        Mr. Kingston. It is also hard recruiting them, too,
    though----
        Mr. Dewhurst. Yes.
        Mr. Kingston [continuing]. In this economy, particularly.
    And then you also had somewhat of a problem with the union. And
    yet you won in court a battle in one plant, right? Did that
    kind of free you up to move faster or did that have any impact?
        Mr. Dewhurst. I just would have to say I do not know. I am
    not familiar with the court battle.
        [Additional information follows:]

        On April 8, 1998, the American Federation of Government
    Employees, AFL-CIO (AFGE) filed a lawsuit on behalf of the meat
    and poultry inspectors ``to halt USDA's implementation of its
    HACCP regulations in so far as it promises to replace federal
    meat inspection with an industry `honor system'.'' The judge
    ruled in favor of FSIS during the summer of 1999. FSIS was
    engaged in negotiations with the National Joint Council (NJC)
    of the AFGE over initiating the models project. A Memorandum of
    Understanding (MOU) was signed with the union May 19, 1999. In
    the MOU model inspection activities were agreed upon,
    including: numbers, types, and grades of inspection personnel;
    training; duration of the pilot; and impact on redeveloped
    personnel, and the number of plants in the initial stages of
    the pilot (30).

        Mr. Kingston. I guess, let me just leave it like this. Our
    office, and many of the offices in this panel are interested in
    this issue. If we can help you, whatever we can do, let us
    know.
        Another issue is, of course, the annual fee request in your
    budget, and that has been a bipartisan thing. But one of the
    issues that I talked to Ms. Wotecki about is that here we have
    states that have an aggregate of about $35 billion in surpluses
    right now, and my State, Georgia, has nearly a billion dollars,
    and yet we reimburse them for some of the inspection fees. And
    it may be time to look at that; you know, what are we doing?
    And I know with the interstate inspection legislation that you
    are working on, maybe this fits into it.
        I think we are all great optimists, but the fee is going to
    fall by the wayside, I am sure, during the process, as it
    historically always has. So what are we going to do when that
    happens to kind of make up for it?
        Secretary Glickman. You are correct. We are working on
    legislation for the interstate shipment of state-inspected
    meat. And perhaps we can get that done this year. You are also
    correct that we do reimburse the states, and perhaps that is
    something that we ought to be looking at, either legislatively
    or through some other methods.
        I will tell you that I think Under Secretary Wotecki is
    right. The volume is that growth, in certain aspects of the
    meat and poultry industry, exceeds our ability to meet the
    inspection needs, even with the new HACCP system, without
    having substantial additional inspectors.

                          FOOD QUALITY PROTECTION ACT

        Mr. Kingston. Now, switching gears a little bit on the Food
    Quality Protection Act, the Environmental Protection Agency
    (EPA) seems to be a little bit more activist, in terms of an
    environmental slant, than I think the original authors of this
    legislation had in mind. And one of the problems is that I
    think USDA is more ``let us make the decisions for pesticides
    on sound science,'' EPA is ``let us do it according to
    environmental polls and constituencies.'' This is being
    critical of them, but that--
        Do you talk to your, not a cabinet secretary, but your
    counterpart, Ms. Browner, on a one-on-one basis about this? And
    where do you go on those conversations?
        Secretary Glickman. We have many issues with EPA, from this
    issue to issues under the Clean Water Act. There are proposed
    rules under that act, as well. We are engaged in constant
    dialogue. For a lot of these statutes, EPA has the prime
    legislative authority, and USDA's role is as much advisory as
    anything. Some statutes have some equal legislative
    jurisdiction.
        I might ask Deputy Secretary Rominger to comment because he
    has been more engaged on this issue.
        Mr. Rominger. I have been meeting, over the last several
    years, regularly with the deputy administrator at EPA. And as
    you may know, they have a new deputy administrator, just
    confirmed a couple of weeks ago, and I have a meeting scheduled
    with him tomorrow for our first sit-down, get-together to talk
    about some of the issues where we are working together and
    where we do have concerns.
        But, yes, we continue to look at ways to implement whether
    it is the Clean Water Act or FQPA in a manner that farmers can
    continue to make a living, and continue to have their pest
    protection methods that they need.
        Mr. Kingston. Was that the time bell?
        Mr. Skeen. That was the time bell.
        Mr. Kingston. Thank you.
        Mr. Skeen. Mr. Farr.

                             STATEMENT OF MR. FARR

        Mr. Farr. Thank you very much, Mr. Chairman. I have a whole
    bunch of questions. So rather than getting a long response,
    perhaps if we could get some responses in writing.

                                SPECIALTY CROPS

        The first question is that the discussion in the field with
    the farmers this year is all about what is happening in
    specialty crop with market consolidation, market contraction,
    just a few buyers left. And I know you said that the Justice
    Department and your Department is looking at some of this.
    Could you put it in writing so that we could send it out to
    them and tell them what we are doing?
        Secretary Glickman. Sure.
        [The information follows:]

        The Department of Justice has recently established a
    Special Counsel for Agriculture in its Antitrust Division. The
    person appointed to the position is Mr. Douglas Ross. The
    Justice Department together with USDA and the Federal Trade
    Commission have recently signed a memorandum of understanding
    to increase cooperation among the three agencies to monitor
    competitive conditions in the agricultural marketplace, to
    share information, and confer regularly to discuss enforcement
    and regulatory matters.

                               AG LAND PROTECTION

        Mr. Farr. In your nine-point program that you were
    outlining in your testimony, you indicated that the ag land
    protection is going to be a big push this year. I want to
    congratulate and compliment you on that. We got zero money for
    it last year.
        Where is the money going to come from this year?
        Secretary Glickman. Well, of course, we have asked for $65
    million in the farmland preservation program efforts.
        Mr. Farr. Last year, you asked for it from a committee that
    had no jurisdiction, which was the Land and Water Conservation
    Fund, which is Interior. Can't this committee put some money
    into that?
        Secretary Glickman. Is it this subcommittee that would deal
    with it?
        Mr. Dewhurst. It is kind of complicated because of
    jurisdiction.
        You are right. The proposal in the safety net package is
    for authorizing legislation, which would be funded by the
    Agriculture Committees. In the safety net proposal, there is a
    very large $65-million-a-year farmland protection program.
    There is nothing to prevent this committee from funding the
    farmland protection program, but I am not aware that there is
    an authority for an appropriation for that program. It could
    raise an authority problem.
        Mr. Farr. Well, we will work on that because I think that
    this committee would like to control that and have some ability
    to help you with that. It is a big issue, and I applaud you for
    your support of it.

                                 ORGANIC RULES

        Organic rules. Last year, you were here, and you told us
    that the rules would be out by the end of this year, last year.
        Secretary Glickman. Did I say last year?
        Mr. Farr. When will they be out?
        Secretary Glickman. The rules are in the OMB clearance
    process. So I hope to get them out as fast as possible.
        Mr. Farr. How long does that take?
        Secretary Glickman. It is taking longer than I would like,
    but that is where they are. So, perhaps, you might want to make
    a phone call.
        [Laughter.]
        Mr. Farr. Well, it has taken a decade----
        Secretary Glickman. I know.
        Mr. Farr. I mean, it is interesting, from the time that you
    passed the legislation, when you were in Congress----
        Secretary Glickman. That is right.
        Mr. Farr [continuing]. To the time the regulations have
    been written, it has been over ten years.
        Secretary Glickman. I hope to get them out before I leave
    this job.

                              SCHOOL LUNCH PROGRAM

        Mr. Farr. A question on school lunch, school breakfast. We
    have legislation in both the House and the Senate that would
    reverse the cut in the school lunch commodity assistance. The
    legislation would restore approximately $500 million of
    commodity assistance to schools in the next nine years. This
    equals nearly 760 million pounds of food that would be
    purchased from American farmers. I am a big supporter of it.
    Could you comment on the bill.
        Secretary Glickman. I would just say we are looking at the
    legislation. I cannot give you a formal position just yet. But
    the subject matter is something that I am very interested in,
    personally.
        Mr. Farr. When do you think you might have a position on
    that?
        Secretary Glickman. We will respond to your question when
    we have a position for you.

                            SCHOOL BREAKFAST PROGRAM

        Mr. Farr. Also, the USDA budget includes a request for $6
    million to fully fund the school breakfast program that Rosa
    DeLauro mentioned. Then you are asking for another $7 million.
    Why do you need another $7 million?
        Mr. Dewhurst. The total cost of the pilot program, the
    school breakfast pilot, was estimated at $13 million. Congress
    gave us part of that money in the current fiscal year 2000
    bill, $7 million, as I recall. So we are asking for the
    remaining $6 million in order to be able to run the program and
    do the evaluation.

                              NRCS WATER RESOURCES

        Mr. Farr. Okay. Last year, the appropriation bill included
    some language in NRCS to provide financial assistance to
    Monterey County, which I represent, for their water resources
    agency, and now that we are applying for those funds, we are
    getting resistance from people in that agency. Could you make
    sure that they are less resistant?
        [Laughter.]
        Secretary Glickman. I will find out the cause of their
    resistance.

                              COMMODITY PURCHASES

        Mr. Farr. And, lastly, one thing that I am very keen on,
    Mr. Chairman--and I would hope that our--I think it would be
    very interesting for this committee and for all of Congress if
    we could get a list from the Department of all of the
    commodities that the United States Government buys, or maybe if
    we could even go further, all governments in the United States
    buy.
        One of the things that I was shocked to find out is how
    much food and specialty crops the United States military buys,
    and, you know, we keep the commodity programs on here. But if
    we could really get a thorough laundry list of all of the food
    that is purchased by Government by commodity, it would be very
    interesting.
        Secretary Glickman. We can clearly give you that from USDA.
        [The information follows:]

        Mr. Farr. Thank you.
        Mr. Skeen. Mr. Nethercutt.

                          Statement of Mr. Nethercutt

        Mr. Nethercutt. Thank you, Mr. Chairman. Mr. Secretary,
    welcome, gentlemen.
        Mr. Secretary, you have always been a gentleman before the
    committee, and even though you and I disagree on some things, I
    appreciate your tenure as Secretary and wish you well at the--
    presumably there is going to be a Republican President.
        Secretary Glickman. You are not sure, though, are you?
        Mr. Nethercutt. The silence is deafening. [Laughter.]
        No, I am not sure.
        Mr. Farr. There is always a lot of false presumption.
        Mr. Nethercutt. In any event, thank you for your service.

                                   Sanctions

        I have strongly been interested in the concept that our
    country should lift sanctions on food and medicine with other
    countries with whom we disagree. I think the embargo policy is
    wrong-headed as it relates to food and medicine that we have
    had in this country for years, and I think it particularly
    hurts our farmers. I won't ask you for your support for our
    bill that we have put in. We have got a lot of Democrats and
    Republicans who feel this is a good thing. But I will suggest
    to you that it would be a good thing for this administration to
    embrace, along with the thought that it might be wise in either
    this administration or the next, whoever commands the White
    House, to think about a consolidated effort in USDA to have a
    single-desk mentality, such that Canada and Australia do, and
    get our State Department and our Treasury Department and our
    USDA on one page as it relates to exports of agricultural
    commodities and capturing markets that we are now losing. On
    soft white wheat, we have lost the last two sales--I have
    forgotten how many millions of dollars, but several hundred
    million--that mean something to our farmers.
        So I would be interested, number one, in your endorsement
    of the idea that we ought to lift sanctions on food and
    medicine, and, second of all, whether you see restructuring
    within USDA to more aggressively try to capture markets that we
    seem to be losing. We need to help our farmers have some hope
    that this world market concept that we employed back in 1996 is
    a good thing.
        Secretary Glickman. Well, you know, both the President and
    I have said that, by and large, we should not use food and
    medicine as a tool of foreign policy. There are some countries
    that we have made the judgment that sanctions are needed
    although, again, there is virtually no place where there are
    absolute prohibitions anymore. But there are relative levels of
    prohibitions for a variety of foreign policy reasons.
        You know, we have made an effort to try to reduce the
    impact of sanctions. We estimate that the effect of sanctions
    on worldwide U.S. agricultural exports is roughly $500 million
    a year, about 1 percent of our export volume, but any amount
    can have an impact, particularly regionally and crop-wise.
        I have talked to the President about this personally, and,
    you know, we continue to look at and work at sanctions
    particularly on agriculture and food products, to see if there
    are ways to minimize their impacts. Wheat is the commodity most
    affected by sanctions. It is a big commodity in your district.
        Mr. Nethercutt. Yes, sir.
        Secretary Glickman. It is a big commodity in my State as
    well. So I understand your concerns there.
        I don't have a particular view on the single desk, but I do
    think that it is important that in the turf battles in some of
    these issues, we do our best to try to minimize them as much as
    possible.

                                P.L. 480 Funding

        Mr. Nethercutt. And I appreciate your views. I am
    concerned, while on the one hand your Department talks about
    expanded trade, yet we reduce in the budget P.L. 480 funding. I
    am advised that there is a proposed removal by the Department
    of the foreign agricultural officer from Singapore, the United
    States' tenth largest customer with over $15 billion in sales
    in 1998. That is a signal for retreat, it seems to me, of an
    aggressive sales policy.
        Secretary Glickman. Can I ask Mr. Schumacher or Mr. Fritz
    to respond to that?
        Mr. Nethercutt. Sure.
        Secretary Glickman. Because, actually, we are adding three
    FAS offices in--I don't now what the countries are, but Gus
    might want to comment just quickly, and also address the
    Singapore and the P.L. 480.
        Mr. Schumacher. First, P.L. 480, as you recall, the
    President announced a major initiative last year on wheat in
    July, and we have some carryover into this year. That was in
    the section 416(b) problem. We have some funding carryover in
    P.L. 480 because of that major initiative. We are now working
    that, but that is why there is somewhat less in the P.L. 480
    request. As I indicated earlier, we also are doing 3 million
    tons under section 416(b) that was just recently announced.
        Concerning Singapore, we are opening a new office in
    Manila. We felt that this office could well serve the region at
    a third of the cost that we have been spending in Singapore. It
    is a very, very expensive place to have offices, and so we are
    shifting that responsibility to where it is cheaper to operate
    and which has good transportation.
        Secretary Glickman. Where are we adding offices?
        Mr. Schumacher. In the Philippines, Canada, and, of course,
    Mexico, the two NAFTA partners where we are doing $13 billion
    in sales. We felt that was the right place. Exports are
    expanding very rapidly in Mexico, especially for crops.
        Mr. Nethercutt. Thank you, Mr. Chairman.
        Mr. Skeen. Mr. Bonilla?

                            Statement of Mr. Bonilla

        Mr. Bonilla. Thank you, Chairman.
        Secretary, I also want to commend you for your fine
    services over the years. I can't believe you have been doing
    this 5 years now. It just seems like yesterday I was running
    into you in the hallway around here. But good luck in whatever
    you wind up doing the next year or so.

                              Pending Supplemental

        I have a lot of territory to cover this morning, so I will
    go ahead and start. I want to start with the pending
    supplemental request that we are hearing is out there for about
    $8 million to cover the FSIS for 2 consecutive years of
    overspending the budget. Do you know when we will be receiving
    that request? And, Secretary, what measures are you taking to
    prevent that overspending from occurring again?
        Secretary Glickman. Do you want to talk about the request?
        Mr. Dewhurst. We are working with the OMB on that, but I
    can't tell you when it will be submitted, other than that we
    are working with them on it. Those over-obligations, as you
    say, occurred in 2 years, 1997 and 1998. It is clear that the
    FSIS needs a much stronger accounting system and much stronger
    internal controls on their spending. They have been a very
    decentralized agency in terms of who in the agency gets to
    authorize spending.
        Our chief financial officer is looking into the matter.
    There is a new accounting system that has just been installed
    at the National Finance Center in New Orleans. The FSIS was
    just brought up on that new system, and FSIS has made some
    organizational changes to insert some additional discipline in
    how it controls money.
        So we are hopeful that those things in total will prevent
    this from happening again.
        Mr. Bonilla. And, I am sorry, you said the supplemental
    request is where, exactly?
        Secretary Glickman. At the Office of Management and Budget.
        Mr. Bonilla. And so the timetable?
        Secretary Glickman. Well, you are going to have to work on
    this fairly quickly, and, you know, since it is not out of the
    administration yet, I can't tell you exactly what is in it. But
    I think it is fair to say that I have some concerns about FSIS.
    That may be in the supplemental request.
        Mr. Bonilla. I think we are doing a supplemental bill early
    March, is my understanding.

                                  Pima Cotton

        I will move now to a different subject. Secretary, you have
    been authorized to establish and operate a competitiveness
    program for pima cotton effective October 1 of last year and
    for the remainder of the 1996 farm law. When do you expect to
    announce the details and implementation of the pima
    competitiveness provision?
        Mr. Collins. I can only tell you that we are working on
    that proposal right now. We have earmarked $10 million for a
    program that would be analogous to the step 2 program that is
    used for upland cotton. I can't give you a specific date on
    when that will come out.
        Mr. Bonilla. Next week?
        Mr. Collins. We will do it as soon as possible.
        Mr. Bonilla. Next 6 months? Next year? I mean, give me
    something.
        Mr. Collins. All I can tell you is soon. I don't have a
    specific date. I will get back to you as soon as I can with a
    timetable, if that will help.
        Mr. Bonilla. I would appreciate that.

                        Boll Weevil Eradication Program

        Secretary, the appropriations bill for this year included
    over $17 million for the national boll weevil eradication
    program. This is a big deal, as you know, with a lot of my
    producers back home. The funding level represented a slight
    increase over the 1999 levels, and I am disappointed that your
    Department chose to reduce funding for this program by about
    $2.6 million, a full 15 percent, thereby actually reducing the
    fiscal year 2000 funding below the fiscal year 1999 funding,
    even though the program is expanding.
        I was also disappointed to learn the administration's 2001
    budget proposal recommends that only $3 million be made
    available for APHIS for the fiscal year 2001 boll weevil
    eradication program. Apparently, the Department is minimizing
    the value of the significant environmental benefits that
    successful completion of this program will provide communities
    across the cotton belt, benefits which have been documented and
    recognized by APHIS and the EPA.
        So my question is: The funding now available will provide
    less than 5 percent cost share for the program. Your budget
    proposal for fiscal year 2001 would essentially eliminate any
    Federal cost share for the program. Do you see that?
        Secretary Glickman. Well, first of all, this is an
    important program. I know there has been an effort to convert
    much of this from a grant to a loan program, but I think Mr.
    Dewhurst may have more specific answers for you.
        Mr. Dewhurst. That is correct. The administration's
    position has been that the program should move from a cost
    share program to a loan program, and there is $100 million in
    loan authority in the Farm Service Agency for the boll weevil
    loan program. I understand that that is not a unanimously
    accepted position, but that has been the position, and that is
    the reason----
        Mr. Bonilla. Well, we appreciate the support of the loan
    program. That is important. But we also feel that spending this
    money, frankly, generates a lot of benefits out there as well.
        Secretary Glickman. We hear you. It is just something we
    will have to work on during the appropriations process.

                     Aphis Eradication and Control Programs

        Mr. Bonilla. How are these priorities determined when you
    have significant increases for other APHIS and eradication and
    control programs, but yet this one is slighted? You have time
    to answer.
        Secretary Glickman. All I can tell you is that APHIS sends
    their budget priorities up to us based upon where they consider
    the nature of the pressing problems. The boll weevil program
    has been in effect for a long time, and I think their belief is
    that it has been extremely successful and it is time to see it
    converted into a loan program rather than a grant program. The
    crisis areas that aphis is dealing with include pest
    infestation, citrus canker and a variety of other issues. So
    they have made some priority judgments based upon the dollars
    that they have got.
        Mr. Bonilla. I have a couple other questions I will send
    you, if that is all right, for an answer on the record. I would
    appreciate that.
        Thank you.
        Secretary Glickman. Thank you.
        Mr. Skeen. Mr. Hinchey?

                            Statement of Mr. Hinchey

        Mr. Hinchey. Thank you very much, Mr. Chairman.
        Mr. Secretary, I want to take this opportunity to thank you
    for your service to our country. The President made an
    excellent choice when he appointed you the Secretary of
    Agriculture.
        Secretary Glickman. Thank you.

                               Rural Development

        Mr. Hinchey. And I want to thank you especially for your
    attention to rural development issues in New York. I would also
    observe that during your tenure you have had to deal with a
    number of interesting and challenging problems: problems of low
    prices due to the economic crisis in East Asia and elsewhere
    around the world, problems associated with the Freedom-to-Farm
    bill, problems of weather and things of that nature, and also
    bad luck that might be attributed to the infestation of exotic
    pests, which I might add parenthetically is a reason to be a
    little bit wary about these trade agreements. But that is just
    another aspect of the problem that we have to deal with.

                        Supplementary Income Assistance

        The supplementary income assistance program is one that I
    want to focus a little bit of attention on in the couple
    minutes that I have. In your testimony, you say that emergency
    assistance has been expensive and not well targeted to those
    producers who need it most. And no one could argue with that.
    It is a difficult program to administer, and it is hard to
    target those producers sometimes. Nevertheless,it is a very
    important program and needs to continue.
        My concern in this regard is that of the $7 billion that
    you propose in supplementary income assistance--$5.6 billion of
    that is going to go to traditional row crops. As a
    representative of New York, where we grow specialty crops--
    fruits, fresh market corn, things of that nature--there is no
    real program to deal with the problems of fruits and
    vegetables. And when fruits and vegetables are hit by bad
    weather, for example, it is not often that they are wiped out,
    but that the quality is reduced substantially as a result of
    that experience. And there is no program to deal with that.
        I would like to bring this to your attention in the hopes
    that the Department would make adjustments in this program so
    that needed help would continue to flow to those farmers in the
    midwestern part of the country who produce the wheat and the
    grains, the rice and sorghum, and all the other products, but
    also that we would be able to devote a little bit of attention,
    appropriately, to these specialty crops that are grown mostly
    in the North.
        Secretary Glickman. I think you raise an excellent point,
    and let me make a couple points. One is that we are trying to
    make our risk management programs more suitable in areas of the
    country that have not traditionally been row crop agriculture.
    While a lot of people have criticized the crop insurance
    program, it is true that where you have long histories of
    established yields, it is easier to set up a risk management
    system than for crops that haven't historically been covered.
    That has really been the problem with dealing with fresh fruits
    and vegetables.
        We are really trying our best under Mr. Schumacher's
    leadership, who comes from Massachusetts and was the Ag
    Commissioner of Massachusetts, to try to make this program
    suitable for farmers who do not grow traditional row crops as
    well as those who grow specialty crops.
        One of the things we are getting rid of is the area-wide
    trigger under the non-insured assistance program. A strawberry
    farmer or a fruit and vegetable farmer will be able to get some
    coverage for individual loss based on only a natural disaster
    declaration. That also helps Mr. Farr's district and other
    places as well.
        We are offering whole-farm crop insurance which ought to
    help people who are not necessarily in traditional areas as
    well.
        Mr. Hinchey. Could you suffer an interruption on that?
        Secretary Glickman. Yes.

                         Supplemental Income Assistance

        Mr. Hinchey. I appreciate that and I wanted to get into the
    issue of crop insurance as well. But what I would like to talk
    about now is the issue of supplementary income assistance. That
    is the issue that I am concerned about at the moment. The
    supplementary income assistance, the $7 billion in additional
    direct farm income assistance during the next 2 years, $5.6
    billion is to provide, and I quote, ``supplementary crop-
    specific income assistance to producers of wheat, feedgrain,
    rice, upland cotton, and oilseed suffering from low prices and
    revenues.''
        I have no argument with that. My concern is that there is
    no supplementary income assistance to farmers who grow
    vegetables, apples, other fruits, and have their crops damaged.
        Secretary Glickman. You are absolutely correct. Because of
    the logistics of administering the program, we based it on the
    crops that are covered under the existing proposal. But
    philosophically, I happen to agree with you. I think we need to
    take farm policy, which is heavily regionalized, and do our
    best to make it much more national. One of the ideas is to have
    farm programs based upon income and perhaps help farmers in the
    countercyclical way rather than focus strictly on specific
    crops that are grown.
        We presented this idea as an alternative to just doubling
    AMTA payments that has been done in previous emergency bills.
    This was not meant to be necessarily the formula for the new
    farm bill. But you are correct. Because of the histories and
    the yields and everything that has been established, it is
    largely based upon the crops that have been covered
    historically.
        Mr. Hinchey. Well, can you give me some direction here?
    Would this be a problem that would benefit more appropriately
    from actions taken by your agency? Or should that action come
    from the Congress?
        Secretary Glickman. No, I think it has got to come from the
    Congress. This is a fundamental issue in the rewrite of the
    1996 farm bill. You need to decide, how to cover crops other
    than traditional crops? Our proposal has to be run through the
    Congress, anyway. This was just the initial proposal.
        Mr. Hinchey. Would you be kind enough to have the
    appropriate person on your staff contact my office so that we
    can benefit from their knowledge in this particular area and
    derive some direction from their knowledge so that we could get
    some assistance for these specialty crops.
        Secretary Glickman. Yes. For example, there is no
    philosophical reason why you couldn't develop a farm bill based
    upon a total farm income of every farm, regardless of what you
    produce, whether it is livestock or crops, whether it is
    specialty crops or row crops. And then you could have some sort
    of countercyclical assistance based on some percentage of farm
    income. It could provide people with some kind of insurance,
    whether it is traditional insurance or more of a direct
    payment.
        It is difficult for us to do that on crops other than row
    crops because we don't have a lot of experience. But it is
    philosophically possible.

                         Supplemental Income Assistance

        Mr. Hinchey. I don't want to in any way detract from the
    row crops, and I don't want to in any way add to the problems
    that they have. God knows that the Freedom-to-Farm bill has
    inflicted enough misery on them. But I do want to provide some
    assistance to the people who grow these specialty crops, like
    apples, like fresh market corn, vines, things of that nature.
        Who would be the person in your office who might contact us
    on that?
        Secretary Glickman. I would say somebody in Mr.
    Schumacher's office.
        Mr. Hinchey. Mr. Schumacher?
        Secretary Glickman. He or somebody in his office.
        Mr. Hinchey. Okay. Thank you.
        Mr. Skeen. Mr. Latham?

                            Statement of Mr. Latham

        Mr. Latham. Thank you very much, Mr. Chairman and
    Mr.Secretary. Someone said, what, in a couple months you will be the
    longest-serving Secretary in like 30 years or something like that.
        Secretary Glickman. Notice my hairline.
        Mr. Latham. It is beginning to show. [Laughter.]
        Anyway, I wish very much that you could come here with a
    budget proposal that you actually could write yourself and not
    have to come from OMB. I think it would appear quite different.

                           MANDATORY PRICE REPORTING

        A couple things. This committee last year with the
    appropriations bill put in mandatory price reporting. Could you
    just give us an update where we are, when we can expect that to
    be in place and operational? And the money, is that----
        Secretary Glickman. Money is not a problem now. You have
    provided the money, at least initially.
        Mr. Dewhurst. Yes, sir, you have provided $4.7 million,
    which we have allocated to the Agricultural Marketing Service.
    They are working on rules. My understanding is that they are
    going to try to have the process going by this summer. We have
    $5.9 million in the 2001 budget to continue the program on a
    permanent basis.
        Mr. Latham. Okay. Very good. We will look forward to it.
        We have been getting a lot of calls from farmers and some
    bin manufacturers about bin storage loans. And, you know, what
    is the estimated date for the final rules for the grain storage
    loans? And, will they be available for grain only or will feed
    and other commodities be eligible for storage?
        Secretary Glickman. I think the final rules will be out in
    the next 4 to 6 weeks.
        Mr. Latham. Is it grain only?
        Mr. Schumacher. Mr. Latham, I was expecting this question.
    I did check the charter act or legislation. It does say
    specifically grains.
        Mr. Latham. Grains, okay.
        Mr. Schumacher. Just specifically grains. I can get that
    language for you.

                            FARM SAFETY NET PROPOSAL

        Mr. Latham. Okay. The proposal that you have had as far as
    changes or adjustments in the farm bill or countercyclical
    payments, I guess, as you well know, was kind of met with
    resounding bipartisan--saying it is probably not going to work
    or not have enough money. And I guess as an example, if you had
    two farmers, one of them had a pretty good year and had 150-
    bushel corn, and the other one had a drought, had 50-bushel
    corn, who would your proposal help? Who needs the help the
    most, and who would your proposal help?
        Secretary Glickman. Well, I can't answer that without
    looking at the financial statements and, you know, the total
    incomes.
        Mr. Latham. But the proposal is based on bushels, and----
        Secretary Glickman. But let me just say, the income
    security would help both. You also have crop insurance as well.
    You have got to put those things together.
        Mr. Latham. But that is not in your proposal.
        Secretary Glickman. No, other than that we have tried to
    improve crop insurance.
        Mr. Latham. I mean, my point is the person who has a very,
    very--maybe exceptionally large yield is going to benefit the
    most, and the person who has a near disaster or a disaster is
    going to get little or no benefit from your proposal. Isn't
    that correct?
        Secretary Glickman. I would ask Mr. Collins to respond.
        Mr. Collins. When the legislation was proposed, we said we
    would like to make the payments based on essentially current
    production. But we didn't really define current production. We
    intend to do that in the statutory language that we send to
    Congress. I think what we have talked about most recently is
    defining a concept of current production that would use current
    planted acreage and a historical average yield, which would
    deal with that problem so that a producer would have an average
    yield.
        Mr. Latham. In essence, then, you are doing an AMTA
    payment.
        Mr. Collins. No. An AMTA payment is based on historical
    acreage and yields going back to 1981. And, this would be based
    on current planted acreage. An AMTA payment can go to people
    who are not necessarily even planting a crop. You would have to
    plant the crop to get this payment, so it would be current
    planted acreage and historical yield. So, it would be different
    than an AMTA payment.
        Mr. Latham. Technically, but it is going to tie to--the
    person that produces the most is going to benefit the most.
    And, historically, going back every--and I am a farmer, so I am
    somewhat aware of this. We have been paying people not to
    produce for how many years?
        Mr. Collins. We stopped acreage programs in 1996.
        Mr. Latham. Well, okay, but you just--a lot of people are
    saying that we are paying people and it doesn't matter whether
    they plant anything or not. Right?
        Mr. Collins. That is what we are doing.
        Mr. Latham. And then how long have we been doing that?
        Mr. Collins. Since 1996.
        Mr. Latham. Since the first farm bill we haven't been
    paying people not to produce?
        Mr. Collins. Oh, it depends what you mean.

                            FARM SAFETY NET PROPOSAL

        Mr. Latham. I mean, to me it is just a bogus argument. We
    have been paying people to take land out of production for, you
    know, 30 years.
        Mr. Collins. We have through set-aside and paid diversions.
    But the AMTA payment is a little different. They don't have to
    take land out of production or they can leave it in production
    and get the payment either way.
        Mr. Latham. With the idea that the farmer, and his being an
    intelligent individual himself, can make a determination as to
    what the best crop on his farm is to plant.
        Mr. Collins. Right.
        Mr. Latham. And that is the idea, the flexibility. So if
    you want to take that away and go back to the idea of paying
    people not to plant----
        Mr. Collins. The Secretary is not proposing taking that
    away. He is proposing leaving the AMTA payment exactly as it
    is, and this would be a rider on top of the AMTA payment.
        Mr. Latham. Right. Obviously, my point is that even though
    it may be phrased differently, we are doing the same thing as
    we have for 30, 40, 50, 60 years.
        Thank you, Mr. Chairman.
        Mr. Skeen. Mr. Boyd.

                             STATEMENT OF MR. BOYD

        Mr. Boyd. Thank you very much, Mr. Chairman.
        Mr. Secretary, thank you for being here and with your team,
    and I, too, want to echo the comments of some othersabout the
    job that you have done. I know that you are in the position of
    overseeing a sector of our economy which is in the tanks, so to speak,
    has been for a while. The program that this Congress put in place in
    1996 obviously is not working, and I applaud you and the administration
    for advancing at least the general outline of a program which will
    hopefully plug the gap temporarily, or hopefully permanently.
        It is just a very serious situation, and I want you to know
    that this member certainly is willing to work with you on
    coming up with something that works.
        I heard the line of questioning from Mr. Latham, and I know
    his concerns, but the truth is that the program we have is not
    working and looks like it doesn't have any hopes of working.
        Mr. Secretary, I know that you thought you were going to
    get away without discussing in detail citrus, but I suspect----
        Secretary Glickman. No, I mentioned it.

                                 CITRUS CANKER

        Mr. Boyd. I know you did, and I appreciate that. But I want
    to remind you and the members--I am going to give you a map,
    Mr. Secretary, of the southern half of Florida, which is the
    citrus-producing area of Florida, and tell you that in October
    of 1995, an Asiatic citrus canker-infected tree was discovered
    in a backyard residence one-quarter mile from the Miami U.S.
    International Airport.
        The map that you have in front of you outlines the spread
    of citrus canker from October of 1995 until today, with
    quarantine and proposed quarantine areas.
        [The map outlining the spread of citrus canker was not able
    to be reduced by printer. The map is retained as part of
    Committee records.]
        As you can see, it is dangerously close to the major
    commercial citrus-producing areas of Florida, and we are, Mr.
    Secretary, in serious, serious jeopardy of losing an $8.5
    billion industry.
        Now, how did that happen? It happened because an invasive
    pest, Asiatic citrus canker, came in through the Miami airport,
    probably brought by some tourist or some visitor to our
    country, and this was the origin of this canker. And as you
    know, the United States Government has responsibility for
    policing that, and we now find ourselves in the position--
    because of the inability of the Federal Government to do that
    job completely, we now find ourselves in danger of losing a
    complete industry.
        I stood with Governor Bush and Commissioner Bob Crawford in
    Florida last week, along with the leaders of the State
    legislature, in which they committed to a $100 million stepped-
    up program, which the commissioner says that he can totally
    eliminate the quarantine and infected areas and eliminate the
    spread this year. Obviously, the program we have been on has
    not worked, and that program they estimate is going to cost
    $100 million. Traditionally, we have shared that 50/50 with
    State and Federal matches.
        I want to read to you--we had a hearing, Mr. Secretary,
    about 2 weeks in Florida on invasive pests. Actually, the
    hearing was chaired by Congressman Pombo, who chairs one of the
    House Ag subcommittees here which deals with that area. And the
    testimony of one of the major growers in the southern part of
    the State I want to read to you, and I quote: ``The
    introduction and spread of canker was not the growers' fault.
    It is an unfunded liability of increased trade and travel and
    of lack of success of U.S. Government interdiction efforts.''
        So I guess my question to you, Mr. Secretary, is: One, are
    you aware of the severity of this problem? Secondly, are you
    prepared to request and help us with the Federal share of the
    funding of this problem? And will that be a part of the
    supplemental request that will be forthcoming to the Congress?
        Secretary Glickman. I can't answer the last question, but
    let me say the first question's answer is yes. We have approved
    already $73 million for citrus canker eradication in Florida
    since 1995, and we have pending at OMB a $16 million
    compensation request. For the first time, the President's
    budget proposes to include $25 million for citrus canker in
    Florida instead of emergency spending from the CCC. We know
    that total eradication, however, is going to cost a lot more
    money. I am aware of the Governor's letter as well as Bob
    Crawford's letter. We are attempting to acquire disaster
    assessment reports from USDA county offices to see if a natural
    disaster designation is justified, and if so, who will be
    eligible for producer loans and crop disaster assistance
    program payments that was authorized by Congress as part of the
    crop loss situation from last year.
        Then, of course, the issue has to do with compensation for
    producers and whether we can do that. This is a very high
    priority program, and we cannot let the citrus industry go
    under. You know, the fact is one tourist can bring in a piece
    of fruit with an insect that can cause this kind of
    infestation. So there is no absolute way to prevent this from
    happening. You do your best under the circumstances. But we are
    going to work with the State of Florida. I promise you that.
        Mr. Boyd. Mr. Chairman, if I might, I won't leave this
    issue, but I will wind up with this.
        Mr. Secretary, you know, we do have some money in the
    pipeline which you helped us with last year through the 1999
    supplemental, then again which Chairman Young and members of
    this committee helped us with. And, by the way, Chairman Young
    spoke to me before this hearing and told me that he wanted to
    express to the committee his serious concern about this whole
    issue. But it is going to take more than that.
        Now, we are looking at about an additional $30 million on
    top of what we put in last year, at least $30 million, for our
    matching share to fund this program, which we think can push it
    out, as you see on the map, we can push it south and block the
    area this year.
        So I look forward to working with you on that.
        Secretary Glickman. Okay. We will.
        Mr. Skeen. Mrs. Emerson.

                           STATEMENT OF MRS. EMERSON

        Mrs. Emerson. Welcome, Mr. Secretary.
        Mr. Chairman, I have a statement I would like to submit for
    the record and some extra questions that I know I am not going
    to get to in my 5 minutes.
        [The information follows:]

        Mrs. Emerson. Let me just say thank you so much, Mr.
    Secretary, for your commitment and dedication to helping our
    farmers and ranchers all over this country during the past
    several years, and I have enjoyed working with you for the past
    three, anyway.

                             TEMPORARY FSA STAFFING

        Mr. Secretary, I have heard some very disturbing news more
    recently, just in the last few days, actually, with regard to
    the FSA and the fact that temporary FSA personnel may be laid
    off sometime within the next couple of weeks. And, obviously,
    you know as well as I do that workload is as heavy as ever
    right now, and I can't think of a time when our producers need
    more help at our county FSA offices.
        So I just wanted to get a sense from you of what your
    intent was with regard to temporary FSA county employees. Do
    you think there might perhaps be a supplemental funding request
    to support program delivery at the county offices?
        Secretary Glickman. I wonder if Mr. Dewhurst may respond
    first. Then Mr. Schumacher may have some comments on that.
        Mrs. Emerson. Okay.
        Mr. Dewhurst. Well, the supplemental money that we already
    got this year provides for a very high level of temporary
    employment in the FSA, about 2,000 staff years' worth of
    temporary employment. We know the workload is heavy. The agency
    has told us they may need some help, but I have not yet
    received from the Farm Service Agency the formal request for
    additional money. We will certainly give it every priority when
    we get it.
        Secretary Glickman. Mr. Schumacher, do you want to respond.
        Mrs. Emerson. That is where you are? You are waiting to----
        Secretary Glickman. We have money to protect the permanent
    employees.
        Mrs. Emerson. Right. I know that.
        Secretary Glickman. Okay. Of course, we had a high number
    of temporaries on board to deal with this crop loss assistance
    program and all the emergency disaster programs, and they were
    needed. We couldn't have done it without them.
        Mrs. Emerson. Right.
        Secretary Glickman. We are looking right now at the
    workload to determine if we need additional money for temporary
    employees this year.
        Mrs. Emerson. Well, just to quote your own statement where
    you say that workload demands are expected to remain at
    relatively high levels due to the continuing farm crisis, I
    would just ask you all to tell us if you need to have
    additional funding for FSA personnel.
        Secretary Glickman. We will.
        Mrs. Emerson. I know my producers are in desperate need for
    help.
        Let me move on quickly to another question, and, Mr.
    Chairman, I want to submit copies of this article from the
    February 2000 Farm Journal. We have copies. You might want to
    hand them out.
        [The information follows:]

                        USDA'S NATIONAL APPEALS DIVISION

        Mrs. Emerson. The February 2000 edition of Farm Journal
    contained an article that highlights a fairly disturbing trend
    at USDA's National Appeals Division and mentions the fact that
    in 1997 and 1998 the NAD reversed 86 percent of regional
    hearing officers' decisions that had favored producers over the
    Department.
        And, consequently--well, first of all, have you seen this
    article?
        Secretary Glickman. I did. I read the article.
        Mrs. Emerson. What is your response to the situation?
        Secretary Glickman. Well, I am concerned about the article,
    and I have asked for a report on it.
        Mrs. Emerson. Okay.
        Secretary Glickman. I would say that the folks in the
    department told me they did not view this as the most objective
    piece of journalism that was ever written. But saying that, the
    issues raised--and they have been raised before in the Farm
    Journal--are ones that require us to look at them.
        You have to look at the kinds of cases appealed, and, you
    know, certainly the overwhelming amount of things handled at
    the county or State level are not appealed. You know, 95, 98
    percent of the things are not appealed at all.
        But saying that, I think it is worth us taking a look at
    this issue.
        Mrs. Emerson. Well, I would appreciate it because numbers
    are numbers, and, you can take the subjective part out of it
    and just look at the numbers. And, you know, recently--this
    impacts my district personally. Recently we had three cotton
    producers receive favorable rulings from your regional hearing
    officers, only to have those three cases overturned by the NAD.
    Not only does that impact those three producers, but, quite
    frankly, it impacts two to three hundred other producers in my
    district.
        The State office had said we weren't going to make any kind
    of decision whatsoever until these three appeals were heard. I
    have to believe that when 86 percent of the appeals go in favor
    of the Department over the producer, that just sounds a little
    questionable to me. And I would be very grateful if you all
    could look into that and give me some sort of a report back.
        Secretary Glickman. We will get you a report on this.
        Mrs. Emerson. Okay. Thank you.
        Mr. Skeen. Ms. Kaptur.

                            STATEMENT OF MS. KAPTUR

        Ms. Kaptur. Yes, Mr. Chairman, I just wanted to also
    highlight that I very much support the Secretary's initiatives
    in the area of private lands conservation and habitat, and
    certainly prime farmland. I am very anxious to receive fuller
    detail on that from the administration.

                              BIOENERGY INITIATIVE

        Your bioenergy initiative is a very deep concern of mine
    and the national security of this country to wean ourselves off
    dependence on foreign fuels. I am concerned, however, on who
    will be eligible and how that program will actually function.
    We shouldn't have monopolies running whatever biofuels and
    bioenergy capacity we build in this country. And I would just
    encourage the Secretary, who has always had an interest in
    small business and a number of competitive groups taking part
    in this to make sure the program is designed that way.

                                FARMERS' MARKETS

        I want to thank you for your initiatives in farmers'
    markets. Over the years you have been Secretary, you can see
    the difference this has made across this country. The
    initiatives that you have in modernizing our whole co-op
    structure, very supportive of those.
        I wanted to just mention a couple points. In the additional
    commodities that you are shipping abroad in order to try to
    lift prices here at home, I would hope you would look at soft
    red wheat. We have been shipping hard wheats, but in our part
    of the country we have got soft red wheat just backlogged for
    years. And if there is any way to move any of that, I think
    those of us on the Great Lakes would be most appreciative.

                              FARM INCOME PAYMENTS

        I wanted to also, if I might, just say a word here about--
    and I would like to submit for the record information relating
    to how our farm income payments have been going outover the
    last several years. I think in terms of efficiency, we have probably
    done a good job. In terms of equity, we have not. And we have talked a
    lot about that here today.
        According to the information that I have here--and this is
    what I wish to submit for the record--40 percent of all AMTA
    payments, $2.2 billion, was distributed to five States. And, in
    fact, five congressional districts received about 20 percent of
    the funds. And Mr. Hinchey's point, other members that have
    talked about the equity issues here, relationship to losses,
    awfully important as we design a program, I know for hog
    producers in our producers and weather-related losses
    associated with vegetable production and so forth.
        Your effort to try to put this in some type of national
    framework and look at what is fair to all producers I think
    would be greatly appreciated, and I think it is true that
    taxpayers now are paying more to assist farmers with economic
    losses than they did before freedom to farm was passed.
        This is a really, really serious issue, and just for
    example, in the State of Iowa, as of October 12th of last year,
    the production flexibility contracts were five times as much as
    in the State of Ohio. And I am not against Iowa, but it is very
    interesting to look at the size of the State, the types of
    production, and what eventually gets the assistance. And yet we
    have lots of farmers that are in very deep trouble.
        So we will submit this for the record, and I just want to
    urge you on in your efforts to try to create a program that is
    both efficient as well as equitable.
        [The information follows:]

                               AGRICULTURAL TRADE

        Ms. Kaptur. I wanted to just spend a moment, if I might, in
    this round on the question of the Commonwealth of Independent
    States, particularly Ukraine, now the most strategic country in
    Central and Eastern Europe. We had the agreement of the
    European Union on that, and also Russia. And to express my
    disappointment and, again, to ask your help if we can find a
    way to do this, to focus the intelligence of the USDA on the
    development of agricultural capacity in those two countries.
    Our programs are a failure as a nation, and I would be willing
    to defend that position in any forum. I don't think USAID
    should be left to its own resources. I was very disappointed to
    see that the FAS office was closed in Kiev and very
    disappointed to learn today that some of the efforts we had
    made in Russia to get cooperation with many of our land grants
    on trying to create the basis of an extension system was
    disapproved by AID.
        I have got to figure out a way to get USDA to be an equal
    partner in these discussions. If Russia is to be a partner with
    us and if we are to achieve export markets there for the
    future, whether it is fertilizers, whether it is tractors,
    whatever it is, we have got to have a system that functions.
    And it isn't.
        And so I would just say, Mr. Secretary, I would be very
    appreciative of the opportunity to figure out why USDA is
    sidelined in these discussions when your people understand
    agriculture. You have built the best system, we have built the
    best system in the world, and yet we can't use some of our
    knowledge in that very strategic part of the globe.
        Secretary Glickman. Well, first of all, let me just say
    that notwithstanding the problems, without your intervention
    they would have been much worse. That is to say that, in terms
    of the food aid packages particularly to Russia, you had a lot
    to do with ensuring USDA's role, the role of private voluntary
    organizations, and whatever capacity building was done. It
    wasn't as much as we would have liked to see. Without your help
    that wouldn't be there.
        I don't know whether Mr. Schumacher might have any comments
    on the Ukrainian issue.
        Mr. Schumacher. No. We had the budget problem overall.
        Secretary Glickman. Yes. You know, I take your criticism,
    constructive criticism, as a challenge to us to try to work in
    a much more thoughtful way to build capacity in these
    countries.
        Ms. Kaptur. Mr. Chairman, I know my time has expired or
    almost--no, I have a couple minutes here, or a minute. But I
    just wanted to say, if there is a way that we could work with
    you in conjunction with this budget submission, the way I
    understand it works now is that AID, if they want to do
    agriculture, gives you some sort of a payment. It comes in the
    form of a transfer to USDA. I want to understand this, because
    you are always in a secondary position and you shouldn't be
    there. And I want to know what I can do in this cycle to make a
    difference. And I want to look at those two countries in
    particular.
        Secretary Glickman. Okay.
        Ms. Kaptur. And we will go to bat for you, but I am very
    disturbed by what is happening over there, and America cannot
    lose this struggle. You have more knowledge than those people
    at USAID, and somehow it doesn't get translated in the budget
    process.
        I thank the chairman for his indulgence.
        Mr. Skeen. Mr. Dickey.
        Mr. Dickey. Mr. Glickman, before I ask you for several
    considerations, I want you to know that I have always agreed
    with you and that I am one of your biggest fans. Do you
    understand that?
        Secretary Glickman. I do.
        Mr. Dickey. Okay. [Laughter.]
        Before going into the two last points that I had, civil
    rights discrimination and TMDL, is there a chance that next
    week we could meet on all of these issues?
        Secretary Glickman. Sure.
        Mr. Dickey. I could come to you at that point.
        Secretary Glickman. We could probably go into greater
    detail on some of the civil rights issue.
        Mr. Dickey. Okay.
        Secretary Glickman. We will arrange that. I will come to
    your office. We will arrange that.
        Mr. Dickey. Well, you know, we will be off.
        Secretary Glickman. Oh, okay. Well, are you going to be
    here?
        Mr. Dickey. I will come back.
        Secretary Glickman. Okay.

                          CIVIL RIGHTS DISCRIMINATION

        Mr. Dickey. It is that important.
        Now, on the civil rights discrimination, finish what you
    were starting before, if you can. Then I want to get to TMDL.
        Secretary Glickman. Well, all I was saying is that it is
    important to understand that the adjudication is not done by
    us. The process is court-created. I think your point is about
    moving this money out as fast as possible.
        Mr. Dickey. Wait, excuse me. That is the black farmers'
    lawsuit. I am talking about--I have sent to you some 1,100
    petitioners--a petition signed by 1,100 people, and you allare
    making an investigation, and my question was: How long is that--how is
    that investigation going? Are there any preliminary findings?
        Secretary Glickman. The Office of Inspector General is part
    of that review. I think he is going to be before your
    committee. I don't know if it is tomorrow.
        But I would give you a report once I talk to him, which I
    would be glad to do.
        Mr. Dickey. Okay.
        Secretary Glickman. I just don't have anything more to tell
    you about it.

                                   TMDL ISSUE

        Mr. Dickey. Then preliminary to our discussion next week,
    the TMDL issue, you are familiar with it?
        Secretary Glickman. I am.
        Mr. Dickey. Total maximum daily load.
        Secretary Glickman. Yes.
        Mr. Dickey. EPA is coming in and doing a lot of things.
    What is the official position of the USDA on that matter?
        Secretary Glickman. I would ask the Deputy to comment. He
    has been more intimately involved in this issue.
        Mr. Rominger. EPA under the Clean Water Act is proposing
    the TMDL regulation, and there was a letter that went from USDA
    to EPA that was not cleared by the Secretary. It did express
    concerns that are legitimate concerns about the proposal, and
    as a result, we have had a team of people working with EPA this
    last month or so, getting our concerns resolved. We think that
    we are making headway in resolving those to the benefit of
    agriculture. That is where the situation is right now.
        Mr. Dickey. Are you including the timber industry as well
    as agriculture in that?
        Mr. Rominger. I think people from the Forest Service have
    been involved in the discussions, but I am not positive.

                            BLACK FARMERS' SITUATION

        Mr. Dickey. Okay. Now, with the remaining time, Mr.
    Secretary, let's go back now to the black farmers' situation.
    It has gone from one post and one pillar--we are just going
    back and forth and everything else. Is there anything that we
    can do as Congress to help in this situation from your vantage
    point?
        Secretary Glickman. Well, in terms of this case, this was a
    profound, historic settlement of long-time claims of
    discrimination. I must tell you that I do think the explanation
    of the process, perhaps by the Department but as much by the
    plaintiffs' lawyers, was not very clear to the folks who were
    affected by it.
        Mr. Dickey. I agree.
        Secretary Glickman. The judge is still actively involved in
    the case. There has been somewhat of a limitation in terms of
    what I can publicly say because it has been in Federal court.
        Mr. Dickey. You can tell me. I am a Congressman.
    [Laughter.]
        Secretary Glickman. But, no, I can't tell you anything.
        Mr. Skeen. That is why he is not telling.
        Secretary Glickman. But we did appoint a monitor, and that
    monitor's job is to review the fairness of the adjudication
    process. There have been allegations, particularly in your
    State, by a lot of farmers that it wasn't fair, that they
    didn't know--certain documents weren't included. So tomorrow,
    or sometime this week, I think it is, the Federal judge is
    going to meet with all the parties to the case to talk about
    these particular concerns.
        Mr. Dickey. Are you going to be in that meeting?
        Secretary Glickman. No, I am not in that meeting. Our
    general counsel will be in that meeting. But he is well aware
    of the issues that you have raised.
        But, again, I point out that we have paid out nearly 2,000
    claims to date, and we are going to try to move this process as
    quickly as possible.
        I must tell you that not every claim is going to be handled
    affirmatively, and that has caused great disappointment out
    there.
        Mr. Dickey. Well, the problem, though, is, as we
    investigate those claims and you are finding some fraud and
    some abuse, you are seeming to put the whole cover over the
    rest of them, and that is what is holding it back.
        Secretary Glickman. No, actually, that is not true. There
    may be some fraud, and there are also some people who just
    aren't eligible.
        The approval process is running about 60 percent approval,
    40 percent disapproval, and I think over the next 6 to 8 weeks
    you are going to see these checks going out much faster than
    they have been in the past.
        Mr. Dickey. We will include this----
        Secretary Glickman. Those who are disapproved can appeal to
    the monitor.
        Mr. Dickey. Right. Then we can talk about this next week.
    Thank you for your consideration.
        Secretary Glickman. Sure.
        Mr. Skeen. Mr. Boyd.
        Mr. Boyd. Thank you, Mr. Chairman.

                              DISASTER ASSISTANCE

        Mr. Secretary, on January 10th, a letter came from several
    members of the Florida delegation, including Chairman Bill
    Young, Senator Mack, Senator Graham, myself, and some others on
    the--let me get my notes here--disaster assistance related to
    Hurricane Irene. In that statutory language, it spoke
    specifically to nursery crops in Florida and other crops in--
    certain specialty crops in Florida that were damaged and
    destroyed by Hurricane Irene.
        Secretary Glickman. Yes.
        Mr. Boyd. And there has been some confusion in your
    Department about how to distribute that money and who is
    eligible and who isn't. And we wrote you on January the 10th
    asking for a clarification about when that would be----
        [The letter follows:]

        Secretary Glickman. Have you not heard back yet?
        Mr. Boyd. Have not heard back yet, have not received a
    letter.
        Secretary Glickman. I asked Mr. Schumacher's office to
    respond. The part of the crop loss assistance program we are
    talking about?
        Mr. Boyd. Right.
        Secretary Glickman. Yes.
        Mr. Schumacher. Congressman, this is complicated, but I
    will be brief. Irene hit October 15th last year, and this has
    to do with the ornamental nursery? Is that the main question?
        Mr. Boyd. Yes, sir.
        Mr. Schumacher. And the letter you sent dealt with that. We
    will get a response to you.
        The legislation is pretty clear that those crops affected
    in 1999 would be eligible for last year's disaster program. We
    now call it the crop disaster program. The hurricane hit on
    October 15th. That was after the crop year ended. Then it
    becomes the definition of what a nursery crop is and when that
    was in inventory. That is what we are still looking at, and we
    haven't finalized it yet. We are leaning towards a decision
    that it will not be eligible under the definition of the 1999
    crop. We are still working with our lawyers on it. We are going
    to give it further consideration.
        Secretary Glickman. I want to make it clear--wait a second.
    October 15, 1999, was after--was there a deadline in the crop
    loss----

                              DISASTER ASSISTANCE

        Mr. Boyd. Mr. Secretary, let me try to answer that. I think
    there has been an arbitrary date set in your shop somewhere
    about what the crop year is for the nursery, and there is no
    such date in practicality. You know, nursery crops are grown,
    basically grown and marketed in lots of cases year round. And
    so I would say to you that if that is the reason that we are
    holding this up, what I would like for you and Mr. Schumacher
    to do is look at that very seriously and see if we can't
    resolve it, because we don't believe that that is an
    appropriate thing to do, to disallow those folks to be eligible
    because you arbitrarily set a date for a crop year that doesn't
    apply.
        Secretary Glickman. Okay.
        Mr Schumacher. We will look at it again. We haven't made a
    final decision on this, Congressman. We hear you loud and
    clear.
        Mr. Boyd. Thank you very much.

                                  WIC PROGRAM

        I will shift gears here just briefly. I had a visit from
    some folks that administer a program that comes through your
    shop, WIC.
        Secretary Glickman. Yes.
        Mr. Boyd. And we were having a chance to look at some
    numbers, and we actually noticed that the clientele nationwide
    is down, which is really a good thing because I understand
    there is no squabble about criteria or eligibility. So when
    your clientele goes down from that kind of program, it is a
    positive thing.
        One of the things that they did say to me, though, is that
    with welfare reform being implemented so successfully across
    the Nation, much of their clientele that was not working now is
    in the workplace. And they are having trouble from an
    administrative standpoint, from a public outreach education
    standpoint, of identifying and locating those who are eligible.
    And they were making a pitch for additional money in that small
    segment of that budget which doesn't go to purchase
    commodities, but it goes to administration, outreach, client
    services, those kinds of things.
        Would you care to address that? Are you knowledgeable
    enough to address it at this point in time?
        Secretary Glickman. I am not. I don't know if Mr. Dewhurst
    knows.
        Mr. Dewhurst. The only thing I can say is that the
    administration believes that even in the current economy there
    are probably 7.3, 7.4 million people on average that can
    qualify for this program. The numbers have been coming down.
    The number is now under 7.2 million people. So it raises some
    questions about how good an outreach job we are doing. That is
    something we have just got to do better.
        Mr. Boyd. Do you have any information that it is more
    difficult to reach those now because of the improved economy
    and the unemployment down? That means that more of those people
    who are eligible for that, more of those potential clients are
    in the workplace and obviously wouldn't be served by normal
    working hours. You know, these folks who are administrators in
    your shop were saying, look, we need to be open in the evening,
    for instance, in places and we don't have the funds to do it.
        Secretary Glickman. I can tell you that on the food stamp
    side of the picture, I think there is general belief that there
    are an awful lot of people who are not being served by the food
    stamp program who are eligible. There may be many reasons for
    this. It may be confusion about welfare reform. It may be
    discouragement from certain people involved in the
    administration of the program. There may be language problems.
    We do have money for an outreach program in the food stamp
    area. So we will talk to our WIC people to see if there is
    something we can do in that area.
        Mr. Boyd. Thank you very much, Mr. Chairman.
        Mr. Skeen. Mr. Nethercutt.
        Mr. Nethercutt. Thank you, Mr. Chairman.

                            ENVIRONMENTAL TERRORISM

        Mr. Secretary, I think we face an increasing problem in
    this country with environmental terrorism. The idea that
    extremists will come into a lab and rip up plants, I think it
    just happened in Michigan.
        Out in my district, Washington State University, is
    performing tremendous research, and literally the new animal
    disease biotechnology facility has to have armed guards at the
    door to keep who knows who out from coming in and ripping up
    plants and so forth in the name of environmental protection
    against genetically modified organisms.
        Vail, Colorado, had the burning of the facility there a
    couple of years ago, and I am wondering what your
    administration--what your Department, I should say, is thinking
    or looking at relative to combating this. I think we need to be
    thoughtful about it.
        I met with my universities, as a lot of research is done
    out in the West. We are considering a potential policy
    implementation that would look at some security measures, try
    to figure out what is the best security for these facilities
    that are paid for by the taxpayers and by well-designing
    researchers and scientists. I am wondering what your thoughts
    are on this subject.
        Secretary Glickman. It is interesting that you should say
    that. I was out at Iowa State where we have a lot of our level
    three labs. They do their best but the security could be
    improved. We are looking at all of our facilities to try to do
    what we can to protect them. The most famous, of course, is the
    Plum Island facility but we have a lot of facilities around the
    country that need protection.
        I am very worried about this. I see it in the whole effort
    on genetically engineered products where you have an awful lot
    of people that, for whatever reason, don't think it is the
    right thing to do and decide to take the law into their own
    hands. It is an extremely great concern of ours.
        We also have been very involved in the whole bio-terrorism
    issue in terms of an interagency process. We have increased our
    staff to deal with some of these issues as well.
        I also know that the Justice Department is taking a much
    more engaged role.
        Mr. Nethercutt. That is good. I just wanted to be sure. I
    assumed you were involved but wasn't sure to what extent.

                          NATIVE AMERICAN FOOD PROGRAM

        A couple of years ago or maybe last year I raised the
    question about the commodity programs that come through USDA
    for Native Americans and the quality and type of food that has
    the likelihood of increasing the incidence of diabetes among
    Native American populations.
        Have you done anything more in that respect? In other
    words, the cheese and dairy commodities are a wonderful gesture
    but maybe for the population that is highly susceptible to
    diabetes it may be we ought to be providing some other
    commodities.
        Secretary Glickman. Well, Shirley Watkins, our Under
    Secretary, has made some changes in those commodity programs. I
    just have to get back with you to tell you.

                                   CRP BUDGET

        Mr. Nethercutt. That is fine. I just wanted to be sure that
    it is a concern of mine.
        The third thing--then I will finish--the President's budget
    is requesting to increase the number of CRP acres from 36.4 to
    40 million acres. This is a good program. We use it extensively
    out west. I dealt with your offices on the whole subject of CRP
    in the past but what we are seeing is the bid price being
    accepted on some of these whole-farm CRP bids are about double
    the cash rent that the working young farmer can get or give.
        I am wondering if you are thinking about the consequences
    of the CRP acres approach that you are taking as it relates to
    our desire to have farmers be able to stay on the ground. When
    you put the ground in CRP that upsets rural communities, the
    seed man, the fertilizer company and the rest. It has a
    negative impact on the other side for the true agriculture
    economy and the consumer.
        Secretary Glickman. There is a constant tension between
    people who have an interest in the inputs in agriculture versus
    a lot of producer groups who see the CRP as an important part
    of total asset management vis-a-vis the environmental groups
    who see this as an important way to preserve soil and land. But
    perhaps Mr. Collins may comment on the issue of how much the
    bid price is.
        Mr. Collins. Yes. I would just comment on the rental rates.
    It is an issue that we spent a tremendous amount of time
    working on, to try and ensure that we are not accepting bids
    that exceed local rental rates. We have quite a process where
    we take surveys of local rental rates through our National
    Agricultural Statistic Service and we take surveys through our
    Farm Service Agency County Offices. We have a committee that
    puts all that data together and looks at the data to ensure
    that we are not excessive on the CRP rental rates.
        The one area you may be focusing on is the rental rates
    under the Conservation Reserve Enhancement programs which have
    been higher than average local rental rates. Part of the reason
    for that is that we have been bidding in, in many instances,
    water quality areas, partial fields, land that has higher costs
    for the producer to put into the CREP program. We have had a
    difficult time trying to establish the right rental rate under
    those programs. In most cases we worked with the States because
    the State cost shares on the CREP programs.
        Mr. Nethercutt. I understand.
        Mr. Collins. But we have worked with the States to do that.
        Mr. Nethercutt. This is not CREP.
        This is CRP. In fact, I had a phone call this morning where
    a farmer is going to bid in at $93 an acre on----
        Secretary Glickman. Normal CRP.
        Yes, normal CRP on land that normally rents for $50 an
    acre. That is the problem.
        Mr. Collins. Well, he may have bid in the most recent bid
    round but we haven't selected those bids yet.
        Mr. Nethercutt. I understand.
        Mr. Collins. So, we may not select that bid.
        Mr. Nethercutt. I understand. But this is something to
    really watch, because we want highly erodible land in CRP but
    not land that is going to destroy the young farmer and take
    productive land out of production.
        Thank you, Mr. Chairman.
        Chairman Skeen. Mr. Hinchey.
        Mr. Hinchey. Thank you, Mr. Chairman.

                           CROP PRODUCTION INSURANCE

        We started to get into the issue of crop production
    insurance last time. You noted in your testimony that it is
    rapidly becoming one of the prime sources of crop protection
    and that the program operates on an actuarially sound basis.
    But the premiums, of course, have got to be subsidized, and
    there is a question as to whether farmers would buy the
    coverage if it weren't for the heavy premium subsidization. It
    seems that it is very likely that they would not, they wouldn't
    regard it as an economically sound investment if they had to
    pay the un-subsidized price.
        That raises a couple of questions in my mind. There seems
    to be no real incentive for the insurance companies to keep the
    costs down because of the very substantial subsidy. And,
    second, crop insurance doesn't compensate the growers of
    specialty crops that we talked about before. They are left out
    of the mix. The cost of the program is pretty expensive. Last
    year it was almost $2 billion; this year it is up around
    $2.168. It goes in 2001 to $2.237 billion. These sums are in
    addition to the $16 billion for disaster and price-related
    losses in the supplemental appropriations that we have passed
    during the past two years.
        So, the question arises in my mind that, maybe it is not
    even necessary. Maybe we ought not to be bothering with this
    program since it is costing us more than $2 billion and that
    price will only accelerate. I know that you recognize the need
    for reform and you want to do something about it. I wonder what
    we should do? Perhaps we should consider just scrapping that?
        Secretary Glickman. No, I don't think so. I think that it
    would wipe out lots of farmers. I believe tens of thousands of
    farmers could not survive without crop insurance. Now, saying
    that, the statute requires that I have to run the program in an
    actuarially sound fashion. So, that is one of the reasons why
    the subsidies from the government keep growing because the pay-
    outs also keep growing and I have to keep these things in a
    relative equilibrium.
        It is true that the program has not worked as well for some
    of the nontraditional program crops, specialty crops,because
    there have not been the histories there. And we have got to make those
    crops as attractive to ensure as some of the traditional crops. Mr.
    Schumacher's shop is working aggressively on that.
        It is also true that the oversight of the private insurance
    industry needs to be exquisitely good. The GAO, as well as our
    IG, have done reports in the past which indicates that they
    haven't been as frugal as they should have been in actually
    managing the program. And, as you know under the statute, they
    basically operate the program.
        We don't sell insurance. They do it.

                           CROP PRODUCTION INSURANCE

        Mr. Hinchey. They do it but you provide the subsidy.
        Secretary Glickman. We provide the subsidy. Taxpayers
    provide the subsidy. Gus, why don't you talk a little bit about
    what we have been trying to do to add products----
        Mr. Schumacher. Very briefly, we have worked very hard
    because again on the West Coast and East Coast it hasn't worked
    perhaps as well as many of us would like. For example, let us
    take apples, a major crop in your State. We have been counseled
    by members of this committee that it has not worked as well.
        We put a task force together. I would like to work with you
    and Mr. Walsh to give you the results of that effort. We are
    going to make that work much better in this coming year. We
    have issues in your State on onions, and also on silage. The
    October 1st eligibility date, was not good enough for your corn
    silage crop, so we extended it to October 15th.
        So, we are working very hard. The whole farm concept, I
    think, will be much more helpful to the mixed agriculture,
    particularly for New York State.
        Secretary Glickman. If I may just add one other point. We
    have recommended lowering the expense reimbursement for the
    companies before and quite honestly that has not been viewed
    with favor by members of the Congress and even members of this
    committee.
        Mr. Hinchey. Okay. I think that is an interesting subject
    and it is one that I think deserves some additional attention
    because it is a very costly program, and because of questions
    about the general efficacy of it. How effective is it? How well
    does it work? And the central issue that if it were not for the
    heavy subsidy, this is a program that couldn't support itself.
        Secretary Glickman. Well, that is probably true but on the
    other hand the vagaries of agriculture are so speculative I
    don't think you could ever operate an insurance program in
    agriculture without having a heavy subsidy. There is no other
    business that is so totally dependent upon the Lord and the
    weather and unpredictable things. So, I think you are always
    going to have a government input into the cost of crop
    insurance.

                             AD HOC DISASTER RELIEF

        Mr. Hinchey. We have ad hoc disaster relief.
        Secretary Glickman. Otherwise the alternative is what we
    have had in the past. Ad hoc disaster legislation. Every year
    Congress will just provide $2 or $3 or $4 billion which would
    be probably more expensive. This way at least with insurance
    there is a little more predictability of what kind of payment
    there will be out there.
        Mr. Hinchey. And producers pay $800 million in premiums.
        Secretary Glickman. Producers also pay a lot of money. This
    is not just a freebie to them. In fact, many of them think it
    is too expensive for them.
        Mr. Hinchey. Farmers?
        Secretary Glickman. Farmers. Oh, yes.
        Mr. Hinchey. Oh, I know. I know they do. They think it is
    too expensive.
        Am I out of time?
        Chairman Skeen. Yes.
        Mr. Hinchey. Thank you.
        Chairman Skeen. Mr. Walsh.
        Mr. Walsh. Thank you, Mr. Chairman.

                                 CROP INSURANCE

        I associate myself with the remarks of my colleague from
    New York. I, having served on the Ag Committee and now Ag
    Approps, felt for a long time that we ought to fish or cut bait
    with this crop insurance program because we do both. We do crop
    insurance and we subsidize it and we do disaster relief. And I
    know one thing for sure, we will always respond to agriculture
    disasters. I am not sure if we will always subsidize crop
    insurance, for what it is worth.

                     HAZARD ANALYSIS CRITICAL CONTROL POINT

        Onto the issue of HACCP. You mentioned at the outset that
    HACCP has resulted in a 50 percent reduction in salmonella.
        Secretary Glickman. Well, there has been a 50 percent
    reduction.
        Mr. Walsh. Well, we will give you credit.
        Secretary Glickman. Well, okay, we will take it. Thanks.
        Mr. Walsh. I think it is great news. I do. And as you know
    I worked very closely with you in the implementation of this.
    There were lots of questions on the industry side about it. And
    we had agreed to sort of a roundtable process whereby everybody
    would be educated and buy-in and it worked pretty well.
        So, the concern that I have remaining on this is that the
    idea, as I understood it, was to put in a scientific process
    and eliminate the sight, touch, smell aspects of meat
    inspection because it was not terribly scientific. It relied
    upon the experience of the inspectors and a little bit of luck
    and so on and so forth. But HACCP was a scientific approach.
        It is my understanding that we have not progressed terribly
    far on reducing the other layers of this process.
        Secretary Glickman. Let me say a couple of things. Number
    one, I think you are always going to need a significant human
    presence. Inspectors may be doing different things, however.
    They won't always be touching, feeling, smelling, those kinds
    of things but they will be involved in reviewing test data.
    They will be involved in oversight type of functions.
        Now, I will be honest with you, the labor relations within
    the Food Safety and Inspection Service has probably not at this
    stage reached the level of harmony that we would like to see.
    HACCP involves a lot of changes, as you can imagine, and there
    is a long history of these seeing, smelling, touching
    functions.
        What we have told our employees is that we are not talking
    about reducing the work force, however, some things will
    change. They will not be doing exactly the same things. We have
    got a real special responsibility to communicate well and bring
    them into this thing.
        But I am not telling you it has been without problems
    because we have had some problems.
        Mr. Walsh. So, it is not happening the way you had
    envisioned.
        Secretary Glickman. No. Certainly not as quickly but itis
    happening. But there are problem areas.

                                     HACCP

        Mr. Walsh. Well, it is my understanding now there is a
    proposal from USDA to the States to allow them to ship meat
    across State lines from State inspection facilities, State-
    sponsored licensed inspection facilities, if they subscribe to
    HACCP.
        Secretary Glickman. That is in proposed legislation. Yes.
    It is not a regulatory thing. It is a bill.
        Mr. Walsh. All right. So, it is not your proposal?
        Secretary Glickman. It is our proposal.
        Mr. Walsh. It is a legislative initiative.
        Secretary Glickman. Right.
        Mr. Walsh. Well, I----
        Secretary Glickman. Well, that is our proposal. It is a
    legislative proposal.
        Mr. Walsh. All right. It is your idea; Senator Daschle is
    going to introduce it.
        Secretary Glickman. There is a lot of congressional
    interest in State inspected product moving.
        Mr. Walsh. Yes. I would suspect there is but why would you
    open up a whole new area of meat inspection to this process
    when it hasn't been fully implemented at the Federal level?
        Secretary Glickman. Well, there is an enormous amount of
    small, niche-marketed facilities, meat and poultry facilities
    around the country that would like to go down this road and
    there is tremendous interest in the industry, as well as among
    members of Congress and various States. We have actually
    resisted this until the last year or two and we have been kind
    of argued as blocking something that needs to be done. But what
    we are trying to do is to ensure that if it happens and it
    happens with respect to basically smaller operations they would
    have to meet our HACCP requirements.
        Mr. Walsh. So, you are saying this is processor-initiated?
        Secretary Glickman. Well, I don't know if I would call it
    processor-initiated. Really the State Commissioners of
    Agriculture is where most of this came from. They have asked
    for us to do this. In fact, the Ohio Commissioner of
    Agricultural has been kind of a leader of this effort.
        Mr. Walsh. Well, I would urge some caution with
    implementing a plan at another level of government that hasn't
    really been fully implemented. I mean the salmonella problems,
    if those problems are just not anecdotal and it is real, then
    that is great. But I think we need to make sure that what we
    have implemented at the Federal level is doing what we thought
    and is not adding additional costs on the industry and the
    consumer.
        Thank you.
        Chairman Skeen. Mr. Farr.
        Mr. Farr. Thank you, Mr. Chairman.

                              FREEDOM TO FARM ACT

        I have a couple of other questions. Following-up on Mr.
    Hinchey's question about the Freedom to Farm Act. I mean what I
    heard you say is that we really ought to just start all over
    and base it totally on income for farmers, regardless of what
    commodities, income for a whole year.
        Secretary Glickman. Well, I haven't made that formal
    proposal but I think that the concept of basing a farm program
    on income rather than on price of a specific commodity is one
    that I think we all ought to take a serious look at. Farmers
    raise a lot of things and particularly with the amount of
    livestock that is grown in this country that is basically
    uncovered or uninsured, I think it is a new way of looking at
    farm policy.
        Mr. Farr. Well, I am very interested in that. If there is
    anybody in your department that is working on it, I would love
    information. It seems to me that if we are going to have a
    credible farm policy going into this new era of where people
    are actually trying to grow specialty crops and high-value
    crops and all kinds, I mean the market is changing so rapidly
    in agriculture, we are growing crops that we never knew we
    would be growing 20 years, 10 years ago, 5 years ago--that we
    need to re-look at this on a basis of equity and fairness. And
    it seems to me that is the best program that I have heard since
    I have been here and, so, I am interested.

                           EXPANDING OVERSEAS MARKETS

        I am also interested in your comments about expanding
    overseas markets. I agree with you, that is a big push. Are we
    going to include specialty crops in that?
        Secretary Glickman. Yes.
        Mr. Farr. As I recall when you briefed us on the Asian
    crisis and the ability for us to loan money to foreign
    purchasers as long as they bought U.S. commodities, in that
    list of things you could buy none of the specialty crops--I
    mean the program was available for specialty crops or people
    didn't know we hadn't done outreach. Is that changing?
        Mr. Schumacher. Let me just address that in two parts. In
    the President's budget we have asked for any unused EEP
    balances to be used for trade promotion. We asked for that a
    year ago, and we didn't get it. But this time we very much
    would like the committee to seriously consider it and pass it
    because not only would it promote tremendous amounts of
    specialty crops overseas but also if we get China NTR, we are
    going to need additional funds to promote those West Coast
    products in the China market. This is a very important issue
    for us in USDA.
        On the specialty crops, we do permit those to be exported
    under the GSM credit program and through other trade promotion
    efforts. Those are permitted and we do provide assistance, I
    believe.
        Mr. Farr. Can you keep our office posted on--we don't
    always know what all the committees and other branches, and
    other houses are doing. We would like to support that strongly.
        Secretary Glickman. China NTR or the GSM?
        Mr. Farr. Well, we haven't made our mind up on China NTR
    yet.
        Secretary Glickman. We will take any opportunity here to
    support it.
        Mr. Farr. But we certainly want to sell wherever we can.
        Secretary Glickman. Okay. Thank you, sir.

                                PIERCE'S DISEASE

        Mr. Farr. Pierce's disease. Are we doing everything--the
    feeling is we are not doing everything we should be doing.
        Secretary Glickman. Dr. Siddiqui is involved with this----
        Mr. Farr. We know how serious it is. I mean really it could
    wipe out the wine crop in America.
        Mr. Rominger. I was down in Temecula and looked at the
    situation down there with the glassy-wing sharpshooter about
    three weeks ago. It is a serious problem. As a result of that
    trip we have put together a task force in the Agricultural
    Research Service, to begin working with theState, with the
    University and looking for more ways to help those growers to stem the
    spread of the glassy-wing sharpshooter. We know we have got Pierce's
    disease all over the State already, but we are looking for ways to try
    and prevent that sharpshooter from spreading the disease like it has in
    Temecula.
        Mr. Farr. Do you think, in your opinion, do we have enough
    resources to do that?
        I mean the State is putting some money in and we are----
        Mr. Rominger. We provided some year-end money last year to
    work on it. We are, as I say, sending people--we are taking
    people from ARS and sending them down there. They have not at
    this point asked us for more funding.
        Mr. Farr. Which I think would be very important to kind of
    do a newsletter on this. We can circulate it with the
    delegations and with members that have wine/grape crops in
    their districts. Because it is the most often-asked question
    and people really don't--they know something is being done but
    not specifically.
        Mr. Rominger. Okay.

                           EXOTIC PEST DISEASE CENTER

        Mr. Farr. And then did Chancellor Rohrbach from the
    University of California, Riverside, talk to you about the
    exotic pest disease center that they want to build?
        Mr. Rominger. They are building it. Yes. It is under
    construction. The Chancellor was with me on the visit to
    Temecula and we also took a look at the exotic pest center.
        Mr. Farr. Well, he has asked us to put $10 million or some
    figure like that in the budget and if it is something that you
    think should be supported, I would be very supportive of it
    also.
        Mr. Rominger. Okay. We will get back to you on that.
        [The information follows:]

        Background on Alternative Pest Control Containment &
    Quarantine Facility--Riverside, CA: The total cost for this
    facility is estimated to be $38 million, with the proposed
    Federal share of $18 million and the non-Federal share of $20
    million. To date, a total of $10.8 million in Federal funds has
    been appropriated for this project. The University has
    requested an additional $7.2 million to complete the project.
    FY 1997 was the last year Congress appropriated funds for the
    CSREES Building and Facilities Program. The recipients of these
    funds have until September 30, 2000, to obtain alternative
    funding to complete the facility. Without additional funding,
    the University will have to scale back the construction of
    biosafety level 3 facility.

                               RURAL DEVELOPMENT

        Mr. Farr. Just something when I was reading your report,
    have you ever thought about--we have got all these sort of
    rural services and telephone and water, rural development, you
    know, rural housing loans. Have we ever leveraged? I mean we
    got all these Internet people coming in here where, you know,
    this industry is just making billions of dollars and they are
    in there, and the Federal Government is regulating them. Why
    don't we require them to, through satellite stuff, just to
    solve these rural communication problems as part of their
    requirement to get licensed or to get things done?
        It seems to me we give them, you know, how the industry has
    taken off, we are going to all--they say that all the phones
    pretty soon are all going to be satellite connected and we
    won't need hardwires. Why don't we require them to take care of
    the rural problems of America?
        Secretary Glickman. Well, you know, the President is
    looking at ways to deal with the digital divide in a lot of
    different ways. One of them is leveraging our rural electric
    and rural utilities portfolio which is up over $30 billion. And
    in fact, there is some leveraging going on. But if you are
    talking about leveraging in terms of let us say, requiring them
    to do certain things in order to get access into the Internet
    or access into perhaps--
        Mr. Farr. Well, let us expand the community reinvestment
    policy that we have for banks and think about that more. You
    know, that is reinvestment back into the community where the
    branch offices are. But a sense of a community reinvestment in
    rural America.
        Secretary Glickman. If I am not mistaken this has been a
    legislative issue for some time, whether there ought to be some
    sort of either set aside or requirement for service of rural
    America.
        Mr. Rominger. Universal service.
        Secretary Glickman. Universal service issues. It is clear
    that there is no reason that rural America shouldn't be on a
    parity with urban America in terms of these services.
        Mr. Farr. My impression is that here in Congress all that
    gets sort of debated in the Commerce Committee and they have no
    idea that the Department of Agriculture has all of these
    programs going on. I mean there--as you once said--it is a
    hold-over from when all America was rural.
        Secretary Glickman. Yes.
        Mr. Farr. And we still have these exciting services out
    there but they don't get the attention they ought to get
    because other departments have all the jurisdiction and have
    all the money.
        Chairman Skeen. I am going to have to call the General.
        Mr. Farr. Okay.
        Chairman Skeen. Thank you very much.
        I would like to recognize Ms. Kaptur, but first, I want to
    thank her for the kind gift that she presented us with.
        Ms. Kaptur. You are most welcome, Mr. Chairman.
        Chairman Skeen. I appreciate that very much.
        Ms. Kaptur. That is Ohio-grown and processed.
        You got one in your office today; it is a surprise. You are
    most welcome.

                       INTRODUCTION OF MR. RALPH HALSTEP

        I wanted to use my prerogative as ranking member, Mr.
    Chairman, to introduce someone who is in the audience today for
    whom I have the greatest admiration and respect. Someone who
    headed one of the major companies of our country that was known
    as Land-O-Lakes, and could be sunning himself on a beautiful
    beach down in Florida next to a golf course but he is choosing
    to spend his years at this point in working as President of the
    Russian Farm Community Project and to my knowledge is doing the
    kind of work that is rare inside that country and which is
    proving to be successful. And I justhave the greatest respect
    for Mr. Ralph Halsted from the State of Minnesota. I am going to ask
    him to stand up because I think his name should be in the record.
        [Applause.]
        Ms. Kaptur. One of the joys of this job is to meet
    Americans of that caliber and I have learned a great deal from
    him and I am sure that the lives that he is changing in Russia,
    the families and the people and the enterprises that he is
    developing is going to help turn that country around. I wish I
    could see it in my generation but I think it might take a
    little bit longer than that, but he is planting those seeds. I
    am just completely impressed.

                              SCREW WORM FACILITY

        I wanted to switch to a different part of the world, Mr.
    Secretary, to Chiapas in Mexico and we have talked on this
    committee under APHIS about the screw worm facility that is
    down there. And we know the desire of all the scientists and so
    forth to move it south to Panama and I have no quarter, I have
    no problem with that and of maintaining the security for our
    animals here.
        But my question goes to whether or not you, as Secretary,
    and a key figure in this administration can somehow work with
    this committee as opposed to just transitioning the workers
    that will be left behind in Chiapas, in a very tender and
    revolution-prone area, to see if we can't--and since the
    problems there are deeply rooted in agriculture--if we couldn't
    use our wherewithal to help the people there to begin to grow
    crops that would make a difference in their lives, maybe
    coffee, maybe tropical fruits?
        We had talked with a Dr. Enrique Figueroa----
        Secretary Glickman. Yes.
        Ms. Kaptur [continuing]. Who is now with marketing and
    regulatory and he had some rather creative thoughts on this. As
    I read the budget submission I read the typical sort of well,
    you know, we got to move the facility and so forth. It seems to
    me with the Inter-American Development Bank, with AND Bank,
    with the World Bank, with all the people we have in position
    America might be able to do a little bit better understanding
    the pressures there, and maybe we actually could help
    contribute to the betterment of the economic condition of some
    of the people there.
        Do you think there is any possibility that the Department
    of Agriculture could work with interested members of Congress
    on that?
        Secretary Glickman. The whole concept is extremely
    important in terms of the eradication effort but I would be
    glad to work with you on it. Dr. Figueroa is a very key person
    in this regard. He is our Deputy Under Secretary for this area.
        Ms. Kaptur. I would ask you, Mr. Secretary, for a meeting
    on that subject. This is a very complicated matter and I know
    Chairman Skeen has an interest in the science of it, as well.
    But I think America can really do something there but it is
    going to take more than the Department of Agriculture but you
    are a critical partner.

                              SEED SALE TO RUSSIA

        The second point I wanted to raise relates to a seed sale
    to Russia that is under consideration by your department. And
    one of the proposals that had come on the table was to find a
    way to make some of that seed available to ordinary dacha
    owners and families.
        The seed sale that occurred last year went through the
    traditional agri-firms and so forth. I am wondering if you have
    given any thought to resurrecting the proposal that would make
    seed available from the people of the United States to ordinary
    families in Russia and do you think there is a way to make some
    of this available in that manner?
        Mr. Schumacher. We discussed this, you and I, extensively.
    We looked at it very, very hard and found that the cost of
    doing that was very, very high. So, it was decided that we
    would not be able to do it this year. I am still looking at it
    to see if we cannot find another way of doing it. But at the
    current time, apparently, the cost is very high in terms of the
    kind of modernization effort that was contemplated. I was
    disappointed. I thought we could do it, but apparently we are
    not able to do it at this time this year.
        Ms. Kaptur. Well, one of the unfortunate aspects of past
    assistance to Russia is this Government has supported the old
    system. We have not built the new system--certainly, in
    agriculture. And I would just ask, Mr. Secretary, your personal
    interest in this matter before any--and the planting season is
    upon us--but I really think that we have to look to the bottom
    and not working through some of the organizations that are
    notorious for diverting revenues. And I just think we have to
    put more intelligence around the table. I have complete respect
    for Mr. Schumacher, but it is not only in his hands here. The
    seed is needed, but there ought to be a way to do this in a
    more humane way and one which strengthens a civil society, as
    opposed to the old agri-firms that still do plenty of business
    inside that country. And I would very much, again, on this
    subject, welcome the opportunity to do look at it more in
    depth.
        Thank you.
        Mr. Skeen. Mr. Dickey?
        Mr. Dickey. Mr. Glickman, I do not know if I have said this
    before, but I have agreed with you and everything you have ever
    done, and I am one of your biggest fans. Do you understand
    that?
        Secretary Glickman. I sure do.
        Mr. Skeen. I would be very careful about what comes next.
        [Laughter.]
        Secretary Glickman. There would not be a b-u-t after that?

                            BLACK FARMERS' SITUATION

        Mr. Dickey. Black farmers, again. Two things that they have
    expressed concern over is, one, there is no explanation as to
    why the delays have been, and you might not be able to answer
    that and, two, if it has been this complicated to get the
    checks to them, how in the world are they going to get the
    opportunity to buy from inventory as the consent decree
    provides? Can you give me any help in either one of those
    areas?
        Secretary Glickman. I cannot now. Again, we have paid out
    about $90 million in the last couple of months, and I expect
    that to be accelerated. Again, somebody outside of the
    Department is making the decisions. So on the second part of
    it, I would have to look at it a little more deeply and get
    back with you.
        Mr. Dickey. Well, I hope we can. Now, who is the scheduler?
    Who do we get in touch with as far as next week?
        Secretary Glickman. John Gibson.
        Mr. Dickey. John Gibson. Okay. I have got to run and catch
    a plane. I am just concerned about the inventory, the
    opportunity they have to buy from inventory is another part of
    it.
        Secretary Glickman. That is largely in Mr. Schumacher's
    shop, the Farm Service Agency, that would be responsible for
    that.
        Mr. Dickey. Can he be with us at the meeting?
        Secretary Glickman. Yes.
        Mr. Dickey. Good. Thank you. Thank you, Dan.
        Thank you, Mr. Chairman.
        Mr. Skeen. Mr. Hinchey.
        Mr. Hinchey. Thank you, Mr. Chairman.

                           RURAL DEVELOPMENT PROGRAM

        Mr. Secretary, as you know, at least half of the poverty in
    America is in rural areas, at least half of the substandard
    housing in America is in rural areas. That is why your rural
    development program is so important.
        Secretary Glickman. Yes.
        Mr. Hinchey. And I commend you for your commitment to it
    and the work that has been done under your administration in
    that area; most recently, your participation in the President's
    Livable Communities Program, and prior to that, the development
    of the Rural Economic Area Partnerships, the REAP zones.
        Secretary Glickman. Yes.

                        RURAL ECONOMIC AREA PARTNERSHIPS

        Mr. Hinchey. But I am very confused, in looking at the
    budget, because I find that all reference to funding for the
    Rural Economic Area Partnerships has been deleted. There are
    five places in the 2001 budget where the words, and I quote,
    ``. . . and areas designated by the Secretary as Rural Economic
    Area Partnerships'' were deleted. So someone has made a
    specific and purposeful effort at eliminating the Rural
    Economic Area Partnerships from the set-asides for EZs and ECs
    this is completely inexplicable to me, particularly in view of
    your long-term and strong commitment to those issues.
        Secretary Glickman. Let me say I have been a strong
    supporter of this. I do not know, Mr. Dewhurst, do you have any
    thoughts or do we need to get back with them as quickly as
    possible?
        Mr. Dewhurst. Well, I think, to be fair to you, we need to
    get back to you. The REAP zones are eligible for a number of
    USDA programs. But you are right, we do not have targeted funds
    in the budget for those zones. So let us give you a more
    complete answer to your question.
        [The information follows:]

        The Agriculture Appropriation Act for 2000 included
    language specifying that Rural Economic Area Partnership (REAP)
    zones, along with Empowerment Zones and Enterprise Communities
    (EZ/EC), are eligible for certain portions of the funding for
    various rural development programs. The President's budget for
    2001 includes language that mentions only the EZ/EC's. However,
    this change was not intended to exclude the REAP zones. As in
    prior years, the Department has worked with the REAP zones as
    if they were part of the EZ/EC initiative and has not
    considered it necessary to have specific appropriation language
    to achieve that end. For 2001, the Department fully intends for
    the REAP zones to share in the rural development program
    funding earmarked for the EZ/EC initiative.

        Mr. Hinchey. Specifically, I would ask you to look at the
    fact that they have been deleted from the set-asides and it
    just does not make any sense. Either this is a mistake or there
    is some----
        Secretary Glickman. We will check it out. We will get back
    to you.
        Mr. Hinchey [continuing]. Fifth column movement operating
    in the Agency.
        Secretary Glickman. I doubt that. Usually, the conspiracies
    are not as you think they are. But we will find out why.
    Because I know that we provided REAP zones in New York, for
    example, with some money last year.
        Mr. Hinchey. Absolutely.
        Secretary Glickman. In fact, we talked about it when I was
    in your district, I think, as well. So we will find out why it
    was not included.
        Mr. Hinchey. Very true, yes. I appreciate that. Thank you
    very much.

                                 USDA STAFFING

        If I have another minute or two, I would just like to
    express a concern about staffing. I know that this
    Administration made a real effort at reforming Government, and
    cutting back on waste. A lot of that was connected with the
    budget resolution of 1993, which you voted for, Mr. Secretary,
    I know.
        Secretary Glickman. Correct.
        Mr. Hinchey. And a lot of that has been good. But we are
    finding that in the county offices, particularly, the workload
    is increasing, and the number of people available to accomplish
    the objectives and purposes, all of which are very good, is
    declining. We are getting to a crunch situation, if we have not
    already passed it.
        You said in your testimony that the higher workload is
    projected to continue into 2001. But there is no provision in
    the budget for salaries and expenses higher than last year.
    Staff has declined by about 6,000 positions since 1993. This
    year's budget proposes funding to support 16,667 staff years.
    We have another 500 or so positions that are being eliminated,
    mostly by attrition, I assume.
        Secretary Glickman. Sixteen thousand all across the board
    or which agency are you referring to?

                             FSA TEMPORARY STAFFING

        Mr. Hinchey. Proposes funding to support, that is FSA.
        Secretary Glickman. FSA, yes.
        Mr. Hinchey. FSA, yes.
        Secretary Glickman. We are down because the temporaries are
    down. We have protected the permanent employees. So there was
    no reduction there. But you are correct, we are down in terms
    of the numbers of temporaries we brought on, largely because of
    the disaster program. That is accurate. We will work with you
    on that. The fact is the workload has not gone down. I agree
    with you.
        I would say, overall, the Department's staff years has gone
    up this year. We are up by about 2 percent, but we are down 14
    percent since 1993. We are up this year some in Rural
    Development, some in NRCS because of all of the conservation
    technical assistance programs, and some inAPHIS, but FSA is
    flat.
        Mr. Hinchey. And the FSA operation in New York has lost 32
    positions in the last five years. So the workload there has
    gone up, but the people available to do it has gone down, and
    it is creating some difficult situations. So I think this is
    something that we just have to look at, and be aware of and try
    to deal with it as best we can.
        Mr. Skeen. Mr. Boyd.
        Mr. Boyd. Thank you, Mr. Chairman.

                                  APHIS BUDGET

        I want to just briefly go back to one area, and that is
    part of the APHIS budget, Mr. Secretary, and reemphasize that
    this, the trade policy, open-market policy that we all know is
    a good thing and want to increase, has some consequences. And
    one of those consequences is this invasive pest issue. And I do
    not think that we have dealt with it. I do not think that we
    have been prepared for it. And I know that you have put some
    additional requests--
        Secretary Glickman. We have about 300 more people in the
    APHIS Quarantine Inspection----

                                   ARS BUDGET

        Mr. Boyd. Right. You have requested some additional money,
    and it is going to take that. And I know you are doing some
    things in the ARS budget too. You have stepped that up, and we
    are attacking it on several fronts. Once it gets here,
    obviously, we are also trying to attack it to some other
    countries, I think. African heartwater tick is one we did not
    talk about. There are some pests out there that will destroy an
    industry. Citrus canker is one, African heartwater tick will
    destroy the livestock industry, deer population, everything if
    it gets out of hand.
        I do not know if you know this, but we found African
    heartwater ticks at some of our ports in Florida within the
    last two or three months. So those are very serious, serious
    issues.
        Secretary Glickman. Mr. Boyd, if I may just say one thing
    about a legislative issue. This issue came up in California,
    concerning the Mexican fruit fly. There was some concern about
    the fact that we had not referred any cases to the United
    States attorney for people who are intentionally bringing
    fruits and vegetables into the U.S. that are infested. The fact
    is that we have referred some cases. But the penalties under
    the law are virtually nothing. There needs to be a significant
    augmentation of penalties for knowingly bringing in infested
    fruits and vegetables.
        We have sent up legislation in the last Congress. That
    would be helpful because then you can get the United States
    attorneys really interested in these cases. You put a few
    people in jail for an extended period of time who knowingly do
    this kind of stuff, it may help stop it.
        Mr. Boyd. Thank you, Mr. Secretary.
        I met with your inspector general on this particular issue,
    and I am going to meet with him some more.
        Secretary Glickman. He is developing I think a more
    concentrated law enforcement effort, and we do need stronger
    penalties.

                                 METHYLBROMIDE

        Mr. Boyd. Two other issues, Mr. Secretary, and I will be
    through. One is methylbromide. We are in this world of open
    markets, and free trade, and yet we allow people who use a
    product that we are now banning to ship stuff in, and I
    appreciate you and your agency's recognition of the importance
    of this pesticide.
        But, you know, two to three years ago we did a 25-percent
    reduction in our overall use, what this country is allowed to
    use. And I think in a year from now, in January 2001, we will
    have a second 25-percent reduction in sales in this country. We
    saw a doubling of the cost of methylbromide two years ago when
    we did the first reduction. Lord knows what is going to happen
    when we do the next one a year from now.
        Where are we on the alternative pesticide use, alternative
    products for methylbromide?
        Mr. Rominger. As you know, we have augmented our research
    funds each year for the last several years on methylbromide
    alternatives, and we are continuing to do that. We have
    developed some treatments for some commodities that look like
    they are going to be satisfactory. There are some new chemicals
    coming online that look very promising. It is going to take us
    a little while to get them registered, but we are pursuing that
    as rapidly as possible. We are putting some USDA money into
    getting the data necessary to get them registered by EPA, where
    companies are not that interested in putting all of the money
    into the research that is needed. So we are continuing to push
    on looking for good replacements for methylbromide.
        Mr. Boyd. Are you doing any in-field research at this point
    in time?
        Mr. Rominger. We are, yes. We are getting money now out
    into the field and doing field research, yes.
        Mr. Boyd. This is a critically important issue to all of
    your specialty crop folks and nursery industries. I know the
    traditional field crops do not use it much, but most of the
    other agriculture does.
        Mr. Rominger. Well, certainly, we hear it from Florida, and
    we hear it from my home State in California, yes.
        Mr. Boyd. Yes, sir.
        Mr. Rominger. Desperately needed.

                          MEAT AND POULTRY INSPECTORS

        Mr. Boyd. One additional question, and it is really a
    follow-up to an area that Congressman Kingston and
    Congresswoman Rose DeLauro touched on, and that is the meat and
    poultry inspectors.
        It is my understanding that you recently won a major
    victory in a lawsuit filed by the meat and poultry inspectors
    unions. And my question is does the winning of that lawsuit
    give you the authority to adopt alternative staffing
    arrangements in an unforeseen emergency inspector shortage?
        Secretary Glickman. We have set up these what is called
    Models Programs to give more flexibility on staffing, and we
    were sued, and we won that case. We feel comfortable it gives
    us some additional authority to use staffing flexibility as we
    fully implement the HACCP rules. But, obviously, we have got to
    do this using good communication with our employee unions,
    employee groups. But, yes, we think it gives us greater
    flexibility.
        Mr. Boyd. Thank you, Mr. Chairman.
        Mr. Skeen. Thank you.
        Marcy, do you have anything?

                            ASIAN LONG-HORNED BEETLE

        Ms. Kaptur. Mr. Chairman, I just had a couple final things
    here. The first one is the one insect that has not been
    mentioned here today is the Asian long-horned beetle, and I
    have to tell you that our maple sugar industry in Ohio is
    worried to death about what is going to happen.
        Mr. Secretary, I would like to ask you, in terms of
    legislation that the Administration has sent up here dealing
    with properly placing wrong and fines on people who are
    responsible. What more needs to be done in order to get the
    Administration to be a party to the suit, perhaps with the
    attorney general from our state or from New York State, where
    the insect has already done major damage, to get cases filed
    that are won, to really send the message? Is your legislation
    sufficient to do that?
        Secretary Glickman. I do not know. This is a monumental
    problem, as you know.
        Ms. Kaptur. Yes. Yes.
        Secretary Glickman. So we have, in fiscal 1999, put in
    nearly $7 million, and this fiscal year, with additional CCC
    requests anticipated or in process, we are talking about $16
    million, much of which is emergency funding.
        I am not aware of any lawsuits. We would have to talk about
    that in greater depth.

                               FEDERAL LITIGATION

        Ms. Kaptur. In terms of New York, what I am thinking is how
    would one get a joint filing by the Federal Government, let us
    say, and the attorney general of New York against importers
    that would have brought it in from China, and it is coming in
    all of the time. The long-horned beetle is not the only pest
    that has come on that packaging material. In fact, one of the
    reasons I am not inclined--there are many reasons--I am not
    inclined to vote for what is now called most-favored, what is
    it, normal trade relations with China--they changed the label--
    is because of the fact that we do not pick up after ourselves
    when these agreements are set in place.
        And on the import of some of these very destructive pests,
    why put that burden on the taxpayer? Why take it out of our
    appropriated dollars? And that is exactly what we are doing to
    ourselves here. So unless there is an insurance fund that is
    set up, unless there are some landmark cases, it seems to me we
    need some landmark cases in this area, and we are not getting
    them. The litigation is far behind where the market is.
        Secretary Glickman. Let me ask Dr. Siddiqui to tell you a
    little bit more about this. We did get a rule adopted on
    fumigation of wood packing material or other treatment, and you
    might explain a little bit about its status.
        Mr. Siddiqui. Yes. About 18 months ago, when we discovered
    the infestations not only in New York, but also Chicago, an
    interim rule was adopted which requires mandatory fumigation or
    treatment of solid wood packing material before its shipped
    from China and can arrive here. So that was one preventive
    measure taken.
        Another one is, once you find infestation, it is too late
    to find who the culprit was, in terms of who brought it. So
    interceptions of these exotic species have had to take place,
    and that is what the Secretary was talking about additional $30
    million is being requested; $27 million in user fees and $3
    million in appropriations for APHIS adding those inspectors at
    the ports of entry.

                       INCREASED PENALTIES FOR VIOLATIONS

        Thirdly, I would like to add that increasing the penalties
    for violations is a critical part of it. That is what the
    Secretary was talking about, the Plant Protection Act, which is
    being pushed by the state planning regulatory officials, the
    National Association of State Directors and a number of
    commodity groups from all over the country in order to increase
    penalties. Right now, the maximum penalty for violation of
    plant pest activities is only $1,000.
        I can tell you about an example from my California
    experience, that spanned 30 years. Someone intentionally
    brought coffee berries from Hawaii to Los Angeles, where we
    have spent millions of dollars in eradicating Med-fly. Through
    the inspection we established who the sender was because he was
    also the recipient in the Los Angeles area. When USDA, in the
    State of California, referred this case to the court, only $534
    was levied as a penalty for an act which could have cost
    millions of dollars to eradicate if an infestation had broken
    out.
        Secretary Glickman. I think the real answer is
    substantially increasing the penalties. In a lawsuit, it would
    be probably pretty hard to actually identify the specific
    culprit, and I think you have got to deal with this
    prospectively. This is a big gap in the law.
        Ms. Kaptur. Right.
        Secretary Glickman. I think we should do something with
    this legislatively.

                           DECLINING MILK CONSUMPTION

        Ms. Kaptur. And, finally, Mr. Secretary, on a totally
    different subject. I am very concerned with the declining milk
    consumption among our youth, simultaneous with an increase in
    consumption in soft drinks and high-sugar-containing foods. And
    we have a rise in osteoporosis among young girls, we have an
    epidemic of obesity among our youngsters, a third of them. I am
    concerned about how--I know we will have the Food Nutrition
    Service up before us later this month--but what can be done, in
    your opinion, to deal with the nutrition of youth, particularly
    inside those school buildings? And I am sure I am speaking out
    of turn here, but to get rid of those exclusive contracts that
    the soft drink companies put in these schools, and they
    literally buy off, school by school, million-dollar contracts.
    You can have ``X'' drink, you cannot have ``Y'' drink. And the
    proof is in the pudding. All you have to do is look at the
    children coming out of those buildings. This is a really
    serious problem in our country.
        Secretary Glickman. You are right. One of the great
    nutrition problems facing this country and our children is the
    amount of soft drinks that are displacing more nutritious
    beverages. I do not know what we can do. Some have argued that
    to participate in a school lunch program you should have to get
    rid of the soft drink machines. I do not think we have the
    statutory authority to do that.
        But I think that you ought to talk to Shirley Watkins and
    her staff about what options there are. The school food service
    people from around the country were here this week, and we have
    tried to figure out if there is any way we can raise the issue
    from a bully-pulpit perspective.
        The school lunch program has done a great job of improving,
    over the last five years, the quality of the content of food.
    We have new dietary guidelines out for comment and we expect
    that sugar in the diet will be addressed.
        I might tell you that next week, on Thursday, we are having
    something called the great nutrition debate at the Department
    of Agriculture, and we are having Dr. Atkins, Dr. Ornish and
    others, including the person who wrote the zone diet, the
    person who wrote the sugar-busters diet, and one objective
    nutritionist. What can I say? [Laughter.]
        I do not know how to characterize this. It is on Thursday
    from 10:00 to 12:00. It is for two hours. The American public
    is getting a barrage of conflicting and competing nutrition
    information. Each of these diets says that it is the ticket to
    Heaven on Earth.
        Ms. Kaptur. All members of Congress read those.
        Secretary Glickman. So it is something that you might be
    interested in. You know there are a lot of great egos among the
    group of people who I have mentioned, and there may be some
    truth in every one of their diets. But now there is so much
    conflicting information out there that I think it confuses
    families a lot about what to eat and what not to eat. We really
    need to do a better job of communicating good nutrition
    information without the Government appearing to be a national
    nanny either. The trick is to find out how to do that.
        But you are right. These contracts give the school
    districts lots of money, and there are ways schools can raise
    lots of money for their own activities/programs that they
    cannot raise any other way with tight budgets.
        Ms. Kaptur. That is correct. Thank you, Mr. Secretary.
        Mr. Skeen. Thank you very much.
        I will owe you one, Mr. Hinchey. I think we have had a
    great afternoon. I appreciate all that you have done.
        Secretary Glickman. Thank you. We have got a lot of work to
    do now.
        Mr. Skeen. The committee will stand in adjournment until 10
    a.m. tomorrow, when we will hear from the Department's
    inspector general. It ought to be very good to be here. So see
    you tomorrow.
        Secretary Glickman. Thank you.
        Mr. Skeen. Thank you.
        [Questions submitted for the record follow:]

                                              Thursday, March 16, 2000.

                    OFFICE OF THE CHIEF INFORMATION OFFICER

                                   WITNESSES

    JOSEPH LEO, CHIEF INFORMATION OFFICER
    PEARLIE REED, CHAIRMAN, NATIONAL FOOD AND AGRICULTURE COUNCIL
    STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE
        Mr. Skeen. Good morning. The committee will come to order.

                           Introduction of Witnesses

        Good morning. We want to welcome today the new Chief
    Information Officer for the Department, Mr. Joe Leo.
        Mr. Leo, let me start off by saying we appreciate the
    enthusiasm that you bring to the job, and I understand from
    your testimony that you had been involved with various
    initiatives to improve how information technology is used to
    deliver programs at USDA. That is quite an accomplishment. This
    new job will be particularly challenging in that regard.

                              OCIO BUDGET REQUEST

        Your budget request for fiscal year 2001 includes three
    major initiatives totaling $83.6 million. As we move forward in
    the appropriations process, we will have to pay close attention
    to these items so that any resources that may be provided are
    targeted to help the Department deliver programs in an
    effective and efficient way.

                     NATIONAL FOOD AND AGRICULTURE COUNCIL

        This morning we also have invited USDA's National Food and
    Agriculture Council to be with us to give us a better
    understanding of the role the group plays in delivering the
    services that are so important to so many farmers and ranchers
    and homeowners at the county-based service centers. Mr. Pearlie
    Reed of NRCS, who serves as the Chairman of the council, is at
    the witness table. Behind him are Keith Kelley of FSA. Good to
    see you again, Mr. Kelley. Inga Smulkstys of Rural Development,
    who, along with Mr. Kelly, are on the board of directors. These
    three people serve the council collaterally. We appreciate your
    being here.
        With that, I will turn to my Ranking Member Miss Kaptur for
    any remarks she may have, before we proceed.

                              Ms. Kaptur's Remarks

        Ms. Kaptur. Thank you, Mr. Chairman. I just wanted to
    welcome Mr. Leo here this morning. I was not aware that Pearlie
    Reed was chair of this group. I suppose I should have been. I
    apologize for not knowing that. We are happy to have you back
    before the committee, and also Mr. Dewhurst for his repeat
    performance here.
        Mr. Skeen. Year after year.
        Ms. Kaptur. Year after year, yes.
        So we look forward to your testimony, and we will await the
    question period. Thank you.
        Mr. Skeen. With that, I turn it over to you, Mr. Leo, and
    then Mr. Reed for any oral comments you may have. Your written
    testimony Mr. Leo will be inserted in the record. It is all
    yours. Glad to have you here. Welcome.

                       Opening Remarks of CIO Joseph Leo

        Mr. Leo. Thank you, Mr. Chairman.
        Mr. Chairman, Ranking Member Kaptur, Members, I appreciate
    the opportunity to discuss with you the information technology
    program at USDA. I would like tosubmit my written comments for
    the record and make just a few brief remarks prior to responding to any
    questions you may have.
        I am joined by Mr. Pearlie Reed, the Chief of the Natural
    Resources Conservation Service, who is Chair of the NFAC, and
    Mr. Steve Dewhurst, Director of the Office of Budget and
    Program Analysis. With us today are Deputy Under Secretary for
    Rural Development Inga Smulkstys, and FSA Administrator Keith
    Kelly, also members of the NFAC.
        The presence of my colleagues reflects our strong
    commitment, as well as that of the Secretary and the Deputy
    Secretary, to continue to work together to modernize our field
    service centers and create a more efficient administrative
    management structure for the county-based agencies.

                            LIFTING SSB RESTRICTION

        Today we want to express our strong support for the
    Secretary's request that Congress remove the restrictive
    language included in last year's appropriations bill that
    prevents USDA from moving forward and implementing the Support
    Services Bureau--SSB.
        The SSB will allow us to consolidate the now redundant
    administrative structures of the three service center agencies
    into one cost-effective, comprehensive administrative services
    operation. The SSB will not divert program funds to
    administrative activities. It is the right thing to do. It is
    good government, and it will strengthen our ability to support
    program delivery to farmers, ranchers and others by improving
    the administrative services program managers depend on to get
    the job done.
        Implementing the SSB, especially by consolidating the
    information technology staffs of the three agencies, is also
    the logical and necessary extension of our efforts to provide a
    Common Computing Environment and shared telecommunications
    network in our field service centers.

                          COMMON COMPUTING ENVIRONMENT

        Our fiscal year 2001 budget requests $75 million for that
    part of the service center initiative dealing with the Common
    Computing Environment--CCE. The CCE is the critical component
    of the service center modernization initiative that will
    provide a single, integrated and modern technology system for
    county-based agencies. The CCE is needed to replace our current
    systems that were developed within the stovepipe of each agency
    and are expensive to maintain and do not enable our employees
    to provide modern and efficient services to farmers, ranchers
    and rural residents. In short, the CCE is the electronic
    highway for delivering agricultural services to rural America.

                             OCIO TO MANAGE THE CCE

        To strengthen the Department's management of this
    initiative, last week the Secretary modified my role from that
    of oversight to direct management responsibility for the Common
    Computer Environment investments. The requested $75 million
    would be under the direct stewardship of my office, and I will
    work closely with Mr. Reed, Ms. Smulkstys and Mr. Kelly to make
    sure that we make significant progress in our modernization
    efforts.

                       COMPUTER SYSTEMS SECURITY REQUEST

        Our fiscal year 2001 budget also requests $6.6 million for
    computer systems security. Recent attacks in the private
    sector, as well as attempted intrusions into our own computer
    networks, make it clear security and privacy must be among our
    highest priorities. The funds we have requested will allow us
    to strengthen computer security at the corporate level, or our
    perimeter, as well as at the individual agency level. We have
    already hired an expert in security as our new associate CIO
    for cybersecurity. His mission is to work with our agencies and
    build a computer security program modeled after the best
    practices in public and private sector organizations.

                              E-GOVERNMENT REQUEST

        Also, computer security is of paramount importance because
    we are moving more and more towards electronic government.
    Today, USDA agencies make a wealth of information available to
    the public on their Web sites. Some agencies are also exploring
    more advanced e-government initiatives so that eventually, for
    example, grant and loan applications, procurements and other
    functions can actually be transacted online in a secure
    environment. We have requested $2 million for contract support
    to develop a Departmentwide electronic service strategy to
    ensure that what we are doing meets our customers' needs, and
    to ensure that we leverage e-government initiatives across
    USDA.

                           CONCLUDING REMARKS OF CIO

        In conclusion, to summarize, we urge you to remove the
    restrictive language that prevents us from streamlining our
    administrative structures in the county-based agencies, and we
    urge you to support funds we have requested for our service
    center modernization effort, for computer security, and for
    providing electronic services to our customers.
        We are confident that with your support, the Department
    will continue to make progress in meeting the challenges that
    we face, and that we will be able to provide our Nation's
    farmers, ranchers and others the modern and efficient services
    they deserve.
        Thank you very much. I will be pleased to respond to your
    questions at this time.
        Mr. Skeen. Thank you.
        [The prepared statement and biography of Joseph Leo
    follow:]

                         REMARKS OF NFAC CHAIRMAN REED

        Mr. Skeen. Mr. Reed.
        Mr. Reed. Thank you, Mr. Chairman, Ms. Kaptur. I am here
    today in my capacity as Chair of the USDA National Food and
    Agriculture Council--NFAC. The chair is rotated annually
    between the USDA field-based agencies, namely the Natural
    Resources Conservation Service, Rural Development, and the Farm
    Service Agency. We, all three of us, are here in support of the
    Office of the Chief Information Officer and to respond to
    questions you might have for us concerning information
    technology applicable to the delivery of programs and services.
        Again, thank you, and I am pleased to be here.

                            IMPLEMENTING CCE AT USDA

        Mr. Skeen. Ms. Kaptur, would you like to take on the
    questioning? I know you have another commitment.
        Ms. Kaptur. Administrator Browner is testifying across the
    hall, and the Chairman has kindly allowed me to ask questions
    first here so I might also attend a portion of that hearing.
        Mr. Leo, maybe I should start with the Common Computing
    Environment questions here. It has taken the Department an
    awfully long time to do this, to try to streamline your
    computer systems and bring them up to date. We had testimony, I
    think, over 10 years ago that the Department has been saying it
    needed to upgrade its computer systems to make it easier for
    farmers to deal with various farm service agencies, so they
    could communicate with one another. Could you explain to us why
    it has taken so very long to effect this, please?
        Mr. Leo. The journey has been a long one, from the
    documentation I have read. I have been with the Department 15
    years and have watched this development from afar, so I am not
    intimately involved with the history and could turn to others
    if we need clarification.
        If we look at what the agencies were faced with during this
    period of time, from my perspective, the following backdrop:
    One, there were declining resources in terms of staff; two, a
    corollary decline in resources in terms of funding for the
    overall programs at a time when programs were growing. So our
    leaders had to make choices.
        First, we have to maintain the legacy or what we call the
    current system environment. It takes a lot of effort, a lot of
    staff years, a lot of money to maintain what is.
        We then, in recent years, wound up with the Y2K challenge,
    and for all intents and purposes, except for a couple of areas
    which I will mention in a moment, we stopped work on our legacy
    systems in order to go in and see where the problems were.
        Now, in recent years we made a couple of significant
    investments in the computer technology, which I believe are
    bearing fruit today as I speak. The two most significant ones
    were our telecommunications network, where we went into
    virtually 2,500 county offices and updated their phone systems
    so they can talk to one another. A farmer can dial one number
    and talk to somebody in Rural Development. If they wanted
    somebody in NRCS, they could transfer the phone call to that
    person. Before that they couldn't. In addition, we wired for
    the coming electronic revolution. We wired to carry our digital
    or data flow. So they now have the infrastructure, if you will,
    in almost every county office. I think we have about 300 to go.
    It allows them that part of the communications which is modern,
    in place and working today.
        In the last several years we bought approximately 30,000
    computers that allow us to start talking on the Internet. One
    of the programs that we have, we are not finished, but we have
    a program, for example, that allows the farmer and rural
    housing applicant to actually fill out the forms. We have not
    yet solved the other end of it. They have to fill out the form
    or the application and fax what they are doing to us. Then we
    have to work on it at the field level and go back in a more
    manual way to them. So now we are asking for investment funds
    so we can do it basically online.
        It has been slow, it has been torturous, but the funding
    resources, the ability to deliver our programs today, I think,
    is our most important priority. Building our future has been a
    struggle. I think that is why I am here today, to help
    accelerate that delivery.

                           SERVICE MODERNIZATION PLAN

        Ms. Kaptur. I wanted to try to get a second question on
    this first round, and I will have others on the computing
    environment for the record.
        We have just received lots of inquiries about the service
    modernization plan. For example, both Chairman Skeen and I have
    received a letter from Rudy Price, the president of the
    National Association of Conservation Districts, dealing with
    some of the conservation districts' concerns. I would like to
    raise those items with you. I will offer many questions for the
    record.

                          FIELD OFFICE CLOSURE IMPACT

        But one of the basic questions really is what steps has the
    Department taken to ensure that the interests and needs of the
    non-Federal conservation partners are safeguarded as USDA
    reorganizes itself, and what impact will the closing of field
    offices have on the delivery of conservation services?
        Now, we have received calls from Ohio. I got one the other
    day from one of my favorite farmers, all upset about what was
    going to happen in Ohio. I had to be honest and say I wasn't
    aware of all the details and how this would work out locally.
    Could you talk to us a little bit about that? Have you gotten
    complaints from many organizations like this?
        Mr. Leo. I would like to handle the first part and then
    turn to Mr. Reed for handling the question on the location, if
    I might.
        First of all, I have met with the NACD four times now in
    collaboration with NRCS, with the Office of the Deputy
    Secretary and with the project manager for the initiative. We
    met for two purposes: One, to explain further our rationale for
    the support for the Support Service Bureau, and secondly, on
    the Modernization Plan. In fact, I along with the Deputy
    Secretary, Special Assistant Linda Delgado and Greg Carnill,
    the project manager, have set up a briefing next week for the
    entire executive board and membership, the last number was 350
    members, to explain further what the Modernization Plan does,
    as well as turning over copies of it.
        There was a little gap, because we respectfully turned over
    the plan, as Congress requested, first to you before providing
    it to the public. We had to meet the deadline to get the plan
    in to you all.
        Now, we are setting up briefings as fast as we can with
    regard to explaining the Service Center Modernization Plan that
    we delivered to you.
        The concerns of NACD, I believe, are genuine. They ask a
    very significant question: How do almost 14,000 people on the
    partnership side work hand in hand together? I believe Mr. Reed
    is in the very best position to answer that question. I can
    assure you, I have been in dialogue along with Mr. Reed and
    others continually to further this work.
        We have passed their request, now that Mr. Reed is chair,
    about how we can strengthen that communication between NACD
    partners and the National FAC. The National FAC is currently
    assessing their request.

                         DECOUPLING DISTRICTS FROM NRCS

        Ms. Kaptur. One of the facts I was given was when the field
    service centers were established, it resulted in over 250
    conservation districts being decoupled from NRCS. Some of these
    may be in Ohio. I am just unaware of that. So I was concerned
    about what impact this would have on NRCS's operating costs and
    on coordination with State and local interests relative to
    conservation.
        Mr. Reed, if you have any comments at this point, they
    would be greatly appreciated.
        Mr. Reed. Just to add to what Mr. Leo said, we are very
    much aware of the concerns raised by the National Association
    of Conservation Districts. The Secretary is personally aware
    and has met with the leadership of the conservation
    partnership. He has directed us to make sure as we proceed that
    the interests of all of our partners, not only the conservation
    districts, but others, are fully incorporated into our
    decision-making process.
        As Chair of the FAC, I think I can speak for Keith and Inga
    as well, we are committed to ensuring that as we move down the
    USDA modernization efforts, that we incorporate into everything
    we do the concerns of our partner organizations.
        Ms. Kaptur. Thank you, Mr. Chairman. My time has expired. I
    am going to ask if Mr. Hinchey might take the lead on this side
    of the aisle as I go across the hall and take care of another
    hearing.
        Mr. Skeen. Certainly. We understand. We appreciate your
    accommodating us.
        Ms. Kaptur. I will try to get back. Again, I thank the
    witnesses.
        Mr. Skeen. Very good.

                     CONTRACTS CANCELLED AT BELTSVILLE LAB

        Mr. Leo, as I understand it, several contracts wererecently
    canceled at the interoperability lab in Beltsville. Would you tell the
    committee what the circumstances were that led up to the cancellation
    of those contracts, and specifically why they were recalled?
        Mr. Leo. I can give you a general answer. A bit of
    forgiveness, I have only been here 6 weeks trying to get the
    entire matter under my belt. What I know in general is that we
    use contractor assistance in order to help us develop all the
    activities associated with the Modernization Plan. We have a
    central contract vehicle, and then there are subcontracts under
    that contract vehicle.
        Upon inspection, on how we were managing that contract, it
    was the belief of USDA personnel that we were perhaps giving
    the contractor too much with regard to assignments, whether
    they have to do with formulating the plan, sizing up what it
    would take to carry out a particular activity, and then
    executing that activity. So we stopped. We basically, with the
    contracting officer and the program officials, decided to
    reexamine how we were managing that contract. We have completed
    that reexamination.
        We have put in place more government management of that
    contract. Now we have restarted that contract, and we have cut
    out some of the tasks that were formerly given to that
    contractor, which now the government employees are doing. That
    is the basic, general reason you saw a sudden stoppage. It
    seemed like people were sort of leaving the job. It was
    actually, basically a stop work order.
        Now we are back. We are bringing back what we think is the
    right mix of contractor personnel and government personnel.

                             EFFECTS ON CONTRACTORS

        Mr. Skeen. It also affected the contracts you had before,
    correct?
        Mr. Leo. What happens is when you use a general contractor,
    you have a number of subcontractors underneath. When you stop
    at the center, all the subs wind up stopping as well.

                               AWARDING CONTRACTS

        Mr. Skeen. When you heat the head, the feet get cold. What
    was the rationale for awarding the contracts to the same
    vendors rather than going out for new bids? Was this part of
    the exercise?
        Mr. Leo. That is certainly an option the government has. My
    understanding is the contractor was doing good performance, it
    is just that our management, our stewardship of the things we
    were assigning that contractor and his subs had to be
    reexamined.
        From the feedback I have received to date, the contractor
    was doing a good job, but was just doing too much of the job.
    The government is now doing more of the stewardship areas. That
    contractor, to my knowledge, is performing in accordance to our
    requirements.

                             LAN/WAN/VOICE UPGRADES

        Mr. Skeen. Fiscal year 2000 is the final year for the
    complete installation of the local and wide-area network and
    voice technology. Now that the Department has nearly completed
    the project phases of this technological installation at the
    service centers, and with the technology changing so rapidly,
    are there any plans for technology upgrades within the service
    centers with respect to local and wide-area network and voice
    technology? That is one of the most marvelous statements I have
    asked a question on.
        Mr. Leo. Yes, sir. We are very proud----
        Mr. Skeen. You are earning your pay.
        Mr. Leo. Thank you, sir. We are very proud of our LAN/WAN/
    Voice-based activity. Basically when you take the task of
    modernizing 2,500 offices and the State offices, in a country
    as vast as ours, it is indeed a challenge.
        For example, we are now in the process of upgrading our
    telecommunications network to what we call a frame relay
    system, which basically means the old technology we were using
    in the computer industry, something referred to as X dot 25, is
    now old. We are modernizing the old way of doing
    telecommunications to its modern way.
        In addition, we have a very clear vision. We must connect
    up to 30,000 computers that are now by and large in a stand-
    alone configuration. The money that we have requested, a large
    part of the $75 million, connects those computers.
        What can we do when we connect them? We can do remote
    diagnostics and management of those computer networks. We can
    upgrade the software in those computers remotely. We can
    actually have something called e-mail and actually send e-mail
    efficiently to over 30,000 employees and so forth.
        So with the funds we have requested, a major part is to
    continue with the connectivity in our telecommunications area.
        I am also told we have somewhere around 300 more sites, and
    we will have completed the effort. In other words, we are at
    about 90 or 95 percent complete in installing that LAN/WAN/
    Voice operation.
        Mr. Skeen. You just can't live without them in this day and
    time.
        Mr. Leo. Thank you, sir.

                      INFLUENCE ON AGENCY IT EXPENDITURES

        Mr. Skeen. Explain how the Office of Chief Information
    Officer influences the formulation of technology expenditure at
    the agency level if the Office of the Chief Information Officer
    does not own the investment funding. And then, how do you
    ensure that there is a common platform for the informational
    systems development? I think that is what you were working on.
        Mr. Leo. That is exactly what we are working on, sir. Let
    me start with the vision.
        The vision is that the legislation created the Office of
    the CIO, and we have faithfully implemented that legislation.
    There are differences in the way agencies manage their
    resources. In some agencies, they are very centralized. We are
    more of a decentralized department, as you know.
        The CIO's office is mainly--but I am trying to change that
    subtly--is mainly now sort of like the captain, cheerleader,
    team leader, coach of the enterprise. So the Secretary has
    vested in the OCIO, and now me, the ultimate responsibility,
    one, as his chief adviser for information technology. Second, I
    have approval authority basically for all major acquisitions,
    which is defined as anything over $250,000, that now must come
    through our office for review and concurrence. So I have an
    ability to look at the entire corporate portfolio in USDA, and
    make independent evaluations.
        Now, in that regard, the reason why I am requesting funds
    before you today for fiscal year 2001 is to provide some
    resources within my office to take stewardship and leadership
    for a couple of critical areas. I believe that the security
    initiative, for example, is absolutely critical, and not just
    to speak about it or put policy out on it, but actually have
    some funds to do some corporate work.
        This is, I would say, the major area that the CIO's office
    needs to get engaged in, the corporate vision of USDA.
        So I have some tools. I am asking before your committee the
    additional resources to put, in essence, the resources behind
    the policy and the resources behind my ability to execute those
    responsibilities vested in me.
        One last example. If I were to look independently at an
    agency's major acquisition or how it is going, we would use
    what we call an IV and V, independent validation and
    verification. Without any funds, I don't have the ability to do
    that.
        So certain prudent--we are not asking for a whole lot--of
    funds enables the OCIO to do the work necessary to ensure that
    the corporate vision of USDA is implemented and the standards
    that we try to promulgate are followed.
        Mr. Skeen. You tested the water, and it is time to swim in
    it.
        Mr. Leo. It is time to swim, sir, but carefully,
    cautiously.
        Mr. Skeen. I appreciate the word ``carefully.'' Thank you
    for that.
        Mr. Hinchey.
        Mr. Hinchey. Thank you very much, Mr. Chairman.
        Good morning, gentleman. No fancy strokes yet?
        Mr. Leo. I think, sir, to stay afloat is my major
    objective.
        Mr. Skeen. You are doing very well.

                         DOWNSIZING USDA COUNTY OFFICES

        Mr. Hinchey. Your biggest issue before the Congress this
    year apparently from your testimony, Mr. Leo, is to remove the
    language from last year's appropriation bill that prevented the
    Department from implementing the Support Services Bureau. I can
    understand why you would want to create a single administrative
    function for each county office. Many of these county offices
    you not only have duplication of activity, but even
    triplication very frequently. There has been a reluctance on
    the part of the Congress to authorize the SSB in part because
    we have seen such a substantial downsizing of the Department
    across the country.
        You note in your testimony that the county offices have
    lost 22 percent of their work force since 1993, while their
    workload has increased with the downturn in the farm economy.
        County offices are going to be called upon to deliver $55
    billion in farm, conservation, and Rural Development programs
    and services this year, with substantial staffing decreases--
    over 1,000 county offices have been closed, and those that
    remain have been downsized by over 10,000 positions since 1993.
        Now, Members of the Congress all have our experiences with
    the delivery of these programs as a result of that downsizing.
    My experience is that the downsizing has gone too far too fast,
    and that the services are not getting out to people, and the
    reason the services are not getting out to people is very
    simple: there are an inadequate number of people in the county
    offices, in the State offices to deliver the services.
        So, therefore, with the opposition of the employee unions,
    you must understand the reluctance on the part of the Congress,
    to go along with this recent initiative, even though the
    elimination of duplication of services is very important. As I
    said, in some offices you have three people essentially doing
    the same thing, so we need a way to resolve this.
        I think one of the ways that we can resolve it is to
    communicate to the Department that they have gone too far too
    fast with the downsizing of government. There are some serious
    problems with the inability of your agencies to deliver the
    services that I know you want to be delivered, certainly the
    Secretary wants delivered, I know the Chairman wants delivered,
    and I do as well.
        So I am not asking you to resolve this matter today, but
    this a big issue, and it has to be resolved. And I think that
    the likelihood of your request getting more favorable
    consideration this year--and it is a good request, and it ought
    to get favorable consideration--but the likelihood of it
    getting favorable consideration will be substantially enhanced
    if the Department expresses a realization of the fact that they
    have gone too far too fast in cutting down on people out in the
    field. I don't know if you want to respond to that.
        Mr. Leo. Well, I have the trusted adviser here for the
    Department as a whole. Mr. Dewhurst, would you care to provide
    the macroview, and I will step in right behind you.
        Mr. Skeen. He is certainly well-known around here. We will
    listen to him any time.
        Mr. Leo. I have had the distinct pleasure, sir, of working
    with him 15 years. I wholeheartedly concur in your observation.
    He is a tremendous asset to our Department.
        Mr. Skeen. Your recommendation is not misused or misstated.
    It is very well done.
        Mr. Dewhurst.
        Mr. Dewhurst. I think, having had the privilege of being
    here over many years and actually testified on this subject
    with Secretary Madigan and then Secretary Espy and now with the
    current Secretary, there are a couple of points that have
    always impressed me about this.
        One is that the Department's personnel levels, as you have
    said, have gone down fairly dramatically in the last 5 years
    for all kinds of reasons. I know that the Secretary, among
    others, has the same kinds of concerns that you do. There are
    some increases in the President's budget in both Rural
    Development and the NRCS in personnel, if the Congress will
    enact the appropriations the administration has suggested.
        In the FSA, there is continuing debate about personnel
    levels in that agency. The budget protects the full-time work
    force at its current level, but does cut temporary employees. I
    happen to think it is important to remember that the objective
    of the SSB was always to have its primary impact at levels
    above the county offices, at the National headquarters level
    and at the regional and State levels. The theory has always
    been the more efficient your administrative structure above the
    county level, the better service you can give the counties,
    and, in fact, the greater proportion of resources you can make
    available at the county level.
        So the SSB was one effort to try to reduce the impact of
    the personnel cuts at the local level, but it does remain an
    issue, and we are having, as you know, some trouble right now
    delivering programs.
        Mr. Leo. I just want to add a bit to Mr. Dewhurst's
    statement. From my perspective, I have worked on this Bureau
    for 2 years, with hundreds of people. It is clear to me that if
    you survey the workers out there, if you survey our staff out
    there, they want the Support Services Bureau with regard to
    delivering integrated service. Our customers out there make no
    distinction with regard to whether the service is coming--let's
    use computers--whether they call FSA for the computer support
    or RD for the computer support or NRCS.
        Our administrative structure has been cut, and in one sense
    we are proud, and in another sense it is a struggle; has been
    cut a larger percentage than our program staff or the ones out
    there delivering the programs. They are cut to the point that
    we need to consolidate these staffs, the administrative staffs,
    to get the synergy out of three combined staffs into one. To
    get rid of, for example, 44 divisions--now it is 10 divisions--
    in our Support Service Bureau as opposed to three separate
    structures. Our whole objective was to deliver those
    administrative services to our program people so that they can
    deliver services to our customers. If we do not do that, then
    you wind up having program folks that are supposed to be
    serving the customers trying to figure out how to get some more
    administrative services, some of them trying to do it
    themselves. You lose focus and energy.
        So I have been at this, sir, with a passion for 2 years. It
    is just good government and good sense. In particular when we
    talk about this vision of the electronic highway for rural
    America, which is an another passion of mine, it is one thing
    to buy it. It is another thing to maintain and operate it. I
    submit to you those information technology staff need to be
    working closer together if we are to provide the services on
    the one hand and then ask them to maintain and operate it and
    keep it in good working order on the other.
        It is sort of like we have three car mechanic shops in
    town. I would like to put them into one modern facility, and
    improve the workers' productivity through automation. We can do
    so much, we can't do it all. It is clear our commitment before
    you today and the $75 million we are asking for is to get
    modern tools into the workers' hands so they can do a better
    and more productive job of providing services to the farmers
    and other residents in rural America.
        Mr. Hinchey. My time is up, Mr. Chairman. May I have more
    time?

                   NFAC ROLE IN SERVICE CENTER MODERNIZATION

        Mr. Skeen. Mr. Reed, you alluded to the National Food and
    Agriculture Council in your opening statement. Please tell us
    what the basis was for the formation of the Council, when it
    was formed, and what is the Council'srole as it relates to the
    service centers?
        Mr. Reed. The National Food and Agriculture Council is an
    organization established by the Secretary to provide program
    and management coordination USDA-wide at the agency head level.
    We call it the NFAC. The NFAC reports to the Deputy Secretary.
    All USDA agencies have a seat at the table.
        The NFAC's focus over the past 6 years has been on program
    and management coordination needs of the field-based agencies,
    mainly NRCS, Rural Development and FSA. In that regard, the
    NFAC's primary function has been to provide leadership,
    oversight and coordination for what is now called the USDA
    field-based agencies' modernization efforts, which includes the
    items you mentioned earlier, the service center collocation,
    State office collocation, business process reengineering, the
    Common Computing Environment, along with other activities.
        The NFAC also provides, which in my view is equally as
    important, the framework for USDA agencies and our partners to
    work together on a multitude of issues from emergency and
    disaster relief to the coordination of the use of facilities,
    property and personnel.

                     NFAC ROLE IN STATE OFFICE COLLOCATION

        Mr. Skeen. The USDA recently announced the selection of 26
    cities to collocate State offices. I want to get into this
    collocation. What was the role of the Food and Agriculture
    Council in the selection of those sites, and can you provide
    for the record the criteria used for the selection of each of
    those cities, including sites that were selected where lowest
    cost was not the basis for the selection?
        Mr. Reed. Yes, sir, we can provide that for the record.
        Mr. Skeen. I would appreciate it.
        Mr. Reed. Thank you.
        [The information follows:]

        The cities selected for State Office collocation were in
    all cases based on cost consideration, but only after first
    determining that they were able to support all program
    performance needs. The requirements of all applicable Executive
    Orders, regulations and statutes affecting how Federal
    facilities are located, acquired and utilized were the next
    considerations. Cost was considered after ensuring that each of
    the above requirements were met.
        The lowest collocation costs were projected by selecting
    cities recommended by State Food and Agriculture Councils--
    FACs--requiring the fewest number of employees to relocate.
    Whether collocation involves moves between cities or within the
    same city, lower operating costs are expected from reduced
    overall space needs and from other economies of collocation.
    Cities requiring the solicitation of lease offers were
    informally surveyed for market rates by each State FAC when
    preparing their cost-benefit analysis. The results of these
    analyses were discussed with the GSA Regional Offices for the
    proposed locations to check against their knowlege of local
    market lease rates.
        The combination of programmatic considerations, existing
    Federal space inventories, socioeconomic requirements for
    locating Federal facilities, and projected one-time and long
    term operating costs were considered by the National FAC in
    forming their recommendations for the Secretary. In all cases,
    the lowest relocation cost scenario was used. Where competitive
    space soliciations will be required, the award will go to the
    lowest cost, acceptable offer.

        Mr. Skeen. Mr. Hinchey.

                          REPROGRAMMING SSB EMPLOYEES

        Mr. Hinchey. Thank you, Mr. Chairman.
        Mr. Leo, just returning to that issue of the implementation
    of the SSB, what you said in response to the question, I think,
    is inarguable. It is absolutely a very important initiative,
    and I want it to be accomplished, and we ought to help you do
    it.
        One of the questions that arises, however, is with regard
    to the present employees. When the SSB is implemented, what
    happens to those employees? Will they be reprogrammed into
    doing the field work, which is now so seriously and obviously
    deficient, or are they going to be eliminated?
        Mr. Leo. Well, I do have some data on that. That was a
    question--you might be aware that I had chaired a labor-
    management council, and I have the opportunity to say I did
    have strong labor support. I had tremendous support from the
    field unions and associations, and I had a lot of support in
    Washington.
        Now, there were some that said, Joe, you have unanswered
    questions, and one of them is the one you just asked, with
    regard to what happens to employees.
        First of all, the vision of the Support Service Bureau in
    combining the staff was to achieve savings. I am either sad or
    happy, I don't know how I feel, that 33 percent of the
    employees, with regard to the cut that you talked about
    earlier, are gone. There was no RIF planned, because I was
    losing employees faster than any effort that I would need to do
    what we call in the government an ``adverse personnel action.''
    I was trying to hold onto what precious little I had, so that
    we assured employees that there would be no RIF, no ``adverse
    personnel action.''
        Number two, we went through a process with our management
    and union partners on how would the transfer occur. The vision
    was simple: We would have employees from NRCS, RD and FSA who
    were in these administrative positions. There are five
    functional areas. I might just enlighten you, those areas were
    civil rights, administrative services, financial management,
    personnel and information technology. Those employees were
    going to be housed in the Support Services Bureau, and the
    Support Services Bureau would be an entity within the
    Department managed by the three leaders of those agencies; what
    I mean by that, simply stated, a board of directors.
        These employees would then work for the whole, as opposed
    to their individual agencies. They would receive a common
    identity, Support Services Bureau employees, and they would
    work for the common good.
        Now, I already indicated the original vision which we set
    out for the Support Service Bureau was efficiency. We wanted to
    get as many program folks at the front, if youwill, delivering
    the services we could. So there was a target, and only a target. It was
    not a mandate, it was a target that we would have this consolidation.
    We would have a total reduction of 45 percent of the existing work
    force in the three agencies over a 10-year period; 45 percent of them
    would disappear over a 10-year period. So by the end of 2002, we would
    achieve our objective.
        Well, if you recall, 33 percent, now about 35 percent, are
    already gone. We had less than 15 or so, about 10 percent, to
    go. We saw no need for any adverse action with 10 percent. That
    would be taken care of just by attrition.
        But the unions and other employees felt we shouldn't have
    to take those additional cuts. I said, great, if we can hold
    them in the budget, they are only targets, we will do the very
    best we can. But administrators, chiefs such as Pearlie Reed or
    Under Secretary Smulkstys, have to look at the total resources
    in the agency and go, how do I best deploy them? If they decide
    in their judgment that 5 percent ought to come from
    administration, because I cannot meet my payroll, then I can
    not substitute my judgment for that leader. In other words,
    those leaders in the end have to stand before you and account
    for their stewardship.
        So they are continually faced with the difficult choices
    between program delivery, and administrative support to support
    that program delivery. So I said, look, these are targets set
    by the Secretary. We made them public so everybody knew where
    we were going. But I explained a half a dozen or more times
    that every cut since I started was taken as a result of budget
    conditions, meaning not enough money to meet the payroll, and
    not as a result of the Support Services Bureau.
        I am going to conclude here by saying it was clear that we
    wanted a very lean, productive administrative infrastructure
    for program support. So, yes, we were reducing our
    administrative overhead in terms of numbers. Difficult? Yes.
    But they were only targets.

                             SSB PEOPLE DEPLOYMENT

        Mr. Hinchey. Well, that was a very long and detailed
    answer, but it wasn't quite responsive to my question.
        Mr. Leo. Yes, sir.
        Mr. Hinchey. My question is if you eliminate these people,
    and the objective is a good one because in eliminating them you
    will improve the efficiency of your operation, recognizing the
    fact that you have cut too far and too fast in other parts of
    the agency, will those people who you will eliminate as a
    result of this SSB initiative be reprogrammed to fill other
    gaps within the agency? You may not be able to answer that
    question, but I would like an answer to it. So if you could
    avail upon others within the Department to provide an answer, I
    would be very grateful to you.
        [The information follows:]

        If future budgetary conditions enable the leaders of the
    Service Center Agencies to reprogram redundant administrative
    staff into program delivery positions, then we are confident
    that they will make every effort to do so where those employees
    meet the necessary qualifications. However, at this point, it
    does not appear that any administrative staff will fall into
    this category. We do not anticipate that any current
    administrative employees will be separated in ``adverse
    actions'' if the SSB is approved and implemented. To the
    maximum extent practical, all current administrative employees
    will be placed in ``matching'' jobs for which they qualify in
    the new administrative structure.
        The remaining ten percent reduction envisioned as a result
    of the SSB will be absorbed by normal attrition--assuming that
    future budget conditions do not force country-based agencies to
    make additional cuts unrelated to the SSB.
        As we have stated, the country based agencies are facing
    tremendous difficulties today meeting increased program
    delivery needs with reduced staffing levels. Staffing in the
    country-based agencies has decreased by 22 percent, or some
    10,000 staff years, since 1993. 6600 of the staff year
    reductions are the result of the Administration's original
    streamlining plan. However, staffing reductions have exceeded
    the original plan by 3,500 staff years. These additional staff
    reductions of 35% reflect the reduced funding levels within
    which these agencies have had to operate over the years.
        Indeed, one of the benefits of the SSB is that, by creating
    a more efficient administrative apparatus, more resources would
    be available for program delivery. However, this assumes that
    future budgetary conditions will allow agency heads to actually
    increase, rather than decrease, field staffing levels. In the
    event that FTE increases are funded, and administrative
    employees are adversely separated--which, again, is unlikely--
    those employees would receive preferences for any program
    delivery positions for which they qualify.

        Mr. Leo. I am clearly trying to do that. I am trying to
    save the program staff, redeploy that program staff. But as I
    indicated, 35 percent of them, the slots are gone, and the
    people are gone. That 35 percent is off the table. I don't have
    them anymore. They are missing.
        If Mr. Dewhurst and company are so persuasive to you that
    we are able to get the employment levels that you have heard
    Mr. Dewhurst state, we will be very happy to look at how to
    redeploy those resources.
        So I think we are doing the very best we know how with the
    resources we have, but I just wanted to say to you, they are
    gone.

                        RESTORATION OF EMPLOYMENT LEVELS

        Mr. Hinchey. I know they are gone, Mr. Leo, but I want to
    help you recover some of those.
        Mr. Leo. Thank you. I am trying automation to make up some
    of that gap. You could really help me with this money I
    requested. That would be one magnificent way of helping me with
    regard to the infrastructure, because if we can make those
    employees more productive----
        Mr. Hinchey. Mr. Leo, you are on one track. I am trying to
    get you on two.
        Mr. Leo. I understand the cuts have been brutal at USDA.
        Mr. Hinchey. We don't have the people in the field
    delivering the services. The services are not getting out to
    the people who need them. That is a serious problem. The agency
    has to address that problem.
        Mr. Leo. Yes, sir.
        Mr. Hinchey. Thank you, Mr. Chairman.

                         TELECOMMUNICATIONS MANAGEMENT

        Mr. Skeen. Mr. Leo, there have been GAO reports that
    indicate the telecommunications at USDA have not been managed
    in the most cost-effective way. Is it your determination that
    the operational costs will be greatly reduced by implementing a
    centralized telecommunications management system. If so, what
    progress has the Office of Chief Information Officer made in
    either the implementation of a centralized system or reduction
    of operational costs? You have several elements there that you
    discussed this morning.
        Mr. Leo. Yes, sir. There is a project that you are
    referring to called, from what I understand, Telecommunications
    Enterprise Network--TEN. The good news is we were able to
    document the entire infrastructure of the Department of
    Agriculture. The not so good news is that we are migrating away
    from a centralized command and control to a centralized
    management.
        The earlier vision that you heard about was to round up
    everything and just do command and control, take over the
    entire telecommunications, all the way down to the desktop in
    telecommunications.
        Quite frankly, sir, we have evolved from there. There is a
    relationship between what the agency should be doing at their
    level and what the Department as a corporate entity should be
    doing.
        Let me give you an example of where I am steering
    telecommunications today. We are trying to control what I call
    the pipes; that is, planning much better. There is a revolution
    going on in the private sector with regard to consolidation of
    telecommunications services. We need to take advantage of that
    revolution. We need to be smart buyers by buying what we call
    the ``throughput''. The technical term is bandwidth. We need to
    buy the pipes so we can move our data very efficiently.
        I am working with the Department officials, the agency
    officials, rather, in managing that part. The LAN part,
    connecting the computers together, we think the agencies--that
    should be their responsibility. So we have evolved in our
    vision, in my view, in a positive manner.
        We then looked at the GAO reports on telecommunications for
    voice, and we have been in a rapid response mode, taking all
    their recommendations. We have been responding back to GAO on
    how we have modernized. We set up, we better control the
    ordering of telephones now, or when a field office is closed or
    somebody moves, we can get that telephone out of circulation
    and not be paying the monthly charges on it. We have organized
    what we call the managers in each agency. We have monthly
    meetings. We responded back to the three GAO reviews and set up
    what is basically a review function in our Kansas City office,
    a centralized area where we could observe fraud or incidents
    that are suspicious. So we think we are taking positive steps.
        Lastly, we believe we are smarter buyers in that the demand
    for telecommunications, let's say, on the data side is growing
    immensely. We are trying to buy with the same dollar that
    growth. So I don't have a dollar or two to put on the table,
    but I am trying to meet with that dollar or two the increased
    demand that we have been getting from throughout the entire
    agency.
        Mr. Skeen. That is indicative of what is going on from the
    producer side of this thing, because if you are in the farming
    business, you have got to have help in getting through these
    systems. But then if you can't even deal with your local USDA
    personnel it makes it very difficult. This is a new age, and I
    don't know why government is always the last one to know about
    what is going on. Of course, we are getting fewer and fewer
    agricultural producers. If they are not with the science, it is
    very difficult.
        Mr. Hinchey.

                      OFFICE CLOSURES VS. WORKLOAD DEMANDS

        Mr. Hinchey. Thank you very much, Mr. Chairman.
        Mr. Leo, I don't want to keep beating this horse to death--
    --
        Mr. Skeen. We have him lathered up pretty good.
        Mr. Hinchey. I do want to get on the record that this year
    the USDA is going to be required to deliver about $55 billion
    in services, and since 1993, you have closed 1,000 county
    offices across the country, and that those that remain have
    been cut back by more than 10,000 positions, all since 1993.
        I understand the motivation behind that, and I think what
    you are trying to do with this SSB obviously is going to help
    achieve these efficiencies. You have got a problem now where
    people can't communicate, not just between the field and
    Washington, say, for example, but right within their own
    offices. So that has to be corrected, and I know that that is a
    major part of your objective.
        But my concern is that while you guys are working to be
    more effective and more efficient, that you are not getting the
    services out to the people who need them. I say that from
    practical experience in New York. If that is happening in New
    York, it has got to be happening in a lot of other places
    across the country.
        Mr. Skeen. Miss. Kaptur.

                       HIRING AND RETENTION OF ITS STAFF

        Ms. Kaptur. Thank you, Mr. Chairman. Again, sorry for the
    musical chairs here this morning.
        I want to thank Mr. Hinchey very, very much for pinch-
    hitting here for us on our side of the aisle.
        I wanted to ask a question about overall staffing, Mr. Leo,
    in terms of the people that are leaving, those through
    attrition, and the ones that are left.
        How successful are you within the agency in being able to
    serve the public and match the professional needs that you have
    based on where people are leaving versus those who remain? What
    is the match between what you really want to accomplish and the
    skills of those who are left to do it? That is the first
    question.
        Secondly, in talking with employers back home, and even
    here in the Congress among our own staffs, it is harder and
    harder to hire because of the job market. It is getting
    tighter, and we also need people who are highly skilled, and I
    wonder how you are doing competing certainly in the high-tech
    area, but as well as other professional areas, in terms of
    salaries, benefits and attracting people to government service
    at USDA. Are you having trouble hiring staff?
        Mr. Leo. Yes, thank you. Actually my deputy Ira Hobbs is
    leading a task force on behalf of the entire Federal Government
    and the information technology arena in particular, with the
    CIO Council, and in our own Department we have joined with an
    OPM effort to examine our IT, information technology,
    employment situation with an eye towards trying to figure out
    new ways of competing. So my answer, if I am correct in hearing
    you, is for the information technology profession.
        Let me just be very honest and say--I am always honest--but
    say to you we have got a problem. It is clear. To start with,
    at the Federal Government, we are not very competitive. The
    issues in information technology are going so fast and the
    demand for these IT professionals is so high that we in the
    Federal Government, given where we currently are, are behind.
    In USDA I think the situation is equal or worse.
        Ms. Kaptur. You said we are----
        Mr. Leo. We are behind in our ability to retain, not just
    attract. One of our phenomena is we have a good attitude toward
    training and providing knowledge so they can be very productive
    in the work force. Unfortunately, as soon as we train them, the
    private sector goes, great, I will pay you that much more,
    whatever, and give you this responsibility, and they are gone.
    I wanted to say in the Federal Government in general, this is a
    very serious problem, and we are examining this issue.
        In USDA, I think we are equal or worse in our situation.
    The reason for that is we have had a very dedicated work force.
    It is now aging, like fine wine, aging real fine, but since our
    work force has declined, we have not had as much of the entry
    level coming in. So now we have got an average age of 46 or 47
    in the IT community, and with about 18 years of service. So we
    are going to be facing some serious attrition. This is why my
    deputy, Ira Hobbs, and our Department, volunteered with OPM to
    examine ways that we can strengthen not only the recruitment,
    but retention of our IT workforce.
        We would be happy to give you, if you would like, some
    further details of that work force in USDA for the record.
        Ms. Kaptur. We would appreciate that.
        [The information follows:]

                              CURRENT IT VACANCIES

        Ms. Kaptur. You have openings right now then that you are
    not able to fill?
        Mr. Leo. Well, it really depends. First of all, the senior
    managers have to make sure they have what we call staff years.
    So if there is a vacancy, do I put that staff year in
    information technology? Assuming they make that decision, when
    we put them on the board, it is very difficult to us to attract
    a pool. I don't think it is hard to get somebody to apply for a
    job. It is a different story to get somebody who is qualified
    for that job to apply. I think that is where we face the
    challenge.
        Retention, I would say, is equally as tough as the ability
    to get the job filled in the first place. We are finding that
    the turnover rates are very difficult, because, as I said, once
    we have them trained, they are gone.
        But I would say generally to you we are having a hard time
    recruiting. Back in my old agency, I was with the Food and
    Nutrition Service prior to taking this job, we would advertise
    sometimes three and four times for a programmer, software
    programmer, before we would get somebody on board. That would
    take 4 or 5 months to get that person.

                             AGENCY FUNDING OF CCE

        Ms. Kaptur. This is very interesting listening. This sounds
    like what I hear in my district from many of my CEOs of our
    locally-based companies in terms of the job behavior and
    tenure, et cetera.
        I wanted to just ask one final question here, and that is
    within the budget for information technology, if you did
    receive the $75 million for the Common Computing Environment,
    would you still need to tap FSA and NRCS and Rural Development
    budgets for some portion of what you need to spend for those
    activities?
        Mr. Leo. Yes. I am aware that in our budget submitted for
    the year 2001, that the agencies, in looking at their
    individual needs at the agency level, have some monies in that
    to add to the $75 million. I believe our total, if everything
    would work, the total available would be $137 million, $75
    million of which comes from what you have just stated, and $62
    million from the agencies' budgets, which has to do with other
    than the Common Computer Environment in general. That is
    basically to support our business process reengineering;
    getting the modernization, if you will, of the way we do our
    programs the old-fashioned way, getting them to do it the new
    way; streamlining our forms, getting our forms in electronic
    format; looking at the job flow and saying, we can do it better
    than the way we are doing it; getting teamwork between, for
    example, various conservation matters that may be in FSA and in
    NRCS.
        So we have these teams working on business process
    reengineering. Once we discover what we want to do, we pilot it
    before we decide to roll out Nationwide. The monies in the
    agencies are to handle that part of the business. The $75
    million is to handle, if you will, the electronic bricks and
    mortar, the infrastructure costs, to do our program.
        Ms. Kaptur. Thank you very much. Again, I want to thank my
    colleague, Congressman Hinchey, for helping me out this morning
    and helping the committee out. Thank you very much.
        Mr. Skeen. Mr. Hinchey.

                           CONTRACTOR SUPPORT IN 2001

        Mr. Hinchey. Thank you, Mr. Chairman.
        With regard to the common computing environment, Mr. Leo, I
    think it is very clear what you are trying to do is the right
    thing. There is no question about the need. There is a
    question, I think, about the ability to bring the system up to
    where you want it to be within the time frame that has been set
    out. I know you have engaged some outside help, Lockheed
    Martin, for example, in looking at some of the security needs
    of your system, which, of course, is very important. I am
    wondering if you are going to need any additional outside help
    in that regard, not just with security, but in implementing the
    entire system.
        Mr. Leo. Yes. Our plan, there are basically three
    components in the budget request before you. Each one does have
    some contract assistance. The $75 million request for the
    Common Computer Environment involves principally buying the
    application servers or communications servers. So equipment
    manufacturers, for example, will be a large part of spending
    those monies. In addition, we will have contractor support in
    applications and development, for example.
        In the $6.6 million, the security initiative, the first
    chunk is for staff. We were asking for 12 staff years to get
    the security staff in place at the corporate level. There is
    contractor assistance in enabling us to understand where we
    are, for example, in digital signatures, what are we doing,
    where is it going in the commercial sector and the government
    sector so we do our smart buys, because you can't just buy
    anything.
        These days you can invest in one piece of technology for
    security, only to be negated not by some willful matter, but
    just by lack of knowledge. You went out and bought another
    piece, and now you have negated your security components that
    you put in somewhere else. So we must think corporately in our
    security, and we will need high-level contractor assistance in
    order to assess where we are and to make recommendations to us
    about which way and how to proceed.
        We also want to evaluate, and we will need contractor
    assistance, to help set up our corporate-level computer
    security programs. So I see a very healthy mix between our own
    employees and contractor assistance in carrying out the IT
    program of the Department.

                           PRIVACY AND DATA SECURITY

        Mr. Hinchey. I mentioned Lockheed Martin because I was
    encouraged to see you had engaged them, frankly, because I know
    in the private sector, they have done some very remarkable work
    with regard to integrating computing systems and making them
    run much more efficiently. They are noted as a defense
    contractor primarily, but they have done some very important
    and comprehensive work in this field generally in the private
    sector. So I think that they could probably do a very good job
    for you, too.
        I know that you are concerned about the issue of
    information security, which is understandable. After all,
    people are applying for mortgages, for example, in the rural
    housing program under USDA and have to provide the same kind of
    information they would provide to a bank. It is important to
    have that information secure within your system.
        There is also another issue, the issue of privacy, and that
    is the issue of protecting the data that people supply to the
    Department, personal data, from the unauthorized use by other
    people. It has become a major industry in America today for
    certain people to, in effect, surf through the various systems
    to which they have access, compile information, and then market
    that information out in the marketplace.
        So, I would just urge you, and I would--beyond urging you,
    I would like very much for you to be able to tell us at some
    point, not necessarily today, but at some point, to what extent
    you are structuring your operation in order to ensure the
    privacy of the people who provide very private personal data to
    you in the context of their applications.
        Mr. Leo. Yes, sir, I will do that. I do have overall
    privacy responsibility at the corporate level, which is one of
    the responsibilities in the Office of the Chief Information
    Officer.
        Mr. Hinchey. Thank you very much.
        Thank you, Mr. Chairman.
        Mr. Skeen. Thank you.
        Mr. Kingston.

                               THE DIGITAL DIVIDE

        Mr. Kingston. Thank you, Mr. Chairman.
        Mr. Leo, one of the things I have noticed is, you know, you
    have some funding for digital divide, and, we talk about that.
    Sometimes I wonder how real that is. I know, for example,
    farmers want less paperwork, but they don't mean they want more
    computer work in place of less paperwork. They just want to
    have less to process.
        How are you handling that? I know a lot of the rural
    community does not have the hook-up capacities. In the FAC
    where I live, which isn't in a rural area, but it is in a
    suburban area, we don't have the capabilities they do in the
    city in terms of Internet access. We have a lot more problems
    with the wiring in, and rural America has more problems with
    the wiring. How is that challenge being handled?
        Mr. Leo. Well, sir, thank you. It is a big challenge. By
    way of statistics one of our organizations, NASS, had compiled
    in 1999, for your information the National Agricultural
    Statistics Service found that 29 percent of farms now have
    Internet access, and 47 percent of the farms have access to a
    computer.
        But, there is a big difference between the larger and
    smaller farms. As you might guess, 77 percent of farms with
    sales over $250,000 have access to a computer, and 52 percent
    have access to the Internet. So a little over half have
    Internet access, and three-quarters of them, if they are over
    $250,000, have Internet connectivity. However, if you go below
    $250,000, only 45 percent of the farms have access to
    computers, and only 27 percent of them have access to the
    Internet.
        The Secretary is also concerned, and I think excited. He
    has established a new group, a new task group within the
    Department, to look at what we have done as well as where we
    are going. For example, we have very exciting news, positive
    news, in Rural Development, about their commitment to
    telecommunications. They have sunk billions into
    telecommunications for rural America. They have done things
    like education, and telemedicine and so forth. I mean, the
    Department of Agriculture has done some very progressive and
    exciting positive things to close the digital divide, if you
    will, in rural America.
        We also have a very healthy program of donating computers.
    We have donated over $1 million worth of personal computers to
    nonprofits. So now the Secretary has put together a task group,
    of which our office is a member, in looking at now what else
    can we do to close the digital divide.
        I agree with you wholeheartedly that we don't want to use
    automation to make the farmer, if you will, work just as hard
    or harder. The vision is obviously to do less. We capture the
    data once, if we have a good data management program going on.
    Once we got the farmer's address, data, and the information we
    need, that information is still good when he is applying for a
    loan, or applying for other assistance in USDA.
        So our vision is, yes, to make less work. In essence, if
    you look at the future way after I am gone, we are probably
    looking at something like 24 hours a day, 7 days a week we
    would be able to provide service electronically to our rural
    customers. Why? Because when we look at the Internet, and we
    look at Web sites, and we look at the ability to move
    information, as they say, in Internet time, like real time. I
    see in the future that we are not saying we don't need personal
    service, but we do need to go out to your farm and do need to
    work with you right there with the soil, or right there with
    the housing situation that we need to repair or so forth. I
    think we also could do a lot with the Internet and with our
    constituencies.

                               MYRIAD OF WEBSITES

        Mr. Kingston. Let me ask you this also. You have a myriad
    of Web pages that you talk about in here. That is very
    impressive. Just quickly, if I am getting on and I want to find
    out what is available to me, I know you have one for plants, I
    think it is 57,000 hits a month.
        Mr. Leo. The best one in the country. Every plant that
    exists is run by NRCS's system.
        Mr. Kingston. If I don't have those, how do I get those
    addresses? Do you go to the USDA Web page?
        Mr. Leo. It is very difficult. I would say we are no better
    than a lot of folks trying to figure out how to get what we
    would call a corporate portal, so when you want to know
    anything about USDA, we could migrate. You go into the portal,
    and you could do like Yahoo, or you could do whatever. I admit
    we cannot do that today. So you would be frustrated, searching
    all over the place.
        The initiative that you see, I have here, the $2 million
    initiative is an attempt to look. I don't want to discourage
    the agencies from doing e-government. They are doing a
    wonderful job. We need a more corporate approach.
        To answer your question, we need to research that portal
    vision. I don't know what to do yet, but I know we have to look
    into it and research it.
        Mr. Kingston. Thank you.

                                CLOSING REMARKS

        Mr. Skeen. Mr. Leo, on that note, with a vote we have
    coming, I want to tell you we appreciate your being here today.
    You are not the only governmental agency that has this problem.
    I think it is endemic to many others as well. But I think you
    are doing an awful lot to correct the problem and move in the
    right direction. So, with that, we are going to say thank you
    very much. If we have anything else, we will be in touch with
    you.
        Mr. Leo. Thank you, sir.
        Mr. Skeen. Have a good day.
        [The following questions were submitted to be answered for
    the record:]

                               W I T N E S S E S

                                  ----------
                                                                       Page
    Dewhurst, S. B.................................................151, 703
    Ebbitt, J. R.....................................................     1
    Glickman, Hon. Dan...............................................   151
    Kaplan, Dennis...................................................     1
    Leo, Joseph......................................................   703
    Reed, Pearlie....................................................   703
    Rominger, Richard................................................   151
    Seybold, G. S....................................................     1
    Thornsbury, D. R.................................................     1
    Viadero, R. C....................................................     1

                                   I N D E X

                                  ----------

                          Office of Inspector General

                                                                       Page
    1999 Audit and Investigative Results.............................    87
    Asset Forfeiture:
        Department of the Treasury Forfeiture Fund...................    90
        DOJ Assets Forfeiture Fund...................................    90
        Funding......................................................    97
        Petition for Remission or Mitigation.........................    90
        Proceedings..................................................    90
        Recovery of Forfeiture Funds.................................    97
    Audits:
        CCC..........................................................    82
        Financial Statement..........................................    80
        Non-USDA Agencies............................................    91
        USDA Consolidated Financial Statements.......................   103
    Backlog..........................................................    98
    Biographies:
        Roger C. Viadero.............................................    47
        James R. Ebbitt..............................................    48
        Gregory S. Seybold...........................................    49
        Delmas R. Thornsbury.........................................    50
    Bioterrorism.....................................................    74
    Bribery of Agricultural Marketing Service Graders................   104
    Budget Request...................................................    88
    Child and Adult Care Food Program................................69, 95
    Civil Rights Settlements.........................................    75
    Common Computing Environment.....................................   100
    Computer:
        Hackers......................................................   106
        Security.....................................................    99
    Confidential Fund Operational Activities.........................    85
    Crop Insurance...................................................    73
    Detroit School Board Case........................................    99
    EBT Processor Operations.........................................    79
    Electronic Benefits Transfer.....................................    99
        EBT Processor Operations.....................................    79
    Equipment Decrease...............................................    92
    Explanatory Notes...............................................109-120
    Federal Farm Assistance..........................................   107
    Fines and Recoveries.............................................    52
    Food Safety Issues...............................................   101
    Food Stamp:
        Cases........................................................    79
        Fraud.......................................................73, 106
        Fraud--EBT...................................................    64
        Investigations...............................................    62
    Forest Service...................................................    62
    FY 2001 Request..................................................    95
    Hazardous Materials Management Program...........................    94
    Hotline:
        Complaints...................................................    86
        Responses....................................................    86
    Hunts Point Market Investigation.............................56, 63, 76
    Invasive Pest Investigations.....................................    71
    Indictments, Convictions, and Suits..............................    86
    Investigative:
        Cases........................................................    98
        Process......................................................    70
    Justification of Increases.......................................   101
    Monetary Results.................................................52, 67
    National Appeals Division........................................    60
    OIG:
        Employees....................................................    61
        Field Auditors and Supervisors...............................    90
        Firearms.....................................................    87
    Opening Remarks..................................................     1
    Operation Talon.................................................58, 101
    Outside Public Accountants.......................................    84
    Personnel Levels.................................................   100
    Public Corruption Investigations.................................   104
    Questions Submitted for the Record:
        Chairman Skeen............................................... 78-96
        Ms. Kaptur...................................................97-103
        Mr. Kingston................................................104-106
        Ms. Delauro.................................................106-108
    Radio:
        Narrowband...................................................    91
        Technology...................................................    70
    Recovery of Funds................................................    95
    Reimbursements...................................................    82
    Resource:
        Partnerships Program.........................................    65
        Priorities...................................................    65
        Used to Monitor the Food Stamp Program.......................    78
    Russian Food Aid Program.........................................    68
    Service Center:
        Initiative...................................................    78
        Modernization Plan...........................................    78
    Smuggling....................................................63, 73, 74
    Sources of Funds.................................................    97
    Staff-Year Costs.................................................    91
    State Mediation Program..........................................    80
    Status of Program...............................................121-149
    Swiss Government Report..........................................    76
    Trade Agreements.................................................    72
    Urban Resources Partnership:
        Grants.......................................................    92
        Program..................................................51, 77, 93
    USDA Financial Statement:
        Audits.......................................................    82
        Audits and Opinions..........................................    83
    Use of Investigations and Audit Resources by Agency for FY 1999.. 88-90
    Women, Infants, and Children Program.............................    81
    Written Testimony of Mr. Viadero.................................  5-46

                            Secretary of Agriculture

    Across the Board Reduction.......................................   503
    Ad Hoc Disaster Relief.........................................266, 530
    Adverse Impact from Multi-Year Coverage Contracts................   385
    Advisory Committees, Panels, Task Forces, and Commissions........   311
    Agricultural:
        Credit Insurance Fund........................................   362
        Contracts....................................................   517
        Exports and Imports..........................................   533
        Land Protection..............................................   217
    Agricultural Research Service Budget.............................   276
    Americorp Activities.............................................   300
    America's Farm Economy...........................................   152
    Animal and Plant Health Inspection Service (APHIS):
        Budget.......................................................   276
        Eradication and Control Program..............................   227
    Appropriation Language...........................................   384
    Biobased Products/Bioen241, 326, 327, 342, 384, 387, 434, 502, 503, 509
        Bioenergy Initiative.........................................   241
    Biosafety Animal Health Facilities...............................   432
    Biotechnology........................................386, 432, 434, 435
    Bioterrorism.....................................................   389
    Boll Weevil Eradication Program................................227, 427
    Budget Summary...................................................   554
    Centralization of County Office Administration...................   157
    Chart Comparing Employee Rights..................................   357
    Citrus Canker....................................................   233
    Civil Rights:
        Discrimination........................................212, 256, 369
        Program......................................................   156
        Relationship of 2501 Program.................................   341
    Codex Alimentarius...............................................   326
    Commodity Credit Corporation (CCC):
        Commodity Purchases..........................................   219
        Commodity Loan Forfeitures (Sugar)...........................   392
        Funded Conservation Programs.................................   352
        Section 4 ADP Limitation.....................................   394
        Section 11 Limitation.......................346, 347, 352, 355, 531
            CRP and WRP Exemption....................................   346
    Commodity Supplemental Food Program:
        Administrative Funding.....................................510, 511
        Legislation..................................................   511
    Common Computing Environment.........................353, 354, 408, 518
    Concentration....................................................   517
    Congressional Relations..........................................   285
    Conservation Reserve Program:
        Administration's Proposal to Expand Acres.............433, 434, 505
        Budget.......................................................   263
        Program......................................................   346
        Technical Assistance.........................................   392
        Update Table.................................................   317
    CRP and WRP Exemptions from Section 11 Cap.......................   346
    Conservation Security Program....................................   355
    Controls for Fraud or Abuse......................................   384
    Cottonseed Assistance Program....................................   503
    Crop Insurance:
        Adverse Impact of Multi-year Coverage Contracts..............   385
        Catastrophic Coverage (CAT) Program..........................   390
        Emergency Financial Assistance Premium Discount Program......   409
        Non-Insured Assistance Program...............................   386
        Premium Discount.............................................   432
        Premium Subsidy for Buy-up Coverage..........................   395
        Private Insurance Company Audits.............................   384
        Production Insurance.............................264, 265, 266, 326
    Dairy:
        Compact......................................................   212
        Declining Milk Consumption...................................   279
        Options Pilot Program........................................   323
        Pricing....................................................207, 208
    Diethylstibestrol (DES)..........................................   519
    Disaster Assistance Program:
        1999 Crop Loss Assistance....................................   409
        Program....................................................258, 261
    Earmarked Grants.................................................   389
    Education........................................................   429
    Effects of Human Nutrition Initiative Studies....................   387
    Employment Increases.............................................   532
    Empowerment Zones/Enterprises Communities........................   153
    Environmental Terrorism..........................................   262
    EPA's Plant Pesticide Rule.......................................   419
    Exotic Pests:
        Asian Long-Horned Beetle.....................................   278
        Disease Center...............................................   271
    Explanatory Notes:
        OSEC.........................................................   695
        Fund for Rural America.......................................   700
    Farmers:
        Black.................................................211, 257, 273
        Chicken......................................................   210
    Farmers Markets:
        Program......................................................   242
        Nutrition Program Separate From WIC..........................   397
    Farm Assistance Programs.........................................   508
    Farm Bill--1996 Legislation......................................   205
    Farm Credit:
        Program......................................................   154
        System.......................................................   206
    Farmers Market...................................................   397
    Farm Income Payments.............................................   242
    Farm Loans:
        Budget Assumptions...........................................   365
        Delinquent...................................................   292
        Direct Credit................................................   323
        Information..................................................   294
        Servicing Error Rate.........................................   295
    Farm Safety Net.......................153, 231, 232, 342, 392, 394, 432
    Farm Safety Net Proposed Legislation.............................342a-x
    Farm Service Agency (FSA) Employment:
        Decline in County Employees..................................   437
        Federal vs. Non-Federal Employee Rights......................   357
        Reducing County Employees....................................   437
        Supplemental Funding for County Office Personnel.............   438
        Temporary Staffing....................................239, 275, 436
    Farm Storage Facility Loans......................................   367
    Federal Litigation...............................................   278
    Fines for Smuggling Crimes.......................................   414
    Food Assistance..................................................   206
        Monetization of Food Aid Commodities.........................   507
    Food and Nutrition:
        Locally Produced Foods in School Food Programs...............   514
        Native American Food Program.................................   263
        Program......................................................   213
        Recovery for School Food Program Unused Food.................   514
        School Breakfast Program--Free.............................214, 218
        School Lunch Program.........................................   218
    Food Safety:
        Camplyobacter and Salmonella Infections, Rate of.............   401
        Federal Food Safety Agency.................................212, 213
        Food Quality Protection Act.................216, 369, 415, 416, 417
        Initiative...................................................   329
        Inspection...................................................   214
        Meat and Poultry Inspectors..................................   278
    Food Stamp Program:
        Current Participation......................................395, 397
        EBT Coverage.................................................   307
        Eligibles Not Participating..................................   396
        Examples of Information Efforts..............................   396
        Legal Immigrants Adults Whose Children are Eligible..........   396
        Legal Immigrants Who Have Turned 65..........................   396
        Outreach and Education for Non-Participant Eligibles.........   546
        Participation Estimate for FY 2001...........................   396
        Reducing Error Rates.........................................   397
    Foreign Market Development.......................................   418
    Forest Service Drug Enforcement..................................   506
    Freedom to Farm Act............................................268, 523
    FSIS Inspector Shortage..........................................   412
    Fund for Rural America:
        Program......................................................   319
        Initiative for Future Agriculture and the Food Systems.....332, 334
    FY 2001 Rescission...............................................   430
    Genetically Modified Foods.......................................   516
    Global Climate Change............................................   388
    Hazard Analysis and Critical Control Point (HAACP) System:
        Inspection Models............................................   420
        Program....................................................266, 267
    Importance of Development Aid....................................   508
    Importance of People to People Aid...............................   508
    Increased Penalties for Violations...............................   279
    Introduction of Mr. Ralph Halsted................................   271
    Karnal Bunt....................................................318, 319
    Lands Legacy Program.............................................   509
    Loan Deficiency Payments.........................................   432
    Mandatory Funding................................................   334
    Mandatory Price Reporting.................................231, 407, 531
    Marketing and Inspection.........................................   154
    Meat and Poultry Inspectors......................................   277
    Methylbromide....................................................   276
    Migrant Labor Housing............................................   415
    National Appeals Division............................241, 438, 439, 502
    National Organic Standards.......................................   408
    Native American Food Program.....................................   263
    Natural Resources................................................   156
    Natural Resources Conservation Service (NRCS):
        Conservation Operations......................................   402
        TMDL Issue...................................................   256
        Water Resources..............................................   218
    New Initiatives..................................................   420
    Nutrition........................................................   156
    Office of the Inspector General--Funding.........................   414
    Office of the Under Secretary for Food Safety....................   327
    Opening Remarks..................................................   151
    Organic Rules....................................................   217
    OSEC Staffing....................................................   301
    Other Services Object Classification.............................   328
    Outbreaks of Emerging Pests and Diseases.........................   530
    Outreach Coordination Project....................................   328
    Outreach for Socially Disadvantaged Farmers Program.......336, 408, 518
        Relationship of 2501 to Civil Rights Program.................   341
    Outside Counsel Hired............................................   315
    Partnership for Change:
        Colonias Initiative..........................................   515
        Funds Use....................................................   398
        Promoting Program Efficiencies...............................   515
    Pierce's Disease.................................................   269
    PIMA Cotton......................................................   226
    P.L. 480:
        Funding....................................................224, 225
        Rice Program...............................................408, 411
        P.L. 480 and Section 416(b) Food Assistance..................   504
    Plate Waste:
        Elementary School Lunch Programs.............................   512
        Recent Studies...............................................   512
        Changes Needed to Reduce Waste...............................   513
    Plum Island Animal Disaster Center...............................   342
    Pond Irrigation/Surface Water Retention..........................   412
    Posted County Prices...........................................418, 433
    Pre and Post NAFTA Data..........................................   539
    Private Insurance Company Audits.................................   384
    Program Integrity Funds Use......................................   401
    Project Terminations.............................................   388
    Public Affairs...................................................   281
    Quality Samples Program..........................................   395
    Questions Submitted for the Record:
        Chairman Skeen..............................................281-410
        Mr. Dickey...................................................   411
        Mr. Kingston................................................412-417
        Mr. Nethercutt, Jr...........................................   418
        Mr. Bonilla.................................................419-430
        Mr. Latham..................................................431-435
        Mrs. Emerson................................................436-506
        Ms. Kaptur..................................................507-542
        Ms. DeLauro.................................................543-547
    Rate of Camplyobacter and Salmonella Inspections.................   401
    Rationale for Increased Subsidy Costs............................   331
    Rattlesnake Ridge Rural Water Development District...............   336
    Research, Education and Economics................................   155
    Rural Development...............................155, 228, 270, 274, 414
    Rural Economic area Partnerships.................................   274
    Sanctions........................................................   224
    Screw Worm Facility..............................................   272
    Specialty Corps..................................................   217
    Special Services to Limited-Resource Producers...................   391
    Staffing.........................................................   275
    Staff Year Reductions............................................   321
    Statement of the Secretary.....................................152, 158
    Supplementals:
        FY 2000 Request..............................................   205
        Pending Request..............................................   226
    Supplemental Income Assistance............................228, 229, 230
    TMDL Issue.......................................................   256
    Trade:
        Agricultural...............................................154, 255
        Expanding Overseas Markets...................................   269
        Food Embargoes...............................................   436
        Food Assistance..............................................   206
        Monetization of Food Aid Commodities.........................   507
        Sanctions....................................................   224
        Seed Sale to Russia..........................................   272
        Tracking Food Aid Commodities................................   507
        U.S.--China..................................................   542
    Tobacco Table....................................................   297
    Women, Infant, and Children (WIC):
        EBT Expenditures.............................................   398
        Eligibles Estimate...........................................   309
        Establishment of Good Nutrition Habits.......................   543
        Estimated FY 2000 Carryover with Participation of 7.1 Million   390
        Farmers' Market............................................397, 514
        Long-Term Benefits to Recipient Families.....................   543
        Long-Term Health Care Cost Savings...........................   545
        Month-By-Month Projected Participation for FY 2001...........   390
        Monthly Participation in Percent Years.......................   309
        Most Recent Participation Data...............................   397
        Program......................................................   261
        Study of Package.............................................   547
        Vegetables in Package........................................   547
    WTO Ministerial..................................................   331
    Year 2000 Conversion Costs.......................................   324

                    Office of the Chief Information Officer

    A-11 Exhibit 42.................................................808-818
    Action on OIG and GAO Audit Findings............................799-808
    Administrative Convergence:
        Concerns of USDA Partners in Administrative Convergence......   866
        Role of Conservation Partners................................   866
        Total Cost of Administrative Convergence.....................   867
    ATM Acceptance by Farmers Markets................................   862
    Biography of Joseph Leo..........................................   749
    Business Process Reegineering:
        Examples of 3 Business Process Improvements..................   819
        Progress in Business Process Reegineering....................   847
        Reorganizing Core Business Processes.........................   837
        Reengineering Field Service Agencies.........................   868
        Reengineering Management Systems Now in Use..................   868
        Support for Consolidation and Reengineering..................   837
    Common Computing Environment--CCE:
        Accomplishment With 2000 CCE Funds...........................   852
        Agency Funding of CCE........................................   767
        Alternative Funding Level of Accomplishment..................   853
        Avoiding Stovepipes..........................................   842
        Basis for Common County Based System.........................   836
        Current Plan.................................................   858
        Object Class Breakdown.......................................   840
        Planned Purchases............................................   842
        Common Computing Environment.................................   704
        Expected Return on Investment................................   841
        FY 2000 CCE Appropriation....................................   869
        Implementing CCE at USDA.....................................   750
        Plans for CCE 2001 Request..................................850-852
        Portable Data Accessories....................................   842
        Priority Order of CCE Items..................................   843
        Reporting to OCIO..........................................705, 841
        Service Improvement..........................................   847
        Strengthening Management Controls............................   841
        Sufficient Funds To Complete CCE.............................   868
    Concluding Remarks of CIO........................................   705
    Contractor Support:
        Contractor Support in 2001...................................   768
        Awarding Contracts...........................................   753
        Contractors Cancelled at Beltsville Lab......................   752
        Effects on Contractors.......................................   753
        IRM Support Services Contracts for 2000.....................773-787
        IT Budget for Contractor Support.............................   821
        IT Contractor Support Costs..................................   772
        Plans to Use Contractor Support in 2000 and 2001.............   829
    Digital Divide...................................................   769
    Downsizing the Workforce.........................................   846
    E-Government:
        E-Government Request.........................................   705
        Object Class Table for E-Government Initiative.............845, 846
        Plans to Develop or Support Electronic-Based Services and
          Program Delivery...........................................   829
        Status of Electronic Filing..................................   871
    Ensuring Common Platform Development.............................   836
    Explanatory Notes:
        Office of Chief Information Officer.........................873-889
        Common Computing Environment/Service Center Modernization...890-900
    Field Office Closures:
        Decoupling Districts From NRCS...............................   752
        Downsizing USDA County Offices...............................   755
        Impact of Decoupling on NRCS.................................   867
        Field Office Closure Impact..................................   751
        Impact of Closures.........................................751, 867
        Office Closures Vs. Workload Demands.........................   762
        State Office Collocation Costs..............................854-857
    Funding New Field Service Centers................................  1107
    Influence On Agency IT Expenditures............................754, 835
    Information Security:
        Allocation of Information Security to Six Areas..............   844
        Common Security Environment..................................   859
        Computer System Security Request.............................   705
        Object Class for Information Security Initiative.............   843
        OIG Recommendations on NASS Information Security.............   861
        Protecting USDA from Hacker Attacks..........................   844
        Priority of Security Increase Items..........................   845
        Privacy and Data Security....................................   768
        Security of E-Business Transactions And Mission Critical IT
          Systems....................................................   829
    Information Technology--IT:
        Breakout of $1.3 Billion Request.............................   840
        Current IT Vacancies.........................................   767
        Hiring and Retention of IT Staff............................763-766
        Number and Costs by Agency FTES..............................   820
        IT Moratorium Threshold Increase.............................   795
        OCIO Influence On USDA Agencies IT Expenditures..............   835
        Other Infrastructure Items...................................   840
        Strengthening IT Management..................................   822
        USDA IT Budget Summary.......................................   772
        USDA Total Planned 2001 Expenditures.........................   819
    Integrating EBT & USDA Eligibility Programs......................   862
    Integrating Paper and Computer Systems...........................   865
    Internet:
        Assessing Internet Benefits and Services.....................   828
        Faster Vendor Sign-up Through the Internet..................863-865
        Myriad of Websites...........................................   770
        Number of Employees Working on Websites......................   854
        Public Response to Internet Services.........................   828
        Profile of Average USDA Web User.............................   865
        Role of Internet Applications In SCMI........................   848
        USDA Programs Delivered Through the Internet................826-828
        WIC Purchase Via Priceline.com...............................   863
    ISTA And CPIC Milestones.........................................   821
    LAN/WAN/Voice:
        LAN/WAN/Voice Installation...................................  1108
        LAN/WAN/Voice Installation Costs.............................   796
        LAN/WAN/Voice Refreshment....................................   839
        LAN/WAN/Voice Upgrades.......................................   753
        USDA Service Center LAN/WAN/Voice Installations..............   795
    Last Quarterly CCC Report.......................................788-794
    Legacy Systems:
        Cessation of FSA Systems Support.............................   848
        Cost Breakout of Legacy Systems..............................   849
        FSA Legacy Systems...........................................   859
        FSA Legacy Systems Replacement by CCE........................   870
        FSA, RD, NRCS and Other Legacy Systems.......................   861
        Need to Change legacy Software and Hardware..................   859
    National Food and Agriculture Council--NFAC:
        Evaluation of Open Office Space..............................   867
        National Food and Agriculture Council........................   703
        Remarks of NFAC Chairman Reed................................   750
        Role in Service Center Modernization.........................   757
        Role in State Office Collocation.............................   758
    NAL Data Warehouse...............................................   861
    Need For USDA Supercomputer......................................   862
    OCIO Budget Request..............................................   703
    Opening of Service Centers on Indian Tribal Lands................  1105
    Opening Remarks of Joseph Leo....................................   704
    Rank of USDA In Computer Use.....................................   865
    Replacement Of Computers In Last 10 Years........................   858
    Service Center Modernization Initiative--SCMI:
        Administrative Funding.......................................   849
        Agencies Policies............................................   849
        Breakout of Object Class:
            25.0, Other Services.....................................   829
            31.0 Equipment...........................................   830
        Conference Calling Expense...................................   835
        Contracts....................................................   833
        Customer Service Training:
            Cost.....................................................   834
            Course Evaluation........................................   834
            Cross Training Of County Staffs..........................   838
            Number of Employees Trained..............................   834
            Other Training Plans.....................................   835
        Downsizing USDA County Offices...............................   755
        Employees and Costs..........................................   797
        Employees Details to SCI Team................................   797
        Improvements through Realignment.............................   837
        IT Budget....................................................   869
        Managing State and Federal Employees.........................   838
        Plans for 2000 ADP Priorities................................   832
        Service Modernization Plan...........................751, 831, 1108
        Timeline For SCMI............................................   854
    Support Services Bureau--SSB:
        Comparison of SSB and Current Organization...................   824
        Lifting SSB Restrictions.....................................   704
        Organization, Staffing and Function of SSB...................   823
        Performance Measures.........................................   825
        People Deployment............................................   760
        Projected SSB Operating Costs And Net Savings................   868
        Reprogramming SSB Employees..................................   758
        Restoration of Employment Levels.............................   761
    Questions Submitted for the Record:
        Chairman Skeen...............................................   772
        Ms. Kaptur...................................................   858
    Telecommunications:
        Centralized Telecommunications and Reduced Cost..............   839
        Sharing Telecommunications:
            Cost Savings with USDOI..................................   826
            With Department of Interior..............................   825
        Strategic Office Location Plan...............................   832
        Telecommunications Management................................   761
    Use of GIS Technology............................................   871
    Witness Statement of Joseph Leo, CIO............................707-748
    Workstations:
        Agencies Behind Schedule.....................................   831
        Connection Costs.............................................   853
        Connecting Legacy Date.......................................   843
        Purchase of Workstations Completed...........................   830
        Workstations by Agency.......................................   830
    Year 2000 Conversion Costs.......................................   796

                     Office of Budget and Program Analysis

    Breakout of Resources for OBPA's Responsibility..................   901
    Buyouts..........................................................   902
    Budget Related Legislative Proposals.............................   902
    Code Of Federal Regulations......................................   901
    Explanatory Notes...............................................906-913
    Legislative Proposals............................................   901
    Questions Submitted for the Record:
        Mr. Skeen....................................................   901
    USDA Budget Summary............................................902, 905

                         Office of the Chief Economist

    Activities in Stoneville, Mississippi............................   918
    Explanatory Notes...............................................921-936
    Exports To Asia and Latin America................................   917
    Food and Agricultural Policy Research Institute to OCE's Mission.   919
    Increases In Object Classification 25.2 and 25.5.................   920
    Impacts of Welfare Reform on Farm labor..........................   917
    Impact Of World Trade Organizations on American Agriculture......   920
    Modernization of Weather and Economic Data Systems...............   918
    Object Class Table for Commission................................   917
    Quantify Increases in Prices and Farm Income.....................   919
    Questions Submitted for the Record:
        Mr. Skeen....................................................   914
    Risk Assessment Rule Making......................................   915
    Risk Assessment Staff Time.......................................   916
    Salary Costs for Commission and Staff............................   917
    USDA Activities Associated with Sustainable Agriculture..........   914
    USDA Food Safety Initiative Funds Budgeted.......................   918

                         Office of the General Counsel

    Attorney:
        Hours by Agency..............................................   979
        Hours Worked.................................................   977
        Locations....................................................   981
    Biography of Charles Rawls, General Counsel......................   974
    Cases:
        Before EEO Commission........................................  1020
        Civil and Criminal...........................................   982
    Debt Collections.................................................   982
    Examples of Recent Progress....................................993-1019
    Explanatory Notes.............................................1023-1061
    FY 2001 Budget Request Breakout..................................   992
    Law Library......................................................   992
    Legal Work Performed.............................................  1022
    New Authorities.................................................983-992
    Object Class Breakout............................................  1021
    OGC Priorities...................................................  1020
    Private Counsel..................................................   980
    Questions Submitted for the Record:
        Chairman Skeen...............................................   975
    Rural Housing....................................................   980
    Staff Years......................................................   976
    Statement by the General Counsel................................937-973
    User Fee:
        Hours by Agency..............................................   975
        Programs.....................................................   975

                           National Appeals Division

    Active Appeals...................................................  1080
    Biography, Norman D. Cooper......................................  1066
    Customer Survey..................................................  1080
    Director Appeals.................................................  1080
    Explanatory Notes.............................................1086-1092
    Final Rules and Regulations...................................1067-1079
    Justification for a Regional Structure...........................  1083
    NAD's Bias Not A Factor In Appeals Process.......................  1083
    NAD Decisions....................................................  1082
    Performance Goals and Indicators.................................  1080
    Questions Submitted for the Record:
        Chairman Skeen...............................................  1067
    Relevance of the 86 Percent and the 5 Percent....................  1083
    Training Budget..................................................  1081
    Witness Statement of Norman G. Cooper.........................1062-1065

                          Departmental Administration

    Advisory Committees:
        Explanatory Notes.........................................1218-1237
        Funded From Other Accounts...................................  1140
        Staff Costs..................................................  1140
    Agriculture Buildings and Facilities:
        Beltsville Occupancy.........................................  1138
        Beltsville Office Facility...................................  1136
        Carry Over From Fiscal Year 1999.............................  1139
        Explanatory Notes.........................................1194-1205
        Object Classification 25.2 Other Services....................  1139
        Strategic Space Plan.........................................  1135
    Aircraft, Distribution of........................................  1115
    Biography of Paul W. Fiddick.....................................  1104
    Civil Rights:
        Complaint Tracking System....................................  1122
        Cost of Settlements..........................................  1105
        Equal Employment Opportunity Complaints......................  1107
        Farm Service Agency Settlement...............................  1124
        Foreclosures.................................................  1105
        Number of Complaints.........................................  1106
        On-site Reviews..............................................  1105
        Processing Complaints........................................  1107
    Colleges and Universities:
        Historically Black Colleges and Universities.................  1116
        Funds Transferred to Land Grant Universities..............1116-1121
        USDA 1890 National Scholars Program..........................  1108
    Collocation Projects:
        Status of Kansas City and Davis..............................  1114
    Departmental Administration:
        A $5 Million Reserve.........................................  1123
        Alternative Discipline Plan..................................  1111
        Alternative Dispute Resolution...............................  1124
        DA Object Classes............................................  1123
        Explanatory Notes.........................................1165-1186
        Federal Agriculture Improvement and Reform Act...............  1122
        Number of Credit Cards Issued................................  1114
        Procurement Reform...........................................  1111
        Savings Through Credit Cards.................................  1114
        Small Business Education and Development Pilot Program.......  1123
    Disabilities, Targeted...........................................  1114
    Hazardous Materials Management Questions:
        Agencies Comprising The Hazardous Materials Working Group....  1164
        Agency Support...............................................  1148
        CCC Grain Storage Site Status................................  1157
        Compliance Docket............................................  1157
        Compliance with State Laws...................................  1146
        Explanatory Notes.........................................1206-1217
        Foreclosures Requiring Cleanup...............................  1150
        Forest Service Funding for Cleaning Up Forest Service Sites..  1163
        Forest Service Reimbursement.................................  1164
        Forest Service Sites Cleanup Costs...........................  1163
        Funding for CERCLA, RCRA, and Pollution Prevention...........  1145
        Funding for Sites............................................  1162
        Increase In Actions Against The Department...................  1163
        Performance Goals............................................  1143
        Salaries and Benefits........................................  1147
        Salaries/Benefits and Cleanup Costs..........................  1148
        Typical Cleanup Efforts and Associated Costs.................  1160
        Underground Storage Tanks....................................  1146
        USDA Site Cleanups........................................1151-1156
    Motor Vehicles, Distribution of..................................  1115
    Personnel:
        Celebration of Excellence Ceremony...........................  1113
        Early Out and Buyout Options.................................  1113
        Plans for Early Out or Buyout Authority......................  1113
        USDA Streamlining............................................  1108
    Questions Submitted for the Record:
        Mr. Skeen....................................................  1105
    Rental Payments:
        Analysis of Current Space Inventory..........................  1139
        Headquarters Complex Rental Charges..........................  1136
        Rental Payments & GSA Repair Costs...........................  1138
    Socially Disadvantaged Farmers and Ranchers:
        Audit of the Program.........................................  1126
        Award Process for Grants.....................................  1126
        Expenditures for the Outreach Program........................  1124
        Explanatory Notes.........................................1187-1193
        Grants Awarded in Fiscal Years 1997-1999..................1126-1134
    Witness Statement of Paul W. Fiddick..........................1093-1103

                     Office of the Chief Financial Officer

    Biography of Sally Thompson......................................  1247
    Cost for FFIS Implementation............................1251-1253, 1263
    Direct Deposit Electronic Funds Transfer.........................  1259
    Explanatory Notes.............................................1274-1288
    FFIS Financial Data Warehouse....................................  1266
    GAO and OIG Audits............................................1259-1263
    GPRA Implementation..............................................  1270
    Increase for Accountability Report...............................  1270
    Increase for Audit Monitoring, Tracking and Resolution...........  1272
    Increase for Corporate Systems Strategy..........................  1265
    Increase for Cost Accounting Reforms.............................  1270
    Increase for Credit and Debt Management..........................  1268
    Increase for Fully Implementing GPRA.............................  1269
    Increase for Information Infrastructure..........................  1266
    National Finance Center:
        Benefits for Providing Payroll Services to Non-Federal FSA
          County Office Employees....................................  1250
        Cross Servicing...........................................1254-1259
        Payroll/Personnel System at NFC..............................  1264
        Staff Year Levels at the National Finance Center.............  1253
    Percent of Employees Using Electronic Funds Transfer.............  1259
    Proposed Paperless Personnel Request System......................  1113
    Questions Submitted for the Record:
        Mr. Skeen....................................................  1248
    Stove Piping Among USDA Agencies.................................  1248
    Transfer of Accountants from Departmental Administration.........  1273
    USDA Travel Costs................................................  1250
    Witness Statement of Sallie Thompson..........................1238-1246
    Working Capital Fund:
        Amounts Paid Into the Working Capital Fund by Current Agency
          Structure..................................................  1348
        Explanatory Notes.........................................1289-1316
        WCF Operating Costs..........................................  1349
        WCF Planned Capital Acquisitions.............................  1350
    WCF Purchase of Computer Equipment and Services..................  1349

                            Office of Communications

    Biography of Sedelta Verble......................................  1321
    Explanatory Notes.............................................1322-1336
    Witness Statement of Sedelta Verble...........................1317-1320