[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

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