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

                      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.,        SAM FARR, California
    Washington                         ALLEN BOYD, Florida
     HENRY BONILLA, Texas
     TOM LATHAM, Iowa
     JO ANN EMERSON, Missouri

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

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

                                     PART 3

                        MARKETING AND REGULATORY PROGRAMS
                            AND CONSERVATION PROGRAMS
                                                                       Page
     Natural Resources Conservation Service...........................    1
     Marketing and Regulatory Programs................................  461
       Animal and Plant Health Inspection Service

       Agricultural Marketing Service

       Grain Inspection, Packers and Stockyards

       Administration

                                    ________

             Printed for the use of the Committee on Appropriations
                                    ________

                         U.S. GOVERNMENT PRINTING OFFICE
     63-747                     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                MICHEAL P. FORBES, New York
     RODNEY P. FRELINGHUYSEN, New Jersey   CHET EDWARDS, Texas
     ROGER F. WICKER, Mississippi          ROBERT E. ``BUD'' CRAMER, Jr.,
     GEORGE R. NETHERCUTT, Jr.,              Alabama
       Washington                          MAURICE D. HINCHEY, New York
     RANDY ``DUKE'' CUNNINGHAM,            LUCILLE ROYBAL-ALLARD, California
       California                          SAM FARR, California
     TODD TIAHRT, Kansas                   JESSE L. JACKSON, Jr., Illinois
     ZACH WAMP, Tennessee                  CAROLYN C. KILPATRICK, Michigan
     TOM LATHAM, Iowa                      ALLEN BOYD, Florida
     ANNE M. NORTHUP, Kentucky
     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, March 2, 2000.

                     NATURAL RESOURCES CONSERVATION SERVICE

                                   WITNESSES

    JAMES R. LYONS, UNDER SECRETARY, NATURAL RESOURCES AND ENVIRONMENT
    PEARLIE S. REED, CHIEF, NATURAL RESOURCES CONSERVATION SERVICE
    DANNY R. SELLS, ASSOCIATE CHIEF, NATURAL RESOURCES CONSERVATION SERVICE
    DANA YORK, ACTING DIRECTOR, BUDGET PLANNING AND ANALYSIS DIVISION,
        NATURAL RESOURCES CONSERVATION SERVICE
    STEPHEN DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE
        Mr. Skeen. Well, thank you and good morning. Appreciate all
    of you being here. It's so quiet it is almost like being in
    church.
        Today we want to welcome Mr. Jim Lyons, the Under Secretary
    for Natural Resources and the Environment, and Mr. Pearlie
    Reed, the Chief of the Natural Resources Conservation Service.
    Welcome, gentlemen.
        Mr. Lyons, based on our conversation yesterday, this will
    be the last time that you will be testifying before this
    subcommittee, and we would just like to thank you for your
    service during your time as Under Secretary. Maybe that is a
    faint way of giving you a little endorsement, but we do
    appreciate the work that you have done.
        The NRCS budget request includes an increase of $86.4
    million for conservation operations and increases totaling
    nearly $1 billion in mandatory programs that will have to go
    through the authorizing committee when the administration sends
    up that legislation. It sounds like an ambitious agenda, and we
    would like to hear your thoughts on this.
        But before I recognize you, I would like to turn to Miss
    Kaptur for any welcoming remarks she may have. And I want to
    thank you, Marcy. I understand that you have sacrificed a trip
    back to your district today to be here with us, and I
    appreciate this. This puts us about at the halfway mark on
    these hearings. Thank you.
        Miss Kaptur. Thank you, Mr. Chairman. We couldn't miss the
    hearing of the Natural Resources and Conservation Service. I
    also want to thank Mr. Lyons for his service to our country and
    for your
    appearance here today; all of those that you have brought with
    you, Mr. Reed, who has been such a pleasure to work with; Ms.
    York; Mr. Sells; and of course Mr. Dewhurst is here for all of
    our hearings.
        I also want to acknowledge in the audience my former chief
    of staff Bobbi Jeanquart, who now works with the Resource
    Conservation Development Councils around the country. We are
    just so proud of her and the work that she did for our country
    and now working in the volunteer and private sector. I love the
    photos you have given us here.

                                  urban sprawl

        Miss Kaptur. This looks like it will be a very good hearing
    this morning. And thank you for everything that you do to help
    to strengthen the ecosystem that we are blessed with in this
    country.
        We recently did a poll in our district, Mr. Chairman, it is
    very interesting, asking citizens about the countryside, about
    urban sprawl, and whether they thought we as a Nation should be
    doing more in order to preserve our heritage and to conserve
    it, and 80 percent said yes. Now, I thought maybe it might be
    40 or 50, and it was just interesting to look at how those
    number came back. So you are part of the most important effort
    in our country to do that, and we welcome you here today. Thank
    you.
        Mr. Skeen. I also want to thank you for the pictures,
    particularly, that one on the front, the sheep look real good
    up against those cattle. They do commingle.
        Mr. Lyons, we will let you have your beginning remarks.

                    Opening Remarks by Undersecretary Lyons

        Mr. Lyons. Thank you, Mr. Chairman I appreciate the
    opportunity to be here with you this morning. And, Miss Kaptur
    and Mr. Farr, since we didn't have a chance to meet before the
    hearing, I want to assure you my comments to Mr. Skeen about my
    decision to move on after this year and explore other
    opportunities to contribute in the natural resource field is by
    no means a prediction about the election, it is simply a
    personal decision to move on and hopefully find other ways in
    which I can help.
        I do want to depart radically from my testimony this
    morning, Mr. Chairman, and simply ask that that be made a part
    of the record, if I may.
        Mr. Skeen. We don't have too many radicals in here, but you
    want to be one, go ahead.

                    american conservation in the new century

        Mr. Lyons. I am showing my true colors, I guess. But I want
    to focus on three things this morning of concern to the
    committee, I think, as Miss Kaptur noted in her opening
    remarks, of concern to the citizens in the United States, I
    know, from conversations with Mr. Farr, brief conversations
    with Mr. Bonilla, concerns that stretch from coast to coast,
    and that is the way America and Americans view the future of
    conservation in the United States as we face the threshold of
    really what is our second century of American conservation.
        The conservation movement, of course, began in the early
    1900s. Pioneers like Teddy Roosevelt helped to bring the issues
    and concerns of conservation into focus for all Americans. For
    nearly 100 years we have dealt with many challenges in the
    conservation arena. One of, I think, the proud successes is the
    work we have done in addressing the concerns that arose out of
    the dirty 1930s, with soil and water conservation and the
    excesses of erosion. But from my experiences, Mr. Chairman, we
    spend a tremendous amount of time debating the issues
    associated with public land management, and in your role on the
    Interior subcommittee, you and I have had a chance to discuss
    those issues as well by virtue of oversight to the Forest
    Service's management responsibilities.

                       land stewardship on private lands

        I would suggest to you and the other members of the
    committee that in the second century of American conservation
    we are going to change our focus. We have to if we are really
    going to get at the issues that are affecting the Nation's
    environmental quality. We will have to refocus on opportunities
    that come with better land stewardship on private lands. Since
    private lands represent two-thirds of the American landscape,
    they are really going to tell the story of whether or not we
    are successful in making further progress in the arenas of
    clean air, and clean water and wildlife habitat improvement.
    That is where we need to focus our attention. I think the
    country is poised and prepared to do so. I think American land
    owners, farmers, and ranchers and forestland owners are
    prepared and anxious to take up that challenge.

                            conservation challenges

        What I want to do is highlight three things, some of what
    we found in the work we have done over the past year in talking
    to constituencies and experts in the arena of conservation as
    to what they think the ills are that we need to address and the
    means we have to do so. Some of that comes from the work we
    recently did in analyzing the findings of the 1997 Natural
    Resources Inventory, which I will highlight just briefly.
    Secondly, I want to talk about how that led to our decision to
    put before you what we think is a bold initiative, a $1.3
    billion conservation initiative which is part of our 2001
    proposal which would make critical investments in the tools and
    the technology, and there I think what I mean is the people
    that make conservation work across the American landscape in
    partnership with private landowners.
        Finally, I want to touch base on another issue, and that is
    that EPA's efforts to formulate new rules for TMDLs, total
    maximum daily loads, which has been quite controversial in the
    agricultural community. I want to make clear where USDA stands
    on that issue, and then I will close.
        With regard to our conservation challenges this past fall,
    we held five regional forums on conservation I discussed with
    you yesterday, Mr. Chairman. They were interesting forums. We
    met with landowners, with interest groups, with the public,
    with individuals with expertise in conservation and
    environmental issues from across the spectrum of interests
    throughout the United States. We learned many interesting
    things, but I think most exciting was to learn that there are
    many success stories across the country of working partnerships
    at the ground level to try and make conservation work based on
    what we have learned over a half century of investing in
    private land stewardship.
        We pulled our information together, and Secretary Glickman
    convened a national summit on conservation in Ames, Iowa, on
    December 7th this past year. At that time we released new
    information from our Natural Resources Inventory and updated
    the information that we periodically accumulate. We found some
    rather surprising, startling things. I shared a packet of this
    information with you yesterday, left one for you, Miss Kaptur,
    with Roger, and also left with you a video that I hope you will
    have a chance to view. Mr. Bonilla and Mr. Farr, make sure you
    get this information as well. In 7 minutes I think the video
    describes the challenges we face in clear and unequivocal
    terms.

                      loss of agricultural and forestland

        Let me point out some key findings. The conversion of land,
    agricultural and forestland, to development is accelerating at
    a rapid rate. In fact, in the period from 1992 to 1997, the
    average annual rate of conversion was more than double of that
    the previous 10 years. So we are losing valuable land, valuable
    for producing the goods and services that America expects of
    their lands, and also land that is valuable in preserving what
    is the quality of life of rural and more and more suburban
    America.

                              soil erosion status

        Another interesting and startling finding was the fact that
    despite tremendous progress in tackling the issues of soil
    erosion, going back to 1982, since 1995, during the period of
    1995 to 1997, the progress we have made in tackling soil
    erosion has stalled. In 1995, we calculated 1.9 billion tons of
    soil was being eroded into the Nation's waterways a year. That
    is the same figure that we calculated in 1997. So our progress
    has stalled. We are trying to determine why that is.
        By our own assessment, at least preliminarily, we see two
    things that come into play. One is by design, strategically. We
    decided--and I was a part of this as the staff on the House
    Agriculture Committee, some of you were involved in this--to
    target our resources on what we consider the most critical
    conservation, highly erodible lands. There we have made
    tremendous progress. Tools like the Conservation Reserve
    Program have made a big difference in curbing soil erosion. But
    as we did that and failed to make needed additional investments
    in conservation because of budget constraints, other
    priorities, other needs, we have been forced to pull back in
    the conservation work that we have done in other parts of the
    Nation. So those non-highly erodible acres are now eroding at a
    higher rate, or we believe they are. As a result the progress
    that we are making in tackling the erosion is being offset by
    increased erosion in other places. So we are literally losing
    ground in our battle over erosion, a significant concern.
        I don't know that I have--here we go. I would share this
    with you. It is difficult to see.
        I think even more disconcerting than that--we have copies
    of this material for all of you that is being handed out now--
    you will see that where the erosion is occurring and is
    excessive is reflected by the red here. You will see that it is
    in regions of the country where we can least afford to lose
    progress. It is in the Chesapeake Bay region in the Eastern
    United States. It is in the Great Lakes region, Miss Kaptur,
    affecting water quality in that part of the world. It is in
    parts of Texas, which is certainly impacting land productivity,
    and combined with the excessive erosion in the Upper
    Mississippi waterway, leading to hypoxia in the Gulf of Mexico.
    And it is in eastern Oregon, Washington and northern Idaho,
    where at the same time we are undertaking a significant effort
    to try and protect salmon habitat and reduce the impacts of
    change there on the quality of waters. We can't afford to lose
    progress there. We are working against ourselves in that
    regard.

                             net losses of wetlands

        Finally, I would also comment that we discovered that while
    net losses of wetlands is showing progress, that is we are
    further reducing the annual loss of wetlands and agriculture,
    we are not yet to the commitment that President Bush made a
    decade ago now. In fact, what we are finding is if it weren't
    for programs like the WRP, we would not be as successful as we
    have been in trying to curb the loss of wetlands and
    agriculture lands. Part of the loss there, by the way, is
    because of increased development where we are losing those
    lands not because of any agricultural conversion, but, in fact,
    we are losing those lands in total.

                          national conservation forum

        We took this information, presented it to the group
    assembled at this December 7th conference, and I would
    emphasize it was a wide spectrum of interests representatives
    in the Natural Resources Defense Council, from the Cattleman's
    Association, from academia, from a wide range of interests and
    expertise. And there seem to be unanimity of opinion about how
    to deal with these issues. The answer is actually a very simple
    one. We simply need to invest in the conservation tools and
    programs we know work, the voluntary assistance programs,
    conservation programs that help land owners determine how to
    help themselves, how to work together as communities, how to
    work through the RC&Ds or through watershed councils or
    conservation districts.
        You all know this because you see this on the landscape day
    in and day out. It works. Unfortunately very few people outside
    of the agriculture community understand that. You know we are
    silently effective in our silence, or our anonymity works
    against us in terms of making clear this is a national issue
    and requires additional investment.

                          2001 conservation initiative

        We took that information and came back to Washington and
    decided we finally needed to do something about it. So we
    constructed a $1.3 billion initiative which is in the 2001
    budget. We literally constructed that in the last month of
    putting together our budget, reflecting what we learned from
    our regional conferences in this national forum. And you will
    see in that package significant investments in those places
    that we think are critical to addressing these national
    conservation needs. That is, we propose to increase funding for
    the Wetland Reserve Program, for CRP particularly; additional
    monies for incentives to enroll producers in conservation
    buffers; additional resources for the EQIP program, which is
    going to be critically important for addressing the working
    landscape, but in particular for dealing with the AFO/CAFO
    issue, which is of national significance; additional resources
    for the Wildlife Habitat Improvement Program, because there we
    have exhausted our authority; additional resources for the
    Farmland Protection Program to start to tackle the issue of
    accelerated agricultural land loss; and most importantly,
    additional resources for technical assistance, because a tool
    kit is no good unless you have, to use an analogy, the
    carpenters to put it in use. And conservation is something that
    requires that hands-on application. You can't do conservation
    on the Internet. You can't do conservation unless you have
    people on the ground working hand in glove with farmers,
    ranchers, and forestland owners.
        The program also includes a unique wrinkle, if you will,
    and that is a proposal for $600 million for conservation
    security payments. That $600 million is intended to provide
    additional incentives and support to producers who don't
    currently have the financial wherewithal to put conservation
    practices in place. So we will compensate them for that.
        In essence, we will finally start to pay producers for
    producing those nontraditional commodities that are so critical
    to the well-being of America. We are going to pay them to
    produce clean water. We are going to pay them to improve
    wildlife habitat. And we will also give them cost share
    assistance to put practices in place. I think that is a novel
    approach to doing business and reflects some of our thinking
    with the potential changes in farm policy in the context of the
    2002 farm bill, because there, at least theoretically, as
    certainly Mr. Farr knows from his work on the Agriculture
    Committee, there at least has been a philosophical decision to
    do away with farm programs. We will see if that actually comes
    to pass. But here is another way to tackle these issues.

                       clean water rules and agriculture

        Let me shift gears and talk a little bit about TMDLs,
    because that issue has gotten a lot of attention. We have been
    working with the Environmental Protection Agency through the
    Clean Water Action Plan to try and deal with a whole host of
    issues as they relate to clean water. The Environmental
    Protection Agency put out a proposed rule for changing the way
    in which they implement the total maximum daily load provisions
    of the Clean Water Act. They put out a very controversial rule,
    one that would grant them new regulatory authorities.
        We have strong exception to some of what EPA proposed, and
    a very strong letter was sent out under my signature to that
    regard. Unfortunately the letter didn't go through clearance,
    it didn't go through the Secretary's office. I didn't do my job
    as much as I should have to make sure it, in fact, had. The
    Secretary has said since he didn't sign off on the letter, it
    doesn't represent official Department views, but nevertheless
    we stand by the substantive issues in that letter.
        As a result of that shot across the bow, so to speak, we
    have set up a working group with staff at EPA, and we are
    working on a daily basis to try and address the concerns that
    we raised, address the concerns of agriculture, place emphasis
    on the use of technologies we know work, voluntary assistance
    programs to get the job done. The key to making sure we can
    follow through on those commitments is funding those programs
    and having the resources to do what we do know works best.
        So we are committed to making sure that we make progress in
    clean water. We are committed to making sure it is done in a
    way that makes sense, that is not a threat to agriculture, but
    rather viewed as an opportunity. And most importantly, Mr.
    Chairman, we are committed to making sure that agriculture
    continues to make the valuable contribution it can make to
    protecting and restoring America's wonderful landscapes.
        Mr. Chairman, I want to tell you that I personally
    appreciate the extent to which you have always been open to me
    and to the Department to listen to these issues to try and help
    us work through the difficult times and try to make the
    investments we need to make in conservation. I know you feel it
    in your heart and your soul. I know, Miss Kaptur, as well, from
    conversations we have, of your strong commitment to make sure
    that we continue to make those critical investments. I look
    forward to working with you on the Great Lakes conference, in
    fact, and having a chance to focus on that particular part of
    the country and the opportunities there.
        It has been a pleasure to work with you, Mr. Chairman. I
    look forward to doing so the rest of this year.
        Mr. Skeen. Thank you, Mr. Lyons. We certainly appreciate
    your feelings. I think you have given us a great summary.
        [The prepared statements and biographies of Mr. James R.
    Lyons and Mr. Pearlie S. Reed, and the biographies of Mr. Danny
    Sells and Ms. Dana York follow:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Skeen. I would like you, Mr. Reed, to have a chance for
    you to have your comments. If you would like to have some time,
    you are on stage.
        Mr. Reed. Thank you, Mr. Chairman.
        Members of the committee, thank you for the opportunity to
    appear here before you today. I will keep my comments brief.
    With your permission I would like to submit my written
    testimony for the record.
        Mr. Skeen. It will be done.
        Mr. Reed. But I have two points I would like to make.
    First, in the great halls of the Capitol, there is a quotation
    from Theodore Roosevelt, 1910, and it reads, ``The Nation
    behaves well if it treats the natural resources as assets which
    it must turn over to the next generation, increased and not
    impaired in value.''.
        And this is what I believe the NCRS is all about with our
    cooperating organizations throughout the country. I believe
    that as this committee goes about making decisions on the
    investment that we should make in conservation, that that is
    what this committee is all about. And I think working together
    we can be successful in turning over to this next generation
    increased natural resources assets that will be better for the
    next generation and the generation following that.
        I would be happy along with Mr. Lyons to respond to any
    questions you might have.
        Mr. Skeen. We thank you.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                             current year staffing

        Mr. Skeen. And we will begin--let's take care of the
    current fiscal year before we talk about the budget request.
    And I think Mr. Lyons gave us a good overview of this
    situation. We share the same feeling. The technicians and the
    technical people that you have had on the ground have been
    sorely missed to some degree because we have just not had the
    force that we had at one time and the technical advice that you
    had. That is a large employment problem, very difficult to find
    people, because a lot of people don't have any technical tie to
    the ground and the environment that we had at one time. Do you
    have adequate financial resources to ensure that NRCS will not
    have to use reduction in force and layoffs or furloughs in the
    fiscal year 2000?
        Mr. Reed. Yes, sir. We do. But we have done that at the
    expense of cutting back to the point where we are doing things
    like not maintaining our fleet at an acceptable level. We have
    eliminated virtually all of our temporary employment, and we
    have done these things with the anticipation that as we move
    through this fiscal year into next fiscal year, we will be in a
    much better financial position. But we cannot continue to
    operate into fiscal year 2001 at the level of cutbacks we have
    made in the basic support structure in 2000.

                        Technical Assistance For FY 2001

        Mr. Skeen. In our meeting yesterday we talked about the
    funding priorities in this bill, and I just want to let you
    know that I appreciated your candor on the subject. But we just
    want to make sure that the financial resources that we do have
    are being managed in the best way possible. Your budget request
    in conservation operations includes an increase of $86 million.
    How much of that increase would go to on-the-ground technical
    assistance, and how much of that increase would be passed
    through the NRCS?
        Mr. Reed. All of the proposed increase will ultimately end
    up in the provision of technical assistance at the field
    office.
        Mr. Skeen. The field-office level.
        Mr. Reed. The field-office level. With the exception of, I
    think, there is a proposal for a $10 million or so grant
    program to be passed on to watershed sponsors, local
    conservation districts, to hire non-Federal coordinators.

                                Staffing Change

        Mr. Skeen. Last year the President's budget proposed an
    almost 1,000-person decrease in NRCS staffing. And this year
    the budget proposal increased the funding that will be result
    in over 1,800 staff year increase. Why the change in the
    philosophy?
        Mr. Reed. The 1,800 staff year increase, of course,
    reflects what Mr. Lyons talked about earlier. The 1,000--I
    think it was 1,055, to be precise--decrease that we thought we
    were facing last year at this time was a real figure at that
    time, but because of the direction that we got in the
    appropriations, and because of some of the things I mentioned
    earlier relative to us cutting back, we were able to manage, we
    believe, through this fiscal year without making that kind of
    reduction. We are going to have approximately 350 or so staff
    year reduction this year, and we think we can manage that with
    attrition.

                     FY 2001 Technical Assistance Priority

        Mr. Skeen. Within the $86 million increase, please identify
    the top priorities.
        Mr. Reed. The top priorities for the administration, of
    course, would be the provision of conservation technical
    assistance, to beef up our AFO/CAFO-type work.
        Mr. Skeen. On-the-ground personnel.
        Mr. Reed. On-the-ground work to work with farmers and
    ranchers, to deal with the challenges associated with
    comprehensive nutrient management planning, those kinds of
    issues.
        Mr. Skeen. I think that covers it pretty well. And we are
    in agreement on that.
        Miss Kaptur.

                             CCC Funding Shortfall

        Miss Kaptur. Thank you, Mr. Chairman.
        First of all I wanted to thank Mr. Lyons and Mr. Reed and
    all those others who have come from the Department for some of
    the excellent information that you are preparing that help the
    Congress and help the country get their arms around these
    questions of resource conservation. I am sitting here listening
    to you, and I am looking at these pictures of orchards, and I
    am looking at land converted to development here, and I am
    thinking, hmm, this is where I live. This makes sense to me.
        I have some questions on your budget, and following on what
    the Chairman has asked, for this fiscal year it is my
    understanding that the NRCS may not have sufficient funds
    available through the CCC to carry out your technical
    assistance programs. I am wondering if you do have sufficient
    funds to maintain current level of services this year, and if
    not, how many positions are you going to have to reduce by the
    end of this fiscal year if you do not have sufficient funds?
        Mr. Reed. Okay. Where we have a big shortfall is in our
    ability to service what we believe now will be the program
    level for the Conservation Reserve Program, and that is about
    $35 million shortfall. And we believe that on or about the 30th
    or so of July, we will have exhausted the resources that have
    been made available to service that program. We have pretty
    much eliminated our temporary employment. We have cut back on
    just about every so-called nonfixed item of expense to try and
    ensure that we can maintain our permanent full-time work force.
    And we will be able to do that, but we won't be able, based on
    what we think is going to happen with the Conservation Reserve
    Program, to service that program in August and September.

                     Supplemental for Technical Assistance

        Miss Kaptur. Mr. Reed, I don't know this, but has the
    administration included that additional need in its
    supplemental request to the Congress?
        Mr. Reed. I will have to ask Mr. Lyons or Mr. Dewhurst to
    respond to that.
        Mr. Lyons. I think that is one for you, Steve.
        Mr. Dewhurst. Well the answer is not yet. We are working
    with OMB. We are looking at the fiscal 2000 issue. The
    administration's proposal for 2001 would raise this legislative
    cap so that there is sufficient money beginning in 2001 to make
    the servicing available. But the issue this year we are still
    looking at with our folks at OMB.

                                 Section 11 Cap

        Miss Kaptur. What is the reason for the shortfall?
    Underfunding last year, or just something that was
    unanticipated?
        Mr. Reed. A combination of both. The reason for the
    shortfall is basically the section 11 cap, the CCC section 11
    cap, which provides for only x amount of dollars to be spent,
    and there is not enough money within that cap to provide for
    the reimbursement for the technical services of NRCS to service
    CCC programs.
        Miss Kaptur. Does that have any relationship to the fact
    that we quadrupled shipments through the CCC last year
    internationally, and some of those funds were drawn for other
    purposes?
        Mr. Reed. I don't believe so, but, again, I would have to
    defer to Mr. Dewhurst.

                  Technical Assistance for Farm Bill Programs

        Mr. Dewhurst. Not directly. When the Congress enacted the
    farm bill in 1996, the Congress also authorized a series of
    conservation programs. The Congress also in the farm bill
    limited the amount of money the Commodity Credit Corporation
    can pay to other Federal agencies for services to the 1995
    level.
        The conservation programs that were created in the 1996
    farm bill were not in existence in 1995, so there has never
    been sufficient money within this legislative cap to provide
    sufficient funds to the NRCS to service the programs. We have
    sort of struggled along the last 3 or 4 years. We found a few
    dollars here and there that were legally available, but,
    frankly, we have sort of exhausted all those resources now. So
    we don't have a lot of places to go unless the law is changed
    and this cap is eliminated or increased.
        Miss Kaptur. Yes, Mr. Lyons.
        Mr. Lyons. Miss Kaptur, I would just say that the section
    11 cap has been a source of debate for quite some time,
    particularly as demand has grown for conservation programs, as
    Steve has alluded to. I would implore you and all the members
    of the subcommittee, who I think understand this issue very
    well, to talk to your colleagues on the authorizing committee
    about this particular issue, because I think the assumptions
    that were made in establishing the section 11 cap don't fit
    today.
        The belief was we should limit the number of bureaucrats we
    hire while we expand programs. It misses the mark in
    understanding that you need conservationists, you need the
    people who could provide the technical assistance to provide
    the additional services that come as those programs and demands
    have grown. And I think we need to correct that misperception.
    This isn't simply about more FTEs, it is about service to your
    constituents, it is about service to the people we serve
    directly. That section 11 cap has become a tremendous problem
    for us to make sure we have the resources we need, not simply
    to grow the size of the agency. That is not the intent, but to
    make sure that we can actually provide adequate and appropriate
    service to the people who need it.

                   Source of Technical Assistance in FY 2001

        Miss Kaptur. I know that I am out of time here. I don't
    expect the authorizing committee is going to move anything this
    year, but I know they are doing hearings. But in talking to
    some of the Members, they don't expect that there is going to
    be any authorizing legislation passed relative to farm
    legislation. So where does that leave us?
        Mr. Lyons. Well, not that I am a proponent of legislating
    on appropriations bills, but there is a place to fix it.
        Miss Kaptur. I will have several additional questions in
    succeeding rounds. Thank you very much.
        Mr. Skeen. Mrs. Emerson.

                Voluntary and Regulatory Rules for Conservation

        Mrs. Emerson. Thank you, Mr. Chairman. I want to welcome
    you all here and state for record that I really appreciate the
    great people that you all have working on the State and on the
    local level, particularly Roger Hanson, who is our State
    conservationist, and Ron Darden, who is one of our district
    conservationists. They and the field staff do a tremendous job,
    and I can't compliment them enough for their hard work.
        Before I get into some specific questions, let me just say
    that I am a little bit confused, because on the one hand, Mr.
    Lyons, you talk about voluntary and incentive-based programs
    that promote best land management practices, a partnership
    effort, and then on the other hand suddenly we have TMDL regs,
    we have animal feeding operation strategies, we have roadless
    initiatives, we have got Forest Service management plans, and
    there is a lot of heavy-handed regulation here. These
    regulations are not voluntary. Consequently I guess I am
    somewhat confused by your statement that the administration
    committed to voluntary programs, because I get the feeling at
    times that there is a misunderstanding on the part of the
    administration that, quite frankly, our farmers know that if
    they don't take care of the land, the land is not going to take
    care of them. And I think that I am a little bit put off by the
    heavy-handedness. I just state that for the record.

                 Regulation of Total Maximum Daily Loads by EPA

        And let me go ahead and ask you, do you really feel like
    your involvement with the TMDL regs represents a partnership
    effort? I mean, these regulations are not voluntary.
        Mr. Lyons. I don't know if you heard my comments earlier
    about a letter that was sent.
        Mrs. Emerson. I did indeed.
        Mr. Lyons. I would submit to you that we are not going to
    get anything done unless we work in partnership with farmers
    and ranchers and that USDA representing the interests of
    agriculture and forestry works with EPA to make sure that
    whatever rules they promulgate make sense, that they achieve
    the goal we all share, which is improving water quality and
    maintaining the productive capacity of the land and the
    capability of producers to farm, to stay in business.
        We are working with EPA to try and address those concerns,
    and I respectfully request that you hold fire until you see
    what comes of that dialogue and what comes out of the rules.
    The rules are not done yet.

              Administration's Position on Voluntary Conservation

        With regard to your comment, though, I know you didn't ask
    me to respond, but I couldn't help but respond to your comment
    about heavy-handedness. You know, I would suggest to you that
    public land issues are certainly different than the private
    land issues, but in none of those instances are we in the
    administration proposing, at least not from the USDA
    standpoint, any new or significant regulations. AFO/CAFO is a
    good example. It is largely a voluntary strategy. Ninety
    percent of all AFOs and CAFOs would not be affected in any
    regulatory way. The discretion exists to deal with those
    remaining 5 percent which EPA would administer. That is not a
    role that USDA would play. Demands that will be placed on NRCS
    and agriculture will come providing additional technical
    assistance and support. We pushed hard to make sure that that
    was the way to do business because we don't think a regulatory
    strategy will work in addressing these issues. We have proof to
    the contrary in terms of what we have succeeded with, as you
    commented in your opening remarks.
        So I don't think there is any inconsistency here. The right
    tool for the right issue. When it comes to conservation issues,
    when it comes to dealing with clean water and private lands, et
    cetera, we need to stick with these voluntary approaches. We
    need to invest in them. We need to help land owners help
    themselves.

                         Regulation and Property Rights

        Mrs. Emerson. I certainly don't think the TMDL is anything
    that is voluntary and does, in fact, deal with private
    property. Speaking of which, have you all done--and I
    understand you were asked this by Senator Lugar last week a
    cost benefit analysis on the TMDL regs. If not, are there plans
    in place for doing that before final regs are issued?
        Mr. Lyons. We are in the process of assessing the workload
    that it would create for USDA doing a cost analysis there.

                        USDA Support for Property Owners

        Mrs. Emerson. How about for the property owners and farmers
    and ranchers?
        Mr. Lyons. The EPA has an obligation in promulgating their
    own rule to assess what the costs are going to be. They have to
    do that in clearance and under SBREFA, as you understand. So we
    are in the process of assessing what we think the costs of
    implementation will be. That is a part of the ongoing dialogue.
    And we have some questions about the adequacy of the analysis
    they did, and we are pushing back hard to try and make sure we
    get the right information.
        Mrs. Emerson. I would appreciate your pushing even harder
    because it remains to be seen that any of their analyses are
    balanced.
        So you can't tell me right now what role you see USDA
    playing in the implementation process of the TMDL regs, or can
    you?
        Mr. Lyons. Well, I can tell you that we don't have a role
    in implementing the regs. The EPA regs, that is EPA
    responsibility. We certainly have a role in dealing with non-
    point source pollution and water quality issues. We will
    continue to play that role aggressively spending upon the
    resources that this committee gives us.
        Mrs. Emerson. But you won't actually be working in EPA in
    making sure that----
        Mr. Lyons. Not at all. Not in any way, shape or form.
        Mrs. Emerson. I have other questions. I will wait for the
    next round.
        Mr. Skeen. Mr. Farr.

                                  Urban Sprawl

        Mr. Farr. Thank you, Mr. Chairman.
        You know, I fly across in country every week from here to
    California, and I am convinced just flying across the United
    States that the American landscape is more in the hands of USDA
    than it is in Interior, and that these programs we are talking
    about are really the key essence of the landscape. As you said,
    it is the mostly in private ownership.
        First of all, I would like to thank you Mr. Sells and Mr.
    Reed for releasing the money and meeting with my constituents
    on this on the Salinas Valley water project. I appreciate your
    leadership on that.

                       Agricultural Issues in California

        Secondly, I would like to tell you that I think that the
    attitude that we have in California is a little bit different
    than Missouri. Land owners in California have 33 million
    people. Urban sprawl is the number one political issue in the
    State. Farmers are getting much more progressive. They are
    realizing it is all about land use.
        I think the frustration I have in looking at all these
    Federal programs is that it is not interrelated with local land
    use. I think you give away too much. I mean, most land owners
    in our area would be willing to give up the land that is
    necessary for habitat management and streambed riparian
    protection without being paid for it as long as the rest of the
    land they could manage without a lot of regulation.

                            Water Quality Protection

        So the couple of things that are going on, we have the Farm
    Bureau and all of the ag interests signed into a program in
    Monterey Bay, which is a huge three-county region, the
    watershed goes into the national marine sanctuary which is one
    Federal policy. So what we are looking at is a water quality
    protection program for the whole watershed. I think this is the
    first time in the United States that it is going to be so
    comprehensive. It is a consortium of 25 government and private
    groups. It will be a partnership to enhance and protect the
    physical, chemical and biological conditions of the
    sanctuaries, the wetlands, into the sanctuary and the adjacent
    watersheds. The project will cover 5,000 square miles of marine
    water and 11 major watersheds covering 7,000 square miles;
    includes the regional monitoring, data sharing, urban and
    agricultural runoff, the marinas, the boating, the wetland, the
    riparian issues, point source pollution. And the focus of the
    program is to effectively integrate the large number of
    existing programs, State, Federal and local, and projects
    related to these issues, and to eliminate the gaps, redundancy,
    and pool resources to address the problem.
        This will all be done by cooperative agreement, which has
    been signed. What I am asking NRCS to do is to help with some
    technical and financial assistance. And I really want you to
    look into this program and help us with this financial
    assistance. Your people on the ground are very keen on it. And
    we can talk more about that.

                                   Easements

        I am trying to figure out all these CSP and conservation
    reserve programs--you indicated that under the Conservation
    Security Program we give annual payments to farmers. And if we
    didn't do it, they would just abandon these conservation
    measures because they don't have the necessary financial
    resources. And the purpose of giving it to them is to reduce
    erosion, to improve wildlife habitat and sustainable soil.
        Why don't we get back more? I mean, why don't we just have
    permanent covenants on that land? You are paying them for it.
    Why don't we buy an easement--rather than just make these
    annual payments? Relating to Mrs. Kaptur's comment, how much of
    this million acres per year that has been converted have we put
    Federal dollars there to try to keep that land in its proper
    natural state, and then the land owner gives up and says, well,
    I am not doing this anymore, we are going to sell it for
    housing.
        We have already put a lot of dough in there to try to do
    the opposite. If, indeed, we are going to have preservation of
    ag land, and it is really complicated in California. You know
    what it is worth, $35,000 an acre. You got to make a living. If
    you buy ag land, you got to still make--payments on it, you got
    to make a killing. We grow things like strawberries and high
    value-added products. But we are in a new era where land owners
    who are serious about being in agriculture realize that they
    are going to have to manage their land properly. They are
    willing to put their own money into it to do it and to stay
    permanently in agriculture.

                          Federal Return for Payments

        I can't understand why we don't as a Federal Government get
    more permanency from the money that we put in and the aid that
    we give them so that when they do, if they do sell it, all the
    stuff that we have tried to do is for naught.
        Mr. Lyons. I will attempt to address that, Mr. Farr. I
    think in part your question reflects the extent to which
    California is different from the rest of the world in that I
    think there is or has been stronger interest in California in
    designing programs that would provide more permanency. But
    those aren't going to fly in Missouri or other parts of the
    world that the folks on the other side of the dais, I think,
    represent.
        When we worked with the Congress in 1996 in putting
    together the farm bill programs, we tried to design programs,
    you know, as the authorizing committee that ultimately put this
    together, that would fit in the different circumstances across
    the landscape. So we do have provisions and programs that
    provide for permanent easements. But, for example, in the WRP
    program, the Wetland Reserve Program, we have provisions that
    wetland owners choose whether they want short-term or permanent
    easements. We have tools that provide for a range of
    circumstances in response to the needs of different land
    owners.
        Mr. Farr. In that short term what happens if they give up
    and they abandon it? What have we gotten out of it?
        Mr. Lyons. Well, we have gotten some conservation over the
    periods of time. Hopefully, through their experience, land
    owners are going to stick with it. We haven't had enough
    experience under this incremental easement program to know what
    the permanency will be. But the critical thing--
        Mr. Farr. Do they have to pay back anything?

                            conservation incentives

        Mr. Lyons. They would if they were to break the terms of
    the contract during its tenure, but not after the fact, as I
    recall.
        I think an important point is, you know, in 1985, 1990, the
    original concepts for CRP, et cetera, were designed with a
    philosophy that what we got back was as producers participated
    in farm programs, they had to put conservation programs in
    place. They couldn't sod-bust, they couldn't swamp-bust. And
    they had to have conservation plans under conservation
    compliance in place. So what we, quote, got back was a
    commitment to conservation where term producers got farm
    program payments.
        Now, the question is in 2002 if farm programs does appear,
    what are we going to have? So we are redesigning the system.
    The conservation security payments you referenced are a
    proposal to come up with a different system of investing in
    conservation, providing incentives, not threatening land
    owners, but saying we are going to compensate you for those
    commodities you can't capture in the marketplace; for the work
    you do to generate clean water, we are going to pay you for
    that. It is a public good. For the work you do to improve
    wildlife habitat which you can't capture unless you lease hunt
    your farm, we are going to pay you for that.
        Mr. Farr. Don't you have to extract some permanency? Here
    is what happens is the better you take care of the land, in the
    long run the more valuable that land is going to be. So you
    have had the government essentially assist you in upgrading the
    quality of your land. Then you go and sell it for development,
    and you get a big price because the land is in better
    condition, and it is more attractive for building homes on, and
    the government gets nothing back.
        I mean, let's take out an equity interest so when the
    development goes, at least we can share in the value of the
    development. I think we need to use more business sense here.
        Mr. Lyons. Some of our programs provide for permanent
    easements. Farmland protection would. Forest legacy, which is
    actually a forest program, would. That is a philosophical
    debate that you all have to have, because ultimately you will
    write the laws that we have to implement in that context. That
    is how we came out in 1996.
        Mr. Skeen. Mr. Bonilla.

                    USDA's Position on EPA Clean water Rule

        Mr. Bonilla. Thank you, Mr. Chairman.
        Mr. Lyons, I will be very frank this morning because I
    think I speak for a lot of farmers and ranchers out there. We
    were so proud of the USDA's initial letter on the TMDL
    situation that came out of the EPA initially, that some of us
    in a bipartisan way, and including the Ranking Members on the
    authorizing committee as well, and the Chairman and key members
    of this subcommittee, again bipartisan, said, in essence, thank
    you.
        I want to submit that letter for the record, if I could,
    Chairman.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Bonilla. We wrote to Ms. Browner saying thank you to
    USDA for standing up for the farmers and ranchers of this
    country and, quite frankly, standing up to some of the radical,
    extreme efforts by the EPA on TMDL. And we were disappointed
    that in the end you guys wimped out on the farmers and
    ranchers.
        You are the U.S. Department of Agriculture. You don't have
    to carry the water for the EPA. You need to stand up for this
    Nation's agricultural industry. That is, after all, what this
    agency was set up for in the beginning, to look after those
    interests, and not some other agenda that might be out there
    that, quite frankly, is in contrast and adverse to what a lot
    of our farmers and ranchers are trying to accomplish out there.
        At a recent hearing on TMDL before the Transportation
    Committee, you stated you were trying to work out concerns you
    have over the proposed regulations. I would just appreciate
    it--you don't have to get into it now if you don't want because
    this subject has been brought up a couple of times already--if
    you provide the committee with a list of those concerns and how
    USDA would like to see them resolved and the progress made on
    each one, because if the USDA does not take a strong stand in
    this area, the EPA is going to roll anything, any concerns that
    you might have.
        [The information follows:]

                            Total Maximum Daily Load

        The main concerns of USDA are as follows. First, we want
    the EPA rules to show support for and recognition of the key
    role USDA conservation programs play in achieving water quality
    improvements. The USDA has forged many significant partnerships
    implementing Best Management Practices (BMPs). Farmers put in
    streamside buffers and idle environmentally sensitive lands to
    improve water quality. The Wetlands Reserve Program, the
    Environmental Quality Incentive Program (EQIP) and one of its
    predecessors the Water Quality Incentive Program have benefited
    thousands of farmers and ranchers and helped them to improve
    the productivity of their operations through improved
    conservation. The Conservation Reserve Enhancement Program
    (CREP) is playing an important role in protecting the waters of
    the Chesapeake Bay, salmon habitat in Oregon and Washington,
    and drinking water supplies for New York City. We want these
    voluntary partnerships to be given due credit. These on-the-
    ground actions need to be includes in what EPA considers
    ``reasonable assurance'' a Total Maximum Daily Load (TMDL) will
    be implemented. Second, we are discussing with EPA when and if
    silvicultural activities should be subject to National
    Pollutant Discharge Elimination System (NPDES) storm water
    permits. Implementation of BMPs can often alleviate water
    quality problems and EPA should utilize BMPs to the greatest
    extent possible. Third, we want the best-available science to
    be used by the EPA, States, and Tribes in setting and
    implementing TMDLs. Theoretical models sometimes have high
    levels of uncertainty and there are often gaps in the data
    regarding what is natural background pollution versus what is
    caused by human actions. When data or analytical techniques are
    lacking, that uncertainty needs to be recognized by the TMDL.
    Fourth, we want to work with EPA in developing comprehensive
    cost projections of the proposed TMDL rule. Finally, we want to
    establish good communication between USDA and the EPA, as well
    as our state and local partners. USDA has formed an interagency
    group with EPA to work through our concerns. That group has
    been meeting regulatory and while progress is being made, this
    is a technical area involving a great deal of complexity. The
    work of the interagency group is ongoing so it is difficult to
    provide specific conclusions at this time about the progress we
    have achieved.

            Representing Agriculture's Position on Clean Water Rules

        Mr. Bonilla. So I hope that the concerns of farmers and
    ranchers, agriculture, are addressed in this area. So if you
    would like to comment briefly, fine; otherwise I would ask in
    essence to submit this for the record.
        Mr. Lyons. I appreciate the opportunity to comment, Mr.
    Bonilla. I would assure you that we are not wimping out, to use
    your term.
        Mr. Bonilla. You can see how a lot of people perceive that.
        Mr. Lyons. I understand that. But what I have to worry
    about in the end is where we end up.
        Mr. Bonilla. For agriculture.
        Mr. Lyons. Where we end up for agriculture, and the Nation
    as a whole.
        Mr. Bonilla. No, agriculture, U.S. Department of
    Agriculture.
        Mr. Lyons. I understand that, Mr. Bonilla. I understand
    that perfectly well. I know what I need to do in my job to make
    sure that Agriculture's interests are represented, and we do a
    good job of ensuring we address clean water in a way that
    represents, reflects and is responsive to Agriculture's needs.
    I understand that perfectly well. But the way that letter was
    drafted unfortunately addressed legal issues that I don't have
    the authority nor the expertise to address, but a lot of legal
    opinions with whether or not EPA has the legal authority to do
    what they are doing. I will not engage----
        Mr. Bonilla. It was your letter.
        Mr. Lyons. Yeah, it was my letter. It had my signature
    block on it. I made that point before, Mr. Bonilla. I don't
    back down from that in any way, shape or form.
        Mr. Bonilla. It sounds like you are.
        Mr. Lyons. I am not. I am trying to make this clear, and if
    you let me finish, I will.
        In addition, I don't think the way you fix a problem is
    getting in the face of the person that you have to work with to
    resolve this. And so we have taken a little different tack on
    this. We made our point, and now we are trying to work this
    out. The letter is great legal fodder for the litigation that
    may follow whatever rulemaking ends up with, but that was not
    my goal. My goal was to make clear we have some serious
    problems with the rule, how it has been drafted. We have worked
    as partners before. We need to get back to the table and work
    as partners again. That was my intent. I can assure you that is
    my goal.
        We would be glad to give you a list of the issues that we
    are attempting to address here as well as describe for you the
    nature of the dialogue and what we hope that accomplishes.

                   Urban Resources Partnership Program Audit

        Mr. Bonilla. I appreciate that.
        I would like to move to a different area. Last year Mr.
    Reed testified that the NRCS was being spread too thin. He
    outlined some concerns he has today as well that he has dealt
    with recently. Fleet maintenance is one thing you addressed.
    This question relates directly to a budgeting and prioritizing
    of funds. Once again, the budget this year is full of new
    initiatives and programs; however, at this time I would like to
    focus on a program that was started in fiscal year 1994 by Mr.
    Lyons. It was not authorized by Congress. The Urban Resources
    Partnership Program.
        Recently the OIG audit identified approximately $21 million
    in misappropriated funds, funds that could have been used for
    fleet maintenance and personnel issues and office equipment and
    things that Mr. Reed was talking about earlier. This includes
    money spent to pay for Sierra Club outings, wall murals, and
    money used to fund civil lawsuits. But even more disturbing is
    your reluctance to accept the responsibility for programs
    placed under your leadership and created by you.
        Under what authority did you expend these funds, and could
    you please provide the committee a detailed list for each of
    the fiscal years the program has been run by your Department,
    the exact money spent for each fiscal year, and from what
    accounts the money was taken?
        Mr. Lyons. Be glad to provide that to you Mr. Bonilla.
        [The information follows:]

                   Urban Resources Partnership Authorization

        The authorizing legislation used by Natural Resources
    Conservation Services to support the Urban Resources
    Partnership is the Soil Conservation and Domestic Allotment
    Act, Public Law 74-46, 49 Stat. 163, 16 U.S.C. 590a-f.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                          USDA's Response to URP Audit

        Mr. Lyons. If I could have 2 minutes to respond, I
    appreciate it.
        Mr. Bonilla. I am out of time, but I am sure the Chairman
    will permit.
        Mr. Skeen. Go ahead.
        Mr. Lyons. Let me state at the outset that I have strong
    exception to Mr. Viadero's study and review. What Mr. Viadero
    didn't have the benefit of, or at least didn't communicate to
    the committee, I don't believe, was a response memo that I
    prepared to his study. I would like to submit copies of that
    for the record, Mr. Chairman, if I could.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                            Authority to Conduct URP

        Mr. Lyons. This memo, I think, highlights some important
    problems with Mr. Viadero's analysis. Basically his analysis is
    focused on a presumption that NRCS does not have the authority
    to do what we sought to do, but as is pointed out in a
    subsequent OGC review that I requested, a review of their
    initial position, OGC pointed out a very important oversight in
    their initial analysis which was the basis for Roger's
    commentary. The OGC stated, quote, our prior opinion on this
    subject did not take into consideration the conservation
    operations appropriations language and its relevance for
    understanding the breadth of the 1935 act. And it goes on to
    explain that the Secretary's authority is quite broad.
        In addition, I would point out that we have had extensive
    conversations regarding this program with the committee in the
    past, and the Chairman and I did have a chance to visit on this
    yesterday. I appreciated that.
        Mr. Bonilla. Your response, by the way, I am told, and I
    have a copy here, was included in the OIG's report.
        Mr. Lyons. No, it was it was not included in the initial
    report, I can tell you that. In addition----
        Mr. Bonilla. I have a copy here.
        Mr. Lyons. What is the date of my memorandum? I don't have
    any follow-up report to Mr. Viadero. Well, then, I encourage
    you to read that, because I think it provides important
    information that perhaps Roger has not looked at closely.
        In addition, I would point out in dialogue with the
    committee we discussed this issue, provided additional
    information for the committee with regard to funding for this
    program. And I would also like to submit for the record a
    letter that Chairman Skeen had sent to Mr. Glickman regarding
    this issue in which he pointed out at least in 1998 that he
    didn't have any objection to the allocation of funds related to
    this program. So we have been open about the dialogue.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        [Clerk's note.--The subsequent House report 105-588
    accompanying the fiscal year 1999 appropriations act continued
    language that funds were not available for the American
    Heritage Rivers Initiative, the Urban Resources Partnership and
    the Northwest Salmon Recovery Initiative until justification
    and reprogramming requests were approved.]
        Mr. Bonilla. Are you pleased with the way the money was
    distributed to the groups that I mentioned briefly?
        Mr. Lyons. Let me suggest two things, if I could,
    Congressman. I think the one thing I would point out is that
    you know we designed this program to try and address the large
    portion of the American population that doesn't understand
    conservation, doesn't understand agriculture, has no idea where
    their food comes from, and needs to learn a little bit more
    about their connections to the land. We are serving
    disadvantaged communities, we are serving African communities,
    Latino communities, Asian Pacific communities in ways in which
    they have never gotten assistance.
        We designed the program, though, so there would be no
    overhead. This is one of those programs where all the money
    went to the ground. We designed the program so that the
    guidance would come from local steering committees of agency
    officials. It was multiagency. We took the NRCS money and we
    multiplied the benefit in working with Forest Service, with the
    Fish and Wildlife Service, the Park Service, with HUD and other
    entities.
        Mr. Bonilla. Thank you for extending my time.
        I just have a final comment. I think some of these
    expenditures are way over the line, but we can get into this at
    another time. Thank you, Mr. Lyons.
        Mr. Lyons. I would be glad to visit with you at any time
    about that, Mr. Bonilla.

                  additional local level technical assistance

        Mr. Skeen. Mr. Boyd.
        Mr. Boyd. Thank you, Mr. Chairman. Secretary Lyons, Mr.
    Reed and others, thank you for coming. I know you have a tough
    job and certainly want you, Secretary Lyons, to take a deep
    breath.
        Mr. Lyons. It is getting me excited now.
        Mr. Boyd. I don't know really where to start, Secretary
    Lyons. I know you probably have heard me say this before, Mr.
    Reed, when I was growing up as a young man, the Soil
    Conservation Service was a technical assistance agency which
    helped the farmers through some really severe erosion problems
    in this country. And Congress put in place this mechanism by
    which we could continue to conserve our soil, and Soil
    Conservation Service is an integral part of that.
        I remember growing up as a young man that we had a local
    director, that stayed there for 30 years and we considered him
    as a part of our family. We loved him, and he helped us do all
    kinds of things to conserve our soil and make sure that erosion
    was minimized.
        I think the general consensus among my constituents now who
    are in the farming business, is that NRCS, has transformed
    itself over the last few years from a technical assistance
    agency to a compliance enforcement agency. And I know you have
    probably heard me say that before. I have had this discussion
    with Mr. Glasgow at the State office. The State people have a
    tough job. I am proud of those folks. I work with them
    regularly. Your county folks, they really do have a tough job,
    also. My questions are going to be along those lines because I
    really would like to see NRCS be a technical assistance agency
    again.
        You talk about that in your budget. You have asked for a
    considerable amount of additional money to provide technical
    assistance or beef up your technical assistance issues. And I
    simply would ask you if you did receive the $28 million in
    funding increase that you requested for field-based technical
    assistance, what improvements would my constituents see as
    customers to your local district conservation office?
        Mr. Reed. Thank you, Mr. Boyd. What you would see in your
    congressional district would be a reflection of what that--
    whatever percentage of that $28 million would be as it relates
    to what has been identified in Florida as the needs on the
    ground for technical assistance to provide to land owners. An
    estimate of what that could be I could provide for you later
    for the record, but every penny of that would be targeted for
    the local field office operations.
        [The information follows:]

                          Florida Staff Year Increase

        If the Natural Resources Conservation Service received an
    additional $28 million in technical assistance, I would ensure
    the entire amount would be allocated to our field offices, with
    nothing going to our National Headquarters offices. It is
    difficult to determine Florida's exact share of the $28 million
    without knowing which resource concerns the additonal funding
    will address. However, by comparing the workload analysis
    staffing need for Florida and the total national staffing need,
    we can determine Florida would get six to eight new field
    employees.

                  improving the focus of technical assistance

        Mr. Boyd. Well, I just want to say that I think the problem
    is just a little bit larger than throwing a few bucks at it. I
    think what happened is the focus of Agriculture has changed on
    the technical assistance side. It is not the fault of the
    people on the ground, because I don't think some of them are
    properly trained in technical assistance or have the
    background.
        We have had this discussion before that you are having
    trouble hiring people at that level with the expertise to know
    how to solve some of these problems. I think the focus of the
    agency has shifted to compliance and some other conservation
    issues on a nationwide basis. But I wanted to make that point,
    and I appreciate your answer.

                  forest service access and road construction

        Mr. Secretary, I want to go to another issue. Congress
    clearly states its policy with regard to access and road
    construction in United States Code 16, section 532, and I
    quote, ``The Congress hereby finds and declares that the
    construction and maintenance of an adequate system of roads and
    trails within and near the National Forest and other lands
    administered by the Forest Service is essential if increasing
    demands for timber, recreation and other uses of such lands are
    to be met, and that such a system is essential to enable the
    Secretary to provide for intensive use, protection, development
    and management of these lands under the principles of multiple
    use and sustained yields of products and services.''.
        I don't know how much clearer the congressional policy for
    this issue, road maintenance in our National Forest, could be.
    How is it that the Forest Service can justify its dismissal of
    such plainly stated congressional will?
        Mr. Lyons. We haven't, sir. I don't think we are in
    disagreement with you at all. Could you point to where we have?
        Mr. Boyd. Well, only that I go to your budget summary,
    budget request, and you are asking for $13 million additional
    money for road maintenance, but on the other, the road
    construction side, you have bypassed any additional funding
    request, and that temporary suspension is in effect. And I
    quote from this: ``Temporary suspension is in effect until the
    development of a revised transportation policy and new
    analytical tools or 18 months, whichever is sooner. A proposed
    transportation policy rule is expected in 2000.''
        Mr. Lyons. So you are talking about the temporary road
    construction to roadless areas, Mr. Boyd. Just to clarify, let
    me explain why we did so, and, of course, this relates to why
    we are studying the roadless area issue. I don't want to take
    the agriculture subcommittee's time to too large a degree, but
    let me explain.
        As I think you are aware, we have over 300,000 miles of
    roads in the National Forest System. We have 55 percent of all
    roads on all public lands. That includes Park Service, Fish and
    Wildlife Service, Bureau of Land Management, et cetera. We have
    such a huge system, we can't maintain it. We have an $8.4
    billion backlog in road maintenance on the National Forest.
    Every year we only get 20 percent of the opportunities we need
    to maintain a small percentage of the system, the system, the
    major part of the system that is used. We can't keep up, so the
    backlog grows every year.
        I think you would agree that the best way to get out of a
    hole is to, first of all, stop digging. And so we elected to
    place a moratorium on building new roads until we could get a
    handle on how to maintain the critical system that exists, just
    as the law directed us to maintain the system which is
    essential as a part of the infrastructure of rural America.
    That is what we are attempting to do.
        Just this morning Secretary Glickman is announcing a
    proposed policy for how we are going to manage and maintain
    that existing road system. As you are well aware, this past
    fall the President directed us to look at issues associated
    with the management and use of roadless areas as well.
        We are trying to get a handle on this huge problem. I agree
    with you completely. I want to be clear, we did get additional
    road maintenance funds, which I dearly wanted. I wanted
    additional money for construction and reconstruction not
    necessarily in roadless areas, but to maintain that system
    again and to fix problems that exist with the system as it is
    currently laid out. OMB simply did not provide us the funds.
    That is evidence to the fact in, my mind, that we have to fix
    this roadless issue.
        As you recall, just 3 or 4 years ago, the Forest Service
    almost lost its entire road budget on the floor of the House.
    We missed by one vote. I don't know how the members on this
    committee voted on this issue. I think you are on different
    sides of this issue. Mr. Hinchey is very familiar with this
    from their experiences on the Interior appropriations
    committee. That was a clear signal to me that we had to get on
    this issue, battle over road construction funding for the--to
    the roadless areas. That is why we are asking the American
    public to tell us how they want us to use their roadless area
    in the future. At the same time we are trying to get the
    resources to manage the existing infrastructure.
        Mr. Boyd. Thank you, Mr. Chairman. I see my time is up. I
    know we will have another round.
        Mr. Skeen. Mr. Latham.

              usda's position on epa proposed water quality rules

        Mr. Latham. Thank you, Mr. Chairman, and welcome. I guess
    I--on the proposed rules from EPA, I really want to make it
    very clear I have to go back and talk to people at home and let
    them know what your position is, for sure, and the real concern
    there is waffling on the your opposition. Could you state
    clearly, you know, what is your position? Do you oppose the
    proposed regulations? And also I would like your opinion
    whether or not you believe, and the position of the Department,
    is that the proposal is not legitimate or does not--it
    conflicts with current law.
        Mr. Lyons. Let me try and address that, Mr. Latham. I think
    the best way to do this is I will send you copies of my
    testimony and Secretary Glickman's testimony recently before
    the relevant committees and subcommittees. As Secretary
    Glickman stated, the letter does not represent official USDA
    policy. At the same time, we have grave concerns with a number
    of elements, provisions of the proposals put forward by EPA. We
    were never sitting down face to face with them, representing
    Agriculture's interests, representing a common concern for
    addressing the water quality concerns of a Nation to the extent
    that pollution remains a concern and seeking to fix those
    issues.
        On the matter of legal authority, we will not express a
    position on legal authority, because EPA has responsibility for
    implementing their legal authorities. We don't ask them to
    comment on ours, and it is not appropriate for us to comment on
    theirs.

                             proposed crp expansion

        Mr. Latham. In your budget proposal, you want to go to 40
    million acres in the CRP program. First of all, how many acres
    are currently in CRP? Authorized 36.4 million; how many are
    actually in?
        Mr. Lyons. We will give you the exact number in one second.
        Miss Kaptur. Would the gentleman yield on that point? I
    wanted to ask from the testimony that has been submitted, it
    says 40 million acres. How much is that? Is that Massachusetts?
    Is that a corner of Ohio? How much is 40 million acres? It
    would be helpful to express it in terms of something the rest
    of the country can understand.
        Mr. Reed. Forty million acres would be about four-tenths
    the size of California.
        Miss Kaptur. Oh, all right. Well that is better then.
        Mr. Latham. It is all in Mr. Farr's district on a permanent
    basis.
        Mr. Lyons. We are at about 31.5 million acres, I believe.
        Mr. Latham. And I guess begging the question here, why do
    you want to go to 40 million if you are not using the acres you
    currently have authority for?
        Mr. Lyons. I think there are two answers for that. One is
    we have heard overwhelmingly from producers and from others who
    see value in the CRP that they want to have the option and the
    opportunity to enroll. They like that. Number two is we think
    that offers us a tremendous opportunity to deal with water
    quality concerns through continued sign-up of CRP acres in
    riparian buffers. We want to have the flexibility to address
    what----

                          potential for crp enrollment

        Mr. Latham. I could take care of half a million of those
    acres tomorrow in Iowa. But the acres are sitting there with
    the authority to use them. We have producers who would love--
    land that should never have come out of CRP, but because of the
    way it was administered previously were not allowed to be put
    back in. I can show you a lot of very highly erodible land in
    my district that could not meet the standards, and it is very
    frustrating knowing that there is that many acres sitting there
    unused, 5 million acres that is authorized and you are not
    using it. And now--I mean, I want a bill to go to 45 million
    acres.
        Mr. Lyons. Okay.
        Mr. Latham. Yeah, fine, except if you are not going to use
    it, what is the use?
        Mr. Lyons. I agree with you, Congressman, that we have had
    some problems in the administration in the past. We are trying
    it. Actually NRCS doesn't have the management responsibility.
    We don't administer CRP. We work in concert with FSA. But we
    know that we can do a better job of letting land owners know of
    this option of enrollment of lands in the riparian buffer
    initiative. We are making progress in that regard. I know
    Governor Vilsack has launched an initiative to deal with water
    quality in Iowa. We think CRP could be a tool. So that is why
    we are trying to provide more flexibility.
        Mr. Latham. I guess my time is up, Mr. Chairman.
        Mr. Skeen. Mr. Hinchey.

                           excessive cropland erosion

        Mr. Hinchey. Thank you, Mr. Chairman.
        Mr. Lyons, thank you for your testimony. I am sorry I was
    late, but we have subcommittees meeting at the same time in
    this building, so it is, as you know, impossible to be two
    places at the same time. But I am glad I was here for some part
    of your presentation and to have the opportunity to ask you
    some questions.
        I am fascinated by the chart you have provided us here, the
    map entitled Excessive Erosion on Crop Land, dated 1997. Is
    that something that you have given us?
        Mr. Lyons. Yes.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                             preserving arable land

        Mr. Hinchey. It is really very impressive, and truly
    worrisome because we continue to lose millions and millions of
    acreage of arable land in the agricultural heartland of the
    country. This information shows that we have an awful lot of
    work to do if we are going to reverse that trend, or at least
    stop it at some point and preserve the arable land that we
    have. So this is something that we need to pay more attention
    to than we have in the past and even than we are paying at the
    moment.

                         conservation security program

        With regard to the budget, your request for $600 million
    for a new Conservation Security Program looks very, very good.
    I am speaking from a parochial point of view because I am quite
    secure in the statement that this kind of program is very good
    for the farmers who live in New York State and the Northeast--I
    would guess Pennsylvania and other parts of the Northeast,
    probably the Midwest, and I certainly hope it is true of New
    Mexico as well, which I suspect it is.
        Mr. Skeen. Anything is possible.
        Mr. Lyons. You could be assured New Mexico is a part of it.
        Mr. Hinchey. I believe it is a program that looks very good
    from the point of view of farmers in New York. So I am looking
    forward to seeing more programs which work directly with the
    farmers to curb erosion and protect water supplies from
    pesticide and other kinds of dangerous runoff. So I hope that
    you are very successful in that movement.

                              farmland protection

        You also proposed a program for farmland protection which I
    think is very important. You are asking for $65 million to
    reauthorize this program, which seems to me like a very small
    amount of money to do the job; nevertheless, it is something
    that must be done. So I just congratulate you on having that in
    there.

                   increase conservation technical assistance

        You have asked for an $86 million increase for conservation
    technical assistance, which is also, I think, something that is
    very important to farmers and very important to the communities
    in which farmers operate.
        The trouble that I see, frankly, in the budget is not in
    the programs. I think these programs are very, very good. What
    I have found in my experience working with your staff in New
    York is that the programs are good, but you don't have the
    people to carry them out adequately. NRCS, for example, lost 22
    positions during the past few years in New York State. And we
    understand that at least 20 full-time positions are necessary
    to satisfy the current demand for technical assistance, not to
    mention any increase in demand. So the programs are good, but
    they are not going to be effective unless we have the people on
    the ground to implement them.
        I know this is all part of a plan to reinvent government,
    which is good in its concept and good also in its
    implementation up to a point. But I fear that in some areas we
    may have gone too far. And I suppose that I would pause now to
    just hear your comments on that.
        Mr. Lyons. You won't hear me disagreeing, Congressman, on
    that subject. We have tried to pare back and cut back, but I
    think we have found that we have hurt ourselves in the impact
    it has had on our delivery system. And you mentioned ceilings
    and positions in New York, those are in reference to the
    erosion chart. You will see that erosion is also excessive in
    the Delaware River Basin and in parts of your country as well
    as it affects the New York City watershed, which, as you know,
    we are doing a great deal of work to try address pollutants, to
    try and address water quality at the source. The fiscal year
    2001 request would provide for additional ceilings and
    additional personnel to try and correct that trend and get
    people on the ground who could then put those conservation
    tools to work and working with land owners.
        Mr. Hinchey. Well, I would like it if you could tell me not
    now necessarily, but how much additional funding would be
    required to fill key positions in the States across the
    country, because this kind of activity is very important from
    the point of view of the farmers.
        You mentioned the New York City watershed. The difficulties
    that we are experiencing in New York are going to be
    experienced by a lot of other places across the country as
    population density increases in those other areas. It is
    important from the point of view of agriculture to keep the
    land in place, prevent it from eroding and running off, and
    particularly carrying with it the agricultural inputs that are
    necessary in many areas to grow productive crops. At the same
    time when you prevent that runoff, you are preventing the
    deterioration of important water supplies and watersheds.
        In the case of New York you have a watershed that provides
    water for about 10 million people. With the water supply coming
    from an agricultural area, there is a real danger that the
    runoff from the agricultural area is going to pollute the water
    supply for 10 million people, probably in the future 15 million
    people. So it is a real concern.
        So I applaud you in some of the initiatives that you are
    taking, but I know from experience that these programs are not
    going to work unless we have people to operate them.
        My time has expired, but I----
        Mr. Reed. Mr. Hinchey, I would like to respond to that. In
    doing so, I think I will also respond to a question Mr. Skeen
    asked earlier as well as a comment Mr. Boyd made in trying to
    be responsive to one of the directions we received from this
    committee, and that is to develop an accountability system so
    that we can provide factual information on the workload and
    what the true needs are. We are to a point where we have some
    pretty good data on that. I think we can provide for you real
    good information about what we actually need at a minimum level
    in order to maintain this great conservation infrastructure
    that we have throughout the countryside, the Nation, in
    partnership with conservation districts and State conservation
    agencies to have people, like Mr. Boyd mentioned earlier, at
    the county level working with the farmers and ranchers across
    America.
        Mr. Hinchey. I appreciate that.
        Thank you, Mr. Chairman.
        Mr. Skeen. Miss Kaptur.

        resources and policy to address farm-suburban-urban conservation

        Miss Kaptur. Thank you, Mr. Chairman.
        I was just looking at what your FTE level is, trying to get
    the numbers straight in my mind as to what is additionally
    needed this year. We talked about the $35 million shortfall and
    how many persons that translates into for fiscal year 2000.
    Perhaps you could find that information while I ask my next
    question.
        I was very impressed, Mr. Lyons, with your comments about
    America being in the second century of conservation. And
    thinking about our ecosystem, we know that the ecosystem
    doesn't stop at the farm's edge. In fact, many times
    agriculture itself interrupts the natural ecosystem that has
    produced the bounty of the natural landscape in this country. I
    will share some experiences I have had in Ohio with
    constituents and others. And I guess my fundamental question to
    you is in the way these programs operate. Where do you have
    good examples of where USDA works at the local level in trying
    to implement conservation programs that go beyond the farm's
    edge?
        That is really the basic question, but, for example, I was
    going through an area in our community which is just
    incredible. They call it an oak-hickory-beach system--it is a
    B-E-A-C-H, not beech tree--but east coast beach system. When
    the glaciers withdrew, they left this unusual system that
    really shouldn't exist in our part of the country where we have
    oak forests and we have a lot of sand and many park systems,
    many wetlands that may not necessarily be on agricultural land.
    And one of the questions I was asked by one of the local people
    working for the Nature Conservancy is why are your regulations
    so narrow? You don't allow wetlands to be designated on private
    property if it isn't farmed. So we have this really holey
    system where maybe the farmers protect a wetland and get a
    payment, but then you have got private property next door. Then
    you have got the metro parks next door to that. Then you have
    Nature Conservancy. It is very interesting to take a look at
    that.
        And somehow our Federal programs are rather restrictive.
    They don't necessarily allow a community to have an umbrella
    organization that naturally pulls all these interests together
    and does what is best in terms of restoring the ecosystem.
        In the urban context, you, as a department, developed the
    Backyard Conservation Program, which interested me because
    though I represent many farmers, not too many ranchers, I live
    in the urban area myself. And, of course, the urban area is a
    huge impediment to the ecosystem functioning, and you have to
    restore a lot of plants and water systems that have been
    disrupted by the development of this past century. We have
    major highways come through the most productive land in Ohio,
    yet the USDA presence in the region doesn't necessarily work
    with the Federal and State highway people to find a way to use
    the hundreds of millions of dollars that are going to come in
    to deal with traffic to also begin looking at easements and how
    one purchases easements or limited access along that route in
    order to protect agricultural interests.
        And so what I find at the local level, we have all these
    high, lofty goals at the Federal level, and they are worthy
    ones, but at the local level the mechanisms for people to even
    use these programs are so very weak. And Ohio didn't apply for
    a dime of farmland protection money. I am embarrassed for my
    State. They all of a sudden discovered maybe it is something
    important. But if you were to poll in our State, just like Sam
    was talking about in the Salinas Valley area, there is no more
    important issue in rural Ohio than sprawl, because we have more
    urban areas than any other State in the country. So we are
    pressed at every single corner and place in our State, but
    something isn't happening at the local level.

                     conservation for the entire landscape

        So could you discuss a bit how perhaps you have discovered
    around the country places where some of these disparate
    interests can be pulled together in the interests of the
    ecosystem in a more holistic manner?
        Mr. Lyons. I would be glad to, Miss Kaptur. I suggest to
    you in the packet of information left for you last night--and,
    again, we will make sure it is available to all the members of
    the subcommittee--some examples of success stories in every
    State in terms of our conservation efforts.
        I want to address the rural-suburban-urban connections and
    systems. As you know, and we have discussed before, you know,
    these systems know no boundaries. Watersheds may start in a
    rural area, but they run right down to the mouth of the river,
    oftentimes through metropolitan areas.
        Miss Kaptur. May I say that in our community I have been
    exceedingly frustrated because we are the recipient from
    watersheds in Michigan and Indiana, and we are sitting in the
    bowl of that, but the USDA says to us, well, we only deal with
    watersheds in rural areas. Even though the urban area is
    completely flooded because of what is happening with the
    watershed in the rural region, there is no connection. And so
    do you know the solution in our community? Our mayor of the
    largest city is saying the answer to runoff, in Toledo, Ohio,
    we are going to tax every urban home owner on the basis of how
    much square footage is on their roof and the asphalt on their
    driveway. That is the answer to runoff in our area, which is
    not the answer. But what I am saying, there is discretion at
    the local level.

                    working together on conservation issues

        Mr. Lyons. Well, we are trying to build those connections.
    I don't want to belabor the discussion on urban programs, but
    that is one place where we can make a difference. We do a lot
    of work in urban-suburban communities in trying to build
    conservation connections and show that we can work throughout
    that entire landscape. Part of that is educating communities to
    the role they can play, while addressing the issues of
    livability and sprawl; is to make where people live a pleasant
    place to live, and protecting open space, reducing erosion,
    restoring vegetation, and at the same time using tools like
    farmland protection to try and keep those open spaces outside
    the city limits as they are. So we are trying to build those
    connections.
        Our investment in urban areas is less than 1 percent of our
    total budget, yet--of course, 80 percent of all Americans live
    in those environments. I think there is a philosophical
    difference that exists in the Congress on what role we should
    play there.
        I admit to my bias. I grew up in urban New Jersey not far
    from Mr. Hinchey's district. You know, I went out in the
    Catskills and the Adirondacks into rural areas to play. That is
    why I developed my love for nature.
        I think it is unfortunate that the residents in urban
    environments can't contribute to protecting their environment,
    their waters, and have a greater appreciation for the
    connections to those rural landscapes.
        Miss Kaptur. I want to say the way in which one organizes
    to deal with this at the local level is exceedingly complex,
    and many times the Federal programs don't create the incentive
    for people to work together beyond the boundaries of the farm's
    edge. You sent us this picture which reminds me of McQueen's
    Orchards in Lucas County, probably our largest orchard. And 2
    years ago the farmer and his family who helped develop this
    incredible set of orchards said, Marcy, come with me. We walked
    across his back lands. What is coming at him is what is on
    this, and he said I am going to be overwhelmed. I want to
    remain in farming. How am I going to do that here? There is
    nobody to help him.
        So I was very interested in the language in your submittal,
    producers in conservation buffers, trying to help producers in
    some way with buffers around the edge. I kept thinking, well,
    maybe that is an initiative that might help a farmer like this.
    Thank you.
        Mr. Skeen. Mrs. Emerson.

                           concern about regulations

        Mrs. Emerson. Mr. Lyons, I apologize. I am still a little
    hung up on this volunteer business. Do you think if you asked
    farmers and producers around the country if they believed the
    TMDL and the AFO/CAFO programs are voluntary, do you think they
    would honestly agree with you? Give me your objective opinion
    about that.
        Mr. Lyons. Well, I don't know how to answer that. They have
    the means, they have the opportunity to deal with these issues
    as they would like currently. And I think you know we certainly
    provide them all the tools and the technology to do so. They
    are not by anything we have done required to do anything under
    TMDLs, and we have had that discussion.
        Under AFO/CAFO we have tried to design a strategy to deal
    with what is a public concern in a way that is going to
    minimize impact on producers. It would address the larger
    operations greater than 1,000 head or more as well as those who
    fail to come into compliance.
        You know, I think--I am saying we still have as a
    foundation a voluntary system for dealing with these issues. I
    think, as Miss Kaptur may note, as the orchardist who sees a
    threat coming, I would suggest to you for American agriculture,
    concerns about environmental quality represent a threat out
    there, and I think we are trying to help producers make sure
    that, you know, they can do what they want to do, stay in
    production, and so in a way that is going to protect the
    productivity of their land as best we can.
        Mrs. Emerson. You know, I would have to say that there
    isn't one producer in my area, and I have a very overwhelming
    agriculture district, who doesn't understand the need to
    conserve the land and take care of it. And so consequently, the
    heavy-handedness of regulation is somewhat problematic because
    I can tell you that even if these programs really are so
    voluntary, it just kind of seems funny that all of the
    ``volunteers'', my producers and ranchers, oppose them. It is
    kind of bizarre.

                    national conservation forums and summit

        Let me ask you something you just mentioned earlier on in
    your remarks about these five regional forums and then the
    national summit on conservation. Can you provide to my office a
    list not only of the invitees to all of those summits, but
    actually those who were in attendance? I would appreciate
    having that.
        Mr. Lyons. We can do that.

                        small watershed program backlog

        Mrs. Emerson. Let me just ask a couple of questions, if I
    could, on Public Law 566, the Small Watershed Program. Could
    you tell me what the backlog of unfunded projects is in the
    program and what your agency is doing to complete these
    projects in a reasonable time frame?
        Mr. Reed. The unfunded backlog is approximately $1.4
    billion. We are doing everything that we can to encourage the
    funding of these projects from other sources because the level
    of funding for Public Law 566 has been flat and declining for
    the last 2 or 3 years.
        Mrs. Emerson. Can I get you all to provide for the hearing
    record a list of the backlog projects? Could we get a list of
    those projects? That would be terrific.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                     deauthorized small watershed projects

        Mrs. Emerson. Also, let me reference something that was in
    the budget summary, in your all's budget summary, that I think
    is real important. On page 70 it says, ``NRCS will continue to
    reduce the backlog of unfunded work by examining approved
    watershed plans in order to deactivate or revise those that
    have become infeasible or where local sponsor interest is no
    longer strong.''
        Now, I recognize you have to go back and update those
    plans, but that underscores the inadequacy of funds in the
    program. Can you tell me how many projects are taken off the
    list in a given year under this procedure and what percentage
    that is of the total number of projects on the backlog list?
        Mr. Reed. I would have to provide that for you for the
    record.
        Mrs. Emerson. I would be very happy to get that.
        [The information follows:]

           WATERSHED PROJECTS MODIFIED OR DELETED DURING FY 1999-2000
    ------------------------------------------------------------------------
      State          Project name          Date              Status
    ------------------------------------------------------------------------
    MS.......  Box Creek..............      99/08  Deauthorized.
    MS.......  Houlka Creek...........      99/08  Deauthorized.
    MS.......  Mantachie; Bogue Fala        99/08  Deauthorized.
                and Bogue Eucuba.
    MS.......  Browns Creeks..........      99/08  Inactive.
    AR.......  Cedar-Piney Creeks.....      99/08  Installation Complete.
    KS.......  Middle Walnut..........      99/04  Installation Complete.
    MN.......  Burnham Creek..........      99/07  Installation Complete.
    NJ.......  Furnace Brook..........      99/08  Installation Complete.
    VA.......  Upper Appomattox River.      99/08  Installation Complete.
    AR.......  Caney Bayou............      99/04  Project Life Over.
    AR.......  Fleschman's Bayou......      99/04  Project Life Over.
    LA.......  Baker Canal............      99/05  Project Life Over.
    LA.......  Cocodrie-Grand Louis...      98/12  Project Life Over.
    LA.......  North Tensas...........      99/05  Project Life Over.
    AZ.......  New Magma..............      99/10  Supplemented.
    CA.......  Indian Creek...........      99/12  Supplemented.
    CA.......  Upper Stony Creek......      99/12  Supplemented.
    MO.......  McKenzie Creek.........      99/08  Supplemented.
    MS.......  Tallahaga Creek........      99/11  Supplemented.
    PA.......  Red-White Clay Creek...      99/02  Supplemented.
    PA.......  Yellow Creek...........      99/08  Supplemented.
    ------------------------------------------------------------------------

                      Reduced Funding for Small Watersheds

        Mrs. Emerson. But then let me ask you with that big backlog
    why you have reduced the funding for that program from 90.8
    million to 74.4 million?
        Mr. Lyons. Maybe I could address that. I take it you are a
    supporter of Public Law 566 and the watershed program.
        Mrs. Emerson. There are some things I support, yes.
        Mr. Lyons. I know there is a lot you support. I was just
    referring to that program. I would suggest to you, Mrs.
    Emerson, that the same problem that exists with Public Law 566
    and perceptions in that program is the problem that exists with
    the other programs you referenced as regulatory programs.
        There are some who will perceive that the Public Law 566
    program is simply a construction program, and it is going to
    provide for investments and watershed projects that are either
    outdated and/or inappropriate and will cause environmental
    harm. I want to point out that Pearlie and I don't share that
    view. We see the value of many of these projects. We have not
    been able to secure funding for these projects. And I think we
    have an education job to do; you to help us communicate to
    people that these are valuable programs, and I guess obviously
    Pearlie and I to help you understand that we are not forwarding
    or advocating regulatory strategies to deal with the pollution.
        Mrs. Emerson. Can you tell me if the 74 million is your
    number, or is that the number OMB gave you all? What did you
    submit in your budget, and what were you given back by OMB?
    That is a better way of putting it.
        Mr. Reed. What I asked Mr. Lyons for was substantially more
    than that.
        Mr. Lyons. And we didn't get it.
        Mrs. Emerson. But then, Mr. Lyons, can you tell me whether
    you cut it, or did OMB cut it?
        Mr. Lyons. I don't think I cut it.
        Mrs. Emerson. Okay.
        Mr. Lyons. Scout's honor.

                            Forest Management Plans

        Mrs. Emerson. Well, I will take your word for it on this
    one. But if you could give me the information, that would be
    helpful.
        Let me ask you, since I still actually have some time here,
    even though obviously our subcommittee doesn't fund the Forest
    Service, you have responsibility for that agency, and I really
    can't resist asking you a question or two about it,
    particularly about the proposed rule on forest management
    plans, which obviously you can imagine troubles me deeply. I
    think that the proposed rule takes us from a multiple use to a
    single use or a no use.
        And perhaps I often use the expression that some in the
    administration would only like us to go meditate and not use
    wise management of our natural resources, but timber sales, are
    already dramatically down from 5, 10 years ago. And last year--
    the appropriated level provided for a total volume offered of
    just 3.62 billion board feet. Do you have an idea of or an
    estimate as to what that rule's impact is going to be on timber
    sales?
        Mr. Lyons. I don't know if I can give you a specific
    answer. I would suggest to you that our view is that the rule
    is certainly not in any way an effort to walk away from the
    concepts of multiple use. In fact, what the rule states is--as
    proposed anyway--is that maintaining the health of the land--
    use the term ecological sustainability, and actually that
    termed by a committee of scientists that provided us guidance
    in reviewing the law and recommending changes in the rule--
    maintaining ecological sustainability is key to maintaining
    social and economic sustainability. So our goal simply is that
    Multiple Use Sustained Yield Act directs us to do--to maintain
    a sustainable flow of the goods and services that come from the
    National Forest without impairment of the productivity of the
    land. That is the critical phrase.
        So I don't see that as impacting the timber sale program in
    any way. In fact, to the contrary, we have hopes that we can
    increase the use of timbering as a civil cultural tool to
    achieve multiple objectives in addition to producing timber.
        Mrs. Emerson. Considering the monies that you all have
    asked to appropriate is a much lower number of board feet, I
    mean, I am not quite sure that that jibes, but I would ask if
    you all could provide--I assume you have done an economic
    impact or evaluated the economic impact on the forest products
    industry and our rural communities near national forests of
    lowering the volume that is going to be offered. Have you
    determined how much it is going to cost our communities and the
    industry by substantially decreasing the amount of board feet?
        Mr. Lyons. I would suggest to you that our proposal for
    2001 is not a substantial decrease from where we were in 2000.
    What was appropriated by the Congress for timber sales in
    fiscal year 2000, there is a slight decline. We certainly can
    provide the information we have that was the analysis for
    preparing that budget if you would like.
        Mrs. Emerson. I would, in fact, like to do that.
        [The information follows:]

        Your concerns focus on two main issues: multiple use and impacts on
    timber sales and community economics. The answer below addresses each
    of these issues.
                                  multiple use
        Regarding the multiple use concern. I can assure you that the
    proposed planning rule builds upon, and will foster, the entirety of
    the agency's legal foundations that encompass the direction given in
    the Multiple-Use, Sustained-Yield Act (MUBY). Inherent in the proposed
    rule's three-part goal of sustainability is the promotion of a wide
    variety of uses, values, products and services through a collaborative
    process that enhances society's capability to make sustainable choices
    across the landscapes they care about.
        The goal of ecological sustainability is consistent with the
    multiple use mission of the National Forest System to develop and
    administer renewable resources for multiple use and sustained yield of
    the several products and services obtained. It is consistent with the
    MUSY direction to provide for harmonious and coordinated management of
    the various resources.
        Further, if meets the NFMA requirement to provide for diversity of
    plant and animal communities based on suitability and capacity of
    specific land areas for meeting multiple use objectives (16 U.S.C.
    1604(G)(3)(B).
                          Timber and economic impacts
        A rule, as a regulatory document (in this case, land management
    planning, has neither economic or timber impacts on any constituent
    group or local community. However implementation of actions done under
    that Rule may have impacts. Thus, we consider and evaluate these
    potential impacts as part of the NEPA process when proposing to revise
    a forest or grassland plan for proposing project-level actions More
    specifically, when the currently proposed planning rule is finalized,
    any proposed plan revisions or subsequent project level proposals will
    be subject to full consideration of economic impacts on potentially
    affected groups, including forest industries and local communities. The
    CEQ Regulations (40 CFR 1508.23) clearly define the point at which a
    proposal exists for meaningfully evaluating effects.

                         Forest Planning Rule Comments

        Mrs. Emerson. The comment--well, I ran out of time, didn't
    I? I am sorry, Mr. Chairman.
        Mr. Skeen. Go ahead with your last question.
        Mrs. Emerson. I know that the comment period on the
    proposed rule closed on the 3rd of February. Can you give me a
    general sense and where the comments are in the time line?
        Mr. Lyons. I am sorry, for the proposed forest planning
    rule?
        Mrs. Emerson. Yes.
        Mr. Lyons. We actually extended the comment period several
    times. In fact, the last time we extended it 11 days to
    accommodate the Chairman of the Senate Energy and Natural
    Resources Committee. We received, I think, 11,000 comments
    during that time frame. We are reviewing those comments and
    meeting with Chief Dombeck and with the Forest Service
    leadership last week to go through comments and all the
    feedback we had received on the rule and have given
    instructions to the rule-writing team to respond to the issues
    raised, the concerns expressed by the public. Comments were
    heard from congressional sources to make rewrites, in some
    cases substantial rewrites, of the rule.
        Mrs. Emerson. So time line?
        Mr. Lyons. We hope to get it finished up later this spring.
        Mrs. Emerson. For the summer sometime.
        Mr. Lyons. Hopefully, yes.
        Mr. Skeen. Mr. Farr.

                          Timber Sales on Federal Land

        Mr. Farr. Just a curious follow-up on Mrs. Emerson's
    question. What is the total percentage of timber sales in
    America that comes off Federal lands?
        Mr. Lyons. I believe our supply--the quantity that we
    supply right now of soft woods, I would be taking a guess right
    now, it is certainly less than 10 percent.
        Mr. Farr. So the rest of the 90 percent of the market is
    controlled outside.
        Mr. Lyons. Most timber produced in the United States comes
    from private sources. A great deal actually is imported from
    Canadian sources in terms of domestic use. We export as well.

                       Legal Liability of NRCS Operations

        Mr. Farr. Of your NRCS jurisdiction, is there anything in
    your services that is not voluntary? You provide technical and
    financial assistance, but people have to ask them, right?
        Mr. Lyons. That is correct.
        Mr. Farr. So let me just suggest, the committee ought to
    consider what I see happening in our area where we are in a
    litigious society, and a lot of the decisions that affect
    policy are made outside the legislative branch. They are made
    in the judicial branch. In a tort era what is happening in
    farming, if you don't learn best management practices, you are
    going to be sued as the results of your less than best
    management practice are going to have a downstream effect on
    somebody's life and property, and they are going to go to
    court.

                          USDA Conservation Leadership

        So I want to just, first of all, compliment you because I
    do think we need some leadership in this country to provide
    upgrading of skills, and where I have seen it is in any area
    that we have cattle ranchers now who through learning better
    skills have totally changed their cattle ranching operation.
    They are into what they call holistic grazing. They graze
    cattle, sheep, and cows and horses together and shepherd them
    from one field to another because they have open ranges. What
    they are finding is that the fields are coming back. This is on
    their own private land they are coming back much stronger and
    much healthier, and yet they are able to also go to the market
    because they are working with nature rather than against
    nature, and they are learning from the technical expertise.
        So I think we need to continue this, as I call it,
    upgrading America's skills on land use, whether it is in our
    forests or ag lands, wherever it may be, because if we don't,
    the consequences are going to be that it is just going to fall
    apart and can't be used for agriculture because there is just
    too many problems that we can't overcome. So we got to sell it
    for urban sprawl.
        So farming is the best defense against urban sprawl. Look
    at California, number one ag State, the number one population
    State, and yet in areas like the Salinas Valley, which I hope
    our committee can see sometime where our land is worth $35,000
    an acre, farmers are still doing best management practices and
    able to say, I would rather be in farming.
        Mrs. Emerson. Would the gentleman yield?
        Mr. Farr. Yeah.

                     Private Sector Conservation Leadership

        Mrs. Emerson. Let me comment that my farmers and ranchers
    are doing the same thing, but they are doing it voluntarily.
    They are not having the heavy hand of government come down and
    tell them they have to do it, because they know if they don't
    do it, they will not be successful.

                      Farmland Protection Program Funding

        Mr. Farr. We are not in disagreement, because it is all
    voluntary in California, only you have many other pressures.
    You have local and State laws that are so much tougher than
    anything the Federal Government has ever thought of, and yet
    they are making it.
        The point I would like to get down to here, is your budget
    request for farmland protection? I mean, we don't have any
    money in that program. Miss Kaptur just talked about the fact
    that people need it, we need to do it. We have $35 million. It
    was authorized, and it was spent in 1998. What is the
    Department going to do to send this new authorization language
    up to the Hill for the $65 million in the budget request? When
    are you going to do it?
        Mr. Lyons. I know we are working on it, Congressman. I
    think that one is fairly simple. It is simply a change in the
    authorized cap. So we could get that--Steve has to clear all
    these things.
        Mr. Farr. Do you have $35 million authorization now, so if
    this committee put $35 million into that program, you are
    authorized to spend it?
        Mr. Lyons. We spent the authorization, so we need an
    increase in the authorization.
        Mr. Farr. And then where would the money come from for the
    program?
        Mr. Lyons. CCC. It would be increased funding out of CCC.
        Mr. Farr. You are not going to the land and water
    conservation fund, I hope.
        Mr. Lyons. That is not what we have proposed.
        Mr. Farr. It was proposed last year. It didn't work. It was
    outside our jurisdiction.

                Environmental Quality Incentives Program Funding

        Your request for EQIP program is $125 million above the
    authorized level?
        Mr. Lyons. It is about $300 million.
        Mr. Farr. When are you going to ask for the authorization
    language?
        Mr. Dewhurst. All of these proposals will be part of the
    administration's safety net program for farmers which will be
    submitted. I am not in a position to give you an exact date,
    but certainly within the next couple of weeks. And all the
    financing for the conservation initiatives in that package
    comes from the Commodity Credit Corporation.

                             Air Quality Task Force

        Mr. Farr. Okay. Lastly, just let me--time has run out.
        Mr. Reed, you served as chairperson of the Ambient Air
    Quality Task Force. I understand that recently the task force
    has made recommendations on two major issues of extreme
    importance to agriculture. The issues are burning of
    agricultural residue and a proposal to develop voluntary
    incentives based on the Air Quality Compliance Program. Could
    you let me know perhaps--I don't want to take the Chairman's
    time--what the status of those recommendations are?
        Mr. Reed. Mr. Lyons signed off this week.
        Mr. Farr. Okay. Thank you. You are doing a good job on that
    program. You are to be commended.

              URP Heritage Rivers, and Pacific Salmon Expenditures

        Mr. Skeen. Mr. Lyons, you submitted a letter for the record
    that I signed on January the 28th, 1998, regarding the
    expenditure of funds for Urban Resources Heritage Rivers and
    salmon recovery initiatives. And I will submit for the record
    the House report language that accompanied the fiscal year 1999
    appropriations bill. The report language directs the agency
    that the funds are not available until reprogramming requests
    are approved.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                              Reprogramming Funds

        Mr. Skeen. I would point out that the USDA has never
    submitted nor did we ever approve reprogramming the use of
    those funds.
        Mr. Lyons. Well I appreciate that, Mr. Chairman. We would
    like to work with you on that. If we have to submit that, I
    suppose we will. I think one of the issues of debate, and you
    are the boss, was that we felt that under conservation
    operations, we had the authority, which is what led to the OGC
    reviews that we asked for. We want to work with you, Mr.
    Chairman, on that and make sure that what we are doing comports
    with what your wishes are.
        Mr. Skeen. Thank you.
        And Mr. Nethercutt.

                     CRP Technical Assistance Availability

        Mr. Nethercutt. Thank you, Mr. Chairman.
        Welcome to the witnesses.
        Last year there was testimony here regarding the financial
    needs of the agency, and also there was a question about
    continuing funding for technical services for producers who
    were establishing CRP cover crops. I am wondering what happened
    with respect to those particular funds.
        Apparently during the process of establishing cover crops,
    the agency suspended its service because of a shortage of
    funding, and producers were caught with programs partially
    completed. In many parts of the West, we have timing
    requirements to make sure that, due to weather patterns, we get
    our cover crops planted, and that there is going to be a
    succession that the termination of service seriously
    jeopardized that important phase of CRP. Congress eventually
    supplied, I think it was $28 million in fiscal year 1999
    emergency supplemental appropriation bill. I am wondering if
    there are ample funds this year in the budget to allow the
    program, the Technical Services Program, to continue.
        Mr. Reed. No, sir. We have approximately $33, $35 million
    shortfall.
        Mr. Nethercutt. How much, sir?
        Mr. Reed. About a $33 to $35 million shortfall.
        Mr. Nethercutt. How do you plan to get around this very
    serious problem?
        Mr. Reed. We talked about that a little bit earlier. I will
    defer to Mr. Dewhurst to give the same response.
        Mr. Nethercutt. See if he gives the same response.
        Mr. Dewhurst. We are working with OMB. You know, the
    problem is the cap in the farm bill and how much money the
    Commodity Credit Corporation can provide for technical
    assistance. The solution to the problem not just in 2000, but
    in the future lies in either eliminating or raising that cap.
        The appropriation you provided was kind of a stop-gap last
    year. Frankly, we would hope there was a better way to solve
    the problem this year, but it is just a matter that we are
    having to look at with folks across town.

                             Conservation Easements

        Mr. Nethercutt. Well, it is a problem. And if we want to
    accomplish the good things CRP has in mind, we've got to make
    sure that the farmer isn't left wanting.
        During the 18th sign-up of CRP, bids were accepted in some
    instances in our State--in my district actually--were twice as
    high as the average cash rent for croplands. We are seeing
    whole farms go in to CRP, and, you know, CRP removes that land
    from the rural infrastructure and the support remaining as well
    as necessary for those remaining farmers. We are finding an
    incentive to put whole farms into CRP at the cost and expense
    of those who want to keep farming, the young guys who are out
    there trying to make a living and need land to farm. I know
    that this is an FSA responsibility, but I am wondering to what
    extent you all are coordinating with FSA to address that very
    real differential.
        Mr. Reed. We really aren't from an NRCS standpoint.
        Mr. Nethercutt. Should you?
        Mr. Reed. We should be. And we are in a continuous dialogue
    on these issues, but when it comes to those issues relative to
    those programs that FSA administers and how that plays with
    respect to these 25 percent limits and things like that, we
    defer to them.
        Mr. Nethercutt. It is real, and it does cause those young
    farmers who want to continue farming--and it really makes sure
    the maintenance of the infrastructure of the rural counties and
    communities is there. It is a very real problem, and so I would
    appreciate your thinking about it. Maybe we can further figure
    out ways to address it.
        Mr. Reed. I would like to add, Mr. Nethercutt, we are
    having a similar kind of problem as it relates to WRP with the
    tax situation and the impact that it is having on local
    communities.

                 Resolving Clean Water and Clean Air Challenges

        Mr. Nethercutt. Mr. Lyons, I know the earlier discussion--I
    am informed and apologize for not being able to be here. I had
    another hearing in Interior, and so I am sorry I missed your
    comments, but I understand there was a focus on clean water
    issues, not necessarily clean air issues. The farmer is caught
    in between, especially the blue grass production industry in my
    State. Blue glass production has literally been removed because
    of air quality problems and challenges that have been raised.
    At a time when the farmer is trying to control residue, using
    burning to meet residue requirements for clean water, the
    farmer is finding him or herself in the middle of clean air
    versus clean water. And again, it is a challenge to try and
    stay in business. I am wondering to what extent you are trying
    to address these clean air and clean water challenges
    simultaneously.
        Mr. Lyons. Congressman, I don't know that we have done an
    adequate job to try to deal with the nexus between clean air
    and water. I think we have an obligation to do that for your
    producers and across the country. We have some serious
    challenges in your part of the world. I don't know if you had a
    chance to see this map, but that red blob is your district.
        Mr. Nethercutt. I know. You say that respectfully.
        Mr. Lyons. I do. I do, sir, and we have talked about the
    challenges. I think we have a joint obligation to help
    producers stay in business, and erosion is not just an erosion
    of land for your producers, it is an erosion of profits, and
    therefore it is critically important we figure out ways to do
    that. We are trying to do that.
        Mr. Nethercutt. It is a State issue relative to the air
    quality and blue grass, but Federal by the EPA, I believe. We
    are seeing all the blue grass production now go over to Idaho,
    which then as--we look at the wind patterns, a lot of that
    smoke comes back into eastern Washington, and the people get
    upset. In the meantime we have lost a lot of blue grass
    producers, and that has had a negative impact on our economic
    structure in eastern Washington. So, it is a tough job, but, it
    sure needs some coordination and some common sense with the
    respect to the ability to burn crop residue.
        Mr. Lyons. We will try and do a better job with it.
        Mr. Skeen. Mr. Boyd.

                        Voluntary and Mandatory Programs

        Mr. Boyd. Thank you, Mr. Chairman. And I want to follow up
    on an issue that Mr. Farr addressed. I think he asked Mr. Reed
    the question about the administration of programs, voluntary as
    opposed to mandatory. But it is my understanding that there are
    some mandatory programs. I know it is mandatory that if you are
    going to farm, that you have a conservation plan in place that
    you have to follow and implement. And I want to make sure that
    our record didn't reflect that you only administer voluntary
    programs.
        Mr. Reed. There are compliance requirements.
        Mr. Boyd. We have addressed that earlier. There are
    compliance requirements.
        Mr. Lyons. But, Mr. Boyd, don't lose sight of the fact that
    if a producer elects to be part of the program----
        Mr. Boyd. I understand that. If you are going to farm, you
    must comply.
        Mr. Lyons. If you are going to farm in the programs.
        Mr. Boyd. I say, again, if you are going to farm, you must
    comply because you won't farm long if you don't farm in the
    programs, at least not in my part of the world.
        We have had a discussion here today about the technical
    assistance plus-ups that you want, and we have had an extensive
    discussion about the lack of adequate personnel, resources,
    training, those kinds of things at the county level, and that
    is working against us. Everybody has, I think, here has beat
    that around a little bit.

                     Conservation Security Program Request

        My first reaction when I see the budget request for new
    programs, and I refer to the Conservation Security Program, is,
    you know, we can't even administer and implement the ones that
    we have in place now. So my first reaction is why do we want to
    further use our resources in trying to implement a program
    which in this case is probably duplicating? I think we got
    plenty of programs in place. So that is my first gut reaction
    based on your summary of the program.
        I would like to ask Mr. Reed or Mr. Lyons, or some of your
    folks to come in and talk to us about the details of this new
    program and how are we going to mesh it in with the whole farm
    security net issue. And I don't want to take up the committee's
    time now because I have another area that I want to go into,
    but I would like to have that if we could do that.
        Mr. Lyons. We submit to do that, Mr. Boyd, I want to say
    one thing. That is we did meet with staff yesterday and
    discussed the fact that we intend to put some proposals
    together, but we want to sit down with you. We know we have a
    short legislative year. We want to sit down and work these
    things through. I think Secretary Glickman met with a number of
    members with the Agriculture Committee yesterday and discussed
    some efforts.

                          Stopping Farmland Conversion

        Mr. Boyd. In that vein, I know you handed out some charts
    earlier. You referred to them, one earlier which doesn't give
    us a benchmark to go against, but the others do. One is a total
    erosion of cropland, and you see between 1982 and 1995 you
    refer to the fact that probably the major cause of this
    significant decrease in cropland use is the CRP program, which
    I concur with and I am a great advocate of.
        I would submit to you and to the other Members that the
    real problem is what Miss Kaptur referred to earlier, and that
    is acreage or farmland conversion to development. And I would
    submit to you that maybe our major focus should be figuring out
    how to stop that. And I know Mr. Farr and others have referred
    to the Farmland Protection Program, which I know the States are
    doing much in areas into conservation, development rights and
    those kind of things.
        Now, I want to ask your indulgence, Mr. Chairman, and the
    indulgence of the committee to go back and address the forest
    issue, because this is the only opportunity we have to address
    Mr. Lyons in this setting. And I know it is not our area of
    purview, but I would ask your indulgence to do that.
        Mr. Skeen. We are indulged.

             National Forest System Payments to States and Counties

        Mr. Boyd. Mr. Lyons, are you familiar with H.R. 2389?
        Mr. Lyons. If you tell me the title of it, I bet I am.
        Mr. Boyd. It is the Secure Rural Schools & Communities,
    Self Determination Act.
        Mr. Lyons. Yes, very much, sir.
        Mr. Boyd. We had a great discussion and debate about that
    last year. Now, I heard today that some people in your
    Department have gone to the Senate and said they want to sit
    down and write a bill in the Senate. Now, Mr. Lyons, we had a
    discussion earlier about forest policies, management practices,
    and you know what we tried to do with H.R. 2389 is set those
    controversial issues aside. We are not going to resolve those
    here. Those are in court, many of them being decided in the
    judicial system, based on interpretation of current law, and
    that is an issue that will not be resolved immediately.
        But there is a consequence to the changed timber management
    practices, and that is that our local schools in these forest
    communities, are being devastated. And what we tried to do when
    we wrote H.R. 2389 was to solve that specific problem, not
    solve the issue or the debate about harvest management
    policies, but simply our goal was to set that aside and solve
    the issue of school funding.
        Now, Mr. Lyons, I attempted on several occasions to have
    discussions with your staff and get your constructive input so
    we could come to an agreement. But, unfortunately, the
    administration continues to oppose this piece of legislation
    which simply tries to address the school functioning issue. It
    doesn't address management practices at all. I don't understand
    why the administration continues to oppose solving the problem
    in funding our local school districts. In the communities where
    the government owns the land and has taken it off the tax
    roles, they have destroyed the economic base because of their
    timber management practice changes. So I hope you will address
    that.
        Mr. Lyons. If I could, Mr. Chairman, I would be glad to.
    You are right, Congressman. We continue to oppose the House-
    passed bill. We are engaged in a discussion with the Senate
    staff. Senator Wyden, Senator Craig requested that we begin
    that dialogue. We are working on the language there. I think it
    is important to importantly characterize the bill there because
    it doesn't simply deal with school funding. We were pleased to
    deal with that issue, and I made that commitment many times
    before.
        Your bill does a little bit more than that, though. It
    creates a very complicated structure that would introduce a new
    concept, and that is it will require the communities to commit
    20 percent of the funds they get under that bill to developing
    community-based and driven projects on the ground. It would
    create an imbalance in the committees, would provide guidance
    to that. And furthermore, it provides no mechanism to fund this
    program. We have a tremendous fear that that will then result
    in appropriations being taken away from the Forest Service to
    implement the basic programs we need to implement.
        We remain committed to try and address the school funding
    issue. I agree completely this should not be about forest
    policy, it should be about education in rural communities. So
    we are working with Senators Wyden and Craig at their request
    to try and work through our differences over the legislation,
    see if we can't come up with something that the administration
    can support. I agree completely with you about the need to come
    up with a reliable, sustainable and certain source of funding
    to deal with rural education needs which have been impacted by
    changes in Federal forest policy, reduced revenues to those
    communities. We do need to address that. We are anxious to
    figure out a way to do that.
        Mr. Boyd. Mr. Lyons, first of all, Mr. Chairman, if I might
    conclude this--number one, the mechanism to fund, as you know
    we changed the language in the House at your request because
    you opposed the old language. And so that made it such that we
    had to find the funding, and we are asking the administration
    to help us identify potential sources. I personally had a
    discussion with the Vice President about that, and he agreed at
    the time we had a discussion to help.
        Mr. Lyons. We do want to do that, sir.
        Mr. Boyd. The other is you opposed the community project
    language. Earlier today in a statement you made, you said, I
    will paraphrase, ``the way to solve problems is not getting in
    the face of those who happen to have a different view and those
    you have to work with.'' And the community project is designed
    to do just what you described earlier in your answer, and that
    is to have people who have opposing views about management
    practices to come together to decide how to resolve, or what
    projects those would be.
        Now, it doesn't take away any authority of yours. Every
    regulation, policy rule and law of the Forest Service still has
    to be followed. And for the life of me I don't understand why
    you oppose this legislation on that basis, because it doesn't
    undermine the authority you have under existing law. It simply
    puts people who are on opposite sides of this fence for a long
    time in the same room and requires them to agree before
    anything is done, and I think that is good policy and will move
    us a giant step forward in helping resolve this whole timber
    management practice issue. So I hope you would rethink that.
        Mr. Lyons. Well, it is appropriate for you to have the last
    word, Congressman, so I will leave it at that. So I look
    forward to sitting down and talking with you over the
    differences we still have over the bill.
        Mr. Skeen. Mr. Latham.

                       voluntary preservation of farmland

        Mr. Latham. Thank you, Mr. Chairman.
        A lot of this discussion about, you know farmers, Mrs.
    Emerson brought up about what farmers are doing as far as soil
    conservation, and just as a statement I personally take offense
    to anyone who implies that farmers voluntarily are not going to
    do everything they can to preserve what is their number one
    asset, their land, and I will--as someone who lives on a farm
    myself and who drinks out of a well, that my family, my kids--
    the idea that somehow farmers are not the number one front line
    people as far as soil conservation is concerned, as far as a
    clean environment is concerned is very offensive to me.

                      federal regulations for agriculture

        And I will tell you also the biggest threat, we talked
    about it last year, to our water supply in upper Iowa, in the
    aquifer, is four Federal agencies today. Somehow people think
    in agriculture you are only regulated by USDA, I mean, which is
    insane if you have to deal with EPA, with Fish and Wildlife,
    with the Army Corps of Engineers, plus EPA to try and fix a
    problem which is going to have a tremendous negative impact on
    water quality in that aquifer, because four Federal agencies
    can't agree on anything. And just the idea that somehow--I wish
    we could just deal with you. But, I mean, there is a feeling
    somehow in urban areas that the only thing farmers have to deal
    with is just the USDA, which is--if you come to my district, I
    will show you how totally outrageous that is. And it is one
    reason why we are extraordinarily sensitive to EPA coming in
    and getting additional authority in our area, because they
    can't manage what they are doing now in a logical, commonsense
    way.
        And I guess that is the point I think needs to be made. I
    think maybe some of our urban friends--that we are not out here
    trying to be the big polluter. We are trying to fix the
    problem. We can't do it because of four Federal agencies that
    won't talk to each other, all claiming jurisdiction. I am
    sorry, but it really is frustrating.

                             other budget proposals

        And my question goes somewhat in the same vein. In your
    testimony there is this livability initiative and the budget
    proposals to provide $5 million for a community Federal
    information partnership and $5 million to help farmers plan and
    develop and implement biomass systems. If you could describe a
    little bit more about this initiative, and also what is your
    agency's role as far as biomass?
        And also I would really like to have you comment, too. We
    have this huge--I was out in Seattle, and the issue of the
    genetically-modified organisms--which anyone who looks at it
    from an environmental point of view should believe that using
    less fertilizer, using less chemicals, having much less
    opportunity even for spills or for runoff, buffer zones,
    filtration, which everyone wants to have, but if you are using
    less chemicals and fertilizers because of these products, I
    mean, to me it makes sense that the environmental community
    should be 100 percent behind these things. I question why they
    are not.
        But I have asked about four questions there. If you would
    respond.
        Mr. Reed. Jim, do you want me to do this one?
        Mr. Latham. Come on, Pearlie. Come on, buddy.

                          biomass products initiative

        Mr. Reed. Okay. On the biomass activity, it is primarily to
    fund about 11--the equivalent of 11 FTE to help with the USDA's
    part of carrying out the President's executive order dealing
    with this particular issue as it relates to a lot of other
    things. The details on it I can't give you, but I could provide
    that for the record.
        [The information follows:]

                                    Biomass

        The biomass initiative is based on the President's
    Executive Order 13134 concerning developing biobased energy and
    other products. It seeks to achieve greater use of renewable
    resources and reduce dependency on imported and domestic energy
    sources like oil or fossil fuels. The President's budget
    requests $5,000,000 for NRCS to fund 11 staff years of
    assistance during FY 2001 and provide funds for competitive
    grants. NRCS has stressed two priorities: (1) expansion of
    feedstock production for biobased products or bioenergy should
    occur commensurate with protection of natural resource values;
    and (2) local communities should be key for organizing biobased
    energy projects and enterprises that are environmentally,
    economically, and socially sustainable.
        With this funding, NRCS would use $1,000,000 to develop
    technical standards and provide training to field staffs so
    that they can provide direct technical assistance to producers
    and local communities interested in biomass enterprises. The
    remaining $4,000,000 would be used to provide competitive
    start-up grants for community projects on biomass energy.

                   community/federal information partnership

        Mr. Latham. So you didn't ask for this funding?
        Mr. Reed. No, I didn't.
        Mr. Latham. You are a great American.
        Mr. Reed. But that doesn't mean I don't support it.
        Mr. Latham. I know. In your position you probably have to.
        Mr. Lyons. You see why Pearlie is Chief.
        Mr. Reed. On the community, slash, Federal information
    partnership, of course that would be funds made available for
    the NRCS to participate appropriately along with all the other
    USDA agencies in some of this Federal geographical data
    committee-type activities. And this is another one that did not
    come from the bottom up, but it is something that we certainly
    should do and is needed in order for us to be a part of the
    larger community and pick up the efficiencies that are needed
    dealing with this particular issue. And those were the two that
    I picked up.
        But you said you asked four questions.

               using sound science to assess agriculture changes

        Mr. Latham. Well, about the--I guess I question, you know,
    your agency's role as far as biomass. And does the Department
    have a position as far as GMOs and how positive it would be for
    the environment or negative?
        Mr. Lyons. Mr. Latham, all I can tell you on that subject
    is that the Secretary has spoken a number of times on the issue
    of GMOs.
        Mr. Latham. If I could, as it relates to the initiatives as
    far as your jurisdiction.
        Mr. Lyons. I don't know that we have made any formal
    statement in that regard. I would share this is another area
    where perceptions contrary to scientific fact seem to be
    driving the debate. I mean, you are aware of the Frito-Lay
    decision with regard to corn, genetically modified corn, I
    think, which baffled many in the industry and many in the
    agriculture community. But it seems to be one of those
    decisions that is driven by public perceptions or concerns
    about the impacts on their ability to market genetically-
    modified products. The science doesn't support the health risk
    concerns that apparently are there.
        In fact, what we can do with regard to reducing
    environmental inputs, nutrients, pesticides, et cetera, would
    seem to me to make a solid argument for the utility of this
    technology. But nevertheless, there is this huge public issue
    that has to be dealt with. I know the Secretary is trying to
    capitalize on opportunities to get that debate out in the
    public forum so we can have an honest discussion about what we
    know is scientifically sound and the technology that is
    available and how we deal these.
        Mr. Latham. I would just apologize, Mr. Chairman, just for
    one statement. I guess I think you could play a key role by
    using sound science to take a position, a positive or negative.
    But I think there is a huge environmental impact here, and I
    think a case could be made that this, maybe, is one of the most
    positive things. We are talking about maybe not using any
    pesticides. We are talking about limiting use of fertilizer to
    fractions of what current level usage is. I mean, I would think
    you would have a position somewhere.
        Thank you, Mr. Chairman.
        Mr. Skeen. Thank you.
        Mr. Hinchey.

               long range view of agriculture and the environment

        Mr. Hinchey. Thank you, Mr. Chairman.
        I just want to say that I think it is obviously very
    important with regard to this particular subject to take the
    longest-range point of view. I know that that is what you seek
    to do in your responsibilities, and by so doing, you are
    providing a great service to the country. The protection and
    preservation of these natural resources and the use of them in
    the most appropriate way is invaluable, not so much to us,
    perhaps, as it will be to future generations. That is the most
    important thing that we have to keep our eye on here. I want to
    congratulate you for the efforts that you are taking in that
    regard.
        Also, with regard to the efforts that you are proposing in
    this budget to rationalize conflicts between agriculture and
    the environment, I know that is an ongoing thing, and it is an
    issue that I think is very important. I see it in a very
    practical way with regard to the New York City watershed that I
    was talking about before. I would just ask you if you would,
    not necessarily this moment, but at some point have a
    discussion with us with regard to the environmental quality
    incentives and the conservation reserve as well as the new
    Conservation Security Program and ways in which they can be
    used specifically to deal with the issue of agriculture in a
    watershed. I would be very grateful to you for that.

                    staff needed for program implementation

        At the risk of being unnecessarily repetitive, let me just
    underline once more the problem that I see with regard to the
    implementation of these programs, given a shortage of staff. It
    is a very practical problem that the services just cannot get
    out to the needed recipients unless you have the human beings
    to deliver them. No matter how you cut it, there is no way to
    get around that. I know this is something you know, but I think
    it has to be said from this side of the table as well. So I
    want to express that to you and thank you very much for your
    efforts.
        Mr. Lyons. Appreciate that very much, Congressman.
        Mr. Reed. Thank you.

                            timber supply correction

        Mr. Lyons. Mr. Chairman, if I could correct the record. I
    did get--one thing I just wanted to answer the question on
    timber supply that was raised to me earlier. The national
    forests contribute 5 percent of the total national demand for
    wood in the United States. Of that, 5 percent comes from
    roadless areas. So we contribute 5 percent to the total wood
    basket of the United States; 5 percent of what we produce comes
    from roadless areas.
        Mr. Skeen. You have done a very good job. Thank you very
    much for your patience and the answers.
        Mr. Farr. Great job, Mr. Chairman.
        Mr. Skeen. Thank you. Thank you all for being here. We have
    worn out a whole bunch of the day, but I think we have done a
    good job, and the pertinent information is there. We wish you
    the very best. Come by and see us once in a while.
        Mr. Lyons. Will do.
        Mr. Skeen. Thank you all. We are adjourned.
        [The following questions were submitted to be answered for
    the record:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                             Wednesday, March 15, 2000.

                       MARKETING AND REGULATORY PROGRAMS

                                   WITNESSES

    MICHAEL V. DUNN, UNDER SECRETARY, MARKETING AND REGULATORY PROGRAMS
    CRAIG A. REED, ADMINISTRATOR, ANIMAL AND PLANT HEALTH INSPECTION
        SERVICE
    KATHLEEN MERRIGAN, ADMINISTRATOR, AGRICULTURAL MARKETING SERVICE,
        ACCOMPANIED BY KEN CLAYTON, ASSOCIATE ADMINISTRATOR
    JAMES R. BAKER, ADMINISTRATOR, GRAIN INSPECTION, PACKERS AND STOCKYARDS
        ADMINISTRATION
    DENNIS KAPLAN, BUDGET OFFICE, DEPARTMENT OF AGRICULTURE

                                Opening Remarks

        Mr. Skeen. The committee will come to order and we will go
    on the record.
        Today we have with us Mike Dunn, the Under Secretary for
    Marketing and Regulatory Programs. Mr. Dunn is responsible for
    the Agricultural Marketing Service, the Grain Inspection,
    Packers and Stockyards Administration and the Animal and Plant
    Health Inspection Service. That is a pretty good plateful. Mr.
    Dunn's team has one new member who has not been before this
    subcommittee, and that is Ms. Kathleen Merrigan, who was
    appointed Administrator of the Agricultural Marketing Service
    last year. We welcome her here today.
        Glad to have you here.
        Ms. Merrigan. Thank you.
        Mr. Skeen. The Under Secretary and his Administrators
    manage a wide range of issues very important to the committee.
    This is a busy day with a lot of subcommittee hearings. I ask
    for cooperation from everyone so that Members can make maximum
    use of their time while we are here.
        Before I ask Mr. Dunn for his statement, I would ask the
    distinguished gentlewoman from Ohio, Miss Kaptur, if she has
    any opening remarks.
        Miss Kaptur. Thank you, Mr. Chairman, very much. I
    apologize for being late. There were three things going on at
    once, including a competing subcommittee hearing. Someday when
    I become Chair of Appropriations, 50 years from now, I am going
    to computerize all meetings. So that they don't occur at the
    same time.
        Mr. Skeen. No apology necessary. We appreciate your time.
        Miss Kaptur. I want to welcome the Under Secretary and all
    of those very capable individuals that have come over this
    morning from USDA.
        I just wanted to say that the world is a brighter place
    today, Mr. Chairman, because the staff director of this
    committee, Hank Moore is a new grandfather. We congratulate him
    and his family. His first grandchild. I think we ought to give
    that family some applause.
        Mr. Skeen. Just wait till you get a houseful of them.
        Mr. Dunn, we will recognize you for your statement.
        Mr. Dunn. Thank you, Mr. Chairman and members of the
    committee. I am indeed pleased to be here before you today to
    discuss the activities of the Marketing and Regulatory
    Programs. I have with me, besides the folks here at the table,
    Dr. Enrique Figueroa, who is Deputy Under Secretary for
    Marketing and Regulatory Programs, in the audience; Mr. Jim
    Baker, who is the Administrator, Grain Inspection, Packers and
    Stockyards; Dr. Craig Reed, who is the Administrator of Animal
    and Plant Health Inspection Services.
        You have already introduced Ms. Kathleen Merrigan, who is
    the new Administrator for the Agricultural Marketing Service.
    Then we have Dennis Kaplan with OBPA, who is here with us to
    round out the members at the table.
        Mr. Chairman, I hope we are able to present our prepared
    statements for both myself and the administrators as part of
    the record.
        Mr. Skeen. Yes, we will do that.
        Mr. Dunn. I would like to give the committee an overview of
    what we are facing in the programs today and the current
    situation in agriculture as we see it. Certainly agriculture,
    the agricultural economy, is in a state of change.
        Concentration and consolidation is taking place in an
    unprecedented amount. That has increased the demand for
    marketing regulatory programs to have more oversight to ensure
    a level playing field for producers. It has increased the
    demand for more information that is transparent in price
    reporting. It has increased the demand for more knowledge about
    how large entities operate vis-a-vis small producers and
    family-size operators.
        Methods of sales are changing very rapidly, moving away
    from the spot market towards contracting and vertical
    integrations. There are more alliances; more cooperatives and
    direct marketing alternatives are being explored by producers.
    New markets, such as organic and sustainable, are niches that
    we see for family farm operations to get into to remain viable.
        Genetically Modified Organisms (GMOs) have raised concerns
    by consumers, environmentalists and by our foreign trade
    partners, which has had an effect on producers, handlers and
    processors. There is concern over our regulatory regime and how
    we regulate GMOs. There is demand for identity preserved and
    segregation of product in shipment. There is demand for
    validation of those who are certifying the content of a
    shipment to be either GMO or GMO-free.
        Increased international trade and travel have also
    increased the demands on marketing and regulatory programs.
    Greater requirements for international information on price-
    setting of common standards have been requested.
        The WTO and NAFTA have increased the need to provide
    technical knowledge transfer and foreign capacity building to
    convince our trading partners that our marketing and regulatory
    standards are an efficient and effective means of assuring the
    quality and quantity of delivered products, and that the animal
    and plant health of our trading partners are assured.
        Over 80 million passengers visited us last year. The volume
    of trade coming into this country is doubling every 6 years.
    This volume is producing a tremendous strain on our ability to
    protect our animal and plant resources.
        On the plant side, in 1998, we detected 250 new plant pest
    infestations, and in 1999 that grew to 334 new finds, an
    increase of 84 in just 1 year. On the animal side, the National
    Veterinary Service Lab received and tested over 37,000
    diagnostic submissions. They helped us to confirm the presence
    of West Nile virus. They assured us that Bovine Spongiform
    Encephalopathy and Classic Swine Fever was not yet on our
    shores. However, recent disturbing finds, such as horses being
    shipped into the United States that have been infested with
    screwworm, reminds us that we are only one slip-up away from
    having a disaster on the animal side. Outbreaks of Citrus
    Canker, Plum Pox Virus and Pierce's Disease are costly
    testimony to our need for early detection and new efficient and
    effective tools to protect our agricultural economy from such
    threats.
        Ongoing eradication and prevention programs are striking
    successes, and they prove that we can reverse infestations when
    we demonstrate that we have the resolve to do so. However, the
    100 million acres lost to invasive species, which is increasing
    at an alarming rate of 3 million acres a year, cry out for us
    to do more.
        Citizens are very concerned about the administration of the
    Animal Welfare Act and the Horse Protection Act and this has
    been on the rise, a concern of citizens. Not a day goes by that
    I don't receive information in my office about alleged
    violations of the Act, stories of mistreatment, maiming and
    death of exhibit animals are all too frequent headlines in the
    nightly news and in the newspapers. And when an animal causes a
    human death, sometimes an unsuspecting spectator, I receive
    volumes of correspondence asking who's in charge and how could
    this happen.
        The animal care unit of APHIS has done a tremendous job of
    reinvention, and in doing more with less by targeting resources
    at worst offenders. I have received thousands of congratulatory
    letters on their successes, but it is now time for us to catch
    up and provide the fiscal and human resources they need to do
    the job that I demand and that you have legislated them to do.
    To address these problems, Mr. Chairman, Marketing and
    Regulatory activities are funded both by taxpayers and
    beneficiaries of program services.

                              2001 budget request

        On the appropriations side, APHIS is requesting $512
    million for salaries and expenses, $5 million for building and
    facilities; Agricultural Marketing Service is requesting $92
    million for salaries and expenses, and Grain Inspection,
    Packers and Stockyards is requesting $33.5 million for salaries
    and expenses. Authorizing legislation was submitted in the
    first session of the 106th Congress that if it was enacted
    would recover $30 million more in user fees for fiscal 2001.
    GIPSA's budget request for 2001 is $33.5 million, salaries and
    expenses, and $42.6 million to be spent from industry user fees
    in our revolving fund for Grain Inspection. The appropriated
    request for Packers and Stockyards is $19.3 million, an
    increase of $4 million. This includes $1.2 million to develop
    models which could be used to verify the existence of
    anticompetitive behavior, $1.3 million to expand the rapid
    response teams, $800,000 to examine the competitive structure
    of the poultry industry and $400,000 to establish a swine
    contract library to implement the Livestock Mandatory Reporting
    Act.
        The request for Grain Inspection is $14.2 million, an
    increase of $2.1 million. Nearly $2 million requested for
    developing new biotechnology testing methods, analytical tests
    and greater quality assurance procedures in grain. This will
    enable the agency to begin the process of addressing the
    changes occurring due to biotechnology. Grain Inspection also
    requests $150,000 be used to address the emerging sanitary and
    phytosanitary standards required under the WTO and NAFTA.
        A request of $100,000 to enhance GIPSA's civil rights
    commitment and a request of $350,000 for an information staff
    to improve communications with the livestock, meat, poultry and
    grain industries is included. Legislation has been proposed
    that, if enacted, would authorize the collection of $23.1
    million in new license fees for administering the Packers and
    Stockyards programs and increasing Grain Inspection user fees
    to cover the cost of maintaining grain standards.
        APHIS proposes $512 million for salaries and expenses, a
    $74.3 million increase above the fiscal year 2000 estimate.
    This large increase for 2001 largely reflects the decision to
    fund through appropriations several emergency programs that
    have been started with funds transferred from the Commodity
    Credit Corporation. There is also an increase of $8.8 million
    for the new Invasive Species Initiative. A $3.9 million
    increase for the AQI appropriated program would lower the
    threat of exotic agricultural pests and diseases entering the
    United States.
        A $2 million increase for the international programs would
    help USDA officials and trading partners resolve pest and
    disease problems and sanitary/phytosanitary-related issues.
        Our second line of defense is animal and plant monitoring
    whose ongoing emergency programs will identify small outbreaks
    before they have a chance to become major infestations. An
    increase of $9.3 million would provide a strong foundation for
    these efforts in monitoring plant and animal health. $5.2
    million of the increase would allow APHIS to address several
    vulnerable areas in the emergency management program and will
    enable us to improve our response to animal disease threats.
        Emerging plant pests remain a significant management issue
    for APHIS. An increase of $25 million would provide $20.5
    million for an ongoing Citrus Canker eradication program in
    Florida and $4.6 million to ongoing Asian Long-Horned Beetle
    programs in Illinois and New York.
        The Animal Welfare budget request is seeking $15.2 million,
    an increase of $5 million over the fiscal 2000 level. These
    funds would maintain the current activities, increase the
    number of inspections and improve follow-up to verify
    corrections of violations found during these inspections.
        $5 million is proposed for general maintenance to the
    support and modernization of Plum Island Animal Disease Center
    facilities for 2001. In addition, APHIS is in collaboration
    with Ag Research Service in requesting $9 million to begin the
    modernization of the National Veterinary Service Lab in Ames,
    Iowa.
        The Agricultural Marketing Service budget includes an
    increase of $18 million. A total of $92 million is requested
    and appropriated in Section 32 funding to support a number of
    activities that support our strategic goals. Additional
    fundings would be used to continue the Mandatory Price
    Reporting for livestock program begun in 2000. That request is
    for $5.9 million. We would ask $400,000 to expand voluntary
    market news reporting to include more data on international
    markets.
        To implement the National Organic Standards program, we are
    requesting $703,000 for start-up costs, $600,000 to expand the
    market news program to include organic news, and $1 million in
    research on the impact that market orders have on organic
    producers.
        To expand the data collection capacity of the Pesticide
    Data Program to accurately reflect the level of pesticide
    residue in drinking water, we are requesting an additional $1.1
    million.
        To conduct microbiological testing in fruits and
    vegetables, to support the Food Safety Initiative, we are
    requesting $6.2 million.
        To develop small farm, export and sustainable agriculture
    activities that will assist small farmers to increase their
    marketing opportunities, $300,000 is requested for an increase
    in the Federal and State Marketing and Improvement Program.
        And to improve the information system to support commodity
    purchase programs, we are requesting $1 million.
        Mr. Chairman, that highlights the additional requests that
    we have in our budget. I and the administrators are willing to
    accept any questions that you might have.
        [The prepared statement and biographies of Michael V. Dunn,
    Dr. Craig A. Reed, Kathleen Merrigan, James R. Baker, Enrique
    E. Figueroa, and Kenneth C. Clayton follow:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                              user fee legislation

        Mr. Skeen. Thank you, Mr. Dunn. Let's start the
    questioning.
        If you would, in your testimony, you urge Congress to enact
    the proposed user fee legislation. Has that legislation been
    submitted yet?
        Mr. Dunn. I would defer to Mr. Kaplan on that.
        Mr. Kaplan. The legislation was actually submitted last
    year. It is the same legislation. So it is up here on the Hill.
        Mr. Skeen. No retread?
        Mr. Kaplan. No retread, no, sir.
        Mr. Skeen. Thank you.

                            asian long-horned beetle

        Mr. Dunn, the administration has made a strong case for
    increased trade with China. You mentioned in your testimony the
    situation with the Asian Long-Horned Beetle which came into the
    United States in wooden packing crates from China. This insect
    is costing Federal and local government millions of dollars in
    damage to trees in New York and Illinois.
        Are the Chinese doing all they can to eliminate this
    problem? What is the status?
        Mr. Dunn. Mr. Chairman, I am very, very pleased to report
    that China has been a model trade partner in this instance on
    Asian Long-Horned Beetle and packing crates. We went to them
    with our emergency program when we introduced it because of the
    infestation that we were getting from the packing crates.
        They have exceeded 97 percent in compliance with what we
    have asked them to do. That is remarkable that they were able
    to mobilize and to be able to be so responsive to our
    regulations in such a short time.

                                   screwworm

        Mr. Skeen. That is very interesting. You mentioned, too,
    the reinfestation with Screwworm.
        Mr. Dunn. Mr. Chairman, I am very sad to report that just
    recently, within the last month, we have had a number of finds
    of Screwworm in horses that are being brought into the United
    States. At our center in Miami we have found that a number of
    the horses have been infested with Screwworms. Unfortunately,
    one shipment had gone out. We are in the process of doing
    trace-back on that to ensure that there has been no
    infestation.
        We are gearing up to ensure that if we have to, we would be
    able to release sterile flies in the United States if we found
    the need to do so. But it illustrates, Mr. Chairman, the need
    to finish up our program and to talk with South America about
    them beginning, initiating a program for eradication of
    Screwworm as well.
        Mr. Skeen. I was around the headquarters in Texas when we
    started that program. It was tremendously successful. We used
    to spend most of our time in the summertime clearing up
    Screwworm problems. Surely we don't want to see it start in
    again. We are trying to move the laboratory down to Panama, so
    they can control it in both Hemispheres. I have great interest
    in keeping that exercise going for us, because it has been very
    well done.
        I was surprised that we had some infestation coming across
    the border on horses.
        Mr. Dunn. It demonstrates, Mr. Chairman, that we have to
    keep our vigilance up, that we need to find a way to finance
    that facility in Panama as well.
        Mr. Skeen. We are working on it.
        Mr. Dunn. Yes, sir.
        Mr. Skeen. Miss Kaptur.
        Miss Kaptur. Thank you, Mr. Chairman.

                              international trade

        Mr. Dunn, in your excellent testimony, you talked about the
    rising level of imports into our country and you used, what was
    the figure you used, every 6 years the volume doubles coming
    in?
        Mr. Dunn. Every 6 years, the volume of what we inspect
    doubles.
        Miss Kaptur. You are talking about agricultural imports?
        Mr. Dunn. This would be all imports that are coming in that
    our inspectors handle--the shipments that come into our
    airports and our seaports, that volume is doubling every 6
    years. We are supposed to inspect everything.
        Miss Kaptur. What percent do we actually inspect?
        Mr. Dunn. Our goal is to inspect 2 percent. Unfortunately,
    we fall short of that.
        What we are in the process of doing is conducting an
    individual risk assessment of each port to determine what the
    pathways are in that port and where pest and disease may be
    coming in. Instead of treating them as ``one size fits all,''
    we are trying to target our resources at those particular
    ports. It is something that the Secretary and I have talked at
    great length about in recent times, and he has a great deal of
    concern about this, as do I.

                           exotic pests and diseases

        Miss Kaptur. What is the total amount that the Asian Long-
    Horned Beetle has now cost the people of this country, counting
    the funds that are in your budget, the funds that the State of
    New York and the cities of New York and Chicago, et cetera--I
    am interested in looking at that.
        I am looking at Citrus Canker. You are asking for an
    increase in the budget you submitted to us. What we tend to do
    is we look at this in terms of individual outbreaks, problems.
    Can you provide for the record the total cost to the people of
    the United States for all of these various invasive species
    that are coming in here and pests that are coming in on
    imported products or animals?
        I have never seen that figure submitted by anybody at USDA.
    Are you able to put that together for us?
        Mr. Dunn. We will do that for the record, Miss Kaptur. I
    could not do it from the hip here.
        Miss Kaptur. Right. You have some numbers there perhaps on
    the cost of the Asian Long-Horned Beetle increasing?
        Mr. Dunn. The amount that we have put in, Federal side, is
    $7.3 million in fiscal 1999 and $13.6 million for fiscal 2000.
        Miss Kaptur. So it is rising?
        Mr. Dunn. Yes, ma'am.
        Miss Kaptur. What is happening with Citrus Canker? Has that
    not also been rising as I recall? That wasn't even in the
    budget a couple of years ago. Now we have that problem.
        Your budget this year proposes over $20 million, $20 to $30
    million?
        Mr. Dunn. Yes, Miss Kaptur. We are requesting $20 million
    in Citrus Canker. Two years ago, the Director of Agriculture
    for Florida, Bob Crawford, and I sat down with the industry to
    try to get our arms around the problem of Citrus Canker. We
    asked our staffs to put together a multiyear plan to address
    this particular problem that we had. They came up with a
    multiyear plan to address Citrus Canker problem.
        What we found is that that plan was not adequate, that we
    didn't have enough buffer zone around trees that were actually
    infected, and it has been exacerbated by hurricanes and other
    weather-related situations.
        So what has happened is, the State of Florida has come back
    to us and asked that we join them in doing a single year, all-
    out attack on Citrus Canker to try to eradicate this. This
    unfortunately is a situation where we simply--the only tool we
    have in our tool box to address this is to remove the trees.
    This is very, very costly. Our proposal for just simply
    eradication and surveying, operating that program is $175
    million for completion. We have already spent about $44 million
    on the eradication program.
        Miss Kaptur. This counts both State and Federal money?
        Mr. Dunn. Yes, ma'am, that would be both State and Federal.
        Miss Kaptur. That is significant money. I know Congressman
    Boyd has been a leader on this subcommittee in trying to
    address that situation. I have very little time in this first
    round, or any round, but I wanted to just really urge you for
    the record, step back from any one infestation, one can list
    them. I would like to know as these imports double every 6
    years, if those are the correct numbers, what this is costing
    us inside our economy to correct the mistakes, to correct the
    problems, and we haven't even talked about some of the other
    costs that I am sure are hidden in your various budgets for
    various outbreaks that we are experiencing.
        I would really like to know what the cost, Federal cost, is
    for international trade in your budget. You probably can't
    speak to some of the other agencies, and I know it is growing
    and I don't want to get off into some sidetrack on just one
    infestation. I would like you to provide us with a summary of
    that.
        Mr. Dunn. We certainly wouldn't hide anything in our
    budget. I will get you that.
        [The information follows:]

        APHIS spent $42.1 million to combat emergency outbreaks of
    various invasive species in FY 1999, as follows (dollars in
    thousands):
            Pest/Disease:                                       Amount Spent
    Asian gypsy moth..............................................      $128
    Asian long horned beetle......................................     5,104
    Brown tree snake..............................................       265
    Citrus canker.................................................    19,710
    Classical swine fever.........................................       982
    European gypsy moth...........................................       490
    Karnal bunt...................................................     2,433
    Medfly........................................................    12,425
    Olive fruit fly...............................................       429
    Pink hibiscus mealybug........................................       137
                        --------------------------------------------------------------
                        ____________________________________________________

          Total, FY 1999..........................................    42,103

                                invasive species

        Mr. Dunn. There is an economist that has projected what
    invasive species cost the United States, and it is somewhere in
    the neighborhood of $123 billion annually. I will get that
    report and send it to you, because that would include forest
    and streams and everything else over and above what we do in
    Animal and Plant Health Inspection Service.
        Miss Kaptur. I know my time is up. Mr. Chairman, I would
    also ask the Under Secretary if he would be able in his reply
    to my question to also suggest other mechanisms that we might
    have available legally to place some of this cost on those who
    have actually created the difficulty, and how one might go
    about doing that--not only in this subcommittee, perhaps in
    other places in this Congress. But it seems to me that the
    importer has a lot of responsibility here, and I am very
    interested in looking upstream, how this actually got here and
    how we might move some of these costs to the perpetrators.
        Mr. Dunn. There is legislation in front of Congress, the
    Plant Protection Act, which would increase the fines for us on
    folks that we find that have smuggled in or brought in
    purposely products that pose a threat to us. I think that is
    one of the steps that we ought to take. But we will get you
    that additional information.
        [The information follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Miss Kaptur. Thank you very much. Thank you, Mr. Chairman.
        Mr. Skeen. Mr. Nethercutt.

                                trade with china

        Mr. Nethercutt. Thank you, Mr. Chairman. Welcome to you
    all.
        Mr. Secretary, we now know that China is willing to buy
    about 50,000 metric tons of U.S. wheat, about 30,000 metric
    tons from my district, soft white wheat from eastern
    Washington. You and I have had conversations before about the
    T.C.K. Smut issue. We are delighted that this barrier, that I
    think is clearly a nontariff barrier, really a pretext by China
    not buying our wheat is perhaps behind us.
        Do you attribute that breakthrough to China's desire to be
    in the WTO and get permanent normal trading relations, or do
    you attribute it to the activity that your agency has
    undertaken to try to convince China that T.C.K. Smut is not a
    serious threat?
        Mr. Dunn. I think realistically, Mr. Nethercutt, I would
    have to say both. We signed--I signed an agreement--April of
    last year with the Chinese on sanitary/phytosanitary issues. We
    did not have a Chinese translation of that until we were in
    Seattle for the WTO meeting. That was signed at that time; that
    appeared to open the doors.
        There was a lot of very hard work. I give credit to our
    international service APHIS employee, Dale Mackey, who is in
    China working very closely with the Chinese to convince them of
    the concerns; and in the Grain Inspection, Packers and
    Stockyards, Mr. Baker's folks worked extremely hard on this.
    But I think there is also a desire for China to prove that they
    are going to be a responsible trading partner.
        Mr. Nethercutt. I hope they are, because it is a great
    market potentially for us in America at a time when prices are
    low and we are trying to get exports moving and move product to
    other countries. I thank you for the work that has been done,
    and all those on your staff who I know have labored on this
    over the years on this issue.

                              wolf reintroduction

        Dr. Reed, I see in your written testimony that APHIS, in
    cooperation with the Department of the Interior Fish and
    Wildlife Service is assisting livestock producers and farmers
    by managing damage caused by increased wolf activity in Wyoming
    and Idaho and Montana. Has the U.S. Department of Agriculture
    assisted the Interior Department in reintroducing wolves into
    these areas?
        Mr. Reed. We had a minor role in the actual reintroduction,
    but as they are reintroduced, we play a part in making sure
    that the predator damage is managed; and we also work with the
    Fish and Wildlife Service to track the wolves and make sure
    that they are not posing a continual threat to producers.
        Mr. Nethercutt. I am on the Interior Subcommittee, as well
    as this one. On this subcommittee, I think I speak for all of
    us on both sides of the political aisle that we are protective
    of the research dollars and the ag funds that go to help the
    agriculture economy across the country.
        Is the Department of the Interior funding its share, fair
    share, of the wolf problem; or having now reintroduced wolves
    to these areas, is USDA now stuck with the consequences and the
    cost consequences of that reintroduction?
        Mr. Reed. I don't think the Department of the Interior has
    abandoned this, but certainly we know our work is increasing.
    The wolf numbers are increasing both in the Northwest and in
    the Upper Great Lakes, and so there are more problems there
    because there are a lot of wolf pups being born every spring.
        Mr. Nethercutt. I understand that. But my question is, who
    is paying the bill by virtue of the reintroduction? Is it now
    switching over to you folks having to pay the consequences and
    the costs of this reintroduction, or is Interior funding any of
    it?
        Mr. Reed. No, both Departments share the costs.
        Mr. Nethercutt. What are the numbers?
        Mr. Reed. I will get those for you.
        Mr. Dunn. Mr. Nethercutt, we do have annually transferred
    from the Department of the Interior's budget $100,000 to our
    Wildlife Services for their share in paying for our work with
    them on predator control of the wolves.
        Mr. Nethercutt. Is that adequate? Does that cover your
    costs?
        Mr. Dunn. I would have to get back to you on what the
    actual costs are.
        Mr. Nethercutt. I would appreciate that.
        [The information follows:]

        In FY 2000, APHIS projects spending $250,000 and the FWS
    will provide $100,000 for wolf introduction work in Montana,
    Idaho, and Wyoming and $109,000 in Arizona and New Mexico. In
    FY 1999, APHIS spent $175,000 and FWS provided $100,000 for
    wolf work in Montana, Idaho and Wyoming and $109,000 in Arizona
    and New Mexico. While APHIS and FWS share in the costs, APHIS
    estimates an additional need of $1,000,000 for Montana, Idaho,
    and Wyoming and an additional need of $140,000 for Arizona and
    New Mexico for aerial support and personnel to address
    complaints.

                                 pesticide data

        Mr. Nethercutt. The Pesticide Data Program is important, I
    think, to American agriculture with the implementation of the
    Food Quality Protection Act. It is unfortunate, in my mind,
    that we are using limited agriculture funds to finance a
    program that really is under the auspices of the EPA. I am just
    wanting to be sure EPA is funding its share and agriculture is
    funding its share.
        Are you satisfied with that breakdown or not?
        Ms. Merrigan. The Pesticide Data Program, as you say, sir,
    has been critical to EPA and their decision-making under the
    Food Quality Protection Act. We began this program in 1993.
    When it was first started, it wasn't necessarily seen as a
    linchpin for EPA decision-making. It has become that and it is
    one of those few programs where we have everyone from A to Z
    supporting it. We are in consultation with EPA in terms of what
    data needs they may have, but it really is a stand-alone
    program within AMS.
        Mr. Nethercutt. I would just close by saying, I am glad you
    are there to bring some reason to the models that are
    promulgated by EPA as it relates to farmers. I will close
    because my time is completed, and I thank you for your work.
        Mr. Dunn. Mr. Nethercutt, I would hasten to add that this
    information that the Agricultural Marketing Service provides on
    the Pesticide Data Program when reregistration of a pesticide
    comes up and the data is used by both sides. So it is a good,
    impartial entity that gathers that information, that everyone
    looks at.
        Mr. Nethercutt. Thank you.
        Mr. Skeen. Mr. Boyd.
        Mr. Boyd. Thank you very much, Mr. Chairman.
        Mr. Dunn and other members of the Department of Agriculture
    staff, I wanted to follow up on a statement that the chairman
    made and that is on the Screwworm issue. I was not aware of the
    information you brought us about the horses coming into Miami,
    maybe a shipment going out into the country someplace. That is
    a critical and scary thought. I know I spent a good bit of my
    youth treating calves with screwworms, summer and winter, Mr.
    Chairman. Not only has the benefit of that program been seen in
    the beef industry and other livestock--the commercial livestock
    industry, but in the South we have a more abundant population
    of wildlife, particularly deer, now than we have at any time in
    the last 50 to 100 years probably, certainly during my
    lifetime.
        A great deal of that reason is because of the eradication
    of the Screwworm. So it is imperative that we stay on top of
    that.
        But I want to shift back to an issue, a subject that Miss
    Kaptur opened, and that is Citrus Canker. It probably won't
    surprise you. I have ``licked that calf'' several times in this
    room, Mr. Dunn; with your indulgence, I would like to ``lick
    that calf'' again, as they say back home. Just to remind you
    and for the record that we first discovered Citrus Canker in
    Miami in 1995. Now today here we are almost 5 years later, 4\1/
    2\ years later, and we have Citrus Canker identified and
    subsequently causing the destruction of half of our lime
    industry, which is 3,000 acres and over 3,400 acres of our
    citrus industry. And the scary part about it is, it is
    scattered throughout the State. It is in Dade and Broward, it
    is over in Collier and Hendry, and it is all the way up the
    coast to Hillsborough, and it is moving north, and I think we
    had a find in the last few days in Palm Beach County. So it is
    moving toward the Indian River area. This is a very scary
    situation for our $8.5 billion citrus industry.
        I was interested in your comments about the meeting 2 years
    ago, not 4 years ago, with Commissioner Crawford about
    developing a plan that now seems not to have worked. I
    certainly don't want to go back and rehash all that; that is
    not productive. What we have to do is go forward from where we
    are now.
        But we have had hurricanes in this country, we have them in
    Florida every year. Those things have to be taken into account.
    My question is basically, you have identified $25 million in
    your budget for Citrus Canker. But I think you said in your
    remarks that the plan that you put in place, the latest plan
    with the State and APHIS now says it is a $175 million project.
        How do we reconcile the $25 million request or $20 million
    request with a $175 million project? Are we throwing the citrus
    industry to the wolves or what are we doing here?
        Mr. Dunn. No, Mr. Boyd, what we are doing on the $175
    million is taking that plan that we put together 2 years ago
    and collapsing it from multiyears to a single year.
        But one of the things that we have recognized is that our
    overall surveillance of the State, we didn't throw a large
    enough net the first time around, and that is why as we began
    to find these moving north and south. And I think to a large
    part, in my mind, this is an emergency situation because it is
    a result of hurricanes and other natural disasters that spread
    this.
        Mr. Boyd. So are you saying that the $25 million, you have
    appropriated separately, but you still presume that you would
    use the CCC for the balance of the needed $175 million?
        Mr. Dunn. We would need--we are saying to the State, now,
    this is a draft plan, the $175 million plan. What we are saying
    to the State is, we assume that this will be a 50-50 match with
    the State, and this is what we need in addition to those moneys
    that we have appropriated this year.
        Mr. Boyd. And the Fed share would be $87.5 million of $175
    million. So we ask for $25 million in a separate budget request
    and you would secure the additional $60-plus million through
    CCC? Is that what you are saying? Because otherwise it doesn't
    reconcile.
        Mr. Dunn. It is over and above that request, Mr. Boyd. The
    actual $87.5 million.
        Mr. Boyd. We are not assuming here that we are substituting
    the budget request process for the CCC emergency procedure that
    we have used in the past; is that correct?
        Mr. Dunn. That is correct, sir.
        Mr. Boyd. Mr. Chairman, if I could continue this.
        Mr. Skeen. Go ahead. We will indulge you.
        Mr. Boyd. I really want to complete the loop here.
        Mr. Dunn, last year, last fall when we did the 2000 budget,
    we put language in there, in section 204 of Title II which says
    that notwithstanding any other provision of law, the Secretary
    shall use not more than $9 million of CCC funds for a
    cooperative program to replace commercial trees removed to
    control Citrus Canker.
        Now, we put that language in there at the request of the
    Department because the Department told us if we put the
    language that way, then we would not have to go through the
    rule-making process, and you could expedite the disbursement of
    those funds; and certainly that would have a positive effect on
    our whole eradication program, because part of the problem here
    becomes a political issue with taking farmers and homeowners'
    trees out of their yards and out of their fields, out of their
    groves.
        But here we are, 6 months down the road, and now we are
    having this discussion about who is going to do it, we have to
    wait 60, 90, 120 days for a rule-making. Can we expedite that
    in some way? Because we put that language in there at the
    request of your folks so that we could expedite the
    disbursement of this.
        It is not a complicated issue. FSA and APHIS, I think, know
    exactly which trees have been removed. FSA has a process by
    which we can get that done.
        Mr. Dunn. Mr. Boyd, what those--the language that you are
    referring to I believe was to provide for the Shade Dade
    Program.
        Mr. Boyd. No, sir, that is a separate deal. That was the $7
    million which has already been disbursed to the State and the
    State is taking care of that. This is the $9 million for the
    commercial grower replacement, tree replacement.
        Mr. Dunn. I believe, then--the rule-making process that we
    have in place right now because what we have changed is the
    perimeter from 125 feet to 1,900 feet which includes more, and
    then for the lime groves findings.
        Mr. Boyd. My question is, we put that language in there
    that way at the request of the Department so we could expedite
    the rule-making process, and now you are telling us that we
    can't do that and it is really going to cause us a problem in
    our whole eradication process because the longer you delay
    those disbursements, the more of a problem you have with the
    growers and homeowners.
        Mr. Dunn. That money that you are referring to, we did get
    that through apportionment last week from OMB. Money for
    homeowners will be transferred to the State to pay for the
    homeowners. There is still some concern about the actual
    valuation of the commercial value of the trees, and that is one
    of the things we are looking at at this time.
        Mr. Boyd. Mr. Chairman, what I would like to do, if
    possible, I would like to end this line of questioning now, but
    on the second round come back to this issue. I know there are
    some folks sitting behind Mr. Dunn and others that have a
    little more knowledge about this, but I would like to have
    answered the issue about the rule-making on the commercial
    grower tree replacement.
        The issue is, we were told last year when we put this
    language in here that this language would expedite the
    disbursement, it would require us not to have a rule; and that
    is the question I would like to have answered on the next
    round.
        Thank you, Mr. Chairman.
        Mr. Skeen. Mrs. Emerson.

                              poultry legislation

        Mrs. Emerson. Thank you, Mr. Chairman. My first question or
    line of questioning, will go to Mr. Baker.
        It has to do with a subject we talked about last year,
    poultry and my deep concern about the increasing concentration
    and consolidation not only in poultry, which I think is the
    worst, but in all agricultural markets right now.
        In my particular district, we really have only one
    processor present, and it obviously happens across the board,
    but quite frankly this raises a lot of questions in my mind
    about fairness and fair competition in the marketplace. My
    producers have now formed their own trade association, if you
    will, called the Heartland Poultry Growers Association, simply
    so they can get together and speak with one louder voice than
    individual ones. They face a lot of challenges which I am most
    concerned about.
        Let me ask you, it is my understanding that the
    administration has endorsed Miss Kaptur's legislation, H.R.
    2829, of which I am an original cosponsor. If that is the case,
    can you all just provide to us a letter stating that the
    administration does endorse this legislation?
        Mr. Baker. I will certainly try. I don't see any reason why
    we shouldn't. We are on record as endorsing it.
        Mrs. Emerson. I believed you were, but if you could
    actually give it to us in black and white, I would feel a lot
    better about it. Could you do me a favor and explain to the
    subcommittee how this legislation does not create special
    privileges for poultry growers or the poultry industry, but it
    merely provides you all at USDA with the very same authority
    you already have over the beef and pork industries?
        Mr. Baker. We presently have administrative authority in
    the beef and poultry industry. We do not have administrative
    authority over the poultry companies.
        Mrs. Emerson. You mean beef and pork, but you don't over
    poultry?
        Mr. Baker. That's right. Any formal action that we have to
    take against a poultry company, we have to refer that action to
    the Department of Justice, which takes that action. We have the
    responsibility to investigate and try to resolve issues with
    poultry companies, but no authority, no heavy authority. It was
    never given to USDA; we have asked for it.
        Mrs. Emerson. So it would be correct to say, then, the
    poultry growers are currently today at a disadvantage relative
    to beef and pork producers; is that correct?
        Mr. Baker. That is correct.
        Mrs. Emerson. Tell me what kind of concerns y'all hear from
    poultry growers, and do you think that Miss Kaptur's and my
    bill would, in fact, help you address those concerns that you
    are hearing?
        Mr. Baker. The last question first: Yes, it would help us
    address them.
        Just recently, in the last month, we sent eight people into
    a poultry company in Mississippi; and five to interview
    growers, and three to interview management for 4 days. The
    management had canceled the contracts with 130 growers, taken
    out the fuel allowance that they had had for years, and reduced
    the value of the contract. We asked a tremendous amount of
    questions, got all the records we could from the company. When
    we left on the fourth day, this company had the best contract
    in Mississippi.
        But again, our authority was not there. Our presence was.
    And the growers were greatly, greatly appreciated that we
    responded with that magnitude to address their concerns.
        Mrs. Emerson. So obviously if you could have the same
    authority that you do with the beef and pork industry, that
    would even help the situation further?
        Mr. Baker. It is kind of like an offduty policeman. In
    other words, he is there, but you really don't know it. That
    just happened with the poultry companies. We are there, they
    don't have to recognize us. They do, and we have since
    developed a better response from the companies. Any formal
    action still has to be taken with Justice.
        Mrs. Emerson. Last year y'all requested an increase of
    $750,000 for poultry compliance activities which we approved,
    and this year you are asking for $800,000 to examine the
    competitive structure of the poultry industry. Can you tell us
    in a little bit more detail what you did with last year's funds
    and what you would do with the proposed increase this year?
        Mr. Baker. Yes. Last year we had beefed up our
    investigative response out in the districts, consolidated
    poultry activities in the Atlanta region, but did not have the
    money to staff up for the poultry work. We used that money
    basically last year to increase the staff.
        This year, most of the complaints that we hear from the
    poultry industry are complaints tied to the contracts; the
    contracts are just not adequate enough to make cash flow. Is
    there competition in the contracts? So we think we need to
    focus on the competitiveness of the contracts, and see if they
    do provide cash flow for people to make a return on their
    investment.
        We want to get into the details of the contracting with the
    people that we were able to hire last year.
        Mrs. Emerson. Mr. Chairman, let me just ask one more quick
    question then.
        If, in fact, we were to pass Miss Kaptur's and my
    legislation granting you the same authority that you have with
    beef and pork, would that require even more than the additional
    $800,000?
        Mr. Baker. We do not think so.
        Mrs. Emerson. Thank you very much.
        Mr. Baker. We do not think so. The money that we have would
    be adequate. The authority is what we need.
        Mrs. Emerson. Thank you very much.

                           mandatory price reporting

        Mr. Skeen. While we are at this stage, let me address this
    to Administrator Merrigan. I understand that the proposed rule
    on mandatory price reporting is scheduled to be published in
    the Federal Register on March 17. And it is now available on
    your website. I want to commend you for the rate at which you
    were able to put the rule together.
        How long is the comment period open and when do you expect
    to publish a final rule?
        Ms. Merrigan. The comment period, as stipulated by the
    statute, would be 30 days long. When we go to a final rule and
    actually implement will be sometime this summer. The statute,
    as you know, sir, had a very aggressive timetable for AMS to
    follow to get this program up and running. By my estimate, we
    are about 6 weeks behind.
        Mr. Skeen. It is aggressive.
        Ms. Merrigan. We are really struggling to meet the
    deadlines. We will have a program up and running. I know people
    are anxious for it. It will be up this summer.
        Mr. Skeen. You have done it very well, especially in the
    time you have had to get acquainted and put it into use. We
    appreciate it.
        Ms. Merrigan. Thank you.
        Mr. Skeen. Miss Kaptur.

                             local producer outlets

        Miss Kaptur. Mr. Chairman, I wanted to ask several of our
    guests this morning, in northwest Ohio, where I live, the only
    place you can buy poultry raised by local growers, retail, is
    at the local farmers market in a little poultry shed which is
    inspected by our city; and I buy my chicken there. At any other
    store in our region--and there are several chains that
    operate--you cannot purchase locally grown chicken. This is
    troubling to me.
        The same is true with eggs. The only place you can now buy
    eggs in our region produced by local growers is at a few of the
    independently owned vegetable markets that operate in our area.
        About 2 years ago, when our hog producers were getting
    about 9 cents a pound for pork, I went to the store and I
    looked at the prices and they hadn't gone down in the retail
    chain. If we have price elasticity in food production, why
    wasn't it reflected on the shelf?
        The question I have to all of you or any one of you would
    be, what is happening in our country?
        Secretary Dunn, you talked about concentration and
    consolidation, that our local producers can't get on the shelf,
    and that in fact whoever is controlling price in this country
    in food purchases at the local retail store doesn't respond to
    the marketplace. But in fact when the price of something like
    pork goes down to the producer, it doesn't go down in the
    store.
        What is happening?
        Mr. Dunn. The question on inspection of the local processor
    is something that food safety inspection service would handle
    which is under Under Secretary Woteki's jurisdiction. We have
    been asked to look at the retail side, especially since last
    year, last December, when pork prices had dropped to $8 a
    hundredweight, and many people did not see prices come down on
    the retail side. That is something we have talked to Economic
    Research Service ERS about.
        Miss Kaptur. Do you have the funds to do that now? Can you
    give us a report on why prices didn't drop in these retail
    stores?
        Mr. Dunn. I do not have anything in Marketing and
    Regulatory Programs that would address the retail sector. That
    would be under the Federal Trade Commission's jurisdiction.
        I might add that I had an opportunity to visit that shop
    that you mentioned. And was very impressed with what they were
    doing.
        Miss Kaptur. I am sure they are inspected by the State, and
    I don't know by how many people. But the point is it is the
    only place you can buy locally grown products from our
    producers. So my question really goes to the heart, if we have
    these producers that are really trying to survive in this
    economy, why can't they get on the local shelf? And I know that
    our community is not the only one where that is happening. Does
    anybody at USDA care about this?
        Ms. Merrigan. Let me, from the Agricultural Marketing
    Service, speak to your question, your concern briefly. I mean,
    there are institutional barriers, as you know. You, along with
    the other committee members, have asked the Agricultural
    Marketing Service and we are working in cooperation with the
    Economic Research Service to look at slotting fees as an
    institutional barrier.
        But one of the other things I find is, a lot of the small
    farmers that I work with are really great on production
    management systems. They are not always so great on marketing.
        One of the things that we try to do at AMS through the
    Federal/State Marketing Improvement Program, through the
    partnership with the SARE program, on small grants for direct
    marketing for farmers that the committee provided to us, and
    through our wholesale market development program, is to find
    ways to get that farmer into the market, to get his or her
    product to local markets.
        The other thing I will tell you about is, we really need to
    think more about the consumer end. You clearly are a consumer
    who cares about buying locally. Where I am from in western
    Massachusetts, they have a whole campaign called ``Be a Local
    Hero.'' The local supermarkets are actually behind it. They are
    stocking more locally grown items. They have T-shirts and
    campaigns, and it really is starting to work the consumer-
    demand side that we don't see across the country.
        One of the things we are trying to do in AMS is look at
    these little experiments, where these things are happening, and
    try to replicate them and share that intelligence from farmer
    to farmer.
        Miss Kaptur. Mr. Chairman, I just want to say with what is
    going on in rural America today--and maybe I just haven't read
    this testimony from all the witnesses this morning completely,
    I don't sense an urgency of USDA, trying to meet the real
    crisis that is out there, in the budget proposals that have
    come before us to try to help these farmers. I am talking about
    small and independent farmers. How, medium-size producers gain
    a foothold in this marketplace. There is too much of a
    business-as-usual attitude.
        Maybe I am not reading your budget submission completely,
    maybe I am misunderstanding something, but I would like to see
    more focus on how this year there is nothing in the
    supplemental. We are just providing AMTA payments to hold the
    whole structure up right now. But in terms of really dealing
    with the small and medium-size farmers that are out there, I
    don't see in this budget efforts to--you think that it is a
    good idea in western Massachusetts--then to expand it to many
    other places, to really work to move product to farmers
    markets, if that is the only option we have got left in the
    country in many places.
        I just don't sense the urgency in where the pressure really
    is, on helping the small and medium-size producer, because the
    big folks are doing okay with the AMTA payments. But it is the
    small and medium-size producers, that aren't row crop, that are
    really having trouble; and I am really troubled by what I see
    as a lack of commitment by USDA and what it has presented to us
    thus far.
        Thank you, Mr. Chairman.
        Mr. Skeen. Mr. Bonilla.
        Mr. Bonilla. Thank you, Mr. Chairman. I would like to start
    with the request, the budget request, for the Boll Weevil
    Eradication Program. There was a request in my understanding of
    2.8 million and that would eliminate any cost share for the 8.5
    million acres either currently in the program or about to enter
    the program.
        This being an especially tough time economically for a lot
    of our producers out there, it seems that this would, in
    essence, be pulling the rug out from under a very successful
    program. I hope that the Department sees fit to change its
    position.
        How do you see this?
        Mr. Dunn. Mr. Bonilla, the last couple of years what the
    Department has done is look at the Boll Weevil Eradication
    Program, and it is very I successful, and it is one that the
    Department does support. However, given the limited budget
    authorities that we do have at USDA, we have worked with the
    farm service agencies to ensure that they have the authority to
    provide loans for producers to take part and provide a buy-in
    by the producers for the Boll Weevil Eradication Program. That
    has been part of the budget submission.
        Mr. Bonilla. Is that, in essence, going to replace what the
    Boll Weevil line item would have provided if it had more money?
        Mr. Dunn. Historically, Congressman, what has happened is
    that the committee, in its wisdom, has found some way to
    replace the funds that we have said would be loans.
        Mr. Bonilla. I am sorry, I don't quite understand.
        Mr. Dunn. Traditionally, what has happened the last couple
    of years is that where we have proposed that this be a loan
    program through the Farm Service Agency, the committee has
    found a way to actually find funds to fund it 100 percent.

                                   FERAL HOGS

        Mr. Bonilla. This is something that a lot of us on this
    committee are concerned about, so we are going to keep trying
    to address this problem because we see it as very--again, as
    you agreed, successful program that we want to make sure that
    our producers can take advantage of.
        I want to move now to a question about something that may
    be unique to our part of the country down in the Southwest,
    along the Texas-Mexico border, and that is the feral hog
    problem in Texas. It is amazing the growth of the hog
    population down there that is now threatening--it is expected
    to pass the white tail deer population--and all of the farmers
    and ranchers down there see them as a--they are kind of fun for
    hunters to chase once in a while, but they are--also, the
    overriding factor is a concern for property destruction. They
    are just creating havoc on a lot of the farms and ranches down
    there.
        Is there any plan to help some of these producers down
    there with this invasion of feral hogs?
        Mr. Reed. We are working with the State of Texas on the
    feral hog population. Unfortunately, hog populations are
    increasing in the wild, just like they are in captivity, and we
    don't see a slowdown in their numbers. But we are helping the
    State of Texas.
        We know they cause considerable damage. Even with hunts and
    the hunt clubs killing some animals, we have got growing
    numbers of hogs, not just in Texas, but Louisiana, Florida,
    Tennessee, and Alabama, too.
        Mr. Bonilla. There has been, if anything, an acceleration
    in the number of hogs that we have down there. We would be
    interested in working with you all on that. Some of the farmers
    and ranchers down there just don't know what to do anymore.
    They are just flooding the place.

                  wildlife services operation budget reduction

        I will move now to a question about imported lamb. Last
    year the President signed a trade agreement that said--set
    limits on imported lamb. It was a very appropriate decision
    that we were glad that he saw the need to make. But on the
    other side, for the sheep and goat producers down there, they
    are concerned because the budget request this year recommends a
    $2.7 million reduction to the Wildlife Services Program. I
    understand Wildlife Services isn't directly connected to trade.
    However, on one end we are helping them and on the other end we
    are hurting them on a program in a reduction that is very
    significant to their ability to meet the needs of these
    difficult markets right now.
        Can you tell us what the thinking is there, helping on one
    end and hurting on the other?
        Mr. Reed. Let me talk about the Wildlife Services side of
    it rather than the trade side.
        We know that there was a reduction in Wildlife Services
    budget request for FY 2001. We haven't had to make reductions
    yet, but we are looking down the road this year to the
    operational budget being reduced, probably across the board. We
    see that as serious.
        We also had a rescission in the Wildlife Services budget in
    FY 2000. We were directed to make the reduction. It puts us in
    a box.
        Mr. Bonilla. So you would agree that this is not enough,
    this $2.7 million? I mean, the reduction does not provide
    enough of what we really need out there for Wildlife Services?
        Mr. Reed. We wouldn't have asked for it if we didn't need
    it.
        Mr. Bonilla. Again, this is an area that we hope to provide
    a higher number on, because I think we are in agreement that
    the line item request now is inadequate.
        Do I have remaining time, Mr. Chairman, or am I out of
    time?
        Mr. Skeen. We will indulge you for about a minute.
        Mr. Bonilla. Thank you.

                                 pork checkoff

        I want to move now--the Secretary recently announced that
    the USDA will hold a referendum on the pork checkoff program. I
    was wondering what the plan is to pay for this, especially in
    light of the fact that the Secretary said the Department did
    not have the money needed to pay for implementation of
    mandatory price reporting.
        Ms. Merrigan. The cost in the first year of mandatory price
    reporting, our estimate is $4.7 million, which the committee
    was very kind to provide to the Ag Marketing Service. Our
    estimate of what it will cost to conduct a referendum in the
    pork checkoff--it is not a final estimate yet because we are
    going to have a proposed rule on the referendum procedure;
    which will have a 60-day comment period, hopefully that will be
    published sometime soon--but our expectation is that that will
    be about $125,000. I have checked with the Office of General
    Counsel, and they have indicated to me that we would be able to
    take that money from section 32 administrative funds, that
    there is that flexibility there.

                                  cattle ticks

        Mr. Bonilla. Very good. And the last question I have on a
    different subject, covering a lot of territory here this
    morning, is the Cattle Tick Program, which a lot of my
    colleagues probably don't even know what is involved, because
    it is unique to our area, or primarily to my area down there.
        Tick fever costs about $5 billion a year in death losses.
    During the past year the first case of tick fever in 24 years
    was detected in Zapata County. Last year the program received a
    very small increase in funding. It is a program that I have
    been talking about for a couple of years now.
        Can you tell us how this money has been spent?
        Mr. Reed. We went down and visited with the tick riders in
    Laredo this past year with your staff. We are doing a number of
    things. We were able to provide pay increases rather than fill
    vacancies. The tick program is one of the most effective ways
    to control cattle ticks coming across the border; it is not
    getting any cheaper to do it but it is still effective. Ticks
    in Texas and Arizona on cattle are not the only problems we
    have. Ticks on other species are equally as important. We like
    the tick program, have supported it, and are trying to find
    ways to help the inspectors improve their grade status. We are
    behind it.
        Mr. Bonilla. Just a final comment, Doctor--not a question,
    Mr. Chairman, but I want to thank you for the attention you
    have given to this program down there. It is very important. I
    know you have worked very closely with my staff on it; I hope
    you keep doing that. Thank you very much.
        Thank you.
        Mr. Skeen. Mr. Farr.

                                 animal welfare

        Mr. Farr. Thank you very much, Mr. Chairman. I have several
    questions, and I will try to get through them.
        The first is related to Animal Care. Can you tell me how
    the Department's enforcement of the Animal Welfare Act has been
    affected by the budget shortfalls in the Animal Care Division
    over the past decade? Just briefly outline for us what the
    problem has been.
        Mr. Reed. Yes, Congressman, I can give you a pretty direct
    response to that.
        We have had basically a flat budget for animal care
    activities since 1991. Back then we were performing about
    17,000 inspections a year of licensed dealers and exhibitors.
    With that flat budget, we have had both an attrition of staff
    and an inability to perform the travel required so we are down
    to less than 10,000 inspections a year. The increased money
    that is in the budget will help to get us closer to the '91-'92
    inspection levels.
        Mr. Farr. I am glad to see--what was it a $5 million
    increase this year by the President?
        Mr. Reed. Yes.
        Mr. Farr. What improvements in the inspection program do
    you think will be possible with the $5 million? Will you get
    back to the 17,000?
        Mr. Reed. We will not get back to 17,000 initially, but we
    will be able to conduct much-needed training of our inspectors
    in the field, so they apply regulations more uniformly.
        The inspection business is more complicated today than it
    was in 1992, especially when you consider the new technology in
    biomedical research and the complexity of the research
    regulations.
        We will be able to hire a number of new inspectors. We will
    acquire equipment, cars, and have gas so they can perform
    necessary inspections.
        Mr. Farr. Has this shortfall affected the Department's
    ability to serve what is called the needs of the ``regulated
    community,'' the community such as zoos and laboratories,
    airlines?
        Mr. Reed. They support the increase and have aligned
    themselves with animal groups to support the increase. They
    want better service.
        Mr. Farr. Is it effective? Have you cut down on your
    service to the regulated community?
        Mr. Reed. We prioritize our inspections and go to the
    places where we think there are the biggest problems. We have
    performed fewer inspections. Those inspections include research
    facility requested inspections to establish their compliance
    status.
        Mr. Farr. So with the increased budget amount, you are
    going to be able to improve those services?
        Mr. Reed. Yes.

                                pierce's disease

        Mr. Farr. The committee reported a supplemental
    appropriations that contained $7.14 million for Pierce's
    Disease. I wanted to thank you for that.
        I am concerned about the way evaporation occurs in this
    funding. What I mean is, by the time the funding would reach
    the field level, the dollar amount could be anywhere from 15 to
    25 percent lower than what has been appropriated. I wondered
    what the agency's level of overhead amount will be, taken out
    of the $7.14 million that was appropriated, what the program
    level overhead amount will be taken out of these funds; and
    when the funds reach the regional office, is more taken out to
    support the regional office?
        What is your estimate of the $7.14 million funding level
    that will actually reach the field?
        Mr. Reed. I would have to get the exact breakdown for you.
    There is going to be a reduction for overhead. We have risk
    assessors, experts that are world-renowned people on Pierce's
    Disease. These folks have to be supported with a portion of
    that money.
        Mr. Farr. I think the frustration is when we get some
    research money appropriated to a crisis like that, just by
    trickle-down effect is the very problem you are trying to
    solve, everybody has put in their administrative claim on it
    and very little money hits the ground.
        What is the use of appropriating it if that is going to
    happen?
        Mr. Reed. We know that at least 85 percent reaches the
    field. We build support costs into the request. We know ahead
    of time that support activities become involved with these
    activities so must be included in the estimate.
        Mr. Farr. So you are claiming that of the $7.14 million, 85
    percent of that money, only 15 percent overhead for all levels
    of government that are involved with that?
        Mr. Reed. Yes.
        Mr. Farr. Total, not 15 percent each?
        Mr. Reed. No, it is not additive along the way.
        Mr. Farr. I will come back to that. Thank you.
        Thank you, Mr. Chairman.
        Mr. Skeen. Mr. Latham.
        Mr. Latham. Thank you, Mr. Chairman.

                           mandatory price reporting

        Welcome, everyone. Last year I made sure the price
    reporting was part of our appropriations bill and last year
    requested $6 million. I guess I have several questions.
        You are assuring us that that funding level is adequate. I
    would like to know how you arrived at the number. And because
    the responsibilities are broken up between the Food Safety
    Inspection Service and the Economic Research Service and the
    FAS, can you tell us where the breakdown is on those dollars,
    what agency, how much they get?
        Ms. Merrigan. The budget request for AMS of $5.9 million
    only covers the responsibilities that the Ag Marketing Service
    has. So as you point out, there are many agencies within USDA
    that have pieces of responsibility under the statute, the
    lion's share, though, being AMS. Of the $5.9 million--and we
    will provide you a detailed breakdown--a little over $3 million
    of that is staff.
        We have to hire a lot of auditors to run this program, to
    double-check that the information that we are receiving is
    accurate. We also have to purchase some hardware, some
    software. There is some travel in it.
        But we have a detailed breakdown on the $5.9 million. We
    feel very confident that that is a good figure.
        Mr. Latham. So the other agencies, then, will have it come
    out of their regular budget? Are there provisions? The budget
    will be adequate?
        Mr. Dunn. Mr. Latham, you will notice in the GIPSA request,
    there was $400,000 in there for their portion of the swine
    contract library in there. It would be my assumption that each
    of those agencies that are responsible for a portion of that
    would make similar requests, and I would have to defer to Mr.
    Kaplan as to what the other entities have done at USDA.
        Mr. Kaplan. There is an additional $500,000 in the NAAS
    budget for this item. For FAS and the other agencies you
    mentioned, this comes out of their base. There are no specific
    increases in their budgets.
        Mr. Latham. I just want to make sure that we don't come
    back and say, oops, we ran out of money and we can't do it. I
    am not sure my producers would appreciate that.

                                  pseudorabies

        Dr. Reed, your agency is working to eliminate pseudorabies.
    I have a major problem in several of my counties, very large
    outbreaks. It concerns me a great deal to see you reducing the
    budget, the funding by, what, $524,000.
        First of all, give us an update on how you are doing in
    this very serious problem, and how you can justify a budget
    decrease with the huge problem we have.
        Mr. Reed. We have shifted $500,000 from the pseudorabies
    program to the monitoring program to look at herds in counties
    to determine disease status. You have to know the disease
    status in all herds in an area to make sure that you are
    eliminating all of the disease.
        Second, we have made considerable progress on pseudorabies
    eradication. We started with over 1,100 infected herds a couple
    of years ago and now we are down to 400 herds. During this
    effort, we had a significant outbreak both in your State and in
    Minnesota that we addressed along the way. So we would have had
    a lot more problems without all of that.
        We can get you specific numbers on herds, dollars, et
    cetera, if that is what you would like.
        Mr. Latham. You are reducing monitoring. It would almost
    seem like, if you reduce that, you are saying, well, we are not
    going to find out about as many cases, so we don't have as big
    a problem. I don't quite understand.
        Mr. Reed. The monitoring is part of the pseudorabies
    effort. There were millions of dollars in direct payments that
    went to producers, but we have to keep monitoring the States to
    determine disease status.
        Mr. Latham. So what you are doing is taking money out of
    that; if I understood your answer, you are decreasing $524,000.
    But you said you are moving money out of monitoring; is that
    correct?
        Mr. Reed. The $500,000 has shifted from the pseudorabies
    program to the monitoring program. I may have misspoken
    earlier.
        Mr. Dunn. Mr. Latham, if I might, 2 years ago we did get
    $80 million for our pseudorabies program and another $40
    million last year to do that. We thought that we were well on
    the road to eradication. I think in Iowa, in particular, which
    is also my home State, the exceedingly warm weather has really
    exacerbated the problem. The fact of the matter is that we had
    not planned for this additional outbreak when we had prepared
    the budget, so we will take another look at this as you are
    suggesting.
        Mr. Latham. I would just, in closing--Go, Cyclones, this
    week at the NCAAs.
        Thank you, Mr. Chairman.
        Mr. Skeen. You are always wishing.
        Mr. Latham. Come on. We are there, man.
        Mr. Skeen. Mr. Boyd.
        Mr. Boyd. Thank you, Mr. Chairman.
        Secretary Dunn, I wanted to say, first of all, that you and
    your people have been very helpful and cooperative as we have
    tried to work through this crisis. I sensed an uneasiness about
    maybe the tone of my question, and I want to make sure that
    that wasn't mistaken.
        If there is an urgency in my tone, it is because, in
    Florida, we are deathly afraid of losing our $8.5 billion
    industry. Unlike the 1980s, when we contained the Citrus Canker
    to the nurseries, this has now spread into producing groves all
    over the State. That is the reason for the urgency in my tone,
    I guess. I just wanted to say that to you, Secretary Dunn.
        Do we have an answer about the commercial tree replacement
    at this time, or is it something you need to get back with me
    on, the rule-making and why we have to do that, given the
    language?
        Mr. Dunn. I have been given an answer, Mr. Boyd, but I
    think we might muddy the waters more than we would clear them,
    so if you would allow us to get back to you in writing on that,
    I would appreciate that.
        Mr. Boyd. The last thing we want to do at this hearing is
    muddy the water more.
        I want you to know that this whole issue of invasive pests
    is one that we all realize is a product of increased trade,
    increased tourism. I think you have cited the numbers yourself.
    There are many of us who support the efforts; I am a sponsor of
    the Canady legislation which will give you more tools to do
    your job, and you have allies on this committee who would help
    you get more resources to do your job. We want you to know
    that, because it is a little bit disappointing when we cite the
    problem annually, year after year, we don't ask for resources
    to deal with the problem.
        I know these are not necessarily your decisions, but I want
    you to know that you do have allies here to help fight this. We
    recognize what your burdens are there.
        I think the only other thing I want to say, if you are
    going to get back with me on the question, is the issue of the
    use of CCC funds; and there are some members of this committee
    that feel like there might be an attempt from somewhere up
    above, OMB or somebody, to replace the authority we have to
    deal with emergencies out of CCC by cracking into this
    committee's discretionary budget. I think I have your
    assurance--I know I certainly have the assurance of the
    Secretary--that that is not the case; and I think that is what
    you told me earlier, that you only asked for $20.5 million to
    deal with this issue, but you know that CCC is available if we
    have to go beyond that.
        Mr. Dunn. Yes, sir, we fully intend to go to CCC for
    funding of this new, combined, 1-year program.
        Mr. Boyd. Thank you very much. I look forward to the answer
    on the $9 million commercial tree replacement program.
        [The information follows:]

        In the case of the Shade Dade program for noncommercial
    trees, the State already had a voucher program in place that
    can provide a basis for distributing the $7 million provided in
    the supplemental. However, in the case of the $9 million
    provided in the supplemental for commercial trees, neither the
    State nor APHIS have a program in place to pay tree replacement
    costs, so it is incumbent upon us to develop a formula for
    determining who should receive compensation and how much they
    should receive. Beause there are many potential recipients of
    the money and many potential formulas for setting the amount we
    might pay, we must go through the rulemaking process to ensure
    that interested parties have a chance to comment and that we
    make the payments on a consistent and fair basis.
        We understand your concern with the delay in getting
    payments to farmers who have suffered losses. Although we must
    use rulemaking, we will expedite the process and give this rule
    our highest priority.

        Mr. Skeen. Mrs. Emerson.
        Mrs. Emerson. Mr. Under Secretary, or any of you all who
    want to answer this question, or everyone. This has to do with
    invasive species.
        The fact is that I am hearing almost as much as I have
    about telephone taxes from my farmers and ranchers about the
    President's executive order on invasive species and what you
    all are doing to support that. A lot of my producers believe
    that that executive order would limit their ability to use
    longstanding and legitimate agricultural products, and
    specifically--some of my livestock producers have said that
    some of the grasses they use for forage could be considered
    alien under the conditions that the executive order may
    establish.
        We have another problem that kind of relates to this, and
    that has to do with the whole issue of reintroduction of elk by
    our Missouri Department of Conservation, because they are
    considered a native species, if you will, and we are going to
    perhaps have, as a result of that, a lot of damage to crops and
    other livestock. The combination of these two things has got so
    many of my people absolutely up in arms.
        Obviously, while I applaud the general idea of the
    executive order, I am a little bit troubled that some of these
    same situations could occur once it is totally promulgated.
    Tell me what y'all are doing to address those concerns, if you
    will.
        Mr. Dunn. Mrs. Emerson, first of all, let me commend you on
    your efforts at reinstituting the Rural Caucus. That is
    something that we in the Department look forward to, and I
    think is going to be a tremendous help for us in rural America
    as well.
        Mrs. Emerson. Thank you. I hope so.
        Mr. Dunn. The Secretary chairs, along with the Secretary of
    Commerce and the Secretary of Interior, the effort on the
    executive order for invasive species. Animal and Plant Health
    Inspection Service has been asked to take the lead as far as
    the Department of Agriculture in this arena. What we are trying
    to do is to combine the efforts of eight different departments,
    over 22 different agencies, to ensure that we are all focusing
    in the same way to identify the problems as early as possible,
    to take the steps that we need to eradicate those problems or
    reverse what we are doing now.
        With the loss already of 100 million acres and another 3
    million acres a year, there is a great deal of concern. Two
    weeks ago, I chaired a panel in which we had members from the
    National Cattlemen Beef Association, from the seed association
    along with the garden club and the national conservation groups
    and the Secretary of Agriculture from California. I anticipated
    that there would be a lot of upheaval, that these folks would
    disagree on things.
        What I found was that they agreed on more things than they
    disagreed. I think that is the spirit that we have got to go
    forward in implementing this executive order. We simply cannot
    use up 3 million acres a year of our countryside.
        Once we--there are a lot of concerns about developing lists
    and who should be on the advisory committee; we expanded that
    advisory committee from 25 members to 32 members to ensure that
    we had all the voices on there. I am guardedly optimistic that
    what we come up with will be positive and good for all sectors.
        Mrs. Emerson. Do you suppose that in developing the list of
    those species which are--you have a look on your face, but,
    anyway.
        Mr. Dunn. There is a lot of concern about developing the
    list. I don't know that anybody is going to go out and say, all
    right, here is the list, because one person's poison is
    another's cocktail.
        Mrs. Emerson. I guess if you don't develop some sort of
    criteria, if you will, for what is alien and what is native,
    then how in fact will this executive order work?
        Mr. Dunn. What we are looking at are things--kudzu, for
    instance, that everybody can agree is a problem, no matter
    where you sit. Those are the types of things that we need to
    attack, that we need to be able to muster all the resources,
    not just the Federal Government, but State and local government
    and Indian reservations as well.
        So we are not in there without partners. We have a lot of
    partners in there and everybody is going to be heard.
        Mrs. Emerson. So that my producers can feel good about the
    fact, I can go back and tell them that they have a seat at the
    table, and that perhaps something as economically indispensable
    as fescue may not be considered alien?
        Mr. Dunn. That would be my hope.
        Mrs. Emerson. And mine, too. Thank you.
        Mr. Skeen. Mr. Farr.
        Mr. Farr. Thank you, Mr. Chairman. Mr. Reed, so in
    continuing that discussion on the Pierce's appropriation of
    $7.14 million, how much of that will reach California?
        Mr. Reed. I didn't do the math.
        Mr. Farr. You said only 15 percent would be taken off by
    all the administrative agencies, so that would be $6.069. So we
    can quote you?
        Mr. Reed. Yes.

                                  organic rule

        Mr. Farr. Let me move to another issue, organic rule. I
    authored the first legislation in the Nation when I was a state
    legislator in California, creating the California Organic Act
    which was the model for the Federal act in 1990.
        Under our act in the State of California, we have a label
    that you can put on, saying ``certified organic,'' and then it
    quotes the law, the ``certified organic'' by the 1990 organic
    act, California Organic Act.
        In the rules you have adopted, is it going to allow the
    States to continue to have--their requirements are tougher than
    the Federal requirements; and I understand in the rule you have
    just adopted, you kind of changed it. You added that States'
    requirements only be to unique environmental conditions with
    specific production or handling practices particular to the
    State or portion of the State.
        Does that interpretation mean that California cannot
    continue to use the ``certified organic'' label?
        Mr. Reed. I need to pass this to Kathleen.
        Ms. Merrigan. Let me just say that Secretary Glickman was
    sorry you were unable to join him at the press conference.
        Mr. Farr. So was I.
        Ms. Merrigan. We had to accelerate our schedule.
        Mr. Farr. He scheduled it on election day in California.
        Ms. Merrigan. We realize that was unfortunate. It was
    because the press broke the story before we broke the story.
        In terms of what a State is allowed to do under this
    proposed rule, it is pretty much guided by the statute that
    Congress passed in 1990. That is, a State can have standards
    beyond the Federal standards, but they may not discriminate on
    products coming in from other States, and they cannot assert
    that their organic product is greater or better than another
    State's product, and for that program that the State would
    have, those organic standards would have to be approved by the
    Secretary of Agriculture.
        The proposed rule, as you say, sets out certain criteria
    that a State program would assert as a reason to have an
    additional standard beyond the Federal standard. An example I
    always use is, if you have a sensitive aquifer that needs
    protection beyond which would make sense at a Federal level,
    that really is needed in a State or a region of a State,
    additional standards might be proposed for that.
        Mr. Farr. So you will be able to have products on the
    shelves that say ``organic,'' but they are not certified State
    organic, so you are going to have a competition in labeling
    here between Federal labels and State labels?
        Ms. Merrigan. No.
        Basically, the main job of USDA, when this program goes
    into place, is to accredit certifying agents, the existing body
    of private and State certifying agents that are out there, who
    will still be able to use their own seals. So, for example, in
    your own State, CCOF, which has a seal, will be able to
    continue to use that seal if they are the certifying agent.
        Mr. Farr. Right now, they are the only ones on the shelves
    in California?
        Ms. Merrigan. No. You have product in California certified
    by a lot of different certifying agents--Oregon Till, OCIA--
    there are no restrictions that I am aware of of product coming
    into your State that is certified by other States.
        Mr. Farr. The bottom line of the new rule is that it is not
    going to affect the existing labeling practices in California?
        Ms. Merrigan. My understanding of the proposed rule is that
    it meets at least all of the requirements that are currently in
    place in California. So there should not be any major
    difference felt in the State of California other than that
    certification will become mandatory.
        Now it is optional. It will become mandatory.
        Mr. Farr. I like that.

                           glassy-winged sharpshooter

        Lastly, the Glassy-Winged Sharpshooter is a huge problem in
    California. You know that. The question is, I am hearing more
    about this than any other exotic pest I have ever heard of, but
    I am also hearing that there is a concern that APHIS isn't
    really treating this much differently from any other pest and
    that there is some concern that since this is not of
    international origin, that we don't pay as much attention to it
    and that, therefore, because it is not of international--not of
    foreign origin, it doesn't get the attention because it is not
    a Federal action pest. Is that true?
        Mr. Dunn. I think that because the Glassy-Winged
    Sharpshooter is a vector for Pierce's Disease, we are treating
    this very, very seriously. In fact, I went out to Riverside and
    gave them $360,000 to help, which I thought was fantastic. I
    observed the city, the county and the State all pitching in to
    fight this problem, because they realize what an impact that
    would have on the local economy. It is something that is
    indigenous to the southeastern part of the United States; it is
    not something that has been indigenous to California.
        We are going to treat this as a serious pest, yes, sir.
        Mr. Farr. You don't treat it differently because it is a
    domestic pest rather than a foreign pest?
        Mr. Dunn. When you look at our regionalization standards,
    there are things that are in some regions of the United States
    that are not in other regions of the United States. What we try
    to do is ensure where we have something that is not indigenous
    to an area, we don't let it get in there. That is, of course,
    why California has all of their folks at the border stopping to
    check, to make sure that produce doesn't come in from other
    parts of the nation.
        Mr. Farr. Is that compensated by the Federal Government or
    is that all State-paid-for?
        Mr. Dunn. It is all-State, that program is a State program,
    but we have a similar program of keeping other things out
    nationwide. We have quarantines that we provide.
        Mr. Farr. That is what I am trying to get to, Mr. Chairman.
    We all--on this subcommittee, we all have sort of our own
    problems, pests that are in our areas, in our districts or our
    States that are not in other districts or States. Yet there is
    the same problem that Mr. Boyd talked about, the same reasons
    for transporting these pests that you don't want to be in your
    State.
        I think that there is a growing concern, and perhaps we
    just need a better education on what the Department does to try
    to contain these problems within the area where they occur so
    that they won't be spread either internally in the United
    States or into this country from outside. Perhaps we just need
    a better briefing on, if there is any difference between the
    two, between foreign and domestic, then what the program is to
    contain them within their region.

                             regulatory activities

        Mr. Reed. We have Federal and State quarantines to prevent
    movement in and out of certain States. We look at the
    Sharpshooter problem in California as an invasive problem, even
    though it didn't come from another country, we are working with
    the States on these problems. If we need to set up a
    quarantine, we will.
        Somebody asked earlier about progress on the Boll Weevil;
    we may get to the point where we need to establish a national
    quarantine on boll weevil. If we do that, it is going to cost
    money to enforce it. You can't just have it and just walk away.
    We consider it serious. That is why the National Plant Board
    and all of us work together with State departments of
    agriculture to make sure if a State has got a reason to keep
    product out of another State, we are going to help make sure
    that it works.
        Mr. Dunn. Mr. Farr, let me make another point, because
    there are some similarities here of the other diseases that we
    have talked about.
        This disease, Pierce's Disease, that the Glassy-Winged
    Sharpshooter is a vector for Plum Pox Virus that we have in
    Pennsylvania, Citrus Canker that we have in Florida; all these
    are viruses that right now we don't have any tool in our bag to
    fight. What we need is a Manhattan Project approach, to going
    in and looking at these viruses. Can we come up with an
    inoculation; is there something that we can do short of
    removing the trees and incinerating them. That's where we are.
        Frankly, we and ARS and others have been doing these things
    piecemeal. What the Secretary and I have been talking about is
    bringing all of this together and taking a look at what it is,
    and going after it with all of our resources, to come up with
    answers that address these problems. We have got to start
    thinking outside of the box that we are in right now.
        Mr. Farr. In closing, the State of California and
    Chancellor Orbach at Riverside has proposed to the State that
    they build a center for exotic disease--for exotic pests
    research, the Manhattan Project that you are talking about.
    They are asking for some Federal support, and the members of
    this committee are supporting that. I hope you are aware of
    that effort in southern California.
        Mr. Skeen. Miss Kaptur.
        Miss Kaptur. Thank you, Mr. Chairman.
        In my final round of questioning, whenever that comes, I am
    going to ask each of you to tell me for the record what steps
    you are taking administratively this year, or incorporated in
    this budget proposal for next year's budget, that are directly
    aimed at small and medium-size farmers and the crisis that they
    are facing across this country. But I will let you think about
    that for a minute.

                           chiapas screwworm facility

        Dr. Reed, you talked in your testimony about the
    effectiveness of the Screwworm Eradication Program. Last year
    when you all were before this committee, I asked the question I
    have asked of the Secretary and of others in the Department
    about the Screwworm facility that exists in Chiapas. We talked
    last year about how that might be converted, working with other
    parts of USDA to a facility that would employ people in
    agriculture down there producing something that would be
    appropriate to that environment. I remember Mr. Figueroa had
    talked about pineapples, coffee, tropical fruits that wouldn't
    necessarily conflict with something we grow in this country.
        Could you tell me, has anything been done inside the
    Department to try to reposition agricultural activity out
    there? I know that many hundreds of people are unemployed now
    who had worked in that particular facility.
        Mr. Reed. We have a meeting with the Mexicans the week of
    March 26 to discuss how we can help. The reason it was delayed
    to the week of March 26, 2000, instead of March 26, 1999, is
    because we don't have financing for the plant in Panama, so
    construction has not started. We know it is a little ways off,
    but we feel the need to have a meaningful conversation with the
    folks in Chiapas to decide on the future use of that facility.
    We are open to everything.
        Of course, whether it is agriculture or whether it is
    nonagriculture, the Mexicans, in great part, will decide how it
    will be used. We will be there the week of March 26, and will
    give you a report of that meeting.
        [The information follows:]

        On March 30, 2000, the US-Mexico Commission scheduled a
    meeting to discuss alternative uses for the screwworm
    facilities in Chiapa De Corzo, Chiapas, Mexico. We will report
    meeting discussions and future action plans when they are
    available to the committee.

        Mr. Dunn. Miss Kaptur, I traveled down to Chiapas to meet
    with the Governor and State Director of Agriculture 3 months
    ago, 4 months ago, to tour the facility that we have there and
    see how we are coming in the phasing-out there and what can be
    done.
        There are some immediate problems that we have in Chiapas.
    One is that there is a Medfly infestation there. I have talked
    with the Governor and the Secretary of Agriculture there. They
    have convinced other states in Mexico that they need to join
    Chiapas in fighting their Medfly problem, to eradicate Medfly.
    I think that is an important step. That is one way that that
    facility could possibly be used.
        But I was very impressed by the diversity of agriculture
    that they had in this state. I had prawns one night that were
    this big. They had a Thai restaurant at this little town in
    Mexico. I said, ``Why do you have this Thai restaurant? Because
    we raise these prawns here.''
        They are doing a phenomenal job of diversity down there
    because they realize they have a real problem with the citizens
    of that State and they have got to provide jobs. It is
    something that I am very cognizant of because you have made it
    indelible in my mind that we have to do something down there
    and not just run away and leave the situation.

                       exotic pest and disease outbreaks

        Miss Kaptur. I thank you for listening to our conversation
    last year, Mr. Secretary. I know we have talked with Gus
    Shumacher at the Department and others. We shouldn't leave this
    up to only AID, which knows almost nothing about agriculture.
    We ought to work directly with USDA to try to reposition; you
    have some friends up here in Congress who would want to help
    you do that. We thank you for being open to it.
        Dr. Reed, I wanted to go back to the issue of APHIS. You
    have such an important job.
        We have always had problems; anytime you cultivate plants,
    you have pests. That is just the nature of living things. But
    it seems to me that we have an unusually large number of
    serious developing problems that are different than in past
    years.
        Could you give us some background and put the number of
    outbreaks and the size of those outbreaks in context for us,
    based on what you have found; and also submit for the record
    the numbers of outbreaks in the various categories that I know
    you have, some of the scientists in your area have? Could you
    just talk to us more generally about what is happening in our
    country as a result of trade with the outbreaks that we are
    experiencing and how does that differ from the past?
        Mr. Reed. I guess we could weave that into part of what we
    are going to submit from the Department on the increase in
    trade and the doubling and all of that.
        We were surprised by the Asian Long-Horned Beetle. We were
    looking for agricultural pests on agricultural products, and it
    was coming in on the pallets. The pallets may have barbells,
    heavy equipment, or other items, and we were focusing on cut
    flowers and agricultural commodities instead of the packaging
    materials. So we have to look at pathways that we hadn't
    considered before.
        We know that there are complicated and multiple pathways
    out of the Caribbean into Florida.
        There are innumerable things that threaten the United
    States. Hog cholera is 90 miles away. If hog cholera gets here,
    we can expect a $2 billion bill the first month and we can
    forget about trading any pork in international markets.
        The greatest impact, to give you the short answer, is we
    have already eradicated a number of things that used to be
    really important to us. When I first got out of veterinary
    school, we were at the tail end of hog cholera eradication; it
    has been gone for 25 years. If it comes back, between the size
    of the farms and the way product moves in this country, it is
    going to spread faster. The demographics of farms have changed.

              countries posing the greatest pest and disease risk

        Miss Kaptur. Are there certain countries that pose the
    greatest risks to us and, if so, what are the top five?
        Mr. Reed. It is kind of a matrix between the problem and
    the country. For plant problems, we look to Asia and South
    America as contributing to the United States' plant problems.
    For animal problems, we look at South America and Europe as
    having animal problems that we don't want to have here, either.
    So it is kind of a matrix, but I will be glad to take a stab
    and get you a list and a matrix of that.
        Miss Kaptur. Have the number of pests increased, the number
    of viruses, the number of living creatures?
        Mr. Reed. Absolutely. We know things now that we didn't
    know 15 years ago. BSE, first identified back in about 1985 is
    a perfect example. BSE is a big problem. We don't want it. We
    are aware of plant viruses and bacteria that we now know can
    cause a problem for us. As Mr. Dunn said, we don't have any
    tools in the tool box to get rid of these. We don't have a
    treatment like we do for bacteria in humans or animals to treat
    these diseases. We have more and more of these diseases coming
    into the U.S. Plum Pox Virus, which is in Pennsylvania, has
    been introduced into the United States for the first time.
        Miss Kaptur. Where did that come from?
        Mr. Reed. We know that it probably came from Europe and the
    Mideast. How does it arrive here? It may be totally
    unintentional. Citrus Canker, for example, can be carried on
    workers' shoes, on equipment, on trucks that are moving back
    and forth. It is microscopic.
        We are into a very different ball game now than we were 5,
    10, 25, 50 years ago. Plus the trade, just the sheer magnitude;
    600 flights a day have been added to all the airlines. A lot of
    those are cargo, a lot of those are international. That is in
    addition to what is already here.
        The airline industry is expanding. You go to San Francisco
    and the terminal has doubled in size. Go to Dulles, it has
    doubled in size from 2 years ago. All these places are bringing
    incredible numbers of people and lots of products. That makes
    the risk grow exponentially.

                              risk insurance fund

        Miss Kaptur. Could I ask, at the WTO on the phytosanitary
    standards and so forth, has there been any discussion of some
    sort of a risk insurance fund that deals with bailing out
    places that may be impacted by trade and assessing fees
    associated with that trade? Have you ever gotten into that
    discussion as opposed to just setting standards?
        Mr. Reed. We have. Within Marketing and Regulatory
    Programs, we have talked about the possibility of insurance
    plans for producers against certain problems. One of the ones
    that is near and dear to my heart is classical Swine Fever, Hog
    Cholera; it would be nice if we had an insurance plan to
    protect us from that disease.
        We do talk about those issues and try to find alternate
    ways to protect our agricultural producers. The user fee that
    we have for Agricultural Quarantine Inspection is helpful. We
    are adding a number of new people to keep the pest and disease
    problems out of the U.S.
        It is not enough just to be able to treat a problem when it
    is here, but to keep it out of the U.S. That is why we are
    focusing on ways to get our preclearance programs in other
    countries so that people and products are free of agricultural
    pests and diseases when they leave another port, before they
    get here, and not just checked once they get here.
        Miss Kaptur. Thank you.
        Mr. Skeen. Thank you. I think we are getting close to
    ordering the end of this hearing. Let's have Mr. Boyd. I know
    that you had something.
        Mr. Boyd. Thank you, Mr. Chairman. I will be brief.
        Just to follow up on that line of questioning, I think the
    State of Florida has currently identified between 35 and 40
    separate pests that we are fighting now and that are having an
    economic impact on our agricultural industry. That is just one
    State. Many of those are indigenous to just our State. It is a
    very serious problem.

                              commodity purchases

        Ms. Merrigan, I have a copy of a letter here--I am not sure
    whether you have seen it or not; it is dated March 8--to the
    Secretary on the issue of the use of the Department's Bonus
    Commodity Program in the purchase of commodities. It is our
    belief that the current situation with fresh market tomatoes,
    we have had an ongoing issue here with Mexico, that maybe that
    program could be used to remove some of the fresh tomatoes,
    keep them from being dumped, destroyed.
        Have you seen that and what are your thoughts on it?
        [The letter follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Ms. Merrigan. I have seen the letter. I have talked to
    staff as recently as yesterday about where this request is. As
    you know, the tomato, because it is such a perishable
    commodity, has additional challenges that we don't face in some
    other procurement situations. But the staff has been directed
    to work on this as expeditiously as possible and to think
    creatively as to ways we might be able to use the Florida
    tomatoes.
        Mr. Boyd. Thank you.
        Thank you very much. Mr. Chairman, that is all that I have.
        Mr. Skeen. Mr. Farr.
        Mr. Farr. I have one short question. Thank you, Mr.
    Chairman.
        Mr. Skeen. How tall?
        Mr. Farr. Within your time frame.

                           pest and disease pathways

        Mr. Reed, I am really interested in this discussion we are
    having on control of exotics. Have you ever considered perhaps
    bringing in the scientists from these producing countries to
    sit down with our scientists to figure out how these things are
    transported and what we might do to prevent the importation? It
    is in both interests.
        When we learn about these exotics in this country, we get
    mad at the host country. Is there a better, using our--it is
    probably not rocket science; people can figure these things
    out. Have you ever convened an international group of
    scientists to make recommendations as to how we might better
    manage these issues?
        Mr. Reed. Yes, our sister agency, the Agricultural Research
    Service and us--and you may know Dr. Dunkel comes from the
    Agricultural Research Service and heads up our Plant Protection
    and Quarantine Programs--work with international counterparts
    to establish international standards. We go to international
    meetings, international plant protection conventions, the North
    American Plant Protection Organization, NAPPO, to participate
    in international standard setting issues.
        We have numerous bilaterals with countries that want to
    move products in here and we want to move products there. So
    there is a lot of international discussion.
        Before the end of this year, we plan on having a specific
    session to determine pathways for each port. As Mr. Dunn has
    said, one size doesn't fit all. Different products from
    different areas come into different places in the country. We
    need to focus our efforts on what is going to give us the best
    shot at finding what we are looking for, whether it is in New
    York City, Detroit, or San Francisco. We will have some
    specific pathway analysis done this year, and it will be done
    with our friends at ARS.
        Within the next few weeks, we will be convening with the
    International Plant Protection Convention. We meet with them
    yearly. These are the kinds of issues we discuss. It is
    incredibly important to work these issues out with the
    international scientists so we know about potential pest and
    disease entry points.
        Mr. Farr. Is there any explanation of your kind of war on
    bugs that we could use as a primer?
        Mr. Dunn. We can get you some things, Mr. Farr. We have
    just put out a Safeguarding American Agriculture on our plant
    side with 300 recommendations of things that we need to do.
    This was something that was sponsored by APHIS. We had members
    of academia and members of the industry to work on these 300
    recommendations.
        Dr. Dunkel is in the process of prioritizing those and
    costing them out, so you will probably see them next year in
    budget requests, because it becomes imperative that we do that.
    Dr. Dunkel is the Chair of the North American Plant Protection
    Organization. He will be hosting the meeting in San Diego,
    upcoming meeting of the NAPPO, to look at this.
        On the animal side, Dr. Torres, who is our chief veterinary
    officer, meets with the Office of Epizoics, International
    Office of Epizoics, and they do a similar type of thing. I have
    asked him to prepare a similar type of--safeguarding-things
    recommendations for us on the animal side. This is becoming a
    larger and larger issue, and something that I feel it is urgent
    that we begin getting our arms around.
        Mr. Farr. I agree. Thank you.
        Mr. Skeen. Miss Kaptur.

                                bonus purchases

        Miss Kaptur. Yes, Mr. Chairman, I wanted to ask
    Administrator Merrigan, you have section 32 funds that you can
    use for commodity purchases. There is about $400 million a
    year, as I am looking at this budget that provides for regular
    commodity purchases for use in school lunch programs; but you
    can use authority up to $300 million a year for bonus buys.
        According to the budget justification that came up to us,
    you are asking, USDA plans to use only $115 million of its $300
    million in bonus authority both this year and next year. Are
    those figures correct? And if they are, why wouldn't the
    Department want to use the full $300 million in view of the
    surpluses overhanging our markets?
        Ms. Merrigan. My understanding is that those numbers vary
    because of different marketing conditions. With your
    permission, I would defer to our Associate Administrator, Ken
    Clayton, who really follows that program on a day-to-day basis.
        Miss Kaptur. I thank you for that.
        Mr. Clayton. Miss Kaptur, I will just lean over here.
        As Ms. Merrigan was indicating, the Bonus Reserve, as it is
    often referred to, is a fund which we use really depending on
    market conditions. So the numbers you see in the budget were
    sort of a best guess at the time the budget was formulated and
    sent forward, certainly subject to revision as you work through
    the process.
        I know committee staff and Department staff work to
    communicate on current status. By definition, it will change
    over time because it absolutely does depend on market
    conditions faced by producers and where we are called upon to
    utilize the funds. That will vary as we move through time.
        Miss Kaptur. Again, I just want to say with the surpluses
    in our marketplace, I really think we ought to look at those
    numbers and see if we can't use those full authorities this
    year and probably next year.
        We have left Mr. Baker kind of off the hook here today. He
    has been kind of quiet. We always like to hear from him. He
    does such an excellent job.
        Mr. Skeen. That is against his nature, too.
        Miss Kaptur. He has had a tough morning here.
        Mr. Skeen. He is a survivor.

                           anticompetitive monitoring

        Miss Kaptur. I wanted to ask GIPSA's responsibilities on--
    anticompetitive monitoring of the marketplace and so forth
    involving all types of livestock, poultry. Could you describe
    for the committee some of the examples of the more onerous
    practices that you have found in the last few years in your
    responsibilities, please?
        Mr. Baker. You are probably referring to things like
    collusion, turn-taking in the marketplace.
        Just last year, we saw a major packer retaliate against a
    small feed yard operator. We will take that packer to task this
    year. When they retaliated, the packer pulled their buyers out
    of the feed yard. That will go to court. But the small and
    medium-size producers in this country are really in fear of
    losing market access. We have shifted a major part of our focus
    in Packers and Stockyards into making sure that that market
    access is there for the small and medium-size producers.
        There are numerous actions that we have taken. Many deal
    with producers who are harmed in some fashion--whether it is in
    the financial area, they fail to get paid; whether it is just
    by fraudulent or unfair trade practices.
        You had indicated earlier in your question, you would like
    to know how much of your budget is for the small and medium-
    size producers. I would have to sit here before you and say 90-
    something percent of ours is directed at that area.
        The biggest challenge we see in the industry today is
    structural change in the industry. The runaway train in the
    industry that has already left the station is this structural
    change. It is contracting and people trying to gain market
    access--maybe through a form of contracting or an alliance.
    This is where our people are gearing up to meet these
    structural changes in the industry.
        Electronic sales, it is unreal how many Internet sales are
    already out there. By and large, most of the people that are
    running the Internet sales have no concept of livestock
    marketing in this country. They have no concept of the Packers
    and Stockyards rules that they have to comply with. When we
    discover one, it is not like you just write them a letter and
    tell them about the rules. You have to actually go and make
    sure that they are following the provisions of the Packers and
    Stockyards Act.
        But this structural change is dynamic. It is changing the
    face of agriculture. If you talk about the grain side a little
    bit, there is the biotech issue. Also under the biotech, what
    we are trying to do is to focus in on the testing procedures
    and the equipment that is being used to make sure that the
    farmers that grow the biotech crops know the value of those
    crops, that there is a standardized process of measuring and
    valuing those crops instead of just the word-of-mouth
    assessment. We are trying to put some standardization to it.
    That is what we have asked for. Regarding your original
    question, we consider 90 percent of our budget is for the small
    and medium-size producers.
        Miss Kaptur. I hope in the written record you will
    elaborate a bit on how in the processing side you are working
    to keep access open to farmers, as you have stated here,
    because I know that is quite a challenge in many places around
    this country. Perhaps, Mr. Chairman, the remaining witnesses
    could discuss in terms of small and medium-size farmers
    administratively, or in this budget submission, what are they
    doing particularly to help them survive in this marketplace.
        Ms. Merrigan. I just jotted a quick list of things down
    which I will go through.
        I do want to concur with your assessment that we do need to
    do more. I want to take that message home to the troops and
    very seriously do an inventory of AMS programs to see where we
    might do better.
        Miss Kaptur. Thank you.
        Ms. Merrigan. Let me start. In our budget proposal we have
    a number of items for organic agriculture. We have found that
    87 percent of organic farmers are small or moderate-size
    farmers, mostly family farmers. Anything we can do to help
    support this industry, I think is important for small farmers.
    In particular, we have a budget item of $639,000 to pay for the
    first rounds of accreditation that USDA will do for the
    certifying agents. I think if we were able to find appropriated
    funds for that, we will go a long way in making sure that
    farmers out there, small farmers, won't suffer onerous fees.
        The FSMIP program--we have a budget increase request for
    $300,000 for this program. I think this is a win-win program.
    We do work with State departments of agriculture and, more
    recently, with community-based organizations to fund small
    amounts of money, on cutting-edge marketing, alternative
    strategies, mostly dedicated to small farmers and sustainable
    agriculture. It is a very small program with a very big bang to
    it.
        Procurement policies--we are the home of procurement for
    the school lunch program. I think we need to think more
    creatively in that avenue. We did a very exciting project this
    last year in the State of Florida, where we worked with some
    farmers to sell directly to schools; looking at that as a model
    and perhaps doing more of that is something that I am very
    interested in.
        Mandatory price reporting--we have a budget item in that. A
    lot of the producers, farmers that I deal with, say that they
    need more market information. One of the challenges we are
    going to face in implementing this program--I know Under
    Secretary Dunn talks about this all the time--is making sure
    that the information that comes from that program is actually
    usable and that small and moderate-size farmers really can make
    sense of the marketing environment that they are in. Once this
    program is in place, it will let us move forward.
        Farmers markets--I take your challenge very seriously. I
    think we need to do more and think more about how farmers
    markets can help be a haven for small and moderate-size
    farmers.
        Direct marketing on the Web--we have some work going on. It
    is at, I would say, the incubator stage in our direct marketing
    team, but we really are looking to do farmer-to-farmer sales
    and interesting marketing arrangements on the Internet, which
    is a growing market for everybody, I guess.
        SARE partnership--the amount of money that you provided
    last year, in the appropriations budget, to allow AMS to
    partner with the SARE, the Sustainable Ag Research and
    Education Program under RE&E, to provide grants to small
    farmers to do direct marketing research projects on their
    farms, is very important.
        Contracting--we have a proposed rule out currently--the
    comment period closes tomorrow--on forward contracting in
    dairy, where Congress directed us to do a pilot study. What we
    are proposing is that when farmers engage in forward contracts
    in dairy under this pilot program that there be a 3-day right
    of rescission, that farmers have a 3-day cooling off period, if
    you will, so they can check with their tax attorneys or lawyers
    to make sure that the contract is really what they want to
    engage in; and that they be given a disclosure sheet of what
    those contracts really mean to them.
        Those kinds of protections, to level the playing field in
    contracting, in the contracting environment that we are in, I
    think are very important; that, I think, is the beginning of
    what AMS should be doing.
        Regarding outreach, we have a very important meeting coming
    up in Memphis, Tennessee, in April. It is our Small Farmer
    Outreach Conference. We did one last year; we are going to do
    two this year, one in Memphis and one in California, where we
    bring in farmers from surrounding States, we actually provide
    them scholarships so it is a no-cost situation for small
    resource constrained farmers. We have a program of all the
    different things that USDA can do to help them.
        In this upcoming meeting in Memphis, we actually have a war
    room set up where we have people from AMS and FSA and all the
    various agencies, NRCS, and farmers can go in and talk about
    their individual problems. I think we need to do more of that,
    bring our programs out to the field.
        Finally, I do have a person in my immediate office who has
    been one of the key staffers in putting together and
    facilitating the Small Farm Commission that the Secretary
    recently appointed. We plan on continuing that partnership. I
    am hoping that body will continue to bring expertise and
    creative ideas to the Department.
        That is a short list. It is, again, something that with the
    accelerating loss of small and moderate-size farmers in this
    country, while I think it is a very impressive list, when we
    look at the statistics, we know we need to do more; and we are
    committed to that.
        Miss Kaptur. Thank you. I couldn't let this moment go by,
    when you mentioned contracting, without acknowledging Mr.
    Baker's tremendous work in trying to get information out that
    farmers can use--on contracting in the poultry industry, for
    example, as well as the price reporting that he has worked so
    very hard on. I just think he has done a tremendous job there.

                                 small farmers

        Mr. Reed. Congresswoman, if I could address your question
    on small farmers.
        Miss Kaptur. I would appreciate that.
        Mr. Reed. You will find that APHIS programs probably deal
    less with big industry and more with small farmers than most
    programs. Pests and diseases hit these small producers and
    farmers, whether they have wheat fields, citrus groves, hog
    farms, or are trying to raise tomatoes. APHIS is working with
    States at the producer level.
        I was in Michigan last week. I talked to two dairymen; they
    are milking 68 head. They are worried about tuberculosis
    getting into their herds from native wild deer. So APHIS--both
    Veterinary Services and Plant Protection and Quarantine work to
    protect plants and animals, but there is a public health
    component addressed by Wildlife Services, too.
        You know of our efforts in Ohio. You know the value we have
    placed on preventing the spread of rabies. This is not only a
    small producer, but a public health problem that we need to get
    a handle on before we have to come back and ask for a control
    measure that is 35 miles wide and 1,500 miles long to keep
    rabies from getting into mid-America. It is on Ohio's eastern
    border right now.
        Miss Kaptur. It has spread west from Pennsylvania, then?
        Mr. Reed. Yes, and West Virginia. We know it is coming
    across the mountains. Our services not only benefit just
    producers, but the general public.
        All of us are committed to making sure that the small
    farmers, who are least able to deal with big disease problems,
    are compensated fairly and promptly. Last year when we started
    making payments on pseudorabies, instead of letting these guys
    sit for a month or 6 weeks, like normal, we were able to pay
    them in 48 hours. I guarantee you that as a former farmer
    myself, having the check after your barns have been cleaned out
    and you don't have any way to produce anything, it is pretty
    nice to have that check in 2 days as opposed to waiting a
    couple of months. We push hard for that.
        Mr. Dunn. Miss Kaptur, I really appreciate this question,
    because I think it really gets to the heart of why we are even
    here, all of us. It is to help those family-size operators.
    They are the ones that need help the most.
        I think--you talk about passion. When I listen to Secretary
    Glickman talk about what we are supposed to be doing, I don't
    know of anybody that gets more passionate about targeting our
    resources to those family-size operators and saying we have got
    to do more, we have to reduce this tide of losing family
    farmers out there.
        He put together the Small Farms Advisory Group. He had
    asked Deputy Secretary Rominger to head that up, and we have a
    number of initiatives that are department-wide that we are
    going on there. What I would suggest is, this is now in Under
    Secretary Gonzalez's shop, where coordination of small farm
    operations resides, but it is not his alone. We all have a part
    in that, and we all have an obligation to fund it and go
    forward.
        What I would suggest to Mr. Kaplan is that we put together
    a crosscut on the small farms budget and bring it up here to
    show you where the Department as a whole has in fact zeroed in
    on that need.
        Mr. Baker did not talk about the things that we are doing.
    We are meeting with State departments of agriculture and State
    attorneys general, as well as our general counsel, along with
    the Department of Justice, to talk about compensation and fair
    trade practices, to talk about contracting that Kathleen had
    talked about, in talking about mandatory price reporting
    because many of the States are going forward with that. The
    bottom line is, is that really helping the farmer?
        During our Outlook Conference, I had a farmer get up there
    at noontime and say, I am drowning in data and I am starving
    for information. So what we have to do is make sure that the
    information we are providing gets to that person and is in a
    usable form so that they can be successful in their operation.
    That is the challenge for us.
        I appreciate you all asking that question because I think
    that is what we should all be about.
        Miss Kaptur. I thank you for that, Mr. Under Secretary,
    very much. I know we all went over the time, but the subject is
    important. They deserve that on the record here in our Nation's
    Capital. I am glad you are all thinking that way.
        I think it would be very interesting to take a look at a
    cross-cutting budget across that Department, trying to position
    the small and medium-size farmers in this economy, because if
    you look at the distribution of the AMTA payments last year and
    the emergency assistance, it certainly didn't go there. I think
    the Secretary recognizes that in the testimony he provided us
    this year, to see the change administratively and budgetwise,
    as we approach the new fiscal year, would be most helpful to
    us. We thank you very much for that.
        That will be my last round of questioning, but I believe
    Mr. Boyd has a question.
        Mr. Skeen. Mr. Boyd.
        Mr. Boyd. I will be very brief, Mr. Chairman. I just want
    to follow up on the theme that Miss Kaptur has pursued here.
        Dr. Reed, I will give you an example. In answering a
    question earlier, you talked about the Asian foreign beetle
    which came in in wood products. My question really has to do
    with what is it that we can do--I mean, what should this
    Congress do statutorily to help you better do your job fighting
    invasive pests? You may have touched on it earlier. There has
    been some mention about the Canady bill, but I wasn't sure of
    your feelings about that. I am throwing you a little softball
    here now, to tell us what you think we can do as a group to
    help you better do your job.
        Mr. Reed. We need the Plant Protection Act passed.
        Mr. Boyd. The Canady legislation?
        Mr. Reed. Yes.
        Mr. Boyd. Thank you, Mr. Chairman.
        Mr. Skeen. Was that your telling blow?
        Mr. Boyd. That's it.
        Mr. Skeen. I just want to say thank you to you folks. This
    morning's topic is tremendously important, having come from an
    agricultural background of my own. Right off the bat, it is the
    only business I know of that when you buy, everything you buy
    is retail and when you sell, everything you sell you sell
    wholesale. As merchandisers will tell you, that ain't the way
    to go.
        You folks have a tough, tough job, and you do it well. We
    appreciate the kind of expertise that you provide, the ordeal
    that you go through, plus coming up with the necessary funding.
    Together we have a good system in the United States. We can
    argue about it, how best to serve it, but it works. You folks
    do that. Thank you very much. The questions from the panel were
    great today.
        I want to say, too, about the Screwworm thing. I was
    involved at the very beginning of that program. I will tell you
    one thing, you lose your appetite for rice pudding. I will say
    no more.
        I hope that we do get the station installed in Panama so
    that we can control that insect from the Southern and Northern
    Hemisphere as well.
        Thank you all very much. Have a good day.
        [The following questions were submitted to be answered for
    the record:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               W I T N E S S E S

                                  ----------
                                                                       Page
    Baker, J.R.......................................................   461
    Dewhurst, Stephen................................................     1
    Dunn, M.V........................................................   461
    Kaplan, Dennis...................................................   461
    Lyons, J.R.......................................................     1
    Merrigan, Kathleen...............................................   461
    Reed, C.A........................................................   461
    Reed, P.S........................................................     1
    Sells, D.R.......................................................     1
    York, Dana.......................................................     1

                                   I N D E X

                                  ----------

                     Natural Resources Conservation Service

                                                                       Page
    Accountability...................................................   201
    Accountability Systems...........................................   243
    Administration's Position on Voluntary Conservation..............    50
    Agricultural Issues in California................................    51
    Air Quality Task Forces..........................................   134
    Alternate Sources of Assistance..................................   282
    American Conservation in the New Century.........................     2
    American Heritage Rivers Initiative............................184, 275
    Animal Agriculture...............................................   186
    Animal Feeding Operations......................................238, 298
    Animal Feeding Operations Technical Assistance...................   190
    Animal Waste and Water Quality Management Issues.................   248
    Aquaculture in New England.......................................   301
    Backyard Conservation............................................   191
    Biomass Products Initiative......................................   143
    Biographies:
        Undersecretary Lyons.........................................    21
        Chief Reed...................................................    43
        Associate Chief Sells........................................    44
        Dana D. York, Acting Budget Director, NRCS...................    45
    Budget Request Breakdown.........................................   173
    CCC Funding Shortfall............................................    47
    Centers and Institutes...........................................   152
    Clean Water Action Plan..........................................   207
    Clean Water Rules and Agriculture................................     6
    Common Computing Environment.....................................   287
    Community/Federal Information Partnership......................144, 286
    Concern About Regulations........................................   115
    Conservation Challenges..........................................     3
    Conservation Compliance and Conservation Operations..............   149
    Conservation Easements...........................................   138
    Conservation for the Entire Landscape............................   114
    Conservation Incentives..........................................    53
    Conservation Program Activities..................................   153
    Conservation Reserve Program (CRP):
        Conservation Reserve Program.................................   275
        Expansion..................................................104, 207
        Suspension...................................................   251
        CRP Technical Assistance Availability........................   137
        Potential for CRP Enrollment.................................   105
        Proposed CRP Expansion.......................................   104
    Conservation Security Program:
        Conservation Security Program vs. Conservation Farm Option...   246
        Request...............................................111, 139, 203
        Staffing.....................................................   207
    Customer Base....................................................   281
    Development of Farmland vs. Non-Farmland.........................   205
    Earth Team Volunteers............................................   177
    Easements........................................................    52
    Environmental Quality Incentives Program (EQIP):
        Distribution of EQIP Funds...................................   187
        Environmental Quality Incentives Program Funding.............   134
        EQIP Allocations.............................................   178
        EQIP Expansion...............................................   209
        EQIP Priority Areas..........................................   183
    Excessive Cropland Erosion.......................................   105
    Explanatory Notes................................................   303
    Farmland Loss....................................................   190
    Farmland Protection..............................................   111
    Farmland Protection Program (FPP):
        Farmland Protection Program..................................   283
        Farmland Protection Program Funding..........................   133
        FPP Expansion................................................   209
    Federal Regulations for Agriculture..............................   142
    Federal Reimbursements...........................................   202
    Federal Return for Payments......................................    52
    Florida Staff Year Increase......................................   102
    Flood Plain Easements............................................   201
    Forest Management Plans........................................130, 262
    Forest Planning Rule Comments....................................   131
    Forestry Incentives Program (FIP):
        Comparison of FIP/SIP Appropriations.........................   177
        Forestry Incentives Program Emergency Funds..................   190
    Forest Service Access and Road Construction......................   102
    Global Climate Change............................................   298
    Grazing Lands....................................................   249
    Grazing Land Conservation Initiative:
        Accomplishments for GLCI.....................................   185
        Grazing Land Conservation Initiative.........................   174
    History Table for FY 2001........................................   176
    Increase in Federal Regulations..................................   259
    International Assignments........................................   181
    International Relations..........................................   289
    Irrigation/Pond Construction Assistance..........................   258
    Land Stewardship on Private Lands................................     3
    Legal Liability of NRCS Operations...............................   132
    Limiting Urban Expansion.........................................   280
    Local Government Conservation Programs...........................   279
    Long Range View of Agriculture and the Environment...............   145
    Loss of Agricultural and Forestland..............................     4
    National Conservation Forum......................................     5
    National Conservation Forum and Summit...........................   116
    National Forest System Payments to States and Counties...........   140
    National Resources Inventory...................................189, 299
    National Soil Information System.................................   155
    National Summit on Private Lands Conservation....................   277
    Net Losses of Wetlands...........................................     5
    Object Class Breakouts.........................................193, 203
    Opening Remarks by Undersecretary Lyons..........................     2
    Other Budget Proposals...........................................   143
    Personnel Actions................................................   206
    Plant Materials Centers:
        Fiscal Year 1999 Plant Releases..............................   157
        Plant Materials Centers......................................   155
        Plant Materials Centers Operating Costs......................   156
        Plant Materials Centers Operated by Cooperating Agencies.....   156
    Preserving Arable Land...........................................   111
    Private Sector Conservation Leadership...........................   133
    Proposed Language Changes........................................   205
    Questions Submitted for the Record:
        Mr. Farr.....................................................   302
        Mr. Kingston.................................................   258
        Mr. Skeen....................................................   147
        Ms. DeLauro..................................................   301
        Ms. Emerson..................................................   259
        Ms. Kaptur...................................................   277
    Regional Offices and Technical Institutes........................   239
    Regional Project Allocations.....................................   172
    Regulation and Property Rights...................................    50
    Regulation of Total Maximum Daily Loads by EPA...................    49
    Representing Agriculture's Position on Clean Water Rules.........    58
    Reprogramming Funds..............................................   137
    Resolving Clean Water and Clean Air Challenges...................   138
    Resource Conservation and Development Program (RC&D):
        Applications...............................................183, 240
        Applicant Areas..............................................   294
        Loan Status..................................................   170
        Resource Conservation and Development......................167, 302
        RC&D Federal and Non-Federal Assistance......................   167
        RC&D Measures Adopted, Planned, and Completed................   168
    Resources and Policy to Address Farm-Suburban-Urban Conservation.   113
    Section 11 Cap..................................................48, 209
    Service Center Modernization Plan................................   294
    Soil Erosion Status..............................................     4
    Soil Surveys:
        Funding and Staffing of Soil Surveys.........................   181
        Soil Surveys...............................................154, 181
        Soil Surveys Reimbursements..................................   155
    Stopping Farmland Conversion.....................................   140
    Staffing:
        Current Year Staffing........................................    46
        Hiring.......................................................   248
        Staffing.....................................................   149
        Staffing Change..............................................    46
        Staff Needed for Program Implementation......................   145
        Staff Reductions.............................................   281
        Staff Year Summary...........................................   177
        Staff Year Table.............................................   150
    State and Local Contributions....................................   152
    Supplemental for Technical Assistance............................    47
    Technical Assistance:
        Additional Local Level Technical Assistance..................   101
        All Conservation Programs....................................   153
        CCC Funded Technical Assistance..............................   296
        Farm Bill Programs...........................................    48
        Fiscal Year 2001 Technical Assistance Priority...............    47
        FY 2001......................................................    46
        Improving the Focus of Technical Assistance..................   102
        Increase Conservation Technical Assistance...................   111
        Shortfall....................................................   202
        Source of Technical Assistance in FY 2001....................    49
    Technical Service Centers and Regional Offices and Institutes..151, 152
    Timber Sales on Federal Land.....................................   132
    Timber Supply Correction.........................................   145
    Total Maximum Daily Load........................................58, 259
    2001 Conservation Initiative.....................................     5
    Urban Conservation...............................................   191
    Urban Resources Partnership (URP):
        Authorization................................................    60
        Authority to Conduct URP.....................................    99
        Funding History..............................................   179
        Program Audit................................................    59
        Urban Resources Partnership...........................183, 201, 210
        URP, Heritage Rivers, and Pacific Salmon Expenditures........   134
        USDA's Response to URP Audit.................................    89
    Urban Sprawl..................................................... 2, 51
    USDA Conservation Leadership.....................................   132
    USDA's Position on EPA Clean Water Rule..........................    54
    USDA's Position on Proposed Water Quality Rules..................   104
    USDA Support for Property Owners.................................    50
    Using Sound Science to Assess Agriculture Changes................   144
    Voluntary and Mandatory Programs.................................   139
    Voluntary and Regulatory Rules for Conservation..................    49
    Voluntary Preservation of Farmland...............................   142
    Water Quality Incentives.........................................   171
    Water Quality Protection.........................................    51
    Water Resources Responsibilities.................................   282
    Watersheds:
        Current Status of P.L. 534 Projects..........................   162
        Deaauthorized Small Watershed Projects.......................   129
        Emergency Watershed Protection Program.......................   164
        New Watershed Construction Projects Started in FY 1998-2000..   164
        Restoration Strategies.......................................   189
        Pilot Rehabilitation.........................................   252
        P.L. 566 Small Watershed Program.............................   263
        Reduced Funding for Small Watersheds.........................   129
        Rehabilitation of Watershed Structures.......................   290
        Small Watershed Program Backlog..............................   116
        State and Local Funding of Watershed Planning Activities...161, 192
        Watershed and Flood Prevention Operations Unobligated
          Balanced...................................................   163
        Watershed and Flood Prevention Operations Loans..............   239
        Watershed and Flood Prevention Operations Loans Program......   293
        Watershed and Flood Prevention Operations Reimbursements.....   166
        Watershed Restoration Strategies.............................   189
    Wetland Determinations...........................................   181
    Wetlands Reserve Program (WRP):
        Wetlands Reserve Program.....................................   147
        Wetlands Reserve Program Expansion...........................   208
    Wildlife Habitat Incentives Progam (WHIP) Expansion..............   209
    Working Together on Conservation Issues..........................   114
    Written Testimony:
        Statement of James R. Lyons..................................     8
        Statement of Pearlie S. Reed.................................    23

                       Marketing and Regulatory Programs

    Biography, Under Secretary Michael V. Dunn.......................   497
    FY 2001 Budget Request...........................................   463
    Opening Remarks..................................................   461
    User Fee Legislation.............................................   561
    Witness Statement, Under Secretary Michael V. Dunn...............   466

                   Animal and Plant Health Inspection Service

    Agricultural Quarantine Inspection:
        Agricultural Quarantine Inspection, General...........676, 679, 685
        Fee Schedule by Activity.....................................   637
        Funding and FTE's by Airport.................................   635
        Number of Staff Years Funded.................................   634
        User Fees....................................................   685
    Animal and Plant Health Regulatory Enforcement...................   671
    Animal Care:
        Animal Care, General.........................................   624
        Animal Welfare........................................596, 620, 704
        Doris Day Annual League......................................   676
        Residential Breeders of Cats and Dogs........................   694
    Animal Health Emergency Management...............................   680
    Animal Import Centers..........................................664, 677
    Argentine Citrus.................................................   683
    Asian Longhorned Beetle........................................561, 680
    Biography, Administrator, Craig A. Reed..........................   525
    Biotechnology....................................................   666
    Boll Weevil:
        Boll Weevil, General..................................687, 710, 712
        Funding......................................................   630
    Brown Citrus Aphid...............................................   669
    Brucellosis...............................................625, 677, 681
    Carryover Funds..................................................   674
    Cattle Ticks...................................................596, 638
    Citrus Canker..................................................689, 698
    Compensation Losses..............................................   695
    Contingency Funds................................................   663
    Countries Posting the Greatest Pest and Disease Risk.............   607
    Emergency Authority..............................................   654
    Emergency Funding................................................   701
    Emergency Management Operations Center...........................   687
    Emergency Management System......................................   703
    Explanatory Notes................................................   960
    Equine Infectious Anemia Program.................................   670
    Exotic Pests and Diseases........................................   562
    Exotic Pest and Disease Outbreaks................................   606
    Federal/Non-Federal Dollars......................................   661
    Feral Hogs.......................................................   593
    Foot-and-Mouth Disease...........................................   626
    Foreign Animal Disease Awareness.................................   672
    Foreign Animal Disease Outbreaks.................................   696
    Foreign Pests and Diseases.......................................   697
    Fumigation.......................................................   683
    Glassy-winged Sharpshooter.......................................   603
    Grasshopper/Mormon Cricket.......................................   690
    History of Budget Request........................................   668
    Illegal Importations.............................................   686
    Illegal Importation of Plant and Wood Products...................   700
    Import/Export and Veterinary Diagnostics User Fees...............   666
    Imported Fire Ant..............................................646, 675
    Institute for International Cooperation in Animal Biologics......   672
    Institute for Wildlife Damage Economics..........................   696
    Integrated Systems Acquisition Project...........................   632
    International Programs...........................................   667
    International Trade..............................................   562
    Invasive Species.................................................   564
    Johne's Disease..................................................   680
    Karnal Bunt......................................................   643
    Kudzu............................................................   677
    Mediterranean Fruit Fly........................................626, 685
    Narrowband Radios................................................   708
    National Animal Health Monitoring and Surveillance...............   644
    National Center for Import-Export................................   677
    National Germplasm Quarantine Center.............................   645
    National Monitoring and Residue Analysis Laboratory..............   671
    National Poultry Improvement Plan................................   672
    National Rabies Management Plan..................................   670
    Noxious Weeds....................................................   629
    Outbreaks of Pests and Diseases..................................   647
    Overseas Locations...............................................   659
    Pest and Disease Control.........................................   695
    Pest and Disease Pathways........................................   612
    Pierce's Disease.................................................   597
    Pine Shoot Beetle................................................   671
    Pink Bollworm..................................................663, 688
    Pseudorabies..............................................598, 627, 680
    Regulatory Activities............................................   604
    Regulatory Enforcement and Animal Care...........................   623
    Risk Analysis and Safeguarding...................................   696
    Risk Insurance Fund..............................................   608
    Questions Submitted for the Record:
        Mr. Bonilla..................................................   707
        Mr. Dickey...................................................   705
        Mr. Skeen....................................................   620
        Mrs. Emerson.................................................   712
        Ms. Kaptur...................................................   695
    Saltcedar Tree...................................................   674
    Scrapie........................................................688, 693
    Screwworm............................................561, 605, 626, 691
    Shared Administrative Costs......................................   680
    Silverleaf Whitefly............................................665, 676
    Small Farmers....................................................   616
    Swine Brucellosis................................................   625
    Trichinae Pilot Certification....................................   669
    Tropical Bont Tick...............................................   658
    Trust Fund Agreements............................................   682
    Tuberculosis.....................................................   631
    Veterinarian Shortage............................................   704
    User Fee Legislation.............................................   561
    Wildlife Services:
        Aerial Operations Safety.....................................   708
        Aircraft Operations..........................................   675
        Brown Tree Snake.............................................   647
        Budget.....................................................689, 691
        Cormorants...................................................   705
        Leadership Excellence Program................................   707
        National Environmental Policy Act............................   705
        Nonlethal Methods............................................   679
        Predator Control Program.....................................   677
        Rabies Control.............................................690, 698
        Rabies Wildlife Management Plan..............................   709
        Reduction.............................................595, 707, 709
        Trap Testing.................................................   677
        Wildlife Services, General.................................638, 687
        Wolf Control.................................................   692
        Wolf Reintroduction..........................................   585
    Written Statement, Administrator, Craig A. Reed..................   498

                         Agricultural Marketing Service

    ADP Purchases....................................................   806
    AMS Website......................................................   830
    Biography, Administrator, Kathleen Merrigan......................   537
    Business Process Reengineering...................................   786
    Checkoff Programs................................................   833
    Class III Pricing................................................   831
    Cotton Programs..................................................   833
    Explanatory Notes................................................   891
    Farmer-Owned Cooperatives........................................   829
    Farmers Markets..................................................   836
    Federal Register.................................................   794
    Federal Seed Act.................................................   794
    Federal-State Marketing Improvement Program:
        Payments to States and Possessions--1999 Grants..............   776
        Payments to States and Possessions--1999 Locations...........   794
        Payments to States and Possessions--1999 State-by-State......   775
    Free Trade with Mexico...........................................   794
    Grading:
        Cotton and Tobacco Reimbursement.............................   805
        Grading Activity Employee Totals.............................   785
        Grading Fees.................................................   785
        Hunts Point..................................................   830
        Qualified Through Verification Program.......................   807
    Inspection and Certification of Equipment........................   827
    International Trade Prices and Volume............................   824
    Limitation on Administrative Expenses............................   801
    Local Producers Outlets..........................................   591
    Market News:
        Breakout by Program and Increase Area........................   779
        Foreign Market Reporting Expenditures........................   779
        International Market Coverage................................   780
        Market News Consolidation or Elimination.....................   786
        Report Status................................................   780
        Object Class--Organic Grown Fruits and Vegetables............   720
        Organic Products.............................................   719
    Mandatory Price Reporting:
        Budget Breakout..............................................   727
        Computer System..............................................   731
        Cost Object Class Breakout...................................   732
        Explanatory Notes............................................   728
        Overview of Spending.........................................   725
        Participation With Other Agencies............................   731
        Price Reporting..............................................   598
        Program Increase Object Class Breakout.......................   720
        Proposed Rule................................................   591
        Proposed Rule Publication....................................   733
        Staff Years..................................................   732
    Marketing Agreements and Orders:
        Peanut Non-Signer Program....................................   805
        Pistachio Marketing Order....................................   806
    Market Protection and Promotion..................................   828
    Microbiological Data Program:
        Initiative...................................................   714
        Budget Request...............................................   840
        Object Classes...............................................   715
        Pilot Program................................................   714
    Organic Certification:
        Final Rule Publication.......................................   720
        Implementation...............................................   718
        Proposed Rule Update.........................................   716
        Object Class Table...........................................   719
        Organic Rule.................................................   602
        Organic Seafood Standards....................................   828
        Program Information--Spending................................   717
    Perishable Agricultural Commodities Act..........................   800
        Small Growers................................................   831
    Pesticide Data Program:
        Accomplishments..............................................   721
        Budget Request...............................................   781
        EPA Involvement..............................................   586
        Federal Funds................................................   716
        Funding Table................................................   722
        Object Class Breakout........................................   724
        Rapid Response...............................................   824
        Registration and EPA.........................................   803
        Resource Table--Cost and Staff Years.........................   724
        Spending by Agency...........................................   825
        Water Testing................................................   782
    Pesticide Data Programs Testing:
        Pesticide Data Program Breakout..............................   803
        Microbiological Data Program.................................   804
        Pesticide Data Program--Water Testing........................   804
    Pesticide Recordkeeping Program..................................   804
    Plant Variety Protection Act.....................................   806
    Questions Submitted for the Record:
        Mr. Skeen....................................................   714
        Mr. Bonilla..................................................   833
        Ms. Kaptur...................................................   835
    Reports:
        GAO Report Findings..........................................   815
        OIG Report Findings..........................................   808
        Status of OIG and GAO Reports................................   816
    Research and Promotion:
        Assistance to Pork Producers.................................   818
        Milk Products Report.........................................   831
        Funding Received from FAS....................................   793
        OGC Legal Services...........................................   792
        New Research and Promotion Programs..........................   817
        Pork Checkoff................................................   595
        Pork Producers Referendum....................................   839
        Referendum Schedule..........................................   793
    Research Cooperative Agreements..................................   817
    Section 32:
        Bonus Purchases..............................................   613
        Commodity Purchases..........................................   608
        Commodity Purchases Increase Request.........................   837
        Surplus Removal..............................................   797
        Disaster Relief..............................................   796
        Emergency Surplus Removal....................................   796
        Export Purchases.............................................   797
        Table........................................................   798
    Shell Eggs.......................................................   829
    Slotting Fees....................................................   828
    Small Farms......................................................   825
        Marketing....................................................   835
    Standardization Program..........................................   783
    Tobacco Funding..................................................   784
    Transportation Services:
        Regulatory Actions...........................................   805
    Wholesale Market Development:
        Budget Request--Projects.....................................   790
        Projects Status..............................................   787
        Santa Fe Area Farmers Market.................................   788
    Witness Statement--AMS...........................................   488

            Grain Inspection, Packers and Stockyards Administration

    ADP Hardware/Software Purchases.................................862-863
    Aflatoxin Inspections............................................   851
    Anticompetitive Behavior.........................................   871
    Anticompetitive Monitoring......................................614-615
    Auction Market Failures.........................................853-854
    Biography of Administrator Baker.................................   558
    Biotechnology....................................................   868
    Biotechnology and Genetically Modified Foods....................884-885
    Biotechnology Reference Facility.................................   869
    Budget Increase..................................................   870
    Civil Rights....................................................865-866
    Competition, Fair Trade Practices, Financial Protection..........   857
    Competitive Structures in Livestock and Poultry Industries.......   881
    Competitive Structure of the Poultry Industry.....871-872, 886, 889-890
    Complaints From Livestock Producers..............................   842
    Cooperative Research Agreements.................................879-880
    Custodial Account Compliance Audits..............................   857
    Dealer Failures.................................................858-859
    Dealer/Buyer Financial Failures..................................   852
    Econometric Models..............................................869-870
    Economic/Statistical Analysis....................................   858
    Equipment........................................................   865
    Explanatory Notes.............................................1065-1106
    Export Cargo Sampling Project....................................   863
    Exported Grain Complaints.......................................847-850
    Final Rule......................................................878-879
    Four Firm Concentration.........................................852-853
    FY 2001 Budget Request...........................................   858
    Genetically Modified Foods......................................876-878
    GIPSA Certificates...............................................   857
    Grain Dust Explosions............................................   847
    Grain Facilities................................................842-843
    Grain Inspected and/or Weighted.................................843-846
    H.R. 2829..............................................881-882, 887-889
    IBP Case.........................................................   862
    Information Staff................................................   867
    International Monitoring Program................................860-862
    Livestock Slaughter.............................................854-855
    Methods Development..............................................   867
    New User Fees....................................................   875
    Oat Standards....................................................   772
    Other Services..................................................864-865
    Pesticide Data Program..........................................859-860
    Poultry Complaints..............................................882-883
    Poultry Compliance Complaints....................................   851
    Poultry Investigation Work......................................883-884
    Poultry Legislation.............................................589-591
    Production and Marketing Contracts...............................   870
    Proposed Regulations--Feed Weighting............................863-864
    Questions Submitted for the Record:
        Mr. Skeen...................................................842-875
        Mrs. Emerson................................................887-890
        Ms. Kaptur..................................................876-886
    Rapid Response Teams...................................872-874, 885-886
    Select Elements in Grains........................................   859
    Slaughters/Processors Subject to the P & S Act..................855-856
    Sufficient Authority.............................................   881
    Swine Contract Library..........................................874-875
    Texas Panhandle Investigation....................................   864
    Unrecovered Losses...............................................   859
    U.S.-China Agreement............................................866-867
    Value-Added Traits...............................................   868
    Violation Cases--Grain...........................................   860
    Violation Reports................................................   851
    Written Testimony of Administrator Baker........................538-557