[Senate Hearing 106-836]
[From the U.S. Government Printing Office]





                                                        S. Hrg. 106-836

AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2001

=======================================================================

                                HEARINGS

                                before a

                          SUBCOMMITTEE OF THE

            COMMITTEE ON APPROPRIATIONS UNITED STATES SENATE

                       ONE HUNDRED SIXTH CONGRESS

                             SECOND SESSION

                                   on

                       H.R. 4461 and 5426/S. 2536

 AN ACT MAKING APPROPRIATIONS FOR AGRICULTURE, RURAL DEVELOPMENT, FOOD 
 AND DRUG ADMINISTRATION, AND RELATED AGENCIES PROGRAMS FOR THE FISCAL 
         YEAR ENDING SEPTEMBER 30, 2001, AND FOR OTHER PURPOSES

                               __________

                       Department of Agriculture
                      Food and Drug Administration
                       Nondepartmental witnesses

                               __________

         Printed for the use of the Committee on Appropriations


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate


                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
62-763                     WASHINGTON : 2000


_______________________________________________________________________
            For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 
                                 20402


                      COMMITTEE ON APPROPRIATIONS

                     TED STEVENS, Alaska, Chairman
THAD COCHRAN, Mississippi            ROBERT C. BYRD, West Virginia
ARLEN SPECTER, Pennsylvania          DANIEL K. INOUYE, Hawaii
PETE V. DOMENICI, New Mexico         ERNEST F. HOLLINGS, South Carolina
CHRISTOPHER S. BOND, Missouri        PATRICK J. LEAHY, Vermont
SLADE GORTON, Washington             FRANK R. LAUTENBERG, New Jersey
MITCH McCONNELL, Kentucky            TOM HARKIN, Iowa
CONRAD BURNS, Montana                BARBARA A. MIKULSKI, Maryland
RICHARD C. SHELBY, Alabama           HARRY REID, Nevada
JUDD GREGG, New Hampshire            HERB KOHL, Wisconsin
ROBERT F. BENNETT, Utah              PATTY MURRAY, Washington
BEN NIGHTHORSE CAMPBELL, Colorado    BYRON L. DORGAN, North Dakota
LARRY CRAIG, Idaho                   DIANNE FEINSTEIN, California
KAY BAILEY HUTCHISON, Texas          RICHARD J. DURBIN, Illinois
JON KYL, Arizona
                   Steven J. Cortese, Staff Director
                 Lisa Sutherland, Deputy Staff Director
               James H. English, Minority Staff Director
                                 ------                                

  Subcommittee on Agriculture, Rural Development, and Related Agencies

                  THAD COCHRAN, Mississippi, Chairman
ARLEN SPECTER, Pennsylvania          HERB KOHL, Wisconsin
CHRISTOPHER S. BOND, Missouri        TOM HARKIN, Iowa
SLADE GORTON, Washington             BYRON L. DORGAN, North Dakota
MITCH McCONNELL, Kentucky            DIANNE FEINSTEIN, California
CONRAD BURNS, Montana                RICHARD J. DURBIN, Illinois
TED STEVENS, Alaska                  ROBERT C. BYRD, West Virginai
  (ex officio)                         (ex officio)
                           Professional Staff

                           Rebecca M. Davies
                        Martha Scott Poindexter
                              Hunt Shipman
                               Les Spivey
                       Galen Fountain (Minority)

                         Administrative Support

                       Carole Geagley (Minority)


                            C O N T E N T S

                              ----------                              

                      Thursday, February 10, 2000

                                                                   Page
Department of Agriculture: Office of the Secretary...............     1

                       Tuesday, February 29, 2000

Department of Agriculture:
    Farm and Foreign Agricultural Services.......................   183
    Farm Service Agency..........................................   183
    Foreign Agricultural Service.................................   183
    Risk Management Agency.......................................   183

                         Tuesday, March 7, 2000

Department of Health and Human Services: Food and Drug 
  Administration.................................................   325

    Material Submitted by Agencies Not Appearing for Formal Hearings

Department of Agriculture:
    Agricultural Marketing Service...............................   571
    Agricultural Research Service................................   575
    Economic Research Service....................................   584
    Cooperative State Research, Education, and Extension Service.   588
    Food and Nutrition Service...................................   591
    Food, Nutrition and Consumer Services........................   596
    Grain Inspection, Packers and Stockyards Administration......   604
    National Agricultural Statistics Service.....................   611
    National Appeals Division....................................   615
    Natural Resources Conservation Service.......................   616
    Office of the Chief Financial Officer........................   622
    Office of Inspector General..................................   625
    Rural Business-Cooperative Service...........................   639
    Rural Development............................................   642
Submitted questions on Government Performance and Results Act:
    Agricultural Marketing Service...............................   997
    Agricultural Research Service................................  1011
    Animal and Plant Health Inspection Service...................  1005
    Cooperative State Research, Education, and Extension Service.   920
    Departmental Administration..................................  1018
    Economic Research Service (ERS)..............................   984
    Farm Service Agency..........................................   938
    Food and Nutrition Service...................................   959
    Food Safety and Inspection Service...........................  1037
    Foreign Agricultural Service.................................  1043
    Grain Inspection, Packers and Stockyards Administration......   989
    Hazardous Materials Management Program.......................  1026
    National Agricultural Statistics Service.....................   979
    National Appeals Division....................................   993
    Natural Resources Conservation Service.......................   971
    Office of Budget and Program Analysis........................   926
    Office of the Chief Financial Officer........................   932
    Office of Communications.....................................   950
    Office of the Chief Economist................................  1000
    Office of the Chief Information Officer......................  1021
    Office of the General Counsel................................   928
    Office of the Inspector General..............................   954
    Risk Management Agency.......................................   944
    Rural Development Service....................................   965

                       Nondepartmental Witnesses

Ad Hoc Coalition.................................................  1051
Alachua County Board of Commissioners............................  1054
American Chemical Society........................................  1055
American Farm Bureau Federation..................................  1056
American Federation of Government Employees......................  1059
American Honey Producers Association, Inc........................  1065
American Indian Higher Education Consortium......................  1066
American Rivers..................................................  1069
American Seed Trade Association..................................  1070
American Society for Microbiology............................1080, 1082
American Society for Nutritional Sciences........................  1077
Association of American Medical Colleges.........................  1084
Association of Research Directors of the Historically Black 1890 
  Land-Grant Universities........................................  1085
ASTA Corn and Sorghum Basic Research Committee...................  1072
Biotechnology Industry Organization..............................  1087
California Industry and Government Central California Ozone Study 
  Coalition......................................................  1088
City of Gainesville, Florida.....................................  1090
Coalition to Promote U.S. Agricultural Exports...................  1091
Colorado River Basin Salinity Control Forum......................  1092
Colorado State University........................................  1096
Cosmetic, Toiletry, and Fragrance Association....................  1097
Council for Agricultural Research, Extension and Teaching........  1098
Defenders of Wildlife........................................1099, 1100
Easter Seals.....................................................  1102
FDA-NIH Council..................................................
Federation of American Societies for Experimental Biology........  1106
Florida State University.........................................  1109
Friends of Agricultural Research-Beltsville, Inc.................  1110
Friends of the National Arboretum................................  1112
Generic Pharmaceutical Industry Association......................  1113
Health Industry Manufacturers Association........................  1115
Illinois Soybean Association.....................................  1118
Imperial County, California......................................  1120
International Association of Fish and Wildlife Agencies..........  1123
Izaak Walton League of America...................................  1128
Joslin Diabetes Center...........................................  1129
Lovelace Respiratory Research Institute and the University of 
  Miami..........................................................  1230
Metropolitan Water District of Southern California...............  1130
Minor Crop Farmer Alliance.......................................  1133
Mississippi State University.....................................  1135
National Agricultural Aviation Association.......................  1136
National Alliance for Food Safety................................  1137
National Association of Pharmaceutical Manufacturers.............  1113
National Association of State University and Land-Grant Colleges.  1139
National Association of University Fisheries and Wildlife 
  Programs.......................................................  1142
National Commodity Supplemental Food Program Association.........  1155
National Congress of American Indians............................  1144
National Consortium for Rural Geospatial Innovations.............  1146
National Cooperative Business Association........................  1148
National Corn Growers Association................................  1150
National Council of Farmer Cooperatives..........................  1152
National Fisheries Institute.....................................  1158
National Food Processors Association.............................  1159
National Grain and Feed Association..............................  1161
National Pharmaceutical Alliance.................................  1113
National Potato Council..........................................  1164
National Rural Telecom Association...............................  1165
National Telephone Cooperative Association.......................  1169
National Treasury Employees Union................................  1171
National Utility Contractors Association.........................  1173
National Watershed Coalition.....................................  1174
New Mexico Interstate Stream Commission..........................  1179
Northwest Indian Fisheries Commission............................  1181
Organization for the Promotion and Advancement of Small 
  Telecommunications Companies...................................  1184
Pharmaceutical Research and Manufacturers of America.............  1187
Predator Conservation Alliance...................................  1189
Red River Valley Association.....................................  1190
Regional Aquaculture Centers:
    Lester W. Myers, Southern Regional Aquaculture Center........  1193
    Ramsey Reimers, Tropical and Subtropical Regional Aquaculture 
      Center.....................................................  1194
    Carter Newell, Northeastern Regional Aquaculture Center......  1195
    Myron Kloubec, Midwest Regional Aquaculture Center...........  1196
Santa Clara Valley Water District................................  1196
Seminole Tribe of Florida........................................  1197
Society for Animal Protective Legislation........................  1203
Society of American Foresters....................................  1199
State of Illinois................................................  1206
State of Wyoming.................................................  1214
Texas A&M University.............................................  1215
The Nature Conservancy...........................................  1177
The Oceanic Institute............................................  1183
U.S. Apple Association...........................................  1219
United States Telecom Association................................  1221
University of Illinois.................................1224, 1227, 1228
University of Southern Mississippi...............................  1232
Upper Mississippi River Basin Association........................  1235
USA Rice Federation..............................................  1236
Wildlife Management Institute....................................  1237

 
AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2001

                              ----------                              


                      THURSDAY, FEBRUARY 10, 2000

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:30 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
    Present: Senators Cochran, Specter, Bond, Gorton, Burns, 
Stevens, Kohl, Harkin, Dorgan, Feinstein, and Durbin.

                       DEPARTMENT OF AGRICULTURE

                        Office of the Secretary

STATEMENT OF DAN GLICKMAN, SECRETARY OF AGRICULTURE
ACCOMPANIED BY:
        RICHARD ROMINGER, DEPUTY SECRETARY
        KEITH COLLINS, CHIEF ECONOMIST
        STEPHEN B. DEWHURST, BUDGET OFFICER
        DOUG SHUMAKER, UNDER SECRETARY, FARM AND FOREIGN AGRICULTURE 
            SERVICES


               OPENING STATEMENT OF SENATOR THAD COCHRAN


    Senator Cochran. The subcommittee will please come to 
order.
    We are under some tight time constraints this morning, and 
I apologize immediately to the Secretary and his colleagues who 
are here to present the President's budget request to us for 
our review this morning.
    We have a vote that is scheduled to commence on the floor 
of the Senate at 11 o'clock, and that gives us a chance, maybe, 
to make some opening comments and hear from the Secretary, and 
probably we will not have a chance for many questions before we 
have to go vote.
    So, I am going to abbreviate my comments, and if we start 
on time, that may also give us a head start on those who might 
have arrived a little later. I know there are other Senators 
who are going to come over for the hearing. With everyone's 
cooperation and understanding, we will proceed.
    Let me just make a couple of observations about the budget 
request as I have reviewed it. It seems to me that the things 
we should notice right off include the fact that the President 
is asking for discretionary appropriations from this committee 
that will amount to a 9 percent increase over this year's 
spending level.
    And one other thing that I noticed right away is that the 
budget request includes proposals for the Congress to impose 
user fees, which in my view, user fees are new taxes in 
disguise, of $568 million. The people who are going to pay 
these are the producers of food and agriculture products, the 
processors, and the handlers. The grain inspection process will 
be hit, among others.
    Another thing that strikes me as noteworthy as well, the 
budget includes $153 million to create the New Delta Regional 
Authority to assist the Lower Mississippi Delta region.
    This proposal includes $30 million in new resources to 
create the new authority, and the definition of how the funds 
are going to be spent is very vague.
    Now, there is a phrase that I remember from law school 
where something could be ``void for vagueness''. If there is 
any truth in that, it may be reflected in the description of 
how the funds are going to be used.
    And I am suspicious, to be honest, about whether this is 
going to really provide the benefits that are advertised by 
this Administration to help lift those who are in poverty and 
who are having a hard time in the delta region of the United 
States.
    I am not going to make any assumptions about who gets the 
money, but creating a new authority with $30 million sounds 
like a lot of money to me to hire people to help others. You 
are going to be helped if you are hired, but if you are not 
hired by the new Delta Regional Authority, you are probably out 
of luck. That is my concern. I really hope the Administration 
will take a hard look at an alternative.
    For example, using the resources at Delta State University, 
at Mississippi Valley State University, at Alcorn State 
University, where research is being done, where efforts are 
being made to educate, to try to help lead and other new 
initiatives that will uplift that entire region, I think the 
money could be better spent if it is given to those 
universities and those educational institutions where they have 
a proven track record of success, where they understand the 
problems of the Delta better than a Washington person who comes 
down there to run a program. And in my view, we would be a lot 
better off if that is the way that program is run.
    There is another big concern that I have, and I think the 
Department of Agriculture is doing a better job than many other 
agencies of our government, and that is to break down these 
barriers to trade, trying to get to the bottom of the 
suspicions and the allegations that are being made 
internationally about the dangers of our seeds and our food 
products that are being exported all over the world because of 
genetic modifications, because of changes that have been made 
through the use of technology to protect the environment, to 
promote efficiency, to try to deliver to the consumer a 
healthier product.
    All the good things that have happened because of 
biotechnology and many other technologies that are used today 
in the production and processing of food and food products is 
all being lost in this din of controversy and criticism and 
demonstrations and riots in Seattle. I think the Department of 
Agriculture is doing a good job in this area, and I hope the 
other agencies of the government will support the initiatives 
of this department.
    So, I know you are working hard on this, Mr. Secretary, 
personally, but I want to encourage you. In my judgment, those 
are the problems in agriculture that are going to require 
additional spending this year, and you recommend here $11 
billion over 3 years for new legislative costs, not new 
appropriations, I notice, but new laws, to provide a safety net 
initiative to protect producers from counter cyclical changes 
and the fall off of revenues and profits.
    That is just a drop in the barrel as to what it is really 
going to cost if we are not able to overcome these misguided, 
uninformed, but nonetheless very real, attacks against American 
agriculture.
    I ended up talking too long, but I feel very strong about 
those issues, and I hope that the other members of the 
committee will forgive me for those comments.
    I am going to recognize senators in the order in which they 
came to the hearing.
    Senator Dorgan.


                  STATEMENT OF SENATOR BYRON L. DORGAN


    Senator Dorgan. Mr. Chairman, thank you very much. And I 
will be mercifully brief, recognizing that we have an 11 
o'clock vote.
    Mr. Chairman, I want to welcome the Secretary and his team. 
They are good to work with. They have had about as tough a job 
as you can have in this country, administering a farm program 
that, in my judgment, is not a very workable farm program 
during periods of collapsed prices. It simply does not provide 
the safety net necessary to give family farmers a chance to 
make a living during price collapse.
    Again let me say to the team that Secretary Glickman has: 
You are working hard and we appreciate that. We need to give 
you some help. We need to change the underlying farm program.
    Now, one feature in this proposal, Mr. Chairman, that I 
think is a significant step is a proposal that says, ``Let us 
move towards some counter cyclical help for family farmers.''
    It is, I think, a move, following your statement, Mr. 
Secretary, that we need significant changes in the farm 
program. I think your budget proposal is a significant step in 
the right direction. Is it far enough? I do not know. But is it 
in the right direction? Absolutely.
    And that is a breath of fresh air, and you are going to 
find a lot of support from people here on Capitol Hill 
especially people like me who feel that you are moving in the 
right direction.
    We have, in many ways, the worst of all worlds at the 
present time. This committee, the Appropriations Committee, has 
had to pass two successive emergency bills essentially to cover 
the deficiencies in the Farm Bill, which is not designed to 
help, during price collapse.
    And I just want to show one chart, that in my judgment, 
shows the combination of the worst possible results. This chart 
shows that at the same time that we have had less income for 
family farmers, we have had more spending by the Federal 
Government. I mean this is a combination of the worst of all 
worlds, more spending by the government and more misery for 
family farmers.
    We can certainly do better than that. And I hope that your 
recommendation, in this budget saying, ``Let us move to a 
counter cyclical approach to helping family farmers during 
tough times,'' triggers action here in Congress that says, 
``Yes, let us do that. Let us do it together.''


                           PREPARED STATEMENT


    This is not about Republicans or Democrats. There is no 
partisan way to go broke on the family farm. And when prices 
collapse, we need a decent farm program to help, and your 
recommendation is a step in that direction.
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator.
    [The statement follows:]

             Prepared Statement of Senator Byron L. Dorgan

    Rural America--particularly family farmers--is facing the greatest 
crisis in decades, but instead of recognizing the importance of those 
who grow our food, we've all but ignored their situation. The crisis, 
now in its third year, is driven by many things. But at its core is the 
current farm policy that has failed our producers. We've enacted two 
major disaster bills to try to help as many producers as we could make 
it through these horrible times with no safety net. And yet, there are 
those who still refuse to acknowledge the failure of their policy and 
find something that will work.
    We've been told that the Freedom to Farm program is fine, and 
family farmers can reply on Congress to pass disaster programs to prop 
up income. That is simply illogical. In 1998 and 1999, government 
payments to producers exploded and net farm income still decreased.
    I've held the first in a series of hearings to outline the impact 
this failed policy has had in rural America. These hearings are 
necessary for a variety of reasons, but foremost among them is the 
continued refusal of the Senate Agriculture Committee to schedule 
hearings. The Chairman of the House Agriculture Committee acknowledges 
there are serious problems with the program and has scheduled such 
hearings. Family farmers certainly know it has failed. And now, the 
President, speaking through the Secretary of Agriculture, has 
acknowledged that the program has failed and must be re-written.
    In response, I plan to soon offer a farm proposal that will act as 
a counter-cyclical safety net. The administration has offered a similar 
and immediate response.
    In its elemental form, any successful plan must target family 
farmers through counter-cyclical methods to help them in times of low 
prices. Conservation programs must be addressed and crop insurance must 
be improved to eliminate abuse and fully compensate producers for 
losses. Finally, a plan must include tools for rural communities to 
succeed and reap the benefits of our rolling economy. The 
Administration's plan includes these elements, and though it must be 
expanded to be truly beneficial and successful, the plan is a good 
start.
    This initiative recognizes that Freedom to Farm has failed and 
underlines the need to provide immediate replacement. The 
Administration lays out a framework for assistance. Now we need to 
match it with a substantive plan.

                           PREPARED STATEMENT

    Senator Cochran. Senator Burns.
    Senator Burns. Mr. Chairman, I have a prepared statement, 
but in the essence of time, may I submit my statement, and as 
well include my comments in the question and answer?
    Senator Cochran. Without objection, your statement will be 
printed in the record. Thank you very much.
    [The statement follows:]

               Prepared Statement of Senator Conrad Burns

    Mr. Chairman, thank you for holding the hearing today in such a 
timely manner. It is only February 10 and you have started the ag 
appropriations process rolling. I commend you for starting the process 
early. I know that Montanans are anxious to see what we can do to help 
agriculture this year. I would also like to thank the Secretary and 
other witnesses for coming to appear before us today.
    I have some real concerns with this budget. In another year of 
projected bad prices for agriculture, I am concerned that this budget 
was put together without any input from Congress, or from producers. 
There is an obvious failure to implement many of the focus areas that 
farm-state senators have been consistently pushing for. There are cuts 
to export programs, to Rural Utilities, to APHIS and to ARS. These 
programs have been a focus for funding to assist agriculture for many 
years.
    First of all I don't understand why this administration is asking 
for less money than last year. It is abundantly clear that prices are 
not going to be better for farmers this year. Emergency spending was a 
major portion of the expenditures last year. It is time to take a close 
look at where the markets are, and decide what we are going to do to 
actually help the producers who are faced with low commodity prices.
    I also have some major concerns with the new Farm Safety Net USDA 
is proposing. I'm glad the president has come to the table with a 
proposal but a $30,000 cap on payments is ridiculous. How can producers 
support their families and stay in business on $30,000? The answer is: 
they can't. 18 percent of producers in this nation account for 85 
percent of production. I find it hard to believe that this proposal 
won't hurt more producers than is currently anticipated.
    $1.3 billion for conservation in the farm safety plan is a fairly 
large increase over last year's budget. I am hopeful that this is not a 
move to lock more land out-of-production or to promote an environmental 
agenda that is not in the best interest of the agricultural community. 
The Administration's budget includes $236 million as part of the Land's 
Legacy Initiative. Of that, $130 million will be used to acquire lands 
for recreation, wildlife habitat, & watershed protection. A portion 
will be used to establish & expand community forests and open spaces. 
The ``A'' in USDA stands for ``agriculture''--not ``acquisition of 
lands''. Setting aside such sums of money for purchasing land for 
wildlife habitat is not my idea of assisting our producers.
    To add to that, these new programs increase the need for FSA staff. 
Without a significant price upswing during the upcoming 12 months we 
will again see a high level of activity in FSA's LDP and price support 
programs. Also, as part of the farm safety net initiative, CRP acres 
will be increased from 36.5 million acres to 45 million acres, meaning 
there will be more contracts to administer. What's more, this 
administration is also proposing a farm facility loan program. These 
programs will accomplish nothing with the current staff levels USDA has 
estimated.
    Nearly every export program was cut. The Public Law 480 program was 
cut drastically as was the Section 416 program. The export subsidy 
program shows a decrease in funds of $154 million. At a time when we 
are fighting for a place in the world market why are we cutting funds 
for important export programs?
    Farm-states like Montana depend on export programs for their 
agricultural economy. My farmers and ranchers need to have these 
markets open. They have been virtually cut off from over 10 percent of 
the world market, due to sanctions and under-funded and under-utilized 
market development programs. The disregard by this administration to 
use these programs allows our competitors an open door to those 
markets.
    In times like these our producers need every available marketing 
option open to them. We cannot afford lost market share. The Market 
Development Program (MDP) and the Export Enhancement Program (EEP) 
especially, provide much-needed help to farmers and ranchers to create 
new product markets. Let's use the tools we have.
    Wildlife Service funding was decreased again this year. I have been 
trying consistently to get more funding for predator control. Year 
after year, this administration takes it away. The re-introduction of 
the wolf has caused severe predator problems in Montana. Yet, I had to 
include line-item funding in the budget last year to take care of my 
livestock producers because the USDA won't fund the clean-up for the 
mess they made. I am more than a little frustrated to see that this 
administration continues to disregard the well-being of agricultural 
producers for predator control. Not to mention, that to fund this 
program would improve wildlife habitat considerably. The coyotes and 
wolves continue to kill not only sheep and calves but deer and other 
wildlife as well. We don't need more conservation programs to save 
wildlife. We need to fund predator control.
    I have been a major proponent of bringing telecommunications to 
rural areas. Bringing Internet access to Montana farmers and ranchers 
increases market opportunities. It provides valuable information on 
agricultural research. A vast amount of information is made available 
to better their farm operations and improve their bottom line. The 
Internet is becoming an increasingly valuable tool for agricultural 
producers and Rural Utilities Service (RUS) funding is an important 
part of that. Farmers and ranchers cannot afford to take the prices 
given them. They must utilize new avenues of marketing and expand their 
horizons. Telecommunications provides that service. Let's help them use 
it, not take it away from them with a cut in RUS funding.
    ARS is this year trying to cut the funding I was able to include 
for the Northern Plains Research Lab in Sidney, MT. This funding is to 
be used for by three new scientists on plant pathology, irrigation and 
value-added crops. This funding is vital for innovation in agriculture. 
As I stated earlier, producers need new avenues and new methods to 
market their products. USDA, who is supposed to be a proponent for 
agriculture, surely doesn't want to take that away.
    On that same note, the Economic Research Service (ERS) budget was 
also decreased. ERS provides important market information to 
agricultural producers. Many Montana producers rely on reports issued 
by ERS for cattle numbers and market reports. Again, the USDA is not 
giving producers a fighting chance to make their own way in the global 
market.
    The Administration's budget suggests that there is strong support 
for USDA Civil Rights activities. Unfortunately, I find that very 
difficult to believe. The USDA has not proved their commitment to the 
civil rights issue. In Montana, we have cases that have been 
languishing at the Office of Civil Rights for years. These cases must 
be solved and they must resolved quickly. I am failing to see the 
action if this is indeed a high priority for the USDA.
    Thank you again Mr. Chairman, I look forward to hearing some 
answers from the USDA, and more importantly to working with you in the 
coming year to improve the economic situation for the American farmer 
and rancher.

                   STATEMENT OF SENATOR ARLEN SPECTER

    Senator Cochran. Senator Specter.
    Senator Specter. Thank you very much, Mr. Chairman. I have 
just a very few brief comments.
    And first, let me welcome my long-standing friend, Dan 
Glickman, we hale from Wichita, Kansas together. Our tenure in 
Wichita did not overlap. I left in 1942, and he arrived there--
--
    Secretary Glickman. In 1944.
    Senator Specter [continuing]. In 1944 at the Saint Francis 
Hospital.
    Secretary Glickman. Wesley.
    Senator Specter. Wesley Hospital.
    Secretary Glickman. Frederick County was blessed----
    Senator Specter. I am not sure if they were blessed.
    Secretary Glickman [continuing]. Not by Arlen leaving, but 
by my coming.
    Senator Specter. He has always been quick on the uptake. He 
beat me to the punch there again.
    Two areas that I want to mention very briefly, and as 
usual, it is a very heavy morning. Secretary Slatter is 
testifying on Transportation, and Judiciary has some important 
matters on the agenda, and we have the early vote.
    But I want to comment about the problems of milk pricing in 
my State, Pennsylvania, where the price per hundred weight is 
down now under $10. A year ago it was $17, in December of 1998. 
It was $9 plus in December of 1999, and those variations just 
make it impossible.
    We have lost 300 to 500 farms in Pennsylvania a year in the 
time period of 1993 to 1998. We do not want to see America with 
solely agricorps. We have a big regional battle between 
Wisconsin, Minnesota on one hand and area compacts. We worked 
out a compact for the northeast, but as a matter of fairness, 
it ought to extend to states like Pennsylvania. And we really 
need to find some way to deal with these cataclysmic variations 
in pricing.
    The other comment I want to make is about the disaster 
matter. The Mid-Atlantic States suffered $2.5 billion in 
disaster last year. Pennsylvania had $700 million. While we had 
a farm bill of $8.3 billion in emergency disaster assistance, 
only $1.2 billion went for disasters, which included Hurricane 
Floyd and flooding in the Midwest, losses to livestock and 
fishery. And that again is an issue which we have to address.
    I know that you are doing an excellent job, Mr. Secretary. 
Herculean efforts against so many, many problems, but I wanted 
to focus on those two problems which are really not just 
Pennsylvania problems, but national problems.
    Thank you very much, Mr. Chairman.
    Senator Cochran. Thank you, Senator.
    Senator Gorton.

                   STATEMENT OF SENATOR SLADE GORTON

    Senator Gorton. Thank you, Mr. Chairman. I join with you in 
welcoming the Secretary of Agriculture whom I believe is not 
only highly competent, but energetic and caring. It is, 
therefore, with deep regret that I express my extreme 
disappointment in the budget that the Administration has 
submitted for the Department of Agriculture.
    It seems to me to accelerate a trend which has already been 
too evident in turning the Department of Agriculture from a 
department interested in the producers and the produce of farms 
of the United States into another welfare department. We have 
significant increases in expansions in this bill for things 
like food stamps.
    We have disguised the methodology of accepting the 
protocols through monies spent by the Department of 
Agriculture. We have empowerment zones. But what we do not have 
is a promotion that oversees the sale of our commodities.
    You know, we, in the Pacific Northwest, have lost a 
substantial portion of our market in Pakistan for our wheat 
when the Foreign Agriculture Service told Pakistan it was not 
available when it was stacked up everywhere. We have a budget 
that continues to ignore foreign market development.
    With respect to the farm safety net plan which has some 
positive qualities, it ignores minor crops. You helped these to 
a certain extent last year with that, but we have gotten no 
cooperation from the Department of Agriculture on it at all. 
And I am just increasingly frustrated that what we have is a 
Department of Agriculture that seems to be interested in almost 
everything other than agriculture itself, and hope that we can 
reverse that direction.
    Again, the Administration has presented you with a great 
difficulty on university and locally oriented research, 
something you have always supported very strongly, and that the 
Department of Agriculture wants to centralize, if to do it at 
all.
    So, I am afraid you and your ranking member, Mr. Chairman, 
have a great deal of work to do to turn this into a decent 
agricultural budget. But I must say that my experience is that 
you have the competence and ability to do just that.
    Senator Cochran. Thank you very much, Senator.
    Senator Bond.

                STATEMENT OF SENATOR CHRISTOPHER S. BOND

    Senator Bond. Thank you very much, Mr. Chairman. I join 
with my colleague from Washington in expressing our confidence 
that we will be able, in this committee under your leadership 
and that of Senator Kohl, to restore and write the priorities 
that this committee and the departments should be pursuing.
    Mr. Secretary, I appreciate your being here today, and we 
do have many areas of mutual interest. I think everyone here 
understands the farm prices are very low. Congress has 
responded in preceding years with significant supplemental 
assistance, roughly $15 billion.
    We hope conditions will improve, but I am not that much of 
an optimist to think they will, and we are going to have to 
respond again and we look forward to, and I hope to have more 
leadership this time, and more information from the USDA on the 
scope of the problem so we can craft the emergency 
appropriations relief in a manner that reflects the best 
information used and your offices can obtain.
    One of the driving forces influencing market practices and 
market prices is trade. It was a pleasure to see you in 
Seattle. I know you were there. I managed to wash the pepper 
spray out of my face after a few minutes. I subsequently got 
behind Senator Burns, and I figured I would let him take the 
pepper spray, because he would be a better target.
    Secretary Glickman. I may just say he was with me the last 
time we were assaulted by somebody throwing bison guts on us. 
You do not want to stay too near him.
    Senator Burns. We draw a lot of attention.
    Senator Bond. I have--Mr. Secretary, I have a very able 
former college wrestler, great athlete, who is my AG-LA and he 
was off at the store making photocopies when we got into the 
problems. So, we have had to train him on staying on task when 
we get into those situations.
    But we did see there the kind of hysteria, the kind of 
impediments, that are being thrown in the way of trade, that 
are being thrown up by the Europeans to prevent competition, 
from better equipped, more technologically advanced American 
farmers. And the GMO nonsense is now being spread in the United 
States.
    And I know, Mr. Secretary, you have spoken on behalf of the 
farmers, of scientists, of health professionals, and consumers 
of using the technology to provide these extraordinary benefits 
that biotechnology can provide for human, health and the 
environment, and we all know more sustainable production and 
more nutritious food, new medicines, vaccines and other energy 
and industrials products.
    I have here a letter that I took to Seattle signed by over 
500 scientists supporting biotechnology, and expressing their 
scientific confidence in the current regulatory scheme 
administered by FDA and EPA and USDA. The letter has a 
statement from the National Research Council of the National 
Academy of Sciences saying that GM crops pose no distinct risk 
distinct from normal breeding.
    The FDA has said the same thing in the Federal Register. 
FDA is not aware of information that would distinguish 
genetically engineered foods as a class of foods developed 
through other methods of plant breeding, and that the agency 
does not require that such food be specifically labeled to 
disclose the methods of development.
    We have, for years, used hybridization and cross-breeding. 
That is an unspecific effort to achieve a favorable mutation. 
One could cross-breed a greyhound and a pit bull and get a dog 
that could not run and would not fight, but with genetic 
engineering, specific traits can be selected, and we can learn, 
we can have a certainty in advance what is being developed.
    I also have a declaration here supporting biotechnology and 
endorsing the current methods of regulation signed by over 
1,000 scientists including Nobel Prize winners James Watson and 
Norman Borlaug, and I have a policy statement from the American 
Medical Association endorsing biotechnology, urging physicians 
to be public spokespersons for agricultural biotechnologies.
    And finally, even more interesting, an interview with 
Patrick Moore, a Ph.D. in ecology, admonishing that this new 
era where pagan beliefs and junk science are influencing public 
policy--he cites GM Foods as an example where policy is being 
influenced by arguments that have no basis in fact or logic. 
Dr. Moore was a founding member of Green Peace, and he has left 
that organization.
    Nevertheless, we still see a vocal, aggressive, and in some 
cases, lawless group of advocacy organizations and competing 
businesses, as well as European protectionists who seek to 
discredit and eliminate biotechnology. And we have just seen 
that biotechnology can provide the nutrition that developing 
countries need through the insertion of the beta-carotene, 
Vitamin A gene into rice.
    I am going to ask, for the record, a series of questions 
like, for example, ``Is this a largely untested technology?'' I 
would like your responses. I want to work with you on that.
    And finally, as you may recall, I have contacted you again 
about the Foreign Agriculture Service office in Singapore, 
which is a linchpin in that country. I will be following up.
    Mr. Chairman, I apologize for the length of this statement, 
but I want to be working very closely with the Secretary and 
the other regulatory agencies in this area in the years to 
come. Thank you.
    Senator Cochran. Thank you, Senator.
    Senator Durbin.

                 STATEMENT OF SENATOR RICHARD J. DURBIN

    Senator Durbin. Thank you very much, Mr. Chairman. I 
understand we are going to try to keep our remarks brief here 
so that we can be off to a vote in a few minutes.
    I want to welcome the Secretary, my friend and former 
colleague, as well as his team. Secretary Glickman, you have 
done a great job, and I am glad that you decided to stay in 
public service and to perform this role, for all of us across 
America are concerned about the future of agriculture.
    Over the last 4 years, freedom to farm has fizzled and 
failed. If I had to give it a grade, I would give it an F, and 
I voted for it. But I did not think I had voted for a bill, or 
a law, that was written in stone.
    We have been spending more federal money trying to bail out 
farmers than ever in our history. Yet we in Congress refuse to 
take a look at the law that is governing these payments. And 
frankly, we lurch from year to year with emergency 
appropriations containing provisions which many of us will 
never be able to defend if we are put on the spot for 
specifics, instead of looking at the big picture.
    Some of my colleagues believe trade is an important part of 
this. I do, too. But I think there are other elements. When a 
State like mine has reports from the University of Illinois 
that about a fifth of the State's 73,000 farms will not cover 
their 1999 operating expenses, and the majority will not make 
enough to cover family living expenses, this is a true 
disaster, because Illinois is a pretty strong state when it 
comes to farming. We usually do not catch a cold the first time 
around, and others suffer before we do.
    So, I hope we can work on, perhaps, addressing some chances 
in freedom to farm that really will help farmers over the long 
haul.
    The last point I would make, Mr. Chairman--and thank you 
for this opportunity. I just returned several weeks ago from 
Africa, and my visits there have had such dramatic impact on 
me, having seen the devastation of the AIDS epidemic.
    [The statement follows:]

                           PREPARED STATEMENT

    Food assistance that the United States is sending is 
critically important in dealing with what could be the greatest 
moral challenge of our time. And I also want to tell you that 
the agricultural research that we have been involved in Africa 
has reaped benefits far beyond what we can measure in 
continuing to provide foodstuffs for people who are living 
merely on the edge of life. I hope we can continue that. I have 
entered some legislation to move along that line.
    I thank you for being here today. Thank you.
    Senator Cochran. Thank you, Senator.
    [The statement follows:]

            Prepared Statement of Senator Richard J. Durbin

    Chairman Cochran, thank you for holding this important hearing this 
morning. I look forward to working with you and Senator Kohl on the 
fiscal year 2001 Agriculture Appropriations bill.
    Mr. Chairman, it's always good to have Secretary Glickman before 
this Committee. I've had the pleasure of serving with him in the House 
and working with him in his capacity as Secretary and find him to be 
dedicated, energetic, and responsive. We're lucky to have him at USDA. 
Mr. Secretary, welcome back.
    I would like to take a few minutes this morning to talk about some 
very important issues that affect the Department.
    First, I am encouraged by the Administration's proposal designed to 
improve the farm safety net. A quick review of that proposal suggests 
that it would be a significant boost to Illinois farmers. In fact, it 
would mean more than $140 million under USDA's Supplementary Income 
Assistance Program, over $60 million for conservation programs, and 
more than $64 million in new risk management assistance for Illinois 
farmers in the first year alone.
    Obviously, our farmers need help. According to a University of 
Illinois study, about a fifth of the State's 73,000 farms won't cover 
their 1999 operating expenses and a majority won't make enough to cover 
family living expenses. Farm net worth is expected to drop about 15.5 
percent on average. The Illinois Farm Bureau predicts that about 18 
percent of Illinois farms will have negative 1999 net incomes and about 
22 percent are in danger of going out of business.
    Mr. Chairman, since 1989 the Federal Government has spent $27 
billion in emergency funding for farm-related disasters, 60 percent or 
$15.9 billion in the last 2 years alone.
    I think it's important for all of us to realize that the 1996 Farm 
Bill, Freedom to Farm, was not written in stone. It can and should be 
changed. I believe we must start now by reforming Freedom to Farm 
because clearly it has failed to meet the most basic needs of 
producers. Restoring the farm safety net, targeting payments to farmers 
in need, and ensuring that livestock producers are not left behind 
should be the first steps. And, Mr. Secretary, I believe you have 
opened this critical dialogue with your proposal.
    I also believe that we should begin a bipartisan effort to expand 
markets for American agricultural products so that farmers can take 
advantage of the immense buying capacity of developing countries. And, 
reforming crop insurance should be on the top of everyone's ``to do'' 
list.
    We must also work to broaden the market for alternative uses of 
agricultural products. More specifically, I hope that my colleagues in 
Congress, and the Clinton Administration, will make every effort to 
expand the role of ethanol in the reformulated gasoline program. 
Knowing what we know about MTBE, this should be a top priority. I 
believe expanding ethanol's role is a win for our farmers, a win for 
the environment, and a win for the rural economy.
    We have a great deal to do and a very short year in which to 
accomplish these initiatives for rural America and our farm families. 
It's time for Congress to roll up its sleeves and get to work.
    Now at the risk of repeating myself, let me mention food safety.
    Our country has been blessed with one of the safest and most 
abundant food supplies in the world. We have the science and know-how 
to make it even safer.
    Currently, our food safety system is fragmented with at least 12 
different federal agencies, 35 different laws governing food safety, 
and 28 House and Senate subcommittees with food safety oversight. With 
overlapping jurisdictions, federal agencies often lack accountability 
on food safety-related issues.
    As you know, I've introduced legislation--the Safe Food Act of 
1999--that would replace the current fragmented federal food safety 
system with a single, independent food safety and inspection agency. 
This new agency would be funded with the combined budgets from the 12 
federal agencies which currently have jurisdiction over food safety. A 
single, independent agency would create a streamlined food safety 
system and lead to improved enforcement of food safety and inspection.
    I hope the Department will continue to explore this idea and work 
with me on ensuring that our food supply is the safest in the world.
    Mr. Secretary, I want to take a minute to thank you and the 
Department for your fine work in Chicago and the surrounding suburbs 
with regard to the Asian Longhorned Beetle.
    As you know, the City of Chicago and the State of Illinois have 
been battling these pests for over 2 years now. Both APHIS and the 
Forest Service have been invaluable partners in this effort. I'm 
pleased to see that the President's Budget includes $29 million, a 
fivefold increase in funding, for emergency efforts to fight Beetles in 
Illinois, New York, Vermont, and Pennsylvania. It is my understanding 
that Illinois may receive up to $7 million for Beetle eradication and 
tree replacement in fiscal year 2001. I know my colleague Senator Kohl 
from nearby Wisconsin is watching anxiously as the State and City 
continue to battle the Beetle.
    Mr. Secretary, I'm concerned that the Department chose to recommend 
cutting a number of important ARS projects at the University of 
Illinois Urbana-Champaign and at the ARS lab in Peoria, in particular, 
regarding soybean diseases. Further, ARS does not include any funding 
for modernization efforts at the Peoria lab. I'll be working with my 
colleagues on this committee to address these omissions.
    Allow me to touch briefly on Africa. As you probably know, I was in 
Africa in January and had an opportunity to see U.S. food aid programs 
in action. I was impressed and heartened by direct feeding programs as 
well as programs that sell U.S. food products at low cost to finance 
development projects. But I was overwhelmed by the impact of AIDS on 
Africa--particularly by the millions of children being left orphaned by 
the epidemic and the devastating impact on African countries' 
economies. I believe U.S. food aid could be used to target communities 
heavily affected by AIDS. I introduced a bill to target $50 million of 
U.S. food aid for nutritional assistance for people living with AIDS, 
for families and children affected by AIDS, and for development 
projects for communities heavily impacted by AIDS.
    I would like to get the Department's views on the potential for 
U.S. food aid being used to help those children, families, and 
communities affected by AIDS in Africa and elsewhere in the world.
    Finally, Mr. Secretary, I included language in last year's bill 
calling upon the Administration to specifically request funding in 
fiscal year 2001 to implement the U.S. Action Plan on Food Security. 
Instead, I found a 17 percent drop in Public Law 480 funding (from 
$1.23 billion to $1.02 billion), and no specific program funding for 
the Action Plan. I'm very interested in an explanation on this matter.
    Mr. Chairman, again thank you for the opportunity to raise these 
issues this morning.

    Senator Cochran. Senator Kohl.

                     STATEMENT OF SENATOR HERB KOHL

    Senator Kohl. Thank you. Mr. Chairman, I am pleased to join 
you again as we review the budget proposal of the Department of 
Agriculture. It is apparent to me that this subcommittee will 
continue to face growing challenges. Initially the last 2 
years, we have had to pass multi-billion-dollar emergency 
agriculture packages. This year, farm income is projected to 
fall again and again, but we will be called on to mend the farm 
safety net.
    To help meet this challenge head-on, the Administration has 
proposed a spending program of approximately $11.5 billion 
through the next 2 years.
    Mr. Secretary, when I looked at this package, I was 
stunned, for as you know, there is nothing of any significance 
for dairy. And, Mr. Secretary, this is not acceptable. Low milk 
prices and federally sanctioned price discrimination have 
devastated the dairy industry in my region.
    Is it not an emergency that we have lost more than 10,000 
dairy farms in Wisconsin since 1990? Does the Federal 
Government owe nothing to the family dairy farmers who you have 
beat almost out of existence with a skewed, anti-competitive 
Federal milk pricing system?
    Now, I know that you worked hard to bring about modest 
reform for the milk market order system last year and to end 
the Northeast Dairy Compact. But, as you know, by the end of 
the year, the Administration accepted the complete revocation 
of those reforms and an extension of the Northeast Dairy 
Compact. And now you want help passing another multi-billion-
dollar farm aid package that ignores dairy. Well, Mr. 
Secretary, not this year.
    The Administration will have my support when it produces a 
farm package based on something other than what crops and 
regions it thinks are most politically popular. You will have 
my support when you bring up a package that is fair and 
redresses some of the grave wrong that has been done to honest 
and productive dairy farmers, and not until then.
    The budget proposal before us deals with these and many 
more issues such as feeding programs for the poor and bases it 
on fair trade, food safety conservation and rural development.
    These programs are not only important to Wisconsin, but to 
America's farmers. They are important to all Americans, and I 
certainly hope we can find a way to work together on all of 
this as the year progresses.
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator.
    Senator Harkin.

                    STATEMENT OF SENATOR TOM HARKIN

    Senator Harkin. Thank you, Mr. Chairman.
    Again, I want to join my colleagues in thanking you, Mr. 
Secretary and Mr. Rominger, and your team for the outstanding 
job you are doing. It is just superlative in the face of some 
real problems out there on the farms.
    I will try to be as quick as I can. First, I want to 
applaud the Administration for its agriculture conservation 
proposals that we see in the budget. Particularly the funding 
for the conservation security program, which I proposed, and I 
think this could really be an area where we can really put some 
more safety nets under those farmers out there in a good, 
beneficial manner for the country.
    The increase in the wetlands reserve program, the EQIP 
program, and the farm land protection program and the wildlife 
habitat incentives program, all great. I applaud you for 
putting that money in the budget.
    Secondly, the bio-based product and the bio-energy 
initiatives at USDA and DOE and the proposed tax incentives in 
the President's budget, again, very positive. Again, I hope 
that you will continue your strong support and your 
department's strong support for those.
    How we can marry DOE and USDA together to provide for more 
bio-based deals similar or like the project that we have in 
Iowa, I will not go into that.
    I also strongly support the $9 million budget request for 
designing a bio-containment facility at the ARS's National 
Animal Disease Center in Eames, Iowa. This center, this 
national center, is a premiere center for research of diseases 
of animals important to agriculture.
    You, Mr. Secretary, and I toured that, as you know, in 
December. And this $9 million item is a first step in upgrading 
the ARS and the APHIS veterinary facilities which are badly--I 
might say, Mr. Chairman, I would like to invite all the 
Senators to come out and look at this national asset that we 
have out there. It is old. It has been there 50 years now, I 
guess, 40 years, something like that--it is the 1960s, I am 
told, so about 40 years.
    And they are scattered around and they just need to be 
upgraded, and I applaud you for putting that in the budget.
    Again, I just want to reiterate, back to what Senator 
Durbin just said. I am at this point with Catholic Relief 
Services. And I have watched them at work from every place from 
East Timor to Africa to Macedonia.
    And again, the issue of food comes up. And they are working 
in places where they really need foodstuffs, and this is just 
one of the NGO's. The Mennonites, the Lutheran church, they are 
all doing great things out there.
    There is certainly some way with soybeans, the surpluses we 
have in pork, in wheat, we are flooded with surpluses. And, as 
you said, Senator, these people are starving over there, 
malnourished, and we have got the NGO's, the people who do not 
charge an arm and leg, and with whom you can trust and deal, to 
deliver these services.
    We have got to break this down some way, Mr. Chairman and 
Mr. Secretary, and get more food stuffs to these ND's that are 
out there doing a great job.
    Thank you, Mr. Secretary. Thank you.
    Senator Cochran. Thank you, Senator.
    Senator Stevens.

                    STATEMENT OF SENATOR TED STEVENS

    Senator Stevens. Mr. Secretary, I look forward to having a 
discussion on specific items that affect my State in 
particular, as these hearings go along.
    But I have come today to make a suggestion to you. I was a 
solicitor in the Interior Department in the Eisenhower 
Administration. We helped work out, at that time, some land 
exchange programs with the Forest Service and BLM, which led to 
expanding lands for Tucson and Phoenix and other places that 
had real problems about expansion.
    This year, we are going to spend $450 million, according to 
the President's budget, to put land back into federal 
ownership. But there is substantial land out there that has 
substantial value that is adjacent to many Western States that 
is owned by the Federal Government, and actually, it can have 
no further Federal purpose.
    I would urge you to go back and look at the concept of 
exchanging lands owned by the Federal Government, but not 
necessarily by the same agency.
    I was just visited by people from Alaska. This is a little 
particular issue, but some of the places in southeast Alaska do 
not have enough land to put in air strips. They used to be 
dependent on amphibious planes.
    Now, most of the planes that are being used are not 
amphibious and they need air strips, but they have to fight 
with the Forest Service to get land. I think we ought to find 
some land that the Forest Service wants to acquire and exchange 
it.
    But basically, I would urge you, we have got to stop 
spending $450 million a year to, according to the 
Administration's budget, put land back into Federal ownership. 
The Federal Government already owns too much land, in my 
judgment. And we are land poor in the West as far as the States 
are concerned.
    I would urge you to think about some way to alleviate this 
strain on the budget from this annual increase the President is 
asking for in terms of dollars to acquire land.
    Now, I know you do not have a chance to answer, but my 
point of view is that we ought to use land exchanges to the 
maximum extent possible and only use cash when it is absolutely 
necessary.
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator Stevens.
    Mr. Secretary, I thank you for your patience in listening 
to our comments and observations about the President's budget 
request. You may proceed.

                       STATEMENT OF DAN GLICKMAN

    Secretary Glickman. Okay. Thank you very much, all of the 
Senators. I appreciate your kindnesses.
    My team is here. Deputy Secretary Rominger is here, of 
course, with Keith Collins, our Chief Economist. Steve 
Dewhurst, our long standing and perennial budget director--and 
I say that in a positive way, because perennials always come 
back and look better each year--Gus Schumacher, who is our 
Under Secretary for Farm and Foreign Agriculture Services.
    I have a long statement, which will be part of the record, 
and I just thought I would make a couple of comments and 
perhaps address some of the comments that were made, because I 
know you are going to have to leave fairly soon.

                        FARM ECONOMIC SITUATION

    It is clear the farm economy in many quarters is in serious 
shape, and what we have done in our budget proposal is to give 
you, early on, an idea of what we can do to augment the current 
farm bill--I repeat that, augment the current farm bill, so 
that we can have early debate on what not only the emergency 
proposal ought to look like, but what the next farm bill ought 
to look like as well. What we have proposed is $11.5 billion 
package of assistance containing three general pieces.

                        FARM SAFETY NET PROPOSAL

    One is a counter cyclical income assistance piece that will 
help producers when times are bad, but will not trigger-in 
relief necessarily when times are good. That is different than 
the Freedom to Farm Bill. While we propose doing this in an 
emergency context, our proposal is on budget and paid up, as 
you know, quite frankly, I would have liked to have seen more 
money in the proposal.
    We will work with Congress on that, but given the fact that 
this was presented in the context of a balanced budget proposal 
of the President, we did the best we could under the 
circumstances, and we want to work with you on the numbers that 
are there. But the principle of counter cyclical farm 
assistance, we think needs to be part and parcel of both the 
emergency relief as well as the next farm bill.
    In addition to that, we proposed a significant conservation 
piece, and it was based on an idea that Senator Harkin 
proposed. But what it does is to pay producers, not on a cost 
share basis, but on a direct basis, based upon certain 
conservation practices that producers carry out on their land 
to protect their resources.
    The theory here is there is more to farming than just 
producing the crop. There is value in the land itself, so that 
we can continue producing crops for the next generations to 
come, so we have the significant conservation piece which 
values the land separately from what is produced on the land.
    The third part is the risk management system where we 
propose additional funds. And just to comment on what Senator 
Gorton says, a major proposal is included here to get rid of 
the area-wide trigger in the non-insured assistance program 
under current law--this is particularly true on specialty 
crops--there has to be a wide-based geographical loss in order 
for an individual producer to get anything out of the program. 
We are proposing ending that with this proposal.
    That will have profound effect, particularly in areas of 
the country which have significant individual losses, but may 
not have a massive hurricane or other widespread catastrophic 
loss.
    We think that these three pieces I've outlined here, taken 
together will be helpful to the form section over the next 2 
years.

                          DAIRY PRICE SUPPORT

    We are also proposing that the dairy price support program 
be extended because it will end at the end of this year. 
Senator Kohl is right, there is nothing more for dairy 
producers, and we want to work with you on that.
    Quite frankly I got burned last year when I tried to 
venture into the dairy debate, but there is no question a lot 
of dairy farmers are hurting.
    The proposal we have put forward would just continue the 
dairy price support program, otherwise the price could fall 
considerably further. We would be glad to work with you on some 
additional dairy legislation.
    In addition, we have frozen loan rates. They would have 
come down if I had not taken that step. There was a lot of 
pressure on us to reduce the soybean loan rate. I was not going 
to do it. I was not going to reduce any loan rates given the 
economic condition of agriculture.

                     FARM STORAGE FACILITY PROGRAM

    We have also proposed to begin a new farm storage facility 
program. We used to have a program like that year ago. We give 
farmers low interest loans to build on-farm storage. Why? In 
this era of identity-preserved agriculture, GMOs, all the niche 
marketing, farmers should have the ability to store on farm, so 
they can be able to market on a more individualized basis. We 
think that this is also an important program.
    So what we have got here is a targeted, national-in-scope 
program that will act as a bridge to the new farm bill, and we 
want to work with you on these proposals. You have challenged 
us, and I think correctly, we have got to put our money where 
our mouth is.
    We have tried to do that within the context of the 
President's balanced budget, but we know that we will have to 
work with you on perhaps making modifications where necessary.
    In terms of exports, I want to make a couple of comments 
there. Last year, the Department programmed 8 million metric 
tons of food assistance, the highest in the last 25 years. What 
Senators Harkin and Durbin said is correct, it is disgraceful 
that there is a huge number of hungry people out there, and we 
have resources available here to help.

                    EXPORT CREDIT GUARANTEE PROGRAM

    Sales under the CCC export guarantee program exceeded $3 
billion, and we have got to continue those efforts on the trade 
policy front. This budget provides about $5.8 billion for 
international programs including $3.8 billion for the CCC 
export credit guarantee program which can be increased if 
necessary. I want to repeat that we will not be locked into 
that number internally within our CCC authority if we think 
more is necessary.
    We are requesting, for a third year in a row, authority to 
use unspent EEP funds for food assistance and market 
development purposes. If we do not use the EEP money, we would 
like to be able to use it in other market development 
activities. We would like that kind of flexibility.
    The budget also supports opening three new agricultural 
trade offices. And of course, we are trying very hard to get 
the WTO China Agreement through, because as you know, China has 
made an initial agreement with us to reduce their tariffs on 
our products to levels, in many cases, below the levels Europe 
has in place. This is something that is an extremely important 
part of trade policy and U.S. agriculture.

                        MARKETING AND INSPECTION

    I am not going to go over everything, only a few critical 
things. In marketing and inspection, we have asked for 
additional monies to deal with mandatory price reporting, so we 
can implement that program beginning this summer. That is a 
high priority with many members of this committee.
    We have asked for additional authority so we can have 
additional resources in our GIPSA market concentration 
activities concerning livestock and poultry. We have asked for 
significant additional money in inspection at the borders, as 
well as dealing with problems like citrus canker, Asian 
longhorn beetle, medfly, hog cholera. And we have asked that 
some of these funds be converted from CCC emergency spending to 
appropriated spending in the budget for the year 2001.

                           RURAL DEVELOPMENT

    In the rural development area, our budget will support over 
$12 billion in loans, loan guarantees and grants and technical 
assistance, which is $1.3 billion more than the year 2000 for 
housing, waste and water programs, dealing with the digital 
divide that is part of the continuing support for rural 
electric and communications and funding for helping rural 
businesses.

                                RESEARCH

    In the research area, the budget proposes an increase of 3 
percent, funding these research activities at $2 billion, and a 
lot of that has to deal with the emerging threats from weeds, 
pests and diseases. Again, that invasive species problem is a 
very, very serious one.

                              FOOD SAFETY

    In the food safety area, as you said, the budget does 
contain additional fees, and I am sure that we can talk about 
this as we have done every year since I have been up here. But 
in addition to that, we are increasing monies directed at the 
President's food safety initiative and enhanced implementation 
of the HACCP systems.
    I just spoke to a group this morning about this, and the 
incidence of salmonella in poultry is down 50 percent since 
HACCP has gone into place. Safe food sells. If people have 
confidence the food system is safe, they will buy it, and we 
have the safest food in the world.
    A lot of these programs in the food safety area are geared 
to giving people confidence that the food is safe. And if they 
believe it, we can deal with some of the hysteria that is out 
there both domestically and on the international front as well.

                             FOOD NUTRITION

    In nutrition, the budget provides for full funding for food 
stamps, child nutrition and WIC. Based on proposed legislation, 
the food stamp eligibility would be restored to over 200,000 
eligible people.
    For Food Stamp participants one of the things we are doing 
is increasing the value of their vehicle to make it easier to 
qualify for the program. It has not really changed much since 
the 1970s. It is still at around $4,600 per year, for the 
maximum value of their vehicle. A lot of working poor people 
cannot qualify in that kind of circumstance.

                      NATURAL RESOURCES MANAGEMENT

    Management of natural resources has been mentioned before. 
The farm safety net proposes a new conservation security 
program, and we have additional funding for EQIP, technical 
assistance, the clean water action plan, as well as the global 
climate change and the land legacy program. An important piece 
is the bio-based fuels and bio-energy program, which we can 
discuss in detail.

                              CIVIL RIGHTS

    We continue to work on our civil rights problems, as well 
as proposing $10 million for the 2501 grant program to reach 
out to help socially disadvantaged farmers. We are trying hard 
to improve customer service by streamlining and restructuring 
the county offices to support one-stop USDA service centers, 
but we have got to have the tools to do that, including the 
common computing environment, as well as other service center 
modernizations and e-Commerce-related capabilities for the 
Department.

                           PREPARED STATEMENT

    I have indicated other things in my formal statement that 
we need for the whole Department, but in the interest of time, 
I just wanted to highlight those items as kind of a summary of 
the major items that need your attention.
    Senator Cochran. Thank you very much, Mr. Secretary.
    [The statement follows:]

                   Prepared Statement of Dan Glickman

    Mr. Chairman, Members of the Committee, it is a privilege to appear 
before you to discuss the 2001 budget for the Department of Agriculture 
(USDA).
    The President's budget proposes $66.4 billion in budget authority 
for 2001 for USDA compared to a current estimate of $72.3 billion for 
2000 and $67.8 billion for 1999. Budget authority for discretionary 
spending, which accounts for about 25 percent of USDA total budget 
authority, increases slightly from $16.3 billion in 2000 to $16.7 
billion in 2001. The request before this Committee for discretionary 
spending is $14.4 billion.
    The Department's 2001 budget request provides the necessary 
resources that will enable USDA to meet its ongoing program 
responsibilities as well as focusing on some key Presidential 
initiatives. These key initiatives include:
  --A new Farm Safety Net Initiative that will provide over $11 billion 
        in additional assistance to the rural economy from 2000 through 
        2002. The initiative includes proposals for new legislation to 
        provide supplementary countercyclical income assistance 
        payments targeted to producers actually facing reduced prices 
        and revenues and to reform the crop insurance program to 
        provide better protection from production losses. Other 
        legislative proposals include a new Conservation Security 
        Program, expansion of the Conservation Reserve and Wetlands 
        Reserve Programs and other conservation programs. This will 
        strengthen farm income support for those producers most in need 
        of assistance due to depressed prices and natural disasters 
        while also stimulating achievement of major environmental 
        benefits through better management of farmland.
  --A continuing Food Safety Initiative for improving the Federal food 
        inspection system from farm-to-table through better 
        surveillance of foodborne illnesses and ways to combat them, 
        strengthened Federal-State partnerships, and expanded research 
        and consumer education. The budget includes increases of $27.5 
        million in five USDA agencies to support the Initiative.
  --A Biobased Products/Bioenergy Initiative to expand markets for 
        agricultural and forestry products to reduce U.S. dependence on 
        oil imports, expand rural business opportunities, and cut our 
        pollution and greenhouse gas emissions. The budget includes 
        increases totaling nearly $90 million to support these 
        activities.
  --A continuing Lands Legacy Initiative that proposes $1.4 billion for 
        a national program to protect great places and provide the 
        tools for localities and States to plan for smart growth and 
        open space presentation. Of this total program, $300 million 
        would be allocated to USDA to carry out work by the Forest 
        Service and the Natural Resources Conservation Service.
    The budget also focuses resources on the following other high 
priority areas:
  --Providing adequate funding for Food Stamp, Child Nutrition, and WIC 
        programs, increased funding for Farmers' Market Nutrition 
        program, new assistance for the Colonias, and legislation to 
        improve child care food program management as well as make it 
        easier for Food Stamp families to own a car and restore Food 
        Stamp benefits to certain groups of legal immigrants.
  --Meeting the urgent needs for water, housing and jobs in rural 
        communities.
  --Supporting research, education, technical assistance and inspection 
        activities to improve agricultural productivity, 
        competitiveness, and small farm viability; help solve pest and 
        disease as well as environmental problems; and provide a safe 
        and nutritious food supply.
  --Expanding domestic and overseas markets through aggressive 
        promotion and a reduction in trade barriers.
  --Continuing an aggressive civil rights policy, providing for quality 
        customer service and efficient program delivery particularly by 
        county-based agency service centers, and effectively managing 
        financial, human, information and other resources.
    The Department also will propose legislation that could affect the 
appropriations process because of the discipline imposed on the 2001 
budget. User fees for the Food Safety and Inspection Service, the 
Animal and Plant Health Inspection Service, and the Grain Inspection, 
Packers and Stockyards Administration are again included in the budget. 
Legislation is also proposed for a number of mandatory programs, 
including farm safety net legislation, which also provides for crop 
insurance reform, legislation to expand eligibility for the Food Stamp 
Program, and improve Child and Adult Care Food Program management, as 
previously mentioned.
    I would now like to discuss the President's budget proposals, as 
they relate to each of the Department's mission areas.

                 FARM AND FOREIGN AGRICULTURAL SERVICES

    The mission of the Farm and Foreign Agricultural Services area to 
secure the long-term vitality and global competitiveness of American 
agriculture has surely been tested by the tough times farmers and 
ranchers have been encountering over the past couple of years. While 
planting flexibility provisions of the Federal Agriculture Improvement 
and Reform Act of 1996 (the 1996 Act), strong export and trade policy 
programs, and other program initiatives already underway have helped 
many crop and livestock producers, it is clear, as the President 
indicated, that the farm safety net still needs to be reinforced.
    The Administration and the Congress worked together over the past 2 
years to provide emergency support for farmers in areas hit hard by 
declining prices and production losses. However, this emergency 
assistance has been expensive and not well targeted to those producers 
who need it the most.
    The budget includes several legislative proposals for farm, 
conservation, and crop insurance programs, coupled with new initiatives 
to be undertaken using current authorities, which will provide $11.5 
billion in additional assistance to farmers, ranchers and rural 
communities from 2000 through 2002. These initiatives to improve the 
farm safety net would provide about $7 billion in additional direct 
farm income assistance over this period. This includes proposed 
legislation for the 2000 and 2001 crop years to provide $5.6 billion in 
supplementary, crop-specific income assistance to producers of wheat, 
feed grain, rice, upland cotton and oilseeds suffering from low prices 
and revenue. The proposed legislation also includes an extension of the 
dairy price support program and a new program to fund livestock 
processing cooperatives to improve income opportunities for producers. 
The Administration's initiatives under current authorities will also 
include maintenance of maximum levels for marketing assistance loan 
rates for the 2000 crops, a new program of incentives to encourage 
increased use of farm commodities for biofuels production, and a new 
farm storage facility loan program to aid producers to expand on farm 
storage capacity to be better positioned to effectively market their 
crops.
    Continued efforts to expand and improve programs which help 
producers manage risk will also be emphasized, and it will be necessary 
to work with Congress to further reform the insurance programs for crop 
and livestock producers. Over $1 billion is included for crop insurance 
and related reforms. This includes a proposal to make noninsured crop 
disaster assistance more accessible to producers by replacing the 
requirements for an area-wide loss before assistance can be made 
available to producers with a less restrictive disaster declaration.
    Enhanced conservation initiatives totaling nearly $3 billion, a 
$1.3 billion increase over authorized levels for 2001 and 2002, 
including a new Conservation Security Program at $600 million per year 
for 2001 and 2002 are proposed. The conservation proposals are also a 
critical component of our farm safety net improvements to assist 
producers in maintaining environmentally sound practices during these 
economically troubling times. The budget proposes legislation to 
increase the Conservation Reserve Program (CRP) acreage cap to 40 
million acres. It also promotes the continuous, non-competitive signup 
that has been underway to enroll land in filter strips, riparian 
buffers, and similar special conservation practices to enhance 
achievement of water quality objectives by providing additional 
incentives under current authority to enhance participation. The 
proposal also would expand other conservation programs funded by the 
Commodity Credit Corporation (CCC) but administered by the National 
Resources Conservation Service (NRCS) including the Wetlands Reserve 
Program (WRP), the Environmental Quality Incentives Program (EQIP), the 
Wildlife Habitat Incentives Program (WHIP), and the Farmland Protection 
Program (FPP).
    These initiatives will serve as the basis for more permanent and 
effective assistance to help producers cope with continuing economic 
stress at less cost to the taxpayer. Unlike previous Ad Hoc (off-
budget) emergency assistance enacted late in the year, the proposal is 
fully paid for in the context of a balanced budget. It is presented as 
a part of the regular budget process so that Congress can take action 
early in the year allowing farmers and their creditors to plan ahead. 
This proposal will enhance and improve the safety net during the 
remaining 2 years of the 1996 Farm Bill and provide a bridge to a new 
farm program. There also will be continuing efforts by the Department 
to work to expand opportunities for small farmers and others who 
traditionally have been under served in our farm programs.

Commodity Credit Corporation

    Changes over the last decade in commodity, disaster, and 
conservation programs have dramatically changed the level, mix, and 
variability of CCC outlays. CCC outlays increased from $10 billion in 
1998, to $19 billion in 1999, and are projected to increase to a new 
record high of about $27 billion in 2000. The increase in CCC spending 
for 2000 is accounted for by higher marketing assistance loan program 
outlays, expenditures related to various Administration initiatives, 
and emergency spending authorized by the 2000 Appropriations Act that 
provided about $9 billion in emergency assistance.
    Projected CCC outlays for 2001 under current law are estimated at 
over $15 billion, including nearly $800 million for initiatives planned 
under current authority. Approximately $4 billion in additional CCC 
outlays would occur in 2001 based on the proposed safety net 
legislation.
    Conservation program outlays account for a significant portion of 
CCC expenditures as well. The 1996 Act authorized direct CCC funding 
for CRP administered by FSA and several new conservation programs 
administered by NRCS.
    CRP provides landowners annual payments and half the cost of 
establishing a conserving cover in exchange for retiring 
environmentally sensitive land from production for 10 to 15 years. The 
1996 Act authorized the program through 2002 and set maximum enrollment 
in the program at 36.4 million acres. About 34.6 million acres in total 
will be enrolled in the program in 2001 up from an estimated 32.3 
million acres in 2000.
    Finally, the budget addresses problems with section 4 of the 
Commodity Credit Corporation Charter Act which caps CCC expenditures 
for computer equipment and section 11 which limits total allotments and 
transfers to State and Federal agencies for administrative support 
services to the 1995 expenditures level. The latter provisions impose 
significant restrictions on the availability of CCC funds for transfers 
and reimbursable agreements used to fund conservation technical 
assistance and other support services for the conservation, commodity, 
and export programs. The budget proposes an adjustment to these 
limitations to permit additional funds for the technical assistance 
needed to carry out the conservation programs authorized in 1996 as 
well as newly proposed programs.
    By 2001, the amount available under the section 4 computer cap will 
be fully exhausted, preventing CCC funding of data processing and 
related activities needed to support efficient and timely delivery of 
FSA programs. If the cap is not raised, a portion of the appropriated 
funds for salaries and other expenses will likely have to be diverted 
to maintaining legacy systems thereby impacting staffing levels. The 
loss of CCC funds for information technology and data processing also 
will impede needed investment in streamlining and Service Center 
modernization initiatives, restricting the Department's investment in 
much-needed technology to implement ongoing business process 
reengineering efforts. USDA needs these investments to improve service 
to its customers and reduce program delivery costs, but the high cost 
of operating and maintaining the current legacy systems that serve our 
customers precludes investment in modernization without additional 
funding.
    The budget for 2001 includes a legislative proposal to raise the 
limit on CCC expenditures for computer equipment by $35 million per 
year for the period 2001 through 2002. The increase in the multi-year 
cap is essential if CCC is going to meet its most basic ongoing 
computer operations and maintenance costs for the farm programs.

Farm Loan Programs

    Traditionally, USDA's role in the farm credit market has been to 
provide a safety net for farmers who are unable to qualify for credit 
from private lenders. The Department supplies about 4 percent of farm 
credit. Private lenders, including the federally-chartered Farm Credit 
System, supply the rest. Although the amount of farm debt has been 
rising, the portion supplied by the Department is about half of what it 
was in 1994. The Department's farm loan programs help farmers who are 
experiencing financial difficulties due to adverse market and 
production conditions, as well as socially disadvantaged, beginning, 
and limited resource farmers.
    Changes in market conditions impact the willingness of private 
lenders to make new loans. Thus, the number of applicants seeking USDA 
program assistance increases dramatically during an economic downturn. 
This occurred in 1999 and is expected to continue through 2000 and 
2001. As long as commodity prices remain low, farmers will have 
difficulty presenting positive cash-flow scenarios to their lenders, 
and many will not be able to qualify for credit.
    The trend in recent years has been a shift to more guaranteed 
loans, as opposed to direct loans. Especially during an economic 
downturn like this one, loan guarantees play an important role. Loan 
guarantees provide private lenders with a way in which they can 
minimize their exposure to risk while continuing to provide credit to 
their borrowers who are experiencing temporary financial difficulties. 
A loan guarantee with interest assistance allows borrowers who 
temporarily cannot meet cash flow requirements to continue to be served 
by their current lenders. USDA has streamlined its guaranteed loan 
making regulations in order to encourage more private lenders to 
participate in the program. Guaranteed loans have lower subsidy costs, 
and lower administrative costs since much of the loan making and 
servicing actions are handled by private lenders.
    The 2001 budget request for farm loans is based on the assumption 
that the farm economy will begin to recover in 2001 and that the 
supplemental funding provided in 2000 will reduce the backlog of loan 
applications. Specifically, the 2001 budget request includes about $1.1 
billion in direct farm loans and $3.5 billion in loan guarantees--a 
total of $4.6 billion. This is $1.2 billion less than the $5.8 billion 
that will be available in 2000, but the 2000 total includes over $2 
billion provided through emergency funds. Because interest rates have 
been rising, subsidy costs for the direct loan programs are higher this 
year. This means each dollar of direct loans made in 2001 will cost 
more than in 2000. Overall, subsidy costs for 2001 total $186 million, 
$83 million less than in 2000.
    For farm operating loans, the 2001 budget includes $700 million in 
direct loans, $2 billion in unsubsidized guarantees, and $478 million 
in subsidized guarantees--a total of $3.2 billion. The availability of 
farm operating loans provides farmers with short-term credit to finance 
the costs of continuing or improving their farming operations, such as 
purchasing seed, fertilizer, livestock feed, and equipment.
    For farm ownership loans, the 2001 budget includes $128 million in 
direct loans and $1 billion for guaranteed loans. The availability of 
farm ownership loans provides farmers with long-term credit to finance 
the costs of enlarging, improving, or purchasing a family farm. In 
addition, the guaranteed farm ownership loan program allows farmers to 
use real estate equity to restructure debts. The direct farm ownership 
loan program cannot be used for this purpose.
    In addition, the 2001 budget includes funding for the boll weevil 
eradication program, Indian tribal land acquisition loans, and 
emergency loans. Due to numerous natural disasters in recent years, 
demand for emergency disaster loans has been very high and supplemental 
appropriations have been needed in order to adequately fund the 
program. The request for emergency loans for 2001 is $150 million, 
which includes loans that would be made to larger-sized farms at higher 
interest rates, under our proposal to close the ``eligibility gap'' 
between USDA and the Small Business Administration emergency loans.

Farm Program Delivery

    The weakened farm economy has challenged our efforts to improve 
customer service while improving efficiency in the Farm Service Agency 
(FSA) and the other county-based conservation and rural development 
agencies. The increasing demand for CCC marketing assistance loan 
programs and disaster assistance has dramatically increased workload 
and placed new burdens on county office staff. The higher workload, 
particularly for the marketing assistance loan programs, is projected 
to continue into 2001.
    FSA Federal and county staffing since 1993 has declined by about 
6,000 staff years, from over 22,500 staff years at the end of 1993 to 
about 17,200 staff years at the end of 1999. Additional funds 
appropriated in 1999 and 2000 have allowed the agency to avoid 
reductions-in-force and to hire and maintain additional temporary staff 
to meet pressing workload needs. The proposed program level in 2001 for 
salaries and expenses of $1.1 billion is estimated to support a ceiling 
of 5,901 Federal staff years, and 10,766 non-Federal county staff 
years, assuming proposed legislation is enacted allowing for CCC to 
cover a portion of FSA's computer operations and maintenance costs for 
the farm programs. The workload requirements to deliver projected 
current programs and proposed new programs in 2001 is expected to 
require over 16,600 staff years as well as continued investment in 
modernization of the delivery system. The current high level of costs 
of operating and maintaining current legacy computer system will 
continue to be incurred in the short run until the common computing 
environment is operational, if FSA and the other field service center 
based agencies are to provide necessary and adequate customer service. 
As recommended in the Civil Rights Action Team report, legislation will 
be submitted to convert all FSA employees to Federal status this year.

Crop Insurance

    Crop Insurance is fast becoming a primary source of risk protection 
for our Nation's farmers. Participation has increased to about 70 
percent of the insurable acres--more than half of which is insured at 
higher levels of coverage that producers select, and the rest at the 
premium-free catastrophic coverage level of 50 percent of approved 
yield and 55 percent of expected market price. The program is operating 
on an actuarially sound basis, and the concern that farmers had about 
the high cost of premiums has been addressed by providing approximately 
a 30 percent discount in premiums in 1999 and about a 25 percent 
discount in premiums in 2000 as part of the emergency assistance 
package that was enacted for those years.
    More work needs to be done in this area and the Administration is 
prepared to work with the Congress toward this end. Based on the 
response received for discounting premiums, the budget includes a 
proposal to increase the premium subsidy on buy-up coverage for the 
2001 crop. This new legislative authority would also address the 
problem of multi-year coverage and establish a pilot program for 
livestock. In addition, the proposed legislation would expand the risk 
management education program and provide incentives, such as royalties, 
to developers of new insurance products. The legislative proposal also 
includes a provision for replacing the area-wide trigger on eligibility 
for the non-insured crop disaster assistance program with disaster 
declarations, beginning with the 2000 crop, so that producers with 
individual losses on crops for which crop insurance is not offered will 
be better positioned to receive assistance.
    The 2001 budget requests that ``such sums as necessary'' be 
appropriated for all costs of the crop insurance programs, except for 
Federal salaries and expenses. This is consistent with prior year 
appropriations and offers the flexibility necessary to meet increases 
in the demand for insurance. The budgetary impact of our legislative 
changes will be reflected on the mandatory side of the ledger.
    As for Federal salaries and expenses in the Risk Management Agency, 
the 2001 budget includes $67.7 million in discretionary spending, 
compared to the $64 million that was appropriated for 2000. About $1.6 
million of the $3.7 million increase is necessary to cover pay costs 
and $0.4 million is for information technology investments. The 
remaining $1.7 million would be used to establish a pilot program for 
insuring bio-based value added products, and to enhance our civil 
rights activities.

International Trade and Export Programs

    Strong export markets remain an essential component of the farm 
safety net, and the aggressive pursuit of overseas markets for our 
farmers and ranchers is one of the Department's highest priorities. For 
2000, the value of U.S. agricultural exports is projected at $49 
billion, unchanged from last year. While export growth remains 
sluggish, export levels should improve as the economies of Asia, Latin 
America, Russia, and elsewhere recover from the financial disruptions 
of recent years. However, a more solid recovery in U.S. exports is 
unlikely until global commodity stocks are reduced from their present 
high levels.
    In view of the current export situation, a number of steps have 
been taken during the past year to bolster our export performance, 
while assisting other countries to meet their food and agricultural 
import needs. For example, the Department programmed nearly 8 million 
metric tons of food assistance under various program authorities last 
year, the highest tonnage level in 25 years. This included over 5 
million tons of wheat programmed under the President's Food Aid 
Initiative and additional assistance provided to Russia. The Department 
also continued to make available sizeable levels of CCC export credit 
guarantees to facilitate sales to buyers in the countries in Asia and 
elsewhere, which required the guarantees in order to secure financing 
to purchase needed imports. Sales registrations under the programs 
exceeded $3 billion last year.
    Progress has also been made in our efforts to expand market access 
through trade policy. Noteworthy among these accomplishments are the 
U.S.-China Agricultural Cooperation Agreement reached last April, and 
the broader bilateral agreement on China's entry into the World Trade 
Organization (WTO) reached last November. These agreements are 
important as the first will remove longstanding technical barriers 
related to imports of U.S. grains, citrus, and meat and, upon China's 
accession to the WTO, the second will result in reduced tariffs and 
enhanced access to Chinese markets for many of our products. Moreover, 
the WTO agreement will place disciplines on Chinese agricultural 
policies, which would reduce the possibility of disruptions in world 
trade stemming from their policies as has occurred in the past. In 
order for United States to benefit fully from the agreement on WTO 
accession, however, it will be necessary for permanent Normal Trade 
Relations (NTR) status to be approved for China. The Administration 
will be working closely with the Congress this year to ensure a 
positive outcome on the NTR matter.
    Another important trade policy activity is the new round of 
multilateral negotiations on agricultural trade. The objectives we have 
established for the negotiations--elimination of export subsidies, 
improved market access by reducing tariffs and increasing quotas, 
reform of state trading enterprises, tighter rules on trade distorting 
domestic support, and facilitation of trade in products of new 
technologies--are crucial for the achievement of our long-term export 
expansion objectives. Although full agreement on the framework for a 
new round of negotiations was not achieved at the Seattle Ministerial, 
the Seattle meeting is not the end to further negotiations on 
agricultural trade. Because of the ``built-in agenda'' for agricultural 
reform in the Uruguay Round Agreement, work on the new agricultural 
negotiations will continue, and the Administration will be working 
vigorously to ensure that U.S. objectives are advanced as we move 
forward.
    The President's budget for 2001 is designed to ensure that the work 
of the Department on these important trade policy and export promotion 
activities can continue. The budget provides an overall program level 
of nearly $5.8 billion for the Department's international programs. For 
the CCC export credit guarantee programs, the largest of our export 
programs, the budget includes a projected program level of $3.8 
billion, unchanged from this year's level. These are current estimates 
of the level of sales that will be facilitated by the programs; 
however, the actual level of programming will be determined by market 
conditions and program demand. As export markets recover, the level of 
export credit guarantee activity should pick up and the level of 
guarantee programming can be increased in order to meet demand and 
maximize export sales.
    For the Department's market development programs, the budget 
provides funding of $120 million for 2001. This includes $90 million 
for the Market Access Program (MAP), the maximum level authorized by 
law. MAP is the largest market development program and is a key 
component in the Department's efforts to increase sales of high value 
products. The program has also served an important role in assisting 
small and new-to-export companies build new overseas markets.
    For the Foreign Market Development Program, commonly referred to as 
the Cooperator Program, the budget continues funding for the program at 
this year's level of $27.5 million. As proposed in last year's budget, 
the Cooperator Program is now funded through CCC rather than funds 
appropriated to the Foreign Agricultural Service (FAS). This change 
will provide increased stability in the level of annual program funding 
and, thereby, will enhance long-term planning by program participants.
    The budget also includes funding for the Quality Samples Program, 
which was first proposed in last year's budget and is being implemented 
by CCC this year. Under the program, samples of U.S. agricultural 
products will be provided to foreign importers in order to promote a 
better understanding and appreciation of their high quality. The 
program will be carried out through private sector organizations and 
agricultural trade associations. For 2001, the budget provides funding 
of $2.5 million for the Quality Samples Program, the same as this 
year's level.
    The budget includes funding for both of the Department's export 
subsidy programs--the Export Enhancement Program (EEP) and the Dairy 
Export Incentive Program (DEIP). In the case of EEP, the budget 
provides funding of $478 million, the maximum level authorized by law 
and the level which is consistent with the U.S. export subsidy 
reductions agreed to in conjunction with the Uruguay Round Agreement on 
Agriculture. Although EEP programming has been limited in recent years 
due to world supply and demand conditions, the awarding of EEP bonuses 
can be resumed whenever market conditions warrant. Again this year, 
proposed legislation will be submitted which would allow unobligated 
balances in EEP funds to be transferred toward the end of the year to 
help support increased programming under the Department's foreign food 
assistance authorities. This would be a very useful tool for ensuring 
that EEP funds do not go unused, while helping to maximize agricultural 
exports and assisting other countries meet their food import 
requirements.
    For DEIP, the budget assumes a program level of $66 million for 
2001. This is a reduction from the levels of recent years and reflects 
two primary factors. The first is full implementation of the Uruguay 
Round export subsidy reduction commitments. The second is the phaseout 
this June of the so-called ``rollover'' provision which allows 
countries under certain circumstances to exceed their annual export 
subsidy reduction commitments by drawing on unused subsidy quantities 
from previous years. In view of the constrained level of DEIP 
programming, the Department will need to work with the domestic 
industry to determine how it can continue to facilitate U.S. dairy 
exports and maintain efforts to develop long-term markets overseas.
    The budget provides an overall program level of just over $1 
billion for Public Law 480 food assistance in 2001, which is expected 
to provide approximately 2.9 million metric tons of commodity 
assistance to recipient countries. As in recent years, Public Law 480 
programming is likely to be supplemented by food assistance made 
available under other authorities, including the Food for Progress Act 
of 1985 and section 416(b) of the Agricultural Act of 1949.
    For FAS, the budget provides appropriated funding of $118 million, 
an increase of more than $4 million over this year's level. Included in 
the increase is funding to support the opening of three new 
Agricultural Trade Offices in Canada, Mexico, and the Philippines. 
These countries have been identified by FAS as priority markets which 
offer significant market growth potential over the next 5 to 10 years. 
These offices, working in conjunction with U.S. market development 
organizations, private exporters, State trade officials, and others, 
will help to ensure that U.S. agricultural products benefit from the 
projected growth.
    Increased funding is also included to enhance FAS' market access 
compliance and negotiation activities. The workload associated with 
these activities has increased substantially with implementation of the 
Uruguay Round Agreement, and it is expected to increase even further 
with the onset of new multilateral negotiations on agriculture. The 
increased funding will help to ensure that resources are available to 
monitor implementation and compliance with existing agreements and to 
ensure that U.S. agricultural interests are fully represented as new 
agreements are negotiated.
    Additional funding is also provided for the increased costs 
associated with maintaining an FAS presence at the American Institute 
in Taiwan and for a portion of projected pay cost increases in 2001. 
The FAS request also includes $3.5 million for the Cochran Fellowship 
Program, which maintains appropriated funding for the program at this 
year's level.

                           RURAL DEVELOPMENT

    Rural America is tremendously diverse in terms of its dependence on 
farming and other sources of jobs and income, and its ability to reap 
the benefits of the Nation's economic prosperity. Likewise, there is a 
substantial range in the wealth and economic well-being of rural 
residents. Homeownership is higher in rural America than in the Nation 
as a whole. Yet, many rural residents lack the resources to qualify for 
mortgage credit, and rental housing is often unavailable or 
unaffordable, particularly for the elderly. Even the basic amenities of 
clean running water and waste disposal are lacking in many rural 
communities.
    USDA's rural development programs are designed to provide loan, 
grant and payment assistance for a variety of needs--rural housing, 
community facilities, water and waste disposal, electric and telephone 
service, and rural businesses. These programs represent a substantial 
investment of public funds--nearly $13 billion for 2001. The returns on 
this investment include jobs--an estimated 200,000 for 2001--as well as 
decent, safe and sanitary housing, improved community services, and 
more opportunities for rural areas to compete successfully in the high-
tech, global economy.
    Through initiatives, such as Empowerment Zones and Enterprise 
Communities (EZ/EC), USDA helps rural communities with strategic 
planning and implementation. The Department works with other Federal 
agencies, State and local governments, and other rural development 
partners to ensure a coordinated effort in meeting local priorities.
    The 2001 budget provides more than $2.5 billion in budget 
authority. This is an increase of over $300 million in budget authority 
over the $2.2 billion provided in 2000, and reflects higher subsidy 
costs due primarily to a projected increase in the Government's cost of 
borrowing.
    Almost $3.5 billion in loans and grants is budgeted under the Rural 
Community Advancement Program (RCAP) that was enacted as part of the 
1996 Act. RCAP funding would be provided in three funding streams, with 
States having the full flexibility to transfer up to 10 percent of the 
funds within the funding streams, and up to 25 percent between the 
three funding streams. This is consistent with the 1996 Act, and would 
ensure better coordination in meeting State and local priorities. 
Within RCAP's three funding streams, $24 million would be earmarked for 
Federally recognized Indian tribes. There are several other earmarks, 
including $42.6 million for EZ/EC communities, and other initiatives.
    The 2001 budget provides mandatory funding of $15 million annually 
for the communities that were selected in Round II of the EZ/EC 
Initiative. This will assist these communities, which have a 10-year 
designation, in meeting the goals of their strategic plans to create 
jobs and economic growth. The budget also provides for targeting of 
about $200 million in loans and grants under USDA's rural development 
programs to projects in EZ/EC communities.
    The 2001 budget includes $581 million for salaries and expenses, 
which is approximately $47 million over the 2000 level. The increase 
will allow the mission area to increase staffing and to fund a limited 
number of information technology initiatives.

Rural Utilities

    The Rural Utilities Service (RUS) finances rural electric, 
telephone and water and waste disposal services. Although most rural 
Americans now have access to these basic necessities, there is still a 
need to maintain and upgrade these facilities to ensure that rural 
America does not fall further behind in the fast-paced world of high-
tech communications, and to address the increasing risks of unsafe or 
poor quality water.
    The 2001 budget would support over $2.2 billion in electric and 
telephone loans, down from $2.8 billion. Guaranteed loans would be 
reduced from $1.7 billion to $1.2 billion. Direct 5 percent electric 
loans would be reduced and municipal rate loans would be maintained at 
about the current level.
    The Distance Learning and Telemedicine Program offers rural 
communities an opportunity to receive enhanced learning and medical 
services and to connect to the information-based economy. In 1997, the 
program was expanded to include loan as well as grant assistance. RUS 
expects to see continued progress in loan activity. Therefore, the 2001 
budget proposes an increase in direct loans from $200 million in 2000 
to $300 million, and an increase in grants, from $20 million in 2000 to 
$25 million. This program will also fund $100 million in loans and $2 
million in grants as part of the Administration's initiative to close 
the ``digital divide.''
    The Water and Waste Disposal Program provides financing for rural 
communities to establish, expand, or modernize water treatment and 
waste disposal facilities. Eligibility is limited to communities of 
10,000 or less in population that cannot obtain credit elsewhere. The 
program supports the Administration's Water 2000 initiative, which 
targets a portion of the funding to serve those rural communities with 
the Nation's most serious water quality problems, including even the 
lack of a dependable supply of drinking water.
    The program level for 2001 includes $502 million in grants, $1,032 
million in direct loans and $75 million in guaranteed loans for water 
and waste disposal projects. This level will provide financing for new 
or improved water systems that will serve about 1.7 million rural 
residents. In addition, about 700,000 rural residents will be served 
through new or improved waste disposal systems. The 2001 budget 
includes $648 million in budget authority to support the program, which 
is an increase over the $606 million appropriated for 2000.

Rural Housing

    USDA rural housing programs, managed by the Rural Housing Service 
(RHS), have played a key role in providing affordable homeownership and 
rental opportunities for rural residents since the 1960s. The programs 
serve very low to moderate income families who cannot obtain 
conventional credit and cannot otherwise afford decent, safe and 
sanitary housing. Interest and rental payment assistance reduce the 
cost of such housing to the families' ability to pay, based on income 
and other factors. The direct loan program serves low income families 
with incomes less than 80 percent of the area median. The average 
borrower's income is $17,500. The 2001 budget would support $1.3 
billion in direct (single-family) homeownership loans--compared to 
$1.16 billion in 2000.
    The 2001 budget would also support $3.7 billion in guarantees--$500 
million more than in 2000. The program offers no interest payment 
assistance, so borrowers must be able to pay commercial rates of 
interest. This keeps the subsidy cost of the program less than 1 
percent per dollar of loan guaranteed, allowing it to fill gaps in the 
commercial credit market where lenders are reluctant to make loans on 
their own. The Administration will propose legislation to increase the 
fee on guaranteed loans, which will further reduce the subsidy cost.
    The combined total of $5.0 billion in homeownership loans and 
guarantees reflects the Administration's strong commitment to improving 
homeownership opportunities in rural areas and is expected to serve 
almost 70,000 rural families.
    The 2001 budget provides for $120 million in direct loans and $200 
million in guarantees for rental housing. The guaranteed program for 
rental housing differs from the direct loan program in that it serves 
families with incomes up to 115 percent of the area median income, 
rather than those below 80 percent of the area median. The guaranteed 
program is proposed to operate without interest payment assistance. 
Currently 20 percent of loans have interest payment assistance. The 
program will continue to use other sources of funds and financial 
incentives, such as tax credits. This combination of the guaranteed 
loan with other incentives keeps rents affordable for low income 
families.
    In the direct rental housing program, RHS currently has a portfolio 
of about 18,000 projects with approximately 245,000 units receiving 
rental assistance payments. About 42,800 of these units will require 
renewal at a cost of $634 million. The budget of $680 million also 
provides for some additional units in existing projects for servicing 
purposes, as well as a small number of units provided in new projects, 
including farm labor housing.
    RHS administers several housing programs that serve specific needs, 
including farm labor housing, self-help housing for families who trade 
their sweat equity for a chance to own their own home, and repair loans 
and grants for very low income households. The 2001 budget recommends 
$30 million in loans and $15 million in grants for farm labor housing. 
It also includes $5 million for emergency assistance for migrant farm 
workers. The budget also recommends an increase in Self-Help grants 
from $29 million available for 2000 to $40 million for 2001.
    The community facilities program provides direct loans, guarantees 
and grants to finance essential community facilities, with priority 
given to health and safety facilities. In recent years, the priority 
has been to serve children and the elderly through child care centers 
and health facilities; however, a wide range of projects have received 
this assistance, reflecting the diversity of State and local 
priorities. The 2001 budget provides $250 million in direct loans, $210 
million in guarantees, and $24 million in grants, including $5 million 
for early warning system grants that would allow rural areas to reduce 
the loss of life resulting from inadequate warnings of hazardous 
weather. The total program level of $484 million is about $75 million 
more than 2000, and will support over 200 new or improved health care 
facilities and other facilities which will improve the standard of 
living in rural America.

Rural Business

    In order to create thriving local economies that provide good 
paying jobs and withstand the challenges of a high-tech global 
marketplace, many rural communities need a more diversified economic 
base. In response to the EZ/EC initiative, many communities have 
prepared strategic plans for their development. Implementing these 
plans, however, requires significant sources of private-sector capital. 
Within USDA, the Rural Business-Cooperative Service (RBS) administers 
several programs, including loan guarantees, direct loans, and 
technical assistance, that encourage private lenders to be more 
responsive to unmet needs and opportunities in rural communities.
    RBS' largest program is the business and industry (B&I) loan 
guarantee program, which has been operating at a level of about $1 
billion for the last few years. The 2001 budget provides $1.25 billion 
in B&I guarantees and $50 million in direct loans, which are targeted 
to areas that have traditionally been under-served by commercial 
lenders. This level of funding reflects the Administration's strong 
commitment to expanding the rural economy, and is expected to create or 
save more than 40,000 jobs in rural America.
    The 2001 budget provides $64 million for the Intermediary Relending 
Program with $4 million of this amount earmarked for the 
Administration's Native American Initiative. This program provides 
loans at 1 percent interest to intermediaries who relend those funds to 
local businesses and other organizations to improve the local economic 
base.
    The rural business enterprise grant program would be funded at $41 
million, a small increase over the 2000 level. These grants help rural 
entities, including public bodies, nonprofit corporations and federally 
recognized Indian tribes, finance and facilitate development of small 
and emerging businesses. The budget provides $8 million for rural 
business opportunity grants, which help rural communities develop 
comprehensive strategies for revitalization and to better coordinate 
Federal assistance. The budget also includes $5 million for the 
National Sheep Industry Improvement Center, which is expected to use up 
most of the $20 million in mandatory funding authority that the Center 
was provided in the 1996 Act.
    The 2001 budget also provides $6 million for rural cooperative 
development grants and $2 million for cooperative research agreements, 
compared to 2000 levels of $3 million and $500 thousand, respectively. 
The increase will be used to provide technical assistance to small-
scale farmers to assist them in developing ways to add value to their 
product in processing and marketing through the cooperative form of 
business organization.

                 FOOD, NUTRITION AND CONSUMER SERVICES

    America has the most affordable, safest food supply in the world, 
thanks to its hard-working farmers and ranchers, not to mention the 
world's most sophisticated food distribution system. Despite the 
strongest economy in a generation and the continued strength of the 
Nutrition Assistance Programs, the problem of hunger persists, and too 
many people have an inadequate diet. The Food Stamp Program, WIC, the 
Child Nutrition Programs, and commodity programs provide nutrition 
assistance to meet this need, as part of the national safety net. By 
improving nutritional status, these programs are contributing to a 
healthier and more productive America.
    The budget includes $35,8 billion to fully fund the Food Stamps, 
Child Nutrition, and WIC Programs, the Nation's primary means for 
carrying out nutrition assistance policy. Over two-thirds of this money 
directly helps low-income children, school age or under.
    The Food Stamp Program is budgeted at $22.2 billion, including a 
$1.0 billion contingency fund for unforeseen needs, on participation of 
about 18.8 million people. The request is $1.1 billion higher than the 
2000 level, and the participation estimate is 0.5 million higher. Food 
Stamp participation peaked in March 1994 at 28 million participants but 
has declined over 10 million participants since then. This trend began 
before welfare reform was enacted, intensified in 1997 and 1998, and 
has since slowed somewhat. The strongest economy in a generation, 
increased support from absent parents and the success of welfare reform 
in moving people into work are helping vulnerable households reduce 
their dependency on food stamps. However, too many people eligible for 
the Food Stamp Program are not applying for these benefits, often 
because they do not realize they are eligible for food stamps or have 
difficulty obtaining them. This trend is problematic because food 
stamps can be the difference that brings working poor families above 
the poverty line. Several initiatives have been launched to help make 
sure that those who are still eligible for food stamps know that they 
can participate. To facilitate participation, funding to promote 
knowledge of the program among likely eligibles has been included in 
the budget.
    Several Food Stamp legislative proposals and initiatives are also 
included in this budget. Eligibility would be restored to legal 
immigrant adults whose children are eligible for food stamps and legal 
immigrants living in the U.S. at the time of welfare reform, who have 
since turned 65. The budget would allow States the option of conforming 
food stamp rules on the treatment of vehicles with more generous 
Temporary Assistance for Needy Families (TANF) program procedures. The 
change will simplify administration of both programs, and help program 
participants own a reliable automobile so that they will have the 
transportation they are likely to need to take advantage of training 
and job opportunities. Using current authorities, efforts will be 
increased to reduce program error rates.
    For the Child Nutrition Programs, the budget requests $9.5 billion, 
slightly below the 2000 enacted level. This includes Team Nutrition 
funding of $10 million and $2 million for the Nutrition Education and 
Training program. A request of $6 million, the final increment needed 
to complete the evaluation of the universal free breakfast pilot is 
also included. Legislation is being proposed that would improve 
administration and program integrity for the Child and Adult Care Food 
Program, and also to reduce barriers for eligible children without 
health insurance to enroll in the Child Health Insurance Program (CHIP) 
or Medicaid by allowing health departments to use National School Lunch 
Program free meal application data to target insurance outreach 
efforts.
    The WIC request includes an increase of $116 million, which will 
support a monthly average of about 7.4 million participants with a 
gradual increase so that 7.5 million participants could be served by 
the end of the fiscal year. A sum of $20 million, a $5 million 
increase, is requested separately under the Commodity Assistance 
Program for the Farmers' Market Nutrition Program. The Food and 
Nutrition Service and WIC State agencies are working to improve vendor 
management and tighten program targeting and integrity. Among the 
initiatives in this regard, $6 million is requested to further State 
implementation of WIC Electronic Benefit Transfer (EBT) technology 
already under development. WIC EBT will improve efficiency and 
integrity in benefit redemption, and it will increase operational 
efficiency in WIC clinics.
    The budget provides $145 million for the Emergency Food Assistance 
Program (TEFAP), including $100 million in food purchases (from Food 
Stamp Program funds) and $45 million for State and local 
administration, not including bonus commodities. The Commodity 
Supplemental Food Program is funded at $93 million, while funding for 
the Nutrition Program for the Elderly (NPE) is increased by $10 
million, to $150 million, to allow for increases in participation.
    Finally, USDA also would increase its efforts to manage the 
nutrition programs effectively and to promote good nutrition. Through 
well managed programs with effective targeting and increased payment 
accuracy, program dollars can be stretched and the benefits magnified. 
The budget includes $129 million for the Food and Nutrition Service 
nutrition program administration, an increase of $14 million from the 
2000 level. This includes $5 million for Partnership for Change, 
promoting coordination of Federal, State, local and private efforts in 
specific target areas, primarily the Colonias along the Mexican border 
from Texas to California. Also included is $2 million to effectively 
promote the Dietary Guidelines to nutritionally at risk individuals and 
low income households, as well as $8 million to improve program 
integrity. Federal resources needed to effectively manage the nutrition 
programs have dwindled significantly over the years, now down to less 
then one half of 1 percent of program funding. Resources to oversee 
States and to implement program improvements, such as EBT for WIC, are 
extremely limited. Therefore, it is very important to the recipients of 
these programs that this request be fully funded.

                              FOOD SAFETY

    Over the last 5 years, USDA has pursued a course to reduce the 
incidence of foodborne illness associated with meat and poultry 
products. The backbone of this effort has been the planning, 
development, and implementation of a new inspection system to achieve 
pathogen reduction through the implementation of hazard analysis and 
critical control points (HACCP) systems. With the phased-in 
implementation of HACCP 3 years ago, steps were taken to introduce 
science-based inspection practices into a system that had not changed 
in nearly 100 years. Under HACCP, the industry has taken the 
responsibility for identifying and addressing food safety hazards that 
may occur during production and improving the sanitation of their 
facilities. To coincide with these changes, the inspection program has 
refocused its efforts on ensuring that production systems are producing 
products that meet sound, science-based microbiological performance 
standards; as well as preventing transmission of diseases from animals 
to humans.
    In January 1998, approximately 300 large establishments entered the 
program and the following year over 2,800 small plants implemented the 
new requirements. Recently, on January 25, 2000, the program was fully 
implemented when the remaining very small establishments entered the 
program. At this time, all meat and poultry establishments have in 
place standard operating procedures for sanitation and HACCP systems 
for controlling food safety processes. All slaughter establishments are 
testing product for generic E. coli contamination to ensure that they 
are preventing fecal contamination, and all establishments producing 
raw product must achieve Salmonella performance standards. Compliance 
with the new requirements, by the large and small establishments, is 
very high and it is expected that the first year experience for the 
very small establishments will also be successful.
    Now that this system is fully implemented, there is evidence that 
improvements made by the industry and inspectors are providing valuable 
benefits for consumers. Data from the first 2 years of implementation 
of the Pathogen Reduction/HACCP rule in large and small establishments 
indicates that the prevalence of Salmonella in meat and poultry 
products was reduced by nearly 50 percent in chicken carcasses. In 
addition, data released from the FoodNet disease surveillance system 
indicates that during 1998, the rate of Campylobactor and Salmonella 
infections declined nationwide.
    For 2001, the budget for inspection of meat, poultry, and processed 
egg products is based on a program level under current law of $688 
million, a net increase of $18 million over the 2000 level. The 2001 
budget includes an increase for pay and benefits to meet statutory 
obligations to provide inspection services without disruption. The 2001 
budget reproposes legislation to recover the full cost of providing 
Federal meat, poultry, and egg inspection. The user fee proposal 
excludes Grants to States and Special Assistance for State Programs. 
Requiring the payment of user fees for Federal inspection services 
would not only result in savings to the taxpayer, but would also ensure 
that sufficient resources are available to provide the mandatory 
inspection services needed to meet increasing industry demand, while 
representing less than 1 cent per pound inspected to consumers.
    The 2001 budget includes increases to enhance the implementation of 
HACCP and science-based inspection procedures. Currently, the Food 
Safety and Inspection Service (FSIS) is examining how to redefine the 
functions of inspection personnel under a HACCP-based food safety 
system. The inspection reforms being evaluated are expected to have a 
substantial impact on the deployment and compensation of FSIS in-plant 
personnel. The overall complexity of inspection work will increase as 
will the inspector's responsibility. Offsetting increased costs for 
implementing the reforms will be savings resulting from an anticipated 
reduction of part-time and temporary personnel not needed to conduct 
certain inspection functions. In addition, FSIS will also implement 
daily randomized inspection in processing establishments, rather than 
conducting inspection during each shift. Implementation of randomized 
processing inspection practices in 2001 will lead to better utilization 
of inspection personnel and eliminate the need for inspection services 
on an overtime basis, saving the industry overtime charges.
    In order to ensure that all establishments producing meat and 
poultry products for U.S. consumers are meeting HACCP requirements, the 
budget includes funding to increase the number and intensity of 
comprehensive reviews of State and foreign inspection programs to 
assure that they are equivalent with Federal requirements. In addition, 
the implementation of HACCP and other regulatory reforms has placed 
increased demands on supervisors and inspectors for learning new 
processes that have increased the complexity of inspection activities. 
In order to ensure that these new functions are uniformly and 
effectively applied, FSIS needs to enable its inspection workforce to 
hold periodic meetings to address concerns and questions inspectors may 
have regarding verification of HACCP systems, process control systems, 
and pathogen testing. The budget also provides the resources needed to 
accelerate regulatory reform through the elimination of regulations not 
compatible with HACCP. The budget provides additional funding for Codex 
Alimentarius, which will be used to prepare U.S. delegates to Codex for 
leadership in international food safety issues through technical 
training seminars.
    The USDA strategy for improving food safety has been multi-faceted 
and broad, involving not only Federally inspected establishments, but 
also the entire farm- to-table continuum. Under the President's Food 
Safety Initiative for 2001, eight USDA agencies are requesting a total 
of $163.7 million, an increase of $27.4 million over the 2000 level. 
Research and data collection on food safety hazards and developing 
means to control them continue to be a high priority activity for USDA. 
In order to continue USDA's success in reducing microbial contamination 
of meat, poultry, and eggs, the budget includes funding to implement 
proposed legislation to permit the interstate shipment of State 
inspected products, and implement the Shell Egg Action Plan.

                   NATURAL RESOURCES AND ENVIRONMENT

    At a national conservation summit that USDA hosted late last year, 
the Department released the latest Natural Resources Inventory (NRI) 
demonstrating that American agriculture will be facing a mounting array 
of conservation challenges in the 21st century. Many of these 
challenges, which appear to be growing faster than we can solve them, 
are all too familiar and include the need to conserve and protect our 
Nation's valuable private land, reduce soil erosion, improve water 
quality, limit the loss of prime agricultural land to development, 
protect and restore wetlands, and enhance fish and wildlife habitat. 
The 2001 budget recognizes the importance that the public has placed on 
these natural resource concerns and a number of proposals are included 
in the budget to help the Department address them.
    Overall the budget for 2001 includes a funding level for the 
Natural Resources Conservation Service (NRCS) that totals about $2.3 
billion, including $877 million in appropriated funding and $1.4 
billion in funding from the CCC. This also includes $654 million for 
conservation technical assistance, a 13 percent increase, which 
represents the foundation of the Department's partnership with 
conservation districts and farmers, as well as the primary means by 
which the Department addresses many of the conservation priorities 
mentioned above.
    The budget recognizes the important contribution that agriculture 
can make in addressing water quality and implementing the 
Administration's Clean Water Action Plan. Polluted runoff resulting 
from animal feeding operations (AFO's) are one of Agriculture's most 
critical challenges in preventing water pollution in the Nation and 
meeting this challenge continues to be a high priority within the 
Department. To help AFO's develop and implement nutrient management 
plans, NRCS will direct a total of $87 million in technical assistance 
funding in 2001 which represents an increase of $20 million and a 
redirection of $11 million. Financial assistance that AFO's might need 
to implement the plans will come from the EQIP which is funded through 
CCC and for which we are seeking an increase of $151 million. The 
budget also supports actions to strengthen local leadership capacity in 
the area of watershed restoration planning. NRCS will direct $10 
million to competitive partnership grants to enable locally-led 
institutions, such as conservation districts or watershed councils, to 
hire non-Federal watershed coordinators who will take an active role in 
problem identification and goal setting. An additional $3 million is 
provided for monitoring work to help target resources and document 
baseline conditions and performance.
    Last month the Vice President announced an ambitious new plan to 
support the farm safety net while at the same time promoting 
conservation, preserving farmland, and protecting soil and water 
quality. This plan recognizes the fact that soil and water are vital 
resources, and that producers should be compensated for their husbandry 
of these resources, just as they are for crop and livestock 
commodities. A cornerstone of this proposal is the new $600 million 
Conservation Security Program which will be targeted to family farmers 
and ranchers who meet certain income-related criteria but who still 
want to practice environmentally sound land management practices. 
Through this program, the Department will make direct payments to 
producers to keep their agricultural operations economically and 
environmentally sustainable by compensating them for voluntary land 
stewardship. It will also be a significant new incentive for farmers to 
install important additional conservation practices such as nutrient 
and residue management and environmentally sound grazing. In further 
support of this farm safety net proposal, the Department will seek to 
reauthorize and fund the Farmland Protection Program and the Wildlife 
Habitat Incentives Program and to expand the Wetlands Reserve and 
Conservation Reserve Programs.
    In support of the Administration's Global Climate Change 
Initiative, the budget includes an additional $12 million for the 
conservation technical assistance program to develop accurate baseline 
soil carbon data and to determine the impacts of Federal programs on 
soil carbon stocks at the national, regional and field levels. In 
addition, NRCS will devote $3 million to fund demonstration and 
research pilot projects to test various carbon sequestration and 
greenhouse gas mitigation strategies and monitoring mechanisms.
    Other budget increases include $5 million to enable NRCS to help 
communities plan, develop and implement conservation based biomass 
production systems and $5 million for financial and technical 
assistance for the Community/Federal Information Partnerships in 
support of the Administration's Livability initiative, which will allow 
communities to develop and use geospatial data for land-use planning 
and decisions.
    Funds will again be limited in the watershed planning and 
construction area where allocations will be made only to those projects 
that demonstrate cost effectiveness and clear environmental need. 
Watershed plans will continue to be closely examined to eliminate those 
projects that have become infeasible in order to reduce the backlog of 
unfunded work. The budget request also includes the use of $4 million 
in subsidy budget authority for a new $60 million loan program that 
will provide loans to State and local governments for the 
rehabilitation of the more than 10,000 project dams that have been 
installed with USDA funding over the past 50 years. Many of these older 
projects are now approaching the end of their projected life span.
    Finally, the Department's 2001 budget will continue to support the 
315 authorized Resource Conservation and Development areas. While 
budget constraints preclude any new area authorizations this year, the 
ongoing program will continue to improve State and local leadership 
capabilities in planning, developing and carrying out resource 
conservation programs.

                   RESEARCH, EDUCATION, AND ECONOMICS

    The Research, Education, and Economics (REE) programs aim to 
address increasingly complex issues faced by producers as we enter the 
21st century by: (1) warding off any potential threats to agricultural 
productivity posed by deadly pests and diseases of U.S. and foreign 
origin; (2) helping the farming community to produce affordable high 
quality foods that are safe and nutritious by taking advantage of 
cutting edge tools such as biotechnology; and (3) creating a future 
workforce that is capable of addressing emerging issues in agriculture.
    For the REE mission area increases are provided for developing 
novel methods to prevent and control exotic diseases, pests, and 
invasive species that threaten U.S. productivity; accelerating the 
development and commercialization of biofuels and other valuable 
biobased products made from agricultural and forestry resources; 
promoting agricultural production practices that are environmentally-
sound; expanding higher education capacity in agricultural and food 
sciences; enhancing nutrition education and food recovery efforts to 
fight hunger; and providing important economic and statistical 
information for decision-makers to better address key issues in 
agriculture.

Agricultural Research

    The 2001 budget provides $894 million for the research programs 
carried out by the Agricultural Research Service (ARS), reflecting an 
increase of about $64 million, or 7.7 percent above the 2000 enacted 
level. Within the total, the budget provides increases totaling nearly 
$98 million, for top Administration initiatives and priorities, such as 
biobased fuels and products and the counter-terrorism initiative aiming 
to prevent and control acts of chemical and biological terrorism 
against U.S. agriculture. The initiatives will be funded in part 
through the savings achieved from the termination of lower priority 
projects, totaling more than $42 million. An increase of $2 million is 
also provided for the National Agricultural Library to rapidly respond 
to information requests in print and electronic form, increase digital 
publishing, and expand access to key agriculture-related information.
    To identify, prevent, and control exotic and invasive diseases and 
pests, an increase of $23.2 million is included in the ARS budget. The 
increase includes $14.4 million for expanding the diagnostic 
capabilities to prevent acts of biological terrorism against U.S. 
agriculture, and preventing and controlling infectious zoonotic 
diseases afflicting livestock and aquaculture. The increase also 
includes $4.3 million for invasive species, and $4.5 million for Food 
Quality Protection Act (FQPA) related activities. An increase of $21 
million is also provided to the Cooperative State Research Education, 
and Extension Service (CSREES) for competitive grants to develop 
intermediate- and longer-term pest control alternatives in response to 
FQPA.
    Additional investments in genetic research can potentially increase 
agricultural productivity and lessen the impact of agricultural 
practices on the environment by generating economically desirable crops 
and animal products that are naturally resistant to deadly diseases and 
pests. The ARS budget contains an increase of $12 million for genetic 
research. Additional funding, totaling $12 million, is also available 
under the National Research Initiative (NRI) competitive grants for 
constructing genomic maps, conducting map-based cloning of select 
genes, and manipulating microbial genomes to increase agricultural 
productivity.
    Scientific and technological advances in biobased products research 
make it possible to enhance farm income, strengthen U.S. energy 
security, and protect the environment. An increase of $14 million for 
research to improve the conversion of agricultural materials and 
feedstocks into biofuels, and enhance the development of valuable 
biobased products. An additional $9.6 million is also included in the 
CSREES budget for competitive grants to generate new information and 
tools for producers to grow and harvest alternative crops, and for 
manufacturers to convert the raw materials into valuable products for 
use by industry and consumers.
    Other continuing ARS budget proposals include:
  --An increase of $5.7 million for food safety research in support of 
        the President's Food Safety Initiative. The increase will 
        support both pre-harvest and post-harvest research. Additional 
        funding, totaling $7.7 million, is available under the NRI to 
        better identify risk factors in food production from farm-to-
        table.
  --An increase of $17.3 million for research in support of the 
        President's Human Nutrition Initiative, aimed at increasing the 
        understanding of how certain nutrients impact human health and 
        weight-loss in individuals.
  --An increase of $23.7 million is provided to promote environmentally 
        sound production practices, enhance the understanding of the 
        adverse impacts of global climate change on food production, 
        and develop methods to improve air quality.
    The ARS budget also includes an additional $39.3 million for 
facility construction and modernization projects at five ARS locations, 
including planning and design of a new Biosafety Level-3 facility at 
the National Animal Disease Center at Ames, Iowa, improvements to 
support new facilities at Beltsville, Maryland; continued modernization 
and construction at the Plum Island facility in New York, continued 
modernization of the Western Regional Research Center at Albany, 
California; and to upgrade the U.S. National Arboretum and the National 
Agricultural Library.

Research, Education, and Extension

    The 2001 discretionary budget request for CSREES over $972 million, 
an increase of $22 million above the 2000 enacted level, with a shift 
within the total for several integrated research, education, and 
extension activities, targeting important programs such as water 
quality, food safety, and the economic viability of small farm 
producers. In addition to research programs financed with discretionary 
funding provided in appropriation bills, the Department has launched 
the $120 million initiative for Future Agriculture and Food Systems and 
will also use funding available under the Fund for Rural America for 
various research and extension initiatives. These initiatives will be 
continued in 2001. An increase of $31 million is also provided for the 
NRI, funding it at $150 million. NRI supports cutting edge research 
aimed at addressing critical issues in agriculture by allowing the 
Nation's best scientists to compete for grant funds. The research 
funded under the NRI targets key areas, such as plant and animal 
genetics, human nutrition, global climate change, animal waste 
management, and pest control.
    Specific budget proposals for CSREES include:
  --An increase of over $9 million for higher education programs 
        through expanding Institution Challenge Grants, Graduate 
        Fellowship Grants, and the Multicultural Scholars program, as 
        well as enhancing the educational capacity at the Hispanic 
        Serving Institutions, and the 1890 institutions. The increase 
        also adds to the balance of the Native American Institutions 
        Endowment Fund to enhance educational capacity and support 
        facility renovation and construction at Tribal colleges.
  --Over $5 million in new funding for nonprofit groups and faith-based 
        organizations to expand community-based efforts to fight 
        hunger, improve nutrition, strengthen local food systems, and 
        help low-income families move from poverty to self-sufficiency.
  --$5 million in new funding for a new Youth Farm Safety Education and 
        Certification program to deliver safety training and 
        certification to youth and migrant workers who may have limited 
        access to formal education.

Economics and Statistics

    The 2001 budget for the Economic Research Service (ERS) and the 
National Agricultural Statistics Service (NASS), in total, is $156 
million, down $9 million from the 2000 enacted level. The proposed 
increases of $5.2 million are provided to support economic analysis 
that improves public and private decisionmaking and meet the 
statistical data needs of our customers, are offset by a decrease of 
$14.2 million, resulting in part from the proposal to transfer food 
program studies from ERS to the Food and Nutrition Service.
    Funding proposals include:
  --An increase of $1 million for ERS for continuing analysis of market 
        concentration, focusing on identifying where concentration is 
        occurring in the marketing chain and who is affected. 
        Assistance would also be provided to the Department of Justice 
        for monitoring merger activity.
  --An increase of $0.7 million for ERS to assess the economic 
        potential for domestic carbon sequestration in agricultural 
        soils and identify the appropriate economic incentives for such 
        activity.
  --An increase of $0.5 million for ERS to expand research and 
        collaboration with appropriate institutions in developing 
        countries to find solutions for global food insecurity.
  --Increases of $3.2 million for NASS to expand the monitoring of 
        pesticide use, expand the current hog survey, develop computer 
        security for confidential and market sensitive information and 
        statistics, and begin preparations for the 2002 Census of 
        Agriculture.

                   MARKETING AND REGULATORY PROGRAMS

    The Marketing and Regulatory Programs facilitate domestic and 
international marketing of U.S. agricultural products by: (1) reducing 
international trade barriers and assuring that all sanitary and 
phytosanitary requirements are based on sound science; (2) protecting 
domestic producers from animal and plant pests and diseases; (3) 
monitoring markets to assure fair trading practices; (4) promoting 
competition and efficient marketing; (5) reducing the effects of 
destructive wildlife; and (6) assuring the well-being of research, 
exhibition, and pet animals. Consumers, as well as farmers, ranchers, 
handlers, processors, and other marketers in the agricultural sector, 
benefit from these activities.
    The budget includes an increase of $15 million for the Agricultural 
Marketing Service (AMS) for a number of important activities. It would 
be used to (1) continue the Mandatory Price Reporting for livestock 
begun in 2000; (2) expand voluntary market news reporting to include 
international and organic markets data; (3) finalize the National 
Organic Standards; (4) enhance the rapid response capability of the 
Pesticide Data Program (PDP) necessary to support the Department's 
responsibilities to meet the Environmental Protection Agency's data 
requirements for agricultural pesticide residues for drinking water 
under the Food Quality Protection Act; and (5) conduct microbiological 
testing of fruits and vegetables to support the President's Food Safety 
initiative.
    For the Animal and Plant Health Inspection Service (APHIS), the 
budget includes an increase in current law appropriated funding of 
$74.3 million. The increase for 2001 reflects a decision to fund, 
through appropriations, several programs that had been started with 
funds transferred from CCC. These continuing activities can no longer 
be considered ``emergencies.'' These programs address the detection and 
exclusion of pests and diseases, including Mediterranean fruit fly, 
Citrus Canker, Asian Long-horned Beetle, and Hog Colera. The budget 
also improves APHIS' Emergency Management System and implements a new 
Invasive Species program. These efforts will address demands to protect 
American agriculture from deliberate or accidental introductions of 
animal and plant pests and diseases from abroad. Other priority 
increases are requested in the following areas: (1) Agricultural 
Quarantine Inspection services will be improved along U.S. borders and 
ports of entry to match the greater demands for these services, by 
using additional point-of-entry inspectors, expansion of canine teams, 
and state-of-the art high-definition x-ray machines; (2) Animal Health 
Monitoring and Surveillance will continue to assure our trading 
partners of the highest quality products, by maintaining 
epidemiological and statistical principles of critical animal disease 
control and diagnostic testing methods; and (3) Animal care activities 
will increase the number of inspections to assure violations are 
corrected, expand public outreach, and encourage stakeholder and 
industry participation. Also, legislation will be proposed to increase 
license fees on the entities regulated under the Animal Welfare Act to 
recover the field level costs of administering the Act and to increase 
biotechnology permit fees to recover the costs of providing such 
services.
    The budget requests an increase for the Grain Inspection, Packers 
and Stockyards Administration (GIPSA) in current law appropriations of 
$7.1 million so that grain inspection activities for standardization, 
compliance, methods development, and all activities under the Packers 
and Stockyards Program are achieved. GIPSA needs to address the complex 
quality information needs emerging as a result of today's 
biotechnological advances, in order to meet market and consumer demands 
with respect to genetically engineered grains and grain products. New 
testing methods will permit greater transparency from grain inspection, 
adding value to grain products so producers can continue to compete in 
the global economy. Specifically, $2 million would be used to develop 
new biotechnology testing methods, analytical tests, and greater 
quality assurance procedures, and $150,000 will be used to address 
emerging sanitary and phytosanitary standards required by the WTO and 
NAFTA. Under the Packers and Stockyards Programs, $5 million would be 
used to: (1) develop models which could be used to verify the existence 
of anti-competitive behavior; (2) expand the Rapid Response Teams used 
to investigate time-sensitive financial, trade, and anti-competitive 
behavior issues; (3) examine the competitive structure of the poultry 
industry; (4) establish a swine contract library, and (5) enhance civil 
rights activities and establish an information staff. This funding will 
allow GIPSA to promote competition and improve market performance, 
which is vital to increasing confidence in the livestock and poultry 
sectors. Legislation will again be proposed to charge user fees for 
grain standardization activities and license fees for packers and 
stockyards activities.

                   DEPARTMENTAL MANAGEMENT ACTIVITIES

    The Departmental offices provide leadership, coordination and 
support for all administrative and policy functions of the Department. 
These offices are vital to USDA's success in providing effective 
customer service and efficient program delivery. The 2001 budget 
proposes targeted increases for USDA's central offices and management 
functions to strengthen Departmentwide management oversight, 
leadership, coordination, and administrative support in keeping with 
the Department's Strategic Plan Management Initiatives to:
  --Ensure that all customers and employees are treated fairly and 
        equitably, with dignity and respect;
  --Create a unified system of information technology management;
  --Improve customer service by streamlining and restructuring the 
        county offices; and
  --Improve financial management and reporting.
    The budget request reflects a continuing commitment to improving 
civil rights enforcement throughout USDA. In recent years, the Congress 
has provided funding for key civil rights initiatives in the 
Department, which is greatly appreciated. This budget includes further 
increases to ensure the achievement of the Department's civil rights 
goals. For example, an increase of $1 million is included to enhance 
the Department's capability to more efficiently and effectively resolve 
workplace conflicts, including equal employment opportunity complaints, 
through an expanded Alternative Dispute Resolution program that will be 
jointly administered by the Office of Civil Rights and the Conflict 
Prevention and Resolution Center. An increase of $7 million is included 
for the Department's Socially Disadvantaged Farmers Outreach Program. 
In 2000, this program was provided with an additional $5.2 million form 
the Fund for Rural America. Authorized by Section 2501 of the Food, 
Agriculture, Conservation, and Trade Act of 1990, this program provides 
grants to organizations to help increase socially disadvantaged 
farmers' and ranchers' participation in USDA programs and to help 
enhance the success of their operations by providing outreach and 
technical assistance. The budget also includes $500,000 for a Small 
Business Education and Development Pilot Program that will: (1) 
demonstrate strategies for the growth and stability of small businesses 
in rural America; (2) identify new markets for agricultural products of 
small, limited-resource farmers; and (3) deliver educational and 
technical resources to sustain economic growth and development.
    The Office of the Chief Information Officer (OCIO) provides policy 
guidance, leadership, and coordination in USDA's information management 
and technology investment activities. The budget includes an increase 
of $6.6 million to implement a comprehensive USDA Cyber-Security 
Program and $2 million to support electronic commerce and information 
management and collection initiatives. The cyber-security program will 
ensure that the Department's information technology (IT) systems are 
protected from unlawful and malicious intrusions. Activities include 
establishing a department-level IT risk management program to provide 
means to identify vulnerabilities in USDA's information assets and 
mitigate security risks; further the development of an information and 
telecommunications security architecture; and conduct security 
awareness and training programs to educate our employees about security 
risks as well as their role in protecting USDA's information resources. 
As USDA agencies increasingly provide customers access to programs and 
services on the Internet, Department-wide electronic commerce 
initiatives will facilitate the development of unified and more 
resource efficient approaches to common issues such as electronic 
signatures, information security, and rapidly evolving technical 
standards. Information management and collection initiatives will also 
provide a quick and easy way for customers to conduct business with the 
Department, reduce customer reporting burdens, and help the Department 
meet the requirements of the Government Paperwork and Elimination Act.
    OCIO also has oversight of the Common Computing Environment (CCE) 
that is part of the Service Center Modernization Initiative (SCMI). CCE 
is a critical component of our plan to reengineer the Department in a 
way that improves customer service while reducing the long-term costs 
of providing those services. In recent years, the Department has 
collocated field offices of the Farm Service Agency, Natural Resources 
Conservation Service and Rural Development to create about 2,500 one-
stop USDA service centers. A key ingredient in providing seamless, 
quality service at service centers is the replacement of these 
agencies' separate, incompatible, and aging information technology 
systems with a single, integrated, and modern information system. CCE 
will allow these agencies to share common information, will reengineer 
business processes to reduce the redundant requests, office visits, and 
paperwork burden faced by customers participating in multiple programs, 
and will save customers time and money by making Internet-based 
services available. Significant progress on SCMI has already been 
achieved. Business processes are being reengineered to streamline 
administrative functions and improve program delivery; modern 
telecommunications systems have been installed; and 30,000 computer 
workstations are being deployed that can be used interchangeably among 
the agencies. Significant efficiencies will be achieved when the 
service centers are allowed to integrate their administrative 
functions. A comprehensive Service Center Modernization Plan has 
recently been completed and adopted by the Department. It lays out the 
next steps and implementation timeframe for attaining the goal of one-
stop service for USDA customers at the county level.
    Until such time as the CCE is fully operational, the service center 
agencies will continue to rely on outmoded legacy computer systems, 
many of which have been in place since the early 1980's. These systems 
are becoming increasingly unreliable and are expensive to operate and 
maintain, costing an estimated $250 million to operate in 1999. While 
spending on existing legacy systems will be held to minimum levels, 
there are operational and maintenance requirements of these systems 
that must be met to provide ongoing customer service. It is just not 
possible to finance the new CCE solely with funds diverted from the 
legacy systems. Additional investments will be needed in the current 
and upcoming years to reach the goal of bringing the CCE into full 
operational status during 2002. Failure to develop a modern IT 
infrastructure poses high risks for the continued ability of USDA to 
meet its basic customer service responsibilities. Thus, consistent with 
the Service Center Modernization Plan, this 2001 budget includes $75 
million for IT investments under the Office of the Chief Information 
Officer that will help achieve a fully operational common computing 
environment during 2002. Additional funds from the Service Center 
agencies' 2001 budgets will support the reengineering of business 
processes, additional equipment for the common computing environment, 
data acquisition to support geographic information systems, and 
training needed to maximize the benefits of this technology.
    USDA's Office of the Chief Financial Officer (OCFO) provides 
overall direction and leadership in the development of modern financial 
systems in the Department. The budget includes an increase of $1.5 
million for a variety of strategies needed to strengthen the 
Department's financial credibility and accountability. These efforts 
include expanding departmental use of a new, integrated financial 
management system (the Foundation Financial Information System) and 
ensuring that all USDA agencies, including OCFO, develop and retain a 
level of expertise to ensure the effective and efficient use of 
financial management information. This funding will be used to 
effectively implement legislative mandates such as the Government 
Performance and Results Act, debt collection and cost accounting that 
are aimed at promoting sound business practices and making valid and 
reliable data and financial expertise available to support decision-
making processes, and to help USDA achieve a clean audit report on its 
financial statements.
    The budget also reflects a number of increases to strengthen 
departmentwide management oversight and leadership in support of USDA 
programs. An increase of $800,000 is proposed to support the 
Department's Biobased Products and Bioenergy Coordination Council. 
Funds will be used to develop standards for and a list of biobased 
products as part of departmental and governmentwide initiatives to 
further the use of environmentally preferable products.
    The Department's Office of Communications (OC) plays a critical 
role in disseminating information about USDA's programs to the public. 
The budget includes increases of $0.9 million to enable OC to utilize 
new technology to reach audiences in a more timely and effective 
manner, and to lead departmentwide communications efforts to reach 
underserved populations.
    Legal oversight, counsel, and support for the Department's programs 
is provided by the Office of the General Counsel (OGC). The budget 
provides an additional $3.7 million to strengthen OGC's ability to 
provide timely response to increasing requests for legal assistance 
from the program agencies, especially in the areas of civil rights, 
natural resources, food safety, concentration, and general law. Funds 
are also included to provide IT improvements to further enhance the 
efficiency of the office.
    The National Appeals Division is responsible for all administrative 
appeals of adverse decisions issued by certain agencies within the 
Department and conducts administrative hearings in a fair and impartial 
manner. The 2001 budget includes an increase of almost $900,000 to 
maintain current activities while providing training to its employees 
that will enhance their required knowledge and skills regarding 
adjudication procedures and USDA regulations and policies.
    The Chief Economist advises the Secretary on policies and programs 
related to U.S. agriculture and rural areas, provides objective 
analysis on the impacts of policy options on the agricultural and rural 
economy, and participates in planning and developing programs to 
improve the Department's forecasts, projections, and policy analysis 
capabilities, including the collection and dissemination of weather 
data to the agricultural community. The budget includes an increase of 
$400,000 to continue the modernization of USDA's weather and economic 
data systems, including the installation of a second automated weather 
station to better cover prime agricultural areas and Internet-based 
dissemination of economic and weather data. An increase of $1 million 
is requested to provide analysis and evaluation needed to support the 
Department's and governmentwide efforts to use more biomass energy and 
biobased industrial feedstocks and products. This proposal includes 
$700,000 to address increasing concern about the effects of 
agricultural operations on the environment and food safety by enhancing 
USDA's ability to assess these risks and reduce them.
    The budget also includes funding to continue ongoing implementation 
of the USDA Washington Area Strategic Space Plan, which seeks to reduce 
facilities' costs by moving headquarters employees into efficient and 
safe government-owned workspace. In 2001, the Department is requesting 
an increase of $46 million for:
  --required increases in rental payments to GSA;
  --renovation of the nearly 70-year old South Building to address 
        serious fire and health hazards and electrical malfunctions;
  --maintaining and operating our buildings; and
  --addressing the increasing threats of terrorism and intrusion to 
        USDA's employees and systems.
    The Hazardous Materials Management Program provides for 
Departmental compliance with legislation requiring the cleanup of sites 
and facilities contaminated by hazardous wastes and the responsible 
management of hazardous materials. An increase of $14.4 million is 
requested to accelerate investigative and cleanup activities in order 
to protect public health and stay on track to meet the goal of cleaning 
up all sites under our jurisdiction by 2045. Along with protecting 
public health and the environment, funding will reduce the likelihood 
of costly enforcement actions and lawsuits against the Department. It 
also will contribute to a proactive effort to seek out and reach 
agreements with outside parties responsible for contamination of sites 
under USDA's jurisdiction. Getting these groups to pay their fair share 
of cleanup efforts contributes significantly to ensuring activities in 
this area are completed as quickly and comprehensively as possible.

                      OFFICE OF INSPECTOR GENERAL

    The Office of Inspector General (OIG) conducts and supervises 
audits and investigations relating to programs and operations of the 
Department, and as such, is the principal law enforcement provider in 
the Department; reviews and makes recommendations on existing and 
proposed legislation and regulations; and recommends policies and 
activities to promote economy and efficiency and to prevent and detect 
fraud and mismanagement in USDA operations. The request provides an 
increase of $5.1 million to conduct additional audits aimed at ensuring 
the safety of agricultural products and protecting the integrity of 
USDA's information systems. The proposal will also support the 
acquisition of specialized law enforcement equipment to enhance the 
safety and security of OIG law enforcement activities, and increase 
criminal investigations in USDA public integrity vulnerabilities.
    That concludes my statement. I am looking forward to working 
closely with the Committee on the 2001 budget so that we can better 
serve those people who are in need of USDA programs and services.

    Senator Cochran. I apologize for our obligation to have to 
leave to vote. We will recess quickly and resume our questions.
    Secretary Glickman. Okay.
    Senator Cochran. Thank you very much.
    Secretary Glickman. Thank you.
    Senator Cochran. The subcommittee will come to order.

                           SAFETY NET PROGRAM

    Mr. Secretary, thank you for your patience. I understand 
the budget proposal includes, for this next fiscal year, $5.8 
billion out of this $11 billion safety net program that you 
mentioned, and that a major component includes a payment limit 
income assistance program.
    You said that even with the proposed payment limit, only 2 
percent of current recipients under the AMTA payment scheme 
will be ineligible. And further, it is my understanding that an 
individual that receives less than the $30,000 payment 
limitation would have his supplemental payment reduced by the 
amount of his AMTA payment.
    The ad hoc emergency disaster assistance provided by the 
Congress in the last 2 years has been offset from within the 
spending caps established by the balance budget agreement. Is 
this new $11 billion proposal submitted by the Administration 
offset, or is it being taken from the budget surplus?
    Secretary Glickman. Well, I would ask Mr. Dewhurst to 
respond. It is not in the category of emergency spending. That, 
I can tell you. So, it is part of the basic budget of the 
government, and I suppose one could say it is paid for in the 
context of the President's balanced budget proposal, but Mr. 
Dewhurst may have a little more specific answer to that.
    Mr. Dewhurst. Well, the Secretary is correct. The 
President's budget has a section on mandatory proposals. It has 
increases, it has decreases, and it has a balance at the end. 
Our increases are in that table.
    None of the offsets were in the Department of Agriculture. 
They are in other places in government, but essentially we are 
within a proposal that is a balanced proposal.

                INELIGIBILITY OF CURRENT AMTA RECIPIENTS

    Senator Cochran. Another concern I have is that your 
suggestion that only 2 percent of current AMTA recipients would 
be ineligible under this new program. I think just the opposite 
is going to be true in my State. I think only 2 percent of the 
producers are going to be eligible, and 98 percent are going to 
be ineligible. I hope you will take another look at that.
    Secretary Glickman. I wonder if, perhaps, Mr. Collins can 
respond--I have not done a State-by-State analysis, but he can 
tell you a little bit more than what I have mentioned.
    Mr. Collins. I have not done a State-by-State analysis 
either, but I could get you that data. I can only say that 
based on the 1998 data that we report to the IRS for purposes 
of issuing Form 1099's for tax purposes, only 2 percent of the 
total number of recipients of payments receiving 1099's had 
more than $30,000 and dependents in 1998.
    That is the basis on which we say that 2 percent would, 
right out of the box, be excluded nationally. It may be that a 
disproportionate share of those are in your State, but I could 
certainly check that.
    Senator Cochran. Or even in the region. It seems to me that 
there is a likelihood that you are going to have the payment 
skewed toward the upper Midwest.
    Not to be critical of that, Senator Kohl.
    But I really think you are going to find, if you look at 
this carefully, it is going to discriminate possibly against 
the Southern Region, the Southern producers. I am suggesting 
that s a possibility. It is a concern of mine. Have you done a 
regional analysis of this?
    Mr. Collins. I think that is true, that it will 
disproportionately affect some crops, such as cotton and rice. 
There tend to be higher payments associated with those crops 
because they are high value crops.
    Senator Cochran. Right. It costs more to produce the crops.
    Mr. Collins. Correct.
    Senator Cochran. Okay. Well, I am hopeful, before we rush 
to embrace the Administration's proposal, we will look at some 
of the details carefully. And I am confident that is what the 
legislative committee will do.
    Frankly, it will not be up to this committee to change the 
law as you are suggesting to get to the point where 
appropriated dollars would have to be made available to support 
this program.

                    NEW CROPS ELIGIBLE FOR SUBSIDIES

    Do you expect there would be an expansion of farm program 
subsidies to new crops as well?
    Secretary Glickman. Our proposal helps new crops, in two 
ways. One is that conservation payments would be available to 
all farmers, everywhere in the country.
    So, the direct conservation payments to the farmers, 
whether in Mississippi or anywhere else, would be on top of 
AMTA. In addition, they would be available to every producer of 
every type of crop. We still have to come up with legislative 
language for this, but it will be a profound enhancement of the 
current farm program.
    In addition, as I mentioned before, our crop insurance 
programs are going to be modified to ensure more participation 
by producers of non-program crops. We are also developing of 
new insurance programs to cover additional crops and to get rid 
of the area-wide trigger that has limited assistance under the 
non-insured assistance program.

                          NEW DELTA INITIATIVE

    Senator Cochran. One other concern that I raised in my 
opening statement is this new delta initiative. I am suspicious 
that this is not going to do nearly as much as the President is 
advertising that it will do. Can you tell us out of this $153 
million proposal to create a new delta regional authority, how 
this money is actually going to be spent?
    Secretary Glickman. I would ask Mr. Dewhurst to, perhaps, 
respond to that question.
    Mr. Dewhurst. The honest answer to your question is: I do 
not know. It is presented as proposed legislation in the 
President's budget to be administered by an agency outside the 
Department of Agriculture, and I am just not versed in what 
that proposal is.
    Senator Cochran. I had an opportunity to make comments 
about the user fees. I am convinced that this is just not going 
to be enacted by the legislative committee, and so the 
expectation that we are going to impose what would amount to be 
new taxes, over a half billion dollars in new taxes on 
producers, processors and handlers of agriculture and food 
products, is just not going to happen. I do not think Congress 
is going to go along with that.
    On the subject of the census, I understand that you have 
granted a waiver----
    Secretary Glickman. That is right.
    Senator Cochran [continuing]. So that food stamps 
recipients can be employed in the taking of the census, and I 
commend you for getting that done. HUD has also made a similar 
kind of waiver. Thank you.
    It seems to me that if we have people involved in taking 
the census, even if they are beneficiaries of food programs, 
they are going to be from the community, and they are going to 
be familiar with where people live and who people are, and we 
will have a more accurate census.
    And people who are being questioned by the census takers 
are going to be more likely to respond to someone they know, 
rather than somebody who is hired out of Washington to come 
down there and try to check up on everybody, and where 
everybody is, and get all the answers to these census data 
forms.
    I remember being chairman of that subcommittee one time. We 
had hearings around the country, New York City and rural areas 
of the country, and how we could actually ensure that a more 
accurate census is being taken.
    That was one of the suggestions that we kept hearing, ``Get 
local people who are well known in the communities you are 
trying to examine and review, and that is how you will end up 
building confidence.'' And so, I think this is a very important 
step, and thank you.
    I have other questions, and I am going to defer to my 
friends on the committee to ask questions, and then I will 
return to continue my questioning.
    Senator Kohl.
    Senator Kohl. Thank you, Mr. Chairman.
    Secretary Glickman, your safety net plan will provide more 
than $6 billion to support crops on top of AMTA payments and 
loan deficiency payments they already receive.

                            DAIRY ASSISTANCE

    I do not begrudge crop producers a meaningful safety net. I 
encourage that. But I am dumbfounded that this Administration 
has not proposed something more meaningful for dairy, 
particularly in light of the disaster of the low milk prices 
that your agency is predicting this year. Still, the Federal 
Government has a record of what I consider to be destructive 
dairy policies.
    So, Mr. Secretary, what am I supposed to tell dairy farmers 
in Wisconsin, or for that matter, across the country, to 
explain this policy? Can I tell them that volatility in dairy 
is not as devastating as it is for other commodities; or 
perhaps should I tell them that when the pie was cut up, their 
income simply was not as important to this Administration as 
income for farmers of other commodities? Mr. Secretary?
    Secretary Glickman. I am fully cognizant of the price and 
volatility issues, but let me just talk about a couple of 
things.
    Number one, we have proposed extending price supports for 2 
years. That is a cost of $300 million, and if that is not done, 
prices could fall to levels way below where they currently are.
    I also think it is important, in this context, to note what 
we have already done. And a lot of what we have done is because 
of what Congress has put in emergency bills. We raised class 
one differentials in the upper Midwest.
    When did we do that?
    Mr. Collins. January 1st.
    Secretary Glickman. January the 1st. We ran a $200 million 
economic assistance program last year. We will run a $125 
million program for dairy farmers again this year. We will 
scale up the dairy options pilot program. We will run the 
DEIP--dairy export incentive program--at its maximum.
    Most dairy farmers will benefit from crop programs. Most, 
if not virtually all dairy farmers produce row crops, and will 
benefit from that as well. And the conservation proposals and 
the EQIP program will have a significant impact on dairy 
producers.
    Now, is that enough? It probably is not enough, and we are 
going to have to work with you on seeing if there are other 
things that we can do. And the fact is, as you know, I did try 
last year to make changes in the milk marketing order system. 
For a lot of different reasons, it was not successful.
    But I do want you to know that we are trying to deal with 
this in a multi-disciplinary approach, from the conservation 
approach, from the risk management approach, from the export 
approach, as well as for direct payments. We just have to work 
with you to kind of continue going down this road.
    Senator Kohl. So you are prepared to consider some 
alterations?
    Secretary Glickman. Well, our proposals were the initial 
proposals based upon our budget. But, you know, I am a student 
of the legislative process. We are going to have to work with 
you, and I fully recognize there are going to be some changes 
in these proposals. If history is any guide, there will be.
    We presented an intellectual framework for what the 
emergency package ought to look like. But do I expect that 
Congress, working with us, will make some changes? Of course.

                        REGIONAL DAIRY COMPACTS

    Senator Kohl. Mr. Secretary, in addition to low milk 
prices, I am very concerned about the impacts, as you know, of 
regional dairy compacts. On dairy farmers in the middle west, 
particularly, of course, Wisconsin. As you know the concerns of 
the upper Midwest dairy farmers are based on the distortion 
that such compacts create and the inevitable increase in milk 
production that will result from these compacts. Ultimately 
these policies will reduce prices for all farmers outside the 
pricing cartel.
    Studies of the impact of the Northeast Dairy Compact, some 
of which are actually commissioned by the Compact Commission 
itself, show: One, that consumers are paying higher milk prices 
in that area; two, that not all nutrition programs are being 
reimbursed for their increased cost under the program; three, 
that when effective, the compact prices encouraged excess 
production of manufactured dairy products; and four, that the 
compact does not prevent the loss of family farms in the 
Northeast.
    Earlier this week, Mr. Collins reviewed, for the 
Agriculture Committee, some of the economic studies at the 
University of Wisconsin, Vermont, Missouri, and Massachusetts, 
the impact of the Northeast Dairy Compact.
    And, Mr. Collins, would you like to review those studies 
and conclusions to this committee? Will you just spend a minute 
or two or three telling us what the major----
    Mr. Collins. I would just probably repeat what you just 
said, Mr. Kohl. The studies generally show that when the over-
order price under the compact exceeds what would have been the 
price under federal orders, consumers in New England have paid 
a higher price than they otherwise would have paid.
    The University of Vermont study shows that in the first 12 
months after the compact was in effect, milk production 
increased 1 percent or 45 million pounds in the compact area, 
due to the compact itself. So, there was an increase in milk 
production.
    The third point you made was the issue related to 
assistance provided to food and nutrition programs. The compact 
commission has provided compensation for the WIC program, and 
has started doing it for the school lunch program. The food 
stamp program recipients, of course, will pay higher milk 
prices without being compensated.
    There have been some studies to show that the compensation 
has not been perfect. That is, in Massachusetts, WIC recipients 
have received compensation to offset their higher milk costs, 
but this is not true in the State of Connecticut, for example.
    Senator Kohl. Mr. Secretary, any justification for setting 
up a price fixing cartel arrangement? Any justification, 
whatsoever, Mr. Secretary? Is there any justification for it, 
Mr. Secretary, in the United States of America?
    Secretary Glickman. Nobody wants to set up a price fixing 
cartel that is violating anti-trust laws or anything else.
    But let me comment on this. As you know, we proposed milk 
marketing order reform, under the Congressional statute. When 
that reform became effective, the Northeast Dairy Compact would 
end. That may have been one of the reasons why we could not get 
milk market order reform because there were a lot of folks who 
did not want the Compact to end.
    We have not taken a formal Administration position on 
compacts. However, I had stated publicly that compacts do raise 
some of the concerns that Mr. Collins has talked about.
    If you were going to go down that road, you would have to 
protect against other parts of the country being affected by 
excessive milk supply, because that could affect dairy farmers 
by getting lower prices in those areas. It could have an effect 
on our programs for the poor.
    Also, I have said that if you were going to have compacts, 
you would need to give authority to the Secretary to revoke the 
compact if, in fact, these terrible things happened.
    Now, I have not addressed absolutely whether we would 
approve the compact or not approve it, because I do not know 
whether you could work out any language that could deal with 
some of the problems that you and Mr. Collins have raised. I do 
not know if that is possible yet.

                        REGIONAL DAIRY COMPACTS

    Senator Kohl. Price fixing arrangements, whether they are 
in the milk industry or any other industry, whether it is in 
commodities or manufactured products, price fixing arrangements 
that prevent producers or manufacturers from selling their 
products in all 50 States, the basis of the American economy, 
price fixing arrangements.
    Any way that you can support them, whether it is milk or 
any other commodity or any other manufactured product--can you 
support that? I asked you another question.
    In terms of the larger issue that I am raising, and in 
terms of your legacy, our legacy, the American economy, what 
makes it great, are you not willing to stand up and say, ``I do 
not know if I will win and I do not know if I will lose, but I 
will fight them to my last breath because price fixing cartels 
are not consistent with the way the American economy has 
worked''?
    Secretary Glickman. Senator Kohl, I hope that I showed last 
year that I was willing to weigh in. I am not afraid of the 
political fallout of taking a position which, apparently, a 
majority of the Congress did not agree with me on.
    The fact is, even under a compact, you can move milk around 
in interstate commerce. A compact will affect the volume of 
milk that is moved, and perhaps the price as well. It also may 
affect lower income citizens.
    As a general proposition, all products should flow in 
interstate commerce as freely as possible. I agree with that.
    Senator Kohl. And they do.
    Secretary Glickman. But I am just saying that I think it 
would have been better if we would have adopted the milk 
marketing order reform that we had proposed, so that we would 
not have to continue to deal with this issue.
    There are problems with compacts. I have said that before. 
I think that if Congress were to decide to go ahead with 
compacts, they would have to address our concerns. I have said 
that before. Those concerns relate to effects on other parts of 
the country. They relate to pricing in other parts of the 
country. They relate to how the poor would be dealt with.
    Senator Kohl. Is there some idea as to how we are going to 
deal with apparent effort on the part of other regions to set 
up their compacts? That is the way these things work. And it is 
going to work. It is expected to work. I have heard from 
members of this committee that compacts are going to be 
proposed for other regions this year. Are you all prepared to 
take a position?
    Secretary Glickman. We will, I am sure, take a position 
when the legislation is at a ripe point where we think we need 
to do that. I am willing to work with you and the other members 
on our concerns. Obviously we have serious concerns about it. I 
have raised that. Mr. Collins has raised it.
    But I am not willing, at this stage, to give you a formal 
position, because I do not have a piece of specific legislation 
to deal with right now.
    Senator Kohl. Mr. Collins, do you have a comment on that?
    Mr. Collins. No, sir.
    Senator Kohl. Really? I mean this whole thing is--what is 
the logic in the year 2000 of paying farmers, the further away 
they get from Wisconsin, more for their product?
    Secretary Glickman. I do not disagree with you on that 
point.
    Senator Kohl. What is going on here? Is there no justice? 
Is it just ``might makes right''? Is that all it is about? I've 
worked here for 12 years and I have learned, and I wish I had 
not learned, that that is all we are talking about here--
``might makes right.'' If you got the votes and you have a 
Federal court decision in your favor, you can do anything.
    Is that the way it works? Why has not the Administration, 
even though maybe this is a small issue, I recognize that, but 
why is not the Administration taking a stronger position on 
this? There is no logic to defend the present milk pricing 
system, just ``might makes right.''
    Secretary Glickman. Well, Senator, I would have to say 
this: There are an many of parts of agriculture that are 
hurting very much right now, and people are looking for 
alternative ways to address the problems, the low prices, that 
producers are getting everywhere.
    Now, we do know that in this particular area, you have a 
situation of regional conflicts, which you do not tend to have 
in other areas of agriculture. Cotton pricing tends not to be 
parochially regional, whereas dairy does get to be regional.
    But I think that the reason why this issue has been so 
difficult to resolve is because those in Congress from farm 
States are looking for ways to help their producers any way 
they can. You know, we have to ultimately take a position based 
upon what we think is the right thing to do, and we will. But 
at this stage, I think it is premature for us to tell you 
absolutely one way or the other which way we would go.

                        REGIONAL DAIRY COMPACTS

    Senator Kohl. Well, you know, ultimately I am hoping that 
we can work constructively again this year on this issue, both 
in terms of the pricing policy and the compacts, because I do 
not hear any defense for them except that that is just the way 
it is. And I appreciate that, and I know you did not create it, 
and it is not easy to change it, but it is certainly worth the 
effort.
    There is no justification. I defy Senator Cochran or 
anybody else to tell me why the further away you get from 
Wisconsin, the more you should get for your milk, while we are 
the State with the most milk producers in the nation. Dairy is 
Wisconsin's leading industry, and we are not asking for any 
advantages, we just do not want to have any disadvantages. It 
does not make any sense.
    Senator Cochran. You pay your quarterback from Mississippi 
a lot more than you pay any other quarterback.
    Senator Kohl. Right.
    Senator Cochran. For Green Bay.
    Senator Kohl. Right.

                           FOOD STAMP PROGRAM

    Anyway, just another question: Mr. Secretary, this 
subcommittee provides more spending for nutrition than any 
other USDA programs. However, over the past few years we have 
seen dramatic declines in spending for the food stamp program.
    In fact, we now learn that over $1 billion of food stamp 
funds are estimated to lapse at the end of this fiscal year, 
and despite the economy and the decline in food stamps 
spending, we continue to hear reports of increased demand at 
food banks and in soup kitchens.
    According to USDA, over 14 million children do not have 
food to meet their basic needs and they are going hungry. In 
Wisconsin, one paper, the Green Bay News Chronicle, has 
reported extensively on the growing hunger problem in that 
region. What has USDA been doing, and what have you learned 
about this phenomena, what actions can the subcommittee take to 
start turning these numbers around, especially the disturbing 
trend of growing child hunger?
    Secretary Glickman. Well, one thing we have done is we have 
asked for full funding for the food stamp program in our 
budget. We also want to take into account a large number of 
people that we think ought to be participating in the program 
that are not.
    This is a very serious problem. The rate of reduction in 
participation in the food stamp program, is much greater than 
the rate of reduction in our poverty rates. We have an awful 
lot of people we believe are not on the food stamp program that 
are eligible. There may be many reasons why.
    One reason may be confusion about the welfare reform law an 
its impact on other laws, the TANF law, AFDC, and Medicaid. 
People are no longer eligible in certain circumstances for the 
State run programs, but food stamps is still an entitlement 
program with federally set eligibility criteria, and a lot of 
people, I think, thought if they were off one program they were 
ineligible for food stamps, which is often not the case.
    So, we have an obligation to do a much more intensive 
outreach and education effort, both in English as well as 
Spanish and other foreign languages, if necessary, to let 
people know what they are eligible for. We are encouraging the 
States to do the same thing, because they basically run the 
programs as well.
    But this is a phenomenon that is out there. The fact is 
that the differential between the haves and the have nots in 
many parts of this country is growing.
    The Food Stamp program is one that most people are on for a 
very short period of time. It is our largest food assistance 
program, and over half of the recipients are children. It is a 
program where the rules have been changed through legislation 
to encourage people to go to work. Outreach and education are 
needed, however to ensure that low income working families know 
that they remain eligible for food stamps.
    We also are proposing some legislative changes. The 
President has proposed making some legal aliens, some people 
who were cut off before, eligible. We have also proposed to 
ease the rules on automobile ownership, because it has been the 
same for almost 20, 25 years. We want to encourage more people 
to own a car. So, if you have a car, you can at least go to 
work, and car ownership has been disqualifying people from 
being on food stamps for some time.
    This is a very serious problem. We are working with the 
activists and the hunger groups and the non-profit community, 
the church communities, to try to deal with this issue. But the 
law does allow people with eligibility to participate in the 
program, and there are an awful lot of people who are not doing 
it.

                         CONSERVATION PROGRAMS

    Senator Kohl. Okay. One last question. I am a strong 
supporter of USDA conservation programs and all conservation 
activities in general. In fact, I am very proud that Wisconsin 
takes credit as the birthplace of today's conservation 
movement. In current law, and in the farm safety net initiative 
you propose, many of the major conservation programs are funded 
directly out of the Commodity Credit Corporation.
    The 1996 farm bill set in place limited funds made 
available through Section 11 of the CCC charter act, which has 
had the result of making it difficult for USDA to carry out 
these important programs.
    Last year, I, along with Senator Cochran, provided you some 
relief in order to make funds available in fiscal year 1999 and 
2000, to carry out programs like the Wetlands Reserve Program 
and the Conservation Reserve Program, notwithstanding the so 
called Section 11 cap.

                             SECTION 11 CAP

    What action do you plan to take in working with the 
authorizing committees to change the Section 11 cap problem and 
what will be the effect in carrying conservation programs in 
fiscal year 2000 if no action is taken?
    Secretary Glickman. I would ask Deputy Secretary to 
respond.
    Mr. Rominger. It is true, Senator, that we are looking at a 
shortfall in funds for technical assistance because of the 
Section 11 cap, and so we are going to be asking the committee 
for a supplemental to be able to cover that. If we do not get 
the supplemental, there will be farmers out there who do not 
get the assistance in developing their plans so they can 
participate in the programs.
    Senator Kohl. Do you have any other----
    Mr. Dewhurst. No, I do not. But to be precisely correct, 
the Administration is going to be asking, in the safety net 
proposal, the authorizing committees to lift the cap, as 
appropriate, to provide the necessary technical assistance.
    If Congress were to take all the actions the Administration 
recommended to create the Conservation Security Program and 
expand the other mandatory conservation programs, without 
expanding the cap, it would produce on the order of a $100 
million shortage in technical assistance funds to support these 
programs. So, increasing the cap is a very important part of 
the conservation initiative of the Administration. Thank you.
    Senator Kohl. No questions.
    Senator Cochran. Thank you, Senator. Senator Burns.
    Senator Burns. Thank you, Mr. Chairman, and thank you, Mr. 
Secretary, for coming up today. I am not going to take long. No 
good deed shall go unpunished, right?
    Senator Cochran. That is right.
    Senator Burns. We can look at the overall budget and there 
are some things we are just tickled to death with, and other 
areas we do not like so much, which means that if we had one 
foot in the hot oven and one foot in a bucket of ice water, we 
ought to feel pretty good. But we do not.

                       EXPORT ENHANCEMENT PROGRAM

    The area of EEP, I would like to see some kind of reform 
made there, so that we can use that tool effectively, and the 
right people get the help in their exports. And I know you have 
done a lot of work in that line, and I would like to work with 
you on reform of EEP and the initial thrust.
    I was quite disappointed in the Department of Agriculture 
when Frito Lay made its announcement that it was not going to 
use any of the enhanced products, genetically enhanced 
products. And I did not hear anything from the USDA, not one 
word. And yet, my good friend from Missouri has done a lot of 
work as far as building a scientific case why this should be.

                            LAND ACQUISITION

    And I also want to take note of another area of which 
Senator Stevens brought up, is land acquisition. It is the 
United States Department of Agriculture. It is not the United 
States Department of Acquisition. And because the government 
has got too damn much land now.
    They cannot even manage what they have got, and so I would 
take a good strong look at that and even though it may come all 
fuzzy and warm and green and all that. It is really hurting 
some of our communities on this land acquisition, because we 
are just very, very concerned about that.
    And in our area, are we making the best use of rural 
utilities--and I appreciate your help on the RUS and those 
areas. That is very good. But those are areas that we will be 
looking at. Our research, we are still losing plant breeders--
we are still losing people in facilities where we do our 
research and development. As the population grows, demand for 
food is going to be there, and this other stuff that we do.

                              CIVIL RIGHTS

    And then the last area is in the area of civil rights. Let 
us get that taken care of. Let us just not give it lip service, 
because we have got several cases pending in Montana that we 
really need to do something about that, Mr. Secretary, and we 
get the feeling that that is being put on the back burner.
    I know some of our Native Americans in Montana that have 
really had a case, and that should be dealt with. And I want to 
make sure those are the areas in which we will work with the 
Chairman and work our way through. But those are areas that I 
have quite a lot of concerns with and we will work with the 
Chairman and try to allocate the funds where we think they will 
be best used. But I would just ask you, and I would not mind 
coming down and sitting down and talking to you about the civil 
rights thing, because I think there is a way to handle that.
    Secretary Glickman. This is not being put on the back 
burner, I can assure you. It is a civil rights responsibility 
of the Department. Of course, I have been to your office once. 
We have talked about these cases.
    Senator Burns. Yes.
    Secretary Glickman. I know that they have been very 
troublesome, both for us as well as for you.
    Senator Burns. Yes.
    Secretary Glickman. As well as for the applicants, and 
maybe it is not a bad idea to come down to talk specifically 
about them again.
    Senator Burns. I would like to do that, and I would like to 
work with you in that area. And again, I would tell you, there 
has never been a time like this, I know why the concerns of 
Senator Kohl.
    Our concerns in agriculture, Mr. Secretary, there is not 
anything wrong on the farm except in the price when we compare 
it to the grocery store, one way or the other. And I would tell 
you, can we justify a cartel? You can if we use our leverage in 
the market, agriculture today, as soon as that drill or that 
planter hits the ground. We use our leverage in the market as 
soon as we turn the bull with the cows. And some way or the 
other, you have got to be an advocate for the producer. You 
have got to be.

                               FRITO LAY

    And just like in this Frito Lay thing, you should have 
picked that up right now and ran with it and defended the 
producers.
    Secretary Glickman. Can I just comment on that point?
    Senator Burns. Yes.
    Secretary Glickman. Okay. Look, I suppose I could have 
called the president of Frito Lay and asked why are you doing 
this.
    Senator Burns. I tried to.
    Secretary Glickman. Okay.
    Okay. But let me talk about what we have to do in this 
context. You know, as much as I think that the decision of 
Frito Lay may not have been the decision I would have made if I 
had been the head of this company, because I do not like to see 
farmers out there confused as to what they can plant and what 
they can sell, the fact of the matter is that they are 
responding to consumer pressures. Right or wrong, they are 
responding to them.
    So, what do we have to do at USDA? The most important thing 
we can do is to give people the confidence, consumers the 
confidence that these products are safe. I cannot tell Frito 
Lay to do anything. The president of Frito Lay would laugh in 
my face if the government tried to tell him what to do.
    But what we have done on the GMO issue is the following: 
Number one is that I appointed this 36, 37 member biotech 
advisory committee composed of people who can help us deal with 
a lot of the tough regulatory issues. I have had the National 
Academy of Science peer-review our approval process in order to 
make sure that the public has confidence. Most of this is in 
the FDA's jurisdiction any way in terms of food products. Frito 
Lay produces food products so I cannot tell them exactly what 
to do.
    If people have confidence their food is safe, if they think 
it is on the level, they will buy it, and a lot of the hysteria 
will go away, and that is the most important thing.
    Senator Burns. Well, I would agree to allow that, but I 
noticed also in your food safety, in here we have got a little 
bit of a cutback and I think the Chairman noticed that. And I 
will point that out--we will talk about that later on. And I 
got another appointment.
    Senator Cochran. All right.
    Senator Burns. I thank the Chairman for his courtesy, and I 
thank you for coming.
    Senator Cochran. Senator Feinstein.

                 STATEMENT OF SENATOR DIANNE FEINSTEIN

    Senator Feinstein. Thank you very much, Mr. Chairman.
    Mr. Secretary, I know you have had a hard time personally 
with loss of members of your family, and I want to extend my 
condolences. And I do not want to give you a bad time, but I 
have to give you a bad time.
    Secretary Glickman. I can separate the personal from the 
professional.
    Senator Feinstein. This is not a good budget for 
California, and I am going to try to take a little bit of time, 
with the Chair's indulgence, to tell you why. The budget does 
provide enough dollars with respect to pest exclusion.

                            INVASIVE SPECIES

    In the last 6 months alone, California has had six 
quarantines. Let me tick them off to you; Oriental fruit fly 
eradication quarantine, a 9 square mile area, Burbank; 
September 2nd, pink hibiscus mealy bug, Imperial County; 
September 3rd, oriental fruit fly eradication, 9 square miles, 
City of Westchester; September 17th, fruit fly eradication, 11 
square mile area, City of Pico Rivera; November 19th, Mexican 
fruit fly quarantine in 72 square mile area of Fallbrook, 
California. And I want to talk about that in a moment--January 
13th, 2000, melon fruit fly quarantine in a 75 mile area of Los 
Angeles County.
    In addition, California's $1 billion nursery industry is 
threatened by red imported fire ants. And the $2.8 billion 
grape industry faces a complete destruction due to an 
infestation of the glassy wind sharp shooter for which there is 
no treatment. I really want you to hear this.
    Secretary Glickman. Yes. Okay.
    Senator Feinstein. Let me talk for a moment about staffing 
on the border.
    Secretary Glickman. Yes.

                      USDA UNDERSTAFFED INSPECTORS

    Senator Feinstein. California's land, air and seaports are 
understaffed. That is clearly reflected in the rates of 
infections that are occurring at these ports of entry. In 1998, 
more than 60,000 foreign aircraft landed at California's six 
major international airports. Fewer than half were inspected by 
USDA officials.
    Of the nearly 10,000 foreign vessels that arrived at 
California ports, fewer than 3,000, less than a third, were 
inspected. Most astonishing, of the more than 29 million 
vehicles entering California from Mexico, fewer than 90,000 
were inspected.
    In San Diego, the USDA has only 49 agents and support 
personnel to monitor three land ports, two airports and a 
harbor.
    Another problem is that the ports of entry are not always 
staffed during hours of operation. At Otay Mesa, for example, 
the USDA operates from 8:30 a.m. to 6:00 p.m., even though the 
ports are open a lot longer.
    Sorry, you are going to have to wait for a minute while I 
find the right page here.
    Inspection hours are limited and shippers are known to slam 
the border before the end of a shift to avoid rigorous 
inspection. Virtually non-existent penalties for violators do 
not deter the smuggling of illegal produce.
    I happened to be sitting next to the United States Attorney 
in San Diego about a week ago, and I said, how many cases have 
you prosecuted in the last year or so for illegal smuggling of 
produce? Guess what the number is? Zero. Guess what? USDA has 
not sent a single case to the U.S. Attorney for prosecution, 
and we now have almost a dozen quarantines. The penalty for 
criminal violation of the smuggling laws is a $5,000 fine.
    For an illegal shipper, this is simply a minor cost of 
doing business, not an effective deterrent. I urge you to use 
your authority to remedy this situation.
    Now, let me talk for a moment about this latest Fallbrook 
quarantine. The Fallbrook quarantine, if I can find the right 
notes again, as I said is 72 square miles. It involves 1,470 
growers and 20 specialty crops.
    Now, where is the rub? These farmers were encouraged by 
your department to grow these specialty crops. They thought to 
reduce the risk of exotic pest introduction no pre-or post-
harvest treatment was provided for any of these crops by USDA.
    As a result of two fruit flies, 150 growers, among the 
1,452 affected, are going to lose their entire harvest, 
virtually everything, almost $3 million worth. And because they 
are small, they face the real probability they are going to 
lose their land and/or their homes as well.
    I have met with your staff. I urge that some assistance be 
provided. I outlined the sections of the code which would 
enable this to be treated as an emergency. That the fact that 
it was extraordinary because USDA had encouraged the growing of 
these specialty crops, and I got nowhere. Zip, zero, nothing.

                       SUPPLEMENTAL APPROPRIATION

    Now, Mr. Chairman, I would hope that in the supplemental 
appropriation, we could add something, because out of the 
1,400, we estimate that there are 150 people that are going to 
lose everything because their whole crop is on the ground. They 
cannot touch it. They cannot put it in a lunch bag to go to 
school. They cannot sell any portion of it, and so they are 
effectively dead for this entire crop season. So, this is a 
huge problem.
    I have met with a number of your inspectors. They all tell 
me that staffing is inadequate on the Mexican border, and I 
have given you a list of the quarantines that is resulting from 
inadequate inspection. And I think we are going to have a huge 
problem, and you can very well see the wipe out of California 
as an agricultural community unless we do something about it.
    Now, the quarantine in Fallbrook in San Diego County has 
resulted in six countries not accepting the produce from the 
entire San Diego County and Riverside County as well. That is 
the present situation today.

                           C&H SUGAR REFINERY

    Now, let me go on because the distinguished senator and 
colleague on my left is present, and I think he has an issue as 
well. And that is the issue of the sugar program. As you know, 
I first met with you in 1994 about the largest cane refinery in 
the United States, C&H Sugar. I have written you 13 letters. 
The refinery is 93 years old.
    When I first met with you, it had over 1,000 employees. It 
is now down to 500, and once again about to close its doors. It 
is also the only source of employment, major employment, in 
Crockett. It refines about 15 percent of the total cane 
consumed in the United States. It requires an excess of 700,000 
tons of raw cane sugar to meet its demand.
    Hawaii is C&H's sole source for its domestic raw cane sugar 
needs. But the cane industry has been in decline for over 10 
years. So, C&H has been forced to cover over half its annual 
consumption through imports, and the quota prevents it from 
importing enough sugar. Higher restrictive import systems force 
C&H to pay an inflated price for raw sugar from both domestic 
and foreign suppliers.
    Even more devastating, the quota limits the amount of sugar 
available to the refinery. That is why they are down to 500 
workers. Simply put, it cannot buy sugar to refine, and it has 
been forced to close its doors.
    In a letter to me, the CEO reports C&H was forced to close 
November 8th to November 15th because it ran out of raw sugar. 
The closing is extremely costly. Other competitor refineries, 
Savannah and Domino, have had similar experiences. The 
government imposed shortage is forcing up the market price for 
raw sugar to levels that are bankrupting refiners.
    The recent production capacity has resulted in a severe 
downsizing of the work force. As recently as 1987, C&H employed 
over 1,400 people. They are now down to just over 500 people.
    Recently, as a short term solution, the USDA allowed C&H to 
import an additional 100,000 tons and expanded the re-export 
period from 90 days to 5 years. I was shocked to learn on 
December 29th of this past year that your department reversed 
its position and reduced the re-export period to 180 days. C&H 
may now be forced to forfeit the bond posted for the sugar at a 
cost of more than $20 million.
    Frankly, according to C&H, the department's actions have 
done far more damage than if you did nothing at all. And 
according to Mr. Conselic had you not intervened, C&H would 
have been forced to shut its doors, and that would have been 
preferable to forfeiting its bond, which I am told could go up 
to $40 million.
    You have got to find a way to resolve this mess. And I 
would say to the sugar beet states, you cannot prevent a 
refiner from getting cane or beet or some sugar to be able to 
refine. It is an unfair policy. And if I have to, I will do 
everything I can on the floor. I will find a way to shut down 
the entire sugar program. I have appealed to sugar senators. I 
just get blank stares.
    But can you carve something out so that C&H can at least 
buy sugar at market prices to be able to refine and nobody 
cares? It is a phenomenon.
    So, the sugar policy of the United States Government is 
going to drive the largest domestic refinery out of business. I 
have no doubt that that is going to happen. And that is a 
flawed policy. But we have got--these are the two big problems.
    Secretary Glickman. Okay.

                        EXOTIC PEST INFESTATION

    Senator Feinstein. One is a huge exotic pest infestation 
that has resulted in nine quarantines, two of them large now. 
And two pests that will wipe out, one, the grape industry and 
the other, the entire nursery industry, unless something is 
done with it. As you know, you have got money in the budget. 
Three-quarters of it is earmarked and it is earmarked to states 
other than California. But we have a huge problem. Could you 
respond to this?
    Secretary Glickman. Yes, I will try to. Thank you. First of 
all, let me tell you--increasing penalties for violating our 
regulation on importation of pest-laden fruit has not passed 
the Congress. One of the problems is if you send a case over to 
the U.S. Attorney it may not be prosecuted if it is small and 
only a misdemeanor. We need to get the penalties up.
    Senator Feinstein. This U.S. Attorney will prosecute.
    Secretary Glickman. Okay. Well, I am just telling you that 
a bill is in the Congress, and if you raise the penalties, the 
incentives will follow and it will make it a lot more 
attractive to prosecute everywhere. We will work with you on 
that legislation. I am told that, my staff has met with you. 
Where they came back and told me about the meeting, and I asked 
them why are we not sending cases to the U.S. Attorney.
    I would like to know from the U.S. Attorney what kind of 
cases actually would be prosecuted. But if we can raise the 
penalties, it would make it a lot more worthwhile for these 
cases to be prosecuted.
    Senator Feinstein. I would be happy to ask him to come 
back, to sit down with you and discuss this.
    Secretary Glickman. Yes. And I will tell you, I am going to 
call the U.S. Attorney myself. I know the person.
    Senator Feinstein. Please.
    Secretary Glickman. I will talk to him and ask him what can 
we do to get him the kind of cases that he might pick a couple 
to prosecute to send the signal out there. I also will talk to 
our Office of Inspector General on this as well.
    On the budget, I understand what you are saying. Clearly as 
we go into a more globalized trade situation, the entire 
government of the United States has to do a better job of 
inspection. In our budget, as you know, fruit fly exclusion and 
detection has been increased from $25 million to this year to a 
request of $55 million, over 100 percent increase for that 
effort.
    For the agriculture quarantine inspection we have asked for 
a 15 percent increase, from $210 million to $240 million.
    Senator Feinstein. May I stop you there?
    Secretary Glickman. Yes.
    Senator Feinstein. My staff tells me it is a just a shift 
of accounts.
    Secretary Glickman. Mr. Dewhurst.
    Mr. Dewhurst. Well, we started with the med-fly which was 
begun with emergency CCC money, but under our rules we can do 
that for 2 years and then we have to budget for it and count it 
against our targets. And we have done that.
    Secretary Glickman. I would have liked to keep it as 
emergency spending so that I would not have to count it but we 
are not able to do it that way any longer.
    Senator Feinstein. But is it net new money or is it a 
shift?
    Secretary Glickman. It is both. It is some net new money 
and some shift. We will get you the specifics on it. For, 
emerging plant pests, we have gone from $1.5 million in 1999 to 
$29 million for 2001. We do have a responsibility to protect 
animal and plant resources and we do not have enough people at 
the border, you are correct.
    Now, on the other issues, as you know, the basis of our 
meeting, I sent Dr. Siddiqui who ran the Plant Protection 
Activities for the California Department of Agriculture, to San 
Diego where he had a meeting, I believe.
    Senator Feinstein. Day before yesterday.
    Secretary Glickman. Yes, the day before yesterday with us. 
I think some of your staff were there.
    Senator Feinstein. The Agriculture commissioner.
    Secretary Glickman. The Agriculture commissioner and 
others.
    Senator Feinstein. Correct.
    Secretary Glickman. Now, what I am told is that there are 
two basic issues. One of the issues is the issue of 
compensation. That is, does the government have a 
responsibility to compensate these producers when there is a 
quarantine.
    Senator Feinstein. And when you encourage them to grow the 
crops in the first place.
    Secretary Glickman. Okay. In any event, we, on occasion, 
have provided compensation. We did it for Karnel bundt in 
wheat. Some of that wheat was in California. We are now looking 
closely at the case of plum pox in Pennsylvania.

                             CITRUS CANKER

    Senator Cochran. Citrus canker.
    Secretary Glickman. Yes, citrus canker. We have done it 
when the authorities asked us. Even then there were some cost 
share between the State and the Federal Government. I do not 
think the Governor from the State of California has declared an 
emergency or asked us to participate in the funding.
    Senator Feinstein. He has not.
    Secretary Glickman. But that would obviously be helpful.
    Senator Feinstein. Right.
    Secretary Glickman. In addition to that----
    Senator Feinstein. If the Governor declares an emergency, 
will you then help?
    Secretary Glickman. It would make it a lot easier for us to 
do that. I have to go back and talk to my folks, but if the 
State declares an emergency, it was a situation where we were 
able to participate, such as citrus canker, we would consider 
providing cost share money on some compensation. So, that would 
make a big difference.
    Now, the other thing is we have a lot of quarantines every 
year. The policy is the government cannot compensate every 
producer for every quarantine for every purpose. Now, what you 
are telling me is we may have contributed or caused a specific 
type of production.
    Therefore, there may be some responsibility. Maybe not 
legal responsibility, but if nothing else, moral 
responsibility. I have instructed our people to go back and 
take a look at that as a result of the meeting a couple of days 
ago. So, we will do that.
    Senator Feinstein. And the border staffing?
    Secretary Glickman. Well, the border staffing is a function 
of money, and some of this money will go for additional 
staffing. I cannot tell you how much. We may need to work with 
you, perhaps, to augment these numbers a little bit.

                      SHORTAGE OF USDA INSPECTORS

    Senator Feinstein. Let me tell you what I am told by the 
Deputy Ag Commissioner of San Diego County. That your people 
work very hard, but they are completely overwhelmed, and they 
cannot keep up with it. And like with drugs, those who smuggle 
get very sophisticated. And when they go off duty and the port 
is open for 2 more hours, they just pour across.
    Secretary Glickman. Yes.
    Senator Feinstein. Now, the avocado growers told me that 
they got one smuggled avocado shipment because they thought the 
pits were narcotics. But, if it is an infestation, they do not 
get them.
    Secretary Glickman. Well, I do think then, when we are 
trying to encourage globalization of agriculture, we have a 
special responsibility to protect American producers and to do 
the adequate amount of inspections. I agree with you, we do not 
have enough inspectors on the borders.
    Whether the budgeted amounts are enough or not, I do think 
it requires a very high priority from our government in all 
aspects, whether it is in California, Arizona, Texas, Florida 
or the Canadian border. We will continue to look at the 
compensation issue. This is on my plate now. I want you to know 
that.

                              SUGAR ISSUE

    Senator Feinstein. All right. Good. Sugar?
    Secretary Glickman. Now, on the sugar thing, I might ask 
Under Secretary Shumaker to respond to you. I would let him go 
first and I will respond.
    Mr. Shumaker. You want to go first?
    Secretary Glickman. No, you go first.
    Mr. Shumaker. Senator, sugar, as you know, is an issue 
throughout the country and it is a very, very complex problem. 
We administer the sugar program. Let me just take 1 minute on 
where we are with the overall sugar issue, because I think some 
members here may be very interested in it.
    We had an increase in acreage in both cane and beets in 
recent years. Good weather, combined with increased acreage 
have meant record cane and beet sugar crops throughout the 
country, including the major producing States such as North 
Dakota, Louisiana, Florida and others.
    So, we have this increased domestic production and 
increased imports of sugar products which are outside the sugar 
tariff rate quotas. These are the key factors in the question 
of the low domestic prices. So, what have we done?
    We are working, particularly, on non-recourse loans. They 
are now available to domestic producers of sugar cane and sugar 
beets. Many of the processors are taking advantage of these 
loans, which in turn benefit the producers that sell to these 
processors. Apart from these loans, there are not many other 
provisions under the current sugar legislation.
    Part of the problem is, of course, Hawaii. I have been to 
Hawaii several times and it has reduced substantially its sugar 
production for a variety of reasons and that has really 
affected C&H over time. So, the Hawaiian diminution of sugar 
production has really affected that one sugar refining plant in 
California.
    Thats why we have the problem, and I have to be honest with 
you, there was some unfortunate set of circumstances in the way 
we handled the TRQ and its impact on C&H. We provided a waiver 
and allowed them to import raw outside the TRQ at a time when 
there is excess domestic sugar on the market.
    We have since initiated, I think my staff has worked and 
kept you fully informed, in an effort to mitigate some of the 
negative effects which you have outlined today that this 
original waiver has had on the sugar program overall. We are 
trying to mitigate the effects on C&H. Obviously we have not 
been as helpful as you would have liked us to have been.
    Senator Feinstein. What about requiring that they forfeit 
their bond?
    Mr. Shumaker. Well, I do not have exact information on this 
question. I will get back to you on that bond issue, because I 
have not been formally briefed on that. But we are trying to 
mitigate the effect on C&H and at the same time, trying to see 
that there are no unfortunate circumstances if that waiver was 
provided on the rest of our sugar industry.
    Secretary Glickman. If I may talk for a minute. I must tell 
you, not that I agree with you on everything, but if we put a 
company in jeopardy because we made a mistake at the 
Department, that is inexcusable. I am going to get to the 
bottom of this matter.
    Senator Feinstein. Thank you.
    Secretary Glickman. This is inexcusable, and it is one of 
the things I used to get frustrated with when I was in 
Congress. You just can say here, well, it may have been because 
of the tariff rate quota. It is kind of like saying it was the 
law, when you try to explain what you did. We have got to 
somehow make good on this.
    I do not know how we are going to do it, and that is very 
troubling to me. I promise you that I will see what I can do, 
because it is not an excuse that some employee made a decision 
and it was not in conformance with what we are supposed to be 
doing.
    Senator Feinstein. Right.

                        SUGAR TARIFF RATE QUOTA

    Secretary Glickman. This company was mislead and went out 
and did certain things based upon that and we have an 
obligation to do what we can to deal with it. I would have to 
tell you domestic production of sugar has gone from 7.3 million 
tons in 1995 to 8.8 million tons last year, a significant 
increase in production. Because of the TRQ and the way that we 
have to administer it under the law, imports have gone from 2.2 
million down to 1.2 million, largely as a result of the 
dramatic increase in production of domestic sugar.
    So, you and others have called me about how to try to deal 
with this problem in the most sensible way that we possibly 
can. But the underlying problem is domestic production is going 
up very significantly.
    Therefore, the administration of the TRQ means imports are 
coming down rather significantly. I gather C&H probably used to 
get a lot of its sugar from Hawaii, but now they having to rely 
on importing their sugar.
    Senator Feinstein. They were, yes. They were limited. And 
you see, the problem is they are not allowed to buy sugar. 
Remember we talked about this? They cannot bring sugar in, as I 
recall. They cannot import it. Now, that is ridiculous. I mean, 
this a free market. Why should not a huge refiner be able to 
import it?
    Secretary Glickman. There is a limitation under the tariff 
rate quota. I am not telling you it all makes a lot of sense. 
All I can tell you is that I understand your frustration with 
respect to this firm who is employing people and, trying to buy 
sugar. But I am going to get to the bottom of it. It is 
unacceptable as far as I am concerned.
    Senator Feinstein. Thank you very much.
    Senator Cochran. Senator Dorgan.

                             SUGAR PROGRAM

    Senator Dorgan. Mr. Chairman, I respect the statement of 
the Senator from California. She has a problem and has to 
address that and resolve it. I know she will not expect anyone 
to apologize for a sugar program that works for sugar producers 
or for family farmers in this country who are raising beets, 
for example. This is one program that has worked over the years 
among a range of programs that have largely failed in 
agriculture. But, you know, she makes a point.
    I appreciate the Secretary's response to her about dealing 
with the C&H issue. But, we ought not believe that repealing 
the sugar program is a thoughtful response. I know you are not 
suggesting that.
    Senator Feinstein. It is the only thing I can do.
    Senator Dorgan. Well, but I do not think----
    Senator Feinstein. I have tried since 1994.
    Senator Dorgan. With all due respect, I do not think you 
can do that either.
    Senator Feinstein. Just to get adequate sugar.
    Senator Dorgan. I mean, I do not think you are able to 
repeal the sugar program, nor should you be able to. We should 
solve your problem, but do so without ravaging family farmers.
    Senator Feinstein. That is right. That is all I want.
    Senator Dorgan. Mr. Secretary, I waited because I wanted to 
ask you a couple of questions about something that is often 
more discussed in the agriculture committee, the authorizing 
committee. But the appropriations in the budget really reflect 
the need for funds that come from farm policy.
    You are now proposing additional money with respect to a 
counter cyclical program. My assumption is that that reflects 
your belief that you have previously stated, that the farm 
program should be significantly changed. That is the statement 
you have made?
    Secretary Glickman. That is correct. Let me discuss with 
you the urgency of that.

                      CHANGE CURRENT FARM PROGRAM

    Senator Dorgan. Some of us believe that rather than wait 
for 2002, that we ought to change the underlying farm program 
this year. We are going to attempt to make the changes to the 
farm program to make it counter cyclical this year. How do you 
feel about that? Would you support that? Do you think there is 
an urgent need to change the farm program?
    Secretary Glickman. First of all let me say, I think the 
1996 farm bill has had major radical changes in the last 2 
years, because the Congress had to appropriate more money in 
emergency spending on top of the basic AMTA-payments.
    Senator Dorgan. But that is not the farm program itself.
    Secretary Glickman. No. But what I am saying is that if the 
farm program is has to have these additional direct payments, 
the Congress has basically said the underlying farm program 
does not work very well.
    Congress has not made any authorizing structural changes in 
the farm bill. The net impact intellectually does not work very 
well. Now, what we would like to see is significant additional 
revisions to that base farm program.
    Knowing how difficult it sometimes is to actually get some 
of this done, what we have proposed is this counter cyclical 
program on top of the existing program. But we would be willing 
to work with you on more fundamental structural changes in the 
farm bill. That is, I think we have developed the intellectual 
principle that we would like to see this program based on, and 
that is a counter cyclical formula and not on straight lined 
payments.
    Senator Dorgan. Now, the chairman of the Agriculture 
Committee likened the emergency aid in 1998 and 1999 to ad hoc 
counter cyclical aid. My assumption is that almost no lender is 
going to consider ad hoc cyclical aid as a part of a regular 
farm program, and that, I think, underscores the need to change 
the underlying farm bill itself or to, as you are suggesting, 
add something to it that changes the nature of the safety net.
    Secretary Glickman. If you cannot change the basic formula, 
then I think you need a bridge to the new farm bill that gives 
a signal to producers as to where we are going to be going.
    Senator Dorgan. But let me ask you, do you think it 
advisable to change the basic formula? Do you basically support 
the efforts of those of us who think it is urgent we do so?
    Secretary Glickman. I think it would be advisable to change 
the basic structure of the current farm bill. I would add two 
caveats. Number one is whether it is, in fact, something that 
could be done. And number two, there are a lot of lenders and 
farmers out there that have factored in these AMTA payments 
into their debt repayments, and into their operating programs. 
So, there is a possibility of creating some instability out 
there unless you were to give them at least as much as they are 
getting in the basic AMTA program.
    Senator Dorgan. Your recommendation to fund something that 
is counter cyclical in your budget also anticipates targeting. 
Can you describe how that is different from AMTA? AMTA does not 
target, is that correct?
    Secretary Glickman. AMTA does not target. There is the 
payment limitation.
    Senator Dorgan. Right.

                              AMTA PROGRAM

    Secretary Glickman. This program would have a more 
restrictive payment limitation than the AMTA program does. It 
is based on income losses, not just based upon a straight 
payment, irrespective of what the market is doing.
    Senator Dorgan. So, targeted to actual losses and also 
targeted with respect to limitations?
    Secretary Glickman. That is correct.
    Senator Dorgan. And that differs from the AMTA payment in 
that the AMTA payment may well go to people, not only that did 
not have losses, but may go to people who did not produce 
anything?
    Secretary Glickman. That is correct.
    Senator Dorgan. And one more attempt at this. There will be 
a disagreement, I assume, in this Congress. Those of us who are 
attempting to change the underlying farm bill as opposed to 
just grafting some counter cyclical piece to it, because we 
think it ought to be done now rather than later.
    We think the year 2000 is important to do it, rather than 
2002, only because history shows us that the current farm bill 
does not provide counter cyclical support. It was not designed 
to, nor will it help farmers when prices collapse, respond to 
that price collapse. In light of that, is it your feeling that 
it is a reasonable thing to do, to try to get an early start on 
changing this farm bill rather than waiting until 2002?
    Secretary Glickman. I would say a couple of things. Number 
one is that AMTA payments are going to come down by about a 
half billion dollars this year and a billion in 2001. So, you 
are going to have some reduction in farm assistance even with 
the 1996 farm bill. Unless it is made up some way, it will 
result in more net income losses to farmers.
    I think it is very reasonable to look at the underlying 
structural nature of the 1996 farm bill, but I would say that 
if you do not think you can do a fundamental re-write of the 
legislation, then you try to at least set some principles for 
interim legislation that will give some leadership to where you 
are going to be going in the 2002 farm bill.
    Two other points. The conservation piece cannot be ignored, 
because for the first time we are going to make payments to 
producers everywhere in the country, not just in the regions 
that have been getting the farm program payments, for practices 
of good conservation practices, and not cost share payments. 
More and more I think in the future, you are going to see more 
farm bills related to conservation as well as basic commodity 
policy.
    Senator Dorgan. I support a conservation element, too. But 
I do not, for example, want to see someone saying, well, let us 
just have CRP replace farming.
    Secretary Glickman. Right.
    Senator Dorgan. I want family farmers to be able to live 
and operate the family farm and make a decent living. And those 
of us who come from farm country have a real stake in seeing 
that happen. And regrettably, as you have said, the AMTA 
payments ratchet down this year.
    Even if grain prices continue to soften, you have a farm 
program that provides less income, even as prices collapse. 
That is the reason it needs to be rewritten.
    Secretary Glickman. Right.
    Senator Dorgan. Mr. Chairman, thank you.
    Senator Cochran. Thank you, Senator.
    Senator Bond.
    Senator Bond. Thank you very much, Mr. Chairman. I 
appreciate being able to come back and pick up where we left 
off. I know that you all are having a great time today. I am 
sorry I have had to go to other hearings.

                        BIOTECHNOLOGY ACTIVITIES

    But, Mr. Secretary, I did want to get into, and I am glad 
we had the opportunity in the public forum, to talk more about 
the biotechnology activities. Are you aware of any food hazard 
that has resulted from utilizing the transgenic process? The 
process as opposed to what comes out.
    Secretary Glickman. I am not personally aware of anything. 
I am aware that in the past, the FDA has looked at this issue 
as it relates to hypoallergenic responses.
    Senator Bond. That is correct. The product.
    Secretary Glickman. Yes.
    Senator Bond. The product when they try to incorporate a 
Brazil nut and a soybean resulted in the potential of causing 
an allergic reaction, and therefore, the Brazil nut was dropped 
as an additive to soybeans. And that was the product. And I 
think that we all agree that each product needs to be reviewed 
on its own.
    Secretary Glickman. Right.
    Senator Bond. But the process itself should not cause any 
harm, should it?
    Secretary Glickman. I am not aware of any. I would say that 
one of the things we are doing at USDA is to continue to 
upgrade our approval process, because the big thing you have to 
do is to give the public and consumers confidence that we are 
doing everything we can. The process needs to be forward 
thinking.
    I mentioned the National Academy of Sciences is doing a 
peer review of our approval process. I have created a biotech 
advisory committee chaired by a former member of the House, 
Dennis Eckart from Ohio, to basically keep a continuous 
advisory eye on what we are doing.
    As you know, the approval of foods themselves is a 
responsibility of the FDA and the EPA has some responsibility. 
But as long as we continue to do this kind of thing and give 
the public confidence, I think this technology will and should 
go forward.
    Senator Bond. Well, and I mentioned to you, and I think I 
have shared with your staff, I do not know if you have seen it, 
but the letter that I took to Seattle signed by 500 scientists 
from all walks, all across the country, saying that we have got 
as good a process as science can develop through the EPA, the 
USDA and the FDA.
    And I agree with you that we need to continue to take--
actually, these are extraordinary methods. Dr. Martina 
McGlouglin, the Director of Biotechnology at the University of 
California, Davis, in her comments to the FDA said that she 
believes that the regulatory oversight must be science and 
safety based.
    She says that suddenly altered products on our plates, 
coming from biotechnology, have been put through more thorough 
testing than any conventional food has ever been subjected to. 
I guess that is a fair statement. There is no other--we have 
never tested any other food products.
    Secretary Glickman. Certainly in the recent period of time, 
I think that is probably true and will continue to be true.
    Senator Bond. And, you know, we agree that labeling of 
foods ought to be based on science.
    Secretary Glickman. I have said that if companies may find 
it useful to engage in labeling, information labeling, it is 
voluntary labeling. They have to make the decision to do that. 
For the government to come in and mandate labeling is clearly 
premature. We have not established a basis or thresholds for 
it. We do not have the scientific basis to determine really 
what is in the product from a commercial basis right now.
    I would have to say this, I want to go back to this point 
again, we have got to make sure that the consuming public, not 
only here but around the world, have confidence that the food 
supply is safe.
    This morning, I went over and spoke to a group of consumers 
from around the world. They are meeting on this very point. I 
was trying to tell them that we have got a food safety system, 
that while it is not perfect, it is by far and away the best in 
the world.
    Whether it is our food borne pathogen safety system or our 
GMO review process, it is a science based system and it is on 
the level. It is independent from industry.
    The industry is not running this system, because that for 
sure would make it kind of suspect. Because of that, I think 
that the industry ought to take our lead and develop similar 
systems.

                        BIOTECHNOLOGY ACTIVITIES

    Senator Bond. We just need to get you a bigger megaphone 
because I believe you are exactly right. That you have to have 
the best science. I understand from the FDA that the FDA says 
that the only reason to label a food if it is different, 
significantly different or if there is a health concern, and 
then the consumers have a right to know that.
    But, if there is no safety issue, the companies can label a 
product if they want to, but it has to be truthful. In other 
words, if they label something as GMO free, then you could not 
sell cheese, most of which is produced with chymosins that 
are--chymosin that are genetically altered in my understanding. 
You could not sell most of the cheese we have today.
    Secretary Glickman. I tell you, one of the things we are 
doing at USDA to address this, in something of an indirect way, 
is to issue our rules on organic certification. As you know, 
the Congress passed a law in 1990 that required us to issue 
rules on how to certify organic products.

                             UNDER THE RULE

    Organic foods can not contain GMOs. That is the result of 
the rule making process. It does not mean the food is any 
safer.
    Senator Bond. Do they get to use BT and still it as an 
organic?
    Secretary Glickman. I do not want to prejudge everything 
within the final rule.
    Senator Bond. Cultural practice.
    Secretary Glickman. Yes, as a cultural practice, they can 
use BT. I do not want to go through all of it, but all I am 
saying is that there is a group of people out there that want a 
certain kind of food. But I have made it clear this is not a 
safety issue.
    Some people argue that a lot of the things we do with our 
food actually improves the safety of food. But, you know, this 
is an interesting issue. I have been working on this for about 
9 months. It is causing a lot of havoc out there in the 
countryside with farmers, as you know, not knowing what to 
plant, where to sell their products. One of the reasons why we 
are talking about doing an on farm storage program for 
producers is so they have a little more control over the 
marketing of their product than they did before.
    When we come up with products that the consumer believes is 
in their interest, nutritional things like the Vitamin A rice, 
may be health related things, I don't think this thing is going 
to turn overnight. But until such time as that happens, I think 
there is still going to be a lot of controversy.
    Senator Bond. I am very much concerned that this technology 
is under such broad scale attack, if we do not have scientists 
speaking out and knowledgeable government officials, like you, 
speaking out to say, hey, we are using the best science, this 
is another step in the continuum of development.
    We have come many, many miles with hybrid corn and cross 
breeding to get better food products from animals and from 
crops, because we have fiddled with Mother Nature. And we have 
come up with improved plants. This is another step. It is a 
more precise step. But I think, and some of the opponents call 
it ``a largely untested technology,'' would you agree with 
that?
    Secretary Glickman. I cannot agree--there is no new food 
that is approved for use in this country, or no new seed that 
is approved for use in this country, that is untested. Period. 
I mean that is just wrong. Does that mean that we should just 
rest on our laurels?
    Senator Bond. No.
    Secretary Glickman. Should we not help to produce better 
systems? We clearly need to do that.
    Senator Bond. Let me--I have written you a letter, and it 
is very important that, I think, that we try to stop the spread 
of ural sclerosis to other parts of the world, which are, 
frankly, under attack from Europeans and others who want to 
stop all genetically modified foods. I just came back from 
Southeast Asia, and in Thailand and countries there, they want 
to know what our regulatory process is.
    They have some excellent scientists. Scientists who have 
worked hand in glove with American scientists. They are working 
on genetic engineering to get rid of the gemini virus in 
tomatoes that causes the yellow leaf welt that destroys 95 
percent of their crop. The papaya ring virus, are things that 
can be dealt with by genetic engineering.
    They want very much to have contact with the USDA and the 
FDA, and I would urge you, if you have someone available who 
can make a trip to Bangkok, to go over with them the process 
that you go through so that they can assure their consumers. I 
sent the letter in the last day or so.
    Secretary Glickman. Okay. But we also have our agricultural 
attache in Thailand. I do not know if you saw this person when 
you were over there.
    Senator Bond. Yes.
    Secretary Glickman. Do we have one in Bangkok?
    Staff. Yes.
    Secretary Glickman. I will make sure they are aware of 
this.
    Senator Bond. Yes.
    Secretary Glickman. We do have the programs and we will 
work on it.
    Senator Bond. They do not seem to believe the embassy or 
visiting senators. They want to hear somebody from the USDA who 
is involved in the regulatory process.
    Secretary Glickman. I will make sure that Mr. Shumacher 
follows up on this.
    Senator Bond. Yes, if you would, please because we want to 
make sure, because this part of the world is going to benefit 
tremendously from genetically modified organisms. And we need 
to work with them. And our Ambassador there, Bob--excuse me--
Ambassador Hechlinger is working very closely with them to 
provide the resources.
    Mr. Chairman, I probably have another 2\1/2\ hours of 
questions, but I will submit them for the record, and I am sure 
the Secretary would like to go to lunch, too. So, thank you 
very much, sir, for accommodating me.
    Senator Cochran. Thank you, Senator.
    I have a number of questions that I will submit as well.
    One final question, though, of you, is about the recission 
the Department elected to impose on the Title I Public Law 480 
program under the budget resolution that we finally wound up 
with. We had a 0.38 required recission and you singled that 
program out. And I also notice that you have singled it out 
again with a cut proposed in this budget request.
    I am curious about the lack of support in the 
Administration for Public Law 480, Title I. It is a very useful 
tool in assisting developing countries with the potential of 
becoming commercial markets for U.S. agricultural products at a 
time when we are seeing barriers and difficulties in 
international trade, like Senator Bond was talking about, and 
others. It seems like a poor time to be targeting an export 
promotion program for under funding and cutting and rescinding.
    Secretary Glickman. Perhaps Mr. Dewhurst can respond first.
    Mr. Dewhurst. Yes, sir. Well, the cut that we were required 
to take added up to about $96 million in the Department in 
discretionary money and the emergency money that Congress had 
provided. It was simply not easy to find $96 million in 
reductions. One of the things that happened, frankly, is that 
we looked at areas where there were substantial carry over 
balances or other ways we thought the impact of the cut could 
be ameliorated.
    In Title I, we had over $100 million in available funds 
carried over from the prior fiscal year. So, when we worked 
with the agency, $8 million of the $96 million was taken out of 
Title I. It was done with the understanding that there were 
these balances and the cut could be handled, at least for this 
year, without a serious impact on the program.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Cochran. Thank you. Mr. Secretary, we appreciate 
your patience with our committee. Thank you for your 
cooperation.
    Secretary Glickman. It was good working with you. Thank 
you.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing:]

              Questions Submitted by Senator Thad Cochran

                           COMPUTER SECURITY

    Question. Mr. Secretary, I notice that the budget for the National 
Agricultural Statistics Service includes funds for the security 
improvement of the agency's computer systems. With the recent news of 
computer hackers breaking into computer systems of major national 
companies and government agencies, how do you perceive the threat to 
USDA computer systems? What would be the potential consequences of a 
computer break-in at the Department? Is this not something that should 
be dealt with by the Chief Information Officer (CIO) of the Department, 
instead of dealing with these needs on an agency-by-agency basis?
    Answer. Recent security break-ins in the private sector and 
security problems at the Environmental Protection Agency make it clear 
that no organization is safe from cyber-security attacks. We are 
working to strengthen our cyber-security program, and have thus far 
managed to repel efforts at intrusion without apparent damage.
    USDA takes such threats seriously due to the market sensitivity of 
many of our reports as well as the confidential information collected 
by the National Agricultural Statistics Service from producers and 
agribusinesses that is maintained on our information systems. The 
information USDA manages affects the financial markets and the lives of 
individuals. The National Finance Center processes payroll for 450 
thousand federal employees and administers the Thrift Savings Plan for 
over 2 million federal employees. Rural Development's loan portfolio 
exceeds $100 billion. At the same time, USDA is increasingly using the 
Internet to provide customers information about programs and services, 
and will eventually use it to allow customers to conduct transactions 
online. I do not want to speculate on the potential consequences of a 
computer break-in at the Department, other than to say that USDA 
clearly has significant resources that are at risk.
    The Department's CIO is taking a holistic approach to strengthening 
our cyber-security program. We have recently hired an Associate CIO for 
Cyber-Security who is an expert in this area and who reports directly 
to the CIO. His mission is to work with each USDA agency to improve 
cyber-security while also strengthening security at the Departmental or 
perimeter level. Given the interconnectedness of the Department's 
networks, and the common issues that all agencies face, we are 
strengthening our corporate approach to security while also continuing 
to identify and address specific weaknesses at the agency level. 
Individual agencies such as NASS have identified immediate needs based 
on their programs, missions, and current vulnerabilities. These 
security steps are important and necessary, but equally importantly 
they must be addressed in the context of strengthening cyber-security 
throughout the Department.

                       COMPUTER SECURITY FUNDING

    Question. Are the needs for computer security funds widespread 
within the Department? What are the practical implications if this 
funding is not provided?
    Answer. OCIO has requested an increase of $6.6 million for fiscal 
year 2001 to complete implementation of a corporate cyber-security 
program. This will allow OCIO to expand USDA's Cyber-Security Program 
Office, establish a department-level Information Technology Risk 
Management Program, develop a USDA Information and Telecommunications 
Security Architecture, and conduct employee training program to 
heighten awareness among all USDA employees about security risks and 
their responsibilities in mitigating those risks. Strengthening cyber-
security is a top priority across
    USDA. Each agency has already or will soon be undertaking a 
comprehensive risk assessment to identify its vulnerabilities and take 
steps to mitigate them based on the value of the data that they manage. 
Some, such as NASS, have completed these assessments and have requested 
funding to implement corrective measures. We anticipate that future 
agency budget requests will reflect their cyber-security needs once 
their assessments are complete.

                         COTTONSEED ASSISTANCE

    Question. Mr. Secretary, as you are aware, the fiscal year 2000 
Consolidated Appropriations Act provided you with discretionary 
authority to provide assistance to producers of cottonseed. This 
authority referenced some $117.2 million in available unobligated funds 
which could be used to finance such assistance.
    It is my understanding that of the $117.2 million in unobligated 
funds that we identified in the bill, the Department first subtracted 
the $4.7 million for implementation of the mandatory price reporting, 
then used these funds for the across-the-board cuts that were also 
required by the bill, then reserved $10 million for the Step-2 program 
for Extra Long Staple cotton, thus leaving $74 million for cottonseed 
assistance. It is my understanding that assistance in the order of $20 
per ton would be necessary to raise the price received to a 5-year 
Olympic average. The amount of funds that you have left for cottonseed 
would only provide about $13 per ton--35 percent less than the average.
    It is also my understanding that prior to the clarification 
included in the Consolidated Appropriations Act, the Department was 
already working to develop a program to assist cottonseed producers 
from other disaster funds. So, it would seem to me that because we 
identified available funds from which assistance to cottonseed 
producers could be made, we actually reduced the amount of money they 
would have received.
    Why were the mandatory price reporting funds not subjected to the 
across-the-board cut?
    Answer. The statutory authority for the 0.38 percent government-
wide rescission provided the Secretary with discretion to target the 
reduction. Implementation of livestock mandatory reporting is a key 
element in providing information needed to promote competition in 
livestock markets and is especially critical to smaller producers. 
Taking more than a token cut would have hampered our ability to 
implement this effort during fiscal year 2000.
    Question. It is my understanding that no final decisions have been 
made to date about whether to exercise this authority. You and I last 
spoke about this issue in December. When do you intend to make a 
decision?
    Answer. Department staff are developing options for the cottonseed 
support program and the ELS cotton competitiveness payment program. We 
have determined that approximately $84 million will be available for 
the two programs. We expect to determine the operating provisions of 
the programs soon.
    Question. Do you have any intention to supplement the $74 million 
remaining from other disaster funds?
    Answer. We likely will allocate $10 million for the ELS program. 
That would mean that the cottonseed program could be funded at $74 
million, a payment of about $11.50 per ton of seed produced. We would 
not propose to increase the cottonseed payment unless our preliminary 
estimate of unspent supplemental AMTA funds proves too low. In that 
case, we would allocate any small increment to cottonseed payments and 
not propose to increase funding for ELS.

                 SUPPLEMENTAL INCOME ASSISTANCE PROGRAM

    Question. Mr. Secretary, I understand that the budget includes a 
legislative proposal estimated to cost $5.8 billion in fiscal year 2001 
and $11 billion over the next three fiscal years (2000-2002).
    It is my understanding that a major component of this initiative 
includes a payment-limited income assistance program. Mr. Secretary, 
you have been quoted as saying that even with the proposed payment 
limit, only 2 percent of current AMTA payment recipients will be 
ineligible. Further, it is my understanding that an individual that 
received less than the $30,000 payment limitation would have his 
supplemental payment reduced by his AMTA payment.
    On what basis did the Department estimate that only 2 percent of 
current AMTA recipients would be ineligible? In my State of 
Mississippi, I would estimate that the opposite would be true, only 2 
percent would be eligible for a payment under this new program.
    Answer. The $30,000 Supplemental Income Assistance Program (SIAP) 
payment limit was selected to limit the amount of supplemental 
assistance provided to very large family and non-family farms. This 
limit would apply to combined payments under SIAP and Agricultural 
Marketing Transition Act (AMTA) payments. This combined payment 
limitation is mutually exclusive to the $40,000 payment limitation for 
AMTA payments alone. For example, a producer eligible for $20,000 in 
AMTA payments would be eligible for up to $10,000 in SIAP payments, but 
a producer receiving more than $30,000 in AMTA payments would not be 
eligible for any SIAP payments. The purpose of SIAP is to target 
smaller producers who have lower farm incomes. For that reason, SIAP 
payments would supplement farm incomes of those producers who already 
receive less than $30,000 in AMTA payments. Our preliminary analysis of 
1998 AMTA payments indicates that only 2 percent of all producers would 
be ineligible for some level of SIAP assistance and an additional 6 
percent would have their supplemental assistance reduced under the 
proposed limit. Based on the same analysis, only 8 percent of 
Mississippi producers would be ineligible for SIAP payments. By 
reducing the amount of payments that go to the very largest producers, 
supplemental assistance to small- and medium-sized family farms would 
increase by more than 20 percent.
    Question. Can you give us an estimate of the geographic 
distribution of these payments?
    Answer. Yes, I can provide that information for the record.
    [The information follows:]
    The table below provides an estimated percentage breakdown of 
Supplemental Income Assistance Program Payments by State for 2000 
crops. The numbers are a preliminary estimate based on 1999 production 
of wheat, feed grains, rice, upland cotton, and soybeans. The 
distribution of payments by State are determined by the level of SIAP 
payments going to each crop and the level of each State's production of 
that crop. This distribution can vary widely from year-to-year as 
payment and production levels vary among the crops and States. For 
crops, such as wheat, upland cotton, sorghum, and rice, where a large 
percentage of all U.S. production is concentrated in a relatively small 
number of States, changes in payment levels for these crops can 
significantly affect the overall distribution of SIAP payments among 
States. With the exception of North Dakota (the second largest wheat-
producing State in 1999), the States with estimated shares of SIAP 
payments greater than 5 percent were also the leading producers of 
wheat, upland cotton, sorghum, and rice. (North Dakota was the leading 
wheat producing State in 1995 and 1996.) Because SIAP is intended to 
offset current year reductions in revenues for each supported crop, the 
large shortfall projected for wheat revenues in 2000 results in 
projected SIAP payments for wheat which are more than the SIAP payments 
for all other crops combined. The largest share of wheat SIAP payments 
would go to those States with the largest share of wheat production. If 
future prices for the various commodities generate larger payments to 
commodities other than wheat, the geographic distribution of payments 
would of course, be much different from the example distribution shown 
in the table which assumes most of the payments would be for wheat.

Estimated Supplemental Income Assistance Payments, Percentage by State

        State                                                    Percent
Alabama.......................................................       .27
Arizona.......................................................       .49
Arkansas......................................................      6.57
California....................................................      3.42
Colorado......................................................      3.11
Connecticut.............................................................
Delaware......................................................       .17
Florida.......................................................       .04
Georgia.......................................................       .60
Idaho.........................................................      3.69
Illinois......................................................      4.28
Indiana.......................................................      2.16
Iowa..........................................................      3.33
Kansas........................................................     14.28
Kentucky......................................................       .82
Louisiana.....................................................      2.18
Maine.........................................................       .02
Maryland......................................................       .43
Massachusetts...........................................................
Michigan......................................................      1.50
Minnesota.....................................................      3.99
Mississippi...................................................      1.58
Missouri......................................................      2.37
Montana.......................................................      4.93
Nebraska......................................................      4.72
Nevada........................................................       .04
New Hampshire...........................................................
New Jersey....................................................       .05
New Mexico....................................................       .38
New York......................................................       .34
North Carolina................................................       .96
North Dakota..................................................      7.26
Ohio..........................................................      2.47
Oklahoma......................................................      3.85
Oregon........................................................       .99
Pennsylvania..................................................       .53
Rhode Island............................................................
South Carolina................................................       .33
South Dakota..................................................      3.72
Tennessee.....................................................       .66
Texas.........................................................      7.51
Utah..........................................................       .37
Vermont.................................................................
Virginia......................................................       .50
Washington....................................................      3.58
West Virginia.................................................       .01
Wisconsin.....................................................      1.15
Wyoming.......................................................       .34
                    --------------------------------------------------------------
                    ____________________________________________________

      Total...................................................       100

Note. Estimates are based on 1999/00 wheat, feed grain, rice, upland 
cotton, and soybean production.

    Question. Do most of them go to the upper Midwest?
    Answer. No, not necessarily. Since the Supplemental Income 
Assistance Program (SIAP) payments are tied to production, the largest 
shares go to the corn belt, central plains, and northern plains States. 
However, the southern States, including Oklahoma, Missouri, and Texas, 
would account for 28 percent of all SIAP payments, based on the above 
estimates.
    Question. One could infer from this new program that in order to 
spend the $2.4 billion allocated for these payments, that farmers of 
crops other than traditional program crops (corn, wheat, cotton, rice) 
would be eligible. Is this true?
    Answer. The Administration's proposal assumes $5.6 billion in 
payments for 2000 and 2001 crops. The Supplemental Income Assistance 
Program (SIAP) would provide assistance to producers of wheat, corn, 
grain sorghum, barley, oats, oilseeds, upland cotton, and rice. The 
proposed program could be expanded to include other crops, but 
recognize that we are working with a limited budget. We will work with 
Congress to include other crops, but will insist on remaining 
consistent with budget spending limits.

                      NEW DELTA REGIONAL AUTHORITY

    Question. Mr. Secretary, the budget includes a $153 million 
legislative proposal to create a new Delta Regional Authority, $30 
million of which is for start-up costs for the new entity, and the 
remaining $123 million is to be targeted to the Delta counties from 
existing programs within the Departments of Housing and Urban 
Development, Commerce, Transportation, Agriculture, Labor, Health and 
Human Services and Education. Can you explain how much of this $123 
million is for the Department of Agriculture?
    Answer. The proposal contains $10 million in funding for the Rural 
Business-Cooperative Service, $8 million in program level for the 
Intermediary Relending program and $2 million in technical assistance 
grants.
    Question. For what programs will it be used?
    Answer. The Intermediary Relending program and Rural Business 
Opportunity Grants.
    Question. Is this in addition to the funds already set-aside for 
empowerment zones from within existing USDA programs?
    Answer. Mr. Chairman, all of the funds referenced in the initiative 
are new funds. In the case of Rural Development's programs, they are in 
addition to the funds set-aside for the empowerment zones and 
enterprise communities.

              PARTNERSHIP FOR CHANGE--COLONIAS INITIATIVE

    Question. A Colonias Initiative is proposed by the fiscal year 2001 
President's budget to promote nutrition assistance, health care, and 
job training placement to eligible participants. This new initiative 
would be a Federal-State pilot program funded at $5 million within the 
Food Program Administration account. Why is this a USDA proposal rather 
than a Health and Human Services initiative?
    Answer. The Colonias Initiative is part of the Partnership for 
Change Initiative that has been operating in the Food and Nutrition 
Service's Southwest Regional Office for several years. So it is 
primarily a USDA, not a Department of Health and Human Services (HHS) 
effort. The Regional Office, as part of its normal operating activity, 
worked in conjunction with other USDA and Federal Agencies in 10 
Colonias communities in Texas in 1999, sparking the building of some 
WIC clinics, helping with USDA rural development targeted loans and 
grants to the Colonias for installed water and sewer systems, and also 
getting the various programs there working together to assist residents 
in finding employment and job training, housing, and language and 
health services.
    In addition to HHS, the Regional Office has worked with the 
Department of Housing and Urban Development (HUD), with Texas A&M 
staff, and with the many local agencies that operate social services 
and infrastructure development projects.

                        COLONIAS SITE SELECTION

    Question. How did the Department determine that only the Colonias 
was to be the appropriate site for a Federal-State Pilot program?
    Answer. Partnership for Change works in other areas, but the 
Colonias are the focus of the budget initiative due to their need. 
These are very needy communities along the U.S. Mexican border occupied 
primarily by Hispanics experiencing high poverty and unemployment rates 
and little infrastructure--substandard housing, utilities, water, 
health, and roads.
    The Initiative will increase coordination of Federal, State and 
local programs and resources to work with residents to address their 
special needs. The initiative fosters effective use of existing social 
services and infrastructure building resources. The Initiative does NOT 
seek to initiate new, not-yet-authorized programs or to change existing 
regulations.

           OTHER SITES CONSIDERED FOR PARTNERSHIP FOR CHANGE

    Question. Were other areas, such as the Mississippi Delta and 
Alaska native villages also considered for this type of program?
    Answer. The Southwest Region is presently assessing the possibility 
of a similar Federal-State initiative in the Mississippi Delta region 
of Arkansas and Louisiana.

                 TIME FRAME FOR PARTNERSHIP FOR CHANGE

    Question. What is the time frame for this proposed pilot program?
    Answer. The $5 million requested by FNS would be used to expand the 
Partnership for Change model to all four U.S. Mexico border States and 
to increase the effort at existing sites. Depending upon the extent of 
success, we may seek expanded funding in future years.
              nutrition education and program information
    Question. The President's budget request proposes additional 
funding for a food stamp nutrition education and a program information 
initiative to inform eligible non-participants of the availability of 
food stamp benefits. How much additional funding is proposed for this 
initiative?
    Answer. We are requesting $10 million for this initiative.

                  PROVISION OF FOOD STAMP INFORMATION

    Question. How will the agency use this funding to inform non-
participants?
    Answer. The funding will be used to try to ensure that eligibles 
are aware of their eligibility. We are pleased that many former food 
stamp recipients have moved on to jobs, and off of the food stamp 
rolls. Data reflect, however, that there are many who are eligible for 
food stamps whose households could use food stamp assistance in their 
transition towards work and responsibility, but who are not signing up 
for benefits. I will ask the agency for more details on this campaign.
    [The information follows:]
    The Food and Nutrition Service (FNS) is considering a number of 
ways to most wisely use these resources. Some of the approaches under 
consideration include:
  --Staffing of the FNS toll free information number with live 
        operators.
  --Developing a device to prescreen households for eligibility and 
        benefits. This prescreening tool might also be placed on the 
        FNS Web site so that participants, advocates, and others can 
        use the guide in the privacy of their homes or offices.
  --Increasing the number of program access reviews in States with 
        identified customer service problems.
  --Printing our educational materials in bulk quantities to assist 
        others in their efforts to reach underserved individuals.
  --Funding grants or cooperative agreements with national 
        organizations that are willing to actively promote the campaign 
        through their constituency networks. Such groups could include 
        advocacy groups, health organizations, the faith based 
        community, Federal, State, and local program managers, and 
        others.
    Ultimately FNS will try to identify all potential ideas, evaluate 
to determine which of them would yield the most positive impact on 
recipients, and implement the most effective strategies.

           FOOD STAMP INFORMATION BUILDS ON EXISTING EFFORTS

    Question. How will this differ from the agency's current outreach 
activities?
    Answer. Currently USDA and program stakeholders have done much to 
reduce potential barriers to participation, including ensuring that 
eligible recipients know they are eligible and how to apply. The fact 
that too many eligibles appear not to be signing up for benefits, 
however, suggests that additional effort is needed. That is why we seek 
the additional funds. Let me ask the food and Nutrition Service to 
supply some additional details on how this effort differs from current 
efforts.
    [The information follows:]
    Our current campaign essentially relies on the voluntary efforts of 
organizations willing to support the campaign financially and with 
their own resources. However, these organizations are indicating to us 
that, while they are willing to facilitate the campaign through their 
own communications networks, they need materials in large quantities to 
support their efforts. To date, we have not had resources to produce 
the bulk copies that these organizations could use to effectively reach 
potentially eligible individuals.
    The new educational initiative will continue to be targeted towards 
the elderly, disabled, working poor families, and households containing 
legal immigrants, those persons most underserved in the Food Stamp 
Program. This initiative will enable FNS to print and distribute the 
educational materials that have already been developed but have not had 
wide distribution. Widespread dissemination of the materials will help 
to overcome Program misconceptions and barriers to Program 
participation, such as changes in Food Stamp Program policy that 
facilitate program access and availability, special accommodations for 
elderly persons, information to help working poor understand that they 
may still qualify for Food Stamp Program benefits, and encouragement to 
certain immigrants that they may be eligible for the Food Stamp 
Program.
    These materials, as well as increased use of the media and 
enhancements to our Web site and toll free number services, will enable 
FNS and the stakeholders to more effectively educate the public about 
the Food Stamp Program and its requirements. The new initiative will 
build on the existing plans by providing the tools our partner 
organizations say they need to be successful.

         MONITORING ABUSE VIA ELECTRONIC BENEFIT TRANSFER (EBT)

    Question. A congressional study showed that the Government loses 
billions of dollars to fraud, abuse, and mismanagement.
    Many States have switched from food stamp coupons to electronic 
benefits transfer (EBT) for disbursement of food stamps. This study 
claims that problems still persist. How is the Department monitoring 
the abuse of EBT as it applies to food stamp disbursement?
    Answer. EBT has been misunderstood as a panacea to all program 
waste, fraud and abuse. It is not. EBT improves the efficiency of 
delivering, redeeming and accounting for food stamp benefits. It makes 
it much easier for USDA and the States to detect trafficking and some 
types of fraud and abuse. The largest area of loss in the report is 
erroneous allotment calculations for food stamp households, which 
cannot be affected by how the benefits are actually delivered--be it by 
the efficient EBT system, or by the traditional paper coupon system.
    Nonetheless, EBT is a big help. USDA and the States are moving up 
the learning curve on how to best use EBT audit trail data for fraud 
reduction. FNS uses a system called Anti-Fraud Locator Using EBT 
Retailer Transactions (ALERT) which uses EBT transaction data to 
identify suspicious retailer activity.

               LOWER MISSISSIPPI DELTA NUTRITION RESEARCH

    Question. It has been noted in the press that USDA will audit what 
people in Mississippi are eating to see what makes them so obese. How 
is the Department implementing this new anti-fat campaign?
    Answer. ARS has a project in the Lower Mississippi Delta region 
known as the Nutrition Intervention Research Initiative (NIRI) whose 
goal is to improve the nutrition and health of families of the Delta 
region, including Arkansas, Louisiana, and Mississippi. NIRI is 
currently conducting a telephone survey of a random sample of 
individuals in these states to determine what they are eating. From the 
existing data, we know that obesity is a problem in all of the three 
states. However, to date we do not have the evidence to suggest that 
they are necessarily eating more fattening foods in comparison with the 
rest of the U.S. population. From the new data that we collect, we hope 
to better understand the causes of obesity in the Delta region and 
develop appropriate intervention strategies to change eating behaviors, 
if necessary.
    Question. Is this a nationwide campaign?
    Answer. The Delta NIRI is currently conducting a telephone survey 
of a random sample of individuals residing in Arkansas, Louisiana, and 
Mississippi.

               ACTIONS TO ADDRESS HUNGER IN SEVEN STATES

    Question. Mississippi was one of the seven States with hunger rates 
of 12.6 percent or higher according to a USDA study conducted during 
1996-1998. What actions have USDA made to address the hunger rates in 
these seven States?
    Answer. Our programs directly address these problems for the low-
income population. In addition to the efforts of Child Nutrition, WIC 
and commodity distribution programs, the Food Stamp Program, being the 
cornerstone of the Nation's nutrition assistance effort, has made a 
number of initiatives to increase participation. Allow me to have the 
Food and Nutrition Service summarize their efforts.
    [The information follows:]
    The seven states with hunger rates of 12.6 percent or higher are: 
Arizona, Arkansas, Louisiana, Mississippi, New Mexico, Oregon and 
Texas. Specific actions taken by the Food Stamp Program to address high 
hunger rates in these States include:
  --State and local government and advocacy organizations in these 
        States were among those provided with Food Stamp Program 
        educational and access materials for distribution to 
        potentially eligible households. These materials include 
        flyers, posters, information packets and CD ROMS. The CD ROMS 
        were provided by FNS so that States and organizations may print 
        additional materials for an even wider distribution.
  --We have conducted Food Stamp Program access reviews in each of the 
        seven States cited above. We are working with each State to 
        correct any deficiencies or obstacles to program access 
        identified in each review. In addition, we are currently 
        accumulating a listing of best practices in program access 
        among the high-performing States and we will work with these 
        seven States to implement these practices and procedures where 
        appropriate.
  --Some of these targeted States are already developing and adapting 
        best practices to address the issue. Oregon and Arizona have 
        State optional program educational plans. In addition, the 
        Oregon State agency has placed their application on their Web 
        site to facilitate the food stamp application process. 
        Mississippi and a number of other States have developed 
        educational materials and videos targeted to needy households. 
        This material is distributed through State and local agencies, 
        cooperative extension offices, faith-based communities, WIC 
        offices and advocacy groups.
  --We have in place a USDA food stamp toll-free number, 1-800-221-
        5689, for households to call to obtain information on 
        participating in the FSP. We recently upgraded this system to 
        provide callers with the option of obtaining their State's toll 
        free number. For example, when prompted, a resident from 
        Mississippi simply punches in his/her zip code to obtain 
        Mississippi's toll-free number.
    We are requesting $8 million in additional funding to do more to 
assure that eligible persons have access to the FSP. These seven States 
will continue to be targeted in any future activity.

                      CAUSE OF HIGH RATE OF HUNGER

    Question. What is this high rate of hunger attributed to?
    Answer. USDA does not have the definitive answer to this question. 
Research on both household and State determinants of food insecurity 
and hunger is ongoing. Factors that are likely to affect State 
prevalences include the poverty rate, cost of living, income stability 
(vs. cyclically or seasonally variable income), and strength of 
extended family and community support systems, including the effective 
use of USDA-funded nutrition assistance programs.

                        WIC VENDOR ACCESSIBILITY

    Question. Why does USDA want to limit the number of retailers that 
can participate in the WIC program?
    Answer. USDA policy is that WIC retailers should be accessible to 
WIC recipients and that they should carry and have available all of the 
WIC foods, taking into account cultural preferences. There is no effort 
to reduce the number of retailers. Stakeholders are cognizant that 
there is a cost to the States to adequately manage and monitor 
retailers. States seek to maintain an appropriate number--balancing 
recipient access and the State's ability to adequately monitor the 
program to prevent abuses.

                    WIC VENDER ACCESS IN RURAL AREAS

    Question. Won't this burden recipients, especially those living in 
rural communities?
    Answer. We anticipate no particular change affecting rural 
communities. The changes to the rules are to ensure that only qualified 
retailers, accessible to recipients, are authorized.

                TECHNICAL ASSISTANCE FOR MANDATORY FUNDS

    Question. The Department will propose legislation to expand the 
Wetlands Reserve Program (WRP), the Wildlife Habitat Incentives Program 
(WHIP), the Environmental Quality Incentives Program (EQIP), the 
Farmland Protection Program, and the Conservation Reserve Program 
(CRP). This proposed ``Farm Safety Net Initiative'' includes an 
additional $1 billion in mandatory spending over authorized levels to 
enhance these conservation programs. How much of this new mandatory 
funding proposed would be used to provide technical assistance for 
these programs?
    Answer. The proposed legislation to implement the Farm Safety Net 
Initiative will provide a total of $266 million in Conservation Credit 
Corporation funding over the five year period fiscal years 2001-2005 
for technical assistance costs related to the CRP, WRP and FPP. This 
will support the enrollment of 250,000 acres annually in the WRP and 
will enable the acreage cap for CRP to be raised to 40 million acres. 
Technical assistance needed for WHIP and EQIP are not subject to the 
Section 11 cap and are based on a percentage of each program's total 
funding level. WHIP would require 25 percent of the program level, or 
$12.5 million while EQIP would require 19 percent or $61.75 million.
    Question. Currently Commodity Credit Corporation (CCC) funds for 
administrative support services is capped at the 1995 level of total 
allotments and transfers to Federal and State agencies (the so-called 
Section 11 ``cap''). This limitation affects the amount of dollars used 
for conservation technical assistance. How does this limitation affect 
the conservation technical assistance available for each of the 
mandatory conservation programs?
    Answer. The programs that are affected by the ``Cap''include the 
Wetlands Reserve Program (WRP), the Conservation Reserve Program (CRP), 
and the Farmland Protection Program (FPP). The current limitations of 
the ``Cap'' do not allow for the full reimbursement of all of the 
required technical assistance needed to carry out these programs.
    Question. The President's fiscal year 2001 budget request proposes 
an increase of $86 million, for a total of $652 million in 2001, for 
conservation technical assistance for the President's Clean Water 
Action Plan. What type of activities will this increase support?
    Answer. The Conservation Technical Assistance proposes a $86 
million increase of which $33 million is for activities associated with 
the Clean Water Action Plan. This includes $20 million in accelerated 
technical assistance to animal feeding operations (AFOs) to develop and 
begin implementing comprehensive nutrient management plans and $13 
million for additional environmental monitoring and research work. In 
addition, $11 million will be redirected to AFO technical assistance.
    The balance of the increase that is not associated with the 
President's Clean Water Action Plan will include $28 million for 
additional field-based technical assistance staff to provide needed 
conservation technical assistance to farmers, ranchers, and other land 
users across all states; $15 million for activities that are related to 
global climate change, including soil carbon studies and livestock 
management pilot programs; $5 million to help farmers plan, develop, 
and implement conservation-based biomass production systems; and $5 
million for cooperative agreements with State and county governments to 
develop various geospatial data to help communities better plan and 
assess their zoning and development strategies.
    Question. The Conservation Reserve Program's current acreage 
enrollment is a total of 36.4 million acres. Does the fiscal year 2001 
budget request for NRCS conservation operations propose enough funding 
provided for the needed conservation technical assistance and staff 
years to meet this current ``cap''?
    Answer. Technical assistance for CRP is provided by reimbursements 
from CCC. Therefore, the fiscal year 2001 President's Budget does not 
propose CRP technical assistance funding in the NRCS Conservation 
Operations account. Instead, the Budget proposes to increase the CCC 
reimbursable cap to provide for needed technical assistance.
    Question. The fiscal year 2001 request includes $4 million in 
subsidy budget authority for a new $60 million loan program to provide 
loans to state and local governments for the rehabilitation of aging 
dams built over the past 50 years. (This need exists nationwide, 
including Mississippi.) How many projects will be supported through the 
new program?
    Answer. It is estimated that 10-20 watershed projects per year 
could receive loans at this funding level. Funds would be transferred 
to the Rural Utilities Service (RUS) for servicing these loans. Funds 
for loan subsidies, $4.17 million, would come from the existing 
watershed operations, financial assistance account and expenses 
necessary to administer the loans would be transferred to RUS from the 
existing watershed operations, technical assistance account.

                               FARM LOANS

    Question. Mr. Secretary, in your opening statement, you mention 
that USDA has streamlined its guaranteed loan making regulations in 
order to encourage more private lenders to participate in the program. 
What is the difficulty that private lenders have had with participating 
in the guaranteed loan program?
    Answer. In the past, lenders have been hesitant to participate in 
FSA's guaranteed loan program because of the perception that the 
program was required too much paperwork required.
    Question. What changes did the Department make in the regulations 
that will encourage increased private lender participation?
    Answer. The streamlined guaranteed loan regulations give lenders 
increased flexibility and make the rules more consistent with standard 
procedures in the banking industry. The new regulation reduces 
requirements for loans of $50,000 or less. For these applications, FSA 
requires limited supporting documentation and historical data. The only 
forms needed to apply are an FSA application, balance sheet, and cash 
flow statement.
    We also implemented a Preferred Lender Program (PLP) for lenders 
experienced with the FSA guaranteed loan program. Under PLP, FSA 
approves the lender's system of credit management, and the lender is 
then able to obtain a guarantee under a simplified process tailored to 
each lender's own policies. To apply for an FSA guarantee, the PLP 
lender submits only a one-page signed form and a narrative addressing 
certain credit criteria. The guarantee is automatically approved if FSA 
does not take any action within 14 days of receiving a complete 
application.
    We also increased flexibility in our collateral and servicing 
requirements. We now permit the subordination of direct loan security 
in favor of a guaranteed loan when specific indicators, such as cash 
flow and equity, are at a level that indicates sufficient financial 
strength. In addition, we allow the subordination, exchange, or release 
of collateral when in the borrower's and Government's best interest.

                      COMMODITY CREDIT CORPORATION

    Question. The fiscal year 2001 President's Budget request includes 
an increase of approximately $55 million to continue emergency 
operations to eradicate Mediterranean fruit fly, Citrus Canker, and 
Asian Long-horned beetle infestations. In past fiscal years, the 
agency's contingency funds and Commodity Credit Corporation (CCC) 
funding were used for emergency operations. Why has the Department 
requested this increase in appropriated funds for emergency operations 
for this particular fiscal year instead of using its current authority 
to use CCC funds and APHIS contingency appropriations?
    Answer. An important factor in the decision was the anticipated 
length of time necessary to combat the infestations. In all three 
cases, we used emergency funding sources to begin a multi-year 
eradication effort. We are submitting the budget request and believe it 
is appropriate to obtain Congressional scrutiny through the regular 
appropriations process.
    Question. How will this shift from CCC to direct appropriations 
reduce the agency's ability to meet its ongoing requirements?
    Answer. Our request assumes that adequate funds will be 
appropriated to enable us to meet our ongoing requirements and that the 
continued eradication funds would not come at their expense.
    Question. How much of this increase is going to be used for the 
Mediterranean fruit fly?
    Answer. Of this increase, $23,200,000 will be used for the 
Mediterranean fruit fly program.
    Question. The Citrus Canker?
    Answer. Of this increase, $20,500,000 will be used for Citrus 
Canker.
    Question. The Asian Long-horned beetle infestations?
    Answer. $4,600,000 of this increase will be used for the Asian 
Long-horned beetle infestations.

                            EMERGENCY LOANS

    Question. The President's fiscal year 2001 budget request for 
emergency loans is $150 million. According to the U.S. Department of 
Agriculture's 2001 Budget Summary, this proposal reflects funding to 
accommodate the expansion of eligibility to larger farms through 
Treasury loans, and to close the eligibility gap with the Small 
Business Administration (SBA) emergency loans. What is the current gap 
in eligibility for emergency loans between the USDA and SBA programs?
    Answer. Existing statutes prohibit the SBA from providing disaster 
loans to any agricultural enterprise. The FSA emergency loan program is 
presently limited to family farms. The net result is that larger than 
family farms (those farms which require substantial labor beyond that 
required by the family and exceed the size of a typical farm in the 
community) cannot receive a disaster benefit that smaller farms 
receive, and some agricultural businesses are currently not eligible 
for any emergency loans.
    Question. Does this legislative proposal have a related cost?
    Answer. A major component of the cost of the emergency loan program 
results from subsidizing the difference between the interest rate 
borrower's pay (3.75 percent) and the governments cost of borrowing 
money (6 percent). The legislative proposal would reduce the subsidy 
cost of the emergency loan program because larger than family-size farm 
borrowers would pay an interest rate equal to the Government's cost of 
borrowing money. The subsidy rate for the emergency loan program is 
24.53 percent for fiscal year 2001. Under the proposed legislation, the 
subsidy rate is estimated to be 21.54 percent based on the assumption 
that 30 percent of emergency loan borrowers would be large farmers 
paying 6 percent interest, and 70 percent would be family-size farmers 
eligible to receive the subsidized rate of 3.75 percent.

               RURAL HOUSING DIRECT AND GUARANTEED LOANS

    Question. The President's fiscal year 2001 budget request proposes 
$120 million for direct loans and $200 million in guaranteed loans for 
multi-family housing. The Administration plans to propose an 
elimination of the statutory requirement that 20 percent of the loans 
guaranteed must receive interest assistance. This legislative proposal 
would reduce subsidy cost of this program. What is the cost savings, 
assuming this legislative change is made by the Senate Banking 
Committee?
    Answer. Currently, the cost of the guaranteed loan program is less 
than two cents on the dollar. We are proposing to make the program even 
more cost effective by eliminating the provision that requires us to 
provide subsidies for at least 20 percent of the loans. We feel that 
this provision is unnecessary in most cases because the tenants served 
by this program have incomes high enough to generate sufficient cash 
flow to the borrower to allow repayment of the loan. This provision 
makes the loan much more difficult and costly to administer equitably 
and market across the country. In addition, operation of the program is 
burdensome for banks because while borrowers make monthly payments to 
the banks, RHS pays the interest credit on the loan annually. Should 
Congress revise the Housing Act as proposed, the Section 538 program 
will become budget neutral.
    The cost savings to the Government for the proposed change is 
estimated to be about $3 million for fiscal year 2001.

              EMERGENCY ASSISTANCE TO MIGRANT FARM WORKERS

    Question. For fiscal year 2001, the President's proposed budget 
includes $5 million for emergency assistance to migrant farm workers. 
Is this a new program?
    Answer. This is not a new program. It is a continuation of the 
emergency grants to assist low-income migrant and seasonal farm workers 
that the Congress funded in the fiscal year 1999 spring supplemental 
appropriations bill.
    Question. If yes, how would the program be implemented?
    Answer. This program will be implemented through a Notice of 
Funding Availability (NOFA) process.
    Question. What type of emergency assistance would be provided?
    Answer. This money will help farmworkers who face natural disaster 
or economic hardships by providing emergency services to low income 
migrant and seasonal farm workers. The types of services could include 
assistance directly to the farm worker such as meeting rent or mortgage 
payments, utility bills, child care, transportation, school supplies, 
food, repair or rehabilitation of farm worker housing. In addition, 
facilities related to farm worker housing such as an infirmary for 
emergency care, a child care facility, or construction of new farm 
worker housing units could also be provided.
    Question. How does this program differ from the emergency grants to 
assist low-income migrant and seasonal farm workers that the Congress 
funded for $20,000,000 in the fiscal year 1999 spring supplemental 
appropriations bill?
    Answer. This program is a continuation of the assistance from the 
fiscal year 1999 supplemental appropriations bill.
    Question. From fiscal year 2000 funds made available for the Fund 
for Rural America for fiscal year 2000, $2.5 million was allocated for 
farm labor housing projects at three or four high priority areas. What 
are the geographic locations of these priority areas?
    Answer. The three high priority areas are the States of California, 
Florida, and Washington.
    Question. The budget proposes funding to maintain Farm Service 
Agency (FSA) federal and permanent non-federal staffing levels in 
fiscal year 2001 at the fiscal year 2000 levels, but to reduce 
temporary non-federal staff by 622 staff year positions due to the 
decreased workload requirements of the agency to carry out programs for 
crop and market loss assistance. Will the FSA staffing levels proposed 
in the fiscal year 2001 budget be adequate to support the 
Administration's ``Farm Safety Net Initiative''?
    Answer. FSA fiscal year 2001 non-federal staff year levels are 
based on performing workload activities similar to fiscal year 2000, 
with the exception of assumed decreases for crop and market loss 
assistance programs and somewhat lower loan deficiency payments. These 
activities account for the proposed decrease of 622 temporary FTE's. 
Staffing impacts associated with the proposed ``Farm Safety Net 
Initiative'' have not been determined and are not included in the 
proposed fiscal year 2001 staffing levels.
    Question. The budget also indicates that the Administration will 
propose legislation to convert all non-federal Farm Service Agency 
personnel to Federal employee status in 2000. Will this proposal have 
any impact on the agency's funding requirements or affect the staffing 
levels presented in the fiscal year 2001 budget?
    Answer. The conversion of all non-Federal county office employees 
to Federal status in fiscal year 2000 will allow greater accountability 
of all employees under one personnel system and improve efficiency of 
Agency operations. It is not anticipated that the conversion will have 
a significant affect on agency funding needs or staffing levels.
    Question. In November 1999 the FSA had approximately 5,300 to 5,700 
temporary employees on board to help with the delivery of payments to 
farmers. FSA knew at the start of the fiscal year that it could not 
keep this very high level of temporary employees if additional funds 
were not appropriated. The Congress appropriated an additional $56 
million for basic program delivery needs, not for temporary employees. 
Did the agency have to reduce the number of temporary employees after 
November 1999?
    Answer. Although we are not certain what is meant by ``basic 
program needs'', we cannot meet those needs effectively without 
temporary employees. The FSA used the $56 million to retain about 665 
permanent county office employees who were originally budgeted for 
separation in order to meet basic program needs and the balance of the 
funding was used to retain the temporaries needed to deal with 
extremely high volumes of ongoing workload, including record loan 
deficiency payments. We consider that to be basic program needs because 
long delays in getting payments to producers were avoided. In order to 
achieve timely delivery of programs and handle ongoing producer 
requests, FSA will likely spend all funding available for temporary 
staff years, except for staff years needed to operate county 
committees, in the first 6 months of the fiscal year. We will then 
begin releasing temporaries in late February and March.
    Question. If yes, by how many?
    Answer. During the months of February and March, FSA anticipates 
the need to reduce nearly all of the temporary employees except for 
temporary staff years associated with county committees.
    Question. If a reduction occurred, how did this affect the 
timeliness of the delivery of payments to farmers?
    Answer. A reduction did not occur in the numbers of temporaries 
after November because Congress appropriated $56 million in CCC funds 
for use by FSA. We used this funding as previously discussed and 
``front-ended'' the use of temporaries to keep current on all workload 
for as long as we can. We have had no producer or congressional 
complaints about payment delays, as we did last year, as a result of 
this policy.
    Question. If a reduction did not occur, what was the time line for 
the delivery of ad hoc disaster payments to farmers?
    Answer. We anticipate some difficulty in completing timely sign-ups 
for some of the disaster assistance programs and an increasing lag in 
providing other payments to producers.
    Question. Which payments have not been delivered to farmers to 
date?
    Answer. By using most available funding for temporaries during the 
first 6 months of the fiscal year, the Agency has remained current in 
most workload and late-payment interest being paid to producers has 
dropped considerably from fiscal year 1999.

                            INVASIVE SPECIES

    Question. The Department has been addressing problems caused by 
invasive plant pests and pest species. What has triggered the need to 
increase and strengthen the Department's efforts in this area, as 
reflected by the 33 percent increase in funding (from $396 to $528 
million) presented to this subcommittee?
    Answer. Two events have triggered the need to increase the USDA 
request. First, in February 1999, an Executive Order charged the USDA 
and 20 other Federal agencies with coordinating a strategy to combat 
non-native species which pose a threat to agricultural and natural 
resources. Second, the on-going acceleration of trade and 
transportation systems to meet the demands of the global marketplace 
reflects the Department's request for these funds. Unfortunately, these 
organisms or invasive species do not honor traditional geographic 
boundaries. Indeed, the pests are one of the by-products of global 
trade. Without the requested funding, easy opportunities will continue 
for unwanted pests and non-native organisms. A total of $561 million, 
an increase of $136 million or 32 percent, is proposed to exclude, 
detect, and eradicate incipient populations and manage established 
species. However, the USDA portion of this request represents only 
$15.4 million. The Department's Animal Plant Health and Inspection 
Service (APHIS) is the largest stakeholder for this Initiative. The 
requested increase will continue to strengthen the Department's on-
going programs which have been addressing problems caused by invasive 
plant and pest species. The APHIS fiscal year 2001 request is $8.8 
million (including $4.45 million in prevention, $3.95 million for 
detection, rapid response, and control, and $400,000 to promote public 
awareness). In addition, increases of $1.1 million are proposed to 
support research efforts at Agricultural Research Service (ARS) labs, 
universities and with other cooperators, $1.5 million for a Cooperative 
State Research, Education, and Extension Service (CSREES), and $4 
million for the Forest Service to expand control, restoration, and 
monitoring for invasive species within the National Forests.

                             BIOTECHNOLOGY

    Question. Secretary Glickman, would you please discuss the 
significance of biotechnology to the future of American agriculture.
    Answer. Biotechnology has enormous potential to benefit American 
farmers, to help us address difficult environmental problems, and 
better enable us to help combat hunger worldwide and improve nutrition. 
Biotechnology is only one of the tools we are using in approaching 
these problems, but it may be our most important one. Biotechnology-
derived crops currently or potentially may offer farmers savings of 
time and energy, be more economical to produce, enable better disease 
and pest control, reduce pesticide use, decrease soil erosion, increase 
crop yields, improve nutritional content, and use less water. In 
addition, new value-added crop varieties with new and desirable output 
traits may provide important new sources of income for producers.
    U.S. and world agricultural markets are rapidly evolving and 
diversifying. The development of new differentiated markets will offer 
new opportunities and challenges throughout the agricultural production 
and marketing chain. With the high technology farming and identity 
preservation tools available to American farmers, they should be 
uniquely able to profit from these innovations. Pharmaceutical, 
nutraceutical, and other specialty crops under development may increase 
the unit value of agricultural production. It will, however, be vital 
to ensure that farmers themselves are able to realize a significant 
portion of this added value.
    Over the past several growing seasons, U.S. farmers have rapidly 
adopted the new technologies, so that, according to one recent study by 
the International Service for the Acquisition of Agri-biotech 
Applications, over 70 percent of the world's roughly 100 million acres 
of transgenic crops were planted in the U.S. in 1999. However, 
ultimately our ability to realize these potentials depends on 
maintaining and enhancing public confidence in our regulatory system 
and in resolution of the current problems in international acceptance 
of our new biotechnology products, particularly in Europe. Market 
uncertainties and an increased level of domestic concern have 
complicated seed purchase calculations for farmers. Issues of concern, 
scientific and otherwise, need to be addressed in a fuller public 
dialogue before we can fully benefit from appropriate uses of 
biotechnology in agriculture.
    Question. Please tell us what significance, if any, the new 
international agreement on genetically modified organisms would have 
and what are its shortcomings from the United States' point of view.
    Answer. The Biosafety Protocol to the United Nations
    Convention on Biological Diversity (CBD) will provide a regulatory 
framework for international trade in bioengineered products known as 
living modified organisms (LMOs). The Protocol is an environmental 
agreement aimed at protecting biodiversity, and was adopted by more 
than 130 countries on January 29, 2000 in Montreal, Canada. The 
Protocol has to be ratified by 50 countries before it can go into 
effect, taking from 2-3 years. U.S. is not a party to the CBD, and 
therefore cannot ratify the Protocol. However the U.S. exporters will 
be called upon to conduct trade of LMOs in a manner consistent with the 
objective of the Protocol.
    The Protocol preserves the countries' rights under other 
international agreements, including the World Trade Organization (WTO). 
It requires that regulatory decisions regarding biodiversity be based 
on scientific risk assessments. Countries will not be able to use 
unfounded concerns about biotechnology as the basis for keeping 
products out of the country. If an exporting country challenges the 
decision of an importing country to not accept a bio-engineered 
product, it will turn to WTO for assistance. WTO establishes a 
biosafety clearinghouse to help countries exchange scientific, 
technical, environmental and legal information about LMOs produced 
through the use of biotechnology. The agreement requires governments to 
provide the clearinghouse with information on the final decisions on 
the domestic use of an LMO commodity within 15 days of deciding on a 
course of action.
    Because the Protocol is designed primarily to protect the 
environment from the potential effects of introducing an LMO, the most 
immediate impact on agricultural trade will be for seeds exported for 
planting. Bioengineered seeds will be part of an Advanced Informed 
Agreement procedure where importing country must decide whether to 
approve the import of a biotech seed. If the seeds are approved they 
require documentation specifying their identity and traits.
    The Protocol will not alter the status quo for bulk commodities 
containing a biotech component. These commodities will not have to be 
segregated. Many countries require the approval of new biotech crop 
varieties under their national laws and regulations. The Protocol, 
however, does not mandate or encourage that countries take such action 
nor does it mandate any type of notice and consent procedure for 
commodities. Upon the enforcement of the protocol, documentation for 
shipments of bulk commodities will have to state that the shipment 
``may contain'' LMOs and that the contents of the shipment are not 
intended for planting. In addition, the Protocol establishes a two-year 
process under which further documentation requirements will be 
considered. The scope of the Protocol does not cover food safety. 
Processed products are not covered by the Protocol. As a non-Party to 
the CBD, our ability to directly influence the outcome of the 
negotiations was somewhat limited. Thus, we were unable to correct a 
series of more minor drafting flaws in the text. Despite our 
disadvantaged position, however, we were able to achieve all of our 
major objectives in the negotiation.

                             BIOTECHNOLOGY

    Question. What is the Department doing to address the dissension 
among agriculture groups, the concerns of the food industry, and 
opposition from activist groups regarding genetically modified 
organisms and the effect this controversy is having on U.S. farmers?
    Answer. With the current level of controversy and concern, it is 
very important that all the relevant Federal departments, including 
USDA, provide accurate information to the public regarding 
biotechnology. USDA has developed a web site on biotechnology to 
address key questions for the public and we have formed an internal 
Biotechnology Communications Committee to ensure that our various 
agencies provide consistent messages on topics that arise. This group 
is also working with the communications offices at FDA and EPA to 
improve interagency coordination in public outreach. A key 
responsibility we have as a Department is to defend the integrity of 
our regulatory processes and decisions. This is a role our regulatory 
and policy officials perform in public meetings throughout the U.S. as 
well as in bilateral and multilateral fora. It is vital for our 
continued credibility that we continue in this role, and are seen as 
balanced and impartial.
    There has been increased media attention to various potential risks 
posed by biotechnology and there have been questions raised by some 
about the adequacy of the existing Federal regulatory system for 
biotechnology products. It is to be expected that, as for any new 
technology, questions will continue to arise. To ensure that we can 
address, in an authoritative manner, any scientific issues that may 
arise, I have asked the National Research Council of the National 
Academy of Sciences to set up a Standing Committee on Biotechnology. 
The membership on this committee and its charge will be announced 
shortly. The first task of the Standing Committee will be to examine 
the risk assessment process and the assumptions underlying it as used 
by USDA's Animal and Plant Health Inspection Service in its safety 
reviews of biotechnology products for agricultural use. The Standing 
Committee will in that study consider whether we are addressing all of 
the relevant scientific issues appropriately, and identify any areas 
where USDA might improve its regulatory oversight based on the most 
recent scientific knowledge. It will also consider how most 
appropriately to monitor biotechnology products that have been approved 
for commercial use.
    Question. What do you think the role of USDA should be in 
protecting the interests of U.S. farmers in this matter?
    Answer. A variety of social and economic issues have been raised by 
critics either of the technology itself or of some of its key 
agribusiness proponents. A number of these complex questions need to be 
aired in a balanced public forum and the implications raised carefully 
considered, in order both to shed light on the public debate and to 
provide me with important recommendations to help guide future USDA 
activities. On February 4, 2000, USDA announced the membership on our 
new Advisory Committee on Agricultural Biotechnology which will address 
these issues. The committee will meet for the first time on March 29-
30, 2000 in Washington, DC. Additionally, we believe that it is 
essential that there be accurate information available about the 
economic impacts on farmers who use biotechnology-derived crops, and on 
the environmental effects of their use in terms of inputs such as 
pesticides. We are increasing our data-gathering efforts in these 
areas.
    The increased controversy surrounding export concerns have led a 
few food processors and shippers to shy away from biotechnology-derived 
materials. This has added confusion in the marketplace, as there are 
increasing demands by some end-users for testing of commodity shipments 
for the presence of biotechnology-derived materials. There are no 
common standards for such testing, nor are there common requirements 
from end-users, but there are an increasing number of companies 
offering a variety of testing services. This is an arena ripe for 
unsubstantiated claims and abuse, which can ultimately impact 
producers, shippers, and processors. USDA is setting up, under the 
auspices of its Grain Inspection, Packers, and Stockyards 
Administration, a reference laboratory which will evaluate and validate 
the testing claims of the various testing kits and services available 
in order to minimize these impacts. We are also considering whether 
there are other appropriate activities we might undertake to help 
address current marketplace uncertainties.

                       ADMINISTRATIVE CONVERGENCE

    Question. The fiscal year 2000 Appropriations Act prohibits funding 
for the establishment of a Support Services Bureau, as proposed by the 
President last year, or a similar entity to converge the administrative 
functions of the Farm Service Agency, the Natural Resources 
Conservation Service, and Rural Development agencies. I find no mention 
of this in the fiscal 2001 budget. Does the Department plan to proceed 
with any convergence of the administrative functions of these agencies 
in fiscal years 2000 or 2001?
    Answer. The fiscal year 2001 President's budget proposes the 
elimination of section 750 of the General Provisions, which prohibited 
the establishment of the Support Services Bureau (SSB). Proceeding with 
the consolidation of the administrative and information technology 
staffs of the county-based agencies is essential to gain the 
efficiencies and management improvements that are needed to provide 
one-stop quality service to our customers.
    Currently, each of the three Service Center agencies (the Farm 
Service Agency, the Natural Resources Conservation Service, and Rural 
Development) retains separate administrative structures. This 
arrangement defeats our goal of providing seamless, quality service to 
our farmers and rural residents as efficiently and effectively as 
possible.
    The SSB organization would converge three redundant, overlapping 
agency bureaucracies into one cost-effective, comprehensive 
administrative services operation. The scope of this convergence would 
be limited to the administrative areas of human resources management, 
financial management, management services, information technology, and 
civil rights. For example, the SSB organization will eliminate two-
thirds of these agencies' existing administrative structures and will 
immediately consolidate 44 separate administrative divisions in these 
agencies down to 10. The SSB will not divert program resources to 
administrative activities; in fact, it is needed because USDA agencies 
are being asked to provide improved program delivery services with less 
funding and staff. The SSB is designed to allow agencies to operate 
efficiently at lower levels of administrative staff and funding.
    As we have continued our related efforts to reengineer Service 
Center business practices and develop a common computing environment, 
the need for the SSB has only become more urgent. We are committed to 
streamlining these functions and I urge the Congress to remove the 
restrictive language that prevents the Department from moving this 
initiative forward.

                      BIOBASED PRODUCTS/BIOENERGY

    Question. The fiscal year 2001 budget proposes a 56 percent 
increase in USDA spending for the development of biobased products and 
bioenergy in support of the President's goal of tripling U.S. use of 
biobased products and bioenergy by 2010. What is the significance of 
this proposed investment to U.S. farmers and rural communities?
    Answer. We expect that this investment will have a significant 
strengthening effect on farm product prices and will enhance the pace 
of job formation and income generation in rural communities. We have 
not, as yet, conducted analyses that adequately quantify either the 
likely increases in farm and forest product prices and farm income 
generated by the proposed increases in biomass activities or the 
effects on rural job formation and income generation. One of the 
pressing needs for which we have requested additional funding for the 
Office of Energy Policy and New Uses (OEPNU) in the 2001 budget is to 
undertake such analyses.
    Based on very limited analysis, however, we have determined the 
projected farm gate price to be paid farmers for switchgrass used for 
co-firing electric power generation. A payment to farmers of $40 per 
ton would be required to bid 42 million acres away from other land uses 
(crop, pasture, and CRP land) in order to produce 188 million tons of 
switchgrass in 2008. That would be used to generate 43,371 megawatts of 
electric power. Most of the switchgrass would be produced in the 
Southeastern and Midwestern states. Based on the analysis, major crop 
prices rise, as a result of bidding land into switchgrass production. 
In 2008, corn prices are projected to be 24 cents per bushel higher, 
soybean prices 61 cents per bushel higher, wheat prices 49 cents per 
bushel higher, and rice prices $1 per hundredweight higher, than what 
prices would have been without the switchgrass production. Net farm 
income in 2008 is projected to be $5.5 billion higher than without the 
switchgrass production.
    We believe it is very important to understand the likely effects on 
farm and forest product prices and on farm income as a result of the 
President's biobased products and biomass for energy initiative. We 
believe, as well, that it will be important to better understand the 
extent to which this initiative will stimulate new business 
development, employment growth, and income generation in rural 
communities, analyses we intend to undertake with the requested 
funding.
    We also intend to undertake analysis of market potential that will 
identify those biobased products and crops that represent high 
potential markets. In this way it will be possible to focus product 
research, development, and demonstration efforts in ways that deliver 
the maximum payoff for taxpayer dollars invested.
    We believe the requested 2001 funding will enable us to both 
identify high potential markets and also to develop a much better 
understanding of the benefit of this initiative to producers, and rural 
America.

                                 TRADE

    Question. What efforts are being made by the Department to improve 
agricultural trade and how does USDA's fiscal year 2001 budget request 
expand and enhance economic and trade opportunities for U.S. 
agricultural producers?
    Answer. The Department has taken a range of actions to improve our 
trade performance over the past several years. We have undertaken a 
significant expansion in the programming of CCC export credit 
guarantees in response to the financial crisis in Asia and elsewhere. 
We have increased our food aid activities substantially. Last year, 
U.S. food aid programming increased to over 9 million metric tons, more 
than the double the previous year's level. We will again be providing a 
substantial level of foreign food assistance this year, including 
nearly 4 million metric tons under the authority of section 416(b).
    We continue our efforts to improve access to overseas markets 
through a vigorous trade policy agenda. Last year, the United States 
reached two significant trade agreements with China that will improve 
access to that growing market. We also continue our preparations for 
the new round of multilateral agricultural trade negotiations.
    The 2001 budget provides increased funding for the Foreign 
Agricultural Service which will support an expansion in some of its 
most important activities related to trade, including its market access 
compliance and negotiation efforts and overseas trade offices.
    Again this year, the budget contains proposed legislation which 
would authorize the Secretary of Agriculture to reallocate unobligated 
EEP funds to carry out other export related activities, including 
foreign food assistance and overseas market development.
    Question. What have been our major successes to expand and open 
markets for U.S. agricultural products?
    Answer. The Department has had numerous successes during the past 
year. A summary of some of the most significant will be submitted for 
the record.
    [The information follows:]
    recent progress in the opening and expansion of overseas markets
    Asia.--The United States and China signed an Agreement on U.S.-
China Agricultural Cooperation in April 1999, an unprecedented step 
forward in U.S.-China agricultural trade relations. Once fully 
implemented, this agreement should result in an estimated $900-million 
increase in annual U.S. agricultural exports to China.
    In December 1999, U.S. and Indian negotiators reached agreement on 
India's phase-out of quantitative import restrictions on a wide range 
of food and agricultural products in accord with an April 1999 WTO 
Dispute Settlement Resolution. Elimination of these restrictions, which 
are to be phased out by April 1, 2001, has the potential to increase 
U.S. food and agricultural exports by as much as $200 million a year.
    The Japanese Ministry of Agriculture, Forestry, and Fisheries 
(MAFF) officially lifted its ban on unapproved varieties of tomatoes 
(primarily roma and cherry varieties) from the United States and Canada 
in September 1999. The sales potential for these varieties in Japan is 
estimated at up to $10 million a year. Also last year, Japan's Ministry 
of Construction (MOC) agreed to allow construction of three-story wood-
frame apartment buildings in its major urban areas for the first time, 
a historic change to its building code that is estimated to increase 
U.S. wood export opportunities by $150 million annually.
    Sponsorship by the Foreign Agricultural Service (FAS) of purchasing 
officials from 85 South Korean food importing companies at the May 1999 
Food Marketing Institute Show in Chicago, Illinois paid handsome 
dividends. Of those in attendance, 49 South Korean companies made 
purchases totaling $42 million in U.S. sales.
    Europe and Newly Independent States.--After 5 years of 
negotiations, the United States and the EU signed a Veterinary 
Equivalency Agreement on July 20, 1999, to facilitate trade in animal 
and animal products. The agreement covered approximately 40 product 
areas valued at $3.0 billion, combined.
    In 1999, FAS negotiators helped to conclude important bilateral 
agreements that paved the way for Estonia and the Republic of Georgia 
to join the WTO as full members. U.S. agricultural exports to the two 
countries are expected to grow by approximately $3-4 million annually 
following their accession to the WTO.
    Market Access Program (MAP) and Foreign Market Development (FMD) 
funded activities by the American Hardwood Export Council earned the 
organization an award from a United Kingdom Government agency promoting 
business sponsorship of the arts. This and a wide range of other 
creative activities promoting US hardwood, resulted in increasing press 
coverage and market profile in Europe, the leading overseas market for 
U.S. hardwood products, with annual exports valued at over $600 
million.
    In a major effort to assist Russia through its acute food shortages 
and economic crisis, the United States supplied the country with Public 
Law 480, Title I credit financing to purchase U.S. corn, soybean meal, 
soybeans, beef, rice, and poultry. Proceeds from the sale of the 
commodities allowed the Russian Government to make overdue payments to 
pensioners. Other commodities, including Alaskan salmon, rice, lentils 
and peas, dried beans, soybeans, and vegetable oil were provided as 
food donations to vulnerable populations throughout Russia through 
various Private Voluntary Organizations.
    In fiscal year 1999, the CCC Supplier Credit Guarantee Program was 
used for the first time by importers in the Baltic Region, the Republic 
of Georgia, and Turkey. Program coverage for the Baltic Region included 
roughly $940,000 worth of meat products. Coverage for the Republic of 
Georgia and Turkey included about $2.9 million worth of U.S. poultry 
products and $57,000 in U.S. hides and skins sales.
    The United States and several countries within the EU worked 
jointly in 1999 to apply biotechnology and other tools to improve crops 
and food safety, identify costly plant pathogens that limit trade, 
reduce production and post-harvest costs, monitor genetic diversity in 
economically and environmentally important forest species, and improve 
management strategies to prevent environmental contamination from 
agriculture. FAS's role in the effort helped bring together U.S. 
scientists from universities and USDA agencies with the EU 
counterparts.
    Western Hemisphere.--The Southern U.S. Trade Association (SUSTA), a 
regional FAS cooperator, was honored with the 1999 Produce Business 
Marketing Excellence Award for its ``Go South!'' marketing campaign. 
Now in its third year, the MAP-funded multi-year marketing campaign 
produced outstanding results, reaching approximately 20 million 
consumers through its advertisements, which were aimed at increasing 
consumer awareness, and increasing commodity sales an average of 106 
percent in fiscal year 1999.
    Foreign Market Development Program funds were used by the USA Rice 
Federation to sponsor one Ecuadorian and two Colombian rice trade 
delegations to the United States to familiarize them with the U.S. rice 
industry. This resulted in several Ecuadorian and Colombian importers 
purchasing U.S. rice for the first time, pushing rice sales to the two 
countries to $28 million and $74 million, respectively.
    In response to Hurricane Mitch, CCC donated 200,000 metric tons of 
wheat valued at $31 million to the Governments of Honduras, Nicaragua, 
El Salvador, and Guatemala in fiscal year 1999 under the authority of 
section 416(b). An additional 45,000 metric tons of corn valued at $6 
million also was donated to the region under the same program.
    Africa and Middle East.--The Cochran Fellowship Program developed a 
U.S.-Sub Saharan Africa Workshop on Codex Alimentarius and the WTO, 
involving 37 participants from 17 African countries. The training 
improved participants' understanding of the processes at work in the 
WTO and the international standard setting bodies. Most importantly, 
the discussions pointed out areas of shared interests, including mutual 
concerns in the next round of multilateral negotiations. The 
participants agreed that there are significant areas in which the 
United States and Sub-Saharan African countries can cooperate in 
international trade and the work of the international standard setting 
bodies.
    FAS staff implemented many first-time Food for Progress programs in 
Sub-Saharan Africa in 1999. Sub-Saharan African countries benefitting 
from the programs included South Africa, Zimbabwe, Swaziland, Togo, 
Cote d'Ivoire, and Equatorial Guinea.
    Commodities donated included: rice, wheat, wheat flour, vegetable 
oil, and pinto beans. The proceeds from the sale of these commodities 
are being used to address basic infrastructure development needs in 
these countries.

                                 TRADE

    Question. What have been the major barriers?
    Answer. There are a number of different types of barriers.
    First, while U.S. agricultural exports have been trending down, so 
has global trade in agricultural commodities. Global demand has been 
weak due to the lingering effects of the 1998 Asian financial crisis 
and higher production of basic commodities worldwide. This has resulted 
in soft world market prices for many basic agricultural commodities and 
foodstuffs. Additionally, the U.S. dollar remained strong during fiscal 
year 1999, making U.S. products more expensive relative to competitor 
countries' products.
    Second, our major competitors--the European Union (EU) and the 
Cairns Group--have been outspending the United States in both public 
sector and private sector market promotion funding by a wide margin. 
Market promotion activities were not disciplined in the Uruguay Round. 
Our competitors were quick to recognize this, increasing spending by 35 
percent in the past three years. Also, direct export subsidies, while 
disciplined under the Uruguay Round, are still at formidable.
    Third, the commodity composition of our competitors' exports are 
more closely aligned with the fastest growing sector of global import 
demand--namely high value products. U.S. high value product exports 
have performed well over the past two decades and have grown in 
importance, but they still represent a smaller share of our overall 
agricultural exports than our competitors. This is especially true of 
our top competitor, the European Union, which is already the world's 
leading high value product exporter and could, as early as this year, 
overtake the U.S. as the world's leading agricultural exporter.

                              CIVIL RIGHTS

    Question. This Committee has provided increased resources over the 
past couple of years to strengthen the Department's civil rights 
efforts and to assure the timely handling of civil rights 
investigations and complaints. What progress has the Department made in 
this area and what additional resources are requested in the fiscal 
year 2001 Budget (by agency and activity as compared to fiscal year 
2000 to enhance these efforts?)
    Answer. Ensuring that all customers and employees are treated 
fairly and equitably with dignity and respect has been one of my top 
priorities. Your support has been critical to the Department's progress 
in aggressively addressing civil rights concerns. We have taken several 
steps toward turning USDA into a civil rights leader in the federal 
government.
    We have nearly eliminated the backlog of more than 1,000 old 
program civil rights complaints. We are providing the support needed to 
resolve the cases under the Pigford v. Glickman class action lawsuit. 
As a result, the adjudicator has made decisions in about half of the 
cases filed to date. We have also made changes to our internal 
processes for handling civil rights complaints, instituted universal 
civil rights training for USDA employees at all levels, and stepped up 
monitoring and review of civil rights enforcement both in programs and 
employment throughout the Department. All agency heads were evaluated 
on civil rights performance during fiscal year 1999, and there was 
improved performance in all but two agencies. Over 90 disciplinary 
actions, including removal, have been taken against employees for 
discrimination or misconduct related to civil rights. Consistent with 
the recommendation of our Civil Rights Action Team, the Office of Civil 
Rights has been reorganized into separate units with distinct 
responsibilities for overseeing the timely and effective resolution of 
program and employment discrimination complaints. USDA also launched a 
new tracking system for processing program discrimination complaints in 
1999.
    Departmental Administration has overall responsibility for the 
civil rights program at USDA and the President's fiscal year 2001 
budget request for DA contains several increases related to civil 
rights. An increase of $1 million is requested to enhance the use of 
Alternative Dispute Resolution (ADR) for resolving employee and program 
complaints. ADR can reduce the number of complaints and accelerate the 
resolution of many cases. We believe the program will resolve workplace 
and programmatic conflicts in less time and with less financial and 
human cost. The budget request also includes a $500,000 increase for a 
pilot program in small rural business education and development. This 
effort will support traditionally under-represented groups in 
establishing viable commercial operations and guide them in identifying 
new markets for agricultural products. A $7 million increase is 
requested for the Outreach for Socially Disadvantaged Farmers Program 
to provide education and training needed to help these farmers succeed. 
In the coming weeks, I will be releasing a progress report on civil 
rights that provides additional details on efforts throughout the 
Department to address these issues.

                       AGRICULTURAL CONCENTRATION

    Question. Increased funding has been provided over the past few 
years to support the implementation of the recommendations of the 
Secretary's Advisory Committee on Agriculture Concentration. Would you 
please give the Committee a report on the status of implementing each 
of the recommendations made by the Advisory Committee.
    Answer. The Secretary's Advisory Committee on Agricultural 
Concentration made a large number of recommendations in four broad 
areas: antitrust and regulation, a market-based disclosure policy, 
vertical linkages, and cooperatives and producer bargaining. USDA's 
Grain Inspection, Packers and Stockyards Administration (GIPSA) has 
undertaken several initiatives that address the Committee's 
recommendations; our response to each of these broad areas is listed 
below.
    For Anti-Trust and Regulatory actions, GIPSA increased staffing to 
address competition, due to its recent reorganization. In this way it 
added economic, statistical, and legal expertise to pursue prospective 
anti-competitive practices. It also establish a Memorandum of 
Understanding between USDA, the Department of Justice and the Federal 
Trade Commission so that greater cooperation is achieved in the areas 
of anti-competive packer and grain practices.
    For Market Based Disclosure the Congress passed, legislation 
requiring mandatory price reporting of livestock. AMS recently proposed 
a rule to implement this legislation.
    For Vertical Linkage actions, GIPSA conducted a broad investigation 
of fed-cattle in Texas and follwed this up with a peer review to assure 
that GIPSA's analysis was sound. USDA has also worked with the 
Department of Justice (DOJ) to investigate the proposed acquisitions by 
Smithfield Foods, Inc. of Murphy Family Farms and Tyson's pork 
operations. While DOJ allowed this merger, USDA is ready to pursue 
other troublesome mergers in the future.
    For Cooperative and Producer Bargaining Agreements, GIPSA is now 
contracting in a cooperative fashion with researchers at universities 
across the Nation to address issues of competition in the poultry 
markets. Also GIPSA has conducted major investigations to determine 
whether contract poultry grower settlements are fair and non-
discriminatory.
    Question. What additional funding is requested for fiscal year 2001 
to continue the implementation of these recommendations?
    Answer. GIPSA has asked for an increase of $1.2 million to develop 
econometric models to help identify collusion, predatory behavior, 
price leadership, market allocation, failure to compete, price and non-
price discrimination and other restraints in the procurement of cattle, 
hogs and lambs by meatpackers.
    An increase of $800,000 is requested to examine the competitive 
structure of the poultry industry. This project will assess the 
characteristics of markets for poultry grower services. Over 95 percent 
of broilers are grown under contract so there is no market for the 
birds. But there is a market, with supply and demand functions, for 
grower services. We know that integrators offer contracts for grower 
services and we know the general terms of those contracts. We also know 
that many growers complain about being unable to negotiate the terms of 
their contract, about insufficient information about contract terms, 
about early termination of contractual arrangements, and about contract 
settlements. However, we know very little about the supply of grower 
services at various levels of compensation; grower costs and returns; 
why integrators offer contracts in some areas but not others; how 
integrators compete with each other for growers; how contract terms 
vary with the number of competing integrators in an area; and other 
information relating to the structure and competitive behavior of this 
industry.
    An increase of $1.3 million is requested for Rapid Response Teams 
to address major investigative issues of immediate and often National 
concern regarding anti-competitive, financial and trade practice 
issues.
    An increase of $350,000 is requested for an Information Staff. In 
addition, GIPSA is required to collect, compile, and publish a monthly 
report . Recent events strongly indicate that hog and chicken 
producers, as well as others in the farm community, need to become 
better informed about GIPSA's role in the marketplace. Grain farmers, 
and the grain industry as a whole, are also going through a difficult 
period. Some groups, especially small farmers and socially-
disadvantaged farmers, lack information to successfully deal with the 
increasingly complex business of growing and selling farm products.
    Also, an increase of $400,000 is requested to establish a swine 
contract library as required by the Livestock Manadatory Reporting Act 
1999.

                              FARM SAFETY

    Question. I note that the fiscal year 2001 budget proposes a new $5 
million youth farm safety education and certification program under the 
Cooperative State Research, Education, and Extension Service. What is 
the need for this program and why can't the activities proposed be 
supported through the existing farm safety program?
    Answer. The Fair Labor Standards Act and selected state laws allow 
child agriculture workers to work at younger ages, for longer hours, 
and in more hazardous occupations than in other industries. Minors 16 
and 17 years of age are exempt from prohibitions on work in hazardous 
occupations identified by the Secretary of Labor, and 14 and 15 year 
old children are exempt from the hazardous occupation restriction if 
they possess a valid certificate documenting completion of safety 
training for tractor operation or other machine operation. This new 
Youth Farm Safety Education and Certification Initiative would 
establish a USDA-administered competitive grants program to States to 
provide formal safety training and certification targeted to youth age 
16-17 years. These grants would also be used for related purposes such 
as curriculum improvement for current safety programs and development 
of new safety education curricula for other agricultural occupations as 
needed. The initiative would provide funds to land-grant institutions 
in order to contract with qualified private businesses and community 
and youth organizations to deliver education and training, such as 4-H, 
Future Farmers of America, and other similar organizations that would 
provide safety education that prepares youth for safety certification.
    This initiative is intended to augment state and local vocational 
agriculture school funds for safety training by agricultural employers 
and other private businesses, and is intended to enhance the safety of 
young farm workers, while maintaining their employability in 
agriculture and minimizing disruptions to farm employers' access to 
youth workers.
    Question. How was the rescission of fiscal year 2000 funding for 
farm safety applied, i.e., what reduction was made in funding for the 
AgrAbility program versus the farm safety formula program.
    Answer. The rescission was applied proportionately against the 
formula portion and AgrAbility. The revised appropriation for Farm 
Safety in fiscal year 2000 is $3,400,430. This appropriated amount is 
split between formula funds and AgrAbility.
    [The information follows:]

Formula Funds...........................................        $803,352
AgrAbility..............................................       2,597,078


    Question. Does the fiscal year 2001 budget continue funding for 
AgrAbility?
    Answer. Funding for AgrAbility is not proposed in the fiscal year 
2001 budget.
    Question. If not, why?
    Answer. This action is consistent with the Administration's belief 
that the most effective use of taxpayer dollars is through 
competitively-awarded, peer reviewed grants. Alternate funding from 
formula programs, State and local governments, and private sources 
could be used to support aspects of this program deemed to be of high 
priority at State and/or local levels.

                          LIVESTOCK REPORTING

    Question. The fiscal year 2000 Consolidated Appropriations Act made 
available $4.7 million which the Department indicated was necessary to 
implement the Livestock Mandatory Reporting Act of 1999 (Title X of the 
fiscal year 2000 Agricultural Appropriations Act). The Committee 
requested it but did not receive a detailed justification on why this 
level of funding was required and just how these funds would be spent. 
Would you please provide that for the record?
    Answer. Additional staff are required to analyze and edit large 
amounts of new data that has never been available through voluntary 
reporting. Also, a compliance unit must be established to audit packer 
records to insure that packers are accurately reporting the required 
information. Time sensitive information requires electronic 
transmission of a large volume of records on a daily basis during 
periods of short duration. A computerized process must be developed to 
manage the data. Outreach programs to educate producers about the new 
information will increase travel, in addition to travel associated with 
managing the program. I will provide for the record a detailed 
accounting of how these funds would be spent.
    [The information follows:]

                        [In millions of dollars]

        Fiscal year 2000 Costs
Salary and Benefits...............................................   2.2
Travel, Transportation, Rent, Utilities, & Communications.........   0.5
Training, Agreements, & Supplies..................................   0.4
Computer System Development Contracts.............................   1.1
Equipment: Hardware, Software, & Licenses.........................   0.5
                                                                  ______
      Total.......................................................   4.7

    Question. What increase, if any is included in the fiscal year 2001 
request to implement the requirements of the Livestock Mandatory 
Reporting Act of 1999?
    Answer. Congress authorized the Department to initiate mandatory 
reporting in 2000 and provided start-up funding of $4.7 million through 
a one-time transfer from Commodity Credit Corporation funds. For 2001, 
the budget includes $5.9 million in funds appropriated to the 
Agricultural Marketing Service to continue the mandatory livestock 
reporting program; $0.4 million to the Grain Inspection, Packers and 
Stockyards Administration to establish a swine contract library; and, 
$0.6 million to the National Agricultural Statistics Service to 
increase the frequency of hog and pig reports from quarterly to 
monthly.
    Question. Please provide a detailed justification as to how the 
funds requested for fiscal year 2001 for this purpose would be 
obligated.
    Answer. The budget justifications are included in the agency budget 
submissions. I will provide you the budget justifications included in 
the agencies' explanatory notes.
    [The information follows:]

                FSIS' FOOD INSPECTOR RECRUITMENT EFFORTS

Background
    A number of factors have made it difficult to successfully recruit 
individuals to fill vacant positions in Field Operations. In the case 
of Veterinary Medical Officers, positions are not competitive in 
today's job market. Top quality candidates for Food Inspector positions 
are also in short supply in many locations, due to many factors. The 
work is typically very demanding, with strict physical requirements. 
Remote locations often have a limited applicant pool, and many who do 
apply have conflicts of interest that do not allow them to serve in a 
regulatory capacity. In the case of Intermittent Inspector positions, 
the requirement to be on-call with no guarantee of hours, and the 
limited benefits, make that position less attractive to most applicants 
than other options in the current job market. The Food Safety and 
Inspection Service, however, is confident it will recruit a well-
qualified and diverse workforce.
    FSIS efforts to increase the number of inspectors include:
  --Refocusing efforts within Human Resources to increase the number of 
        applicants on standards registers for field occupations. 
        Applicants to these registers are solicited through a variety 
        of recruitment initiatives such as on-campus visits, 
        conventions, advertisements, direct mailings, and posted 
        announcements on the Internet and at all Office of Personnel 
        Management Service Centers. FSIS also publishes job 
        opportunities in agricultural publications, such as the 
        Cattlemen's Journal and Farm Bureau. FSIS recruits from 
        veterinary schools, Hispanic-serving institutions, and 
        historically black colleges and universities, as well as at 
        veterinary conventions and agricultural career days at 
        universities where candidates are identified. In addition, 
        public notices about FSIS jobs are available at all State 
        employment agencies.
  --Recruiting and hiring 80 more inspectors by the end of the fiscal 
        year to achieve a target employment level of 7530.
  --Broadening the emphasis of FSIS' recruitment program to include 
        other scientific backgrounds to meet current and future hiring 
        needs and conducting recruitment training in September to train 
        new recruiters in this area.
  --Asking current agency personnel to assist in publicizing 
        recruitment needs.
  --Asking candidates who applied for inspector positions in areas 
        surrounding locations with shortages if they would be 
        interested in a position in locations that are experiencing 
        shortages.
  --Providing Veterinary Medical Officers with a recruitment bonus up 
        to 25 percent of their salary, particularly in areas where 
        there are fewer candidates. This has been approved in eastern 
        Pennsylvania, Iowa, and Nebraska. FSIS is also exploring 
        additional options, such as relocation and retention bonuses 
        for inspectors.
  --Scheduling inspector entrance tests in locations where there is a 
        need for inspectors. FSIS conducts tests in 10-12 locations 
        around the nation each month. These tests are spread out 
        geographically.
  --Exploring alternative ways to fill other than permanent (OTP) full-
        time positions, such as permanent part-time tours of duty, and 
        term and temporary appointments. We will be working with the 
        inspectors union to explore the feasibility of options 
        identified.
  --Collecting and analyzing exit interview data to identify possible 
        retention issues.
  --For an application, contact Keith McFarlin at 1-800-370-3747, ext. 
        2580, or visit the U.S. Government official site for jobs and 
        employment information at www.usajobs.opm.gov.

                  SERVICE CENTER MODERNIZATION FUNDING

    Question. What is the total dollar amount that USDA has invested on 
its modernization effort to date? What will be the total cost for 
implementing the entire effort and what are the milestones for 
completing all aspects of it?
    Answer. The USDA has invested $322,265,000 in the modernization 
effort through the end of fiscal year 1999. This amount includes $8.6 
million for program management and change management training, $31.1 
million for Business Process Re-engineering (BPR), $122.4 million for 
installation of the LAN/WAN/Voice shared telecommunications system, 
$77.9 million for development and initial acquisitions for the Common 
Computing Environment (CCE), and $82.3 million for acquisition of base 
data for Geographic Information Systems (GIS).
    The total implementation cost is estimated at $875 million through 
fiscal year 2005. Major milestone dates are reflected in the following 
excerpts from Appendix Q of the Service Center Modernization Plan. They 
are currently under review in light of funding availability in fiscal 
year 2000. It is critical that adequate resources be available to 
quickly transition to modern systems and processes. During the 
transition period, we are forced to pay for two sets of systems. We 
must make investments in the modern technology needed to serve our 
customers in the future while maintaining existing legacy systems to 
serve our customers today. Delays in the modernization process mean 
that the Department will incur costs for these two systems over a 
longer period of time, reducing savings and delaying benefits.
    [The information follows.]

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       FISCAL YEAR 2000 FUNDING FOR COMMON COMPUTING ENVIRONMENT

    Question. For fiscal year 2000, Congress appropriated $12.6 million 
to your office for the Common Computing Environment. Once Congress 
approves expenditures of these funds, what will you require to be 
completed in terms of planning and management of the Service Center 
Modernization Initiative (SCMI) before you allow the funds to be spent, 
and whom in the Department are you going to hold responsible and 
accountable for its success?
    Answer. The Deputy Secretary of Agriculture recently enhanced the 
role of the Chief Information Officer (CIO) in managing the information 
technology component of the Service Center Modernization Initiative 
(SCMI). In March 2000, the CIO's role will be modified from one of 
oversight and facilitation to one that includes direct responsibility 
for implementation. The CIO will have direct involvement in CCE 
planning and acquisition decisions. The CIO will also be responsible 
for developing the necessary management mechanisms to ensure that the 
IT modernization activities are conducted in full cooperation and 
coordination with the administrative and program business elements of 
the overall modernization effort. Expanding the CIO's role will ensure 
that the necessary planning has been done, consistent with legislative 
and other requirements, and that there is an appropriate management 
structure in place to ensure successful acquisition, deployment and 
operation of investments funded from this account.

              SERVICE CENTER MODERNIZATION FUNDING REQUEST

    Question. For fiscal year 2001, USDA requested $75 million for its 
common computing environment as a separate line item, and an additional 
$62.4 million from service center agency budgets. First, why did USDA 
decide not to include this request under the Office of the Secretary to 
ensure that these expenditures would be closely watched at that level? 
Second, for the record, could you provide for the record a detailed 
explanation of exactly what these funds will be used for?
    Answer. These expenditures will be closely monitored by the Deputy 
Secretary. However, we believe the Chief Information Officer (CIO) has 
the needed expertise to direct the acquisition and implementation of 
the Common Computing Environment (CCE). Therefore, the $75 million 
request for hardware and software acquisitions is included in the CIO's 
budget.
    With respect to the $62.4 million in agency funds, we interpreted 
congressional action on our previous centralized funding requests to 
mean that Congress wanted to retain the base funding the agencies were 
contributing to modernization in the agency budgets and provide any 
increased funding under a central account.
    Following is a summary of planned uses of fiscal year 2001 
modernization funding:
  --$75 Million Common Computing Environment Fund
    These funds will be used specifically for the acquisition and 
deployment of shared hardware and software to implement a CCE for the 
Service Center agencies. Depending upon final fiscal year 2000 
activities, the planned acquisitions and amounts are as follows:
  --$1.5 million for technical architecture maintenance, piloting, 
        operations and deployment support;
  --$33.3 million to complete the acquisition of network/communications 
        servers/software to fully connect the CCE workstations and 
        provide for remote management;
  --$15 million to begin acquisition of application servers/software 
        needed to host business applications;
  --$14.6 million for workstation and server software, including GIS;
  --$8.1 million for shared peripheral equipment including networked 
        printers and plotters; and
  --$2.5 million for training.
  --$62.4 Million in Agency Funds
    Planned use of agency funding is as follows:
  --$22.7 million to continue BPR and pilot testing and related change 
        management training and program management costs;
  --$23.6 million for continued acquisition of base data needed for GIS 
        applications, and
  --$16.2 million for individual employee CCE equipment such as 
        workstations, portable printers, and data collection devices.

             SERVICE CENTER BUSINESS PROCESS REENGINEERING

    Question. Over the past several years, GAO has been supportive of 
USDA's effort to modernize the service centers computer systems but 
very critical of the Department's approach of focusing first on buying 
new technology without clearly understanding how one-stop services will 
be delivered at all sites. What is the department's status of defining 
business process for its service centers?
    Answer. Business process reengineering (BPR) is at the heart of the 
Service Center Modernization Initiative (SCMI). BPR analyzes the 
service center agencies' current program and administrative processes 
to see how they can be streamlined and integrated to improve the 
effectiveness and efficiency of USDA's service to customers. Our BPR 
efforts to date have given us the understanding of our basic business 
processes needed to move forward with the CCE and have served as the 
basis for defining the CCE technology architecture. We recognize that 
the CCE will need to support business as we know it today as well as 
any changes in that business over the next decade. That is why our CCE 
architecture is designed around open, interoperable and scalable 
systems. We look at the CCE as the basic technology infrastructure to 
support county-based program delivery through the first decade of the 
21st century. Failure to move forward will hamper our ability to 
service our customers and respond to the needs of the future.
    There are 20 active BPR projects focusing on core business areas 
such as lending, managing risk, conservation and environment, community 
development and outreach, and administration. Each of these projects is 
tested in a laboratory environment before being piloted in the field 
and deployed nationally.
    SCMI has initiated the reengineering design of approximately 60 
percent of the Service Center business processes and will reengineer 
the remaining 40 percent of the business processes as resources permit. 
The BPR project designed to streamline human resources administration 
has completed all testing and piloting and is being deployed 
nationally. BPR projects involving the lending, community development, 
managing risk, conservation, and administrative areas are scheduled to 
complete testing and piloting in fiscal year 2000 and be deployed 
nationally in fiscal year 2001.

                       ONE-STOP CUSTOMER SERVICE

    Question. If I were a customer, what can I expect in terms of one-
stop service at an office where only NRCS is located but I want to 
apply for a farm loan?
    Answer. Currently, you could expect an NRCS employee to generally 
describe the farm loan programs and provide some written information 
and a referral to the FSA office servicing your county. As we complete 
the development and pilot testing of some of the reengineered process 
and install full CCE technology, the level of service provided will 
increase. In the future, you should also be able to go into the NRCS 
only office and through a user-friendly kiosk or computer terminal run 
through an automated question/answer process to pre-qualify for a loan 
and submit an application for the loan. You would have the option of 
scheduling an appointment with the FSA loan officer either at his or 
her base Service Center or at the NRCS office or going on-line 
automatically, using the computer or kiosk and a two-way video 
connection, to discuss your loan application and needs. The NRCS 
employee could assist you to get started with the technological 
connection, but since he or she is a conservationist and not a loan 
officer, the technology connection will deliver the one-stop service 
that we envision. In order to achieve these and other beneifts of the 
CCE, it is critical that the funds requested in the fiscal year 2001 
President's budget be appropriated.

          SERVICE CENTER MODERNIZATION/INFORMATION TECHNOLOGY

    Question. In light of the e-business revolution, what steps is the 
Department taking to give a fresh look at the way it does business 
across all agencies and whether its organizational structure at 
headquarters is appropriate to deliver benefits and services to 
customers in the new millennium?
    Answer. Modernizing the county-based agencies is the primary effort 
underway to reengineer the way business is conducted across agencies. 
We are also taking steps towards implementing unified financial, human 
resources, procurement, and other administrative systems that will 
substantially change the way business is conducted in our headquarters 
complex. Our fiscal year 2001 budget for the Office of the Chief 
Information Officer requests funding for e-government initiatives that 
will allow us to develop a corporate strategy for e-government, 
including taking advantage of opportunities to leverage agency 
initiatives across the Department. In addition, part of the $75 million 
requested for the Common Computing Environment will provide enabling 
technology to support e-government activities in the USDA Service 
Centers. Most USDA agencies are at the initial stage of e-business, 
which we refer to as e-government. Agencies are providing a wealth of 
information about their programs and services, as well as market data 
and other information, to citizens via the Internet. However, agencies 
are also increasingly exploring ways to use the Internet to enable 
farmers, rural residents, and other customers to actually conduct 
secure business transactions with the Department online. In some cases, 
this involves working with other Federal agencies on web sites that 
will provide citizens a common online access point to programs and 
services so a customer can get to important program information without 
having to know which specific agency provides the service.

                             CIO PRIORITIES

    Question. With a new Chief Information Officer (CIO), what are the 
three highest priority issues, in order, for the CIO to address at the 
Department? What are the time frames for addressing these issues? How 
will the CIO be held accountable and what authority have you provided 
to him?
    Answer. Among the CIO's highest priorities are to: provide 
effective leadership and oversight to the Department's Service Center 
Modernization Initiative, specifically the information technology 
component; enhance the security of our financial and information assets 
and protect the privacy of our customers; and improve the corporate 
management of the Department's telecommunications resources. With the 
Congress' support, we expect to make significant progress on each of 
these issues this year. The CIO is personally committed to these 
priorities. He has all of the authority vested in him by the Office of 
the Secretary and by the Congress through the Clinger-Cohen Act and is 
working closely with the USDA management.

          LESSONS LEARNED FROM THE YEAR 2000 COMPUTER PROBLEM

    Question. To its credit, USDA recently made a successful transition 
to the Year 2000. In preparing for Y2K, the Department spent more than 
$50 million to get its information systems ready. What were the 
positive lessons learned, and how are they being applied today at USDA?
    Answer. Our Y2K success, as well as the successful transition 
through the Leap Year rollover, was the result of partnership and close 
collaboration between the Information Technology and Program Management 
officials. The involvement of program officials in what was previously 
viewed as an IT issue ensured that accountability would rest with the 
system users, not just the IT departments. Program managers have also 
learned valuable lessons about the role of IT in their business 
operations. This principle will continue to apply as the Department 
addresses cyber-security and other key IT issues. The use of 
Independent Verification and Validation--IV&V's--to provide independent 
assessments throughout the Y2K project has also been demonstrated to be 
a very positive tool with which to better assess and manage our 
critical IT investments. In addition, the Business Continuity and 
Contingency Plans--BCCPs--developed by each mission area have helped 
prepare us to continue providing vital programs and services should any 
future problem threaten to disrupt our mission-critical systems. A 
close collaboration between program and IT officials, the use of 
IV&V's, and BCCPs will continue to characterize how we manage 
information technology at USDA.
    Question. Beside making the actual transition itself, to what 
extent has the Department been able to capitalize on its Year 2000 
investment and make added improvements in the Department-wide use of 
information technology?
    Answer. USDA has been able to capitalize on the transition by 
improving the use of information technology in several key areas. The 
need to purchase Y2K compliant equipment accelerated efforts to upgrade 
computers in the county-based agencies; modernize the equipment in our 
Agricultural Research facilities; and upgrade many of our mission area 
software applications.

             SPENDING TO RESOLVE YEAR 2000 COMPUTER PROBLEM

    Question. For the record, what was the total dollar amount spent by 
the Department on Year 2000 fixes and what does this include?
    Answer. The total amount spent on USDA's Y2K activities since 
fiscal year 1996, including supplemental funding, was approximately 
$188 million. This included funds for hardware and software upgrades 
and replacements, renovation, validation and implementation of systems 
undergoing repair, and technical assistance. Emergency supplemental 
appropriations in fiscal years 1999 and 2000 provided $57 million of 
this amount.

                     OUTREACH/TECHNICAL ASSISTANCE

    Question. The fiscal year 2001 budget requests additional resources 
for USDA outreach and technical assistance activities (e.g., the 
Department's Office of Outreach, the Outreach Program for Socially 
Disadvantaged Farmers and Ranchers, and various outreach efforts of the 
USDA agencies). Please provide a list of all outreach activities of the 
Department of Agriculture, by agency, account and activity. Please 
provide the fiscal year 1999, fiscal year 2000, and proposed fiscal 
year 2001 funding levels for each of these programs/activities, along 
with a brief description of each program or activity and how it is 
distinguished from the various other outreach/technical assistance 
activities of the Department.
    Answer. The Department is in the process of preparing a report that 
will provide these details. We will make that report available to you 
as soon as possible.

                               DETAILEES

    Question. Provide a list, by USDA agency, of each employee detail 
or assignment (by employing agency, title, and position) in each of 
fiscal years 1999 and 2000 to date for a period of up to 32 days, and 
identify the agency to which that detail or assignment was made and the 
purpose of the detail assignment.
    Answer. Not Included.
    Question. Provide this same information for employee details/assignments 
made for a period of more than 30 days, and indicate the 
dollar amount of the reimbursement made to the employing agency for 
each detail/assignment.
    Answer. Not Included.
       advisory committees, panels, commissions, and task forces
    Question. Provide a list of the advisory committees, panels, 
commissions, and task forces funded in each of fiscal year 1999, 2000 
(planned), and proposed to be funded for fiscal year 2001, and the 
amount of funding in each of these years to be allocated for each.
    Answer. The following table lists advisory committees, panels, 
commissions, and task forces funded in fiscal years 1999, 2000, and 
2001 and the amount of funding for each year.
    [The information follows:]

                        USDA ADVISORY COMMITTEES
------------------------------------------------------------------------
                                                    2000         2001
 Policy Area and Committee Title   1999 Actual    Estimate     Estimate
------------------------------------------------------------------------
FOOD, NUTRITION AND CONSUMER
 SERVICES:
    National Advisory Council on       $42,611      $47,350      $50,000
     Maternal, Infant and Fetal
     Nutrition...................
FOOD SAFETY:
    National Advisory Committee         36,314       61,350       67,000
     on Meat and Poultry
     Inspection..................
    National Advisory Committee         35,770       37,350       40,000
     on Microbiological Criteria
     for Foods...................
                                  --------------------------------------
        Total, Food Safety.......       72,084       98,700       107,00
RESEARCH, EDUCATION AND
 ECONOMICS:
    Advisory Committee on          ...........      125,400      108,050
     Agricultural Biotechnology..
    Forestry Research Advisory          14,342       23,350       27,000
     Council.....................
    Strategic Planning Task Force       65,340  ...........  ...........
     on Research Facilities......
    USDA/Hispanic Association of        19,140       17,350       21,000
     Colleges and Universities...
    USDA/American Indian Higher    ...........       56,350       60,000
     Education Consortium........
                                  --------------------------------------
      Subotal, CSREES............       98,822      222,450       216,05
                                  ======================================
    National Genetic Resources           4,508       13,850       17,000
     Advisory Council............
    National Nutrition Monitoring  ...........       32,350       35,000
     Advisory Council............
    Dietary Guidelines Advisory         98,185       47,350  ...........
     Committee...................
                                  --------------------------------------
      Subtotal, ARS..............      102,693       93,550       52,000
                                  ======================================
    Advisory Committee on                6,155       23,350       30,000
     Agriculture Statistics......
                                  --------------------------------------
      Subtotal, NASS.............        6,155       23,350       30,000
                                  ======================================
    Advisory Committee on Small    ...........      127,350      150,000
     Farms.......................
                                  --------------------------------------
      Total, Research, Education       207,670      466,700      448,050
       and Economics.............
                                  ======================================
MARKETING AND REGULATORY
 PROGRAMS:
    Advisory Committee on Foreign       10,405       16,250       19,660
     Animal and Poultry Diseases.
    General Conference Committee        11,776        7,280       10,430
     of the National Poultry
     Improvement Plan............
    National Wildlife Services          18,100       15,450       18,100
     Advisory Committee..........
                                  --------------------------------------
      Subtotal, APHIS............       40,281       38,980       48,190
                                  ======================================
    National Organic Standards          16,909       47,350       50,000
     Board.......................
                                  --------------------------------------
      Subtotal, AMS..............       16,909       47,350       50,000
                                  ======================================
    Federal Grain Inspection            27,451       28,350       32,000
     Advisory Committee..........
                                  --------------------------------------
      Subtotal, FGIS.............       27,451       28,350       32,000
                                  ======================================
      Total, Marketing and              84,641      114,680      130,190
       Regulatory Programs.......
FARM AND FOREIGN AGRICULTURAL
 SERVICES:
    Agricultural Policy Advisory        14,120       11,470       14,120
     Committee for Trade.........
    Agricultural Technical
     Advisory Committees for
     Trade in:
        Animal & Animal Products.       14,110       11,460       14,110
        Fruits and Vegetables....       14,110       11,460       14,110
        Grains, Feed, and               14,110       11,460       14,110
         Oilseeds................
        Sweetners and Sweetner          14,110       11,460       14,110
         Products................
        Tobacco, Cotton, and            14,110       11,460       14,110
         Peanuts.................
        Emerging Markets Advisory       32,507       30,050       32,700
         Committee...............
        Edward R. Madigan          ...........       12,350       15,000
         Agricultural Export
         Excellence Award Board..
                                  --------------------------------------
          Subtotal, FAS..........      117,177      111,170      132,370
                                  ======================================
        Advisory Committee on           26,490       32,350       70,000
         Beginning Farmers and
         Ranchers................
        National Drought Policy        407,658      440,350  ...........
         Commission..............
                                  --------------------------------------
          Subtotal, FSA..........      434,148      472,700       70,000
                                  ======================================
        Advisory Committee on      ...........       77,350      100,000
         Risk Management.........
                                  --------------------------------------
          Subtotal, RMA..........  ...........       77,350      100,000
                                  ======================================
          Total, Farm and Foreign      551,325      661,220      302,370
           Agricultural Services.
NATURAL RESOURCES AND
 ENVIRONMENT:
    Task Force on Agricultural          49,443       47,350       50,000
     Air Quality Research........
    USDA/1890 Task Force.........        1,559       12,350       15,000
                                  --------------------------------------
      Total, Natural Resources          51,002       59,700       65,000
       and Environment...........
                                  ======================================
OFFICE OF THE CHIEF ECONOMIST:
    Commission on 21st Century         183,332      347,350      120,000
     Production Agriculture......
                                  --------------------------------------
      Subtotal, Advisory             1,192,665    1,795,700    1,222,610
       Committees................
                                  ======================================
    Contingencies/Reserve........      607,335        4,300      577,390
                                  --------------------------------------
      TOTAL, ADVISORY COMMITTEES     1,800,000    1,800,000    1,800,000
       LIMITATION................
------------------------------------------------------------------------

                                 ______
                                 

              Questions Submitted by Senator Arlen Specter

                                 DAIRY

    Question. Milk prices dropped to $9.63 per hundredweight at the end 
of 1999, the lowest price in 21 years. Over the past several years, 
price swings of 30 to 40 percent from one month to the next have become 
common. Pennsylvania is the fourth largest dairy producer and there are 
approximately 9,900 dairy farms which produce $1.73 billion worth of 
milk each year. Over the past decade, however, Pennsylvania has lost an 
average of 300-500 farmers per year. Between 1993-1998, Pennsylvania 
lost 11.4 percent of its dairy farmers. What action is the 
Administration taking to help dairy farmers who are facing record low 
milk prices?
    Answer. The Commodity Credit Corporation (CCC) is purchasing cheese 
and nonfat dry milk to support the price of milk. The extension of the 
price support program through 2000 has permitted the CCC to purchase 
almost 1 million pounds of cheese and 156.5 million pounds of nonfat 
dry milk to support the price of milk. CCC expects to purchase another 
1-9 million pounds of cheese and 100-150 million pounds of nonfat dry 
milk in fiscal year 2000. The change in the wholesale beverage milk 
price formula as part of USDA's market order reform will help dairy 
farmers this year. Now the beverage milk price is adjusted by the 
higher of the milk for cheese price or the milk for butter/nonfat dry 
milk price. Since USDA is supporting the nonfat dry milk price, the 
wholesale beverage milk price is about $1.40 per hundredweight higher 
than it would be without CCC's administration of the milk price support 
program. The higher beverage milk price increases dairy farm income by 
over $800 million for fiscal year 2000. The price support purchases 
also yield farmers an income increase of another $800 million through 
the increased wholesale price of milk solids and cheese. The 
Administration's proposal to strengthen the farm safety net includes 
extending the milk price support program for 2 more years, until the 
next Farm Bill. The Farm Service Agency is also making $123 million in 
Dairy Market Loss Assistance payments to dairy farmers this spring.

                                DROUGHT

    Question. The Mid-Atlantic States suffered $2.5 billion in losses 
as a result of the drought in 1999. Pennsylvania alone suffered $700 
million in drought losses. While the fiscal year 2000 Agriculture 
Appropriations bill provided $8.3 billion in disaster assistance for 
farmers, the vast majority of this money went to farmers in the Midwest 
to compensate for low commodity prices. Only $1.2 billion was provided 
for natural disasters which had to compensate for all natural disasters 
nationwide, including Hurricane Floyd, flooding in the Midwest, 
livestock loss and fishery loss. What action is the Administration 
taking to provide assistance to farmers hit by drought?
    Answer. The Administration is implementing all the programs within 
our authority to alleviate the financial hardship caused by drought. 
These programs include the crop disaster program, crop insurance, non-
insured assistance program, emergency conservation program, the 
livestock assistance program, the pasture recovery program, and 
emergency loans.

                 FISCAL YEAR 2000 SUPPLEMENTAL REQUEST

    Question. Does the Administration plan to seek additional funds for 
farmers in the fiscal year 2000 Emergency Supplemental Appropriations 
Bill?
    Answer. The Department is currently working with OMB to develop a 
supplemental request for fiscal year 2000. The supplemental will likely 
include authority to use unobligated Emergency Conservation
    Program funds to repair farm structures and equipment damaged by 
Hurricanes Dennis, Floyd, or Irene. The request will also include 
language to allow CCC funds to be used to fund loan forgiveness for 
loans made by producer-owned associations that suffered losses from 
Hurricanes Dennis, Floyd, or Irene. We also plan to request selected 
funding for the Rural Housing Service.

                                PLUM POX

    Question. On October 20, 1999, the USDA announced that the Plum Pox 
virus was found on peaches grown in Adams County, PA. This is the first 
discovery of the Plum Pox virus in the United States. The virus infects 
many fruit species, including peaches, apricots, plums, and almonds and 
causes the fruit to fall prematurely from the tree. This outbreak has 
the potential to cause severe damage to the PA fruit industry. The 
orchards have been placed under quarantine and the USDA has recommended 
destroying all of the fruit trees in the infected region. What action 
have you taken to ensure the swift distribution of indemnification 
money to PA fruit farmers?
    Answer. We are considering a compensation plan based on sound 
economic principles, and the compensation plan is still under review.
    Question. When can farmers expect to receive appropriate 
compensation?
    Answer. As soon as the funding is announced, we will be proposing 
regulations on how producers can participate.

                      YEAR 2000 DIETARY GUIDELINES

    Question. The proposed Year 2000 Dietary Guidelines for Americans, 
currently under review by the Secretaries of Agriculture and HHS, make 
changes to the 1995 Guidelines for fats and sugars. The proposed Year 
2000 guideline advises: ``Choose a diet that is low in saturated fat 
and cholesterol and moderate in total fat'' and advises ``if you drink 
alcoholic beverages, do so in moderation.'' However, in regard to 
sugar, the proposed guidelines state ``Choose beverages and foods that 
limit your intake of sugars.'' Why do the proposed guidelines use 
``moderation'' language in connection with fat and alcohol but use 
``limit'' language concerning sugar?
    Answer. The Dietary Guidelines Advisory Committee was charged with 
reviewing the 1995 Dietary Guidelines and determining if, on the basis 
of current scientific and medical knowledge, revisions were warranted. 
The Committee is composed of leading academic researchers. 
Collectively, they embody immense expertise in evaluating research 
studies in the areas of nutrition, medicine, and epidemiology. The 
recommendations from the Committee for all guidelines are based on 
their scientific judgements of the information available in the peer-
reviewed scientific literature. As a general principal, I trust 
science. Let me get some more specific details as to why the specific 
wordings were chosen.
    [The information follows:]
    According to the Committee's final report, the term ``moderation'' 
in relationship to total fat intake was used for the following reasons:
  --The proposed change in terminology from low to moderate represents 
        the committee's view that a change in perception has occurred 
        in the meaning of these two terms with respect to total fat. 
        This change is not accompanied by a change in the numerical 
        recommendation (30 percent) for the maximum percentage of 
        energy provided by fat.
  --There has been a long-standing belief among experts in nutrition 
        that low-fat diets are most conducive to overall health. This 
        belief is based on epidemiological evidence that countries in 
        which very low fat diets are consumed have a relatively low 
        prevalence of coronary heart disease, obesity, and some forms 
        of cancer However, populations in these countries tend to be 
        rural, consume a limited variety of food, and have a high 
        energy expenditure from manual labor. Therefore, the specific 
        contribution of low-fat diets to low rates of chronic disease 
        remains uncertain. Particularly germane is the question of 
        whether a low-fat diet would benefit the American population, 
        which is largely urban and sedentary and has a wide choice of 
        foods.
  --Another reason for not overly restricting intake of total fat comes 
        from evidence that populations consuming higher quantities of 
        unsaturated fats have a favorable profile of blood lipoproteins 
        and a relatively low prevalence of coronary heart disease, 
        provided that intakes of saturated fats are low. Thus, the 
        recommendation for a diet moderate in total fat is based in 
        part on the recognition that unsaturated fats carry potential 
        benefits.
  --The committee further held the concern that the previous priority 
        given to a ``low-fat intake'' may lead people to believe that, 
        as long as fat intake is low, the diet will be entirely 
        healthful. This belief could engender an overconsumption of 
        total calories in the form of carbohydrate, resulting in the 
        adverse metabolic consequences of high-carbohydrate diets.
    According to the Committee's final report, the use of the term 
``limit'' in relationship to sugars intake was for the following 
reasons:
  --The committee recommends changing the wording of the guideline to 
        include the word limit because intake of sugars has increased 
        steadily since the early 1980s.
  --Although dental caries continue to provide a major rationale for 
        this guideline, the committee expressed very serious concern 
        about current trends in the consumption of sugars by the U.S. 
        population. These trends raised concerns because of their 
        coincidence with other undesirable changes in the country's 
        nutritional well-being, e.g., increasing rates of obesity and 
        inadequate intakes of calcium that carry a risk of impaired 
        long term bone health.
  --Nationwide food intake survey data for all age groups demonstrate 
        that consumption of soft drinks and other sweetened beverages 
        like fruitades and tea increased dramatically over the past 
        decade.
  --Other data suggest that a significant proportion of the population 
        may not be meeting its needs for calcium and other nutrients 
        because of their displacement by the increased consumption of 
        sweetened beverages.
    The Committee concurred with the 1995 wording of the alcohol 
guideline, and therefore offered no rationale for use of the term 
``moderate'' in relationship to alcohol consumption.
    The Committee has submitted its final report to the Secretaries of 
Agriculture and Health and Human Services. The Secretaries are in the 
process of reviewing the report, and will publish the official Dietary 
Guidelines for Americans, Fifth Edition, after the review and clearance 
process is completed. The Dietary Guidelines for Americans, Fifth 
Edition, will form the basis for official nutrition policy of the 
Department.

                   WIC FOOD PACKAGING RECOMMENDATIONS

    Question. I understand that the WIC program has made 
recommendations that juice products should be provided in a 46 oz. can 
which was the least expensive package available at the time of the 
recommendation. However, it has been brought to my attention that a 46-
oz. glass packaging alternative could be made available to WIC 
consumers at a slightly reduced cost. From a standpoint of good 
sanitary practice, the glass jar can be resealed and is 100 percent 
recyclable. Does WIC plan to provide an updated list of packaging 
recommendations that takes into account current costs and benefits?
    Answer. Federal WIC regulations do not restrict the form of 
packaging allowed for authorized juices. State agencies are responsible 
for determining the brands and types of WIC foods authorized for use in 
their State from among those foods authorized in Federal WIC Program 
regulations. They are also responsible for determining allowable 
packaging sizes. Some States may currently be allowing the 46 ounce 
glass bottle of juice.
    State decisions may be influenced by a number of factors such as 
cost, product distribution within a State, and WIC participant 
acceptance. They are not obligated to authorize every available food 
allowed via Federal WIC requirements. Additionally, the State can limit 
the type, e.g., frozen concentrate, single strength, etc., or the 
brand, e.g., the least expensive.
                                 ______
                                 

           Questions Submitted by Senator Christopher S. Bond

                             BIOTECHNOLOGY

    Question. With respect to genetically-engineered foods do you think 
that labeling of such foods should rely on science-based criteria?
    Answer. The issue of labeling is unresolved. It is a debatable 
proposition whether labeling can e science-based. Studies are 
inconclusive regarding the food safety risk associated with using GMOs. 
The recent National Organic Standards regulations preclude the use of 
GMOs, but it is based on marketing needs for the industry, not science-
based criteria.

                        GMO CROPS AND LIVESTOCK

    Question. Scientists, farmers and ranchers have been genetically-
modifying crops and livestock for centuries, have they not?
    Answer. The genetic makeup of crops and livestock has been improved 
by selection and cross- breeding for thousands of years, with increased 
precision as the rules of genetics have become better understood over 
the past century and a half. The modern tools of biotechnology have 
made these processes more rapid, precise, and better controlled than 
ever in the past. However, it shoud also be noted that these tools also 
enable the movement of genes into crops and livestock, and in some 
instances traits that could not have previously been introduced by 
traditional means.

                    GMO CROPS AND MANDATORY LABELING

    Question. In the immediate term, please speak to thwe difficulty 
farmers would face if forced to segregate crops for the purpose of 
mandatory labeling?
    Answer. There is no mechanism, measure, or verifiable test 
presently in place to certify whether a segregated commodity is GMO 
free. However, the Grain Inspection, Packers and Stockyards 
Administration is requesting nearly $2 million to develop such tests.
    Question. Please indicate how mandatory labeling requirements might 
undercut our ability to negotiate trade openings abroad?
    Answer. Assuming products were required to indicate whether it 
contained a genetically- modified organism, USDA believes this 
requirement may limit our markets abroad. There is no overall consensus 
whether and under what circumstances labels would apply and whether the 
perceived benefits associated wiht a label can be achieved.
    On a related note, the United States is a signatory to the 
Biosafety Protocol held in Montreal earlier this year. This agreement 
leaves GMO decisions to the state. It reflects the lack of consensus 
among the signatories on the GMO issue. It will impact bio-engineered 
seeds, where an Informed Agreement process is in place so that an 
importing country can decide whether to approve or disapprove of its 
entry onto their soil. If approved, documentation must accompany this 
shipment specifying seed identyu and traits. The Protocol does not 
mandate or encourage countries to segregate or label products used for 
feed or food, nor does it mandate any transaction-by-transaction notice 
and consent procedure.

                       GRAIN STORAGE LOAN PROGRAM

    Question. Do you believe that beyond the immediate term, that 
additional storage capability will assist farmers if segregation and 
identify-preservation is necessary?
    Answer. Yes, based upon the Department's evaluation of current 
storage utilization, additional storage facilities would allow farmers 
to segregate or preserve the identity of certain crops if necessary.

                    GMO CROPS AND MANDATORY LABELING

    Question. Are you concerned that there is a risk that mandatory 
labeling could scare consumers in an unwarranted way that would make 
them think falsely that their food is not safe and encumber processors 
to such an extent that farmers would quiot using biotechnology?
    Answer. USDA is concerned about the marketing risks associated with 
mandatory labeling of bio-engineered crops and genetically modified 
agricultural products for traditional commodities. Whether or not 
labels can truly capture all the necessary information remains a 
debatable proposition. Meanwhile, some farmers are limiting or 
discontinuing the use of seeds that are genetically engineered.
    Question. Would you expect that if consumers demanded particular 
information--that the marketplace would, in effect, drive companies to 
label absent a government mandate?
    Answer. While the USDA encourages a market approach, it must uphold 
policies that are fair. USDA is concerned that these decisions may not 
be based upon a rational science-based approach, but instead focus on 
the perceived risks. The trends indicate a move toward voluntary 
standards, where some notable firms have already announced a ban on 
genetically modified foods. Whether one agrees with the merits of this 
approach, voluntary standards by some notable firms may create a 
catalyst to all producers to provide a label, in lieu of a government 
requirement.
    Question. Please provide additional information on the NAS review 
of our regulatory structure to ensure that it is as effective as 
possible.
    Answer. In 1986 a regulatory regime for biotechnology products was 
established by the National Academy of Sciences (NAS). This 
organization used a coordinated framework, with shared responsibilities 
for biotechnology products among the USDA, EPA, and FDA. USDA recently 
proposed a further review by the (NAS), through the National Research 
Council (NRC). The NRC has since established a Committee on 
Biotechnology, Food and Fiber production, and the Environment. 
Establishing the committee through NAS will bring the best science to 
address the issues facing our regulators now and in the future. For 
example, a current study is underway on genetically modified pest 
protected plants which puts NAS in a unique position to judge the 
merits of introduction of these new products into our environment. It 
also allows NAS to further develop information obtained from its last 
general biotechnology study in the 1980s to assure the regulatory 
structure is as effective as possible.

                           STORAGE FACILITIES

    Question. What is the scope of storage facilities eligible under 
the President's request?
    Answer. The eligibility will include grain storage facilities 
including all necessary permanently attached fixtures.
    Question. Do they include storage capacity for livestock feed such 
as silos and pits?
    Answer. High moisture grain storage facilities will be eligible to 
receive a loan. Pits and silos will not be eligible because the program 
will be geared toward the storage of grain.

                              HACCP MODELS

    Question. With respect to inspector shortages, some have been told 
the implementation of HACCP models program will allow the agency to 
change in-plant staffing configurations. Please tell me your time line 
for implementation of these new staffing arrangements.
    Answer. The Food Safety and Inspection Service (FSIS) has developed 
a time line for implementing changes as a result of the HACCP-based 
Inspection Models Project (HIMP). I have asked FSIS to provide 
information on the time line for the project.
    [The information follows:]
    In the models phase of the HIMP the staffing of each plant is 
reduced to the complement needed for HIMP inspection procedures. In 
inspection activities the 30 plants scheduled to participate in the 
models phase of the HACCP-based Inspection Models Project are operating 
under new staffing configurations. Data are being collected about 
inspection workload to validate the staffing configurations in use in 
the models plants, and to determine further staffing configuration 
proposals. If the new inspection procedures are proven to be effective, 
based on data collected by a third party, the Agency plans to publish a 
proposed rule this summer that would propose extending HIMP procedures 
to all young chicken slaughter plants under Federal inspection. 
Consultations and negotiations with the National Joint Council (NJC), 
representing inspectors, would be necessary to discuss the impact on 
inspector working conditions, including changes in staffing 
configurations. FSIS will not make any permanent changes until the new 
system is demonstrated to be effective, the rule has been presented to 
the public for comment, and is reviewed prior to any final decision.
    Question. For the county-based agencies (FSA, NRCS, RD), please 
provide an, estimate of the degree to which these agencies contract 
with private sources for services, both at headquarters and in the 
field, which have traditionally been performed by Federal employees, 
such as accounting, loan servicing, information technology development 
and maintenance, etc. Include estimated expenditures and FTE levels for 
fiscal year 2000 and for fiscal year 1995. Finally, please describe the 
process used to analyze decisions to contract our to insure that the 
service level is not compromised and that cost savings are actually 
achieved.

                          FARM SERVICE AGENCY

    Answer. The following services are performed at FSA Headquarters 
and our Kansas City Administrative Office (KCAO). These services are of 
a type traditionally performed by government personnel.


----------------------------------------------------------------------------------------------------------------
               Category                         Degree          FY 1995 Expenditure/FTE  FY 2000 Expenditure/FTE
----------------------------------------------------------------------------------------------------------------
Accounting...........................  N/A....................  None...................  None
Loan Servicing.......................  N/A....................  None...................  None
IT Support Services, PC Help Desk and  High...................  $35,000,000............  $42,100,000
 Mail Room Operations.                                          220 FTE................  230 FTE
IT Maintenance.......................  Low....................  None...................  None
----------------------------------------------------------------------------------------------------------------


    These positions have never been staffed by government personnel, 
but have been performed by contractors because the government lacks the 
employees with the skill levels, needed to perform these efforts in-
house. Only after the agency performs a capability assessment to 
determine if the effort can be performed by government personnel is the 
effort awarded to contractors. Typically, large system operation and 
maintenance is provided by contracts.

                 NATURAL RESOURCES CONSERVATION SERVICE

    Answer. The Natural Resources Conservation Service's (NRCS) 
strategic information technology development model is based on the 
Government's development of its business requirements. A capability 
assessment is then made to determine whether the NRCSI business 
requirements can be achieved in house or if contract services are 
required. Typically IT project management is performed with NRCS 
personnel; while contract support services are used for the actual 
software development. The following matrix identifies the degree, 
estimated expenditures, and FTE levels to which NRCS contracts with 
private sources for services.

----------------------------------------------------------------------------------------------------------------
               Category                         Degree          FY 1995 Expenditure/FTE  FY 2000 Expenditure/FTE
----------------------------------------------------------------------------------------------------------------
Accounting...........................  N/A....................  None...................  None
Loan Servicing.......................  N/A....................  None...................  None
IT Development.......................  High...................  $7,000,000.............  $4,700,000
                                                                88 FTE.................  59 FTE
IT Maintenance.......................  Low....................  None...................  None
----------------------------------------------------------------------------------------------------------------


                           RURAL DEVELOPMENT

    Answer. In 1999, the Rural Housing Service's Centralized Servicing 
Center in St. Louis used task order contracts (under the Office of 
Personnel Management's temporary services contracting rules) to acquire 
the services of approximately 50 persons to perform one-time tasks and 
to provide transitional support. All other loan portfolio 
administration tasks are performed by government personnel. other than 
these specific CSC related temporary services, all other contract 
services are commercial in nature and are awarded based on the 
mandatory sources, socioeconomic preference programs or competition 
requirements contained in the Federal Acquisition Regulation.
    The information technology systems used by Rural Development for 
portfolio administration tasks are supported by a combination of 
government and contractor staff. If the required services are 
determined to be inherently governmental, only in-house resources are 
used. In those cases where the government possesses a capability 
similar to a commercial service provider, the decision to contract out 
is based on the duration and nature of the tasks involved: the ability 
to timely meet statutory or other external deadlines, and the level of 
expertise and number of staff resources required to successfully 
complete the tasks. All laws, regulations and guidelines on contracting 
out for services are followed.
    The total number of contract actions for program support services, 
whether awarded by formal contracts or simplified purchase procedures, 
have been coming down since 1995, due largely to changes in the budget 
and in how the program is conducted in the field. In fiscal year 1995, 
the total amount of service contracts was $57 million, while in fiscal 
year 2000, we anticipate awards equaling $38 million or less All formal 
contracts (actions above $100,000) for program support services are 
essentially continuations under existing contract options or are new 
competitions for services that have been traditionally contracted out. 
The single exception to this trend in the past 5 years occurred with 
the contracts awarded in fiscal year 1995 to support the Dedicated Loan 
Origination and Servicing (DLOS) system at the CSC. The upward blip in 
the trend resulted from a number of high dollar amount contracts 
awarded for CSC support, such as the DLOS system's hardware and 
software, and the related contracts for a tax reporting service, force-
placed insurance service, and escrow investment and disbursement 
service.
    In the headquarters, contract services, such as for information 
technology support, have been relatively stable or have involved the 
acquisition of unique services like the DLOS actions described above. 
Approximately 126 fewer actions occurred in 1999 than in 1998. The 
trend thus far into 2000 appears to continue downward. In the field, 
almost all program support services are awarded using simplified 
purchasing methods (small purchases) and average less than $10,000 
each. The majority are commercial in nature (real estate appraisals, 
inventory housing repairs, caretaker services, legal foreclosure 
services, title services, commercial credit reports, etc.); and, the 
annual number and amount of awards are dependent on program loan cost 
funding levels.
    Because Rural Development's service contracts are based primarily 
on functional Statements of Work, they require the contractor to 
deliver specified results rather than a specific number of workers. 
Information concerning the number of contractor employees performing a 
contract is not collected. No cost comparison studies were required 
under current Federal Acquisition Regulation rules, nor done for these 
program support contracts, since they were for commercial services not 
normally performed by government employees. The support contracts 
require the timely delivery of commercial services at fixed prices, and 
at specified levels of quality, without regard to the number of 
employees used by the contractor. The following matrix identifies the 
degree, estimated expenditures, to which RD contracts with private 
sources for services.

----------------------------------------------------------------------------------------------------------------
               Category                         Degree          FY 1995 Expenditure/FTE  FY 2000 Expenditure/FTE
----------------------------------------------------------------------------------------------------------------
Accounting...........................  N/A....................  None...................  None
Loan Servicing.......................  N/A....................  None...................  None
IT Development.......................  N/A....................  None...................  $469,000
                                                                                         No FTE comparison
IT Maintenance.......................  N/A....................  $5,000,000.............  $7,500,000
                                                                                         No FTE Comparison
----------------------------------------------------------------------------------------------------------------

                                 ______
                                 

              Questions Submitted by Senator Conrad Burns

             ADMINISTRATION IGNORING CONGRESSIONAL REQUEST

    Question. I am concerned that this budget was put together without 
any input from Congress, or from producers. There is a failure to 
implement many of the focus areas that farm- state senators have been 
consistently pushing for. Why did the administration ignore the 
requests we have made over and over?
    Answer. The Administration has tried to be responsive to the needs 
of producers and others while also being responsible with the use of 
the taxpayers' money. The farm safety net and other priority 
initiatives in the budget include many elements consistent with 
proposals advanced by key members of Congress and others. Obviously, 
not every worthy idea can be accommodated in the budget, but the 
Administration has put forth a set of reasonable and specific proposals 
for consideration. Congress can, of course, accept, reject or modify 
the proposals put forth in the budget.
    Question. Why is this Administration asking for less money than 
last year? Emergency spending was a good portion of the expenditures 
last year. Under the circumstances, I believe we need to take a close 
look at where the markets are, and decide what we are going to do to 
actually help the producers who are faced with low commodity prices.
    Answer. The Administration has proposed a supplemental income 
assistance program specifically to aid producers of crops with 
depressed prices. This proposal attempts to supplement the deficiencies 
the current production flexibility contract payments which are neither 
based on current production or prices. And, the safety net proposal is 
designed to provide a more stable basis for providing aid to producers 
in crisis than the expensive unpredictable ad hoc emergency assistance 
of the level enacted over the past couple of years. Outlays for the 
Commodity Credit Corporation will likely reach a record $27 billion 
this year due in large part to the $9 billion emergency aid package 
enacted with the fiscal year 2000 budget. Outlays for fiscal year 2001 
by CCC under our regular programs are projected to be over $15 billion, 
which is still relatively high since commodity prices are not projected 
to improve significantly if at all although the AMTA production 
flexibility contract payments will be $1 billion lower in 2001 as 
required by the 1996 Act.

                              FSA STAFFING

    Question. Your market analysts are not calling for a significant 
price upswing during the upcoming 12 months, meaning we will again see 
a high level of activity in FSA's LDP and Price support programs. The 
Administration has proposed a new conservation payment program to help 
small farmers, saying the majority will be eligible for payments up to 
$30,000. Part of that same initiative is to increase CRP acres from 
36.5 million acres to 45 million acres, meaning there will be more 
contracts to administer. You are also implementing a farm facility loan 
program. How will staff levels be allocated to cover these programs?
    Answer. FSA fiscal year 2001 non-federal staff year levels are 
based on performing workload activities similar to fiscal year 2000, 
with the exception of assumed decreases for crop and market loss 
assistance programs and somewhat lower loan deficiency payments. These 
activities account for the proposed decrease of 622 temporary FTE's. 
Staffing impacts associated with the proposed ``Farm Safety Net 
Initiative'' have not been determined and are not included in the 
proposed fiscal year 2001 staffing levels. If the Farm Safety Net 
Initiative or any other legislative assistance package is enacted, we 
would work with OMB and the Congress to address staffing requirements. 
However, I would note that, except for CRP, the conservation proposals 
would be administered by the NRCS, thereby impacting their workload. 
Furthermore, increasing CRP enrollment to the proposed 40 million acre 
level would occur over a number of years, not just in fiscal year 2001, 
and the relatively small acreage increment in fiscal year 2001 could 
probably be absorbed in terms of agency workload. We are concerned 
about the farm facility loan workload in 2001, as the program was 
announced for implementation too late for administrative funding to be 
considered in the budget.
    Question. FSA's need for temporaries has caused Supplemental 
Appropriations requests at least twice in the last 2 years. If there is 
a continuous need for this help, why isn't USDA budgeting for it?
    Answer. Recent supplemental funding has allowed FSA to avoid 
budgeted permanent employee separations, and commit additional 
temporary staff resources to meet increased workload requirements due 
to the economic crisis in agriculture. FSA cannot budget for emergency 
and disaster program activity in advance of legislative requirements, 
and as a result must respond to increased workload demand through 
supplemental requests for funding and staffing resources.
    Question. If we are increasing FSA programs, but decreasing 
available staff, what are you doing to accommodate that?
    Answer. In November, 1999 FSA received $56 million in additional 
funding which allowed FSA to retain critical permanent county level 
staff and commit additional staff resources to meet increased farm loan 
program workload and address program delivery and payment processing 
needs for marketing assistance loans and loan deficiency payments this 
past fall and winter. The workload for these programs was and is still 
high and new emergency programs were added by the Congress last fall.
    FSA is reviewing its potential needs with the Department for 
additional fiscal year 2000 supplemental funding. This supplemental 
funding would permit the Agency to pay for more temporary staff years 
in order to complete implementation of over 20 new emergency disaster 
provisions in a timely way and also to ensure that producer payments, 
including loan deficiency payments, are made timely in coming months.
    Question. Are you increasing technology, or are there any efforts 
being made within FSA to streamline the commodity and direct lending 
programs to ease workload, and take the burden off farmers?
    Answer. FSA is currently working towards posting market prices on 
the Internet for use by the Agency's customers for market loan 
repayments or loan deficiency payments. The process would automatically 
calculate the loan deficiency payment for the farmer.
    For Price Support Loan and Loan Deficiency Payment Programs, FSA 
provided an Internet-based reporting system for access by Federal 
entities, industry, and general public. Data excludes producer-specific 
information, but does provide loan and loan deficiency payment 
information. Users can also initiate queries for reports by commodity 
for any active crop year.
    FSA was one of the first agencies to use smart cards. For the 
Agency's Peanut program, through the use of smart card technology to 
store sales information, FSA assures fair and equitable quota 
allocations to peanut growers.
    FSA has several projects underway to streamline direct lending to 
reduce workload for producers and FSA staff. The Agency has developed 
procedures to reduce documentation requirements for loans under $50,000 
and for repeat loan customers with acceptable loan performance history. 
The revised procedures have been finalized by the Agency and will be 
transmitted to the Department and then the Office of Management and 
Budget (OMB) for final approval and publication. These procedures will 
reduce the required paperwork on qualified loans to a few pages. The 
Agency is also revising procedures for processing emergency (EM) 
disaster loans. The new procedures must be cleared by OMB and published 
for public comment, which we expect in late summer, 2000. As proposed, 
the changes to the EM program will reduce the submission requirements 
for producers and simplify the calculations, that must be performed by 
field staff. In addition to these two initiatives, FSA has undertaken a 
major initiative to streamline all other direct loan regulations. This 
project will reduce the affected regulations by nearly half, eliminate 
several forms, and simplify processes and procedures for making and 
servicing direct farm loans. Because of the sweeping nature of this 
project, completion is not projected until 2002.
    Question. What is the status of allowing farmers to electronically 
file for USDA/FSA programs?
    Answer. FSA has taken the lead role in organizing a multi-agency 
effort to develop the electronic filing capability defined by HR-852 
and S-777. FSA intends to develop capabilities even if the bills do not 
become law. This effort is being integrated with the Secretary's 
paperwork reduction initiative and the electronic access initiative 
(EAI), which is a component of the Service Center Initiative (SCI). 
Significant achievements have been made in building the fundamental 
components of the desired capability. We will provide more detailed 
information for the record.
    [The information follows:]
    The Paperwork Reduction Implementation Team (PRIT) developed a 
five-phase approach to meet the requirements of the bills. This 
approach is being utilized to prioritize and fund development efforts. 
The technical infrastructure is being developed under the Service 
Center Initiative (SCI).
    Phase I.--Place digitized forms on the Web. Customers complete on-
line but mail fax to USDA service center. News and information for 
farmers consolidated and organized for simplified access.
    Phase 2.--Forms completed on-line and e-mailed to USDA service 
center.
    Phase 3.--Intelligent forms that perform basic field edits.
    Phase 4.--Forms linked to service center data bases. Fields pre-
filled with customer data.
    Phase 5.--Forms replaced with on-line software applications.
    The short-term priorities are to implement phases 1 and 2. USDA 
deployment of forms on the web site is limited to forms with prior OMB 
approval for on-line collection including approval of the customer 
instructions. A small number of forms among the three service center 
agencies and RMA already meet this criteria.
    PRIT is currently seeking approval from OMB for the deployment of 
Phase I. In addition, FSA makes available electronically on a daily 
basis:
  --market rates,
  --CCC rates,
  --Farm Loan rates,
  --News releases via FSA's news listserver. Farmers and producers can 
        subscribe to the news list through the FSA web site.
    FSA also provides burley tobacco lease and transfer information 
online for selected states. The Agency is also establishing a website 
for each Service Center that will be available to the general public, 
including farmers, producers, and vendors. That site will provide the 
public with national and local farm program news and information, 
including notices of meetings for farmers to attend.

                              CIVIL RIGHTS

    Question. The budget mentions you wish to federalize county office 
employees. This will ease administration--none of us can disagree with 
this. You have stated this is necessary for a variety of reasons, 
including to make them more directly accountable to you for civil 
rights reasons. However, over 90 percent of the complaints are about 
Federal employees working in farm lending programs. What are you doing 
to make them more accountable? What energies are you expending to 
rectify this larger, more real problem? How many people have you 
disciplined and/or fired over these matters?
    Answer. I have clearly communicated to all USDA employees my 
expectation that every customer and every employee be treated fairly 
and equitably with dignity and respect. There are no exceptions and no 
excuses.
    Our employees have an enormous role to play in maintaining a 
positive, equal opportunity environment. Therefore, we have provided 
civil rights training for nearly all USDA employees. We are conducting 
compliance reviews of the USDA agencies and are monitoring the 
compliance review activities of the agencies' own civil rights offices. 
We are improving our policies on accountability and discipline in civil 
rights cases. The new policy will require an investigation into conduct 
whenever a settlement agreement is approved or a finding of 
discrimination is issued. Over 90 disciplinary actions have been taken 
against employees, ranging from removals to letters of reprimand.
    I am holding agencies accountable for meeting civil rights goals. 
For example, the Farm Service Agency's annual performance plan contains 
measurable, annual targets for its goals to: increase the number of 
small, limited-resource, and socially disadvantaged family farmers and 
ranchers elected to County Office Committee positions; increase the 
number of program and employee complaints processed on time; increase 
workforce diversity; and increase the number of loans to beginning and 
socially disadvantaged farmers/ranchers. In fiscal year 1999, the 
number of FSA direct and guaranteed loans made to minorities and women 
increased 25 percent from the number made in fiscal year 1998 and 50 
percent from the number made in fiscal year 1997.
    Question. How many staff years of field level employees have been 
consumed by doing the research on the Pigford Vs. USDA lawsuit?
    Answer. We estimate that the full-time equivalent (FTE) of almost 
240 field level staff years will be used during fiscal year 2000 for 
Consent Decree activities related to the Pigford vs. USDA lawsuit. 
About 80 percent of this estimated staff year usage will have been 
expended by the end of March. Existing agency field level employees 
have been doing the work at Headquarters and in the field, but this has 
necessarily diverted them from their normal duties of loan making, loan 
servicing, and other ongoing Farm Service Agency workload.

                 NATIVE AMERICANS CLASS ACTION LAWSUIT

    Question. What should we expect now with the class action lawsuit 
brought by the Native Americans?
    Answer. Keepseagle v. Glickman is a class action lawsuit filed on 
November 24, 1999, in the District Court for the District of Columbia 
on behalf of Native Americans. The Complaint alleges discrimination 
under the Equal Credit Opportunity Act and Title VI of the Civil Rights 
Act of 1964 in the access to and participation in USDA's farm programs. 
In addition, the Complaint alleges that USDA failed to process properly 
the civil rights complaints of Native Americans. The Plaintiffs are 
seeking damages in the amount of $19 billion. The Complaint defines the 
potential class as:
    All Native American participants in FSA's farm programs who 
petitioned USDA at any time between January 1, 1981 through November 
24, 1999, for relief from acts of racial discrimination visited on them 
as they tried to participate in the farm programs.
    To date, the Plaintiffs have identified 5 potential class agents, 
396 identified potential class members, and a potential class of 19,000 
Native Americans. USDA filed an Answer to the Complaint on January 24, 
2000. The Plaintiffs must submit a motion to certify the class by April 
12, 2000. The lawsuit is in the early stages of litigation and USDA 
will continue to evaluate the merits and litigation risks as the case 
moves forward.

                        CIVIL RIGHTS SETTLEMENTS

    Question. What is the status of the civil rights settlements? If 
this is what you consider a high priority, how long will it take you to 
respond to lesser priorities?
    Answer. When I became Secretary of Agriculture, I made a commitment 
to addressing longstanding civil rights concerns in the Department. I 
am very pleased with the steps we have taken to address these issues 
and ask for your continued support as we continue the difficult process 
of remedying past abuses.
    In April 1999, the Department entered into a class action 
settlement agreement with African-American farmers, providing 
compensation for those who felt they had been discriminated against in 
applying for USDA programs. The agreement provides for an independent 
facilitator to determine if each case meets the class definition, an 
independent arbitrator, and an independent adjudicator who all operate 
independently of USDA. In addition, the Department of Justice (DOJ) is 
responsible for coordinating most of the settlement payments in these 
cases.
    Thus far, over 19,000 farmers have joined the class action suit, a 
much larger number than was expected. The adjudicator has made a final 
determination on over 40 percent of the claims and, in about 60 percent 
of these, decided in favor of the farmer. Because of the volume of 
claims to be paid, there has been some difficulty in coordinating the 
payments. In some cases, payments to farmers have been delayed. USDA, 
DOJ and the facilitator are working to solve these problems and all 
payments will be made as quickly as possible, with the goal of making 
payments within 90 days of the decision.

                 RESOLUTION OF CIVIL RIGHTS COMPLAINTS

    Question. The Administration's budget suggests that there is strong 
support for USDA Civil Rights activities. Unfortunately, I find that 
very difficult to believe when, in Montana, we have cases that have 
been languishing at the Office of Civil Rights for years. What do you 
intend to do to get these cases resolved in a timely manner?
    Answer. I understand that nearly half of these cases have been 
closed and the majority of the remaining cases are in various stages of 
the investigation process. We are working diligently to resolve these 
cases as quickly as possible and have taken steps to ensure that all 
cases alleging discrimination in USDA programs are resolved in a timely 
manner. However, conducting thorough and objective investigations is 
often time-consuming. Consistent with the recommendation of our Civil 
Rights Action Team, the Office of Civil Rights is being reorganized 
into separate units with distinct responsibilities for overseeing the 
timely and effective resolution of program and employment 
discrimination complaints. USDA also launched a new tracking system for 
processing program discrimination complaints in 1999.

                         EXPORT PROGRAM FUNDING

    Question. Nearly every export program was cut. The Public Law 480 
program was cut drastically, as was the Section 416 program. The export 
subsidy program shows a decrease in funds of $154 million. At a time 
when we are fighting for a place in the world market why are we cutting 
funds for important export programs?
    Answer. The budget does not represent any reduction in the 
Administration's commitment to expanding overseas markets for America's 
farmers and ranchers. In many cases, the budget continues export 
promotion and trade programs at or near current program levels. This is 
true for CCC export credit guarantees, the Market Access Program, and 
Foreign Market Development Program.
    In some cases, the budget reflects lower program levels for 2001, 
but this is due to special considerations. For example, the Export 
Enhancement Program is reduced to be consistent with the maximum 
program level established in its authorizing statute as well as the 
Uruguay Round export subsidy reduction commitments. Funding for the 
Public Law 480 program appears to decline, but this is due primarily to 
large funding balances which carried over from 1999 and have expanded 
substantially the level of funding available in 2000. In the case of 
section 416(b) food donations, the budget was sent to print before the 
recent decision to increase this year's programming by 3 million metric 
and, thus, does not reflect the full extent of this year's activity.
    Question. Farm-states like Montana depend on export programs for 
their agricultural economy. The Foreign Market Development (FMD) 
Program and the Export Enhancement Program (EEP) especially provide 
much-needed help to farmers and ranchers to create new product markets. 
How can USDA cut the EEP program and give no additional funding to FMD 
when President Clinton has heavily promoted global trade?
    Answer. The Department has taken many actions to expand trade and 
develop new markets in recent years. We expanded substantially the 
level of programming under the CCC export credit guarantee programs in 
response the financial crises in Asia, Latin America, and elsewhere. 
Last year, we undertook a tremendous increase in food aid programming 
through the authority of section 416(b) and programmed the highest 
level of food aid in at least the past 25 years. We have reached two 
very important agreements with China which will provide significant 
benefits to America's farmers and ranchers. The President also has 
taken action to reform our policy on unilateral economic sanctions in 
order to provide additional sales opportunities in markets where 
previously U.S. exporters could not compete. Taken together, these 
actions plus others, clearly demonstrate the Administration's 
commitment to expanding trade.
    There is always more that can be done of course. Funding for EEP 
has been reduced in order to comply with the limitation established in 
its authorizing statute and to meet our commitment to reduce export 
subsidies under the Uruguay Round Agreement. Nevertheless, to ensure 
that EEP funds are fully used, the Administration again this year is 
proposing that Congress pass legislation which would authorize the 
Secretary of Agriculture to reallocate unobligated EEP funds to support 
other export activities, including market development and foreign food 
aid. If this authority were available, the Department would have the 
option of expanding funding other export programs, one of which could 
be the Foreign Market Development Program.

                        FSIS INSPECTOR SHORTAGE

    Question. Historically, Congress has fully funded the Food Safety 
Inspection Service's budget. Yet every year there is a shortage of 
inspectors. These shortages have caused backups at the plant and 
financial losses for producers. Our commitment to funding food safety 
programs is proven every year, but if the agency is missing the mark in 
projecting its needs, this problem will become worse. How can the 
agency assure that it has asked for the funding necessary to hire all 
needed inspectors for this year and next?
    Answer. The budget is based upon historical levels of industry 
growth and includes a level of funding necessary to ensure that the 
Government meets its responsibilities for providing inspection services 
without disruption to the industry.

                   TELECOMMUNICATIONS TO RURAL AREAS

    Question. I have been a major proponent of bringing 
telecommunications to rural areas. Bringing internet access to Montana 
farmers and ranchers increases market opportunities. It provides 
valuable information on agricultural research. A vast amount of 
information is made available to better their farm operations and 
improve their bottom line. The internet is becoming an increasingly 
valuable tool for agricultural producers and Rural Utilities Service 
(RUS) funding is an important part of that. How can this administration 
promote development and a better way of life for agriculture and then 
decrease funding for a program which offers rural areas an opportunity 
to dig out of the agricultural crisis?
    Answer. Since 1993, RUS has provided over $112 million in loans to 
eight telecommunications borrowers in Montana and has funded 13 
distance learning and telemedicine projects across the state totaling 
$3.9 million in grants. We are pleased to report that the 
Administration's funding request for fiscal year 2001 is actually 
higher than the current fiscal year appropriation. Our infrastructure 
lending levels are proposed to remain at the same level as this year, 
but our distance learning and telemedicine program is requesting a $100 
million increase in loans, to $300 million total, and a $5 million 
increase in grants, to a total of $25 million. In addition, under the 
authority of the distance learning and telemedicine loan and grant 
program, the administration is seeking $100 in loans and $2 million in 
grants for a pilot program to promote broadband initiatives and 
internet service.

                     CONSERVATION SECURITY PROGRAM

    Question. $1.3 billion for the conservation in the farm safety plan 
is a fairly large increase over last year's budget. This funding must 
not be used as the only route to provide assistance to farmers. Nor 
should it be used solely for set-asides. How can USDA assure that the 
conservation funding will truly be help for agricultural producers and 
not an avenue to lock more land out of production?
    Answer. The Conservation Security Program (CSP)--the centerpiece of 
the President's initiative--is a new voluntary program targeted to 
family farmers and ranchers who would receive a direct payment for 
maintaining or improving their natural resources. The program is built 
on the concept of helping people who actually work the land and keeping 
that working land in agricultural production in a sustainable 
condition. The CSP is not a cost-share program, but would be another 
conservation tool in the USDA ``toolbox'' of conservation programs.
    The CSP is not intended to take land out of production. In fact, 
land that is currently enrolled under a Federal conservation easement 
would not be eligible for the CSP, unless the easement agreement allows 
agricultural production to be continued. Conservation easement or 
similar long-term conservation protection programs provide payments for 
a variety of purposes, including conservation, farmland protection, and 
flood reduction. Under such easements, program participants must 
protect and maintain the land in a prescribed manner and have agreed to 
do so in exchange for the program payments. Since these lands are 
adequately protected by contract, additional payments under the CSP 
would not be responsible. This policy would make ineligible land 
enrolled in programs such as the Conservation Reserve Program, easement 
feature of the Wetlands Reserve Program, Debt Cancellation Conservation 
Contract Program, Water Bank, Emergency Watershed Protection Program 
floodplain easements, and similar Federal programs.
    Question. Why is this Administration focusing on ``Conservation 
Programs'' when what is broken in agriculture is the Market side?
    Answer. The Conservation Security Program is one piece of the 
policy mix in dealing the agricultural economy. It is not intended to 
be connected in any way with the price of the commodities being 
produced or to try to fix market issues. The CSP would build upon the 
existing conservation technical infrastructure and complement other 
USDA programs. Direct annual payments would be made to producers to 
financially recognize them for good land stewardship that produces the 
environmental benefits which we all enjoy--clean water and air, reduced 
soil erosion, improved wildlife habitat, and sustainable soil. Payment 
levels would be based on the comprehensiveness of producers' 
conservation efforts.

                        LANDS LEGACY INITIATIVE

    Question. The Administration's budget includes $236 million as part 
of the Land's Legacy Initiative. Of that, $130 million will be used to 
acquire lands for recreation, wildlife habitat, and watershed 
protection. A portion will be used to establish and expand community 
forests and open spaces. Has the USDA lost sight of the producer and 
what the USDA was created to do? The ``A'' in USDA stands for 
``agriculture'' not ``acquisition of lands''. Setting aside such sums 
of money for purchasing land for wildlife habitat is not my idea of 
assisting our producers. Was any thought given to offering producers 
incentives based on Conservation plans? Purchasing more land will 
simply take it off the tax rolls and further over burden our Counties 
and the States. When did USDA go into the business of land acquisition? 
What programs will go without funding or with limited funding to allow 
such purchases?
    Answer. The Land's Legacy Initiative contains the Farmland 
Protection Program (FPP) administered by the Natural Resources 
Conservation Service (NRCS). The FPP is beneficial to agricultural 
producers because it is used to purchase conservation easements from 
landowners enabling the land to remain in agricultural use rather than 
being converted to other uses. This program was authorized in the 
Federal Agriculture Improvement and Reform Act of 1996 (H.R. 2854/
Public Law 104-127) for the purpose of purchasing conservation 
easements or other interests on lands with prime, unique, or other 
productive soil to limit non-agricultural uses of the land. The 
authorization language requires that all lands in the FPP have a 
conservation plan on any highly erodible lands. Other incentives based 
on conservation plans are not authorized for the program at this time. 
The 1996 Federal Agriculture Improvement and Reform Act of 1996 
authorized $35 million for the FPP and all funds have been exhausted. 
However, demand for the program continues to increase, agricultural 
producers want to sell the development rights for their farms and be 
assured that their family farms will remain in agricultural use for 
future generations. The funding for the FPP will not impact other NRCS 
conservation programs.
    The Forest Service (FS) also supports the Lands Legacy Initiative 
primarily through two of its program areas. The Land Acquisition 
Program acquires lands, waters and related interests within the 
National Forest System as authorized by the Land and Water Conservation 
Fund Act of 1965 (Public Law 88-578). Many of the acquired lands are 
located in congressionally designated areas such as Wilderness, 
National Recreation Areas, Wild and Scenic Rivers and National Scenic 
Trails. Land acquisitions also improve forest management through 
consolidation of boundaries and providing access to existing National 
Forests and Grasslands. Land acquisition funds are provided through the 
Land and Water Conservation Fund under the Department of the Interior. 
In fiscal year 2001, a total of $130 million has been requested for 
acquisition, management, forest and wilderness inholdings and cash 
equalization.
    The second FS mission area that focuses on the Lands Legacy 
Initiative is State and Private Forestry. The purpose of these programs 
is to maintain working landscapes, to assure the economic vitality of 
communities and individuals through sustainable management of the 
natural resource base on which they rely. Among the State and Private 
Forestry programs, the Forest Legacy Program (FLP) conserves resource 
values of forest land, emphasizing lands of regional and national 
significance that are threatened with conversion to nonforest uses. 
Working in partnership with State Foresters, local governments, land 
trusts and interested landowners, the Forest Service supports the 
acquisition, by States or local entities, of conservation easements or 
fee simple title to unique lands. The program provides a cost-effective 
mechanism to protect critical wildlife habitat, conserve watershed 
functions, and maintain recreation opportunities.
    Another State and Private Forestry program, the Urban and Community 
Forestry Program works to assist local communities in managing trees, 
forests, urban parks, greenspace and vegetation in order to improve 
urban lands livability, and reduce sprawl that encroaches on rural 
working lands. Through planning, demonstration projects, and technical 
assistance, Urban and Community Forestry programs improve air quality, 
diminish noise pollution, cool air, reduce erosion, and cut water 
treatment costs.
    Finally, the FS will also serve as a key partner with USDA's Rural-
Business Cooperative Service to make loans available through a new USDA 
revolving loan program to State, local and tribal governments in order 
to establish a green trust partnership that enables communities to 
protect open space, limit sprawl, enhance air and water quality, and 
reduce greenhouse emissions

                          PROJECT TERMINATIONS

    Question. The Administration's budget proposes a 50 percent 
increase in funding for development, production, and commercialization 
of biobased products and bioenergy. This sounds like a glorious boost 
to research funding. However, what would you suggest I tell the 
producers of the Northern Great Plains when they ask why the funding 
for agriculture research at the Sidney ARS facility was cut?
    Answer. The President's budget required that very difficult choices 
be made. All of the projects are evaluated within the ARS research 
portfolio. Decisions are based on (1)the relevance of the research 
project in addressing critical issues; (2) the availability of 
sufficient funds to conduct the research; and (3) the overall impact of 
the research on American agriculture. The research recommended for 
elimination at Sidney is in the area of irrigated crop rotation 
research. Other research activities at Sidney, such as biological 
control of invasive species like leafy spurge and the wheat stem sawfly 
were considered higher priority.
    Question. These people are more interested in the leafy spurge and 
sawfly research that acutely hit them in their wallet. There is also 
$561 million for Invasive species research. This is for fiscal year 
2001. Aren't leafy spurge and sawfly invasive species?
    Answer. Yes. Leafy spurge (Euphorbia esula) is an invasive weed 
from the Mediterranean and Northern Europe, and wheat stem sawfly 
(Cephus cinctus) is an invasive insect from Eastern Asia and China. New 
natural enemies from Europe have been found for leafy spurge, and will 
be introduced after testing them. This work is based out of the ARS 
European Biological Control Laboratory in Montpellier, France. 
Biological control of the wheat stem sawfly, based out of the ARS 
Biological Control Laboratory in Beijing, China, is also progressing 
well. A promising parasite of the sawfly has been introduced to 
quarantine in Bozeman, in a program conducted in cooperation with 
Montana State University. It will be released after testing if it 
appears to be restricted in its host range to the pest.
    Question. What makes them so important in 2001 and not now?
    Answer. Leafy spurge and wheat stem sawfly are as important now as 
they will be in fiscal year 2001. Funding for these projects is not 
proposed for termination.
    Question. Why cut these programs one year and boost them the next?
    Answer. As stated above, funding for research on leafy spurge and 
wheat stem sawfly will continue.

                         GLOBAL CHANGE RESEARCH

    Question. What do you suggest I tell the producers that depend on 
these grass roots programs when they see $32 million being set aside 
for Global Change research?
    Answer. ARS research on global change addresses challenges that 
face agricultural producers and provides a wide array of environmental 
benefits. Research on rangelands indicates that woody species such as 
mesquite are replacing the more desirable grasses. Among the possible 
causes being investigated are altered climate and increasing 
atmospheric concentrations of carbon dioxide, a greenhouse gas. ARS 
research shows that increasing concentrations of carbon dioxide 
stimulate growth of some weeds more than crops. Work on managing crops, 
rangelands, and soils to sequester carbon dioxide into plants and soils 
increases soil organic matter, which benefits crop productivity, 
decreases erosion by wind and water, and suppresses leaching of 
agricultural chemicals into waterways. Other ARS researchers are 
working on ways to use weather and climate models to predict and avoid 
risks to agriculture associated with extreme weather events.

                        BUILDINGS AND FACILITIES

    Question. The Agricultural Research Service (ARS) Buildings and 
Facilities budget was cut by $14 million. This concerns me greatly. As 
agricultural producers look for new ways to increase profits and 
enhance production, it is extremely important that they have facilities 
available to conduct research and hold classes. As an example, I was 
extremely pleased that last year $530,000 was included for a new 
building at Fort Keogh in Miles City, MT. This agricultural research 
station had been operating on a shoe-string and is in major need of a 
new facility. The new building will help sheep and cattle ranchers 
learn about new methods and utilize agricultural research. If we hope 
to ever dig agriculture out of the hole it's in, innovation must be 
encouraged. Can the USDA find a way to restore the funding necessary 
for new innovation in agriculture?
    Answer. The fiscal year 2001 Federal budget submitted by the 
President recommends a number of new initiatives to address changing 
priorities facing agriculture and the American consumer. The research 
budget proposed for ARS reflects an increase of $97.8 million in 
support of new research initiatives in emerging and exotic diseases in 
plants and animals; agricultural genomics and genetics; human 
nutrition; invasive species; food safety; food quality protection; air 
quality; biobased products and new non-food and commercial uses of 
agricultural commodities; global climate change; integrated ecological 
sciences; and agricultural information dissemination.
    Examples of new innovations that would result from expanded 
research initiatives proposed in fiscal year 2001 include developing 
new methods for the biological control of invasive weeds and other 
pests important to agriculture; finding new markets for biobased 
feedstocks and products to increase economic opportunities for 
agricultural producers and rural communities; developing new ways to 
increase carbon storage in soils and determining ways to predict and 
investigate climate change impacts on agriculture; improving the 
economically desirable traits of livestock, poultry and aquaculture 
species; and expanding diagnostic capabilities to prevent acts of 
biological and chemical terrorism on U. S. agriculture and a host of 
other new innovations.

                       MARKET INFORMATION PROGRAM

    Question. The Economic Research Service (ERS) budget was cut by $10 
million. ERS provides important market information to agricultural 
producers. Many Montana producers rely on reports issued by ERS for 
cattle numbers and market reports. Again, the USDA is not giving 
producers a fighting chance to make their way in global markets. How 
will you change this?
    Answer. The agency's request for 2001 is $55.4 million, a net 
decrease of $10 million from the 2000 appropriation of $65.4 million. 
The change consists of four parts: a $1 million increase for an 
initiative on structural changes and concentration in food and 
agriculture; a $.5 million increase to support a global research and 
outreach initiative; a $.7 million increase for a study on carbon 
sequestration; and a $12.2 million decrease for evaluations of food 
stamp, child nutrition, and WIC programs. Funding for these evaluation 
studies in 2001 is included in the Food and Nutrition Service (FNS) 
budget. The net decline has no implications for the ERS market 
information program. ERS continues work closely with other agencies in 
supporting the USDA market information program and meeting the needs of 
American producers. The agency continues to publish a monthly report on 
the livestock sector outlook. This report includes analysis of major 
market developments, as well as key data on cattle, hogs, poultry, and 
dairy. ERS has an active program of research supporting the cattle 
industry and the work of other USDA agencies which relates to cattle. 
Examples include work on cattle cycles and our role in developing the 
Department's new price reporting program.

                             BIOTECHNOLOGY

    Question. In regards to Frito Lay's recent announcement that they 
will no longer use genetically modified corn in response to consumer 
concerns--is USDA working with these companies and processors to make 
sure that the public is receiving the proper information on food safety 
and the potential benefits of technological advancements in genetically 
enhanced crops?
    Answer. USDA's regulatory processes are open and transparent and 
the information on the safety reviews undertaken by USDA's Animal and 
Plant Health Inspection Service (APHIS) are made available to the 
public. Companies that are regulated by APHIS, or by the Food and Drug 
Administration (FDA) or the Environmental Protection Agency (EPA), are 
well aware of the extensive reviews that biotechnology products have 
undergone. Food manufacturers have spoken with me and other USDA 
officials regarding their concerns on these issues. In my view, we do 
not have a role in trying to influence companies as they decide how to 
respond to what they perceive to be their customers' demands, whether 
domestic or foreign. In addition, the responsibility for assuring the 
safety of food falls to FDA.
    However, we do believe that we need to devote more energy to 
demonstrate to the public our commitment to ensure that concerns are 
addressed. USDA has developed a web site on biotechnology to address 
key questions for the public and we have formed an internal 
Biotechnology Communications Committee to ensure that our various 
agencies provide consistent messages on topics that arise. This group 
is also working with the communications offices at FDA and EPA to 
improve interagency coordination in public outreach.
    Question. Additionally, Frito Lay is the largest user of cotton 
seed oil in the U.S. 60 percent of cotton seed oil is produced from 
genetically enhanced crops. It is past time to give some serious 
thought on how to address biotechnology. What plans does USDA have to 
do so?
    Answer. A key responsibility we have as a Department is to defend 
the integrity of our regulatory processes and decisions. This is a role 
our regulatory and policy officials perform in public meetings 
throughout the U.S., as well as in bilateral and multilateral fora. It 
is vital for our continued credibility that we continue in this role, 
and are seen as balanced and impartial, rather than as simply pro-
biotechnology.
    There has been increased media attention to various potential risks 
posed by biotechnology and there have been questions raised by some 
about the adequacy of the existing Federal regulatory system for 
biotechnology products. It is to be expected that, as for any new 
technology, questions will continue to arise. To ensure that we can 
address, in an authoritative manner, any scientific issues that may 
arise, I have asked the National Research Council of the National 
Academy of Sciences to set up a Standing Committee on Biotechnology. 
The membership on this committee and its charge will be announced 
shortly. The first task of the Standing Committee will be to examine 
the risk assessment process and the assumptions underlying it as used 
by USDA's Animal and Plant Health Inspection Service in its safety 
reviews of biotechnology products for agricultural use. The Standing 
Committee will in that study consider whether we are addressing all of 
the relevant scientific issues appropriately, and identify any areas 
where USDA might improve its regulatory oversight based on the most 
recent scientific knowledge. It will also consider how most 
appropriately to monitor biotechnology products that have been approved 
for commercial use.
    A variety of other issues have been raised by critics either of the 
technology itself, or of some of its key agribusiness proponents. A 
number of these complex questions need to be aired in a balanced public 
forum and the implications raised carefully considered, in order both 
to shed light on the public debate and to provide me with important 
recommendations to help guide future USDA activities. On February 4, 
2000, USDA announced the membership on our new Advisory Committee on 
Agricultural Biotechnology which will address these issues. 
Representatives of the Grocery Manufacturers of America and other 
groups along the food production and distribution chain are represented 
on the committee. The committee will meet for the first time on March 
29-30, 2000, in Washington, DC.
    Additionally, we believe that it is essential that there be 
accurate information available about the economic impacts on farmers 
who use biotechnology-derived crops, and on the environmental effects 
of their use in terms of inputs such as pesticides. We are increasing 
our data-gathering efforts in these areas. As niche consumer markets 
develop for identity-preserved non-biotechnology commodity streams or 
value-added biotechnology-derived products, USDA will have a role in 
certifying the testing methods used to verify the contents of a 
shipment through its Grain Inspection, Packers, and Stockyards 
Administration, and validating the identity of value-added products 
through its marketing and regulatory agencies.

                     WHEAT LOAN DEFICIENCY PAYMENTS

    Question. In the last agricultural appropriations bill, 
Representative Lucas included language which would provide an LDP for 
grazing wheat. Although grazing wheat is not mechanically harvesting 
the crop as the 1996 Farm Bill specifies, the USDA did set a precedent 
when they allowed an LDP for silage. When does the USDA expect to have 
the program in place to give an LDP to producers that graze their wheat 
crop?
    Answer. The language you refer to was in the conference report and 
not in the bill. It is my understanding that the current law, however, 
only allows USDA to make LDP payments to producers who actually harvest 
their loan eligible crops. The Federal Agriculture Improvement and 
Reform Act of 1996 provides for marketing assistance loans with respect 
to certain commodities that are produced on farms containing eligible 
cropland covered by production flexibility contracts and on any 
production of extra long staple cotton or oilseeds. LDP's are an option 
available under the marketing assistance loan program that allows a 
producer to receive an LDP from CCC provided the producer agrees to 
forgo obtaining a marketing assistance loan. Marketing assistance loans 
and LDP's are made on the actual harvested production of the commodity. 
Producers who do not harvest a crop do not have a commodity to pledge 
as collateral for a loan. Therefore, a producer is not eligible for an 
LDP on a commodity that was utilized as pasture.
    In short, with respect to the conference report language request to 
include wheat acres utilized for pasture to the commodities eligible to 
receive an LDP, my understanding is that I do not have the authority to 
base marketing assistance loans, and subsequently LDP's on anything 
other than actual harvested production. Such a change would require 
legislative action by Congress.
                                 ______
                                 

                Questions Submitted by Senator Herb Kohl

                SETTLEMENT OF PROGRAM CIVIL RIGHTS CASES

    Question. I continue to hear of problems at USDA related to civil 
rights issues. Please provide the status of ongoing issues regarding 
the civil rights settlement with plaintiff Black farmers and any other 
major issues before the Department including those involving Native 
Americans.
    Answer. I am committed to ensuring the civil rights of USDA's 
customers and employees. I am very pleased with the steps we have taken 
to address these issues and ask for your continued support as we 
continue the difficult process of remedying past abuses.
    In April 1999, the Department entered into a class action 
settlement agreement with African-American farmers, providing 
compensation and closure for those who felt they had been discriminated 
against in applying for USDA programs. The agreement provides for an 
independent facilitator to determine if each case meets the class 
definition, an independent arbitrator, and an independent adjudicator 
who all operate independently of USDA. In addition, the Department of 
Justice (DOJ) is responsible for coordinating most of the settlement 
payments in these cases.
    Over 19,000 farmers have joined the class action suit, a much 
larger number than was expected. The court-appointed adjudicator has 
made a final determination on over 40 percent of the claims and, in 
about 60 percent of these, decided in favor of the farmer. Because of 
the volume of claims to be paid, there has been some difficulty in 
coordinating the payments. In some cases, payments to farmers have been 
delayed. USDA, DOJ and the facilitator are working to solve these 
problems and all payments will be made as quickly as possible, with the 
goal of making payments within 90 days of the decision.
    Regarding other major issues, I have been told that the Department 
is working to resolve 13 employment-related and 4 program-related class 
action cases. One of these is a complaint alleging discrimination 
against Native Americans. The complaint was filed on November 24, 1999 
and an answer to the complaint was filed by USDA on January 24, 2000. 
The class would be comprised of all Native American participants in 
Farm Service Agency programs who complained to USDA about 
discrimination in farm programs between January 1, 1981, and November 
24, 1999.

               CIVIL RIGHTS INVESTIGATION AND ENFORCEMENT

    Question. Please provide details involving the Department's ongoing 
activities regarding civil rights investigation and enforcement as they 
relate to both client and employee issues.
    Answer. Since last year, the Office of Civil Rights (CR) has 
developed procedural manuals and standard operating procedures and 
realigned the program and employment divisions. All CR program 
complaint files are being reviewed to determine priority for 
investigation and appropriate resolution. CR will provide management 
diversity training to all USDA managers in headquarters and each agency 
will provide similar training to their managers in the field. 
Consistent with the recommendation of our Civil Rights Action Team, the 
Office of Civil Rights is being reorganized into separate units with 
distinct responsibilities for overseeing the timely and effective 
resolution of program and employment discrimination complaints. USDA 
also launched a new tracking system for processing program 
discrimination complaints in 1999
    The Program Compliance Division has scheduled evaluations of agency 
civil rights programs to assess whether the offices are properly 
staffed and to determine the level of enforcement of applicable civil 
rights statutes, regulations, and policies. I understand that four 
agencies will be evaluated this year: the Natural Resources 
Conservation Service, Rural Development, the Foreign Agricultural 
Service, and the Office of Inspector General. Employment compliance 
reviews are scheduled or are being conducted throughout the Department 
to identify any violations of employee civil rights. All agency heads 
were evaluated on civil rights performance during fiscal year 1999, and 
there was improved performance in all but two agencies. Over 90 
disciplinary actions, including removal, have been taken against 
employees for discrimination or misconduct related to civil rights.
    We have nearly eliminated the backlog of more than 1,000 old 
program civil rights complaints. We are providing the support needed to 
resolve the cases under the class action lawsuit brought by Black 
farmers (Pigford v. Glickman). The adjudicator has made decisions in 
about half of the cases filed to date.

                       USE OF SECTION 2501 FUNDS

    Question. Please provide a detailed analysis of your historical, 
current, and projected (fiscal year 2001) use of section 2501 funds 
including the results from such use (both results sought and realized).
    Answer. Congress began funding the 2501 program in fiscal year 1993 
to provide training and technical assistance to small and disadvantaged 
farmers. The initial funding level was $1 million and has increased to 
$3 million on an annual basis. In fiscal year 2000, $5.2 million of 
additional funding has been made available from the Fund for Rural 
America. The fiscal year 2001 Budget requests a program level of $10 
million to fund the program at the level recommended by the Civil 
Rights Action Team's Report. Additional information follows.
    [The information follows:]
    Fiscal year 2000 is the final year for 23 of the 26 projects that 
have been funded. Final project reports will be submitted in the first 
quarter of fiscal year 2001. I am particularly encouraged by projects 
such as those at the Federation of Southern Cooperatives/Land 
Assistance Fund in Georgia and Tuskegee University in Alabama. They 
have provided outreach and technical assistance that has increased 
ownership of farms and ranches by socially disadvantaged citizens.
    For example, Georgia reported 111 counties with a population of 
black farmers. Statewide, from 1992 to 1997, there was an increase of 
95 black farmers. Eighteen of these counties were in the 2501 program 
and they reported an increase of 66 black farmers. Thus, the 2501 
projects contributed to 73 percent of the total increase in black 
farmers in Georgia. Nearly all counties reporting increases in black 
farmers had double-digit percentage increases.
    In Alabama, 8 of the 12 project counties showed an increase in 
black farm numbers between 1992 and 1997. In Bullock, Lowndes, and Hale 
Counties the increases were 46 percent, 42 percent, and 25 percent, 
respectively. USDA intends to build on these successes of the 
Federation of Southern Cooperatives/Land Assistance Fund and Tuskegee 
University.
    For fiscal year 2001, USDA plans new outreach projects. We are 
currently preparing a request for proposals for new projects to be 
published in the Federal Register. We plan to evaluate proposals by the 
end of the fiscal year so we will be ready to make awards upon 
enactment of fiscal year 2001 appropriations. The planned Minority Farm 
Register and Small Farms Register and the increased agreements with 
community organizations will also help the program meet its objectives.

                         FUND FOR RURAL AMERICA

    Question. The budget justification indicates that $60 million in 
budget authority is being obligated under the Fund for Rural America in 
fiscal year 2000. Of that amount, $5.2 million is being added to the 
amount already appropriated for section 2501 activities. It has been 
brought to my attention that interest has been expressed by the 
University of Arkansas at Pine Bluff (an 1890 Institution) to further 
develop a demonstration farm in the vicinity. I also understand that 
you visited this site in 1998. Would funding provided through section 
2501 be appropriate for use in development of the facility as 
envisioned by UAPB, or would any other program included under the Fund 
for Rural America?
    Answer. The University of Arkansas at Pine Bluff partnered with the 
Natural Resources Conservation Service to establish a National Wetland 
Water Management Center on a 870-acre farm in Lonoke, Arkansas. I 
visited this Center in 1998. Successful technology from this farm is 
transferred to the State's small farmers, many of whom are socially 
disadvantaged. Five small farmers who are participants in the 
University's 2501 project are also demonstration farmers with the 
Center.
    Section 2501 provides funds for training and technical assistance 
to small and disadvantaged farmers. In April 2000,the Office of 
Outreach intends to solicit new proposals for 2501 grants to be awarded 
in fiscal year 2001, subject to appropriations. Demonstration projects 
like this one, may well meet the requirements for a grant under the 
2501 program and we encourage all proposals.

                               USER FEES

    Question. The fiscal year 2000 Appropriations Act includes language 
requiring information to be submitted with the budget in the event 
unauthorized user fee revenues are assumed in the overall budget. The 
budget proposal for the Agriculture Subcommittee includes $600 million 
in such fees, most of which are related to USDA programs. In the event 
these fees are not authorized, what items within the proposed budget do 
you want reduced in order to keep our spending within prescribed 
limits?
    Answer. The budget is based upon a current law request. Should the 
authority for user fees not be approved by the authorizing committee 
this current law request would not have to be revised.

                 COMMISSION ON 21ST CENTURY AGRICULTURE

    Question. The 1996 Farm Bill included a provision authorizing the 
Commission on 21st Century Agriculture to examine and recommend options 
for farm policy to replace the current farm law. What is the status of 
this commission and when should its report be released?
    Answer. The Commission on 21st Century Production Agriculture has 
been actively meeting since February 1998. Most recently, the 
Commission met January 27-28, 2000, in Washington, D.C. with policy 
experts from around the country to discuss the future of agricultural 
policy in the United States. The next meeting is scheduled for March 7, 
2000. The Commission and staff are working to develop recommendations 
for future farm policy and expect to publish a report January 1, 2001 
pursuant to Sec.  183b and Sec.  184b of the Federal Agricultural 
Improvement and Reform Act of 1996.
    Question. The 1996 Farm Bill included a provision authorizing the 
Commission on 21st Century Agriculture to examine and recommend options 
for farm policy to replace the current farm law. What is the status of 
this commission and when should its report be released?
    Answer. The Commission on 21st Century Production Agriculture has 
been actively meeting since February 1998. Most recently, the 
Commission met January 27-28, 2000, in Washington, D.C. with policy 
experts from around the country to discuss the future of agricultural 
policy in the United States. The next meeting is scheduled for March 7, 
2000. The Commission and staff are working to develop recommendations 
for future farm policy and expect to publish a report January 1, 2001 
pursuant to Sec.  183b and Sec.  184b of the Federal Agricultural 
Improvement and Reform Act of 1996.

                        FARM*A*SYST/HOME*A*SYST

    Question. The Farm*A*Syst/Home*A*Syst program funded by CSREES has 
proven itself to be an integral component of Departmental strategies to 
improve water quality and protect the environment through its national 
network of state Farm*A*Syst programs. Congress has recognized the 
value of this program by directing CSREES to fund the program by name 
including funding for national headquarters in Madison, WI and for 
grants to states from the water quality accounts. While we recognize 
that the Integrated Accounts are generally competitive, the intent of 
Congress to specifically fund the existing Farm*A*Syst program is 
clear. Still, CSREES has thus far refused to provide the funding for 
this valuable program as directed by Congress. Please inform this 
Committee how you interpret the direction of Congress to fund the 
Farm*A*Syst/Home*A*Syst program at no less than fiscal year 1999 levels 
and how you intend to comply with congressional direction.
    Answer. Section 406 of the Agricultural Research, Extension and 
Education Reform Act of 1998 (Public Law 105-185) provides the 
authority to award grants to colleges and universities in accordance 
with section 1404 of the National Agricultural Research, Extension, and 
Teaching Policy Act of 1977 (7 U.S.C. 3103) on a competitive basis for 
integrated agricultural research, education, and extension projects. 
CSREES is finalizing the fiscal year 2000 Water Quality Program Request 
for Proposals (RFPs) in which the national and state Farm*A*Syst/
Home*A*Syst providers may compete openly for grants. The funds 
available under Sec. 406 of the RFP far exceed those spent on 
Farm*A*Syst/Home*A*Syst in fiscal year 1999.

             SUSTAINABLE AGRICULTURE RESEARCH AND EDUCATION

    Question. I have long been a supporter of the Sustainable 
Agriculture Research and Education programs and I applaud the 
Department for budgeting additional funding for the SARE program for 
the first time in many years. For too long this valuable program has 
received inadequate funding and inadequate support from the Department, 
relative to spending on research for conventional agriculture. However, 
as you know, sustainable agriculture includes a wide range of cultural, 
biological and other practices designed to ensure that farms are both 
economically and environmentally sustainable. While I strongly support 
research and education to support organic agriculture, I am concerned 
that the Administration's proposal is limited solely to organic when 
the field of sustainable agriculture is much broader. Why did the 
Administration limit its SARE increase to organic when the research 
needs of the broader system of sustainable agriculture is in equal need 
of new research and education funding?
    Answer. The SARE program has supported over 200 projects related to 
organic agriculture. The increase requested in the fiscal year 2001 
President's Budget for SARE will enable the agency to focus all of the 
current funding to the needs of the broader system of sustainable 
agriculture while targeting organic agriculture through the increase. 
The existing SARE program has significant experience with organic 
farming and marketing issues under the larger umbrella of sustainable 
agriculture, and an innovative structure. The SARE structure consists 
of regional organization with strong stakeholder involvement; 
integration of research with extension and outreach; multi-
institutional collaboration; and a commitment to on-farm research that 
is well-suited to the involvement of organic stakeholders and to 
addressing organic farming and marketing research and extension in a 
holistic manner. The SARE initiative on organic research and extension 
will serve an expanding and increasingly active constituency of 
producers and consumers.

                             BIO-TERRORISM

    Question. I understand the Federal government is developing an 
ongoing strategy for defense against bio-terrorist activities. Please 
outline the role of USDA in this effort.
    Answer. The U.S. agricultural food and fiber production system is 
uniquely vulnerable to deliberate introduction of highly infectious 
diseases and pests, particularly those of foreign origin. USDA has 
successfully prevented widespread damage caused by numerous accidental 
introductions of non-endemic plant and animal pests and diseases in the 
past by rapidly responding to outbreaks and implementing appropriate 
control measures. The Department is participating in an inter-agency 
effort regarding bio-terrorist threats affecting agriculture.

                             METHYL BROMIDE

    Question. Please provide information regarding USDA activities 
regarding the search for a methyl bromide alternative.
    Answer. The USDA is working with the U.S. Environmental Protection 
Agency (EPA), States, industries, including the Crop Protection 
Coalition, to address high priority needs of commodities and products 
in both soil and postharvest fumigation. Co-chaired by ARS, USDA 
participates in a USDA/EPA methyl bromide working group, established by 
the Secretary Glickman and EPA Administrator, to review potential 
alternatives for efficacy and EPA registration status. A long list of 
action items has been identified relative to registration and some 
registration problems were recently resolved due to that effort.
    [The information follows:]
    Agricultural Research Service Research Program: In 1999, ARS 
reviewed its methyl bromide research program with growers and other 
methyl bromide users in meetings in Florida and California to receive 
input on the methyl bromide research program to make sure it is 
properly focused on the highest priority problems. In addition, ARS 
organized a field trip of USDA and EPA personnel to study issues 
particular to the floral and nursery industries in California. ARS also 
provides a representative to the Montreal Protocol Methyl Bromide 
Technical Options Committee to conduct assessments of the availability 
and efficacy of methyl bromide alternatives and to provide technical 
advise to the Montreal Protocol on related issues.
    ARS conducts research at 20 Federal laboratories to find 
alternatives to present soil fumigation and postharvest uses of methyl 
bromide as follows:
    At Weslaco, Texas, and at Orlando and Miami, Florida, ARS is 
developing alternative quarantine treatments for citrus, vegetables, 
and subtropical fruits, as well as studying ways to minimize phytotoxic 
effects of these treatments. Emphasis is placed on pest-free zones, 
irradiation, heat and cold treatments, and advanced quarantine pest 
detection systems.
    At the Hilo/Honolulu, Hawaii, ARS laboratory, alternatives are 
being developed for tropical fruit infested with fruit flies, 
especially Mediterranean and oriental fruit flies, to allow export of 
Hawaii-grown fruit to foreign markets and mainland United States, and 
to protect mainland United States from introduction of pests present in 
Hawaii. This research focuses on irradiation, heat and cold commodity 
treatments and on techniques to eradicate fruit flies.
    At Manhattan, Kansas, ARS is developing alternatives to use of 
methyl bromide to fumigate flour mills, food processing plants, and 
other structures for insect infestations. Building heat-ups alone and 
in combination with other treatments such as diatomaceous earth are the 
approaches being researched.
    Research to develop alternatives to soil fumigation with methyl 
bromide to control pathogens and weeds is conducted at 15 ARS 
locations. Methyl bromide is used to some extent on more than 100 
crops, although nearly 80 percent of all the preplant methyl bromide 
soil fumigation is used on just four crops--strawberries, tomatoes, 
ornamentals/nursery crops, and peppers. Alternatives to methyl bromide 
soil fumigation include host plant resistance, biological control, 
alternative chemicals, and different cultural practices, either alone 
or in combination.
    At Washington, D.C., biological control and alternative, naturally-
occurring chemicals are being evaluated as alternatives to methyl 
bromide for control of soilborne diseases of ornamentals.
    At Beltsville, Maryland, biological control agents are being 
identified and their mode of action determined to improve control of 
diseases of vegetables.
    At Kearneysville, West Virginia, natural plant volatiles are being 
evaluated as alternative fumigants and compost and other cultural 
methods identified for disease and weed control.
    At Fresno, California, integrated strategies are being tested that 
involve host plant resistance, biological control and alternative 
chemicals for control of disease, nematodes and insects of 
strawberries, grapes, tree fruits, and vegetables. The application of 
alternative chemicals using irrigation systems is being tested.
    At Riverside, California, research is under way to reduce methyl 
bromide emission in strawberry and vegetable production and to track 
the movement and degradation of methyl bromide and alternative 
fumigants.
    At Davis, California, work is directed at using host plant 
resistance and cultural modifications to manage diseases in tree fruits 
and nuts.
    At Salinas, California, research is aimed at finding biological and 
cultural control methods to manage strawberry and vegetable diseases, 
and characterize the ecology of pathogens.
    At Wenatchee, Washington, disease problems in tree fruit production 
are being identified, and strategies for their control are being 
sought.
    At Corvallis, Oregon, biological controls are being investigated 
for diseases of ornamentals and nursery crops, and the role of 
beneficial microorganisms in disease and weed management is being 
explored.
    At Stoneville, Mississippi, biological control agents to control 
weeds in vegetables are being identified and characterized.
    At Tifton, Georgia, the emphasis is on finding cultural methods and 
alternative chemical treatments and integrated strategies for control 
of nematodes and diseases on vegetables, and on identifying alternative 
herbicides for control of weeds.
    At Byron, Georgia, research is aimed at improving cultural 
practices and host resistance to manage nematodes and diseases in 
peaches and other tree fruits.
    At Gainesville, Florida, work is under way to find alternative soil 
treatments, such as solarization, flooding, or heating, to control 
pests, weeds, and pathogens in vegetables.
    At Orlando, Florida, integrated methods involving biological 
control, cultural practices, and alternative chemicals are being 
developed for control of weeds, nematodes and diseases in tomatoes, 
peppers, and other vegetables.
    At Charleston, South Carolina, alternative fumigants, host-plant 
resistance, and cultural practices are being explored as alternative 
disease management strategies in vegetables and fruits. The survival 
and spread of soilborne pathogens as influenced by other microorganisms 
and the environment is being determined.
    In addition, field-scale validation projects that were begun in 
fiscal year 1996 were continued in Fresno, California, and Orlando, 
Florida, to determine if the most promising experimental alternatives 
were effective, economically feasible, and adaptable to commercial 
production systems of strawberries, vegetables and perennial crops.
    Cooperative State Research, Education, and Extension Service 
Research Program: Research dollars in Hatch, Special Research Grants, 
and NRI was $298,000 for fiscal year 1998 and $778,000 for fiscal year 
1999. It is estimated that $2.8 million will support methyl bromide 
activities in fiscal year 2000. The Methyl Bromide Transition Program 
is a $2 million competitive grants program designed to support the 
discovery and implementation of practical pest management alternatives 
for commodities affected by the phase out of methyl bromide. This new 
program will focus on short to intermediate term solutions for all 
commodities at risk using either combinations of presently available 
technologies or newly developed practices. The emphasis of the new 
funding will be towards integrated management approaches, their 
development and implementation, including research, education and 
extension activities on all commodities at risk.
    USDA's Interregional Research Project No. 4, (IR-4) began 
addressing the methyl bromide issue in 1998. A team was formed to work 
on discovery and development of safe products and new technologies that 
have the potential to fill the void in tomato and strawberry production 
created when methyl bromide is phased out. Much work has already been 
done and is ongoing with the standard products currently used to 
control the same spectrum of pests as methyl bromide. A weakness of all 
of the standard products is poor or no control of annual and perennial 
weeds. IR-4 has ongoing programs to address this for tomato producers 
and a new program is evaluating materials for crop safety and control 
of yellow and purple nutsedge in tomatoes. Weed control in strawberries 
is also being approached. IR-4 is also evaluating new, unregistered 
products as methyl bromide alternatives for strawberries and tomatoes. 
Strawberry field trials began this fall and tomato trials are scheduled 
for early in 2000.

                             METHYL BROMIDE

    Question. What changes in agricultural production and marketing 
have occurred in the private sector in anticipation of the loss of 
methyl bromide?
    Answer. Currently, there are no substitutes that are as efficient 
or cost effective as methyl bromide. Continuing research and field 
trails of alternatives will provide substitutes when the phase-out in 
completed in 2005. However, without methyl bromide, some production 
changes may take place in areas of the U.S. where alternatives are not 
cost effective for production of certain crops. There are some new 
materials in field trials at this time that hold promise as replacement 
chemicals but are not commercially available at this time.
    USDA data are not currently available to show changes in production 
and marketing due to the anticipated loss of methyl bromide. Economic 
models predict production declines and acreage shifts for such crops as 
tomatoes, peppers, cucumbers, watermelons, and strawberries in 
California and Florida if methyl bromide is no longer available. The 
U.S. is scheduled to reduce methyl bromide consumption by 25 percent in 
1999, 50 percent in 2001, 70 percent in 2003, and 100 percent in 2005. 
USDA data from 1997 to 1999 show stable or increasing acreage and 
production of affected crops. USDA estimates of methyl bromide-treated 
tomato, pepper, strawberry, and eggplant acreage in Florida were stable 
or increasing from 1992 to 1998 (available in even years only), while 
methyl bromide-treated strawberry acreage in California decreased 
between 1996 and 1998.

                          MINOR USE PESTICIDES

    Question. Please outline the efforts of USDA to assist in the 
development and availability of minor use pesticides.
    Answer. The Pest Management for Minor Crops (IR-4) Program is a 
highly effective effort between the State Agricultural Experiments 
Stations, CSREES, and the Agricultural Research Service (ARS). IR-4 
provides the national leadership, coordination, and focal point for 
obtaining data to support the regulatory clearance through the U.S. 
Environmental Protection Agency (EPA) for pesticides and biological 
control agents for specialty food crops such as fruits and vegetables 
as well as non-food crops like ornamentals.
    In many cases, the agricultural chemical industry cannot 
economically justify the time and expense required to conduct the 
necessary research for products with limited market potential. With 
assistance from IR-4, producers of small acreage crops such as 
vegetables, fruits, nuts, and herbs have expedited access to pest 
control products. In order to accomplish the above, a four step process 
has been developed for food crops. Step one involves research 
prioritization. Because of limited resources, IR-4 requests and 
receives input from stakeholders on potential research projects. Yearly 
workshops are conducted that involve growers, commodity organizations, 
university research and extension specialists, EPA staff, and industry 
representatives to determine which projects are the most critical to 
minor crop agriculture. Step two is research planning. Research 
protocols are written after careful review and comments from 
stakeholders. Step three is research implementation. A typical IR-4 
program consists of both field and laboratory phases. For the field 
work, researchers apply the crop protection chemical to the target crop 
according to the experimental protocol. The crop is harvested and 
transferred to the laboratories where the chemical residues in the 
crop, if any, are determined. All field and laboratory research is 
conducted under EPA Good Laboratory Practices. Step four is data 
submission and approval. The data are critically reviewed and formatted 
into a regulatory package and submitted to the EPA for the review. If 
appropriate, the EPA will approve the submission and grant a pesticide 
food tolerance to support registration of the use on the minor crop. 
The process for ornamental crops is similar, however, these crops do 
not require a pesticide tolerance.
    Question. Please provide any economic data available regarding the 
cost to producers due to the unavailability of these products.
    Answer. At this time, data and/or models are not available to allow 
for development of a comprehensive economic analysis of the impact of 
the unavailability of pesticides that are needed for minor crops. In 
total, minor crops farm gate value is $40 billion or 40 percent of 
total U.S. crop value.
    IR-4 has a few specific examples of economic impact as a result of 
their work. IR-4 has developed and submitted data to EPA for the insect 
growth regulator tebufenozide on blueberries, blackberries, 
raspberries, canola, cranberry, mint, and turnip. This chemical 
received the 1998 Presidential Green Chemistry Award because of its 
unique ability to control problem pests without damaging non-target 
organisms and the environment. Many consider this Reduced Risk 
pesticide an efficacious alternative for many high risk pesticides 
which are under EPA scrutiny associated with the Food Quality 
Protection Act (FQPA). The Cranberry Institute has estimated the use of 
tebufenozide will provide economic benefits ranging from $17 to $35 
million annually depending on the severity of the target pest 
infestations.
    In an another example, the clearance of the herbicide pyridate on 
the ultra-minor crop garbanzo beans--chickpea, grown on only 15,000 
acres in the states of Washington, Oregon and Idaho has resulted in a 
net revenue increase of more than $3.3 million on the part of 
producers. This single registration combined with changes in government 
farm programs has allowed garbanzo beans to become an important 
rotational crop in certain production systems in the Pacific Northwest 
region.
    Finally, IR-4 is currently assisting sweet corn growers in 
Wisconsin and other North Central states with the clearance of the 
herbicide glufosinate. IR-4's data has supported an EPA-approved 
Emergency Exemption. The emergency exist due to the cancellation of 
cyanazine and use restrictions of other triazine herbicides to protect 
the ground water. The University of Wisconsin has estimated that 
without the emergency approval of glufosinate for Wisconsin sweet corn, 
losses to Wisconsin farmers would exceed $2.9 million and the loss to 
Wisconsin overall economy would be much greater.
    As EPA continues to implement FQPA, we expect to see many older 
chemical pesticides come under increases scrutiny. A likely outcome is 
the reduction or elimination of existing tolerances. The impacts on 
minor crops are potentially severe because there are few registered 
alternatives. The IR-4 program mitigates these impacts by helping to 
assure that modern pest management tools are available to minor crop 
producers.

                          MINOR USE PESTICIDES

    Question. Please describe your ongoing collaboration with EPA 
regarding the development of minor use pesticides in order to protect 
producers, consumers, and the environment.
    Answer. Though IR-4 has worked closely with EPA since the Agency's 
inception, the two groups started some new initiatives in 1998 to build 
better coordination and cooperation. First an EPA/IR-4 Technical 
Working Group was formed. This group meets quarterly and focuses on a 
number of important issues involving better productivity and efficiency 
in handling minor crop registrations. Some highlights of this 
collaboration effort are noted as follows:
    For the first time in IR-4's history, a three-year work plan with a 
schedule of all of IR-4's projects and petitions has been submitted to 
the EPA. This will allow the Agency to schedule their petition review 
process more efficiently, more importantly it will allow EPA to 
schedule and review IR-4 submissions along with the submissions from 
industry on the minor crops.
    EPA and IR-4 have developed a standard format summary for IR-4 data 
submissions. This summary has saved EPA significant time in reviewing 
IR-4 submission, with a savings estimated as much as two months, and 
eliminating EPA funding of expensive external contract review to 
develop a similar summary.
    IR-4 proposed to EPA that they utilize existing IR-4 and industry 
data to establish crop group tolerances for most minor uses of the 
reduced-risk pesticides, spinosad and azoxystrobin. EPA has approved 
IR-4's proposals. This resulted in direct savings of over $1 million 
for IR-4 in field residue and laboratory analysis expenses in 1999. 
These resources were directed to developing solutions for other import 
minor crop pest control needs. More importantly, EPA approval will 
allow grower access to these two new materials almost three years 
earlier than under normal circumstances.
    EPA has also developed new procedures directions in order to allow 
IR-4 to have certain minor uses classified as Reduced-Risk. Prior to 
the modification, industry was required to submit a comprehensive 
justification document. The new process is streamlined requiring only 
pertinent data in order to allow EPA to make the classification.
    Finally, one of the IR-4 scientists has been assigned to EPA, 
working on the staff of the Director of the Office of Pesticide 
Programs. That IR-4 scientist provides day to day linkages from IR-4 to 
EPA, including working closely with EPA's Minor Use Team Leader and 
Ombudsperson to support efforts to address minor crop policy issues and 
challenges brought about by FQPA implementation.

                DAIRY FORAGE/INTEGRATED FARMING SYSTEMS

    Question. For a number of years, funding has been provided through 
the ARS Dairy Forage Center in Madison, WI for research related to 
Integrated Farming Systems. In fiscal year 1997 a cooperative agreement 
was executed between ARS and the University of Wisconsin and the 
Michael Fields Institute, a non-profit research organization, for work 
related to Integrated Farming Systems. Please provide information 
showing the level of funding provided for Integrated Farming Systems 
each year since fiscal year 1997 including an explanation of activities 
by ARS, the University of Wisconsin, and the Michael Fields Institute.
    Answer. The levels of funding assigned to the Integrated Farming 
Systems research area conducted by or funded through the U.S. Dairy 
Forage Systems Research Center (USDFRC) by year are as follows: 
$500,000 in fiscal year 1997; $497,100 in fiscal year 1998; $490,900 in 
fiscal year 1999, and $501,600 in fiscal year 2000. ARS, the University 
of Wisconsin (UW) and the Michael Fields Agricultural Institute (MFAI) 
all conducted research under these funds. The USDFRC has provided 
funding for this project, conducted research, and participated in the 
annual meetings of cooperators. The UW provides leadership and conducts 
research. The MFAI conducts research on the project, publishes a 
quarterly newsletter and a Profitable Farming Update Series (2500 
subscribers), and cooperates on the development and testing of a 
Software Decision Making Program ``Crop Rotation Options Program'' 
(CROP).
    Question. Provide information explaining specific actions taken by 
the ARS Dairy Forage Laboratory since 1997 in support of the Integrated 
Farming System's mission.
    Answer. The U.S. Dairy Forage Research Center (USDFRC) conducted 
research on (1) developing low-input management of intensive grazing 
systems, giving emphasis to procedures that provide needed supplements 
to growing and lactating dairy cattle without nutrient buildup in 
pastures and loss to the environment; (2) evaluating and developing 
cropping systems that provide quality feed for profitable dairy farms 
in an environmentally safe manner; (3) developing strategies for 
managing nutrients in crop-livestock systems with special emphasis on 
animal manure to, at minimal cost, maximize nutrient recycling and 
minimize environmental risks, (4) investigating surface loss of 
phosphorus and nitrogen from pasture paddocks that have been managed in 
different ways, and (5) cooperating in a multi-agency/institute project 
on farm diversification--``Small Grains Initiative'', the goal is to 
incorporate small grains and legumes into a normal corn-soybean 
rotation while considering production and marketing objectives.
    Question. Please provide materials showing ongoing activities at 
the Dairy Forage Center including what is proposed for fiscal year 
2001.
    Answer. The activities given in the answer to the previous question 
related directly to the Integrated Farming Systems mission. The Dairy 
Forage Center conducts several lines of basic research that help to 
support the systems research. These lines address (1) inefficient soil 
fertility management that reduces forage quality and yield and 
adversely affects water quality; (2) inability to fully exploit the 
plant genetic potential and manipulate the genetics by environment 
interactions for improved forage quality; (3) excessive harvest and 
storage loss of forage nutrients; (4) plant cell walls limit the 
consumption and digestion of forages; (5) excessive loss of forage 
protein during digestion in the rumen; (6) insufficient integration of 
research information to allow field evaluation of management options 
(systems approach) in the dairy forage enterprise.
    Additionally, for fiscal year 2001, using currently available 
funds, new thrusts will be initiated in the areas of (1) evaluating how 
modification in forage phenolic and fiber affect the production and 
utilization of forage crops by dairy animals and the cycling of 
nitrogen and carbon on dairy farms and (2) the development of forage 
legumes that are productive, pest resistant, persistent, non-
estrogenic, high-quality, and compatible in mixtures with grass for 
silage, hay and grazing.
    Full funding of the President's fiscal year 2001 budget request for 
bioenergy will support the development at USDFRC of improved methods 
for harvesting, handling, and storing herbaceous biomass and chemical 
characterization of feedstock quality parameters affected by management 
and storage.
    The President's budget also proposes that the USDFRC investigate 
the function of important genes in crops. Full funding for this 
initiative will allow the application of the ARS system for regulating 
gene expression to enhance the quality and value of cool season forage 
and turf grasses.

                      AQUACULTURE RESEARCH FUNDING

    Question. It was my understanding that there were discussions in 
fiscal year 1999 to transfer $400,000 from the Kearneysville, WV ARS 
facility to Leetown, WV for work at the NCCCWA. I further understand 
that Senator Byrd was opposed to this transfer. I now learn that a 
total of $1.3 million was transferred. Please explain the level of all 
transfers (including specific project increases and decreases) from 
Kearneysville to Leetown and also indicate whether Senator Byrd was 
appraised in advance of these transfers.
    Answer. Your understanding of the discussion in fiscal year 1999 on 
the transfer of funds between the ARS Kearneysville, WV, facility and 
the NCCCWA at Leetown, WV, is correct.
    The aquaculture grant which provides funding in the amount of $1.3 
million to the Fresh Water Institute at Shepardstown, WV was 
transferred to the new Cold Water Aquaculture Center at Leetown, WV. 
These funds were initially appropriated in fiscal year 1989 and managed 
from headquarters from 1989 through 1995. These were eventually 
transferred to the ARS facilities at Kearneysville, WV beginning in 
1996 for closer program coordination. These are extramural funds and 
are not implemented inhouse. Since these are aquaculture funds, they 
are more appropriately managed at the new aquaculture facility at 
Leetown. No inhouse funds were transferred from Kearneysville.
    Question. If Senator Byrd was not so appraised, please explain.
    Answer. Our failure to appraise Senator Byrd of this move was based 
on our clear understanding from the conception of the National Center 
for Cool and Cold Water Aquaculture that there should be a close 
working relationship between the NCCCWA and the Fresh Water Institute. 
We believed that the transfer was consistent with Senator Byrd's 
desires.

                       CLIMATE CHANGE TECHNOLOGY

    Question. The Budget includes funding for the Climate Change 
Technology initiative of which $300,000 would be directed to the 
Appalachian Farming Systems Center in Beaver, WV. Please explain how 
the Climate Change Technology initiative fits in with the newly 
recognized mission of the Beaver, WV center which is to assist small 
farmers in Appalachia.
    Answer. Successful and productive research through the Climate 
Change Technology initiative conducted at the Appalachian Farming 
Systems Research Center will provide expanded economic opportunity for 
small farmers in Appalachia. Funding through the Climate Change 
Technology initiative would be used to quantify the rates of soil 
carbon sequestering of alternative farming systems. The funds will also 
be used to identify and develop grasses and trees that have a high 
value as energy biomass. Development of perennial legumes that are 
suitable for the acid, low-fertility soils of the region is an 
important part of the core program to improve pasture productivity for 
cow-calf operations, and could also be used in a system to produce 
biomass for energy or value-added products. Research results will be 
used to develop farming systems that best meet small-farm economic and 
environmental goals including greater diversification of farm products, 
trading in carbon credits, and an improved ability to sustain 
production during droughts. Additionally, carbon sequestration in soils 
improves the soil's capacity to store nutrients and to hold water, 
which is especially beneficial during droughts.

                            INVASIVE SPECIES

    Question. Your fiscal year 2001 budget provides significant 
increases to battle invasive species. Please identify the most 
significant invasive species threats facing Wisconsin and what the 
Department is doing to eradicate or manage these species.
    Answer. The most significant invasive species threats facing 
Wisconsin are gypsy moths. To combat this pest, we are cooperating with 
the State of Wisconsin on survey and regulatory activities, as well as 
on the eradication of isolated outbreaks. Bacterial spraying is planned 
for 85,000 acres, including sites in Madison, Janesville, Beloit, and 
Wausau. In fiscal year 1999, the bacteria that attack the pest were 
sprayed last year on about 54,000 acres. With the funds requested in 
our Invasive Species request, we would conduct pathways analyses to 
develop target invasive species (such as gypsy moth) for national 
survey through cooperative agreements and development of response 
capabilities. These analyses will help us target invasive species for 
national and State survey and activities. Another significant threat in 
Wisconsin is the Eurasian Water milfoil (Myriophyllum spicatum L.). 
This submerged aquatic weed originates from Europe, Asia, and North 
Africa. It is rapidly spreading throughout the United States by 
invading lakes, ponds, and reservoirs. It is especially troublesome in 
nutrient rich waters with high motor boat use. Due to its unique growth 
habits, Eurasian Water milfoil competes aggressively with native 
plants. The plant's ability to grow in eutrophic conditions over a 
broad temperature range also contributes to its competitive edge over 
native plants.
    Question. Please describe efforts taken by the Department in 
working with foreign nations to help avoid the introduction of these 
species?
    Answer. We have over 80 foreign service officers assigned to over 
30 countries around the world that are high risk for the entry of 
invasive species. These officers work with foreign governments and 
exporters to minimize the risk of entry of invasive species in 
agricultural imports through activities such as preclearance programs, 
the certification of export facilities, and the establishment of 
inspection protocols. In addition, we have control programs in select 
countries to reduce the threat of key invasive species, such as 
Mediterranean fruit fly, foot-and-mouth disease, and screwworm.
    Question. To what extent would the problem of invasive species be 
controlled by an increase of border personnel?
    Answer. An increase in border personnel could significantly enhance 
our capability to exclude invasive species, as well as improve our 
response to threats from various exotic pests, and provide us with 
opportunities to examine emerging pathways, such as rail cars entering 
the U.S. from Canada. This is why we are requesting additional 
inspectors through our Agricultural Quarantine Inspection (AQI) 
program. Also, the revenue from our AQI user fees that took effect on 
January 1, 2000, will help in our exclusion efforts by providing for 
the hiring of additional inspectors, expanded canine teams, and state-
of-the-art high-definition x-ray machines.
    Question. To what extent will the inspection levels included in the 
fiscal year 2001 budget accomplish this objective?
    Answer. While our AQI program of user fees will bolster our border 
efforts with more staff years. Our fiscal year 2001 Invasive Species 
request does not include positions at the borders or ports-of-entry. 
The new positions we are proposing for this program are statisticians 
and program analysts at the State, regional, operational methods, and 
policy levels. These personnel would collect, validate, and use import 
and pest data to diagnose and predict the pathways of various invasive 
plant pests and animal diseases into the United States. They would also 
evaluate the impact of new inspection strategies at ports of entry.
    Question. To what extent is USDA working with other federal 
agencies on border inspections to halt the introduction of invasive 
species?
    Answer. About half of our Invasive Species request is targeted to 
help establish a new partnership with the U.S. Departments of Commerce, 
Interior, EPA, while seeking greater collaboration with State agencies 
and other stakeholders, through increased use of grants. For example, 
we plan to incorporate existing educational grants to the States with 
the goal of expanding public knowledge on the types of invasive species 
under USDA regulation. To address the needs of the nation's plant 
health industries and the State plant health agencies, we plan to 
increase cooperative funding and grant opportunities that increase the 
efficient use of Federal and State resources involved in the protection 
of the environment, and plant and animal health.

                             ANIMAL WELFARE

    Question. The fiscal year 2000 appropriations bill included an 
increase of $1 million above the previous year level (nearly $500,000 
above the budget request). How is the $1 million increase being 
incorporated in the fiscal year 2000 plan of operations?
    Answer. APHIS intends to use this increase to hire additional 
inspectors; expand inspections of existing facilities; replace 
vehicles; provide necessary training for our inspectors; and purchase 
imaging and communications equipment to provide documentation and 
evidence of violations.
    Question. Please provide a summary of fiscal year 1999 Animal 
Welfare activities including number of investigations, the nature of 
violations, enforcement actions, and their outcomes.
    Answer. In fiscal year 1999, APHIS investigated a total of 313 
cases. Examples include a case where USDA and the U.S. Attorney's 
office in Oregon successfully prosecuted 9 people for their roles in a 
pet-theft ring. Charges included providing false information concerning 
the suppliers of dogs sold into research. Two of the people received 
sentences of 4 to 6 months of home detention and 1-year term of 
probation, and they agreed to be permanently disqualified from being 
licensed under the AWA. They were also prosecuted in the State Circuit 
Courts for theft of companion animals.
    Another example occurred in October 1998, when APHIS settled a case 
with an airline which agreed to donate $25,000 to an APHIS-approved 
organization to research methods to promote the safe and humane 
handling of pet animals during transportation. The results of this 
research will be disseminated to all carriers registered under the 
Animal Welfare Act.
    A particularly innovative enforcement case settled in August 1999, 
involved a major primate reasearch laboratory. Terms of the settlement 
included reducing the number of chimps at the facility by 300 over a 3-
year period; submitting to a review of their animal care program by an 
external team of experts; establishing an independent compliance 
official with access to all facilities, records, and animals; and a 
$100,000 civil penalty, held in abeyance, assuming no new AWA 
violations.
    The budget proposes a $5 million increase in these activities for 
the coming year. In addition, legislation relating to the Safe Air 
Travel for Animals Act is in conference which might affect USDA program 
activities.
    Question. Would any of the request for the fiscal year 2001 be tied 
to new regulatory activities not related to the Safe Air Travel for 
Animals Act?
    Answer. None of the request for fiscal year 2001 is specifically 
related to the Safe Air Travel for Animal Act. APHIS intends to use 
this increase to maintain current activities; expand inspections of 
existing facilities; provide necessary training; and hire additional 
inspectors. This would include an overall increase in oversight of 
registered airline carriers.
    Question. Has USDA reviewed the pending Safe Air Travel for Animals 
Act to determine if it would have any affect of USDA operations or 
budget?
    Answer. APHIS has a copy of and has reviewed the proposed Act.
    Question. If so, what were the findings?
    Answer. One area of significant impact of the proposed Act arises 
from the requirement for airlines to notify USDA 24 hours prior to any 
live animal transport. If the intent is to have USDA inspect those 
flights with live animal shipments, it would have a major impact since 
there are approximately 500,000 animals shipped annually. Additionally, 
if USDA is to be responsible to inspect cargo areas of aircraft to 
assure compliance with the Act, this would require extensive training 
for USDA inspectors.

                       AGRICULTURAL CONCENTRATION

    Question. Concentration and the structure of agriculture. There is 
an ongoing debate about the changing structure of the U.S. farm sector 
and the extent to which the concentration of marketing power is harmful 
to small independent family farmers. I hold the unique position of 
serving as not only the ranking member of the Agriculture 
Appropriations Subcommittee, but also as the ranking member on the 
Judiciary Subcommittee on Antitrust, Business Rights, and Competition. 
Therefore, I have special interest in this debate. What are your 
overall views of this debate and do you think moratoriums on mergers, 
as was proposed last year, would be appropriate?
    Answer. Moratoriums on mergers may not necessarily be appropriate. 
However, USDA feels concentration and vertical coordination in 
agriculture requires increased vigilance. USDA is applying scrutiny to 
a number of proposed mergers and will take appropriate action to 
mitigate any detrimental effects that might be caused by those mergers.
    USDA's Grain Inspection, Packers and Stockyards Administration 
(GIPSA) has responsibility for enforcing the Packers and Stockyards 
Act, including investigating competitive practices, trade practices, 
and ensuring financial protection for producers in the livestock 
industry. The Justice Department, along with the Federal Trade 
Commission, has primary responsibility for enforcing the traditional 
antitrust statutes, including the Sherman Act and the Clayton Act.
    Question. Do you think USDA should have authorities similar to 
those at the Justice Department to examine and address problems related 
to the structure of the U.S. farm sector?
    Answer. It may not be necessary to pursue additional authority at 
this time. On August 31, 1999, the USDA signed a Memorandum of 
Understanding (MOU) with the DOJ and FTC. The MOU calls for the three 
agencies to cooperate on issues related to monitoring competitive 
conditions in the agricultural marketplace. The agencies will confer 
regularly to discuss and review law enforcement and regulatory matters 
to increase each agency's understanding and to improve each agency's 
effectiveness in carrying out its respective legal responsibilities, so 
there is no need for separate authority at this time.

                          RAPID RESPONSE TEAMS

    Question. The fiscal year 2001 budget request includes an increase 
of $1.3 million for Rapid Response Teams at GIPSA. What have the Rapid 
Response Teams, alone or in conjunction with other USDA activities, 
done to address small producer concerns regarding their perceived 
disadvantages in the market place?
    Answer. To date, small producer concerns and problems have been 
addressed in the following ways. First, the Rapid Response Teams have 
met with producers in Missouri and South Dakota provide local, on-site 
counsel and assistance to producers in order to enhance communication 
and respond to specific producer complaints and concerns to proactively 
respond to potential violations of the Packers and Stockyards Act as 
well as consider new legislation passed by these states. Second, the 
Rapid Response Teams have responded to small-producer complaints and 
concerns regarding two poultry integrators and one livestock auction 
market. Swift, decisive action by the rapid response teams protected 
the producers' interests and prevented or minimized financial harm. 
These actions were most beneficial to small producers, who may not have 
the resources to properly protect their interests.
    Question. Provide a listing of locations and reasons for deployment 
of Rapid Response Teams in fiscal year 1999 or, to the extent 
information is available, in fiscal year 2000. Describe specific 
incidents or corrective actions that were taken in fiscal year 1999 or 
in fiscal year 2000 resulting from the deployment of these teams.
    Answer. In July 1999--Sioux Falls, Brookings and Mitchell, South 
Dakota--the Rapid Response Teams addressed concerns of cattle and hog 
producers that packers allegedly violated the Packers and Stockyards 
Act since enactment of South Dakota's mandatory livestock price 
reporting law on July 1, 1999. The portion of the law prohibiting 
packers from discriminating in prices paid for livestock was declared 
unconstitutional by a U.S. District Court on July 26, 1999. An 
investigation was completed by GIPSA's Denver regional office, and is 
under review at GIPSA headquarters.
    [The information follows:]
    September 1999--Kirksville, Marshall, Maryville and Mexico, 
Missouri--The Rapid Response Team responds to livestock producers' 
concerns that packers may have violated the Packers and Stockyards Act 
when Missouri's new mandatory livestock price reporting law was enacted 
on August 28, 1999. Enforcement of the Missouri law is presently held 
in abeyance pending a Federal court decision on its constitutionality, 
but the law initially generated a considerable amount of controversy 
and misunderstanding among producers and the packing industry. Swift 
action by the Rapid Response Team enhanced communication between GIPSA, 
the state of Missouri, producers, and the packing industry. Possibly as 
a result of the pro-active actions of the Rapid Response Team, no 
violations of the Packers and Stockyards Act and regulations were 
found.
    November 1999--Excel, Wichita, Kansas--The Rapid Response Team 
responds to an issue concerning two Excel plants that were harvesting 
kidneys before carcasses were weighed on the hot weight scale, 
resulting in carcass weight being short about 2 pounds per carcass. 
Excel made $710,791 in restitution to its feedlot suppliers, who were 
expected to reimburse their customers.
    January 2000--Tecumseh, Nebraska--The Rapid Response Team responds 
to complaints concerning a broiler processor that ceased operations on 
January 14, 2000, owing 29 poultry growers $461,619 for unpaid poultry 
obtained under a poultry growout contract. A team of Packers and 
Stockyards investigators was immediately dispatched to the plant to 
marshal trust assets, determine who was unpaid, and assist them in 
filing trust claims under the Packers and Stockyards Act. Emergency 
funding of operations under a bankruptcy court order was agreed to, 
allowing for the purchase of feed and for processing of chicks on hand 
to continue until all birds have been processed. All valid trust 
claims, calculated to total $250,820 will be fully funded.
    February 2000--Jackson, Mississippi--The Rapid Response Team 
responds to poultry growers' concerns of unfair treatment under the 
Packers and Stockyards Act as a result of complaints made by poultry 
growers about changes to their growout contracts. The poultry firm's 
management and grower representatives negotiated amendments to the 
original contract offer that improved grower pay and addressed other 
grower concerns. Most growers have signed the negotiated contract.
    February 2000--Paxinos, Pennsylvania--A packer ceased operations in 
February 2000, owing approximately $175,000 for livestock. An immediate 
investigation resulted in sellers receiving payment in full without 
further delay and/or litigation expense to collect the amounts owed
    February 2000--Williston, North Dakota--The investigation concerns 
the proper payment for leased livestock sold at auction. The 
investigation is pending.
    February 2000--Blackfoot, Idaho--An auction market operated without 
the required surety bond. The Rapid Response Team worked with the 
auction market and its surety company to immediately reinstate the bond 
before further sales were held. The investigation is continuing.

                              CRANBERRIES

    Question. In the fiscal year 2000 Consolidated Appropriations Bill, 
Congress directed USDA to evaluate the current supply/demand situation 
in cranberries to make purchases to relieve the downward pressure on 
cranberry prices. Several Senators from the nation's top cranberry 
producing states also wrote you last winter urging you to take action 
to purchase surplus cranberry supplies.
    Please update this Committee on the status of your efforts to 
address the oversupply situation in the cranberry industry.
    Answer. USDA has made efforts to assist the industry through 
several purchases of cranberry products for distribution through 
domestic food feeding programs. In 1999, USDA purchased 1.0 million 
pounds of cranberry/apple juice. In 2000, USDA has purchased an 
additional 5.0 million pounds of cranberry/apple juice and for the 
first time, purchased 3.7 million pounds of trail mix, of which one-
fifth or approximately 750,000 pounds consisted of dried cranberries. 
USDA is aware of the situation that the cranberry industry still finds 
itself in and is presently considering the feasibility of an additional 
purchase of cranberries.

                             ORGANIC RULES

    Question. The budget request of fiscal year 2001 includes an 
increase of $614,000 for reporting of organically grown fruits and 
vegetables and a net increase of $703,000 for organic market protection 
and promotion. When do you expect to publish a final rule on National 
Organic Standards?
    Answer. USDA will release its revised organic standards proposed 
rule in early March. We expect to have a final rule in place by the end 
of 2000.
    Question. Please provide information regarding steps taken by the 
Department to offset the initial costs of accreditation services from 
within available funds.
    Answer. The proposed rule will provide for a waiver in the 
accreditation fees during the first 18 months of the program. This will 
provide an incentive for certifying agents to become accredited under 
the new national program as soon as possible.

                        GIPSA AND BIOTECH GRAINS

    Question. There is growing debate over the use of biotechnology as 
related to agricultural production, such as the discussion about 
segregation of grain that may or may not have been genetically altered. 
Please describe the activities of GIPSA regarding this issue.
    Answer. USDA, through the Grain Inspection, Packers and Stockyards 
Administration (GIPSA) establishes standardized quality grades and 
testing methodologies. These standards are used every day by sellers 
and buyers to communicate the type and quality of cereals, pulses, and 
legumes bought and sold. Biotechnology is affecting this program in two 
fundamental ways: (1) increased consumer demand for conventional crops 
has created a need for reliable testing methodologies to distinguish 
bio-engineered from conventional crops; and (2) an anticipated increase 
of new value-enhanced traits will create an expanded need for 
standardized testing methodologies to measure the enhanced quality 
attributes.
    To meet the market's need for impartial, professional verification 
of biotechnology testing technologies, GIPSA announced on November 12, 
1999, that it would establish a biotech reference laboratory. The 
laboratory will evaluate and verify the validity of analytical 
procedures used to detect and quantify biotechnology traits in grains 
and oilseeds and establish sampling procedures for use in testing 
genetically enhanced grains and oilseeds. However, questions remain as 
to the capability of the U.S. marketing system to segregate 
conventional and biotech crops. Accurate and consistent testing 
technology is essential as the market struggles to segregate crops in 
an efficient and effective manner.
    Question. If this debate becomes more heated in the coming months, 
especially if it becomes more complicated by trade considerations, do 
you think the levels currently requested for fiscal year 2001 will be 
adequate?
    Answer. It appears that GIPSA's request for an additional $1.98 
million and 10 staff years is adequate. This projected need is based on 
GIPSA validating the performance of methodologies and accrediting 
commercial laboratories to provide testing services. If market 
conditions create a need for direct Federal testing, additional funding 
will be necessary to develop expanded methodS for the testing 
capabilities of GIPSA's technical center in Kansas City, Missouri. Once 
methods are developed, these tests will be funded by user fees.

                      MILK FORWARD PRICE CONTRACTS

    Question. Please outline the steps you are taking to ensure that 
the Department meets its statutory obligation to establish a pilot 
program for forward price contracts between milk producers and milk 
handlers by the beginning of March.
    Answer. USDA has developed a proposed rule to implement the 
program, a Program Announcement, a set of Questions and Answers about 
the program, and a Forward Pricing Pilot Program Fact Sheet and 
Disclosure Statement. The proposed rule will be published at the 
beginning of March with a 15-day comment period. A final rule 
implementing the pilot program will be published as soon as possible 
after comments received on the proposed rule are addressed.

                                 HACCP

    Question. I am aware of a recent court challenge rising out of 
Texas related to your authorities under HACCP. Can you provide an 
update to this action?
    Answer. Supreme Beef's legal action contesting USDA's authority to 
promulgate the Salmonella performance standard regulations and to 
suspend inspection for failure to meet that standard continues. Both 
USDA and Supreme Beef have filed cross motions for summary judgment. On 
February 14, 2000, USDA held the suspension of inspection for Supreme 
Beef in abeyance after the company committed to take action to meet 
USDA regulatory standards. The suspension will remain in abeyance 
pending verification by USDA that Supreme Beef's corrective and 
preventive measures are effectively implemented.
    Question. In the event USDA does not prevail in the particular 
action, what would be the effect on the HACCP program overall to USDA 
food safety operations?
    Answer. USDA is not able to predict either the basis or the scope 
on which the judge might rule in the Supreme Beef litigation. However, 
in a worst case scenario under which the judge overturned the USDA's 
authority to require that establishments meet microbiological 
performance standards, the current approach to food safety might be 
disrupted. The use of Hazard Analysis and Critical Control Point 
(HACCP) systems itself is a process requirement, not a substantive 
performance standard. The current Salmonella performance standards for 
carcasses and ground products serve as direct, pathogen-based measures 
of the accomplishments of establishment HACCP systems.
    Question. What have been the reactions to this action form within 
the meat and poultry industry and from consumer advocates?
    Answer. Industry and consumer advocates share our concern for 
establishing the most effective food safety system possible. Several, 
but not all, industry organizations have joined in filing amicus curiae 
briefs in support of Supreme Beef. Conversely, consumer groups are 
expected to file an amicus curiae brief in support of USDA.

                         EGG SAFETY ACTION PLAN

    Question. I have heard some concern from egg producers about the 
Egg Safety Action Plan released by the President's Council on Food 
Safety on December 10, 1999. There is concern that the extensive 
environmental testing requirements might be particularly costly for egg 
producers. What is the Administration's estimates of the total cost for 
testing? Of egg diversion?
    Answer. Total cost estimates for environmental testing will be 
developed as USDA and HHS progresses through the rulemaking necessary 
to implement the Egg Safety Action Plan.
    Question. What are the relative differences in effectiveness and 
cost of testing eggs rather than production environment?
    Answer. The Salmonella Enteritidis (SE) Pilot Project, conducted by 
FSIS prior to the development of the President's Shell Egg Action Plan, 
showed that testing manure in the layer houses was effective in 
identifying flocks with SE infected eggs. Based on the cost of 
analysis, the number of samples required, and the degree of correlation 
associated with the analytical results, it is more cost effective and 
practical to conduct environmental testing rather than testing eggs to 
determine SE infection in a layer flock.
    Question. Since public funds pay meat, poultry and egg product 
inspection cost, including costs for Salmonella testing in meat and 
poultry, would the use of taxpayer funds be appropriate in this case as 
well?
    Answer. The meat and poultry industry currently pay for the costs 
of E. coli testing. E. coli testing under the Pathogen Reduction/HACCP 
rule serves the same purpose that microbiological testing under the 
Shell Egg Action Plan would serve, which is to ensure that their food 
production processes are under control. Accordingly, the cost of 
environmental testing requirements is a cost that should be borne by 
the egg production industry.
    Question. Egg producers have expressed concern about the 
possibility of inconsistent enforcement of regulations if the 
Administration relies heavily on state agency personnel to implement 
the Plan. Please list steps that the Department of Agriculture will 
take in order to ensure consistent enforcement of any eventual federal 
egg regulations by state agencies.
    Answer. The 2000 budget for the Food Safety and Inspection Service 
requests an additional $2.0 million to begin implementation of the 
Shell Egg Action Plan. Under the plan the agency plans to provide State 
agencies the training and information necessary to ensure consistent 
enforcement of egg regulations by State and Federal agencies.
    Question. The Food and Drug Administration has proposed a warning 
label on egg, which differs from the food safety and handling label 
required on meat and poultry products required by the Food Safety and 
Inspection Service. In your view, should safe handling labels on meat, 
poultry and eggs be consistent?
    Answer. Safe handling labels on meat, poultry, shell eggs and 
processed egg products should be consistent in providing appropriate 
information to consumers to ensure safe handling.
    Question. CDC first identified internally contaminated eggs as a 
source of Salmonella enteritidis infection in the late 1980's. Many 
consumer groups are concerned about the length of time it took for USDA 
and FDA to develop an action plan to address this public health 
problem. What steps could be taken to reduce the government's reaction 
time to food safety problems in the future?
    Answer. The establishment of the President's Council on Food Safety 
has helped ensure that food safety problems in the future will be 
quickly identified and responded too. The Council provides the 
necessary forum for ensuring increased agency cooperation and 
coordination for addressing complex food safety issues. In addition, 
the Food Safety and Inspection Service (FSIS) and the Food and Drug 
Administration (FDA) have signed a Memorandum of Understanding to 
facilitate the exchange of information about establishments under dual 
jurisdiction of FSIS and FDA and emerging food safety issues.

                        FSIS INSPECTOR SHORTAGES

    Question. To what extent have inspector shortages caused 
disruptions in the meat and poultry industries over the past year as 
reported on a month to month basis?
    Answer. The additional funding included in the fiscal year 2000 
budget for inspection staffing has permitted FSIS to hire additional 
inspectors to staff meat, poultry and egg products plants and will help 
to minimize inspector shortages. Inspector shortages have occasionally 
caused plants in certain locations to alter production practices to 
accommodate inspector staffing problems. Since the beginning of 
December, 1999, the agency estimates that there has been a minimal 
disruption to the industry due its inability to have an inspector 
available at all times an establishment wants to operate.
    Question. What assurances can you provide that projected staff year 
reductions for fiscal year 2001 will not continue or exacerbate 
problems of inspector shortages?
    Answer. The projected staff year reductions are based on two 
separate and distinct initiatives. In both cases, USDA is committed to 
a full and complete public dialogue and will not move forward unless 
the changes are demonstrated to be effective. If the data and analysis 
support the change, USDA anticipates being able to implement staff year 
reductions without exacerbating inspector shortages.
    Question. What is USDA doing to improve inspector recruitment 
activities?
    Answer. USDA has taken a number of actions to improve inspector 
recruitment activities. Those actions are outlined in the paper 
developed by the agency, which I will provide for the record.
    [The information follows:]

                FSIS' FOOD INSPECTOR RECRUITMENT EFFORTS

Background
    A number of factors have made it difficult to successfully recruit 
individuals to fill vacant positions in Field Operations. In the case 
of Veterinary Medical Officers, positions are not competitive in 
today's job market. Top quality candidates for Food Inspector positions 
are also in short supply in many locations, due to many factors. The 
work is typically very demanding, with strict physical requirements. 
Remote locations often have a limited applicant pool, and many who do 
apply have conflicts of interest that do not allow them to serve in a 
regulatory capacity. In the case of Intermittent Inspector positions, 
the requirement to be on-call with no guarantee of hours, and the 
limited benefits, make that position less attractive to most applicants 
than other options in the current job market. The Food Safety and 
Inspection Service, however, is confident it will recruit a well-
qualified and diverse workforce.
    FSIS efforts to increase the number of inspectors include:
  --Refocusing efforts within Human Resources to increase the number of 
        applicants on standards registers for field occupations. 
        Applicants to these registers are solicited through a variety 
        of recruitment initiatives such as on-campus visits, 
        conventions, advertisements, direct mailings, and posted 
        announcements on the Internet and at all Office of Personnel 
        Management Service Centers. FSIS also publishes job 
        opportunities in agricultural publications, such as the 
        Cattlemen's Journal and Farm Bureau. FSIS recruits from 
        veterinary schools, Hispanic-serving institutions, and 
        historically black colleges and universities, as well as at 
        veterinary conventions and agricultural career days at 
        universities where candidates are identified. In addition, 
        public notices about FSIS jobs are available at all State 
        employment agencies.
  --Recruiting and hiring 80 more inspectors by the end of the fiscal 
        year to achieve a target employment level of 7530.
  --Broadening the emphasis of FSIS' recruitment program to include 
        other scientific backgrounds to meet current and future hiring 
        needs and conducting recruitment training in September to train 
        new recruiters in this area.
  --Asking current agency personnel to assist in publicizing 
        recruitment needs.
  --Asking candidates who applied for inspector positions in areas 
        surrounding locations with shortages if they would be 
        interested in a position in locations that are experiencing 
        shortages.
  --Providing Veterinary Medical Officers with a recruitment bonus up 
        to 25 percent of their salary, particularly in areas where 
        there are fewer candidates. This has been approved in eastern 
        Pennsylvania, Iowa, and Nebraska. FSIS is also exploring 
        additional options, such as relocation and retention bonuses 
        for inspectors.
  --Scheduling inspector entrance tests in locations where there is a 
        need for inspectors. FSIS conducts tests in 10-12 locations 
        around the nation each month. These tests are spread out 
        geographically.
  --Exploring alternative ways to fill other than permanent (OTP) full-
        time positions, such as permanent part-time tours of duty, and 
        term and temporary appointments. We will be working with the 
        inspectors union to explore the feasibility of options 
        identified.
  --Collecting and analyzing exit interview data to identify possible 
        retention issues.
  --For an application, contact Keith McFarlin at 1-800-370-3747, ext. 
        2580, or visit the U.S. Government official site for jobs and 
        employment information at www.usajobs.opm.gov.
    Question. In the event that inspector shortages remain a problem, 
what steps can the Department take in the management of food safety 
operations to reduce the harmful effect of these shortages to industry 
and the ultimate consumer?
    Answer. The 2001 budget requests the funding necessary for a 
sufficient number of inspectors to meet industry demand. Our 
intensified recruitment program is showing results that should prevent 
future shortages.

                        HACCP INSPECTION MODELS

    Question. Please provide an update on the HACCP Inspection Model in 
place, including a description of any problems that might delay full 
implementation of the HACCP Inspection plan by the fourth quarter of 
fiscal year 2001?
    Answer. The HACCP-based Inspection Model Project is progressing as 
planned. I have asked the Food Safety and Inspection Service to provide 
an update on the project for the record.
    [The information follows:]
    At present, 24 plants slaughtering young chickens, swine, and 
turkeys are listed as volunteers in the HACCP-based Inspection Models 
Project (HIMP). Baseline data collection, which measures current 
inspection program performance, has been completed in sixteen young 
chicken plants, four swine plants, and two turkey plants. Baseline data 
collection will be completed in a fifth swine plant in March and will 
begin in the third young turkey plant the first week of April.
    Seven young chicken and two swine plants have entered the models 
phase, in which the plant assumes post-mortem responsibilities while 
FSIS conducts oversight and verification inspection. Of these, six 
young chicken plants and one of the swine plants are in a models 
transition phase that precedes the collection of data for measuring 
plant performance under new models phase procedures. One young chicken 
plant and one swine plant are now in the actual models data collection 
phase.
    A public meeting on HACCP-based Inspection Models Project is 
scheduled in March. Input from this meeting should help us identify any 
problems that may delay the implementation schedule as planned.

                              FOOD RECALLS

    Question. Consumer groups have criticized USDA recently in the 
Washington Post Magazine for taking too long to issue a recall notice 
in the Sara Lee outbreak, an outbreak where 100 people became ill and 
21 died from hazardous bacteria, Listeria, in ready-to-eat meat 
products. What was the reason for the delay in issuing a recall in this 
case?
    Answer. Sara Lee initiated a voluntary recall. USDA did not have 
any positive laboratory results that would have mandated requesting the 
announcement of a recall any earlier. Sara Lee took action before there 
was a USDA laboratory result from intact Sara Lee product that was 
positive for Listeria monocytogenes, or a legally sufficient, 
epidemiological association between the product and the illnesses could 
be established On the same day Sara Lee announced the recall, USDA 
posted a recall Notification Report on its website, and faxed and e-
mailed the same report to over 300 public health and food safety 
officials throughout the country.

                            LISTERIA TESTING

    Question. Consumer groups have criticized USDA for failing to 
require testing of ready-to-eat meat products and plants for Listeria. 
While USDA recommended such testing, it has not issued regulations to 
mandate testing for all processors. Does USDA have any concerns that 
this voluntary policy will result in uneven adherence with the testing 
recommendation?
    Answer. We are concerned about the voluntary policy and we are 
currently evaluating the need to require testing for Listeria.
    Question. Would mandatory testing provide public health protections 
and a level-playing field for the industry?
    Answer. Mandatory testing for Listeria could further enhance the 
safety of meat and poultry products by reducing the risk of Listeria 
entering the food supply.
    Question. Has USDA considered this?
    Answer. USDA is considering the need for mandatory testing for 
Listeria monocytogenes and is gathering additional information to 
determine the need for rulemaking.

                       DAIRY MARKET LOSS PROGRAM

    Question. As you know, last year the Agriculture Appropriations 
bill provided $125 million in emergency relief payments for dairy 
farmers. While I appreciate the Secretary's decision to target the 
funding to small operations, I am concerned that the payments may not 
get into farmers' hands until this spring. Please tell this Committee 
what caused the delay in the announcement of the sign up period, 
particularly given that USDA is using the same process to distribute 
payments used in fiscal year 1999.
    Answer. The Dairy Market Loss Assistance Program was implemented in 
February, 2000. Payments will be issued in March. Though the process 
remained relatively unchanged, an amendment to the regulations was 
necessary to implement the program. The amendment to the regulations is 
anticipated to be published in the Federal Register on or about 
February 16.
    Question. You've called for an end to ad hoc emergency payments for 
agriculture and proposed instead the two-year stop-gap safety-net plan. 
That proposal provides only for an extension of the dairy price support 
program, which is viewed inadequate by most farmers. I know that dairy 
farmers would prefer a more meaningful solution to price volatility 
than emergency payments, but given the regionalism I have encountered, 
emergency payments have been the only way I have been able to get 
assistance into the hands of dairy farmers.
    Since you have excluded dairy and livestock from your safety net 
proposal when prices are so low, will you support emergency assistance 
for milk and livestock producers this year?
    Answer. The Administration's safety net proposal includes the 
proposal to extend the milk price support program which was estimated 
to cost $300 million and $200 million for a pilot livestock insurance 
program. However, the dairy situation has worsened since the proposals 
were developed which makes the dairy price support extension even more 
critical and could increase the cost of the program. It is not clear 
yet if other livestock producers will need emergency aid in 2000.
    Question. And if so, how much funding do you think will provide 
adequate income in light of our low milk prices?
    Answer. It is too premature to determine funding levels for 2000. 
It is clear that milk producers will be stressed as dairy prices are 
expected to average about 40 percent less in fiscal year 2000 than 
fiscal year 1999. Poultry prices are down but red meat prices are up. 
If the current dry conditions in most parts of the country continue, 
there may be great need for emergency assistance for milk and other 
livestock producers. We are willing to work with Congress to determine 
adequate funding levels as the condition of milk and livestock 
producers becomes clearer in 2000.

                             NAD DECISIONS

    Question. I am concerned about recent reports that 86 percent of 
the decisions of regional hearing officers that are favorable to 
farmers were overturned by the Director of the National Appeals 
Division, but that only 5 percent of adverse decisions were overturned 
at the national level. Is the Department's analysis consistent with 
these figures?
    Answer. The Department has taken a close look at this issue and is 
concerned with the misconceptions that have been raised. While it is 
unclear what specific figures were used by the Farm Journal, the 
Department's analysis shows similar trends. However, it is important to 
consider the fuller context of the roles of the parties in the 
adjudicative process in order to understand why these numbers are not 
indicative of bias. Provided for the record is the most recent 
Departmental analysis of this matter.
    [The information follows:]
    Each NAD appeal is adjudicated on its own merits. The basis for NAD 
determinations and its procedures are specified in Title 7 Code of 
Federal Regulations, Part 11. The NAD Director has no control over the 
numbers or merits of any case for which a review of a hearing officer's 
determination is timely requested by a party. By law, Title II, 
Subtitle H, of the Federal Crop Insurance Reform and Department of 
Agriculture Act of 1994, the Director upholds, reverses, modifies or 
remands hearing officer determinations on review.
    If a hearing officer determines error in an agency's administrative 
decision, only the head of an agency may seek a review. In most cases, 
however, no error is found by hearing officers. In fiscal year 1999, 
for example, no agency error was determined by hearing officers in 75 
percent of the cases appealed to NAD. If error is determined by a 
hearing officer, the head of the agency must state specific reasons why 
the hearing officer's decision is wrong, including violations of 
statutes and regulations. Under USDA regulations, the Director must 
base his decision on the laws and regulations of the agency and their 
generally applicable interpretations. Moreover, an appellant cannot 
challenge the validity of agency regulations because only the federal 
courts can determine that an agency regulation is invalid.
    NAD has no jurisdiction over the appropriateness of agency 
regulations. Agencies promulgate their own regulations. Given agency 
expertise with respect to its own regulations, the head of an agency 
will select for review only those cases in which the hearing officer's 
determination is not consistent with the agency's laws and regulations. 
This results in a higher percentage of reversals of hearing officers' 
determinations in cases taken on review by the head of an agency. On 
the other hand, there is a far greater number of cases in which the 
hearing officer determines no agency error. In these cases, the hearing 
officer found that the Agency correctly applied its own regulations, 
and it is highly unlikely that the Director would determine on review 
that both the hearing officer and the agency misconstrued the latter's 
own requirements. Thus, there is a very low percentage of reversals of 
hearing officer's determinations in cases taken on review by 
appellants.
    In 1997, the USDA Inspector General issued a comprehensive report 
on NAD covering part of the period in which reversal rates were 
reported as such by the Farm Journal. The report found that NAD 
hearings were not appropriately focused on whether adverse decisions 
were consistent with laws, regulations, and agency policies and 
procedures, . . . NAD hearing officers exceeded their authority and 
substituted their judgment for that of the agency. The report 
recommended that NAD update its written guidelines, improve its 
management information system, and provide employee training on the 
proper exercising of authorities and responsibilities. In response, NAD 
has published its latest rules of procedure in the Code of Federal 
Regulations (Title 7, Part 11, Subpart A), is continuing improvements 
to its management information system, and has conducted employee 
training on topics surrounding the adjudicative process and exercising 
of authorities. Included in NAD's 2001 budget request is a funding 
increase that would allow the Division to set in motion a comprehensive 
and continuous employee training program. A copy of the report is 
provided for the record. (Evaluation report No. 50801-2-AT, March 1997)
    [The information follows:]

                           EXECUTIVE SUMMARY

Purpose

    This report presents our evaluation of decisions rendered by the 
National Appeals Division (NAD) to individuals and others who were 
originally denied U.S. Department of Agriculture program benefits and 
who appealed those denials. Our evaluation was performed as part of the 
Office of Inspector General's farm program strategy designed to ensure 
overall program integrity and assist program managers to find solutions 
for known or potential program weaknesses. Our review concentrated on 
administrative appeals related to Commodity Credit Corporation programs 
administered by the Farm Service Agency (FSA). The review included an 
(1) examination of the agencies' documentation used to support their 
adverse decisions and present their cases to NAD hearing officers and 
(2) evaluation of the hearing officers' decisions and of NAD director 
reviews.
    Those who appeal to NAD need to demonstrate that when the agency 
made its adverse decision, either it (1) did not base the decision on 
proper criteria (i.e., laws, regulations, or procedures), (2) did not 
consider all relevant evidence, (3) relied on evidence that was 
inaccurate, or (4) relied on evidence that did not prove a violation of 
the stated criteria. NAD must confine its rulings to the criteria upon 
which the adverse decision was based and not substitute its judgment 
for that of the agency.

Results in brief

    NAD hearings were not appropriately focused on whether adverse 
decisions were consistent with laws, regulations, and agency policies 
and procedures. In some cases, this occurred because FSA did not 
clearly show the criteria used and the evidence it considered in making 
its adverse decision. In other cases, NAD hearing officers exceeded 
their authority and substituted their judgment for that of the agency. 
We concluded that significant resources were expended by NAD, FSA, and 
the appellants to arrive at decisions that misconstrued agency program 
requirements. Improper decisions like these could either deny an 
appellant benefits to which he/she is entitled or hinder FSA's efforts 
to pursue program abuses. We also found that FSA personnel did not 
always adhere to decisions made by the State and/or county committees 
when presenting the agency's cases at NAD hearings.
    Management controls over NAD hearings need to be strengthened. We 
concluded that NAD needs to:
  --update its written guidelines clarifying policies and procedures 
        for evidentiary hearings and director's reviews,
  --improve its management information systems to help ensure that the 
        division adheres to timeframes established by legislation and 
        that resources are used efficiently and effectively, and
  --provide training which better explains the differences between the 
        authority and responsibilities of NAD and those of the 
        agencies.
    We also concluded that FSA needs to improve training for State and 
county office personnel to ensure the quality of adverse decisions and 
to ensure that adverse decision letters provide sufficient information 
to explain the basis for the adverse decisions.

Key recommendations

    We recommended that FSA clearly show the criteria and evidence used 
in making its decisions by providing sufficient information in adverse 
decision letters to explain the authority and basis for the decisions, 
and that any modifications to the initial adverse decision are 
adequately explained and related to any new evidence or criteria.
    In order to ensure that NAD hearing officers do not substitute 
their judgment for that of the agency, we recommended that the NAD 
director require hearing officers to limit the scope of NAD hearings by 
identifying the laws, etc., that the appellant claims the agency did 
not adhere to, and the evidence that the appellant contends was 
erroneous or omitted. Hearing officers should also state whether the 
appellant contends there is no reasonable basis for the agency's 
determination. In addition, we recommended that hearing officers limit 
their determinations to whether an agency complied with applicable 
laws, regulations, and generally applicable interpretations.
    To strengthen management controls over NAD hearings, we recommended 
that NAD formalize and update its policies and procedures, improve its 
management information system, and provide training for hearing 
officers and reviewing officials which ensures they understand the 
difference between NAD's authorities and those granted to the agencies.

Agency position

    In their written responses to the report, both NAD and FSA agreed 
with the findings and recommendations. Based on their responses, we 
agreed with their management decisions for 6 of the 11 recommendations.

                              INTRODUCTION

Background

    The Federal Crop Insurance Reform and Department of Agriculture 
Reorganization Act of 1994, Public Law 103-354, required the Secretary 
of Agriculture to establish and maintain an independent National' 
Appeals Division (NAD) within the Department to handle administrative 
appeals. On December 27, 1994, a notice was published in the Federal 
Register (59 F.R. 66,517) establishing NAD. NAD was assigned 
responsibility for all administrative appeals formerly handled by NAD 
of the former Agricultural Stabilization and Conservation Service and 
by the National Appeals Staffs of the former Farmers Home 
Administration (FmHA), the former Soil Conservation Service (SCS), the 
Commodity Credit Corporation, and the Federal Crop Insurance 
Corporation.
    Current agencies whose appeals are assigned to NAD include (1) the 
Farm Service Agency (FSA), (2) the Rural Development Service (RD),\1\ 
and the Natural Resources Conservation Service (NRCS).
---------------------------------------------------------------------------
    \1\ RD includes the Rural Housing Service, the Rural Utilities 
Service, and the Rural Business-Cooperative Services.
---------------------------------------------------------------------------
    NAD is headquartered in Alexandria, Virginia, and has 3 regional 
offices and 65 field locations in 37 States. As of September 30, 1995, 
NAD had 131 fulltime employees-including 80 hearing officers and 12 
reviewing officials.\2\
---------------------------------------------------------------------------
    \2\ Reviewing officials perform Director reviews.
---------------------------------------------------------------------------
    Under Public Law 103-354, a participant has the right to appeal an 
agency's adverse decision to NAD if the request is made no later than 
30 days after the date on which the participant first received notice 
of the decision. The appellant (participant) has the right to have a 
hearing by NAD within 45 days after NAD receives the request for the 
hearing.
    The act requires the appellant to bear the burden of proving that 
the agency's adverse decision was erroneous. The hearing officer must 
consider any information presented regardless of whether the evidence 
was known to the agency official, employee, or committee making the 
adverse decision at the time the decision was made. The hearing officer 
must also leave the record open for a reasonable period after the 
hearing to allow the appellant or agency to submit information 
necessary to respond to new facts, information, arguments, or evidence.
    If a NAD hearing officer upholds an adverse decision by the agency, 
the appellant may submit a written request to the NAD director for 
review of the hearing officer's determination. The written request must 
be filed no later than 30 days after the date on which the appellant 
receives the hearing officer's determination. If a NAD hearing officer 
reverses the agency's adverse decision, the head of the agency may make 
a written request to the NAD director for a review of the 
determination. The notice must be filed no later than 15 business days 
after the date of the hearing officer's determination. When requested 
by the appellant or the agency, the director, or designated NAD 
official, will review the hearing officer's determination to determine 
whether it is supported by substantial evidence. Exhibit A presents a 
flowchart of the NAD administrative appeals process for FSA adverse 
decisions.
    From October 1, 1995, through September 30, 1996, NAD hearing 
officers reversed FSA's adverse decisions 35.8 percent of the time 
compared to 24.7 percent for RD cases and 21.7 percent for NRCS cases. 
Table 1 shows a comparison of hearing officers' determinations on FSA, 
RD, and NRCS cases. A comparison of hearing officers' determinations in 
the three NAD regions is provided in exhibit B.

                                    TABLE 1.--HEARING OFFICER DETERMINATIONS
                                  (October 1, 1995 through September 30, 1996)
----------------------------------------------------------------------------------------------------------------
                                                    Agency Reserved    Agency Upheld       Modified
                                                  ------------------------------------------------------  Total
                                                    Number  Percent   Number  Percent   Number  Percent   Number
----------------------------------------------------------------------------------------------------------------
FSA..............................................      666     35.8    1,073     57.6      123      6.6    1,862
RD...............................................      368     24.7    1,090     73.1       33      2.2    1,491
NRCS.............................................       18     21.7       63     75.9        2      2.4       83
                                                  --------------------------------------------------------------
      Total......................................    1,052     30.6    2,226     64.8      158      4.6    3,436
----------------------------------------------------------------------------------------------------------------

    Also, during fiscal year 1996, NAD hearing officers were overturned 
on 114 of 772 FSA cases (see table 2). Exhibit B provides information 
concerning director review requests made by appellants and by agencies.

                                       TABLE 2.--DIRECTOR'S DETERMINATIONS
                                  (October 1, 1995 through September 30, 1996)
----------------------------------------------------------------------------------------------------------------
                                                      Hearing
                                                      Officer         Hearing        Modified          Total
                                                     Reversed     Officer Upheld
----------------------------------------------------------------------------------------------------------------
FSA.............................................             114             636              22             772
RD..............................................              14             323              20             357
NRCS............................................  ..............              49  ..............              49
                                                 ---------------------------------------------------------------
      Total.....................................             128           1,008              42           1,178
 
----------------------------------------------------------------------------------------------------------------

Objectives

    Our evaluation was performed as part of the Office of Inspector 
General's (OIG) farm program strategy designed to ensure overall 
program integrity and assist program managers to find solutions for 
known or potential program weaknesses. Our review concentrated on 
administrative appeals related to Commodity Credit Corporation programs 
administered by the FSA. The review included an (1) examination of the 
agencies' documentation used to support their adverse decisions and 
present their cases to NAD hearing officers and (2) evaluation of the 
hearing officers' decisions and of NAD director reviews.

Scope

    The evaluation was conducted in accordance with ``Quality Standards 
for Inspections'' issued in March 1993 by the President's Council on 
Integrity and Efficiency. We conducted work at the NAD Headquarters in 
Alexandria, Virginia, and at FSA Headquarters in Washington, D.C. 
Fieldwork was performed during the period October 23, 1995, through 
October 4, 1996. We used judgmental sampling to select cases for review 
in order to focus our resources on problem areas identified during our 
discussions with personnel from NAD and FSA.

Methodology

    To accomplish the evaluation objectives, we conducted interviews at 
both NAD and FSA Headquarters. We also telephonically interviewed NAD 
personnel from the three regional offices located in Golden, Colorado; 
Indianapolis, Indiana; and Memphis, Tennessee.
    We reviewed NAD's authorizing legislation and regulations to 
provide background and criteria for evaluating the quality of NAD 
determinations and for evaluating NAD's overall operations.
    We judgmentally selected and reviewed hearing records from 35 NAD 
cases based on problem areas identified by various sources such as 
congressional inquiries, discussions with personnel from NAD and FSA, 
input from various OIG regional offices, and whistleblower requests 
received by OIG.
  --Three cases were reviewed because of a congressional inquiry.
  --Ten cases were recommended for review by NAD.
  --Ten cases were selected from a list of cases which FSA had planned 
        to submit to the Secretary's office for review.
  --Two cases were recommended for review by FSA National and State 
        office personnel.
  --Eight cases were identified by various OIG regional offices as 
        problem cases.
  --Two cases were from whistleblower complaints received by OIG.\3\
---------------------------------------------------------------------------
    \3\ We reviewed two whistleblower complaints (Nos. PS-4601-0001 and 
PS-4601-0002) as part of our evaluation of NAD appeals. However, 
administratively final NAD determinations can only be reviewed by a 
U.S. district court. Therefore, we were unable to make specific audit 
recommendations to address individual cases.
---------------------------------------------------------------------------
    In selecting our sample, we picked cases which related to specific 
problem areas identified by the various sources including
  --the preponderance of evidence standard for review,
  --granting of equitable relief,
  --remands,
  --acceptance and use of oral testimony,
  --acceptance and use of Office of the General Counsel (OGC) legal 
        opinions, and
  --use of NAD subpoena powers.
    We reviewed NAD procedures related to these areas, reviewed the NAD 
hearing records as they pertained to the problems, and determined 
whether procedures provided sufficient guidelines to ensure that NAD's 
policies and procedures were clear.
    For each of the 35 sample cases, we reviewed NAD determinations and 
evidence included in the hearing record and listened to tapes of the 
hearing. We reviewed the findings of facts and conclusions in the 
hearing officers' and review officials' determinations to evaluate 
whether they were consistent with the evidence presented at the 
hearing. We also evaluated the agencies' preparation and presentation 
of the adverse decisions for each case.
    In addition, we (1) evaluated NAD's management information systems 
(2) attended training with NAD personnel and evaluated the training, 
and (3) followed up on a prior audit report and management alert.
    OIG Audit Report No. 46001-1-At, issued September 29, 1995, 
presented the results of an audit performed at the request of the 
former FmHA administrator to evaluate hearing officer decisions and 
FmHA program staff decisions related to FmHA loans. In contrast, our 
current evaluation focused on the Commodity Credit Corporation programs 
administered by FSA. Therefore, recommendations in the prior report 
were not applicable to FSA programs on which the current report 
focused.
    During the course of fieldwork on Audit No. 46001-1-At, NAD was 
established as an independent agency responsible for various other 
programs. Although NAD was established as a new and independent agency, 
the initial organization of NAD was centered around the old FmHA's 
internal appeals organization. The prior audit report, as well as a 
management alert, dated February 8, 1995, included issues regarding the 
establishment of NAD. Management decisions were completed for all of 
the recommendations contained both in the management alert and the 
prior report.
    Even though corrective action was taken on our prior audit 
recommendation to issue procedures for the issuance and enforcement of 
subpoenas, our current evaluation disclosed additional improvements 
needed in procedures related to subpoena power. (See Finding No. 3.)

                      FINDINGS AND RECOMMENDATIONS

I. NAD hearings were not appropriately focused on whether adverse 
        decisions were consistent with laws, regulations, and agency 
        policies and procedures

    NAD hearings did not appropriately focus on whether adverse 
decisions were consistent with laws, regulations, and agency program 
policies and procedures. This occurred because (a) FSA did not always 
clearly show the criteria used (i.e., laws, regulations, etc.) and 
evidence considered in making its adverse decisions and (b) NAD hearing 
officers sometimes substituted their judgment for that of the agency. 
As a result, significant resources were expended by NAD, FSA, and the 
appellants in debating matters which were not within NAD's authority to 
determine. Additionally, resulting improper NAD determinations could 
either deny an appellant benefits to which he/she is entitled, or 
hinder FSA's efforts to pursue program abuses.

FSA DID NOT ALWAYS CLEARLY SHOW THE CRITERIA USED AND THE EVIDENCE 
        CONSIDERED IN MAKING ADVERSE DECISIONS

            Finding No. 1

    FSA did not always adequately cite laws, regulations, and handbook 
instructions, nor relate the applicable criteria to the evidence 
considered when making adverse decisions. This often resulted in 
unclear and confusing issues during NAD hearings. Although FSA had 
implemented procedures to provide the required notification of 
decision,\4\ we concluded that the notification did not always give 
sufficient information to the participant. Also, FSA personnel did not 
always adhere to their agency's determinations while presenting the 
agency's case to NAD.
---------------------------------------------------------------------------
    \4\ Public Law 103-354, section 274, requires: ``Not later than 10 
working days after an adverse decision is made that affects the 
participant, the Secretary shall provide the participant with written 
notice of such adverse decision and the rights available to the 
participant * * * for review of such adverse decision.''
---------------------------------------------------------------------------
    When making adverse decisions, State committees (STC) and county 
committees (COC) should ensure the following.
  --Relevant laws, regulations, and procedures are followed.
  --All relevant evidence is considered and evidence used in making the 
        decision is accurate and reliable.
  --Judgment decisions are based on accurate, reliable, and convincing 
        evidence and the decisions are reasonably related to the 
        appropriate laws, regulations, and procedures.
    FSA should provide sufficient information to the participants so 
they understand the basis for the decision, know what options are 
available if they dispute the adverse decision (i.e., appeal to the 
county or State level, mediation, NAD, etc.), and clearly understand 
the scope of NAD hearings. To explain the adverse decision, the 
agency's letter to the participant should address each of the three 
areas cited in the previous paragraph.
    Our review of 35 NAD hearing records disclosed that the criteria, 
evidence considered, and basis for the agency's decision were clearly 
presented in the adverse decision letter for only 10 of the cases. For 
the remaining 25 cases we found the following. (See exhibit C.)
  --Neither the criteria nor the evidence was cited in seven cases.
  --Criteria was cited but the evidence was not in seven cases.
  --Evidence was cited but the criteria was not in nine cases.
  --There was no adverse decision letter in the hearing record for two 
        cases.
    Even though OGC recognizes that appellants cannot challenge 
agencies' generally applicable interpretations,\5\ it is important that 
both the appellant and the hearing officer understand the basis for the 
procedure. In many instances, handbook procedures are not provided as 
part of routine communication between FSA and participants because they 
are often tools or tests used to determine whether the participants 
have complied with laws, regulations, and contract requirements. In 
such situations, it is important for FSA to adequately relate the 
procedures to the laws and/or regulations so that the hearing officer 
can determine whether the procedures were correctly applied. An example 
follows.
---------------------------------------------------------------------------
    \5\ OGC comments included in NAD's Interim Final Rule, dated 
December 29, 1995.
---------------------------------------------------------------------------

            NAD LOG NUMBER--95001121W

    The appellant was denied program benefits because FSA determined 
that he did not provide the required active personal labor or 
management, and therefore was not actively engaged in farming. As 
criteria, FSA cited Handbook 1-PL, paragraph 154, which states that: 
``If a member of a joint operation receives a guaranteed payment for 
any part of a contribution of labor or management, exclude all of the 
specific type of contribution for which payment is received.'' However, 
FSA did not explain how the criteria related to the agency's 
determination that the appellant was not actively engaged in farming.
    The hearing officer determined that ``Nowhere in the regulation 
cited * * * is there any reference to withdrawing of funds being a 
constraint on eligibility,'' and concluded:
    The appellant was unaware of the ramifications of these actions 
until notified by the CFSA [Consolidated Farm Service Agency] that he 
had been denied eligibility for program benefits because he was 
determined not to be actively engaged in farming * * *. Therefore, 
because the Appellant was not notified of the policy of the Agency 
prior to being determined ineligible for program benefits, the 
determination is unfair.
    The hearing officer also concluded:
    The Appellant denies he is receiving a ``guaranteed payment'' from 
the partnership and contends it is, in fact a draw.
    It was clearly the intent of the Appellant for these funds to be 
considered a draw from his one-half of the partnership. The only 
documentation considered by the CFSA was in the form of the tax return. 
The tax return was prepared incorrectly for the intent of the 
Appellant.
    The hearing officer did not conclude that the agency's procedure 
was wrong but that it was misapplied (e.g., definition of guaranteed 
payment). We concluded that the agency should have explained how the 
handbook procedure related to regulations which address contributions 
to farming operations, and why the appellant was not provided prior 
notification of the handbook procedure.
    We also found that FSA personnel did not always adhere to COC, STC, 
or FSA National Office determinations and subsequent modifications 
while presenting the agency's cases to NAD hearing officers. In two of 
the sample cases, the FSA representative attending the hearings 
improperly determined that the finality rule (90-day rule) applied in 
those cases. In another case, the FSA representative improperly used 
the COC's initial determination of scheme or device, even though the 
adverse decision had been modified to a ``failure to fully comply'' 
determination which is based on different criteria. Details of the 
latter case follow.

            NAD LOG NUMBER--95001142W

    The COC determined that the appellant participated in a scheme to 
circumvent the provisions of the malting barley program. In an FSA 
State office appeal review, the STC determined that the ``failure to 
fully comply'' provision of the regulations better fit the 
circumstances of the case. A letter from the acting deputy 
administrator for farm programs approved the STC's request to handle 
the matter by stating: ``Based on the determination of the State 
committee and the informal advice from your Regional Attorney's office 
this is your authority to handle the cases referred to in your 
memorandum under the ``failure to fully comply' provision of the 
regulation.''
    The STC notified the appellant that ``[T]he State Committee 
normally would have determined a scheme was used to obtain additional 
benefits and denied barley program benefits. However, after 
communication with your county committee, the state committee sought a 
more moderate solution.''
    However, the FSA representative at the hearing improperly contended 
that the appellant participated in a scheme or device to circumvent 
spot checking procedures.
    In summary, we concluded that FSA needs to improve its adverse 
decision letters by ensuring they provide sufficient information to 
explain the authority and basis for the decision. Additionally, any 
modifications to the initial decision should adequately explain and 
relate to new evidence, criteria, or other reason for the modification. 
The initial adverse decision letter along with modifications should 
serve as FSA's primary evidence in presenting cases to NAD. This would 
reduce the time and resources needed by FSA in preparing and presenting 
cases to NAD. FSA representatives should adhere to the agency's 
determination when presenting cases to NAD. We also concluded that 
information provided to the appellant should relate handbook procedures 
to the appropriate law or regulation whenever necessary to clarify how 
the procedures apply to the applicable criteria and evidence.

Recommendation No. 1a (to the FSA Administrator)

    Provide sufficient information in adverse decision letters to 
explain the authority and basis for the decision. At a minimum, the 
letters should provide a (1) brief summary of the applicable law or 
regulation and handbook procedure, (2) summary of the evidence used in 
making the determination, and (3) description of the adverse decision 
relating the evidence to the applicable criteria in order to show a 
reasonable basis for the determination.

Recommendation No. 1b (to the FSA Administrator)

    Ensure that any modifications to the initial adverse decision are 
adequately explained and related to any new evidence or criteria, and 
that the modifications are sufficiently communicated to the appellant 
and to NAD. Also, ensure that FSA personnel attending NAD hearings 
adhere to determinations and any subsequent modifications made by the 
COC, STC, or FSA National Office when presenting the agency's case in 
NAD hearings.

            FSA Response

    In its March 21, 1997, response, FSA replied that it ``accepts and 
agrees with the findings and recommendations of the audit.''

            OIG Position

    FSA's response did not specify the actions it plans to take for 
these two recommendations. To reach management decisions, we need to be 
informed of the action to be taken and the timeframe for carrying them 
out.

NAD Hearing Officers sometimes substituted their judgment for that of 
        the Agency

            Finding No. 2

    NAD hearing officers sometimes substituted their judgment for that 
of the agency. We concluded this occurred because hearing officers did 
not limit issues to whether the agency's adverse decisions were 
consistent with the laws, regulations, and generally applicable 
interpretations.\6\ Instead of determining whether agencies complied 
with applicable criteria and considered accurate and relevant evidence 
in making their adverse decisions, hearing officers allowed discussion 
of broad issues for which they determined the merits of each party's 
position. As a result, the hearing officers' determinations often 
failed to identify where agencies had erred in their adverse decisions.
---------------------------------------------------------------------------
    \6\ Generally applicable interpretations refer to the administering 
agency's interpretations of laws and regulations which are applicable 
to all program participants.
---------------------------------------------------------------------------
    In 25 of the 35 NAD cases reviewed, we concluded that the hearing 
officers had not related their determination to relevant criteria. In 
24 of the 25 cases, we also concluded that the determination was not 
related to relevant evidence. (See exhibit C.)
    Legislation which authorizes U.S. Department of Agriculture (USDA) 
programs gives the Secretary authority to carry out the programs. This 
authority is delegated by the Secretary to the appropriate agency such 
as FSA, RD, NRCS, and other USDA agencies. In order to carry out these 
programs, certain steps are taken by the administering agency. Rules 
and regulations governing the programs are published in the Federal 
Register, and the administering agency establishes policies and 
procedures which are generally applicable interpretations of laws and 
regulations used in program administration. Agencies' adverse decisions 
must be made in accordance with the applicable laws, regulations, and 
the generally applicable interpretations made by the agencies to carry 
out programs.
    NAD determinations, on the other hand, are based on information 
from the case record and whether the agency's adverse, decision is 
consistent with the laws and regulations of the agency, and with the 
generally applicable interpretations of such laws and regulations. In 
order for the hearing officer to overturn the agency's adverse 
decision, the appellant must show that the adverse decision was 
erroneous.
    As presented in NAD's Interim Final Rule, OGC had determined: ``NAD 
Hearing Officers are not administrative law judges. NAD has no 
jurisdiction over questions of law or the appropriateness of agency 
regulations. It simply decides the factual matter of whether an agency 
complied with such laws and regulations in rendering an adverse 
decision.''
    OGC further determined that ``NAD is not a forum for appellants to 
challenge agency statutes, regulations, or the generally applicable 
interpretations of those statutes and regulations.''
    Based on our review of the applicable legislation and regulations, 
we concluded that issues appealable to NAD would include the following.
  --The agency did not follow laws, regulations, and procedures.
  --All relevant evidence was not considered.
  --Evidence considered was not accurate.
  --The agency had no reasonable basis for its judgment (i.e., the 
        evidence had no relationship to the criteria used in making the 
        adverse decision).
    The NAD Hearing Officer Manual states that ``[O]nly evidence that 
is relevant to the underlying issues should be considered.'' However, 
issues discussed at hearings were often broad and not related to 
whether the agency made an error in making its adverse determination. 
Therefore, considerable time was used to debate matters which were not 
within hearing officers' authority to determine.
    The following is an example where excessive time (approximately 18 
hours) was used because the hearing officer did not determine the 
appropriate scope of the hearing. More specifically, the hearing 
officer did not relate his determination to the relevant criteria, 
utilized unsubstantiated evidence in drawing conclusions, did not 
consider all relevant evidence, and did not apply the appropriate 
burden of proof standard.

            NAD LOG NUMBER--9500104OW

    The producers applied for benefits under the Disaster Assistance 
Program, claiming their crop was damaged by flooding. FSA denied the 
benefits, stating that the producers did not operate their farm in a 
workmanlike manner--they did not till the soil before planting their 
crops (a practice referred to as ``no-till''), and they did not 
properly maintain a culvert that was necessary to drain the affected 
acreage. The producers appealed, and NAD reversed FSA's decision. NAD 
based its reversal on an SCS handbook published for another area of the 
State, and on the producers' unsubstantiated claim that their crop 
failed because of a natural disaster, not because they used improper 
farming methods.
    FSA based its argument on the requirements stated in FSA Handbook 
5-PA, paragraph 149. This paragraph provides that certain practices 
such as ``cultural practices normal to the area or introduced by ES 
[Extension Service] or SCS to improve conservation'' and minimum till 
and no-till practices customary to the area should not be considered 
unworkmanlike. FSA had determined that the producers' soil was not 
conducive to the ``no-till'' method and that the method was not normal 
and customary to the area.
    Although the hearing officer focused on the tillage method used by 
the producers, he failed to appropriately address FSA's generally 
applicable procedures found in paragraph 149 of the handbook. Instead, 
he relied on the evidence supplied by the producers, an SCS pamphlet 
promoting ``no-till'' practices. We concluded that this pamphlet was 
irrelevant as evidence because it applied to a different area of the 
State, and to a soil type different from the type on the producers' 
farm.
    Even though the producers' evidence did not apply to their farm, 
the hearing officer's finding of facts stated ``Appellants' exhibits * 
* * demonstrate and promote conservation tillage (notill, minimum till, 
etc). Such practices are not uncommon in the area of Appellants' 
farm.'' From this assumption, the hearing officer concluded that ``the 
practice of minimum or no tillage is an acceptable practice (more than 
acceptable by some) notwithstanding what some farmers in (the county] 
may practice.'' The producers did not contend that ES or SCS 
recommended the ``notill'' practice for their farm, and they did not 
provide any evidence of such a recommendation.
    For the cause of the crop loss, the hearing officer used 
unsubstantiated evidence and concluded that ``it is obvious that the 
development (of the crop] was retarded by lack of sunlight.'' The 
hearing officer inappropriately introduced this unsubstantiated 
evidence into the hearing record by asking the producer whether the 
crop could have been stunted by a ``lack of sunlight.'' However, no 
evidence was introduced to show that there was a lack of sunlight or 
that the crop was affected by this condition.
    In calculating the producers' crop yields, FSA determined that a 
contributing factor to the producers' crop loss from flooding was their 
failure to properly maintain a drainage culvert located on their farm. 
However, the hearing officer gave no consideration to this 
determination when making his decision.
    The hearing officer utilized broad criteria defining overall 
eligibility for the Disaster Assistance Program payments to conclude 
that ``the Appellants met their burden of showing that their crops 
failed due to flooding and subsequent drought conditions.'' However, we 
concluded that the hearing officer should have focused on more specific 
criteria in FSA Handbook 5-PA, paragraph 149, and should have 
specifically identified whether FSA's decision was erroneous, as it 
relates to the applicable criteria.
    We concluded that by relying on broad criteria and failing to 
utilize relevant criteria and evidence, hearing officers used the 
``preponderance of evidence'' standard (see Finding No. 3) to make 
determinations which they were not authorized to make, and failed to 
determine whether the producer met the burden of proving that the 
agency's adverse decision either contained an error or was based on 
one.

Recommendation No. 2a (to the NAD Director)

    Require hearing officers to limit the scope of NAD hearings to 
matters relevant to the agency's alleged errors. In order to provide 
this assurance, the ISSUE section of the hearing officers' 
determination should
  --identify the law, regulation, and/or procedure to which the 
        appellant claims the agency did not adhere (ensuring that the 
        criteria is not broad and vague),
  --identify the evidence that the appellant contends was not 
        considered by the agency or the evidence which was supposedly 
        erroneous, and
  --state whether the appellant contends there is no reasonable basis 
        for the agency's determination.
            NAD Response
    In its March 21, 1997, response, NAD stated that ``The format for a 
Hearing Officer determination was revised to include citations to 
relevant laws and regulations, specific exhibits entered into the 
record, and to address the burden of proof.''

            OIG Position

    We concur with NAD's management decision for this recommendation.
Recommendation No. 2b (to the NAD Director)
    Require hearing officers to limit their determinations to the 
factual matter of whether an agency complied with applicable laws, 
regulations, and generally applicable interpretations. In order to 
provide this assurance, the conclusion section of the hearing officers' 
determination should include the following.
  --Cite the specific laws, regulations, and/or procedures which are 
        relevant to determining whether the agency's adverse decision 
        was in error, and avoid referring to broad criteria not 
        specifically related to the alleged error. When determining 
        that the agency failed to follow appropriate criteria, state 
        how the agency erred.
  --Cite the specific evidence used in drawing the conclusions, whether 
        the agency had considered all relevant evidence, and identify 
        what evidence was in error.
  --Contain a description of how the relevant evidence did or did not 
        logically relate to the relevant laws, regulations, and/or 
        procedures. The description should also include a conclusion as 
        to whether the appellant met the preponderance of evidence 
        standard by showing that there was no logical relationship 
        between the two, when applicable.
            NAD Response
    In its March 21, 1997, response, NAD stated:
    As stated in response to recommendation 2a, the Hearing Officer 
determination format has been revised since the issuance of the 1995 
determinations reviewed for the audit. There has also been specific 
training on writing of determinations and all Hearing Officers will 
have had substantial training and discussion on writing determinations 
by the end of this fiscal year.
    The ``Conclusions'' section now cites specific laws and regulations 
which are relevant to determining whether the agency's adverse decision 
was erroneous or not. Specific statements are used to analyze evidence 
that was considered relevant and credible as well as setting forth the 
applicable regulations used in determining whether the agency's adverse 
decision was erroneous. Further, a specific conclusion is dedicated to 
determine whether the burden of proof has been met through a 
preponderance of the evidence.

            OIG Position

    We concur with NAD's management decision for this recommendation.

II. Management controls over NAD hearings need to be strengthened

    Management controls over NAD hearings need to be strengthened. We 
concluded that NAD needs to (a) update its written guidelines and 
clarify its policies and procedures for evidentiary hearings and 
director's reviews, (b) improve its management information system (MIS) 
to provide performance measures at various NAD levels, and (c) provide 
training which better explains the differences between the authority 
and responsibilities of NAD and those of the agencies.

NAD needs to update its policies and procedures

            Finding No. 3

    NAD's policies and procedures did not always provide sufficient 
guidance to address issues arising during NAD hearings. As reported in 
NAD hearing officers sometimes substituted their judgment for that of 
the agency. We also noted that NAD did not have a formal system for 
maintaining current NAD policies and procedures, and that FSA 
instructions regarding appeals to NAD were not consistent with NAD 
regulations.
    In selecting our sample of 35 cases, we picked cases which related 
to problem areas identified through discussions with NAD and FSA 
personnel and through inquiries made to various OIG regions. Some of 
the material issues which were causing difficulties at NAD hearings 
included
  --the preponderance of evidence standard for review,
  --granting of equitable relief,
  --remands,
  --acceptance and use of oral testimony,
  --acceptance and use of OGC legal opinions, and
  --use of NAD subpoena powers.
    We reviewed NAD's regulations, policies, and procedures related to 
these areas, and NAD's hearing records as they pertained to the 
problems. The following discussion details areas where we concluded 
that NAD's policies and procedures need to be updated.

            Preponderance of Evidence Standard

    NAD legislation requires that the appellant bear the burden of 
proving that an agency's adverse decision is erroneous. However, NAD's 
Interim Final Rule, dated December 29, 1995, added that the appellant 
must prove that the decision is erroneous ``by a preponderance of the 
evidence.'' In its comments to NAD's Interim Final Rule, FSA expressed 
concern that the inclusion of the ``preponderance of evidence'' 
standard shifted the burden of proof from the appellant to the agency 
by diluting the statutory requirement that the appellant must prove 
that the agency's decision was erroneous. FSA also commented that the 
``preponderance of evidence'' standard conflicted with the law, and 
should be removed from the regulations.
    We did not attempt to determine whether the ``preponderance of 
evidence'' standard was consistent with NAD legislation. However, we 
did find that neither NAD's regulations nor procedures explained how 
the ``preponderance of evidence'' standard was to be applied in NAD 
hearings.
    As discussed in Finding No. 2, hearing officers sometimes used the 
``preponderance of evidence'' standard to make determinations which 
they were not authorized to make, and, in doing so, failed to determine 
whether the appellant met the burden of proving that the agency's 
adverse decision either contained or was based on an error. NAD should 
provide written guidelines defining ``preponderance of evidence'' and 
explaining how this standard applies to evidence presented at NAD 
hearings.

Equitable Relief

    Public Law 103-354 states that the NAD director shall have the 
authority to grant equitable relief in the same manner and to the same 
extent as the authority given to the Secretary. Although NAD has 
established procedures relating to equitable relief cases, we 
questioned whether such cases should be subject to review by hearing 
officers.
    Equitable relief involves instances in which participants who have 
taken actions which could affect their eligibility, acted in good faith 
by relying on the actions or advice of an authorized representative of 
the Secretary. In these instances, the NAD director is authorized to 
grant relief to the participants by providing program benefits to the 
extent determined appropriate for fair and equitable relief.
    Even though hearing officers do not have the authority to grant 
equitable relief, Public Law 103-354 includes the denial of equitable 
relief in the definition of an adverse decision. In cases where the 
appellant challenges the agency's denial of equitable relief, NAD's 
Hearing Officer Manual instructs the hearing officers as follows:
    [Y]ou should make findings and conclusions concerning the 
appropriateness of granting or denying such relief. If you determine 
that the agency erred in denying equitable relief, you may so hold and 
return the case to the agency for further action consistent with your 
determination. You do not have the authority to affirmatively grant 
equitable relief yourself, although the Director may do so if the case 
comes to him for review.
    We concluded that such cases should not be subject to review by 
hearing officers since they have no authority to make a determination 
on the appeal. If hearing officers overturned agencies' denials of 
equitable relief, they would in effect be granting equitable relief. We 
concluded that cases involving denial of equitable relief should be 
reviewed only by the NAD director.

            Remands

    NAD's policies and procedures did not adequately address remands. 
There were no policies or procedures for establishing timeframes to 
complete remand cases. Also, there were no guidelines to explain what 
types of situations warrant a remand.
    Public Law 103-354, section 278(b), requires the NAD director to 
issue a final determination or remand a case back to the hearing 
officer within 10 business days if a review is requested by the agency 
or 30 business days if requested by an appellant. NAD's Interim Final 
Rule, section 11.9(d)(1), states:
    If the Director determines that the hearing record is inadequate or 
that new evidence has been submitted, the Director may remand all or a 
portion of the determination to the Hearing Officer for further 
proceedings to complete the hearing record or, at the option of the 
Director, to hold a new hearing.
    Neither the legislation, NAD's Interim Final Rule, nor NAD's 
procedures establish timeframes for completing remand cases. We 
contacted the NAD regions and found that each region assigned new case 
numbers for remands. Regional office personnel told us that remands 
were handled as though they were new hearings for tracking purposes, 
and that hearing officers had 45 days to hold another hearing (if 
necessary) and another 30 days to make their determinations. 
Notifications of remands are sent to the regional offices. However, 
regional office personnel said that there is a time lag of 1 or 2 weeks 
before the notice is received and the hearing officer receives the 
case.
    In one of our sample cases, the NAD appeal was concluded 
approximately 7 months after the request for appeal was filed. The 
hearing officer used 74 days to make his determination for the remand. 
The delay in processing the participant's appeal resulted in a 
congressional inquiry into the timeliness of the NAD process. The 
following is a summary of that case.

            NAD LOG NUMBER 95000494E

    RD disapproved the appellant's request to obtain funding for a 
waste water treatment plant. The agency determined that proposed basic 
engineering services (BES) fees were excessive as compared to fees 
charged for similar projects when agency funding was not involved. The 
appellant contended that the BES expenses were appropriate for the 
complexity of the proposed project and that a fee curve should not be 
used to establish BES expense limits.
    The hearing officer reversed the agency's determination based on 
his determination that regulations did not authorize the agency to 
establish a fee curve maximum to evaluate proposed BES expenses. 
However, the hearing officer neither had the authority nor the 
expertise to determine whether the fees were reasonable. Further, from 
our review of the hearing record, and based on the reviewing official's 
conclusion which follows, we concluded that the appellant did not show 
that the agency's decision was adverse to the appellant (as opposed to 
a matter of general applicability) and did not meet the burden of 
proving that the agency's determination was erroneous.
    During the director's review, the reviewing official concluded:
    The data which the appellant submitted to show engineering fees on 
other projects is conflicting and does not readily identify the fees 
charged for projects not involved in Agency funding. We find no 
substantive evidence to support the HO's (hearing officer] finding that 
the proposed BES is not in excess of those ordinarily charged by the 
profession for similar work when Agency financing is not involved.
    Further, we find no substantive evidence to support the Hearing 
Officer's determination that RD has approved other projects in which 
the BES exceeded the maximum allowable.
    Even though the reviewing official's conclusion indicated that the 
appellant did not meet the burden of proof, the case was remanded to 
the hearing officer to ``determine if the fees are reasonable.'' 
However, since the agency's decision was a matter of general 
applicability and the reviewing official determined that there was no 
substantive evidence to show that the agency's decision was erroneous, 
we concluded that the hearing officer's initial determination should 
have been overturned instead of remanded back to the hearing officer.

            Acceptance and Use of Oral Testimony

    NAD's policies and procedures do not provide guidelines to assist 
hearing officers in weighing oral testimony. FSA officials told us that 
one of their major concerns was that hearing officers were accepting 
unsubstantiated oral testimony as persuasive evidence.
    NAD's Interim Final Rule, part 11.8(5)(ii), states:
    Any party shall have the opportunity to present oral and 
documentary evidence, oral testimony of witnesses, and arguments in the 
support of the party's position * * *. Any evidence may be received by 
the Hearing Officer without regard to whether that evidence could be 
admitted in judicial proceedings.
    NAD's Hearing Officer Manual instructs hearing officers to keep in 
mind that not everything that a witness says is factual evidence. 
However, NAD's policies and procedures do not provide general 
guidelines on how to weigh oral testimony. We found that hearing 
officers sometimes accepted and inappropriately relied on 
unsubstantiated oral testimony. The following is an example.

            NAD LOG NUMBER--95001719E

    FSA determined that the appellants participated in a scheme or 
device to evade payment limitations by misrepresenting their interest 
in the farming operation. The agency's evidence showed that the 
producers did not maintain separate bank accounts for their interest. 
The agency also noted that the producers had no evidence to show that 
cash rent was paid for the land, that they owned or leased the land, or 
that they supplied capital for the farming operation.
    The hearing officer subsequently overturned FSA's determination 
largely on unsubstantiated oral testimony of the appellants. Little to 
no physical documentation was offered by the appellants to support the 
oral testimony. The reviewing official who conducted the director's 
review wrote: ``Although the record contained little documentation of 
[the appellants'] 1993 farming activities, the Hearing Officer 
determined that the appellants' testimony sustained the burden of proof 
required to reverse CFSA's decision.'' [Underlines added.]
    The reviewing official also concluded: ``In the absence of 
testimony by CFSA personnel involved in accepting the appellants' 
applications for disaster and associated documents, the Hearing Officer 
accepted the appellants' testimony as persuasive.''
    We concluded that the hearing officer's reliance on unsubstantiated 
oral testimony, given the seriousness of an adverse decision concerning 
a scheme or device, was improper. As a result of NAD's decision, an 
assistant U.S. attorney declined prosecution of the case, and stated: 
``We are declining prosecution in this matter. While it appears that 
the (appellants] engaged in a scheme to defraud the Department of 
Agriculture * * * by accepting the [appellants] uncorroborated, and 
false statements, the NAD has undercut our ability to prove any 
criminal violations.''
    In many instances, especially where matters such as schemes and 
devices or bad faith determinations are made by FSA, hearing officers 
should ensure that oral testimony, other than expert witnesses 
providing an opinion, is substantiated by the appellant.
Acceptance and Use of OGC Legal Opinions
    Even though NAD is in the process of establishing procedures to 
obtain independent legal opinions when needed, there are no procedures 
addressing situations in which a hearing officer should utilize OGC 
legal opinions obtained by the agency.
    In the ``NAD Notes'' for February through March 1996, the director 
wrote: ``OGC is developing a system to provide us independent legal 
opinions related to program issues. We will work with * * * OGC to 
effect an appropriate means of securing definitive legal opinions on 
the laws applicable to matters at issue * * *.''
    The hearing officers are further instructed to refer requests for 
legal opinions to NAD regional directors. However, situations arise 
where hearing officers must determine the relevance of OGC opinions 
obtained by the agency to their determinations, or where the agency's 
opinions from OGC should be included as criteria or evidence relevant 
to the NAD determination. In these situations, NAD procedures should 
instruct hearing officers to determine the relevance of OGC opinions to 
the administrative hearing and, when appropriate, include the opinions 
in making their determinations. Independent legal opinions should be 
obtained when necessary to ensure that ``definitive'' opinions clarify 
any ambiguous ones.
    The following is an example where the hearing officer improperly 
made a legal determination which was contrary to an OGC opinion 
obtained by the agency.

            NAD LOG NUMBER--95000487W

    In this case, the agency determined that the appellant acted in 
``Bad Faith'' by illegally converting chattel property which was part 
of a farm operating loan. The agency based its adverse decision, in 
part, on an OGC opinion that the appellant's sale of chattel 
constituted conversion as defined by the appropriate State's statutes.
    Although the agency had approved the sale through public auction of 
certain equipment owned by the appellant, the appellant sold the 
equipment prior to the public offering for less than the amount the 
agency determined the equipment was worth. The appellant received a 
check from the buyer which was made payable to both the appellant and 
the agency. Although, the check was neither deposited nor cashed, the 
purchaser refused to return the equipment.
    The hearing officer incorrectly concluded that ``since there is no 
acceptance of the offer by all parties (Appellant and Agency), the sale 
had not been executed, thus, no valid sale has occurred.'' From this 
conclusion, the hearing officer determined that the appellant had not 
illegally converted chattel property. Therefore, the hearing officer 
not only exceeded his authority by making a legal determination, but 
also erred in his determination (acceptance occurred when the purchaser 
agreed to the price and tendered the check to the producer).
    For this appeal case, we concluded that the hearing officer should 
have considered the OGC determination when making his determination. If 
the hearing officer questioned the accuracy of OGC's decision, he 
should have requested assistance from the NAD regional director.

            Subpoenas

    Public Law 103-354 gives the NAD director and hearing officers the 
authority to issue subpoenas requiring the attendance of witnesses and 
the production of evidence. In response to OIG Audit Report No. 46001-
1-At, dated September 29, 1995, NAD issued procedures for the issuance 
and enforcement of subpoenas. However, NAD procedures do not address 
instances where hearing officers may determine that the attendance of a 
witness is necessary even though no request is made by the appellant or 
the agency. An example follows.

            NAD LOG NUMBER--95001333S

    FSA determined that the appellant participated in a scheme or 
device designed to evade payment limitations. The appellant alleged 
that he acted only as a custodian of farm records, financing, and bills 
for another individual's farming operation. FSA concluded that the 
appellant was, in fact, the producer in that farming operation. 
Important evidence presented by FSA included a signed statement from 
the other individual stating that he had no interest in the farming 
operation other than as a hired hand.
    As part of an appeal to the STC, the other individual had provided 
a signed statement in September 1989, showing that he was a separate 
person for payment limitation purposes. Subsequently, in April 1990, 
the other individual provided a statement to the county executive 
director recanting the September 1989 statement and showing that he was 
only a hired hand on the farm. Even though the agency had a signed 
statement from the other individual stating that he was not truly a 
producer in the farming operation for which the adverse decision was 
made, the hearing officer gave the statement little consideration by 
stating:
    We find it significant to note that neither statement was prepared 
by [the other individual] and as addressed by Appellants the second 
statement was obtained by the county executive director and contained 
vague and ambiguous references to Appellants. Therefore, while this 
information was reviewed in making our decision, we did not consider 
the information to be compelling evidence.
    The fact that the statement was prepared by someone other than the 
person who signed it was of little significance compared to the 
statement itself and the signature of the producer. The appellant 
claimed that the statement was coerced and false. However, he did not 
provide any evidence to support his claim. If the hearing officer 
believed that the statement may have been coerced or false, he had the 
authority to subpoena the other individual as a witness.
    NAD needs to update its written guidelines to clarify its policies 
and procedures regarding when witnesses may be subpoenaed and establish 
a formal system to assist the NAD director in ensuring that the 
division's policies and procedures are consistently applied throughout 
the agency.

            FSA Instructions Need Clarifying

    We also noted a need for FSA to improve its instructions. FSA 
instructions regarding appeals to NAD were inconsistent with NAD 
regulations. FSA Notice APP-11 presented suggested notification 
language for initial COC decisions. The suggested language, in part, 
stated:
    If you believe the decision by the County Committee is in error, 
you may elect any of the options in the following sequence:
  --Reconsideration by the County Committee.
  --Request mediation.
  --Appeal to the State Committee.
  --Appeal to the National Appeals Division.
    You may elect these options in the indicated sequence. You may 
select any of the first three options, or you may skip any of the first 
three options and select a later choice, or skip all three and appeal 
to NAD.
    We found that the suggested language was not consistent with NAD 
regulations which state:
    A participant must seek an informal review of an adverse decision 
issued at the field service office level by an officer or employee of 
FSA * * * before NAD will accept an appeal of an FSA adverse decision. 
Such informal review shall be done by the county or area committee with 
responsibility for the adverse decision at issue. * * * After receiving 
a decision upon review by a county or area committee, a participant may 
seek further informal review by the State FSA committee or may appeal 
directly to NAD.
    NAD regulations also allow an optional informal review for adverse 
decisions issued at the FSA State office level. The participant is not 
required to seek the informal review before appealing to NAD in these 
situations.

Recommendation No. 3a (To the NAD Director)

    Implement a formal policies and procedures system by combining the 
current Hearing Officer Manual and various ``NAD Notes'' into a 
numbered and dated manual.

            NAD Response

    In its March 21, 1997, response, NAD stated that it had ``created a 
directive system to disseminate NAD policies and procedures. The 
directives are to be numbered and incorporate expiration dates.''
            OIG Position
    We concur with NAD's management decision for this recommendation.
Recommendation No. 3b (To the NAD Director)
    Update NAD guidelines to clarify policies and procedures related to 
the following areas.
  --Preponderance of evidence standard for review
  --Granting of equitable relief
  --Remands
  --Acceptance and use of oral testimony
  --Acceptance and use of OGC legal opinions
  --Use of NAD subpoena powers

            NAD Response

    In its March 21, 1997, response, NAD replied:
    The NAD Interim Final Rule and comments published in the Federal 
Register cover the areas addressed. Further, the issues of 
Preponderance of Evidence, Equitable Relief, OGC Opinions and Subpoenas 
are covered in the NAD Hearing Officer Manual. Subpoenas and Equitable 
Relief have also been addressed in NAD Notes.

            OIG Position

    We disagree with NAD's management decision for this recommendation. 
Based on our review of 35 cases, we continue to conclude that needs to 
provide additional guidance on the 6 areas enumerated in the 
recommendation.

Recommendation No. 3c (To the FSA Administrator)

    Ensure that guidance given to State and county offices concerning 
NAD appeals is consistent with NAD regulations by updating Notice APP-
11 to notify appellants that they must first seek an informal review of 
COC determinations before appealing to NAD.

            FSA Response

    In its March 21, 1997, response, FSA replied that it ``accepts and 
agrees with the findings and recommendations of the audit.''

            OIG Position

    FSA's response did not specify the actions it plans to take for 
this recommendation. To reach a management decision, we need to be 
informed of the actions to be taken and the timeframe for carrying them 
out.

NAD's Management Information System Needs Improvement

            Finding No. 4

    NAD's MIS does not provide information necessary to make key 
decisions for evaluating the division's performance. This occurred 
because NAD's data base was unreliable and current management reports 
were ineffective. As a result, NAD's management does not have 
sufficient means to ensure that the division adheres to timeframes 
established by legislation (i.e., hearing must be held within 45 
calendar days of request) or ensure that resources are used efficiently 
and effectively.
    In testimony before Congress addressing the 1997 appropriation, the 
NAD director stated:
    The current tracking system was initially designed to handle only 
former FmHA type appeal cases and provide canned reports. The current 
tracking system does not meet NAD's monitoring and reporting needs and 
limits our ability to provide Congress and USDA critical data regarding 
the appeals handled by NAD.
    An MIS should provide decision-makers with the necessary data to 
guide operations towards fulfilling the division's mission. The system 
must be effective and efficient so that reliable and timely information 
can be generated. A well designed system that incorporates these 
elements provides management with the necessary information to evaluate 
appeal case progress and employee performance.
    A critical function of NAD's MIS is to track appeals to NAD in 
order to ensure that appellants are given a timely hearing and 
determination as prescribed by the timeframes required by law. In 
addition to tracking timeframes, the MIS is an important tool for 
measuring the performance of the division at all levels, and 
determining where resources are needed within the division to ensure 
efficient and effective operations. Management reports can be designed 
to identify problem areas in the performance of hearing officers, 
regional personnel, and national reviewing officers. Once problem areas 
are identified through these reports, the director can take appropriate 
action such as focusing quality assessment reviews in order to better 
identify the cause of problems, update policies and procedures based on 
problems identified, and determine training needs for both individuals 
and the organization.
    Based on our review and our discussions with NAD personnel, we 
concluded that NAD's current MIS was inefficient and ineffective 
because of an unreliable data base and ineffective management reports.

Unreliable Data Base

    We found that NAD's data base is unreliable because it does not 
include sufficient dates and status codes needed to ensure compliance 
with legislated timeframes and the proper allocation of resources. The 
MIS does not track NAD hearings to determine whether hearings took 
place within 45 days from the date the request was received and if 
hearing officers' determinations were made within 30 days from the date 
of the hearing. We also found that remand cases were not tracked to 
ensure timely resolution.
    NAD's current MIS consists of a data base called ``NASTRACK'' for 
data entry. ``NASTRACK'' is a combination of two subsystems. One 
subsystem is the system used by the former FmHA's internal 
administrative appeals unit. It contains all information related to 
appeals filed through FSA. The second subsystem was created by NAD and 
contains all information related to appeals filed by all other agencies 
for which NAD has responsibility. Information is retrieved by NAD using 
the Statistical Analyses System (SAS).
    The data base provides for three entries relating to the dates in 
which a hearing officer must hold a hearing and make a determination. 
These entries include the date the request was received, the date of 
the hearing, and the hearing decision date. However, information 
concerning the date of the hearing was unreliable. In instances where 
hearings are held open,\7\ the date the hearing was closed is entered 
as the hearing date. Also, even though a hearing may take more than I 
day, the last day of the hearing is normally entered as the date of the 
hearing.
---------------------------------------------------------------------------
    \7\ Public Law 103-354 requires that the hearing officer shall 
leave the hearing record open for a reasonable time to allow for the 
submission of information by the appellant or the agency to respond to 
new facts, information, arguments, or evidence presented.
---------------------------------------------------------------------------
    In order to determine if hearings are held within 45 days of the 
request, the MIS should include data to reflect the first day of the 
hearing. This would provide reliable data for determining whether the 
hearing was held within 45 days of the date of request. Since hearings 
are not always concluded in 1 day, the MIS should also include data to 
reflect the date that the hearing was closed. By comparing the closed 
date with the date of the hearing officer's determination, NAD will 
have reliable data to determine whether determinations are being made 
within 30 days of the hearing.
    The MIS does not include status codes needed to determine why 
timeframes were not met. For example, when a hearing is not held within 
45 days as required by NAD legislation, certain factors may have caused 
the delay (i.e., the appellant waived the 45-day requirement, or a 
hearing officer was unable to schedule the hearing within the 
timeframes because of a heavy caseload). Similar status codes should be 
used for other timeframes designated by legislation, regulations, or 
the director's instructions. We concluded that this type of information 
is necessary to evaluate the division's compliance with legislative 
requirements and to ensure the efficient use of resources.
    Additionally, we found that NAD assigns new case numbers to 
remanded cases. Thus, timeframes allowed for all remand cases are the 
same as for those required for new evidentiary hearings and 
determinations. We concluded that the director should establish 
appropriate timeframes for remand cases to ensure that the appellant is 
provided a timely determination, and that NAD should keep track of the 
remand cases to ensure that those timeframes are met. (See Finding No. 
3.)

Ineffective Management Reports

    NAD's MIS produces 13 standard management reports through SAS. We 
concluded that the standard management reports were inefficient and 
ineffective. In the past, RD has provided a SAS programmer to query 
data fields and produce custom reports. However, as of November 1, 
1996, RD no longer provides this assistance to NAD. Because NAD no 
longer has the capability to query on specific data fields in order to 
produce custom reports, it must now rely solely on its standard 
management reports.
    The ``Hearing Officer Backlog Report'' and the ``Overdue Hearing 
Decision Report'' are generated by NAD's National Office. However, NAD 
personnel told us that both reports utilize the date that the appeal 
request is made and are considered overdue when more than 75 days have 
passed. Therefore, these reports do not reflect whether the appropriate 
timeframes were met. Additionally, questions concerning the status of 
the hearings must be investigated by the individual regions. In many 
instances, regions must contact the appropriate hearing officer to 
follow up on possibly overdue hearings or determinations.
    To create the reports, regional management assistants must retrieve 
information from each of the two subsystems within the MIS and must 
manually calculate the totals for overdue hearings, decisions, and 
caseload reports per hearing officer and per region. The management 
assistants must also rely heavily on individual casefiles and hearing 
officers as well as ``NASTRACK'' screens to follow up on cases for 
which NAD may potentially exceed timeframes or has apparently exceeded 
them, and to verify the overall accuracy of the reports. Management 
assistants also told that NAD's MIS was inefficient because only 4 of 
12 reports available to the regions provided useful information in 
determining the status of the hearings. The reports include the
  --reversed, upheld, modified report,
  --overdue hearing officer's report,
  --overdue decision report, and
  --suspended hearing report.
    NAD's standard management reports do not provide information useful 
in monitoring the performance of personnel such as hearing officers. 
For example, we noted that there were no reports to show the number of 
times that an individual hearing officer was reversed by a reviewing 
official or the backlog associated with individual hearing officers. 
Also, there were no reports to evaluate regional performance (i.e., 
summary of the number of times hearing officers within the region were 
reversed, or backlog by region), or reviewing officer performance.

Recommendation No. 1b (To the NAD Director)

    Update the MIS in order to provide necessary information to ensure 
that
  --NAD provides appellants timely determinations and complies with 
        legislative timeframes, and
  --management reports contain relevant information, provide a means 
        for measuring the performance of the division at all levels, 
        and provide tools for determining where resources are needed.
            NAD Response
    In its March 21, 1997, response, NAD replied:
    One of the highest priorities of NAD is to upgrade its current 
Management Information System (MIS) in order to provide more accurate 
and timely data, as well as to provide a more effective monitoring tool 
to ensure timely hearings and determinations. NAD has requested special 
initiative funds in fiscal year 1998 to achieve this priority. The 
request for additional funds stated that the current tracking system 
was put in production in 1989 to track former Farmers Home 
Administration (FmHA) appeals and does not fulfill NAD's monitoring and 
reporting needs. Additionally, the current MIS limits the ability of 
NAD to furnish the Secretary, the Congress, and other interested 
parties information regarding the appeals handled by NAD. This vital 
initiative is being coordinated with the Department's OIRM [Office of 
Information Resources Management].

            OIG Position

    We concur with NAD's management decision for this recommendation.
Training from NAD and FSA Could be Improved

            Finding No. 5

    Our review disclosed that NAD's training program has not provided 
the support needed to ensure complete and accurate determinations. Past 
training was provided by judicial colleges which emphasized judicial 
training for administrative law judges. More recent training provided 
overviews of how the farm agencies operate day-to-day with some indepth 
instruction relating to how agency decisions are made. However, the 
training has not provided NAD's staff with information needed to 
reinforce their current hearing and review skills or to understand why 
and under what authorities agencies make decisions. As a result, 
hearing and review officers have made errors at the basic level and 
have inappropriately made decisions that are reserved by law or 
regulations to the agencies (see Finding No. 2). We also found that FSA 
needs to provide further training to State and county personnel to 
ensure that adverse decisions are clear and sufficiently supported.
    We concluded that NAD training should be directed toward teaching 
and reinforcing basic skills related to conducting administrative 
hearings, rendering administrative hearing decisions, and understanding 
the authorities of hearing officers. The training should help ensure 
that hearing officers utilize only relevant criteria and evidence and 
limit their determinations to whether the agencies complied with 
applicable criteria and considered accurate and relevant evidence in 
making their adverse decisions. Hearing officers should be trained to 
avoid broad issues and ensure that determinations address whether the 
adverse decisions were erroneous. The training should also be directed 
toward the following areas. (See Finding No. 3.)
  --Preponderance of evidence standard
  --Burden of proof
  --Equitable relief
  --Remands
  --Acceptance of oral testimony
  --Acceptance and use of OGC legal opinions
  --Use of subpoena power
    Our evaluation also disclosed that NAD had not implemented a 
quality assurance review system. Such reviews should be used to 
identify individual and organizational training needs as well as 
identify needed policy and procedure updates, and assist in evaluating 
how well NAD is achieving its mission.
    FSA should provide additional training to its State and county 
office personnel to improve the quality of the adverse decisions and 
documentation, especially adverse decision letters, supporting the 
decisions. The training should help ensure that COC's and STC's 
adequately document their adverse decisions (i.e., clearly show the 
basis for their determinations including summarizing applicable 
criteria and evidence) and provide sufficient information to the 
participants and to NAD through their adverse decision letters and any 
subsequent correspondence when necessary. (See Finding No. 1.)
Recommendation No. 5a (To the NAD Director)
    Provide training to review and hearing staff which is directed 
toward teaching and reinforcing basic skills needed to conduct hearings 
and reviews and issue appropriate determinations, and which focuses on 
explaining the differences between the authorities of NAD and those 
granted to the agencies.

            NAD Response

    In its March 21, 1997, response, NAD replied:
    NAD is providing regional training in the area of writing 
determinations, conducting hearings, and exercising the authorities of 
NAD this fiscal year. Additional training has been scheduled for fiscal 
year 1998 in the adjudicative process. Further, each employee of NAD is 
developing individual training plans in coordination with the Planning, 
Training, and Quality Control section of NAD. These individual plans 
include basic curriculum, established by the Deputy Director for 
Hearings and Administration, as well as advanced courses related to the 
employee's job responsibilities.

            OIG Position

    We concur with NAD's management decision for this recommendation.
Recommendation No. 5b (To the NAD Director)
    Establish a quality assessment review system.

            NAD Response

    In its March 21, 1997, response, NAD replied:
    The Planning, Training, and Quality Control (PTQC) Section of NAD 
was established in 1996 to address this area as well as training and 
the Government Performance and Results Act of 1993 (GPRA). The PTQC 
Section of NAD has established a quality assessment review system for 
hearing and review determinations. The assessment reviews will evaluate 
the quality of hearing determinations; identify common proficiencies 
and weaknesses to determine training needs; and satisfy GPRA Annual 
Performance Plan goals. A final report on the review will be submitted 
annually to the Director. The staff of the PTQC Section has randomly 
selected 36 cases, 12 from each region, for review in fiscal year 1997 
and plans on selecting a minimum of 48 cases in fiscal year 1998. The 
number of cases reviewed will increase in future years.

            OIG Position

    We concur with NAD's management decision for this recommendation.
Recommendation No. 5c (To the FSA Administrator)
    Provide additional training to State and county office personnel 
designed to improve the quality of their adverse decisions and assist 
them in understanding the documentation needed to support the adverse 
decisions.

            FSA Response

    In its March 21, 1997, response, FSA replied that it ``accepts and 
agrees with the findings and recommendations of the audit.''
            OIG Position
    FSA's response did not specify the actions it plans to take for 
this recommendation. To reach a management decision, we need to be 
informed of the actions to be taken and the timeframe for carrying them 
out.

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    EXHIBIT B--SUMMARY STATISTICS FOR HEARING OFFICER AND DIRECTOR 
                             DETERMINATIONS

                             HEARING OFFICER DETERMINATIONS BY NAD REGION AND AGENCY
                                  [October 1, 1995 through September 30, 1996]
----------------------------------------------------------------------------------------------------------------
                                                                      Agency
                                                                     Reversed      Agency Upheld     Modified
----------------------------------------------------------------------------------------------------------------
EAST:
    FSA.........................................................             117             366              23
    RD..........................................................             116             523              17
    NRCS........................................................               4              36               1
                                                                 -----------------------------------------------
      TOTAL.....................................................             237             925              41
                                                                 ===============================================
WEST:
    FSA.........................................................             256             433              68
    RD..........................................................              87             196               6
    NRCS........................................................              10              15               1
                                                                 -----------------------------------------------
      TOTAL.....................................................             353             644              75
                                                                 ===============================================
SOUTH:
    FSA.........................................................             293             274              32
    RD..........................................................             165             371              10
    NRCS........................................................               4              12  ..............
                                                                 -----------------------------------------------
      TOTAL.....................................................             462             657              42
----------------------------------------------------------------------------------------------------------------


                               DIRECTOR'S DETERMINATIONS APPELLANT REVIEW REQUESTS
                                  [October 1, 1995 through September 30, 1996]
----------------------------------------------------------------------------------------------------------------
                                                                Hearing      Hearing
                                                                Officer      Officer      Modified      Total
                                                                Reversed      Upheld
----------------------------------------------------------------------------------------------------------------
FSA.........................................................           13          531           14          558
RD..........................................................            3          317  ...........          320
NRCS........................................................  ...........           48  ...........           48
                                                             ---------------------------------------------------
      TOTAL.................................................           16          896           14          926
----------------------------------------------------------------------------------------------------------------


                               DIRECTOR'S DETERMINATIONS APPELLANT REVIEW REQUESTS
                                  [October 1, 1995 through September 30, 1996]
----------------------------------------------------------------------------------------------------------------
                                                                Hearing      Hearing
                                                                Officer      Officer      Modified      Total
                                                                Reversed      Upheld
----------------------------------------------------------------------------------------------------------------
FSA.........................................................          101          105            8          214
RD..........................................................           11            6           20           37
NRCS........................................................  ...........            1  ...........            1
                                                             ---------------------------------------------------
      TOTAL.................................................          112          112           28          252
----------------------------------------------------------------------------------------------------------------
Note: The tables presented in this exhibit were compiled from information contained in NAD's ``fiscal year 1996
  Annual Report.''

   EXHIBIT C--SUMMARY OF DEFICIENCIES CITED IN FINDINGS NOS. 1 AND 2

----------------------------------------------------------------------------------------------------------------
                                                          FINDING NO. 1 (ADVERSE DECISION       FINDING NO. 2
                                                                      LETTERS)                (HEARING OFFICER
                                                        -----------------------------------    DETERMINATIONS)
                                                         NEITHER THE                       ---------------------
          NAD LOG NUMBER                  AGENCY           EVIDENCE    CRITERIA   EVIDENCE   RELEVANT   RELEVANT
                                                           NOR THE      CITED/     CITED/    CRITERIA   EVIDENCE
                                                           CRITERIA   EEVIDENCE   CRITERIA     NOT        NOT
                                                            CITED     NOT CITED  NOT CITED  ADDRESSED  ADDRESSED
----------------------------------------------------------------------------------------------------------------
95000494E........................  RD..................  ...........  .........  .........          X          X
95001719E........................  FSA.................  ...........  .........  .........          X          X
95001333S........................  FSA.................  ...........  .........          X          X          X
95001677S........................  FSA.................  ...........  .........          X          X          X
95001368S........................  FSA.................            X  .........  .........  .........  .........
95000487W........................  FmHA \1\............  ...........  .........  .........          X          X
95001166W........................  FSA.................  ...........  .........          X  .........  .........
95001121W........................  FSA.................            X  .........  .........          X          X
95001816V \2\....................  FSA.................  ...........  .........  .........  .........  .........
95001168S........................  FSA.................  ...........  .........          X          X          X
95001492S........................  FSA.................            X  .........  .........          X          X
95200026S........................  FSA.................  ...........  .........          X          X          X
95001634E........................  FSA.................            X  .........  .........          X          X
96000613S........................  FSA.................            X  .........  .........  .........  .........
95001143W........................  FSA.................  ...........  .........          X          X          X
95001142W........................  FSA.................  ...........  .........          X          X          X
9500104OW........................  FSA.................  ...........          X  .........          X          X
9500111OW........................  FSA.................  ...........  .........  .........          X  .........
95001588W........................  FSA.................  ...........  .........          X  .........  .........
95001335S \3\....................  FSA.................  ...........  .........  .........          X          X
95001334S........................  FSA.................  ...........  .........  .........  .........  .........
95001707S........................  FSA.................  ...........          X  .........  .........  .........
95001328S........................  FSA.................  ...........          X  .........  .........  .........
95001706S........................  FSA.................  ...........          X  .........  .........  .........
95001353S \3\....................  FSA.................  ...........          X  .........          X          X
96000781E........................  FSA.................  ...........  .........  .........          X          X
96000846E........................  FSA.................  ...........  .........  .........          X          X
95002271E........................  FSA.................            X  .........  .........          X          X
96001275E........................  FSA.................            X  .........  .........  .........  .........
96001454E \4\....................  FSA.................  ...........          X  .........          X          X
95002249E........................  FSA.................  ...........  .........  .........          X          X
96000435E........................  FSA.................  ...........  .........          X          X          X
96000870E........................  FSA.................  ...........          X  .........          X          X
96000468E........................  FSA.................  ...........  .........  .........          X          X
96000914E \5\....................  FSA.................  ...........  .........  .........          X          X
                                                        --------------------------------------------------------
      TOTAL............................................            7          7          9         25         24
----------------------------------------------------------------------------------------------------------------
\1\ This case involves the farm operating loan program which is now administered by FSA.
\2\ There was no adverse decision letter in the hearing record.
\3\ The FSA representative attending the hearings improperly determined that the 90-day rule applied.
\4\ This case was also recorded as NAD No. 96000756E.
\5\ There was no adverse decision letter in the hearing record.


                             NAD DECISIONS

    Question. What is the Department doing to ensure that the appeals 
process is not biased against producers?
    Answer. The Director has issued specific guidance in a NAD 
Directive, which is provided for the record. Bias is not established by 
percentages of results, but in a failure to conform to the highest 
standards of integrity and objectivity in applying the law. NAD adheres 
to such standards.
    [The information follows:]
                                                    March 19, 1999.

           National Appeals Division Directive No. NAD-98-08

               DISQUALIFICATION OR RECUSAL FROM AN APPEAL

    Purpose: The purpose of this directive is to clarify National 
Appeals Division (NAD) policy on disqualification or recusal from an 
appeal case. This policy is in addition to, and not in lieu of, any 
requirements regarding conflict of interest or bias imposed on United 
States Department of Agriculture (USDA) employees by Federal statutes 
(including civil rights laws), particularly 18 U.S.C. 201-209, the 
Standards of Ethical Conduct for Employees of the Executive Branch (5 
CFR 2635), and USDA policies and regulations applicable to employee 
conduct.
    Authority: 7 U.S.C. 6992, 7 CFR part 11.
    Background: The mission of NAD is to conduct impartial 
administrative appeal hearings and reviews. The proper adjudication of 
NAD appeal cases requires an unbiased adjudicating official with no 
personal interest in the outcome of the case, i.e., a neutral decision 
maker. The question of impartiality in NAD cases usually takes on one 
of two forms: bias and conflict of interest. For the purpose of this 
directive the term ``Adjudicating Officer'' refers to Hearing Officers, 
Appeals Officers, the Deputy Director for Hearings and Administration, 
the Deputy Director for Planning, Training and Quality Control and the 
Director, NAD.

    Policy:

Conflict of interest

    A conflict of interest in an appeal can arise in several instances. 
Examples include, but are not limited to, cases where the Adjudicating 
Official has a close or familial relationship with a party to the 
appeal, a financial interest in the outcome of the appeal, or any other 
circumstance where a gain or loss to the Adjudicating Official flows 
directly from the appeal determination and interferes with the ability 
to make an impartial determination.
    As a matter of practice, the Adjudicating Official should be 
attentive to any conflict of interest or the appearance thereof in 
every case assigned. When such instances occur, Hearing Officers should 
notify the Assistant Director for the region that they must be recused 
from the appeal case. Appeals Officers will likewise notify the 
Supervisory Appeals Officer. When allegations of a conflict of interest 
are leveled at the Adjudicating Official by either party to the appeal, 
the Adjudicating Official will notify his/her supervisor, as 
appropriate and will either recuse himself/herself based on his/her own 
assessment of the validity of the allegations, or make note in the 
appeal record that the allegations are without merit. Should the 
Director recuse himself/herself on an appeal, the Director will assign 
the case to another Adjudicating Official.

Bias

    The concept of bias is more subtle than conflict of interest and 
more complex to deal with in that it rarely arises as a result of self-
assessment by the Adjudicating Official, but usually surfaces as an 
allegation by a party to the appeal. In NAD appeals, bias is usually 
alleged as: (1) a prejudgment based on prior rulings (either with the 
same parties or in a similar case) or attitude toward an issue, or (2) 
a personal bias (attitude toward a person) expressed as partiality, 
animosity or favoritism. Prior rulings on the same or similar case, a 
point of view or prejudgment about regulations, policy or law are 
rarely grounds for disqualification or recusal. However, personal bias, 
can be, if proven or admitted. The ethical responsibilities of the 
Adjudicating Official require recusal if personal bias will affect 
impartiality. When allegations of bias are made by a party to an 
appeal, the Adjudicating Official will either recuse himself/herself, 
if appropriate, or make note in the appeal record that the allegations 
were made but have no merit.
    Responsibilities of supervisory personnel: Assistant Directors for 
the regions, and the Supervisory Appeals Officer should exercise good 
judgment in assigning or reassigning cases where there is the 
appearance of a conflict of interest or bias.

                      DAIRY OPTIONS PILOT PROGRAM

    Question. Please provide this Committee with an update on the 
status of the Dairy Options Pilot Program.
    Answer. The Dairy Options Pilot Program (DOPP) Round II, Notice of 
Availability was published in the Federal Register on Thursday, 
February 24, 2000. Producer training sessions are scheduled to begin in 
some States during late March and early April. All producer Round II 
DOPP training sessions will conclude by late September, 2000.
    Major changes for Round II include the following:
  --Producers choosing to participate in DOPP can submit a completed 
        application (contract) within 2 weeks from the date of 
        training. (In Round I, producers were required to sign a 
        contract before they were permitted to attend the training 
        session.)
  --The DOPP producer contract will specifically allow participants to 
        refrain from buying milk contract options for future sale if 
        such a strategy is not in their best interest at the time. 
        (Round I contract language required that participants buy 
        contract options equivalent to a minimum of 100,000 pounds.)
  --The time that participants have to purchase contract options has 
        been expanded from 2 months to 4 months from the date of the 
        training.
  --The forward horizon over which participants can hedge has been 
        expanded from 6 months (from the date contract options are 
        purchased) to 12 months (from the date of training).
    Question. During the oral questioning, you indicated that the 
Department planned to scale up on the DOPP. How, specifically, does the 
Department plan to do this?
    Answer. Section 191 of the Federal Agriculture Improvement and 
Reform Act of 1996, limited the Secretary of Agriculture from operating 
a pilot options program in more than 100 counties. During Round I of 
the DOPP, the program was operated in 38 counties in seven States. 
During Round II, 61 counties in 32 States were selected. DOPP will be 
available in the following States and counties: Maricopa County, 
Arizona; Marin and Sonoma counties, California; Weld County, Colorado; 
Gilchrist and Okeechobee counties, Florida; Morgan and Putnam counties, 
Georgia; Gooding, Jerome, and Twin Falls counties, Idaho; Clinton and 
Washington counties, Illinois; Elkhart and Marshall counties, Indiana; 
Clayton, Dubuque, and Winneshiek counties, Iowa; Nemaha County, Kansas; 
Adair and Barren counties, Kentucky; Carroll and Frederick counties, 
Maryland; Franklin County, Massachusetts; Allegan, Clinton, and Sanilac 
counties, Michigan; Fillmore and Wabasha counties, Minnesota; Webster 
and Wright counties, Missouri; Gage County, Nebraska; Chaves, Lea, and 
Roosevelt counties, New Mexico; Madison and Wyoming counties, New York; 
Iredell County, North Carolina; Ashtabula, Mercer, and Wayne counties, 
Ohio; Adair and Mayes counties, Oklahoma; Marion and Washington 
counties, Oregon; Lebanon and Tioga counties, Pennsylvania; Deuel and 
Grant counties, South Dakota; McMinn County, Tennessee; Archer County, 
Texas; Cache and Utah counties, Utah; Washington County, Vermont; 
Franklin and Rockingham counties, Virginia; Skagit, Snohomish, and 
Whatcom counties, Washington; Barron and Shawano counties, Wisconsin.

                     FORAGE CROP INSURANCE PROGRAM

    Question. Over the years, farmers have complained that insurance 
for forage is far too limited, that payments are not always made when 
they are warranted due to inadequate data collection of forage 
production. This has particularly been a problem for producers who have 
historically grown forage for on-farm use and not for sale. Please 
review for the Committee the status of forage insurance and steps the 
Department has taken to improve the forage crop insurance program.
    Answer. The Risk Management Agency (RMA) currently has three basic 
programs for insuring forage: (1) actual production history (APH) plan 
for forage production, (2) a dollar plan for forage seeding, and (3) a 
group risk plan (GRP). We will provide for the record more details of 
how the programs operate, steps taken to improve them, and their 
current status.
    [The information follows:]
    The forage production APH program and the forage seeding dollar 
plan have been in existence for more than 20 years, but recently 
improved through a proposed and final rule in the Federal Register for 
the 2001 crop year. The APH forage production program is an individual 
yield based program and improvements include: allowing optional units, 
providing for acreage reporting dates to be based on regional 
differences for program flexibility, providing year round coverage for 
certain California counties, allowing direct marketing, and simplifying 
the program by eliminating the Winter Coverage Endorsement and building 
the winter coverage protection into the policy provisions. The forage 
seeding program has been improved by: adding insurance dates for 
California and South Dakota, providing for acreage reporting dates to 
be based on regional differences for program flexibility, allowing an 
increased replanting payment, if allowed by the Special Provisions, 
allowing replanting payments in certain California counties, and 
removing planted acreage requirements for qualifying for a replanting 
payment.
    The GRP forage program was first piloted the 1994 crop year in 
Minnesota and Wisconsin. While the program remains a pilot, it has been 
expanded to additional counties in 8 States. For the 1998 crop year, 
RMA added acreage intended for rotational grazing as insurable acreage. 
RMA's determination of payment yield by county and by year is based, in 
part, on the National Agricultural Statistic Service (NASS) county 
yield for harvested acres. RMA is currently evaluating methodology and 
overall effectiveness of the GRP forage program and consulting with 
other Federal agencies whose data is used for program determinations. 
RMA is also using a Fellow from the American Academy for the 
Advancement of Science (AAAS) to help identify other ways to insure 
forage.
    In addition to the programs mentioned above, RMA continues to 
research options for insuring the quality of forage produced under the 
Forage Production Policy. In 1999, RMA began offering a Rangeland and 
Pasture Group Risk Plan. The program is being piloted in 12 counties in 
Montana, with 2 million acres insured under this policy in its first 
year. In 2001, RMA plans to offer an insurance product covering 
producers of forage seed in seven States. RMA is also researching a 
rangeland and pasture APH product to provide individual coverage for 
rangeland and pasture producers. These initiatives have included 
consultation with forage specialists and forage growers to determine 
their needs.
    In 1999, there were 14,000 policies in effect for forage; total 
acreage insured was approximately 3,680,000 acres. States with the most 
acreage insured were Wisconsin and Minnesota; in other major producing 
areas such as Nebraska, Colorado, California and Oregon, participation 
in the forage insurance program is much lower.
    RMA has conducted numerous listening sessions with growers of hay 
and forage in an attempt to determine concerns of producers. The major 
concern is the need for quality provisions in the current Forage 
Production policy. RMA is currently developing a quality provision 
which will be included in the forage production policy in the future.
    Many producers are not interested in a risk management tool for 
forage production because they produce forage for on-the-farm use only. 
Since they don't consider this a marketable crop, they often do not 
keep records. Growers have also advised that in some markets, most 
notably in California--the nation's largest forage producing area--the 
ability of growers to harvest multiple cuttings per year provides them 
with a spread of risk sufficient to preclude interest in a risk 
management tool.
    Question. Are there any legislative changes required to provide 
meaningful insurance for forage producers, particularly for those 
farmers who grow forage for on-farm feed?
    Answer. No legislative changes are required for RMA to continue its 
efforts to improve the insurance options available for forage producers 
including those who grow forage for on-farm feed.

                         MILK PRICE PROTECTION

    Question. In the recently announced safety net proposal, the 
Administration proposed a new program to provide livestock producers 
with price protection. Why hasn't the Administration proposed something 
comparable to provide milk price protection?
    Answer. At this time, RMA has neither the legislative authority nor 
the funding to offer a milk price insurance program or livestock 
insurance. RMA currently has the Dairy Options Pilot program to help 
dairy farmers manage risk. The livestock proposal is also for a pilot-
scale program. RMA would need to evaluate the performance of both types 
of programs before expanding them to a national scale.
    Question. How could a milk price protection program be structured:
    Answer. We have consulted with private insurers who are studying 
how best to design a milk price insurance program. They inform us that 
they would begin by trying to adapt the livestock price design to milk, 
but are unsure if it will work. At this point there are uncertainties 
involving the availability of price data as well as the different sales 
patterns--daily for milk, occasionally for cattle.

                      FSA COUNTY OFFICE PERSONNEL

    Question. I understand the Department intends to propose 
legislation to convert all non-Federal FSA employees to Federal 
employee status in 2000.Is there a cost associated with this 
conversion? If so, what?
    Answer. The conversion of all non-Federal county office employees 
to Federal status in fiscal year 2000 will move all employees under one 
personnel system and improve efficiency of Agency operations. It is not 
anticipated that the conversion will have a significant cost effect on 
agency operations.
    Question. Have the Federal employee union representatives expressed 
an opinion on this proposal? If so, what?
    Answer. We are unaware of any employee union comments on the 
specific proposal to convert non-Federal county office employees to 
Federal status, with their tenure.

                 RESOURCE CONSERVATION AND DEVELOPMENT

    Question. The Resource Conservation and Development Program has 
been valuable for the rural communities in Wisconsin. Unfortunately, 
the last remaining RC&D Council in Wisconsin--Glacierland--has not yet 
received official designation by the Secretary. This is despite an 
increase in fiscal year 2000 appropriations for RC&D which Congress 
directed be spent to designate new councils. What is the status of the 
designation application of Glacierland RC&D?
    Answer. There are currently 315 RC&D areas nationwide, including 
five in the State of Wisconsin. The Glacierland RC&D applied for 
designation in may, 1997. Although the fiscal year 2000 appropriation 
provides an increase of $265,000 for RC&D, this funding is needed to 
cover pay and other cost increases. Similarly, the additional funds 
proposed in the fiscal year 2001 Budget are requested to cover cost 
increases, rather than to increase the number of designated areas.

                            DEBT FOR NATURE

    Question. With declining farm income and increased environmental 
pressures on agricultural lands in Wisconsin, there is a growing farmer 
interest in the FSA debt forgiveness provisions of the Debt for Nature 
program. However, I understand that existing funding for Conservation 
Operations may be inadequate to meet demand for this valuable program. 
In order to meet estimated demand for Debt for Nature without reducing 
existing conservation services, what level of increase in Conservation 
Technical Assistance would be required.
    Answer. NRCS estimates that field efforts to address 31,000 
contracts affecting 4.2 million acres would require over $50 million in 
technical assistance funding and could require up to 775 staff years of 
effort. This estimate is based on a 20 percent participation rate in 
the program by the 157,000 borrowers who have loans secured by real 
estate. In some states, such as Wisconsin, landowner interest is very 
high and preliminary efforts to deliver the program reveal that the 
participation rate may be greater if a concerted effort is made to 
market the program. In addition to technical assistance it would be 
important for financial assistance authority and funding to be 
available.

                 FLOOD CONTROL STRUCTURE REHABILITATION

    Question. The fiscal year 2000 appropriations act included language 
directing the $8 million be available for technical and financial 
assistance for pilot rehabilitation of upstream structures in four 
states. Please provide the status of this effort in terms of criteria 
for locating pilot areas and a timetable for action.
    Answer. NRCS is currently working with local communities, project 
sponsors and state dam safety officials in Ohio, Wisconsin, 
Mississippi, and New Mexico on their high priority dam rehabilitation 
projects. The projects underway are those that have some of highest 
risk to public health and safety. These projects will demonstrate the 
variety of alternatives that will be involved and issues that will be 
encountered with rehabilitation, as well as the many benefits. We are 
currently assisting project sponsors with planning, design and 
implementation. There is currently over $540 million in known dam 
rehabilitation needs nationwide and communities in these 4 States are 
already on the waiting list for assistance. NRCS has provided watershed 
project sponsors the opportunity to apply for Pilot Rehabilitation 
Project funds provided in the fiscal year 2000 Appropriation Bill. 
Construction should begin during this summer and continue through 2001.
    Question. Has the Department established a priority national 
listing of endangered structures, and if so, what criteria was used and 
please provide a copy.
    Answer. The Department has not established a priority national 
listing of endangered structures. Currently there is no statutory 
authority, other than annual appropriation language to conduct an 
assessment or provide assistance.
    Question. If not, are there plans to do so? Explain.
    Answer. Since there is no statutory authority for rehabilitation, 
there are no plans to develop criteria for ranking endangered 
structures. The Administration's budget includes $4 million in subsidy 
budget authority for a new $60 million loan program to assist State and 
local governments that wish to rehabilitate dams. None of the costs for 
rehabilitation activities (including any technical assistance costs 
such as planning, design, and engineering costs) shall be borne by the 
Department of Agriculture. If NRCS provided technical assistance, all 
costs would be required to be reimbursed by watershed sponsors.

                         CONSERVATION AND DAIRY

    Question. There is growing concern among dairy farmers about the 
impact of state and federal environmental restrictions and the lack of 
voluntary conservation programs to assist them. With the exception of 
EQIP, other conservation programs have been geared primarily to 
cropland and crop producers. Please tell this Committee how the 
Department plans to meet the conservation needs of dairy farmers under 
existing programs as well as under the Administration's new 
conservation initiative.
    Answer. Under the proposed conservation programs proposed as part 
of the Administration's Farm Safety Net, more farmers would be included 
in national conservation programs and more funding would be available 
for current USDA conservation programs. The Conservation Security 
Program (CSP) would be open to farmers and ranchers nationwide who 
voluntarily practice good stewardship on cropland, pasture and range 
grazing land, hayland, and other agricultural lands for the production 
of agricultural products. Thus, many dairy farmers would be eligible 
for CSP. The CSP, proposed to be funded in the amount of $600 million 
in both fiscal years 2001 and 2002, would provide direct annual 
payments to producers to financially recognize them for good land 
stewardship that produces the environmental benefits which we all 
enjoy--clean water and air, reduced soil erosion, improved wildlife 
habitat, and sustainable soil. Payment levels would be based on the 
comprehensiveness of producers' conservation efforts. The $125 million 
increase in the Environmental Quality Incentives Program would mean 
that 50 percent more farmers and ranchers would receive cost share to 
implement conservation practices. Of this increase, 50 percent must be 
targeted for livestock production. The announced increases in other 
programs would be available to eligible dairy farmers as well, 
including the Wetland Reserve Program to enroll 250,000 acres, the 
Wildlife Habitat Incentives Program to $50 million per year, the 
Farmland Protection Program to $65 million per year, the Conservation 
Reserve Program to 40 million cumulative acres, and the ``continuous 
sign-ups'' bonuses under the Conservation Reserve Program to $125 
million in fiscal years 2001 and 2002. $100 million in continuous 
signup bonuses will be provided in fiscal year 2000.
    In addition to the technical and financial assistance that would be 
provided through the Conservation Initiative, a total of nearly $56 
million in technical assistance will be specifically directed to animal 
feeding operation (AFO) owners this fiscal year through the 
Conservation Technical Assistance activity and will increase to $88 
million next fiscal year.
    Question. Additionally, there is concern that NRCS has insufficient 
resources to help livestock producers develop nutrient management plans 
under the time frame proposed under the Unified Strategy for Animal 
Feeding Operations. In order to help livestock and dairy producers meet 
the deadlines of the strategy, how much additional staffing would be 
required and is that reflected in the Administration's fiscal year 2001 
budget proposal?
    Answer. NRCS estimates that approximately 300,000 animal feeding 
operation (AFO) owners and operators will seek NRCS comprehensive 
nutrient management planning technical and financial assistance. 
Preliminary information derived from the NRCS Workload Analysis System 
indicates that it takes, on average, 235 hours of technical assistance 
to plan, design, and provide appropriate oversight, according to NRCS 
technical standards, the components related to manure management for a 
typical AFO. This average is currently under review to adjust for 
expected efficiencies. NRCS anticipates that partners will contribute 
about 14 percent annually, or about 335 FTEs per year--their expected 
level for fiscal year 2000. Assuming that the remainder is done by NRCS 
and that CNMP planning is completed in 2009, and that CNMP 
implementation assistance is needed through 2012, preliminary estimates 
indicate that NRCS will need approximately 2,935 FTEs per year over the 
next 10 years. Fiscal year 2001 budget levels propose approximately 800 
FTEs for AFO planning and implementation assistance.

                   CONSERVATION TECHNICAL ASSISTANCE

    Question. The budget request includes an increase in the 
Conservation Operations account. We continue to hear concerns from 
conservation districts and from other stakeholders that the USDA 
county-based delivery network is under increasing strain due to 
declining staff and increasing workload. Some have suggested that the 
increase in the budget may not be sufficient to meet current demand for 
conservation assistance let alone the new conservation initiative. In 
any case, if the $1.3 billion in new conservation programs included in 
the Farm Safety Net Initiative is enacted, I expect that problem will 
be exacerbated. Will your requested budget levels for Conservation 
Operations be sufficient to carry out the conservation programs 
currently authorized and those included in the new initiative?
    Answer. The requested funding levels for the Conservation Technical 
Assistance program and the CCC funded mandatory conservation programs 
in the Farm Safety Net proposal provide sufficient technical assistance 
to implement these expanded programs. Specifically, within Conservation 
Operations, the President's Budget proposes an $86 million increase and 
the farm safety net proposal includes language to provide an additional 
$75 million in fiscal year 2001 for technical assistance related to 
certain conservation programs including the Conservation Reserve 
Program.

                      COUNTY-BASED STAFFING LEVELS

    Question. Concern about inadequate staffing at USDA Service Centers 
has not been limited to conservation. We've seen, in particular, 
problems with the delivery of emergency assistance because of 
inadequate staffing levels. Would you also comment on the other county-
based agencies in regard to their staffing needs?
    Answer. Staffing levels in all three of the county-base agencies 
have declined below the levels projected in the Department's 
streamlining plan and reflect levels that can be supported given 
current budgets and other demands, such as the need to maintain 
information technology (IT) systems. Recent budgets for these agencies 
have been developed on the basis that funding would be provided for 
implementation of a Common Computing Environment (CCE) that would 
provide a single, modern system to serve the needs of the agencies and 
their customers more efficiently than the patchwork of the existing 
systems. Actual appropriations for the CCE have fallen far short of 
requested and needed levels, meaning that agency staffs do not have the 
benefit of modern technology and agencies must continue to maintain 
aging systems. Further, in the case of Rural Development, the fiscal 
year 2000 appropriation or salaries and expenses was $8 million below 
the request.
    Question. If there is additional emergency assistance provided in 
fiscal year 2001, will the Administration's budget proposal for county 
staffing be sufficient to deliver that assistance in a timely manner?
    Answer. The FSA budget proposal does not include any assumption of 
emergency assistance in fiscal year 2001, other than a small amount of 
carryover activity for programs legislated in fiscal year 2000. If 
additional emergency assistance legislation is enacted, we will work 
with OMB and the Congress to address requirements.

                      CONSERVATION RESERVE PROGRAM

    Question. In the fiscal year 2000 Appropriations Act, three 
separate general provisions were included that placed limitations or 
required changes to the Conservation Reserve Program. These are found 
in sections 763, 764, and 765. Please describe the effects of these 
provisions on the implementation of the CRP in fiscal year 2000 and 
include information regarding how these provisions affected farmer 
participation and the conservation goals of the program.
    Answer. The effects of Sections 763, 764, and 765 on the 
implementation of the CRP in fiscal year 2000, along with other related 
information will be provided for the record.
    [The information follows:]
    Section 763 rescinds Section 1232(a)(11) of the Food Security Act 
of 1985, as amended (1985 Act), commonly referred to as Conservation 
Reserve Program Highly Erodible Land (CRP HEL). Because this section 
amended the 1985 Act, no further action is necessary. The provisions of 
section 763 may increase farmer participation in the program and are 
consistent with the goals of the program to reduce soil erosion, 
promote water quality, and enhance wildlife habitat. The Farm Service 
Agency amended 7 CFR part 1410 withdrawing CRP HEL as a producer 
obligation and issued instructions to the field implementing this 
section.
    Section 764 permits land to be enrolled with minimal environmental 
value at much greater cost by prohibiting implementation of FSA's 
Notice CRP-338 which was issued with NRCS concurrence regarding contour 
grass strips. Section 764 permits enrollment of these existing strips 
installed according to NRCS standards. Enrollment of this land with 
little erosion improvement would cost an estimated $25 per ton compared 
to the historical program average for cost-share practices of $.62 per 
ton. Producers utilizing this provision would be required to refund the 
federal cost of any remaining value of the federal cost of the original 
installation. The provisions of section 764 will increase farmer 
participation in the program but appear to be inconsistent with the 
goals of the program to reduce soil erosion.
    Instructions implementing section 764 are in development for 
issuance to field offices.
    Section 765 provided that none of the funds made available under 
the Act could be used to implement Notice CRP-327 or any related 
administrative action, but further clarified that the section does not 
apply to any lands for which there is not full compliance with the 
conservation practices required under terms of the CRP contract. Notice 
CRP-327 prohibited commercial shooting preserves on CRP acreage.
    The Farm Service Agency worked with industry representatives in 
fiscal year 2000 to develop procedures to implement the provisions of 
section 765. Although fee hunting has been allowed on CRP acreage since 
the program's inception, commercial shooting preserves on which the 
cover is manipulated are not compatible with the authorizing statute, 
which prohibits making commercial use of the forage on CRP acreage 
except during droughts or other emergencies. The provisions of section 
765 have had no known impact on farmer participation in the program and 
although the provision includes language requiring compliance with the 
CRP contract, this is difficult.

                DISCONTINUATION OF SECTIONS 764 AND 765

    Question. If the Department does not support continuation of these 
changes in fiscal year 2001, please specify with justifications.
    Answer. The Department does not support the continuation of Section 
764 because:
  --Contour Grass Strips were developed to address sheet and rill 
        erosion as rainwater washes across a field and many farmers 
        installed these strips according to NRCS standards which did 
        not require a grass cover.
  --Enrollment of land with little erosion improvement would cost an 
        estimated $25 per ton compared to the historical program 
        average for cost-share practices of $.62 per ton.
  --The Department also does not believe continuation of Section 765 is 
        necessary. FSA will continue to work with landowners and 
        hunting interests to maintain the purposes of CRP while 
        permitting fair hunting opportunities.

                       FUNDING FOR ROUND II EC/EZ

    Question. In fiscal year 2000, specific set-asides were provided 
under rural development programs for EC's and EZ's. In addition, 
funding was also provided directly to benefit Round II EC/EZ's. Please 
provide information relating to the distribution of funds under these 
set-asides.
    Answer. The $15 million in discretionary grants is distributed to 
the second round empowerment zones and enterprise communities as 
follows: $2 million each to the five empowerment zones and $250,000 
each to the 20 enterprise communities. These funds are used in a 
variety of ways, but for the most part, provide a financial base that 
allows the communities to develop long-term investment strategies, and 
provide a source of funds that are used to attract other investment 
capital, including the Rural Development funds that are set-aside for 
use by the empowerment zones and enterprise communities.

                            RUS FFB ACTIVITY

    Question. The fiscal year 2000 Appropriations Act provided a 
program level of $1.7 billion for FFB electric loans. The budget 
request for fiscal year 2001 reduces this program level almost in half 
even though there is very little budget authority exposure. What is the 
reason for this reduction?
    Answer. The fiscal year 2001 budget request for RUS guarantee 
funding totals $1.2 billion. This represents a $500 million reduction 
when compared with the $1.7 billion that Congress provided in the 
fiscal year 2000 Appropriations Act.
    The Agency believes the additional $500 million that Congress 
provided in the fiscal year 2000 Appropriations Act will help to reduce 
the large backlog of loan applications the Agency has on hand. In light 
of this, we believe that the $1.2 million is adequate to meet the 
electric borrowers' capital needs that are anticipated during fiscal 
year 2001.
    Question. Why is demand not adequate given the need expressed by 
the rural electric community for expanded loan programs?
    Answer. There has been extensive need expressed by the rural 
electric community. In a effort to meet the capital needs of the 
electric borrowers while minimizing the budgetary impact, this 
Administration proposed new lending authorities in the fiscal year 1999 
and fiscal year 2000 budgets. We now believe we can adequately address 
the demand through the FFB program.
    Question. Do you think the proposed $400 million program level for 
Guaranteed CFC/CoBank loans will meet the demand of borrowers as a 
satisfactory alternative to reductions in Direct 5 percent and FFB loan 
levels?
    Answer. We are hopeful that borrowers will utilize the CFC/CoBank 
alternative, if they are unwilling to utilize an FFB funded guarantee 
program. The CFC/CoBank option is not intended to serve as an 
alternative to the Direct (5 percent) hardship loan program. We believe 
the $50 million request for hardship loans in fiscal year 2001 will be 
adequate to meet the anticipated need. The flow of hardship loan 
applications has slowed recently.

                        NATIVE AMERICAN PROGRAMS

    Question. The fiscal year 2000 Appropriations Act provided a 
specific set-aside for water and wastewater programs for Native 
Americans. Please provide the status on this initiative.
    Answer. As provided in the fiscal year 2000 Appropriations Act, the 
Rural Utilities Service has allotted $12 million for Native Americans. 
That amount is being retained in the National Office reserve. State 
Offices may request funds from the National Office reserve. The Rural 
Utilities Service has limited individual grants to $1 million. As of 
March 1, 2000, $2,555,500 has been allocated for 7 projects. Based on 
inquiries received, it appears that all of the funds will be used.

                        WIC VENDOR ACCESSIBILITY

    Question. I am concerned about the way food assistance is, in some 
instances, distributed to those in need. For example, I understand USDA 
is considering a rule change for the WIC program that might limit the 
availability of WIC-participating retail outlets. What is the rationale 
for this limitation and what impact will it have on the ability of some 
WIC-eligible persons to participate in the program?
    Answer. USDA policy is that WIC retailers should be accessible to 
WIC recipients and that they should carry and have available all of the 
WIC foods, taking into account cultural preferences. There is no effort 
to reduce the number of retailers. Stakeholders are cognizant that 
there is a cost to the States to adequately manage and monitor 
retailers. States seek to maintain an appropriate number--balancing 
recipient access and the State's ability to adequately monitor the 
program to prevent abuses. We anticipate no particular change affecting 
rural communities. The changes to the rules are to ensure that only 
qualified retailers, accessible to recipients, are authorized.

              PUERTO RICO'S EBT PROGRAM AND PROGRAM ABUSE

    Question. Another distribution problem, unfortunately, is tied to 
program abuse or, in some cases, rules that allow people to circumvent 
the intent of nutrition programs. For example, I understand that an EBT 
pilot has been implemented in Puerto Rico that has few if any 
restrictions on how nutrition assistance is distributed and potentially 
could impair the program's ability to get the intended benefits to the 
most vulnerable participants such as children. Could you describe what 
the Department is doing to curtail program abuse, and can you speak to 
the situation in Puerto Rico and what you are doing to make sure 
benefits are properly distributed?
    Answer. First, with respect to Puerto Rico's program--based on a 
congressional mandate, Puerto Rico began issuing cash nutrition 
assistance benefits in lieu of food stamps in the early 1980's. Several 
studies of this benefit delivery system established that it did not 
significantly affect recipients' expenditures on food. In 1999, when 
Puerto Rico began to pilot EBT, no new limitations were placed on the 
nutrition assistance funds. However, I am told that Puerto Rico will 
look into the possibility of limiting all or part of its EBT benefits 
to food purchases sometime in 2001.
    With respect to efforts to curtail program abuses via EBT, the 
program has been having growing success. But EBT is not a panacea that 
can address all program waste, fraud and abuse. And, for a cash program 
like Puerto Rico has been operating, much of the anti-fraud advantages 
of EBT are moot. The cash system does not have ``ineligible items'' and 
trafficking.
    In the continental U.S., however, the Food and Nutrition Service 
aggressively tackles fraud via the EBT system.
    I will ask the Food and Nutrition Service for additional detail on 
both of these topics.
    [The information follows:]
    FNS aggressively tackles trafficking food stamp benefits for cash 
to ensure benefits are used properly and not diverted from their 
intended purpose. FNS actions to detect and punish store traffickers 
include:
    The Anti-Fraud Locator Using EBT Retailer Transactions (ALERT) 
system helped the FNS Compliance Branch target its investigations of 
authorized stores. In fiscal year 1999, the Compliance Branch completed 
517 retailer investigations which involved the trafficking of food 
stamp benefits for cash. Due to serious violations of program benefits, 
including trafficking and selling ineligible items such as alcohol or 
tobacco, 1,365 stores were disqualified from being able to accept food 
stamps or sanctioned with Civil Money Penalties in fiscal year 1999.
    To increase States' ability to finance activities to disqualify 
recipient traffickers, the Food Stamp Program has issued a proposed 
rulemaking which would allow the States to establish claims for the 
misused benefits and to retain 35 percent of collected amounts. This 
regulation is expected to be published in final this year.
    Puerto Rico began issuing cash nutrition assistance program 
benefits in July 1982. Studies of this benefit delivery system in 1983 
and 1985 established that issuing benefits in this form did not 
significantly affect recipients' expenditures on food.
    Public Law 99-198 of December 23, 1985 allowed the Commonwealth to 
continue using its cash program which has remained in operation since 
then. A pilot EBT program was implemented in two local offices in 
Puerto Rico in November 1999. This EBT project is scheduled to be 
expanded to the entire Commonwealth within a year. Puerto Rico will 
look into the possibility of limiting all or part of its EBT benefits 
to food purchases sometime in 2001.

                            BREAKFAST PILOT

    Question. Last year Congress provided USDA with new funding of $7 
million to carry out a pilot project to research the connection between 
consumption of a nutritious breakfast and academic performance. Please 
provide the Committee with an update on the status of the School 
Breakfast Pilot.
    Answer. USDA is continuing preparations to commence the 
demonstration of universal free school breakfast in School Year 2000-
2001. A rigorous study design has been developed with the assistance of 
a contractor and a panel of national experts. A number of school 
districts, across the nation have also expressed interest in this, and 
selection of an evaluation contractor is underway.
    [The information follows:]
    A Federal Register notice announcing the application process for 
school food authorities (SFAs) who wish to participate was published in 
early December, 1999.
    School districts throughout the country have expressed interest in 
participating in the pilot project demonstration. A total of 383 school 
districts from 43 States submitted applications. Selection of the six 
school districts to participate in the pilot projects will occur in 
early Spring. These districts will be selected to be geographically 
dispersed, with a blend of urban and rural areas, and consideration 
given to socioeconomic conditions.
    In addition, the process of selecting an evaluation contractor to 
collect and analyze data and produce a final report is underway. The 
request for proposals (RFP) for the evaluation of the pilot projects 
were mailed to over 60 potential offerors in February, 2000. We expect 
to make a final selection of the evaluation contractor by early Summer.

                     SCHOOL BREAKFAST PARTICIPATION

    Question. Several years ago, Congress eliminated funding for school 
breakfast start up funds. However, in some states, including Wisconsin, 
school participation in breakfast lags well behind participation in the 
National School Lunch program. What steps is USDA taking to improve 
participation in school breakfast?
    Answer. In recent years, we have made a concerted effort to enhance 
the availability of the School Breakfast Program. These efforts have 
borne fruit. The number of schools participating in the program and the 
number of children receiving breakfasts have more than doubled.
    A number of factors undoubtedly contributed to this growth: the 
start-up grants may have encouraged schools to participate because the 
cost of special equipment was defrayed; also, Congress added 6 cents on 
top of the basic reimbursement. And, just as importantly, schools and 
communities recognized the value of school breakfasts for both health 
and learning. Currently, about 7 million children participate daily at 
about 70 thousand schools around the country.
    Nevertheless, we are aware that participation in the breakfast 
program lags far behind the numbers for the National School Lunch 
Program, and we are working with our partners in the U. S. Department 
of Education to help school administrators understand the contribution 
that school breakfasts can make to academic achievement and to deal 
with local issues such as bus schedules and to try to have schools 
provide children with an environment conducive to eating school meals 
and allowing them enough time to do so. We must stress, however, that 
in some ways the most important factor is parental and community 
involvement. If people understand that breakfast is a vital part of the 
school day, they will be receptive to making the breakfast program 
available in their schools and encouraging their children to eat the 
breakfasts that are available to them.

                     SCHOOL BREAKFAST REIMBURSEMENT

    Question. I am concerned by anecdotal reports that the 
reimbursement schools receive for school breakfast, even for free 
meals, does not cover the costs of providing the meals. Has USDA 
examined this concern? If so, what has it concluded?
    Answer. The Food and Nutrition Service completed a study on school 
lunch and breakfast costs in the past few years. The study suggested 
that the revenue stream to schools, including Federal and child 
payments, exceeded the cost of meal production. Funding for breakfast 
program schools generally were able to deliver meals within the maximum 
reimbursement rates provided. The majority of breakfasts are reimbursed 
at the ``severe need'' free meal reimbursement rate of $1.30, with many 
others supported at the regular free rate, $0.21 less. Let me provide 
some additional information from the study.
    [The information follows:]
    The Department has conducted a study, the School Lunch and 
Breakfast Cost Study, concerning food costs and school revenues. The 
study, on a statistically representative sample of schools which 
participate in the National School Lunch and School Breakfast Programs, 
examined food preparation and other costs (e.g., utilities) which 
schools incur in operating these programs, and compared these costs 
with the total revenues the schools receive from USDA reimbursements, 
student payments for reduced price and paid meals, and other program 
revenue sources.
    The study found that, overall, the revenues from all sources 
obtained from reimbursable lunches exceed the cost of producing these 
meals, and that `` SFAs appear to subsidize breakfasts and non-
reimbursable meals with surplus revenues derived from reimbursable 
lunches.'' In other words, food service managers treat their non-profit 
food service accounts as an aggregate; they balance total revenues for 
all the programs they operate, but not for each program separately. 
Because nearly all schools that participate in the breakfast program 
also participate in the lunch program, most school food service 
accounts operate on a break-even basis.
    Schools with a high percentage of low-income students are also 
eligible to receive additional reimbursement for breakfasts to free and 
reduced price eligible students if their costs of production for these 
meals exceed the regular reimbursement rates, less any payments 
received from students for reduced price breakfasts. Schools may be 
reimbursed for their full production costs for these breakfasts up to a 
maximum rate in school year 1999-2000 of $1.30 for a ``severe need'' 
free meal, and $1.09 for a free breakfast. Reduced price meals are 
reimbursed at $0.21 less, and paid meals are reimbursed at $0.21 in all 
schools. In fiscal year 1999, ``severe need'' breakfasts accounted for 
76 percent of all free and reduced price breakfasts, and 65 percent of 
all program breakfasts served nationwide.
    The Department is required by law to establish uniform 
reimbursement rates and procedures for school food programs. These 
rates may not exceed costs in a some very high cost areas.
    However, the available information suggests that reimbursement 
levels do not hinder schools' participation in the breakfast program. 
Approximately 73 percent of schools which participate in the school 
lunch program also participate in the breakfast program.
    The Department's School Nutrition Dietary Assessment study found 
that those which do not participate have decided not to do so based on 
perceived lack of need for the program, scheduling and busing issues, 
or other issues not related to the level of program reimbursements. 
Therefore, it appears likely that the level of reimbursement for 
breakfasts is adequate.

           TEMPORARY INCREASE IN BREAKFAST REIMBURSEMENT RATE

    Question. Would a temporary increase in the per meal reimbursement 
for school breakfast encourage additional school participation?
    Answer. It is possible that some schools might start up a program 
if the initial reimbursement were higher. Although, with 73 percent of 
school lunch schools in the breakfast program, and the size of the 
reimbursement rate not really figuring into the decision of the other 
schools not to participate, we believe the number of new schools would 
not be large. While the costs could be kept down by limiting such a 
proposal only to new schools, since the schools would know that the 
higher rates are temporary, we think they will be reluctant to make the 
investment to begin and continue to operate the breakfast program.

                   WIC FARMERS MARKET FUNDING DELAYS

    Question. The fiscal year 2000 Appropriation Act provides for $10 
million to be made available for the WIC Farmers Market Nutrition 
Program within 45 days of enactment and an additional $5 million to be 
made available upon a determination that caseload will be maintained. 
Since for planning purposes it is important for farmers market groups 
to know well in advance the level of funding available for the program, 
a long delay in the availability of the contingent $5 million could 
have been problematic. Have there been any problems regarding the 
availability of total funding for the WIC Farmers Market program due to 
the time of the release of funds?
    Answer. Yes, some States have complained that delays have occurred 
in program implementation due to the uncertainty created by the 
contingency provision. We would much prefer that the entire 
appropriation be made available at the start of the year.

          IMMEDIATE AVAILABILITY OF WIC FARMERS MARKET FUNDING

    Question. If the WIC Farmers Market Program funding is not moved to 
the Commodity Assistance Program (as suggested in the budget request) 
but instead is retained in the WIC account, would it be advisable to 
include language that would immediately make available the full amount 
(whether the level be $15 or $20 million) even though a contingent 
amount would be based on the availability of carryover funds?
    Answer. Yes, we would prefer that the full amount be made available 
at the beginning of the year.

               CHILD AND ADULT CARE FOOD PROGRAM POOLING

    Question. In Senate Report 106-80, the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriations Bill, 2000, I asked for language to be inserted that 
said:
    ``The Committee urges the Department to provide technical 
assistance and guidance to those states not maximizing the number of 
children served under the Child and Adult Care Food Program in their 
jurisdiction. These states should be encouraged to follow the example 
of those states that pool a limited amount of Title XX with Child Care 
Development Block Grant (CCDBG) funds to meet the technical requirement 
of the current law.''
    I also had similar language included in the Senate Report on the 
Departments of Labor, Health and Human Services, and Education and 
Related Agencies Appropriations. It said:
    ``The Committee recognizes that some states have successfully 
pooled resources from the Social Services Block Grant (SSBG) to 
maximize the number of children served under the Child and Adult Care 
Food Program. The Committee believes that the Department could provide 
technical assistance and guidance to other states so that they may use 
SSBG resources to serve more children in the CACFP.''
    What has the Department done to carry out the directive in Senate 
Report 106-80 described above?
    Answer. I know that we have done our best to carry out the intent 
of this language. By encouraging States to pool funding streams with 
Title XX, they can increase the number of proprietary child care 
centers with 25 percent or more low income children that can 
participate in CACFP. Expanding the supply and quality of child care is 
a national objective, so this is very important to us. Allow me to 
submit some additional information as to how we addressed this.
    [The information follows:]
    The issue here is the limitation on proprietary child care programs 
that allows them to participate in CACFP only if 25 percent or more of 
their children receive support from Title XX, a Federal social services 
block grant program that assists low income children and other low 
income persons. Over the years, States have found it necessary to use 
more and more of their Title XX funds for purposes other than child 
care, often using other funds to help the low income households with 
their child care costs. This has had the unintended consequence of 
disqualifying proprietary child care providers serving the same low 
income children, simply because some non-Title XX support for low 
income children is being used. The law, however, permits non-Title XX 
money to function like Title XX money, if it is put into the same 
account as some Title XX money. Thus, with a portion of funding coming 
from Title XX and the rest coming from other sources, all of the funds 
can function like Title XX funds for the purpose of measuring the 
extent of federal support for low income children that a proprietary 
child care center may be receiving. If they have 25 percent or more 
supported by this pooled Title XX money, they may qualify for CACFP.
    Over the past several years, the Department has provided guidance 
and technical assistance to State agencies relative to the pooling of 
Title XX funding. The most recent formal guidance was issued to all 
Child and Adult Care Food Program State administering agencies on July 
6, 1999. That memorandum informed State agencies of the Congressional 
interest in and support for pooling of Title XX funding; provided 
guidance on how pooling can be accomplished; and offered technical 
assistance to States in establishing a pooling mechanism.
    In the near future, the Department will be issuing a second 
memorandum to State agencies. This memorandum will provide information 
on the Department's recent efforts in this area, including the 
technical assistance that has been provided to four States, three of 
which are now using pooling. It will also contain a clarification to 
the earlier memorandum that may facilitate other States' use of this 
process.

              COORDINATION WITH HHS RE NUTRITION EDUCATION

    Question. What is the Department doing to coordinate with the 
Department of Health and Human Services in these efforts?
    Answer. We have worked with the Department of Health and Human 
Services, the States and others in this effort. Allow me to have the 
Food and Nutrition Service provide some additional detail.
    [The information follows:]
    We have worked with the Department of Health and Human Services on 
this issue in the past in order to fully understand the structure of 
Title XX funding to the States. We have also worked with Congressional 
staff, members of the National Child Care Council (a largely 
proprietary child care organization) and State Title XX and Child 
Nutrition agencies. As a result of these efforts some States have 
already begun pooling some portion of their Title XX funds, and other 
States, including California, are moving toward pooling. The Department 
issued a memorandum in 1999 encouraging States to consider this 
approach, and we will be issuing a follow-up memo on this topic in the 
near future.

                          AFTER-SCHOOL CENTERS

    Question. In Senate Report 106-80, the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriations Bill, 2000, I asked for language to be inserted that 
said:
    ``The Committee urges the Secretary to develop a better strategy to 
encourage participation in after-school centers by adolescents and 
older children through programs available under the authorities of the 
Child Nutrition Act. The Committee is concerned that members of the 
qualifying age group who lack proper after-school supervision will be 
more prone to participation in undesirable activities. The use of 
nutritional programs should be considered an appropriate tool to 
attract adolescents to a more risk-free environment which should help 
improve academic performance and reduce the incidence of juvenile 
crime. In addition, the Secretary is directed to provide information to 
the Committee relating to the effectiveness of such a program and 
provide views on the advisability of expanding the availability of free 
or reduced meals under this authority to children over the age of 12.''
    Question. What progress has the Department made in developing the 
strategy asked for in this language?
    Answer. Improved child care accessibility and quality is a national 
priority. We have developed and implemented a strategy to encourage the 
use of this new after school snack program authority. For example, USDA 
entered into a partnership with the U.S. Department of Education (21st 
Century Community Learning Centers), as well as the Department of 
Justice and its numerous programs designed to help ``at risk'' youth. 
USDA has also done promotional work with various organizations, 
particularly the American School Food Service Association, the National 
School Age Child Care Alliance, and the National Head Start Conference 
and more. We have even helped develop a web site to provide one-stop-
shopping of Federal resources for local after school programs.
    Please allow me to have FNS submit some additional detail on these 
efforts.
    [The information follows:]
    The enactment of the William J. Goodling Child Nutrition 
Reauthorization Act of 1998, Public Law 105-336, significantly expanded 
the availability of after school snack programs. It made snack 
reimbursements available to every child through age 18 in every public 
and nonprofit private school of high school grade and under in the 
Nation. Previously eligibility was limited to a small number of 
schools, and to participants only through the age of 12. It also made 
snacks available to public and nonprofit private organizations that 
provide after school programs for children through age 18 in areas in 
which at least half of the children are eligible for free and reduced 
price meals. Such programs could operate for participants only through 
age 12 prior to the Act.
    Since the enactment of Public Law 105-336, the Department has 
undertaken a number of activities to encourage participation in the 
after school snack programs. The Department has: entered into a 
partnership with the U.S. Department of Education (21st Century 
Community Learning Centers), as well as the Department of Justice and 
its numerous programs designed to help ``at risk'' youth; done 
promotional work with a number of organizations including the American 
School Food Service Association, the National School Age Child Care 
Alliance, and the National Head Start Conference; conducted ``Roll 
Out'' sessions in the seven Food and Nutrition Service regions; joined 
other Federal agencies involved in the Federal Support to Communities 
Initiative which has developed a web site to provide one-stop-shopping 
of Federal resources for local after school programs; begun 
participating in ``Federal Fairs'' at various sites throughout the 
Nation at which agencies will promote their after school programs; and 
developed and distributed an after school snack ``success stories'' 
booklet to State agencies. We can assure the Committee that the 
Department will continue its efforts to make the availability of after 
school snack programs known to those who might benefit from them.
    The Department shares the Committee's belief that after school 
programs are an effective way of providing supervision to a vulnerable 
population and that the availability of nutrition benefits can be 
helpful in drawing children to these programs. For that reason, making 
these program available to school children through the age of 18 in 
non-school programs, rather than only in school settings, is something 
the Department would support in principle. However, given the fact that 
the after school snack programs established under Public Law 105-336 
are relatively new and that information on them is limited, we believe 
that it is premature at this time to provide the Congress with an 
assessment of their effectiveness. This is something that could be done 
after two or three years of program operation.

            EXPANDING AFTER SCHOOL MEALS TO CHILDREN OVER 12

    Question. Also, has the Secretary developed an opinion yet on 
advisability of expanding the availability of free or reduced meals in 
after-school programs to children over the age of 12?
    Answer. The Department has been working internally with its 
regulations to provide programs with a more ``seamless'' structure, 
with the idea of making it easier for schools to use school meals 
programs for more of the student's nutritional needs. Because after 
school programs appear to be an effective way of providing supervision 
to a vulnerable population and that the availability of nutrition 
benefits can be helpful in drawing children to these programs, we 
certainly support in principle, the extension of after school snacks to 
all school children through the age of 18 in all school and non-school 
settings when the programs are primarily organized to provide care for 
the children. This change would put the benefits available under the 
Child and Adult Care Food Program (CACFP) on par with those in the 
National School Lunch Program.
    This expanded-eligibility, more seamless program structure would be 
well received by the school and child care community. There would be 
some additional cost that would need to be considered, which is why I 
can only say we support this in principle. But this additional 
flexibility in the Child and Adult Care Food Program would provide 
assistance to non-school based community programs targeted to at risk 
teenagers and this might reduce costly problems elsewhere, creating the 
budgetary offsets that would be needed to make this change cost neutral 
if not a savings on a Government-wide basis.

                             FOOD GLEANING

    Question. For several years, the Secretary has encouraged food 
gleaning. Please provide an update on USDA's efforts to encourage food 
gleaning activities from both within the public and private sector.
    Answer. The Department has encouraged, energized, and provided 
technical assistance to private, non-profit, and corporate food 
recovery and gleaning efforts. Such efforts have been increased and 
incorporated into the broader Community Food Security Initiative. The 
outcome is a substantial increase in the amount of excess food 
collected and distributed to the hungry. However, the nonprofit groups 
are not able to make the necessary infrastructure expansions on their 
own to dramatically increase food recovery and gleaning efforts. In 
fiscal year 2001, the Department is seeking about $5.3 million to 
assist faith-based organizations and other nonprofit groups in engaging 
in a wide range of food security, gleaning, and anti-hunger activities. 
[The information follows:]
    USDA has taken the following steps to bolster gleaning activities:
    Created or aided grass-roots food recovery projects in over 40 
states in conjunction with farmers and ranchers, where USDA's Farm 
Service Agency has facilitated the donation of over 6 million pounds of 
excess food.
  --Worked with the Department of Transportation to provide support to 
        Second Harvest and other nonprofit groups to transport food 
        that is recovered and gleaned. The project has brought together 
        a consortium of nonprofit groups and industry representatives 
        in assessing needs and developing pilot projects to assist 
        public, private, and non-profit entities in distributing 
        additional food.
  --Worked with the nonprofit group World Hunger Year to establish ``1-
        800-GLEAN-IT,'' a toll-free hotline to provide an easy-to-reach 
        source of information on how to get involved in a local 
        gleaning or food recovery program.
  --Distributed over 20,000 copies of a Citizens' Guide to Food 
        Recovery and Gleaning, an easy-to-use ``how to manual'' on how 
        to start or expand food recovery efforts. Changed USDA crop 
        insurance regulations to allow producers receiving crop 
        insurance to donate any product that is still wholesome from 
        fields that are partially damaged.
  --Worked with the National Restaurant Association to produce a guide 
        for its members on how to safely donate excess food.
  --Awarded 12 school districts funds to develop ``best practices'' to 
        increase the donations of excess food from school meals and to 
        develop innovative ways to engage students in fighting hunger 
        through community service.
  --Utilized a USDA report which correlated the location of farmers' 
        markets to the location of food banks and other food recovery 
        groups to begin actively working to increase donations from 
        farmers' markets to food banks and other recovery groups 
        throughout the country.
  --In collaboration with the Department of Defense, and the General 
        Services Administration, USDA has donated more than $8 million 
        worth of excess canned food.

                           COOPERATOR PROGRAM

    Question. Beginning with fiscal year 2000, funding for the Foreign 
Market Development (Cooperator) Program is mandatory. A letter from 
USDA was included in the Congressional Record during Senate 
consideration of the fiscal year 2000 Agriculture Appropriations Act 
which indicated that the funding level for the Cooperator Program would 
remain the same as in the previous year. I understand that OMB 
concurred in this commitment. What was the actual program level of the 
Cooperator Program in fiscal year 1999, including any carryover 
funding?
    Answer. For fiscal 1999, the FAS appropriation provided $27.5 
million in new funding for the Cooperator Program. Drawing upon 
available carry-over balances in addition to the new funding, FAS was 
able to approve marketing plans of nearly $34.0 million in 1999.
    Question. Does the Department intend to maintain, at least, the 
total fiscal year 1999 level in fiscal year 2000 and fiscal year 2001? 
If not, please explain.
    Answer. Yes, the President's Budget provides $27.5 million, funded 
from CCC, for the Cooperator Program in both 2000 and 2001. These 
funds, coupled with carry-over balances, are sufficient to continue 
marketing plans at the fiscal 1999 level.

                     DAIRY EXPORT INCENTIVE PROGRAM

    Question. International markets in dairy trade are becoming 
increasingly important to our Nation's dairy farmers. But because world 
dairy markets are so badly distorted, U.S. milk producers have relied 
on the Dairy Export Incentive Program to help them compete in world 
markets. I am concerned, however, about the future of this program in 
fiscal year 2001, given our WTO obligations to reduce both the volume 
of DEIP exports as well as the value of product exported. This is 
particularly a concern given the low milk prices predicted for the 
duration of this year and surplus production of milk powder. Please 
tell this Committee what will be the impact of our trade agreement 
obligations on both the opportunities of U.S. dairy farmers in world 
markets and the price depressing effect of excess product in this 
country.
    Answer. Beginning July 1, 2000, the United States will be in the 
final year of phasing in Uruguay Round commitments limiting the volume 
of subsidized exports. Limitation commitments applicable to the total 
value of export subsidy bonus awards, will take effect with the 
beginning of fiscal 2001.
    The DEIP was originally intended to be a trade policy tool to 
counteract the export subsidies and other unfair policies of competing 
exporters, especially the European Union. It was not designed as either 
a price support program or a surplus disposal program for dairy 
products, although it clearly has provided benefits in terms of helping 
support prices and moving dairy products onto world markets.
    Beginning with the 1996 Farm Bill, more emphasis has been placed on 
the market development aspects of the DEIP to help lay the groundwork 
for expanded U.S. commercial dairy product exports in anticipation of 
ongoing reforms in domestic and international dairy policies. While 
difficult to quantify, the DEIP has encouraged greater interest by the 
U.S. dairy industry in international markets. Today, more than 90 
percent of U.S. cheese exports are unsubsidized, and exports of other 
unsubsidized dairy products such as ice cream, yogurt, whey products 
and many dairy based food ingredients have experienced steady growth 
despite ongoing economic difficulties in Asia, Russia, South America, 
and elsewhere. Although the domestic market will continue to be of 
greatest importance to U.S. dairy producers, we see growing 
opportunities for exports to the benefit of the entire U.S. dairy 
sector.
    Question. What does USDA plan to do to mitigate the impacts of 
significant reductions in subsidized exports?
    Answer. First, it is important to note that the Department will 
continue to help facilitate commercial exports with the program. DEIP 
will continue, although at a reduced level as noted in your question.
    In addition, we will have to work with the U.S. dairy industry in 
other export related activities, such as foreign market development 
activities. For example, to help expand commercial dairy product 
exports, the Foreign Agricultural Service has awarded nearly $2.5 
million this year to the U.S. Dairy Export Council for a variety of 
foreign market development purposes. At a time of tightened budgets for 
foreign market development, the amount dedicated to promoting U.S. 
dairy product exports has more than doubled since 1995. We believe this 
is money well spent, having contributed to expanding non-subsidized 
dairy product exports, and opportunities can only improve as Asian 
economies recover, China enters the WTO, and the world economy in 
general accelerates.
    Question. In the event that WTO rules impair the effectiveness of 
the DEIP program, what opportunities are there to include dairy 
products in some form of humanitarian assistance?
    Answer. Food aid and humanitarian assistance provides additional 
outlets for surplus nonfat dry milk. Already we have programmed 25,000 
tons of surplus milk powder for donation under the authority of section 
416(b). We will continue to look for additional opportunities to 
provide dairy products as part of U.S. humanitarian assistance efforts.
    Question. Please provide data on expected volume of subsidized 
dairy products, and the value of the subsidies for both the U.S. and 
European Union when the WTO obligations are completed next year.
    Answer. That information will be provided for the record.
    [The information follows:]

----------------------------------------------------------------------------------------------------------------
                                                           United States                  European Union
                                                 ---------------------------------------------------------------
                                                     (Dollars)         (MT)            (ECU)           (MT)
----------------------------------------------------------------------------------------------------------------
Butter and butter oil...........................      30,497,220          21,097     947,800,000         399,300
Skim milk powder................................      82,463,935          68,201     275,800,000         272,500
Cheese..........................................       3,635,638           3,030     341,700,000         321,300
Other milk products.............................          20,974              34     697,700,000         958,100
----------------------------------------------------------------------------------------------------------------
Exchange rate US $1 = 1.03 ECU as of February 29, 2000.

                             AID TO RUSSIA

    Question. While food aid to Russia serves both humanitarian 
objectives and as an outlet for U.S. production, concerns remain about 
the food distribution process in that country. Please provide 
information regarding safeguards in place to ensure proper distribution 
of food to the Russian people and note any problems that have or are 
occurring.
    Answer. USDA took many steps to minimize any irregularities within 
this very large program. The agreements with the Government of Russia 
included several clauses on monitoring and the proper uses of 
commodities and proceeds from the sale of commodities. A critical part 
was the creation of a bilateral working group that discussed issues and 
developed solutions to any irregularities.
    USDA and the U.S. Embassy in Moscow assigned several monitors to 
travel throughout Russia to observe commodity arrivals and speak with 
recipients of the commodities to ensure that commodities were actually 
received. The monitors, the working group, and the Government of Russia 
prepared shipment, arrival, and distribution reports that provided a 
path from the arrival of the commodity in Russia to the recipient. No 
major irregularities in distribution were observed. Any discrepancies 
were discussed and resolved within the bilateral working group.
    A few issues arose relating to the quality of commodities, but the 
bilateral working group and the U.S. industry worked with the Russian 
Government and customs officials to work out these difficulties. 
Finally, private voluntary organizations were instrumental in 
delivering commodities to the most needy individuals and institutions. 
Organizational controls and reporting requirements helped to ensure 
proper distribution by these groups.

                              WORLD HUNGER

    Question. Several years ago, you used authorities of the section 
416(b) program to make surplus U.S. commodities available for donation 
to overcome world hunger. Of course, the Public Law 480 programs, like 
Title II, have long proven to be of vital importance to help combat 
world hunger. These programs also have the added benefit of providing 
an outlet for U.S. production, which will become increasingly important 
as the U.S. complies with its WTO obligations. However, the budget 
request for 2001 shows a major reduction in all Public Law 480 program 
levels, including a significant reduction in the Title II account. In 
addition, the budget indicates that section 416(b) donations during 
2000 will return to more traditional (which means lower) levels. I find 
this combination of facts troubling. Can you describe your 
understanding of world food needs now and in the foreseeable future 
and, how closely are you working with USAID to ensure that those needs 
are met?
    Answer. Current and foreseeable food needs are considerable. The 
Economic Research Service produces an annual Food Security Assessment 
which reviews the world food situation and identifies food aid needs 
around the world. This is the basis on which decisions on foreign food 
aid programming can be made.
    The Foreign Agricultural Service and USAID meet several times each 
month to coordinate the U.S. government's food aid programs. USDA, 
USAID, the State Department, and OMB are members of the Food Assistance 
Policy Council, chaired by USDA, that establishes policy for U.S. food 
aid activities and reviews food aid allocations. In recent months, the 
FAPC has met frequently to review food aid concerns around the world, 
and to ensure that critical food aid needs are met on a timely basis.

                     INTERNATIONAL TRADE SANCTIONS

    Question. Last year, considerable debate occurred in Congress on 
the subject of trade sanctions and their effect on the U.S. 
agricultural sector. What is the current status of international trade 
sanctions that affect U.S. agriculture?
    Answer. On April 28, 1999, President Clinton announced the 
administration would exempt commercial sales of food, medicine and 
medical equipment from future unilateral economic sanctions regimes 
where it had the authority to do so, and would apply that policy 
immediately, with appropriate safeguards, to currently embargoed 
countries. The Treasury Department's Office of Foreign Assets Control 
issued regulations last July to amend the current sanctions regimes for 
Iran, Libya, and Sudan to implement the new policy. This significant 
step by the Administration to rationalize U.S. sanctions policy has 
already resulted in food sales to Iran and Libya.
    The Administration also has taken steps during the past year with 
respect to sanctions imposed on certain individual countries. A summary 
of those actions will be submitted for the record.
    [The information follows:]
Recent administration actions on sanctions
    North Korea.--On September 17, 1999, the President announced some 
easing of sanctions against the Democratic People's Republic of Korea 
(North Korea) under the Trading with the Enemy Act, Defense Production 
Act, and the Export Administration Regulations. The easing of sanctions 
will allow most consumer and other non-sensitive goods to be available 
for export to North Korea and will allow importation of most North 
Korea-origin goods to the U.S., including raw materials. Investment in 
North Korea sectors such as agriculture, mining, petroleum, timber, 
cement, transport, infrastructure, travel/tourism will be permitted. To 
support the goods trade, most commercial and personal funds transfer 
will be allowed between U.S. and North Korean persons and transport 
restrictions will be relaxed to allow commercial air and sea transport 
between the U.S. and North Korea for passengers and cargo, subject to 
normal regulatory requirements.
    India and Pakistan.--On October 27, 1999,the President used new 
authority granted by Congress in the Defense Appropriations Act to 
continue waivers on all economic sanctions, including USDA agricultural 
credit guarantees that apply to India under the Glenn Amendment. In the 
case of Pakistan, however, the President chose to waive only sanctions 
related to USDA agricultural credits and U.S. commercial bank lending.
    Cuba.--On January 5, 1999, the President announced that the United 
States Government would authorize case-by-case licensing of food and 
agricultural exports to independent, non-governmental entities in Cuba.

                     INTERNATIONAL TRADE SANCTIONS

    Question. Do you foresee any changes in the status of these or 
other countries in the coming year in the absence of Congressional 
action?
    Answer. The Administration recognizes the need to rationalize 
sanctions policy. The Administration's steps with regard to food, 
medicine and medical equipment are appropriate first steps, and the 
Congress has taken a similar step in proposing sanctions reform. It is 
necessary that both branches of government work together if U.S. 
sanctions policy is to be rationalized. The Administration has worked 
and will continue to work with interested parties in Congress towards 
achieving meaningful sanctions reform.
    We continue to believe that comprehensive sanctions reform 
legislation must include meaningful waiver provisions for the 
President, symmetrical disciplines imposed on the executive and 
legislative branches with respect to the process by which new sanctions 
can be imposed, a determination that the expected gains to the United 
States outweigh the expected costs to other national interests, and a 
preference for multilateral rather than unilateral sanctions.
    Question. Please quantify, if possible, the economic shifts that 
might occur to the U.S. agricultural sector if these sanctions were 
lifted or substantially modified.
    Answer. According to a recent USDA analysis, the removal of 
unilateral sanctions on six countries--Cuba, Iran, Iraq, North Korea, 
Libya and Sudan--could have increased annual shipments of U.S. 
agricultural products by 0.9 to 1.5 million tons annually.
    While the losses are only a small percentage of total U.S. 
agricultural exports, American producers and exporters would like an 
opportunity to compete in those markets. For sanctions to be effective, 
they must have broad multilateral support. Our ability to deny key 
economic benefits unilaterally to any country is sharply limited 
because many nations can supply the same kinds of food and agricultural 
commodities.
    Question. What is the current Administration position on the 
subject of international trade sanctions as they relate to agriculture?
    Answer. The current Administration position on international trade 
sanctions as they relate to agriculture is based on two basic 
principles. The first is a humanitarian principle that basics, such as 
food and medicine, should not be used as a tool of foreign policy. The 
second is an economic principle that our sanctions policy should not 
impose undue burdens on our farmers.
                                 ______
                                 

             Questions Submitted by Senator Byron L. Dorgan

                            FARM SAFETY NET

    Question. You recently made the following statements * * *
    ``As you all know, many in the farm sector have not shared in the 
overall national prosperity * * * That's why the USDA budget includes a 
new safety net proposal worth $11.5 billion over the next two years. I 
believe that this plan represents a shift in farm policy philosophy, 
one that I hope will guide lawmakers as they begin to think about the 
2002 farm bill.''--Press Release, February 7, 2000
    The farm financial picture would be much different had Congress not 
passed emergency aid legislation in 1998 and 1999. Without the added 
government payments, net cash income would have likely fallen below $50 
billion in 1999, the lowest level since the farm financial crisis of 
the mid-1980s. Rising crop surpluses, continued low prices and 
declining incomes will contribute to increasing farm financial stress 
in 2000, indicating a need for further Federal assistance. However, 
added assistance should not be made in the form of emergency 
legislation with the bulk of the payments in the form of Agricultural 
Market Transition Act (AMTA) payments. That approach, taken the past 
two years, is not in the best interests of farmers and taxpayers, as 
the assistance is ad hoc and ineffectively targeted.--News Release, 
February 2, 2000
    I assume you stand by these remarks.
    Now, the Chairman of the Ag Committee has likened the emergency aid 
legislation in 1998 and 1999 to ``ad hoc counter-cyclical'' farm 
support, and thus feels there is no need to change farm legislation. Do 
you believe that the banks that finance the planting of crops in Rural 
America share the Chairman's view and are happy with cash-flowing farms 
based on the whims of whether or not Congress will pass yet a third 
emergency aid package?
    Answer. No, I believe bankers would be happier knowing with 
certainty that their customers will be safeguarded with a counter-
cyclical payment. Producer payments based on ad hoc emergency 
assistance are generally unknown at the time loan applications are 
reviewed and therefore, add more risk to the banker's portfolio.
    Question. Given the counter-cyclical proposal made by the 
Administration, would the Administration be willing to support a move 
in Congress to change or amend the current farm program, popularly 
known as ``Freedom to Farm,'' provided any change in the support 
structure was counter-cyclical and targeted in nature?
    Answer. Yes, the Administration's safety-net proposal is intended 
to be an amendment to the Federal Agriculture Improvement and Reform 
Act of 1996 (FAIR Act) and operates during the remaining life of the 
FAIR Act. However, the Administration has proposed that its 
Supplementary Income Assistance Program (SIAP), the key income support 
provision in the safety net package, be provided in addition to 
existing FAIR Act income and price support provisions. The 
Administration's proposal is counter-cyclical: producers of an eligible 
crop would receive a payment sufficient to bring the gross income for 
the entire U.S. production of the crop up to 92 percent of the average 
gross income of the crop during the preceding five crop years. If 
income equals or exceeds 92 percent of the five-year average, then no 
payment would be made. The proposal is targeted in two ways: first, the 
payments would only go to producers whose crops are suffering an income 
shortfall and, second, SIAP payments would be limited. The sum of the 
fixed FAIR Act payments plus the SIAP payments could not exceed $30,000 
per producer. The Administration would consider alternative 
specifications of a supplementary income assistance program provided 
that the program is counter-cyclical and targeted.

                     ADMINISTRATIVE FUNDING LEVELS

    Question. The reorganization of USDA was to coincide with the 
government becoming less involved in the business of farming. The 
various agencies serving farmers were straight-lined, as far as staff 
personal levels were concerned, and budgets for administration were 
scrutinized and kept at bare bone levels.
    We now know that ``the government'' did not disengage from 
agriculture. In fact, due to the various emergency disaster packages 
which were necessary to implement due to the ongoing farm crisis, USDA 
is now involved in administrating programs for farmers at record 
levels. This has caused a backlog of work in local county Farm Service 
Agency offices.
    Furthermore, the Risk Management Agency has been reforming crop 
insurance to make it more affordable while at the same time, offering a 
higher level of coverage. In 1993, one basic crop insurance policy was 
available. Now, there are a number of policies available, with more 
coming on line each year. However, these new products are being offered 
with basically the same number of staff.
    Computer technology notwithstanding, the proper administration of 
this growing array of programs and services being provided will need to 
be addressed. Do you anticipate that the level of funding proposed for 
FSA and the RMA in this budget is sufficient to administer these 
programs?
    Answer. The FSA staffing levels proposed in the budget reflect a 
decrease of temporaries due to a current assumption that there will be 
no new programs of economic or disaster assistance legislated for 
fiscal year 2001. There is also no new FSA staffing proposed for the 
proposed Safety Net Initiative. Pending legislation to reform the crop 
insurance program may require a significant increase in RMA 
administrative resources, including increases in staffing and funding 
for computer support. As events unfold for 2001, we will need to work 
with OMB and the Congress to address staffing needs when specific 
workload impacts can be determined.

           RURAL EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES

    Question. This year's budget proposes to provide mandatory funding 
for $15 million in grants annually for Round II Rural Empowerment Zones 
and Enterprise Communities (EZ/EC). This approach, however, has been 
tried unsuccessfully in the past. Last fall, the conferees of the VA-
HUD Appropriations Conference Committee Struggled to find discretionary 
funds to make sure that our commitment to rural EZ/ECs was not 
abandoned after it was apparent that the plan to provide grants through 
mandatory funding had failed. Please provide for the record a statement 
outlining what the Administration will do differently this year to 
actually move legislation forward that would grant mandatory funding 
for EZ/EC.
    Answer. The Administration will be working with the House Committee 
on Ways and Means and the Senate Finance Committee on securing the 
final eight years of mandatory funding through the Social Services 
Block Grants administered by the Department of Health and Human 
Services. This also was the funding source for the first round of 
Empowerment Zones/Enterprise Communities. It is our understanding that 
a bill containing the funding will be considered by the Oversight 
Subcommittee of the Ways and Means Committee in the very near future.
    Question. What assurance can you give the Members of this 
subcomittee that we won't have to struggle to find discretionary funds 
for this purpose?
    Answer. We will make every effort to secure mandatory funding for 
the final eight years as was outlined in the Administration's original 
proposal.

                 REGULAR MULTILATERAL FOOD AID PROGRAM

    Question. USDA's own Economic Research Service estimates that 
global food aid requirements in 2000 are expected to be at least 14 
million metric tons, not including emergency needs. However, the 
Administration's request for global food aid (Public Law 480 Title II) 
for fiscal year 2001 is less than that estimated to be distributed in 
the current year. Why in the face of growing global food aid needs has 
the Administration requested a smaller allocation for Title II in 
fiscal year 2001 ($837,000,000) than it estimates spending in the 
current year ($967,000,000)?
    Answer. The Public Law 480 Title II program level for 2000 is 
higher than it has been in recent years due to special circumstances. 
An unusually large amount of funds--$123 million--carried over from 
1999 to 2000, and these have been made available for programming this 
year.
    The President's budget requests $837 million for Title II in 2001, 
which is an increase of $37 million above the level of funding 
appropriated for 2000. We believe the funding requested should be 
adequate to help meet global food needs in 2001. This level of Title II 
programming will, of course, be supplemented by food aid commodities 
made available through other programs and authorities.

                       SURPLUS COMMODITY PROGRAM

    Question. Last year, USDA purchased more than eight million metric 
tons of wheat and other grains from hurting U.S. farmers and donated it 
to needy countries under CCC authority. Last October, USDA announced 
that only three million tons of surplus commodities would be purchased 
in the current fiscal year. Thus far, however, only a little over 
800,000 tons has been purchased by USDA--more than a third of the way 
through the current fiscal year. At a time when U.S. agricultural 
production and carryover stocks are at record high levels, and farm-
gate prices are at historic lows, why hasn't USDA used its authority 
under the CCC Charter Act and section 416(b) to help offset the crisis 
in farm country by purchasing surplus commodities for countries in 
need?
    Answer. USDA is using its authorities to help improve our export 
performance and support farm prices and income. In the case of foreign 
food assistance, this year, we expect to provide nearly 4 million tons 
of commodity donations to food deficit countries under the authority of 
section 416(b) of the Agricultural Act of 1949. When coupled with 
assistance we will be providing under other USDA program authorities, 
total USDA food aid programming should reach nearly 6 million tons. 
This amount will be supplemented by donations made under the Public Law 
480 Title II program, which is administered by AID and, thus, total 
U.S. food assistance could total as much as 9 million metric tons this 
year.
                                 ______
                                 

            Questions Submitted by Senator Richard L. Durbin

                  ANTITRUST IN THE LIVESTOCK INDUSTRY

    Question. The Office of the General Counsel (OGC) is budgeted at 
$32.1 million and 350 staff years in 2000; to $36 million and 370 staff 
years in 2001, increases of 12 and 6 percent respectively. Will these 
additional resources include a focus on antitrust in the livestock 
industry?
    Answer. The proposed budget for fiscal year 2001 reflects OGC's 
heightened emphasis on concentration issues, food safety, natural 
resources and civil rights. As part of its emphasis on concentration 
issues, OGC will provide substantial legal services to the Grain 
Inspection, Packers and Stockyards Administration in the enforcement of 
Packers and Stockyards Act provisions that support fair trade practices 
and competition in the livestock industry.
    Question. How may lawyers will work on antitrust and 
competitiveness issues in the livestock industry?
    Answer. Because of budget constraints in fiscal 2000, OGC has been 
unable to fill attorney positions vacated by attrition, Currently, 
there are 3.5 FTEs in attorney positions that work on competitiveness 
issues in the livestock industry. If OGC receives its requested 
appropriation for fiscal 2001, we would expect to add attorney 
positions such that there would be at least 5 FTEs working on 
concentration and competitiveness issues in the livestock industry.

                        LIVESTOCK PILOT PROGRAM

    Question. Will Illinois counties be included in any pilot programs 
in risk management to be instituted for livestock producers?
    Answer. When authorized, RMA will follow a very deliberate process 
to determine the scope and area of availability of pilot programs that 
are initiated. Factors involved in that process include producer 
interest, economic value for the area (State and counties), data 
availability, and resource availability and the feasibility of the 
pilot plan of insurance to meet the specific needs of the producers in 
an area. Although Illinois counties may be included in such a pilot 
program, it is impossible to determine which counties will be included 
in a pilot at this time.

                       EXPORT ENHANCEMENT PROGRAM

    Question. EEP funding for fiscal year 2001 in your budget is set at 
$478 million. Less than $3 million has been used under EEP annually 
since 1997. EEP programming is currently limited because of world 
supply and demand conditions. Given this situation, shouldn't we 
consider a legislative change so that we can use these resources for 
other activities, including food aid and market development?
    Answer. Yes, the Department shares your view. In conjunction with 
the budget, the Administration again this year will submit legislation 
to authorize the Secretary of Agriculture to reallocate unobligated EEP 
funds to support other export program activities, such as market 
development and food assistance. We understand that legislation similar 
to the Administration's proposal has already been introduced in the 
Senate.

                   U.S. ACTION PLAN ON FOOD SECURITY

    Question. As you know, I included language in last year's 
appropriations bill calling upon the Administration to specifically 
request funding in fiscal year 2001 to implement the U.S. Action Plan 
on Food Security. What we see instead is a 17 percent drop in Public 
Law 480 funding (from $1.23 billion to $1.02 billion), and no specific 
program funding for the Action Plan. Can you explain the 
Administration's lack of commitment to this important issue?
    Answer. USDA is committed to promoting both global and domestic 
food security. International food aid is one part of our work to 
implement the U.S. Action Plan on Food Security. The decrease in the 
proposed 2001 Public Law 480 program level occurs because of large 
carryover funding balances in the Public Law 480 programs which carried 
over from 1999 into 2000. Public Law 480 Title I carryover funds were 
relatively large because the large scale of section 416(b) foreign 
donations in 1999 reduced the demand for Title I assistance. Also, a 
portion of the emergency Public Law 480 Title II funds provided in 1999 
were carried over to 2000.
    USDA is working closely with other agencies to develop a detailed 
implementation plan to determine how we can best contribute to meeting 
our goal of halving malnutrition on a global basis by 2015. We hope to 
have a unified plan for the U.S. Government by late spring. This will 
provide a guide for future budget requests to implement the action 
plan.
    The Economic Research Service (ERS) has produced an important study 
of why countries are at risk for food insecurity and examines ways we 
can help. ERS classified its global research, statistics and outreach 
as a high priority area and has budgeted for research collaboration 
with appropriate institutions in developing countries on issues 
critical to both the U.S. and foreign governments to implement the 
Action Plan on Food Security. Emphasis will be placed on developing 
better science, more efficient technology transfer mechanisms, better 
information for market and policy decisions, and creating a safer and 
more secure world food supply.

                        SECTION 416(B) DONATIONS

    Question. Similar to the decline in Public Law 480 funding, section 
416(b) seems to be in decline. Yet, the most recent Food Security 
Assessment indicates an increase in the current status quo food gap 
over the previous year's report--from almost 11 million tons to 12.7 
million tons. How can we be giving less to programs like the World Food 
Program when the need is greater than ever?
    Answer. We are continuing to make available large quantities of 
commodities to the World Food Program (WFP) during fiscal year 2000. At 
present, we estimate we will program a total of four million tons under 
section 416(b) authority this year, of which approximately one million 
tons will be through the WFP. This is in addition to the donations 
provided to WFP under the Public Law 480 Title II program.
    Question. With regard to section 416(b), we are four months into 
fiscal year 2000 and I'm concerned that a section 416(b) soybean 
program has not been initiated and very little wheat has been produced 
for donations. For soybeans, I understand that private voluntary 
organizations, such as CARE, Catholic Relief Services, and Africare, 
developed section 416(b) proposals with the assistance of U.S. soybean 
producers. In sub-Saharan Africa, where 70 percent of the population 
lives in poverty, these programs would improve HIV/AIDS prevention, 
construct community-managed irrigation, provide literacy training, and 
introduce improved agricultural practices. Why have the fiscal year 
2000 section 416(b) soybean and wheat programs been delayed?
    Answer. Concerns regarding the overall U.S. budget situation this 
year required some time to assess. The final calculations of the non-
Social Security budget surplus were not complete until mid-January. 
This was a key piece of information for the Administration as it 
considered additional budget allocations, including those to the 
agriculture sector. With the release of the President's budget on 
February 7, the Administration was able to move ahead with an 
announcement on section 416(b) programming.
    While assessing the overall budget situation, USDA staff compiled 
production and trade data on a number of countries experiencing food 
import needs, but lacking large financial resources. Developing such 
information takes some time both for USDA to compile and for other 
agencies to review. All of this activity was on-going to provide 
sufficient information to make country/commodity decisions once the 
over-all budget situation was clear.
    Question. When can we expect to see them initiated?
    Answer. USDA intends to program close to 4 million metric tons of 
commodities to nearly 50 countries in 2000. We are actively working 
with foreign governments and private voluntary organizations. A number 
of agreements have already been signed, including agreements for 
Bosnia, Ethiopia, Jordan, Indonesia, and the World Food Program.

                           FOOD AID TO AFRICA

    Question. I traveled to Africa in January and had an opportunity to 
see U.S. food aid programs in action. I was impressed and heartened by 
direct feeding programs as well as programs that sell U.S. food 
products at low cost to finance development projects. But I was 
overwhelmed by the impact of AIDS on Africa--particularly by the 
millions of children being left orphaned by the epidemic and the 
devastating impact on African countries' economies. I believe U.S. food 
aid could be used to target communities heavily affected by AIDS. I 
introduced a bill to target $50 million of U.S. food aid for 
nutritional assistance for people living with AIDS, for families and 
children affected by AIDS, and for development projects for communities 
heavily impacted by AIDS. I would like to get your view on the 
potential for U.S. food aid being used to help those children, 
families, and communities affected by AIDS in Africa and elsewhere in 
the world.
    Answer. In addition to food donated through the World Food Program 
to needy people in Africa, USDA works with private voluntary 
organizations (PVOs) to target African and other countries with 
humanitarian and development programs. USDA anticipates working closely 
with PVOs to target programs that can be of assistance to AIDS-affected 
communities. We will review proposals for the most affected countries 
and seek to take advantage of programming opportunities.

                         FACILITY MODERNIZATION

    Question. Six USDA/ARS facilities were included in the budget. The 
Peoria Lab was not. Although it was not specifically listed, a need 
still exists for modernization efforts. What is the Department/Agency 
doing to help expedite the modernization of the Peoria ARS Lab?
    Answer. Modernization has been ongoing at the Peoria Lab since 
1993. The scope of the modernization includes renovation of the North 
Wing (Pilot Plant), Chemical Wing, South Wing (Biological Wing), 
Administration Wing, and upgrade site utilities and infrastructure 
improvements.
    The site utilities and infrastructure improvements are complete. 
The North Wing Modernization is being accomplished in three phases. 
Design for all phases is complete. Construction of the first phase was 
completed in fiscal year 1999. Construction of the second phase is 
scheduled to be completed in the third quarter of fiscal year 2000. The 
last phase of construction will be awarded late in the third quarter or 
early in the fourth quarter of fiscal year 2000 and is expected to be 
completed in the second quarter of fiscal year 2002.
    The Chemical Wing modernization will also be accomplished in three 
phases. Design of all phases will be awarded in March 2000 and is 
expected to be completed in fiscal year 2001.
    Question. Will the Agency undertake rehabilitation work in fiscal 
year 2001?
    Answer. Modernization funds are not being requested in fiscal year 
2001 for the National Center for Agricultural Utilization Research 
(NCAUR) due to more critical funding requirements in other ARS 
buildings and facilities projects and since completion of the design 
project for the Chemical Wing modernization is not expected until the 
latter part of fiscal year 2001.
                                 ______
                                 

             Questions Submitted by Senator Robert C. Byrd

                  WATER AND WASTEWATER GRANTS PROGRAM

    Question. How do you justify a reduction in the water and 
wastewater grants program when basic needs like those in West Virginia 
will go unmet?
    Answer. It is recognized that the amount included in the fiscal 
year 2001 budget for Water and Waste Disposal grants is slightly lower 
than the current fiscal year 2000 estimate. However, there are 
competing needs for funding, and additional funding for Water and Waste 
Disposal programs would likely come at the expense of other programs.
    West Virginia's initial allocation of Water and Waste Disposal 
grants has averaged about $8.5 million the past few years. Since the 
need for this assistance is greater in West Virginia, additional 
funding has also been provided from the national reserve. In fiscal 
year 1998, actual obligations totaled $12.9 million, and in fiscal year 
1999, obligations totaled $14.3 million, increases on 61 percent and 55 
percent respectively over the initial allocation. In addition, for 
Water and Waste Disposal loans, the state allocation for West Virginia 
has averaged $13 million, and actual obligations have averaged about 
$19.5 million in each of the last two years.

                     NEW SPENDING FOR RURAL AMERICA

    Question. Don't you think that $11.5 billion in new spending for 
rural America should be distributed in a way that benefits all of rural 
America.
    Answer. I do think the $11.5 billion in funding for Rural 
Development should be distributed in a manner that provides benefits to 
all residents of rural America. The Rural Development agencies allocate 
most of the funds based on each state's proportion of rural population, 
rural poverty, and other factors that differ somewhat depending on the 
individual program and its purpose. The intent being to ensure equal 
treatment, but to also ensure that the funds are used in a manner that 
assists those most in need.

          PROGRESS ON WATER AND WASTEWATER SYSTEMS DEVELOPMENT

    Question. Would you provide me information about the progress of 
developing water and wastewater systems in West Virginia?
    Answer. West Virginia has a very active Water and Waste Disposal 
program. Since October 1, 1996, the State has obligated 68 loans for 
over $56 million and 89 grants for $56 million. The State's initial 
allocation levels for loans and grants have totaled a little over $20 
million; the additional amounts have come from National Office 
reserves. In spite of these expenditures, however, there are still 
significant needs.
    Question. To what extent is West Virginia catching up to other 
states in meeting these basic needs and how much of a need still 
exists?
    Answer. There are still significant unmet needs in West Virginia. 
The State currently has applications for 35 loans and 18 grants 
totaling over $77 million, which is well over three times its 
allocation level from recent years. Due to the many variables involved, 
RUS does not monitor States' progress against that of other States. 
While RUS has not compiled comprehensive listings of water and 
wastewater needs, the WV Infrastructure and Jobs Development Council 
conducted an assessment that indicated needs totaling over $2.7 billion 
in West Virginia. Our State staff advises that the vast majority of the 
entities and projects would be eligible for RUS assistance.

      EMERGENCY LIVESTOCK ASSISTANCE AND PASTURE LAND REVEGETATION

    Question. I want to thank Secretary Glickman for the attention that 
he has given to reducing the impact of the drought of 1999 on West 
Virginia farmers. Last August, as we stood together under a cloudless 
sky in the crispy brown cornfields of West Virginia, and Secretary 
Glickman declared all fifty-five West Virginia counties disaster areas, 
thereby allowing special circumstance USDA assistance to be provided to 
farmers in my state. West Virginia farmers, and I, are grateful for his 
ongoing attention to the needs of small family farmers in smaller 
agriculture states. Cooperative efforts between the U.S. Department of 
Agriculture and the West Virginia Department of Agriculture have helped 
speed available assistance to distressed farmers. However, I am 
concerned about delays in distributing emergency funds to provide 
assistance to livestock producers for losses due to drought or other 
natural disasters, and for the cost of restoring pasture lands damaged 
by the drought. I am concerned that the difficulties in providing this 
assistance may be a direct result of a shortage in appropriated funding 
for these programs. Could the Secretary explain what is causing delays 
in administering emergency assistance programs, specifically the 
livestock assistance program and the pasture land revegetation program?
    Answer. Sign-up for the Livestock Assistance Program began November 
1, 1999, a few weeks after the fiscal year 2000 Appropriation bill was 
signed by the President. Sign-up ended in mid-February, which allowed 
time for producers to enroll in the program and our county offices to 
complete the application process. We expect to process and issue 
payments soon, possible in March.
    The Pasture Recovery Program was created by the Administration in 
response to the extreme drought that plagued much of the eastern half 
of the United States. It took time to develop because the program is 
new. We expect to begin sign-up shortly.
    Question. How can Congress be of assistance in these matters?
    Answer. Short-term ad hoc programs cause us to react to 
emergencies, and by their very nature, these programs often come too 
late and offer too little. I would like to work with the Congress to 
establish long-term solutions that would reduce or eliminate the need 
for ad hoc programs. The President's budget purposes an improved 
approach to providing assistance to farmers in times of distress 
including supplementary countercyclical income assistance targeted to 
producers faced with reduced revenues, improved risk management 
programs, and new programs combining income and environmental benefits. 
While some of our initiatives can be done administratively, most will 
require legislation. Producers and their bankers will be better served 
if we can get these programs in place early so they can rely on them in 
their planning and make better informed farming decisions.

                         MILK MARKETING ORDERS

    Question. How has the implementation of the Option 1A for pricing 
fluid milk impacted West Virginia dairy farmers, and dairy farmers in 
other regions of America?
    Answer. To date, the implementation of Federal milk order reform 
has benefitted all West Virginia producers delivering to Federal milk 
markets. It is important to recognize that the Federal milk order 
program is not a price support program, and that the changes made as a 
result of consolidation and reform were to improve the marketing of 
milk. I have asked the Agricultural Marketing Service to provide more 
information on the impact of consolidation and reform on West Virginia.
    [The information follows:]
    The most recent information indicates that about 96 percent of West 
Virginia's Grade A milk is marketed under four of the newly 
consolidated Federal milk marketing orders--Northeast, Appalachian, 
Mideast, and Southeast. Prior to consolidation the Federal order 
markets shipped to were: Middle Atlantic, Carolina, Louisville-
Lexington-Evansville, Ohio Valley, Eastern Ohio-Western Pennsylvania, 
and Southeast. We believe the rest of West Virginia milk was marketed 
in areas of Virginia or Pennsylvania where milk marketing is regulated 
by State orders.
    The implementation of Option 1A Class I differentials is only a 
small part of the overall impact of Federal milk order reform on farm 
milk prices. Changes in Class I differentials in the markets where West 
Virginia farmers deliver milk ranged from -$0.09 to +$0.09 per 
hundredweight. The effect of these changes in Class I differentials on 
producer blend prices are projected to range from -$0.04 to +$0.07 per 
hundredweight.
    The consolidation of markets also had some impact on producer blend 
prices depending upon whether consolidation of the orders increased or 
decreased the proportion of milk used in Class I products. For the 
markets served by West Virginia dairy farmers, Class I utilization 
changed only slightly, ranging from up 0.1 percent to down 2.7 
percentage points. The impacts of market consolidation on West Virginia 
producer blend prices range from almost nothing to about -$0.05 per 
hundredweight.
    The most important factor affecting producer milk prices was the 
implementation of a Class I mover based on the higher value of the 
Class III or Class IV price formulas. The adoption of the new Class I 
price mover increased the Class I price for January 2000 by $1.11 per 
hundredweight, and for February 2000 by $1.08 compared to what it would 
have been under the old system. The resulting higher Class I prices 
during these two months increased producer blend prices about $0.55 to 
$0.80 per hundredweight, depending on point of delivery. Although we 
expect these price impacts from the new Class I price mover to moderate 
later in the year as milk supplies and demand come more into balance, 
they have been beneficial to dairy farmers during this period of low 
farm milk prices.
    In conjunction with the milk order consolidation and reform 
process, USDA analyzed the impacts of a number of proposals and 
published the analyses in a Final Regulatory Impact Analysis. The 
following table summarizes the expected average impacts on all-milk 
prices to dairy farmers delivering to Federal order markets over the 
six-year analytical period. The all-milk price is a weighted average 
price determined by multiplying the change in the minimum price for 
milk in each class (Class I, II, III, and IV) by the amount of milk 
used in each class. The average all-milk price for all Federal order 
markets was forecast to be $.03 per hundredweight higher under Federal 
order reform and Option 1A Class I location differentials. In 17 former 
Federal order markets, the all-milk price was projected to decline, 
while in 15 former markets, the all-milk price was projected to 
increase.

                 CHANGE FROM BASELINE IN ALL-MILK PRICES
                              [Dollars/cwt]
------------------------------------------------------------------------
                                           USDA Baseline    Modified 1A
               FMMO Region                6-Year Average      Change
------------------------------------------------------------------------
Northeast:
    New England.........................          $15.54            $.05
    NY-NJ...............................           15.00             .34
    Middle Atlantic.....................           15.53            -.13
Appalachian:
    Carolina............................           17.08             .16
    Tennessee Valley....................           16.78             .09
    Louis-Lex-Evansville................           16.14            -.05
Southeast...............................           16.57             .07
Florida:
    Upper Florida.......................           19.06            -.18
    Tampa Bay...........................           18.88             .31
    SE Florida..........................           19.94  ..............
Mid East:
    MI. Upper Pen.......................           15.91            -.03
    So. Michigan........................           15.01             .13
    E. OH.-W. PA........................           15.32             .17
    Ohio Valley.........................           15.74             .03
    Indiana.............................           16.04            -.05
Upper Midwest:
    Chicago Regional....................           14.44             .02
    Upper Midwest.......................           14.27            -.03
Central:
    Iowa................................           14.70             .17
    NB.-W. Iowa.........................           15.04            -.02
    E. So. Dakota.......................           15.31            -.19
    Central Illinois....................           16.49            -.57
    So. Ill-E. Missouri.................           15.71            -.20
    S.W. Plains.........................           15.39             .13
    E. Colorado.........................           14.84             .32
    W. Colorado.........................           15.39            -.66
    Greater Kansas City.................           16.45            -.66
Southwest:
    Texas...............................           15.66            N.08
    NM-W. Texas.........................           14.47             .22
Western:
    S.W.Idaho-E. OR.....................           13.80             .19
    Great Basin.........................           14.51            -.15
AZ-Las Vegas............................           14.70            -.04
Pacific N.W.............................           14.43             .01
All Fed. Orders.........................           15.23             .03
------------------------------------------------------------------------

    Question. How has the implementation of Option 1A impacted the 
price of milk for consumers?
    Answer. Implementation of the Option 1A is expected to have a minor 
impact on the price of milk for consumers. I have asked the 
Agricultural Marketing Service to provide additional information for 
the record.
    [The information follows:]
    A $0.12 increase in the Class I price translates into about a $0.01 
increase in a gallon of milk. Option 1A increased the average Class I 
price differential for all markets about $0.04 per hundredweight or 
less than $0.01 per gallon. The change in the Class I mover raised 
Class I prices on average about $1.10 per hundredweight for the first 
two months of 2000. Therefore, the average price of a gallon of milk in 
January and February in all Federal order markets may have been between 
$0.09 to $0.10 per gallon higher than it would have been under the old 
system. This is the short-term impact of Federal order reform. USDA's 
Regulatory Impact Analysis indicates that Federal milk order reform 
with Option 1A Class I differentials would increase the retail price of 
a gallon of milk, on average, across all markets about $0.01 for the 
period 2000 through 2005. For the part of West Virginia that is in the 
Mideast market, no real change is expected on average for the 
analytical period.
    Question. What can we do to improve the income of dairy farmers?
    Answer. There are a number of things that can be done to improve 
dairy farm income, and almost as important, to reduce the risk of 
volatile farm milk prices to dairy farmers. I have asked the 
Agricultural Marketing Service to provide more information on the 
actions taken by USDA to improve the income of dairy farmers.
    [The information follows:]
    A 2-year extension of the dairy price support program that is due 
to expire on December 31, 2000 would help protect farm income. The 
dairy price support program has been a critical safety net during the 
past several years, purchasing 121 million pounds of nonfat dry milk in 
fiscal year 1998, 172 million pounds in fiscal year 1999, and 171 
million pounds so far this fiscal year. Absent this program, farm milk 
prices would be even more depressed. The President's budget request for 
2001 proposes extension of the price support program through 2002, at 
which time the current farm bill expires.
    USDA has committed to use the Dairy Export Incentive Program (DEIP) 
to the maximum extent allowed by international agreements. The 
assistance that is provided by DEIP expands the market for U.S. dairy 
products and helps build future markets abroad for dairy products.
    For several years, USDA has been using the Dairy Options Pilot 
Program to educate and assist dairy farmers in managing risk through 
use of the futures and options market. The second phase of the program 
was announced on March 7, 2000, and will provide training in the use of 
futures and options and subsidize the cost of options contracts to 
dairy farmers in 61 counties in 32 States.
    On March 1, 2000, USDA announced a proposed Dairy Forward 
Contracting Program as authorized by the Agricultural Appropriations 
Act of 2000. This program will give proprietary handlers who market 
milk under Federal milk orders more flexibility in offering forward 
price contracts to dairy producers. Forward price contracts provide 
another tool for producers to reduce price risk. Cooperatives already 
offer forward contracts to their members' producers. USDA, in designing 
this pilot program, has created certain safeguards for dairy farmers as 
they learn to use this new method of pricing. Implementation of the 
program is tentatively scheduled for May 1, 2000.
    On the cost side, USDA's Cooperative State Research, Education and 
Extension Service in conjunction with the land grant university system 
continues to provide educational materials to dairy farmers. Though 
expanded internet services, dairy farmers now have access to the the 
latest information on production methods, new technology, and current 
dairy and feed market information that can be used to increase 
efficiency. Also, information is available on the Sustainable 
Agriculture Research and Educational Agriculture program, organic 
farming and other value-added production and marketing information that 
enables farmers to receive more of the consumer's dollar.
    Milk prices are currently at levels unseen in more than two 
decades. The recent collapse in milk prices will result in severe 
economic hardship for the Nation's dairy producers. To assist dairy 
producers through this economic emergency, the Administration is 
working with Congress to develop an emergency aid package for 
agriculture that will include assistance to dairy producers.

                              AQUACULTURE

    Question. Could you please provide a status report regarding 
construction of the National Center for Cool and Cold Water 
Aquaculture, including milestones that will occur during construction 
of the center and timetables for the completion and maintenance of this 
project?
    Answer. The National Center for Cool and Cold Water Aquaculture is 
about 35 percent complete. Site grading and subgrade piping and 
electorial work are 95 percent complete. Structural steel and roof 
decking for the Lab/Office building and the Tank/Aquaria building is 
scheduled to be completed by May 2000. The final inspection of the main 
building is scheduled to start August 2000. The scheduled completion 
date for all work is September 1, 2000.

                              AQUACULTURE

    Question. What is the USDA's strategic plan for a national policy 
to encourage development of, promote, and support U.S. aquaculture as 
required by the National Aquaculture Act of 1980?
    Answer. The USDA's strategic plan for a national policy to 
encourage development of, promote, and support U.S. aquaculture is 
being updated and the working draft entitled, ``National Aquaculture 
Development Plan of 2000'' is near completion.
    Question. What efforts are underway to coordinate American 
aquaculture efforts on a national level?
    Answer. As mandated by the National Aquaculture Act of 1980 and 
amendments, the Joint Subcommittee on Aquaculture (JSA) coordinates 
Federal research, technology transfer, and assistance programs in 
aquaculture, reporting to Congress and the Executive Office of Science 
and Technology Policy through the cabinet level National Science and 
Technology Council (NSTC), chaired by the President.
    The JSA has interacted with the aquaculture industry and other 
customers, stakeholders, and partners to assure federal programs meet 
the needs of the industry and the American public. ARS participates in 
JSA sponsored workshops as well as holding program planning workshops 
to obtain stakeholder input on ARS aquaculture research program. The 
JSA meets formally four times a year to bring membership from 12 plus 
agencies together; ARS is a regulate participant. ARS national program 
leaders and ARS scientists are regular participants in planning 
meetings with the five Regional Aquaculture Centers administrated by 
Cooperative State Research, Education, and Extension Service (CSREES) 
and frequently collaborate on research projects.
    ARS has developed a plan Aquaculture Research for the future: Five 
Year Research Plan in response to an outcome of a stakeholder meeting. 
Stakeholders identified under investment in aquaculture research by ARS 
as a major issue. In response to that criticism, ARS is developing 
within a broad framework specifically how the Agency would invest 
future appropriations for aquaculture research.
    Program managers in ARS and CEREES are responsible for assurance 
for quality and relevancy of national aquaculture research.
    Question. What role will the National Center for Cool and Cold 
Water Aquaculture play in the strategic plans?
    Answer. ARS scientists, especially Research Leaders, participate in 
workshops, both intramurally and extramurally to establish relevancy of 
ARS aquaculture research programs and often are requested to 
participate in similar activities held by others at the national level. 
The staff at the National Center for Cool and Cold Water Aquaculture 
will participate in national strategic planning meetings sponsored by 
ARS. Another very important role for the National Center for Cool and 
Cold Water Aquaculture is to conduct the research to solve the 
aquaculture industries highest priority problems. This research will 
involve intramural and collaborative extramural and intramural 
projects.

                            POULTRY GROWERS

    Question. Contract poultry growers face the difficult task of 
disposing of excess poultry litter. West Virginia State College and the 
West Virginia Department of Agriculture are working to explore 
technology to control the adverse impact of excess poultry litter and, 
at the same time, produce a value-added product from the litter. A 
$500,000 appropriation that I added for waste utilization through the 
West Virginia Department of Agriculture's Poultry Waste Energy Recovery 
(POWER) project was reduced by fifteen percent as a result of across-
the-board rescissions. Excess poultry litter is a serious problem that 
pollutes water supplies and causes health problems. What USDA efforts 
seek to improve disposal methods of excess poultry litter?
    Answer. An important conceptual consideration regarding poultry 
litter management is that we attempt to have industry personnel and 
others understand the need to utilize a valuable source of nutrients, 
rather than to dispose of a waste. One problem is excess nutrient 
availability from all sources, which include commercial fertilizer and 
bio-solids, as well as urban run-off. When poultry litter/manure is 
seen as having a comparative value, utilization options should 
increase.
    USDA has a number of programs that attempt to assist the poultry 
industry in dealing with environmental issues. For example, CSREES 
cooperates in various ways with the Environmental Protection Agency 
(EPA) National Agricultural Compliance Assistance Center, such as in 
grant coordination. CSREES is managing competitive grants for a 
National Curriculum Development for Environmental Protection project, 
and the USDA/EPA National Agricultural Compliance Assistance Program.
    CSREES has recently initiated the Waste Management National 
Initiative Team. CSREES has for many years provided competitive and 
other grants to states through the Water Quality National Initiative 
Team, some of the results of which are summarized in the document 
entitled, National Extension Targeted Water Quality Program, 1992-
1995''.
    The CSREES National Research Initiative (NRI) can support research 
on poultry litter utilization methods through competitively-awarded 
grants. In the past, the NRI has funded poultry research, which 
included a broiler litter project.
    CSREES, Land Grant University, other agency personnel, and private 
groups recently held the Alliance for Environmental Stewardship: A 
Comprehensive Approach workshop in St. Louis, Missouri. The 
proceedings, which will be available by April, prioritized 
recommendations as to what is needed to develop a comprehensive 
approach to environmental protection, and how all parties can fulfill 
their responsibility to protect the environment.

                            POULTRY GROWERS

    Question. What opportunities are available to West Virginia poultry 
growers who wish to employ better poultry litter management techniques?
    Answer. Independent poultry growers should first contact their 
county Extension agent for assistance with concerns about poultry 
litter management. Note that litter refers to the manure and wood 
shavings or other absorbent material used in the production of poultry, 
but for this response the term will include caged layer manure. Agents 
will provide written and technical assistance to the farmer. If the 
problem is beyond the expertise of the agent, assistance will be 
requested from state specialists at West Virginia University.
    CSREES supports the National Poultry Waste Management Symposium. 
This symposium is a biennial event started in 1988, focuses on cutting 
edge technologies and concepts, and includes commercial exhibits and 
poster sessions that cover various hot topics. Grower participation is 
encouraged through publicity and through a reduced registration fee. 
The next symposium is scheduled for October 2000.
    The West Virginia Poultry Association holds an annual Convention 
and Festival during which educational sessions are held, and 
participate in other areas of assistance throughout the year and 
cooperate in various educational events. Independent producers and 
growers are encouraged to attend meetings such as the National Poultry 
Waste Management Symposium.
    Future opportunities for the West Virginia industry relate to 
projects on which the industry is working at this time, such as the 
pelleting of poultry litter, and generation of electricity from litter.

                         CONSERVATION AND WATER

    Question. The Natural Resources Conservation Service in West 
Virginia, under the leadership of Bill Hartman and Paul Dunn, continues 
its important work to implement watershed and conservation programs in 
West Virginia that make a positive impact on the state's rural 
communities. Funding for Small Watershed Projects in West Virginia was 
reduced by fifteen percent. This will delay treatment of mine drainage 
sites, and slow the work of the Potomac Headwaters Land Treatment 
Watershed Project. Unfortunately, delays to these programs will also 
mean a delay of the day when all West Virginians have reliable access 
to healthy drinking water. What action is the USDA taking to improve 
conservation and water services in rural America? How can West 
Virginians participate and benefit from these programs?
    Answer. One option for rural communities and watershed sponsors in 
West Virginia would be to include water supply source development in 
any new Public Law 566 or Public Law 534 watershed projects that are 
currently being planned. Although these projects have been historically 
developed for upland land treatment, flood prevention, water quality, 
or recreation purposes, local sponsors can include water supply as a 
project purpose. By doing so, the cost for developing a quality water 
supply can be significantly reduced. Currently NRCS has statutory 
authority under Public Law 566/534 to provide a 50 percent cost-share 
for such source water development. However, priorities for funding 
watershed projects in the last ten years has been focused on soil 
erosion control, land treatment, water quality and environmental 
benefits.
    Also, the President's Budget provides $1.6 billion for the Rural 
Utilities Service's water and waste loans and grants programs.

                          SUBCOMMITTEE RECESS

    Senator Cochran. The hearing is recessed.
    [Whereupon, at 12:55 p.m., Thursday, February 10, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2001

                              ----------                              


                       TUESDAY, FEBRUARY 29, 2000

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 2:03 p.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
    Present: Senators Cochran, Gorton, Kohl, Dorgan, and 
Durbin.

                       DEPARTMENT OF AGRICULTURE

                        Office of the Secretary

STATEMENT OF KEITH COLLINS, CHIEF ECONOMIST

                 Farm and Foreign Agricultural Services

STATEMENT OF AUGUST SCHUMACHER, JR., UNDER SECRETARY

                          Farm Service Agency

STATEMENT OF KEITH KELLY, ADMINISTRATOR
ACCOMPANIED BY PARKS SHACKELFORD, ASSOCIATE ADMINISTRATOR FOR PROGRAMS

                      Foreign Agricultural Service

STATEMENT OF TIMOTHY J. GALVIN, ADMINISTRATOR
ACCOMPANIED BY RICHARD G. FRITZ, GENERAL SALES MANAGER

                         Risk Management Agency

STATEMENT OF KENNETH D. ACKERMAN, ADMINISTRATOR
ACCOMPANIED BY DENNIS KAPLAN, DEPUTY DIRECTOR FOR BUDGET, LEGISLATIVE 
            AND REGULATORY SYSTEMS, OFFICE OF BUDGET AND PROGRAM 
            ANALYSIS

               OPENING STATEMENT OF SENATOR THAD COCHRAN

    Senator Cochran. The subcommittee will please come to 
order. Today we are convening a hearing of our Subcommittee on 
Agriculture Appropriations to review the outlook for production 
agriculture, and the budget request for farm programs. We are 
pleased to have as our panel today Mr. Gus Schumacher, Jr., 
Under Secretary for Farm and Foreign Agricultural Services of 
the U.S. Department of Agriculture, Mr. Keith Collins, Chief 
Economist of the Department of Agriculture, and Dennis Kaplan 
of the Budget Office of the U.S. Department of Agriculture.
    We are coming off 2 years where Congress and the 
Administration have agreed to supplement the assistance that is 
provided directly to producers of agriculture commodities. This 
assistance has taken place because of disasters that have 
occurred on the farms and ranches in the United States by 
reason of weather, other related problems, and economic stress 
that has beset agricultural producers due to changes in 
economic growth and health in other parts of the world, and 
among the customers who buy what is produced on the farms and 
ranches in the United States.
    Statistics have indicated that this difficulty in 
production agriculture is not yet over. As a matter of fact, 
the President's budget request includes increases of some $10 
to $11 billion that would be made because of changes that are 
recommended in farm program law and conservation programs and 
other Agriculture Department activities because of changes that 
are recommended by the President in the laws, not to produce 
any more discretionary funding from this committee, 
necessarily, but rather to mandate additional spending by 
changing the law.
    The difficulty with that is that we are under a 5-year farm 
bill. It has not yet expired. It has 2 more years to go. It is 
not likely that Congress is going to, in an election year, be 
able to come in and revamp the agriculture programs as the 
Administration is suggesting, so I hope this panel will help us 
look at alternatives to changing the law and the program law 
and looking at the discretionary funding that we might consider 
if we should consider any such supplementary payments as we did 
during the last 2 years, or what other forms of relief we might 
consider to help deal with this problem.
    I understand that some of the commodity prices may be 
increased, or the outlook for increases in prices over the next 
couple of years, but I am also told that this year we could 
have just as serious a problem in some commodity areas as we 
have had since 1993.
    I also have heard that we may see some substantial 
increases in production in foreign countries that could have an 
effect on the overall world supply of commodities. For example, 
in Brazil, cotton production is expected to be much higher. 
What impact is that going to have on the U.S. cotton producer? 
These are things we will look at today, and we appreciate very 
much your being here and helping us work our way through this 
dilemma and figuring out what we can do as a committee in 
charge of setting the spending and funding levels for the 
Department of Agriculture to solve the problems that are faced 
by the producers of U.S. agriculture commodities.
    We have copies of your statements, and we will make those a 
part of the record in full. We encourage you to make whatever 
summary comments you think would be helpful to the committee.
    Mr. Collins.

                       STATEMENT OF KEITH COLLINS

    Mr. Collins. Mr. Chairman, thank you. Thank you for 
inviting me, and I am going to take just a few minutes to 
provide some context for this discussion today. I will try to 
answer at least a couple of questions about the state of the 
farm economy that you just raised in your comments.
    As you look back over the last couple of years, as you and 
everyone know we have had very weak commodity markets in the 
United States, but we have not seen an erosion or a 
deterioration in the U.S. farm financial condition to the 
extent that might be expected, and there are a lot of reasons 
for that, and let me mention four.
    One, of course, is the large built-in payments of the farm 
bill and the supplementary payments that have been enacted in 
the last 2 years.
    A second reason is, I think farmers have made lots of 
prudent choices not to take on more debt over the last 2 years.
    A third reason is that we have an overall farm balance 
sheet that has not broken down during the last 2 years, and a 
fourth reason is, we have had a strong off-farm economy which 
has helped farmers have better off-farm job opportunities and 
higher off-farm incomes.
    The result of all of that is that when we look at 
nonperforming loans at agricultural banks, and we have data as 
of October 1999, we see that nonperforming loans have hardly 
increased. They are not much different than they were in the 
early 1990's, for example. Nevertheless, certain farms, certain 
regions, certain commodities around the country will have more 
financial pressures than others.
    I think in all likelihood, as we look out to the rest of 
this year, that we are going to face very weak markets for all 
of our major commodities in the year 2000, particularly for 
crops and for dairy. Despite an improving world economy, our 
exports are still stagnant. They are moving sideways. We expect 
the global economy to grow a little over 3 percent this year. 
That would be the highest rate since 1996, and that is 
certainly good news. However, import recovery in a number of 
our major markets is very slow.
    We can look at Japan. We can look at Europe. As well as 
that, we have fierce competition, as you mentioned, from a 
number of competitors such as Argentina and Brazil, in addition 
to China and even the European Union as well.
    For 2000, we are currently projecting agricultural exports 
at $49\1/2\ billion. That is up only slightly from last year's 
$49 billion. When we add in USDA's recently announced 
humanitarian assistance package, that will add to that 
forecast.
    I want to mention a few forecasts of average farm prices to 
again put this situation in a historical context and illustrate 
the farm price problem that producers face. Soybean prices 
during this marketing year are expected to be the lowest since 
1972-1973. Cotton prices, so far since August, have been the 
lowest since 1974-1975. Corn and wheat prices this year we 
think will be the lowest since 1986-1987. Milk prices this year 
will be the lowest since 1990-1991, and rice prices the lowest 
since 1992-1993.
    Those are all price forecasts for the 1999-2000 year, so 
many farmers could see an escalation of financial stress in the 
year 2000 as the farm economy, I think, is poised to take a 
fairly sharp drop in farm income. Farm cash receipts this year 
are going to go down another $2 billion. That will make them 
about $18 billion below the record of 1997.
    In addition to that, without new legislation, Government 
payments would go down $5\1/2\ billion in the year 2000. So 
with lower receipts from the market and lower Government 
payments, we have a forecast of net cash farm income in 2000 of 
$49.7 billion, which would be a 16 percent, roughly $9 billion, 
drop. That would be the lowest net cash farm income since 1986.
    Many farmers are also going to face higher production costs 
this year, and I would mention interest rates and fuel prices 
are also squeezing that income level down. During the fourth 
quarter of 1999, farm interest rates averaged 35 to 45 basis 
points higher than the fourth quarter of the year earlier. In 
addition to that, if you look at West Texas intermediate crude 
oil prices during 1999 they averaged $19.24 a barrel. At the 
end of last week they hit a 9-year high of almost $31 a barrel, 
and farmers are not going to be able to avoid those higher fuel 
costs, particularly as we move now into the peak diesel fuel 
period of use from February through May.
    Farm real estate values have maintained farm balance sheets 
up to this point. However, with rising interest rates, and if 
we get this drop in income that we are projecting, we expect 
little to no growth in farm land values over the next couple of 
years.
    I would like to conclude with just a couple of very brief 
comments about the state of commodity markets. Last week, the 
Department of Agriculture held its annual Agricultural Outlook 
Forum, and we had about 1,300 people, an all-time record high 
in attendance, and I think you could hear much concern at that 
conference about the weakness in commodity markets. If I could 
summarize the concerns in two words I would say they are 
weather and competition, and wheat is a good example of that.
    If you look at wheat acreage, it is going to be down again 
in the year 2000. We have had very dry weather in the plains 
States, and we think that the lower acreage will reduce U.S. 
production, but our stocks on June 1 are going to be the 
highest level since 1988. The Australians in all likelihood 
will have a record crop this spring. The European Union will 
likely have a record crop in the fall. As a result of that, any 
wheat price advances are going to be limited.
    For corn, we have had record high total use in 1999. Next 
year, we expect higher production, with use about the same. 
That would result in little to no change from the $1.90-a-
bushel price that we see this year, and China's role as a corn 
exporter is going to be a very important factor in the price 
outlook.
    I would say that the soybean perspective is a little 
different than that for grains. Soybean acreage is likely to 
expand again in the year 2000. We could see record production, 
rising carry-over, and even lower prices than the $4.75 a 
bushel expected this year.
    Cotton and rice prices have also been very low this 
marketing year. Cotton production, we think, will be up in the 
year 2000, with the price outcome dependent very much on the 
role of China as a cotton exporter in the world market.
    This year's lower rice prices--they are down about 33 
percent this year--will probably trim back acreage a little 
bit, but continuing large rice stocks are going to hold prices 
in check.
    The picture for livestock and poultry in the year 2000 I 
think is more optimistic than it is for crops. We expect cattle 
prices to average about 5 percent higher. I would point out 
that we are starting out this year with the largest number of 
animals in feed lots in 25 years, so we are probably not going 
to see much of a pop in cattle prices until we get into the 
second half of the year.
    Lower hog numbers are expected to reduce pork production 
and push up hog prices about 15 percent. Broiler prices, on the 
other hand, I think will be down a little bit, but lower feed 
costs will help maintain producer net returns.
    Milk is going to be the significant weak spot on the whole 
livestock side of the economy this year. In the last 2 years, 
1998 and 1999, and we had strong milk prices, we had low feed 
costs. That gave us, in 1999, the highest year-over-year 
increase in milk production in the decade of the 1990's, and 
that continuing surge is going to keep pressure on milk prices 
for much of the year 2000 and probably result in about a 13-
percent drop in milk prices for the year.

                           PREPARED STATEMENT

    Well, Mr. Chairman, in conclusion I would say that the year 
2000 is shaping up to be a year of lower income, particularly 
for producers of major field crops, for dairy, as well as for 
other crops which I did not go into, such as tobacco, sugar, 
peanuts, and some horticultural crops. So once again, it 
appears that the role of Government payments is going to be a 
crucial factor in determining where the state of farm finances 
end up at the end of the year 2000.
    Thank you.
    [The statement follows:]

                  PREPARED STATEMENT OF KEITH COLLINS

    Mr. Chairman and Members of the Subcommittee, thank you for 
inviting me to discuss the state of the farm economy and its prospects. 
I will describe the situation in major commodity markets, the financial 
well-being of farmers and the prospects for economic recovery.
    While an overall farm economic crisis during the past year of 
generally weak markets has been averted, in part due to emergency 
assistance, market fundamentals remain weak, especially for crops. 
Global economic prospects are improving, yet commodity supplies are 
large and rapid recovery in farm income appears unlikely. In fact, 
under current legislation and programs, net cash farm income in 2000 is 
projected to be the lowest level since 1986, prompting the President, 
consistent with his concerns about the 1996 Farm Bill, to include 
several proposals in his budget to provide farmers and ranchers 
additional income protection. While U.S. agriculture continues to face 
the prospect of low prices and incomes and ongoing structural change, 
many indicators remain favorable up to now, including asset values, 
debt levels, inflation, interest rates, and productivity.

            GENERAL ECONOMY BOOMS; AGRICULTURE SLUMPS--WHY?

    The U.S. economy just established a record for the longest 
expansion in history. Strong income growth, low unemployment, surging 
productivity, low inflation and interest rates and a stunning increase 
in equity markets have made life better for most Americans. While the 
farm economy prospered in the mid 1990s, it did keep pace with the 
general economy in the late 1990s. Several factors that propelled the 
national economy have been absent from the farm economy.
    One factor has been strong investment in the U.S. economy. The 
growth in the U.S. economy combined with economic problems in recent 
years in other countries has fueled an enormous increase in direct 
foreign investment in the United States and a large increase in 
investment in U.S. stocks and bonds. Another factor has been rapid 
technological change and productivity increases which have reduced per 
unit labor costs and improved competitiveness. The U.S. appears to be 
in the global lead in high technology, ranging from information 
sciences to biological sciences to communications, creating new 
industries and transforming other industries that can use these 
technologies, such as financial sectors, retailing, travel and 
entertainment.
    Production agriculture has been helped by some of these trends, 
such as low inflation and interest rates and new technology. However, 
production agriculture has been particularly vulnerable to foreign 
competition and economic recession in foreign countries, which have 
reversed the upward export trend of the earlier 1990s. In addition, 
growth in investment has lagged that in the general economy, as 
agriculture has not benefitted greatly from international capital and 
has had a reduced rate of return on assets. Moreover, production 
agriculture has probably not been able to utilize new technology to the 
extent of the rapidly growing nonfarm industries.
    As we assess the prospects for 2000, many agricultural commodity 
markets show little improvement in their fundamentals. For the 1999/
2000 marketing year, USDA forecasts the average price of soybeans to be 
the lowest since 1972/73, the prices of corn and wheat the lowest since 
1986/87 and the price of rice the lowest since 1992/93. Cotton prices 
are also down sharply and so far this season are the lowest since 1974/
75. Cattle and hog prices were relatively weak in 1999 but have 
strengthened recently and are expected to be up this year. Milk prices 
were relatively strong in 1999 but dropped sharply at year's end and 
are expected to average the lowest level in 9 years in 2000.
    In addition to historically low agricultural commodity prices, many 
producers the past couple of years have been adversely affected by 
drought, excessive heat, pests, flooding and wind which lowered crop 
yields and quality, reduced forage supply and quality and lowered milk 
production. In recent months, many areas of the United States have 
experienced subnormal precipitation. Unseasonably mild and windy 
weather also has accompanied the lack of precipitation since October, 
increasing the evaporation of moisture from the topsoil. Soil moisture 
levels are very low in the northern Great Plains and upper Mississippi 
Valley due to the prolonged absence of precipitation. Another area, 
extending from western Texas to southern California, also remains very 
short of soil moisture. In addition, parts of the Great Plains, eastern 
Corn Belt, mid-Atlantic and New England endured long-term drought in 
1999, depleting subsoil moisture reserves in those areas.
    Congress and the Administration have responded to these problems by 
providing over $15 billion in emergency assistance to farmers and 
ranchers the past 2 years, greatly limiting the farm financial stress 
that farmers and ranchers would otherwise face because of historically 
low prices and reduced production. These emergency payments plus 
payments authorized under the Federal Agriculture Improvement and 
Reform Act of 1996 (1996 Farm Bill) pushed government payments to a 
record-high level in 1999 and net cash farm income to a near record-
high. Had Congress not provided emergency assistance, net cash income 
would have likely fallen below $50 billion in 1999, the lowest level 
since the farm financial crisis of the mid-1980s. Reduced government 
payments and continued low prices could push net cash farm income below 
$50 billion in 2000, increasing farm financial stress and debt 
repayment problems.

          EXPLAINING THE FARM ECONOMIC DOWNTURN IN MORE DETAIL

    The primary source of the farm economy's weakness is imbalances in 
commodity markets brought about by several years of large U.S. 
production--despite production problems in many areas--and by lower 
exports. Exports have been pulled down by large foreign production, 
economic problems in Asia, Russia and South America and a strong 
dollar.
    Reduced Exports.--The value of U.S. agricultural exports in fiscal 
year 2000 is forecast to remain at last year's $49 billion, after 
reaching a record high of $60 billion in fiscal year 1996. Asia 
accounts for a large portion of the drop in exports of both bulk and 
high-value agricultural products. In fiscal year 1996, $26 billion in 
U.S. agricultural products were exported to Asia, compared with $18 
billion projected for this fiscal year, a drop of $8 billion.
    As for total bulk products, such as feed grains, wheat, soybeans, 
cotton and rice, export value is down 40 percent since 1996. Declines 
in tonnage account for about one-fifth of the drop in export value of 
bulk agricultural products, and declines in export prices account for 
four-fifths of the drop. In contrast, the export value of high-value 
agricultural products has changed little since fiscal year 1996, 
remaining steady at about $32 billion. The value of livestock product 
exports is projected to be down about 2 percent and the value of 
poultry product exports is forecast to be off nearly one-quarter in 
fiscal year 2000, compared with 4 years ago. However, the volume of 
livestock and poultry products exported has increased since 1996.
    As the global economy has improved, exports for some commodities 
have picked up. Within this weak export picture, there has been some 
positive news. In volume terms, U.S. corn exports are up nearly one-
third during January-November, compared with the same period last year, 
with expanded sales to Japan, South Korea, Egypt, South America and 
Taiwan. Wheat and wheat flour exports are up 9 percent over that 
period, as sales to Japan, South Korea, Mexico and South America have 
improved and food aid shipments to Russia led to a sharp increase in 
exports to that country. During January-November, soybean exports were 
up 13 percent over a year ago, as increased sales to East and Southeast 
Asian countries more than offset reduced sales to Europe.
    Although an acceleration of U.S. exports toward 1996 levels is not 
expected, the apparent turnaround in several key macroeconomic 
indicators make the outlook for higher exports more positive than it 
has been in a couple of years. South Korea's economy has emerged from 
recession, growing 9 percent in 1999, and the economic recovery that 
began last year in Southeast Asia is expected to accelerate in 2000. In 
addition, several Latin American countries are forecast to show 
positive growth in 2000 after being in recession last year. With 
economic recovery, most forecasters expect world economic growth in 
2000 to exceed 3 percent, a rate not seen since 1997.
    Another key factor for U.S. exports is the U.S. exchange rate. Over 
the past year, the value of the U.S. dollar has been declining in value 
against several key currencies. On an agriculture trade-weighted basis, 
the value of the dollar is down about 5.5 percent from a year ago, 
although the dollar continues to remain about 11 percent stronger than 
in the early 1990s. A decline in the value of the dollar makes U.S. 
commodities more attractive to foreign buyers.
    Large Global Crop Production and Stocks.--Despite some weather 
problems, global crop production exceeded consumption each of the past 
3 years leading to rising U.S. and world stocks of grains and oilseeds. 
Global stocks of grains at the end of the 1998/99 marketing year 
reached 350 million tons, up from 256 million tons at the end of 1995/
96 marketing year. The growth in global carryover of grains is almost 
entirely due to increased yields per acre, as grain planted area over 
the past 3 years is about unchanged relative to the average of the 
early to mid-1990s. In 1999/00, global consumption is expected to 
exceed production causing global ending stocks of grain to drop to 335 
million tons.
    Global stocks of oilseeds have risen by 63 percent since 1996/97, 
increasing from 17.1 to 27.9 million tons at the end of the 1998/99 
marketing year. Unlike grains, much of the increase in oilseed 
carryover can be attributed to increased plantings. World oilseed area 
increased 8 percent from 1996 to 1998 and global oilseed area remained 
about unchanged in 1999. In 1999/00, record global oilseed production 
for the fourth consecutive year is expected to cause global ending 
stocks of oilseeds to remain at near last year's level.
    While adverse weather has reduced crop yields in many areas of the 
United States over the past 2 years, these production declines 
generally have been offset by good yields in other sections of the 
country. In 1998/99, the U.S. corn and rice crops were the second 
highest on record, soybean production was record high and the wheat 
crop was the largest since 1990. Only cotton production was down 
appreciably in 1998, as severe weather problems in much of the cotton 
belt resulted in the smallest crop in nearly 10 years. In 1999/00, 
weather adversely affected yields for most major crops. Even so, U.S. 
rice production was record high, the corn crop was the fourth highest 
on record and the soybean crop was the third highest on record.

          IMPLICATIONS OF THE FARM CRISIS AGGREGATE INDICATORS

    Cash Flow.--For 2000, farm cash receipts are forecast to fall to 
$189.9 billion, or $17.7 billion below the record of $207.6 billion set 
in 1997. Lower receipts mean lower net cash farm income, which for 2000 
is forecast at the lowest level since 1986 and more than $9 billion 
less than in 1999. These aggregate figures mask the steep declines in 
cash receipts and farm income expected for major crops, hogs and milk. 
Cash receipts for wheat, feed grains, soybeans, cotton and rice are 
forecast to decline from a record $56.8 billion in 1997 to $40.3 
billion in 2000, a 29-percent drop. While projected to be up from last 
year's $9.2 billion and 1998's $9.4 billion, cash receipts for hogs are 
forecast to be $9.7 billion in 2000, down 26 percent from 1997's $13.1 
billion. Dairy receipts are forecast to drop to $21.4 billion in 2000, 
down 9 percent from last year.
    Government payments have offset much of the decline in cash 
receipts for major crops, thereby helping to maintain producers' cash 
flow. Total government payments increased from $7.5 billion in 1997 to 
a record $22.7 billion last year. In calendar 2000, government payments 
could exceed $17 billion under existing program authorities, the second 
highest ever. The emergency farm aid package passed by Congress in 1999 
is expected to provide $2.4 billion in payments to farmers in calendar 
2000.
    Farm cash production expenses, forecast at $171.5 billion in 2000, 
are expected to increase by about 1 percent for the third consecutive 
year, after rising more than 4 percent each year from 1993-97. A large 
part of the stagnation in production expenses is due to the fall in 
grain prices, which has greatly lowered livestock producers' feed 
costs. Feed costs are projected to fall to $23.8 billion in 2000, down 
from $26.3 billion in 1997.
    Balance sheet.--Farm business balance sheets have shown 
considerable improvement since the mid-1980s. Farm operator debt levels 
are about 10 percent below the peak levels of the 1980s and asset 
values are substantially higher. The debt-to-asset ratio for farm 
operators is up a little from 1997, but it is still expected to remain 
at about 16 percent at the end of 2000, compared with the low 20s 
during the mid-1980s. Even though farmers' balance sheets are much 
improved from the mid-1980s, the projected decline in farm income will 
reduce farmers' credit reserves and an increasing number of producers 
will face debt repayment problems.
    Debt repayment capacity utilization measures the extent to which 
farmers are using their available lines of credit. In 1999, record 
government payments boosted net cash income and increased the level of 
debt farmers could service, lowering farmers' debt repayment capacity 
utilization to 56 percent of the debt that could be supported by 
current income. In 2000, farmers are expected to use more than 66 
percent of the debt that could be supported by their current income. 
This figure is substantially down from over 100 percent in 1981 and 
somewhat down from the more than 70 percent during 1977-85, but would 
the highest level since 1985.
    While the balance sheet for agriculture in the aggregate looks 
reasonably sound, that could change if farmland values fall sharply. 
Farm real estate values, which showed strong increases through much of 
the 1990s, started to level off last year. Cropland values declined in 
5states in 1998, and in 1999, cash rents declined in 9 states, although 
the declines were small. In 2000, the value of farm real estate, which 
represents the largest component of farm assets, is expected to rise 
0.5 percent, compared with a 1-percent increase estimated last year. 
Farmland values will likely remain stagnant or decline in areas of the 
country in which crop production dominates the farmland market, but 
increase in those areas where farmland values are influenced by urban 
pressure and other factors, such as the Northeast and some Western 
States. Farmland value data are reported with a lag, and thus far, the 
data show the drop in hard hit crop regions have been fairly modest. 
Recent Federal Reserve Bank data show that for certain parts of the 
country, such as portions of Iowa, Illinois and Indiana, land prices 
declined 2-5 percent between October 1, 1998, and October 1, 1999. 
Given current production and price prospects, we can expect further 
pressure on land prices in the months ahead, particularly in the Corn 
Belt, Plains States, and Mid-south.
    Commercial lenders report declining farm loan repayment rates, 
increasing numbers of farm loan extensions and renewals and more 
stringent collateral requirements. However, all major institutional 
lenders continue to experience historically low levels of 
delinquencies, foreclosures, net loan charge-offs and loan 
restructuring. In 1985, over 10 percent of all bank nonreal estate 
loans to farmers were either delinquent (past due 30-90 days) or 
nonperforming (past due 90 or more). In the first quarter of 1999, 2 
percent of all bank nonreal estate loans were either delinquent or 
nonperforming. Bank charge-off rates, which reached 3.36 percent of 
nonreal estate loans in 1986, remained below 0.2 percent in the first 
quarter of 1999. In addition, delinquencies of the Farm Service Agency 
(FSA) have declined from a year ago and since 1996.
    Over the past year, the amount of credit provided to farmers and 
ranchers by FSA directly or through credit guarantees to commercial 
banks has increased sharply. The total value of loans provided to farm 
borrowers through direct and loan guarantees is up 75 percent, compared 
with a year ago. Congress authorized over $5.7 billion in FSA 
guaranteed and direct loan program authority in fiscal year 2000 to 
assist farmers in obtaining credit. The fiscal year 2000 program level 
for FSA farm loans is $1.9 billion more than the $3.8 billion obligated 
during fiscal year 1999 and $3.5 billion more than the $2.2 billion 
obligated in fiscal year 1998.

         IMPLICATIONS OF THE FARM CRISIS--FARM LEVEL INDICATORS

    On January 1, 1999, USDA classified 59 percent of farms as being in 
a favorable financial position--positive cash flow and low debt 
compared with assets. The remaining farms had a debt-to-asset ratio 
above 0.4, 4 percent of farms; or negative farm income, 33 percent of 
farms; or both, 5 percent of farms. Most dairy producers entered this 
year in a strong financial position following 2 years of strong prices 
and low feed costs. However, sharply lower milk prices could contribute 
to growing financial stress for those producers who remain highly 
leverage. For producers of field crops who are already highly 
leveraged, continued low prices of these commodities and weather-
reduced production will increase their financial vulnerability. The 
areas of the country that specialize in the production of these 
commodities, such as the Corn Belt, Plains States, Delta and Southeast 
and areas affected by adverse weather, will likely see more of an 
increase in farm financial stress than other areas of country. The 
extent farm financial stress increases in the coming months will also 
depend on whether the Congress passes an emergency aid package and the 
size of that package.
    Looking ahead at the 2000/01 crop years, income prospects from a 
crop sector perspective suggest sharp declines in income. The net 
income--cash receipts plus government payments less cash production 
expenses--for wheat, feed grains, upland cotton, rice and soybeans 
could fall to $18 billion, down $6 billion from $23.8 billion for 1999/
00 and the 1995-99 average of $24.0 billion.

                MARKET PROSPECTS--THE NEXT 12-18 MONTHS

    Crops.--Large U.S. and global production of major crops coupled 
with more than ample stocks going into 1999/2000 marketing year are 
expected to continue to pressure grain, oilseed, cotton and rice prices 
through the remainder of the 1999/00 marketing year. Given no major 
weather disruptions in the major crop growing regions of the country, 
crop prices are expected to remain low over the next several months and 
into the 2000/01 marketing year.
    In 1999, U.S. producers planted the lowest wheat acreage since 
1972. But, wheat prices in 1999/00 are projected to decline from $2.65 
per bushel last season to $2.50-$2.60 per bushel this marketing year, 
as winter wheat yields were record-high in 13 states and higher carryin 
stocks this season nearly made up for the year-to-year drop in 
production, leaving total wheat supplies very near last year's level. 
Wheat exports are forecast to be up slightly, reflecting the 
combination of strong export competition and increased food aid 
shipments. However, total use is projected to fall this season due to a 
nearly 100-million-bushel drop in feed use. Ending stocks are forecast 
to increase from 946 million bushels at the end of the last season to 
997 million bushels at the end of this marketing year, the highest 
since 1987/88. (This forecast does not account for the 3-million-ton 
food aid program announced on February 10.)
    Looking ahead to the 2000/01 marketing year, which begins on June 
1, a further decline in winter wheat acreage will likely push total 
U.S. wheat acreage and wheat production lower. Winter wheat plantings 
last fall were down 1 percent from a year earlier. Lower wheat supplies 
and some improvement in exports could lead to slightly higher wheat 
prices next season.
    The 1999/00 corn crop of 9.44 billion bushels is down from last 
year's crop of 9.76 billion bushels. While the size of the corn crop is 
down this season, total supplies are up as higher beginning carryover 
added nearly 500 million bushels to current-year supplies. Higher use 
is expected to more than offset the increase in total supplies, causing 
ending stocks of corn to drop from last season's 1.79 billion bushels 
to 1.74 billion bushels at the end of this marketing year. Total corn 
use this season is projected to reach a record-high 9.5 billion 
bushels, compared with last season's 9.3 billion bushels, as domestic 
use is projected to increase by about 3 percent while exports are 
projected to fall slightly from last year. The farm price of corn for 
the 1999/00 marketing year is projected to average $1.75-$2.15 per 
bushel, compared with last year's $1.94.
    In 2000, corn acreage is expected to be near last year's level and 
assuming trend yields the corn crop would be up slightly and total corn 
supplies would be near this year's level. Total use also may be near 
this year's level, as ethanol use expands but declining livestock 
numbers hold down feed use. With little to no change in ending stocks, 
corn prices are expected to show only modest improvement next season.
    Soybean plantings of nearly 74 million acres in 1999 exceeded the 
record of 72 million acres in 1998. However, soybean production dropped 
4 percent in 1999, as drought adversely affected yields in several 
States. Despite the drop in production, total soybean supplies this 
season are record-high, as larger carryin stocks more than compensated 
for the drop in production. Most of the increase in supplies is 
expected to be absorbed by larger exports, which are forecast to be up 
11 percent, leaving soybean ending stocks about unchanged from last 
year. Soybean prices for 1999/00 are currently projected to average 
$4.50-$5.00 per bushel, compared with last season's $4.93.
    Plantings of soybeans could continue to expand in 2000, as returns 
to soybeans, including loan deficiency payments and marketing loan 
gains, relative to other major crops encourage farmers to switch 
acreage into soybeans. Higher acreage and trend yields could lead to 
record soybean production in 2000 and another year of rising carryover. 
Under the pressure of rising stocks, soybean prices could face 
additional pressure in the 2000/01 marketing year.
    The 1999 cotton crop is estimated at slightly less than 17 million 
bales, up 22 percent from last year's crop of 13.92 million bales, 
pushing 1999/00 carryover stocks up nearly 12 percent from last year's 
3.94 million bales. In both, 1998 and 1999 weather reduced cotton 
yields in several States. Despite abundant current-year supplies, U.S. 
cotton mill use is projected to decline from last season's 10.4 million 
bales to 10.2 million bales, as textile imports continue to grow. U.S. 
cotton exports are forecast at 6.4 million bales during 1999/00, up 2.1 
million bales from last year, as the continuation of Step 2 payments 
has improved the competitiveness of U.S. cotton in U.S. and foreign 
markets. From August through December, the U.S. farm price of cotton 
averaged 44.9 cents per pound, compared with 60.2 cents last season.
    Plantings of cotton are expected to remain about unchanged in 2000. 
However, cotton production could be up in 2000, assuming weather does 
not adversely affect yields in the major cotton producing States. 
Despite the expected increase in production, price prospects could 
possibly improve, especially if China's supply of exportable cotton 
declines in the coming months.
    Rice production in 1999 rose 12 percent from a year earlier, as 
acreage rose 7 percent to the second highest level on record and per 
acre yields improved. The combination of larger production and stagnant 
total use is projected to lead to a near doubling in carryover stocks 
to 40.6 million cwt. Rice exports are projected to increase slightly in 
1999/00, due to stronger milled rice exports resulting from lower U.S. 
prices and larger food aid shipments, while domestic use is expected to 
drop from last year's record high. Rice prices are forecast to average 
$5.75-$6.25 per cwt., compared with last season's $8.89. The decline in 
prices could lead to a cutback in rice plantings and production in 
2000, but large carry-in and another year of large supplies will likely 
continue to pressure rice prices during the 2000/01 marketing year.
    Other crops face mixed prospects in 2000. Sales receipts of fruit, 
vegetable, greenhouse and nursery crops are expected to rise $1.2 
billion to $41.7 billion. While fresh vegetable prices are likely to 
rise from last year's reduced levels, fresh citrus prices are returning 
to normal after the December 1998 freeze. Horticultural exports are 
also likely to rise slightly in 2000 after 2 flat years, as Asian 
economies strengthen and U.S. citrus supplies recover. Tobacco receipts 
will decline again in 2000 to $1.8 billion, down $0.4 billion from the 
year before. Rising retail prices and reduced use are causing sharp 
quota reductions. Peanut production may decline a little with a return 
to trend yields and reduce cash receipts somewhat. Sugar production is 
likely to continue growing, despite reduced prices, as weak prices for 
alternative crops deter switching. International trade obligations will 
cause increasing concern about 2000/2001 imports and supplies.
    Livestock and Poultry.--Record-high per capita meat production 
pressured livestock and broiler prices last year. In 2000, higher 
poultry production is expected to be about offset by lower beef and 
pork production, causing per capita meat consumption to drop below last 
year's. Lower red meat production is expected to boost prices for 
cattle and hogs in 2000. In addition, livestock, poultry and dairy 
producers should benefit from another year of low feed costs.
    In 1999, hog prices steadily improved throughout the year averaging 
$34 per cwt. for the year. During the fourth quarter of 1999, hog 
prices averaged over $36 per cwt., more than $14 higher than one year 
earlier. In December and January, hog prices averaged $38 per cwt., 
moving above break-even for the first time since late 1997. Responding 
to the low returns the past couple of years, producers began to reduce 
their breeding herds in late 1998 and continued to reduce them in 1999. 
Although the number of sows farrowing in June-November was down 4 
percent from a year earlier, the increase in pigs per litter was up 2 
percent, leading to a 3-percent decline in the pig crop. The drop in 
hog numbers is expected to lead to nearly a 4-percent decline in pork 
production in 2000. The decline in pork production could push hog 
prices above $40 per cwt. during the second half of this year, with hog 
prices averaging $39-$41 for the entire year.
    Cattle prices are projected to average about 5 percent higher in 
2000 following last year's nearly 7 percent increase, as the 
liquidation of the nation's cattle herd finally leads to reduced beef 
production. The USDA's January 1 inventory of cattle and calves on 
farms showed 98 million head, down from 103.5 million head on January 
1, 1996. In 1999, lower cattle and calf numbers did not translate into 
less beef production, as record slaughter weights, another year of poor 
incentives to hold back heifers for herd expansion and reduced forage 
due to drought led to record beef production. Beef production will 
remain large during the first 6 months of 2000, as cattle on feed 
inventories continue at record levels. On January 1, the number of 
heifers on feed was up 11 percent, while the number of steers on feed 
was up 6 percent from a year ago. During the second half of 2000, 
higher cattle prices and low feed costs should provide an incentive for 
producers to reduce heifer slaughter and begin rebuilding the cattle 
herd. Reduced placements of cattle on feed is expected to lead to a 
sharp reduction in beef production during the last half of 2000. For 
all of 2000, beef production is forecast to be down 3 percent.
    Broiler prices in 2000 are projected to be off about 2 percent from 
last year after falling 8 percent in 1999. In response to attractive 
returns in 1998, poultry producers expanded the hatchery flock which 
could be about 5-percent larger than a year ago through the first half 
of this year. In the face of larger supplies, prices for whole birds 
are expected to remain weaker than a year ago. Prices for most broiler 
parts in January were 10-20 percent below a year ago, while strength in 
the export market kept leg quarter prices about 5 percent above last 
year. Despite the price drop, producer net returns are expected to 
continue to remain positive.
    For all of 1999, milk prices averaged $14.38 per cwt., down from 
the record of $15.42 per cwt. in 1998, but still well above the 
previous 5-year average. These strong milk prices coupled with low feed 
costs and favorable weather in most areas of the country caused 
producers to expand milk production by over 3 percent in 1999, the 
highest year-to-year gain in milk production this decade. Increasing 
milk production and seasonally soft demand for dairy products caused 
milk prices to collapse at the end of 1999. The surge in milk 
production will likely pressure milk prices over the next several 
months. For all of 2000, the all-milk price is forecast to average 
$12.55 per cwt., down nearly $2 from last year and about $1.60 below 
the previous 5-year average.

                  OTHER FACTORS AFFECTING THE OUTCOME

    There is no doubt the farm economy is weak and many producers are 
having serious cash-flow problems. A number of key factors that will 
determine the financial fate of U.S. agriculture over the coming year 
are as yet unknown. A few key things to watch:
    Market access.--There is continuing concern by producers over the 
acceptance of transgenic crops and the economic returns to producing 
them. Consumer and government reaction to these crops in overseas 
markets will determine producer use of transgenic seeds, marketing 
practices, and farm prices.
    China.--China will continue to be a potentially major factor in 
world agricultural markets for several reasons. First, China's domestic 
macroeconomic policy is a factor in Asian trade patterns and exchange 
rates. Second, China has not been much of a wheat importer in recent 
years and holds large stocks of cotton and corn. China has lowered 
producer prices for major commodities in 2000 and that may result in 
some crop production cutbacks or switching among crops. China's exports 
limit U.S. prices of corn and cotton, but production changes and stock 
reductions in the 2000 crop year may begin to limit China's effect on 
world markets.
    Accession to the World Trade Organization (WTO) would be a very 
positive factor for U.S. exports and farm prices. China's commitment to 
eliminate export subsidies should reduce their exports and reinforce 
domestic policy changes that reduce production incentives. Recent USDA 
analysis suggests that U.S. farm exports to China could rise as by at 
least $2 billion by 2005.
    Global weather.--As always, adverse or exceptionally good weather 
around the world could affect the level of crop food, feed and fiber 
supplies and prices. At this point, weather generally looks favorable, 
with dry areas in the U.S., North Africa and the Middle East.
    Emergency assistance legislation.--The drop in farm prices the past 
2 years raised concerns with the farm income safety net resulting in 
Federal emergency assistance of over $15 billion. The President's 
fiscal year 2001 budget proposes a new farm safety net initiative. The 
initiative, designed to broaden Federal support, includes four 
complementary proposals that would: (1) enhance farm income support by 
providing supplementary countercyclical income assistance, (2) increase 
environmental benefits and farm income with expanded conservation 
programs, (3) improve risk management programs and (4) expand economic 
opportunities in farm and rural areas. These legislative proposals 
would provide about $11.5 billion in additional assistance to the 
farmers and ranchers during 2000-2002.
    The income assistance program would provide supplemental income 
assistance payments to eligible producers of wheat, feed grains, rice, 
upland cotton, and oilseeds. The supplemental payments would be 
provided to eligible producers if the projected nationwide gross income 
for the crop falls below 92 percent of the preceding 5-year average. To 
target the program to smaller farmers who typically have lower farm 
income, payments would be subject to a separate $30,000 per person 
payment limitation. The income assistance program is projected to cost 
$3.1 billion during fiscal year 2000-01. In addition, the President 
proposed to extend the dairy price support program, which terminates at 
the end of this year, for 2 additional years.
    The budget proposes an additional $1.3 billion for a Farm 
Conservation Programs Initiative, which includes a new $600 million 
Conservation Security Program to provide annual payments to farmers and 
ranchers who implement sound conservation practices. Additional funding 
is also provided for the Environmental Quality Incentives Program 
(EQIP) and the Wildlife Habitat Incentives Program (WHIP). In addition, 
the President proposed to remove the enrollment cap on the Wetland 
Reserve Program (WRP) and to increase the enrollment cap on the 
Conservation Reserve Program (CRP) from 36.4 to 40 million acres.
    The fiscal year 2001 budget would extend the premium discount 
available in 1999 and 2000 for farmers who purchase buy-up coverage for 
crop insurance. The premium discount and the costs associated with 
higher participation are expected to total $640 million. The budget 
also requests $100 million to establish coverage for multi-year losses 
and $100 million to provide livestock producers with price protection.
    Lastly, the Administration proposes using $80 million in fiscal 
year 2001 to provide equity capital for new livestock and other 
processing cooperatives. The proposal would help address concerns about 
market concentration and provide farmers with an additional source of 
income through cooperative ownership.
    That concludes my remarks, and I invite questions. Thank you.

                                         TABLE 1.--FARM ECONOMY OVERVIEW
                                            [Dollars in billillions]
----------------------------------------------------------------------------------------------------------------
                                       1996            1997            1998            1999E           2000F
----------------------------------------------------------------------------------------------------------------
Cash receipts...................          $199.1          $207.6          $196.8          $191.9          $189.9
Government payments.............            $7.3            $7.5           $12.2           $22.7           $17.2
Cash expenses...................          $159.9          $169.0          $167.8          $170.0          $171.5
Net cash farm income............           $57.5           $58.5           $55.0           $59.1           $49.7
Net farm income.................           $54.9           $48.6           $44.1           $48.1           $40.4
Farm debt.......................          $156.1          $165.4          $172.9          $172.8          $172.5
Farm assets.....................        $1,003.9        $1,051.6        $1,064.3        $1,067.2        $1,072.8
Debt-to-assets (percent)........            15.6            15.7            16.2            16.2            16.1
Agricultural exports)...........           $59.8           $57.3           $53.6           $49.0           $49.0
Agricultural imports............           $32.6           $35.8           $37.0           $37.4           $38.0
Value of the dollar \1\.........           101.0           109.6           115.5           112.0           108.7
Farm production (mmt) \2\.......             410             417             431             415              NA
Farm prices received \3\........             112             107             101              95              NA
Grain stocks-to-use (percent)               16.0            17.9            18.7            18.1              NA
 \4\............................
CPI-food (percent)..............             3.3             2.6             2.2             2.2             1.9
----------------------------------------------------------------------------------------------------------------
E=estimate; F=forecast.
\1\ Real agricultural trade weighted, 1990=100.
\2\/ U.S. production of grains and oilseeds.
\3\ Index of prices received by producers for all farm products, 1990-92=100, data for 1999 is for the month of
  August, 1999.
\4\ Marketing year world ending stocks in the year indicated.
 
Note: Data and forecasts are based on early February 2000 conditions.















    Senator Cochran. Thank you, Mr. Collins. We have been 
joined by other Senators, members of the committee, and I am 
going to yield to them at this point for any comments or 
questions they may have of our witness panel.
    Senator Gorton.

                   STATEMENT OF SENATOR SLADE GORTON

    Senator Gorton. I thank you very much, Mr. Chairman. You 
recognize better than anyone how we are pulled by our various 
responsibilities. I have a hearing starting in 10 minutes or so 
with another part of the Department of Agriculture, the Forest 
Service, for which I have a particular responsibility, so I 
appreciate being able to make a statement and at least leave 
some questions for Mr. Schumacher with respect to my 
constituents who live under the ambit of his jurisdiction.
    We are not any different than that of the rest of the 
country, from wheat growers to apple orchards, potato growers, 
asparagus farmers, and an adverse set of markets has really 
taken its toll in Washington State as well as it has elsewhere. 
My farmers produce more than 230 food, feed, and seed crops, 
and only two, wheat and barley, are under the guise of program 
crops. When overseas markets are lost and ignored, and when 
excessive regulations are imposed, when the tools necessary for 
production are stripped away, and when the younger generation 
becomes discouraged, they do need some forms of assistance.
    Last year, one of our peculiar needs was with apple 
growers. Our most recognizable and profitable crop had its 
lowest price level in decades. There was a combination of 
adverse economic conditions both at home and abroad that were 
directly related to that struggle. There were all kinds of 
environmental restrictions placed on the growers, and our 
growers also needed support in overseas marketing and sales.
    Under Secretary Schumacher visited the State last July, 
unfortunately politicized the plight of the growers and Members 
of Congress from the State. They did tell him of a desire to 
see loan programs made available for their commodity as well as 
increased trade and market access.
    You, Mr. Chairman, ended up being tremendously helpful in 
providing in the big agricultural relief bill a specific 
mention of apples, I think perhaps for the first time ever.
    Then, of course, in December the President came to Seattle 
during the World Trade Organization ministerial, and made the 
apple industry his poster child for world trade 1 day before he 
trashed the entire WTO ministerial itself and guaranteed for 
all practical purposes that we will not get any agricultural 
trade opening during the balance of his term.
    Now, in spite of what you did, Mr. Chairman, I have just 
learned that several of our apple grower applications for the 
loan program have been declined by the Department of 
Agriculture, and I hope that Under Secretary Schumacher will 
explain why, and when we can get some of the things that you 
helped create for us.
    On perhaps a less significant level our potato growers have 
expressed concern about their markets, and are very worried 
about the closure of the Foreign Agricultural Service Office in 
Singapore, and perhaps the Under Secretary can tell us what his 
alternatives are to that.
    Now, we did just in the last 48 hours have the good news 
that China has finally gotten into the wheat market and 
announced a 50,000 metric ton purchase, but that 50,000 metric 
ton purchase by China is exactly one-eighth of the loss that we 
had from 1998 to 1999 in wheat sales to Pakistan, our best 
existing market, and I think we need to know, my wheat growers 
need to know how it is that we suffered such tremendous losses 
in our sales to Pakistan.
    Asparagus growers are concerned about the influence of low 
cost product from Peru, hop growers about the loss of chemical 
tools, cherry growers are threatened by a lack of labor and 
housing, dairymen and cattlemen are constantly battling Federal 
agencies on water use and buffer zones, pea and lentil growers 
are at odds over the cuts in the Public Law 480 program, and 
all of the commodities in my State are barraged by those in the 
Administration and out of it advocating an anti-dam sentiment, 
cutting off water supplies in areas in which agriculture is 
simply not possible without irrigation.
    So basically, it seems to me that we need an Administration 
that speaks with one voice in favor of agricultural industries, 
that does not simply advocate with lip service opening up 
foreign markets, but really helps to do so, that does not 
destroy by its regulations with respect to the tools of 
agriculture the availability of the tools that agriculture 
needs, including water, and that attempts to advance both a 
free market system and the use of the huge amounts of money, 
the billions of dollars that we appropriated for temporary 
relief, at the same time.
    I must say, I am frustrated when you provide us with help 
for crops like apples and nothing much happens. I am frustrated 
by the loss of markets that we have historically held in the 
United States, and I am frustrated by the increasing 
regulations that impose grave difficulties on a business, on a 
profession that already has enough problems created by lower 
market prices overseas, and by increasing competition, and does 
not need to be regulated out of existence by its own government 
at the same time.
    So I thank you, and now I have got to do the Forest Service 
bit, but I do hope that Secretary Schumacher will talk both 
about the apple loan program, about the office in Singapore, 
and about how it is that we have managed to lose our wheat 
markets so dramatically in countries that have been good 
customers of ours in the past, while we are at least beginning 
to get a little bit of encouraging news from China, though only 
very modest in comparison with what we have lost.

                           PREPARED STATEMENT

    Senator Cochran. Thank you very much, Senator, and we will 
see that the questions you have are submitted for the record.
    Senator Gorton. Thank you.
    Senator Cochran. Senator Burns.
    [The statement follows:]

               PREPARED STATEMENT OF SENATOR CONRAD BURNS

    Mr. Chairman, thank you for holding another hearing today so we may 
further discuss the administration's farm proposal.
    As I mentioned at the last hearing, I have more than a few concerns 
with this plan. To start with, this administration is asking for less 
money than last year. In small grain country there has been no 
improvement in price or movement. An effective and imaginative approach 
that will provide adequate short-term assistance, as well as a long-
term plan to keep farmers in business is not only needed but required. 
The administration's proposal before us today, does neither.
    It appears that the Administration is putting a heavier emphasis on 
the conservation side of their proposal, when we have an economic 
emergency across the countryside. Our efforts should be spent on trade 
and economic issues, not on promoting Vice President Gore's 
environmental agenda. Good economics and prosperity in farm country do 
more for good conservation practices.
    I am very concerned about the $1.3 billion for conservation in the 
farm safety plan. Not only does it promote an agenda that is not 
necessarily in the best interest of the agricultural community, but it 
leaves out any real commitment to crop insurance reform. It is 
imperative we have an effective risk management plan. All the 
conservation initiatives in the world are not going to help a producer 
make sound economic decisions to keep their farm a sustainable 
operation in the first place.
    I think conservation plans can be highly effective. I don't mean to 
downplay their importance. However, I am very suspicious about this 
proposal and its intent. Especially when staff levels for technical 
assistance for NRCS were not adequately increased. CRP acreage would be 
increased in this proposal from 36.5 million acres to 45 million acres, 
meaning there will be more contracts to administer. There is no way the 
staff levels allocated will be able to handle the increased workload.
    Effectively, this proposal provides no real solutions to the farm 
crisis. The counter-cyclical income support proposal provides only $6 
billion over the next 3 years. Last year alone, the emergency package 
totaled $8.5 billion, and over the past 2 years, over $16 billion has 
gone to agricultural producers. Even with the counter-cyclical income 
assistance plan as a supplement to AMTA, $6 billion is simply not going 
to pull farmers through.
    This new Farm Safety Net proposal also contains a $30,000 cap on 
payments. Montana producers cannot support their families and stay in 
business on $30,000. Currently, with the $40,000 payment limit, many 
Montana farmers and ranchers are already eliminated. I have no idea why 
the USDA is decreasing the amount to further hurt farmers.
    18 percent of producers in this nation account for 85 percent of 
production. USDA figures estimate that only 8 percent of the nation's 
producers will be eliminated from this payment plan. Again, I have no 
idea where USDA came up with this figure. I believe a much larger 
number than 8 percent would be eliminated from the counter-cyclical 
payment. It should not be the intent of this proposal to put the 
primary producers of this country at a disadvantage.
    I know my Montana farmers and ranchers are not looking forward to 
another year of zero profit. However, it seems that is what this plan 
would provide them.
    At a time when we are fighting for a place in the world market, why 
we are cutting funds for important export programs? Nearly every export 
program was cut. The Public Law 480 program was cut drastically as was 
the Section 416 program. Farm-states like Montana depend on export 
programs for their agricultural economy. We have been cut off from over 
10 percent of the world market, due to sanctions and under-funded and 
under-utilized market development programs.
    This administration has shown no stomach to take on our 
competitors. We must use these programs and stop allowing our 
competitors an advantage. Why do you feel these tools provided you by 
Congress are either unimportant or misunderstood or ineffective? If it 
is the latter two, why hasn't the administration approached Congress 
with some ideas to make them understood and effective?
    Mr. Secretary, all the social programs that look and sound nice can 
all be replaced by a strong farm economy. That is what we need for 
rural economic development. There can be no other way. Excess acres in 
CRP has led to the decay of our rural cities and towns. Our standard of 
life in rural America continues to decline. This administration can 
brag all they want about how great this economy is and has been, but 
that has not been the case in farm country and the figures show it. We 
cannot get a handle on our cost production. Unrealistic rules and 
regulations cost untold dollars--dollars we do not have. It is not 
whether we like to do the right thing to ensure sustainability of our 
operations; it is a fact that we do not have the money.
    In times like these our producers need every available marketing 
option open to them. We must provide them effective risk management. If 
we are not, why not? We must assist in a reliable export system. If we 
are not, why not? We must assist in short-term resources to again cope 
with another year of depressed grain prices and if we are not, why not?
    I do not know how many employees you have there between 13th and 
14th on Independence and how many of them have BS's, MS's and PHD's . 
It sounds like we have some misdirected resources that should be 
spending valuable time devoted to farm income. Mr. Secretary, that is 
where it is at .  .  .
    Thank you again Mr. Chairman. I look forward to working with you 
and other members on this committee to come up with effective solutions 
to the farm crisis.

    Senator Cochran. Senator Dorgan.

                  STATEMENT OF SENATOR BYRON L. DORGAN

    Senator Dorgan. Mr. Chairman, thank you for holding this 
hearing, and let me also thank you for helping us in Congress 
craft an emergency package to respond to collapsed commodity 
and livestock prices, which has been very important to family 
farmers. In fact, I think the testimony today by Mr. Schumacher 
and Mr. Collins indicates that, without the two emergency 
packages in the last couple of years, the farm economy would 
have been in much more desperate trouble than it now finds 
itself in.
    I must say--just to begin, before I ask a question of the 
witnesses--I was in Seattle as well, and it is interesting how 
two people can have different views of the exact same event. I 
was, in fact, at the presentation that President Clinton made 
to the apple growers and others in Seattle, and my own view of 
that circumstance is that the President did not trash the WTO, 
as was said by my colleague.
    In fact, he stated the obvious: When we talk about 
globalization, and the movement towards a global economy, the 
rules of trade must keep pace with the movements towards 
globalization. The rules have not kept pace, and the result was 
tens of thousands of people marching in the streets of Seattle. 
I think the President simply stated the obvious, and did not in 
any way trash the WTO talks and put us in a position where we 
will not get an agricultural agreement. I just wanted to make 
that point.
    I do not think you will ever have trade talks, especially 
dealing with agriculture, but trade talks generally, without 
having substantial numbers of people demanding that the rules 
of trade be discussed along with the increasing pace towards 
globalization. Those rules are critically important to working 
people, to the environment, and to a range of other issues.
    Having said that, let me now say to Mr. Schumacher and Mr. 
Collins: Your testimony is not very heartening to those of us 
who are yearning for a stronger agricultural economy. Mr. 
Schumacher, you talked about the past. Last year, U.S. farmers 
experienced the lowest wheat prices in 8 years, lowest corn 
prices in more than a decade, lowest soybean prices in 27 
years, lowest hog prices since the depression, the steepest 
decline in milk prices in history, and so on. When you talk 
about the future, Mr. Collins, you talk about U.S. agriculture 
continuing to face the prospect of low prices and incomes, and 
ongoing structural change.
    I guess that leads to this question. Farmers are now in the 
Dakotas preparing to think through their plans for the year. 
They are going to need to borrow some money. They are going to 
go to a lender to talk about getting some seed, and some fuel, 
perhaps machinery repairs in order to plant some seed this 
spring.
    Their lenders are only going to look at what the current 
farm program provides as a safety net. I assume the lenders 
will not be able to look at some anticipated emergency response 
that may or may not happen later in the year. While these 
emergency responses have been critical, I expect that if we do 
not do something to change the underlying safety net itself, a 
lot of farmers are going to find their lenders saying, well, 
look, all we can do is project what might happen to you given 
market prices and given the current farm program. We cannot 
anticipate that Congress may or may not pass some kind of 
emergency piece later.
    Am I correct in that circumstance? I mean, have you 
analyzed that, Mr. Schumacher?
    Mr. Schumacher. If I may, Mr. Chairman. Yes, I went through 
the same discussions with farmers from North Dakota, 
Washington, and California in the last few weeks. The farmers 
are saying that the Congress will provide another emergency 
package. And the lenders are saying, well, we are not sure, or, 
we are not sure what form that might take. The Administration 
has a proposal on the table that will extend a couple of years, 
to give a little more surety to farmers and their lenders so 
they can get through probably another year or year and a half, 
of a pretty tough time in commodities.
    Senator Dorgan. Mr. Collins.

                            FARM SAFETY NET

    Mr. Collins. I agree with your general assessment, Mr. 
Dorgan. Certainly a bird in the hand is worth two in the bush. 
I think if you are a banker particularly, we know from Federal 
Reserve surveys over the last 2 years, that bankers have been 
increasing credit requirements on farmers.
    You combine that with the fact that income to debt is going 
to go down. That ratio will go down quite substantially in the 
year 2000 without additional government payments. And I think 
there is no question that makes it more difficult to get a loan 
for those producers that are on the edge. Yes.
    Senator Dorgan. Mr. Chairman, I know that you do not relish 
seeing myself and my colleague, Senator Conrad, come to the 
floor to talk about agriculture, but to us it is the single 
most important issue in our State's economy. Almost 40 percent 
of North Dakota's economy is agriculture. And it has just 
dropped off the table. We have been hit by floods, by chronic 
rain and moisture that has caused the worst crop disease in an 
entire century, on top of collapsed prices and a safety net 
that just does not make up the difference. So that is what has 
pressed us on behalf of our constituents to say we have to do 
something different.
    Your testimony today, Mr. Schumacher and Mr. Collins, in my 
judgment, underscores the need for us to review how we can 
change the underlying safety net, how we can make changes to it 
that provide more structure and more assistance during 
collapsed grain prices without having to rely on an emergency 
bill later in the year. Because if we have to rely on an 
emergency bill again this year or next, a lot of those farmers 
will be told by their bankers, you do not cash flow here, you 
better take whatever little equity is left and get off the 
family farm.
    And my fear is that we are losing so many family farmers 
because we have a lot of pride of authorship in the current 
farm bill and a reluctance to reopen it. It is painfully 
obvious to virtually everyone that this is not working. This 
would work in certain times. During good times, when prices are 
good, you could transition and it would be just fine.
    You could transition people out of a safety net with $5 
wheat. I suppose it would be just fine. But when grain prices 
collapse, this is an unworkable system. This farm program does 
not work. The quicker Congress comes to grips with that, the 
better, and the more family farmers will be given a chance to 
continue to do what they do best.
    So I think your testimony today gives us a good description 
of where we are, a description of where you think we are 
headed, and this ought to be a wake-up call to every single 
Member of Congress who cares about farm policy and cares about 
retaining a network of family farms in this country's future.
    Mr. Chairman, thank you very much.
    Senator Cochran. Thank you, Senator Dorgan.
    Senator Durbin, I had indicated that Senators could either 
make an opening statement or ask questions, because I know 
there are other obligations that each of us has. If you want to 
do both or one, that is your choice.

                 STATEMENT OF SENATOR RICHARD J. DURBIN

    Senator Durbin. At the risk of pushing too hard, I will 
submit my statement for the record and make a very condensed 
version of it, and ask a few questions, all in 5 minutes.
    Let me first thank you all for being here. Thank you, Mr. 
Chairman for this hearing.
    Mr. Collins, we have had a chance to speak many, many 
times. And, Mr. Schumacher, of course, Mr. Kaplan, great to 
have your team here with us today.
    I am trying to step back for a moment. I listened to my 
colleague from the State of North Dakota and so many others in 
the farm belt, I'm probably trying to do the impossible. I am 
trying to figure out whether this is an anomaly that we are 
living through and, a few years from now, we will look back and 
say, those were the bad times and we have recovered, or whether 
we are facing a trend line here, which is inexorable, that we 
just cannot overcome.
    Are we facing changed circumstances in the global economy, 
when it comes to agriculture, which we just have to concede are 
inevitable? Are we facing new production in countries that, 
years ago, could not have considered it, at levels that we 
never would have been able to predict, that have now become our 
competition? Are we dealing with a global demand for product 
which is so unpredictable from year to year that we find 
ourselves at the mercy of this market? Can we even, on the best 
bipartisan day, come up with a new approach to helping American 
farmers that can anticipate some of these variables, as well as 
the variable of weather and exchange rates and so many other 
things that come into play?

                           PREPARED STATEMENT

    I guess, Mr. Collins, since yours is the role of an 
economist, I really would try to ask you if you feel that there 
are certain changes in the global economy that account for the 
current doldrums that we have been in in agriculture for the 
last couple of years and appear to face for the next few months 
at least.
    [The statement follows:]

            PREPARED STATEMENT OF SENATOR RICHARD J. DURBIN

    Good afternoon. Chairman Cochran, Senator Kohl thank you for 
holding this important hearing today. I think it is important for this 
committee to examine the severe economic crisis that continues to 
plague rural America while exploring options that can help relieve the 
stress and promote U.S. agricultural products abroad.
    First, as I've said before, I am encouraged by the Administration's 
proposal designed to improve the farm safety net. A quick review of 
that proposal suggests that it would be a significant boost to Illinois 
farmers. In fact, it would mean more than $140 million under USDA's 
Supplementary Income Assistance Program, over $60 million for 
conservation programs, and more than $64 million in new risk management 
assistance for Illinois farmers in the first year alone.
    Obviously, our farmers need help. According to a University of 
Illinois study, about a fifth of the state's 73,000 farms won't cover 
their 1999 operating expenses and a majority won't make enough to cover 
family living expenses. Farm net worth is expected to drop about 15.5 
percent on average. The Illinois Farm Bureau predicts that about 18 
percent of Illinois farms will have negative 1999 net incomes and about 
22 percent are in danger of going out of business.
    Mr. Chairman, since 1989 the federal government has spent $27 
billion in emergency funding for farm-related disasters, 60 percent or 
$15.9 billion in the last 2 years alone.
    I think it's important for all of us to realize that the 1996 Farm 
Bill, Freedom to Farm, was not written in stone. It can and should be 
changed. I believe we must start now by reforming Freedom to Farm 
because clearly it has failed to meet the most basic needs of 
producers. Restoring the farm safety net, targeting payments to farmers 
in need, and ensuring that livestock producers are not left behind 
should be the first steps.
    I also believe that we should begin a bipartisan effort to expand 
markets for American agricultural products so that farmers can take 
advantage of the immense buying capacity of developing countries. I am 
pleased that Under Secretary Gus Schumacher has joined us today to talk 
about efforts being undertaken by the Foreign Agricultural Service.
    Allow me to touch briefly on Africa. As you probably know, I was in 
Sub-Saharan Africa in January and had an opportunity to see U.S. food 
aid programs in action. I was impressed and heartened by direct feeding 
programs as well as programs that sell U.S. food products at low cost 
to finance development projects. But I was overwhelmed by the impact of 
AIDS on Africa--particularly by the millions of children being left 
orphaned by the epidemic and the devastating impact on African 
countries' economies. I believe U.S. food aid could be used to target 
communities heavily affected by AIDS. I recently introduced 
legislation, the AIDS Orphans Relief Act of 2000 (S. 2030), to target 
$50 million of U.S. food aid for nutritional assistance for people 
living with AIDS, for families and children affected by AIDS, and for 
development projects for communities heavily impacted by AIDS.
    Mr. Chairman, I would like to get Under Secretary Schumacher's 
views on this legislation and the potential for U.S. food aid being 
used to help those children, families, and communities affected by AIDS 
in Africa and elsewhere in the world. I would also like to suggest that 
the Senate Appropriations Committee, particularly the Agriculture and 
Foreign Operations Subcommittees, should schedule a joint hearing to 
further explore this issue.
    Finally, I included language in last year's bill calling upon the 
Administration to specifically request funding in fiscal year 2001 to 
implement the U.S. Action Plan on Food Security. Instead, I found a 17 
percent drop in Public Law 480 funding (from $1.23 billion to $1.02 
billion), and no specific program funding for the Action Plan. I'm very 
interested in an explanation on this matter.
    Mr. Chairman, again thank you for the opportunity to raise these 
important issues today.

                      CAUSES OF AGRICULTURAL SLUMP

    Mr. Collins. Your comment just before those questions is a 
whole bunch of questions in one, and I would almost like to 
say, all of the above, to all of the factors that you raised. 
There are a couple of things that strike me, and let me go back 
to the simplistic part first. There are two fundamental forces 
that have been at play over the last couple of years. One has 
been a dramatic slowdown in the world economy. We were growing 
at 3 to 3.5 percent and, all of a sudden, we were growing at 
less than 2 percent. And that has really pared back demand in a 
lot of areas of the world.
    Second, we have had several successive years of very good 
crops around the world, part of it due to technology, but part 
of it due to just very good weather. We are on track to have 
pretty good weather again this year. I just reviewed all of the 
global weather maps, and we have dry weather in western North 
Africa, some dry weather in Iran, and I think that is pretty 
much it for the major commodities.
    So those two factors have helped create a cyclical trough 
that we have been in right now. Agriculture does run in cycles, 
not predictable ones, but we go up and down, and we are down 
right now. And I think you have to take care not to think that 
we are going to be down forever.
    But, at the same time, there are some surprising structural 
changes taking place around the world that are going to be, I 
think, promising for some crops and not so promising for 
others.
    Senator Durbin. May I ask you, if I might, to kind of zero 
in on one particular thing? For a long period of time, the 
Federal farm policy, among other things, focused on the belief 
that if we took certain acreage out of production in the United 
States of America, it would have an impact on world price. And 
we used that thinking for a long time in terms of the number of 
acres you could plant in certain program crops, the 
conservation reserve program and the like. Is that premise 
still valid in the world today?
    Mr. Collins. I think that it is for major field crops. To 
give you an example, our share of world wheat trade this past 
year was 31-32 percent. Our share of world cotton trade, 25-26 
percent. Our share of world corn trade, 70 percent. Our share 
of world soybean trade, somewhere about 60 percent. These are 
very large percentages of world trade. And if we were to take 
acreage out of production, no doubt it would have an effect on 
foreign acreage.
    Now, some of those shares are not as big as they used to 
be. The soybean share is not as big. The wheat share is not as 
big. So, to that extent, taking land out of production would 
have less of an effect than it would have had in the past, but 
it still would have an effect.
    Senator Durbin. But are we such a market maker that if we 
took the 31 percent of world production in wheat and said, we 
are going to set aside 10 percent of the acreage and we are 
going to reduce our production by 10 percent, in other words, 
reduce 3 percent of the total sales of wheat worldwide, that 
would have a price impact sufficient to warrant that plunge on 
our part?
    Mr. Collins. No, I did not say that. I do not know that it 
would have a price impact sufficient to warrant taking that 
land out of production, but it would have some price impact. I 
still think that we are in a world market where we have lots of 
competitors who are price responsive--Argentina and Australia, 
with respect to wheat prices. When wheat goes up, we know 
Australia will divert land from livestock to wheat, for 
example. Brazil and Argentina, with respect to soybeans, we 
know that they would like to see higher soybean prices, and 
that would accelerate the rate at which they are bringing new 
land into production in Brazil.
    So we could take land out of production; I think we could 
affect prices, but, over time, the effect would be eroded by 
competitor response.
    Senator Durbin. Well, I am going to make one last footnote 
on this particular aspect and say that I have a special 
interest, as many do in the Midwest, about the ethanol program. 
I think it has been conceded by you and others that absent a 
quick response by the Administration to our concerns about this 
ethanol program, we put at risk some 10 cents a bushel in corn 
price. So I hope that our friends in the EPA and the White 
House could come together on this very quickly.

                       FOOD ASSISTANCE FOR AFRICA

    Mr. Schumacher, it is good to see you. Let me ask you a 
specific question based on a trip that I took in January to 
Africa. I really went to look at food assistance programs and 
microcredit, and ended up spending most of my time looking at 
the AIDS epidemic, which is just overwhelming and devastating, 
and may be the most moral challenge of our generation.
    One of the things I came away with was the belief that, as 
overwhelming as it is, there are things that work. And some of 
the things that work are food assistance, particularly to those 
families willing to bring in AIDS orphans. These are families 
that literally are living hand to mouth on a day-to-day basis, 
who, because of the extended family custom in Africa, will 
bring in the orphans from the households of their brothers and 
sisters and relatives and bring them under their roof if they 
can do it economically.
    The question is answered as to whether they can do it by 
basic things, like microcredit programs, which do not relate 
directly to your Department, but equally food assistance 
programs. I really came away believing that if we did nothing 
else but try to strengthen the existing African families so 
that they can bring in these orphans and find a home for them 
and keep them off the street, it may have more tangible impact 
on this epidemic than many other grandiose plans.
    In the nation of Uganda, which is viewed as the most 
successful nation in Africa in dealing with the AIDS epidemic, 
they have reduced the infection of pregnant women from 30 
percent just 10 years ago to 15 percent. That is an amazing 
thing to occur in a very small country. And yet, in this nation 
of 17 million people, there are 1.7 million orphans today.
    What I am hoping to do is to work with you and the 
Department to talk about food assistance programs directed 
toward Africa and other countries facing this epidemic in the 
hopes that we can strengthen these families and keep the kids 
off the street and the girls out of prostitution. But when I 
look at the Administration's budget when it comes to Public Law 
480, for example, or the 416(b) donations, we are moving in the 
opposite direction.
    At a time when we have more stock on hand, it appears that 
we are cutting back in the food assistance that we want to 
provide in the world in the donations that might come out of 
food sales in countries in Asia and Africa. So I would like to 
ask you, can you tell me what the Administration's commitment 
is in these two areas and whether you think there is a 
receptive attitude toward some of the suggestions I have made?
    Mr. Schumacher. I think you have two questions. I had not 
really thought about that first question, and certainly it is 
something I will go back and discuss with my staff. Because if 
you look at what happened about a year ago in Kosovo, when the 
Kosovars were being driven out by the Milosevic government, 
refugee camps were set up, but many Albanian families took in 
their cousins from Kosovo and fed them.
    What we tried to do with our food aid is to provide food 
for the host families, which I think is what you would like to 
counsel us to do in Africa, as well, to have some kind of 
programs where people take in AIDS orphans and would get some 
relief funds, food, and also provide some microcredit to help 
them move along. I think it is an excellent idea and I am going 
to explore that with my staff later on.
    On the level of food aid overall, we did 9 million tons 
last year, feeding 40 million people in nearly 60 countries. 
This year we have announced another 3 million tons, and we are 
going to push very, very hard. If there are additional needs 
due, for example, to the floods in Mozambique or difficulties 
in Ethiopia, certainly we will consider those on their merits.
    Senator Durbin. Well, let me be specific with you. When it 
comes to the U.S. action plan on food security, a 17-percent 
decline in the Administration's request in funding for that 
program. That worries me.
    Similar to that decline, the 416(b) donation program seems 
to be in decline. Yet the most recent food security assessment 
report indicates an increase in the current food gap over the 
previous year's report, from almost 11 million tons to 12.7 
million tons. So we would be giving less assistance in food to 
the World Food Program, the largest food program on the earth, 
at a time when the demand is growing in Africa, as well as 
other countries, Africa in particular, presents a great 
challenge to us as to whether we will respond to this AIDS 
crisis.
    So my question to you is, why are we gearing down in these 
programs at a time when it appears the world need is gearing 
up?
    Mr. Schumacher. Well, I think we are in fact increasing our 
416(b) over last year, and we have pushed hard this year to get 
the 3 million tons. We had some carryover funding available for 
Public Law 480 this year. Because we used so much 416(b) last 
year, we did not use as much Public Law 480. And I think that 
is why the request for new budget authority was a little less 
this year, because of the carryover we had from unused Public 
Law 480 that we are going to be using this year.
    Senator Durbin. Thank you. And I hope to work with you, as 
I have in the past, on this, particularly as it relates to this 
AIDS epidemic.
    Mr. Chairman, I want to thank you for the hearing and for 
all your cooperation. Just last week, Senator Frist had a 
hearing in the Foreign Operations Committee, on the African 
Subcommittee, about this AIDS epidemic. And it is our belief 
that we have an opportunity this year, on a bipartisan basis, 
to try to address this terrible crisis. And I hope that in the 
course of this appropriation bill we can as well.
    Mr. Schumacher. Tim Galvin, Administrator of the Foreign 
Agricultural Service, was indicating that last year we did 
quite a lot of food aid, the highest in 25 years. And our 
budget reflects not only the fact that we have the carryover 
this year in Public Law 480, but also that we donated 500,000 
tons of food to Russia last year, and we do not have that big 
Russian donation this year. I think on our day-to-day work, 
especially in Africa, in really vulnerable countries, we have 
been pretty aggressive. But if you feel that we need to do more 
in certain areas, I will come to visit with you on that.
    Senator Durbin. I learned a lot on my trip, Mr. Chairman. I 
learned, in Africa, that we are shipping a lot of vegetable 
oil, which is being sold locally and used for development. 
Their biggest complaint is we are shipping it in a can and they 
wanted it in durable plastic containers. So I told them, if I 
do nothing else as a United States Senator from Illinois, I am 
going to work on changing that container. And so, maybe as part 
of this hearing, we can get into that as well. Thank you.
    Senator Cochran. Thank you very much, Senator. I appreciate 
your participation in the hearing and your work of this 
subcommittee.
    Mr. Schumacher, you really did not have a chance to make a 
statement before we started asking you questions. I will yield 
to you now for any comments or statements that you would like 
to make as a part of your testimony to the committee.

                     STATEMENT OF AUGUST SCHUMACHER

    Mr. Schumacher. I do have a prepared statement I hope we 
can put in the record.
    Senator Cochran. It will be.
    Mr. Schumacher. But if I may I would like to make a very 
short statement, because there are many questions I would like 
to answer. First of all, I have my three administrators here 
who are going to counsel me when I make mistakes or, with your 
permission, come to the table, and also Mr. Fritz, our General 
Sales Manager, who has really worked very, very hard on this 
food aid issue. It has not been easy, but we have managed to 
ship an enormous tonnage to many, many countries and have had a 
major benefit.
    For example, I was down in the Dominican Republic over the 
weekend and looked at the impact of the 100,000 tons of wheat 
that we donated, and how that had affected that country, and 
the enormous number of small projects that we have done, 
including even starting some very small markets that are 
benefitting producers. So when you see the results actually on 
the ground, it is quite extraordinary what is occurring with 
the counterpart monies of this food aid.
    As Mr. Collins has indicated, things do not look great for 
this coming year in agriculture, and it was brought home to me 
in a number of areas. Mr. Gorton mentioned my trip to 
Washington State last year. With all due respect to Senator 
Gorton, that was not a political trip. I was invited out 
because the apple industry was in such trauma. They have the 
lowest prices in many, many years. Growers were going out of 
business. They were desperate. There were 270 growers of all 
sizes that came, and we talked and we listened. The result of 
that is, working together, we developed an apple action plan, 
and we are putting a lot of things together to help the apple 
industry.
    In my own home State of Massachusetts, I met yesterday with 
some of the cranberry growers. Usually we call cranberry income 
the Massachusetts mortgage lifter, but prices have plummeted 
from $80 a few years ago to, they said yesterday, $20. Those 
producers are in desperate straits.
    Governor Bush of Florida was in to see the Secretary and me 
on Sunday at the Governors Conference and was mentioning the 
crisis in his citrus industry, not only with citrus canker but 
some of the low prices that I think, Keith, you mentioned in 
your testimony. So beyond just the major commodities, we are 
seeing low prices in almonds, apples, oranges and, in 
California, some very great difficulties as well, so this poor 
price outlook is extending except in livestock.
    We have a chart here where you can see that total CCC 
outlays, which we are predicting to be $27 billion this year, 
are higher than the previous peak. Total CCC outlays, in 
unadjusted numbers, were $25.8 billion in 1996 and $19 billion 
in 1999.
    What we have done, as you have indicated, is put on the 
table a proposal in four parts to take us through the end of 
the 1996 farm bill, building on it and adding to it where we 
think it really is needed. What we propose, Mr. Chairman, is an 
$11 billion package, offset and on budget. Let me go through 
the four parts, and then Keith and I can answer questions on 
those. First, as Mr. Dorgan has indicated, we need to build on 
the basic AMTA payments with a countercyclical income 
assistance program. Our proposal calls for payments if the 
projected gross income for major commodities falls below 92 
percent of its 5-year average. Payments would be made in 
addition to, not in lieu of, the production flexibility 
contract payments. We propose, and it is controversial, 
combined supplemental payment limitations of $30,000.
    It does not address the issues that Senator Gorton raised, 
of how to assist other commodities, for example, his hard-
pressed apple industry. We can discuss that here or elsewhere 
as well.
    These payments, in contrast to the AMTA, will be 
countercyclical, as I mentioned, rising when farm incomes fall 
and falling when farm incomes rise. They would also be crop 
specific, and they would be based on actual production rather 
than some historical base, so that only producers actually 
producing the crop would be eligible for the payments. As I 
have travelled around the country I have picked up some 
criticism from farmers, who say that some folks who live in the 
apartments in Chicago were getting payments when perhaps the 
farmers were not. There has been a bit of controversy in some 
of the areas there. So that is one of our proposals: 
countercyclical income support.
    The second part of our proposal is improving crop 
insurance. We understand the Senate Agriculture Committee is 
beginning to mark up a crop insurance reform bill, and we 
certainly commend that. We have noted that farmers responded 
very favorably to the subsidy of buy-up coverage last year and 
the year before. We want to build on that success, and the 
budget proposes to extend the buy-up discount, thus encouraging 
farmers to become steady customers, and to provide multi-year 
coverage just like any other business.
    We are also proposing a pilot livestock insurance program. 
And for those crops that do not have crop insurance, the budget 
proposes removal of the NAP area trigger, which will be 
particularly welcome I think in California and some of the 
eastern parts of the country, and maybe even the South, where 
you have crops that are not insured.
    This will help those farmers that are hit by hailstorm or 
an isolated freeze get support. The yellow sticker is to remind 
me to talk about the Non-insured Assistance Program. At my age, 
I sometimes forget to do that. We have a very major issue on 
crop insurance. The budget provides a total of $1.3 billion 
through fiscal year 2002 for these reforms.
    The third part of our proposal is on conservation. And this 
we think is also a very important part. Senator Durbin inquired 
about set-asides. What we are proposing here is sound land 
management.
    I think the heart of our conservation proposal is the $600 
million Conservation Security Program, which could help all 
farmers, because all farmers would be eligible to receive it. 
If, for example, a cranberry grower, an apple grower or a 
soybean grower undertook good conservation practices by 
reducing chemicals or reducing runoff, they would be entitled 
to a payment regardless of where they farmed. The program would 
be available to all farmers. We are working out the details 
with NRCS. I think this is an important issue and we would like 
to discuss it further if you wish.
    And then, finally, the fourth part of our proposal is 
getting trade back on track. One of the things we call for, and 
we have called for it a couple of years in a row, is the 
authority from Congress to use the unobligated balances of the 
Export Enhancement Program to promote our exports overseas.
    One of our problems, and we will come to this in a minute, 
is staffing. Senator Gorton has raised the issue of Singapore. 
We have some major staffing problems in our mission area. And 
we are not able to do the kind of work we were doing a couple 
of years ago when I was before you. This is the seventh year I 
have been before you in different capacities. So we would like 
to use the unexpended funds. For example, when China comes into 
the WTO, we will need to ratchet up our trade promotion work in 
China and, Senator, ratchet up more food aid. We would like to 
use those unexpended balances for food aid or trade promotion, 
to move products overseas.
    We also have in the budget some proposals to enhance 
marketing flexibility. We have asked for $130 million over 2 
years to help cooperatives develop livestock processing 
facilities. We will be announcing fairly shortly the program 
under CCC for construction of on-farm grain storage. This is 
going to be very important as more and more marketeers would 
like specialty kinds of grains, and we want those farmers to 
have access to storage to provide for those specialty grains. 
And we are launching a new program to encourage production of 
bio-based energy.
    Let me focus for just 1 or 2 minutes more, with your 
permission, on the staffing issue, Mr. Chairman. We are in 
trouble on staffing. If you look at the graph in front of you--
it is kind of a busy graph--but you can see that in 1998, 1999, 
and 2000, as our CCC outlays have gone up, our staffing has 
gone down a bit. And we really are working very hard. We 
proposed some staffing initiatives here. We are proposing not 
to lay off any permanent staff. FSA has been using temporary 
staff, but we are under tremendous pressure. We had to absorb, 
for example, and I think quite rightly to absorb, the staffing 
for the consent agreement implementation. That is $13 million 
to $15 million.
    We are very concerned about staffing in the Foreign 
Agricultural Service, where we have been down $5 million over 
the last couple of years. We have asked for increases. We have 
not received them. And we really need to work with you to see 
if we can get the Foreign Agricultural Service back on track to 
get exports back up again.
    For the Risk Management Agency, we are having some 
difficulties with staffing, because their liabilities have gone 
up quite a bit and the staffing has been basically straight-
lined. Again, in the Farm Service Agency, the county employees 
are working overtime night after night after night to service 
the kind of demands that we are putting on them to implement 
the 22 new programs that Congress gave us last year. So we have 
a lot of work to do in the staffing area, and my gency 
Administrators are here to answer any of your questions on 
staffing issues that you may want to ask us.
    Finally, we very much appreciated your help last year on 
the critical funding authority for CCC for the current 
appropriation for net realized losses. We thank you for giving 
us this authority. It was very, very important. I also want to 
particularly thank you and the committee for recognizing the 
strain that the workload has placed on our agencies and 
providing the additional resources last year to the Farm 
Service Agency for delivering those programs. We have been 
overtaken by events in all three mission areas. And in addition 
to those staffing resources, we are asking for a little bit 
more in this budget in certain key areas.
    So, to summarize, we focused on proposals for 
countercyclical assistance, trade, conservation, and crop 
insurance, and also some of the difficult management issues we 
have had in delivering 22 new programs in addition to 
administering the loan deficiency payments and related programs 
that have gotten farmers through and provided the kind of 
income support to stabilize agriculture through these very 
difficult times that Mr. Collins has described.

                           PREPARED STATEMENT

    I appreciate being before you today, sir, and look forward 
to taking your questions.
    [The statement follows:]

              PREPARED STATEMENT OF AUGUST SCHUMACHER, JR.

    Thank you, Mr. Chairman. I am pleased to appear before you and 
members of the Subcommittee to talk about the Administration's budget 
proposals which assist farmers and ranchers. I would like to thank my 
colleague Keith Collins for his opening statement. I have with me today 
Keith Kelly, Administrator of the Farm Service Agency, Ken Ackerman, 
Administrator for the Risk Management Agency, Tim Galvin, the 
Administrator of the Foreign Agricultural Service, and Richard Fritz, 
the Department's General Sales Manager.
    As Keith Collins indicated, and as you are all aware, this will be 
yet another challenging year for America's family farmers.
    Last year, U.S. farmers experienced the lowest wheat prices in 8 
years; the lowest corn prices in more than a decade; the lowest soybean 
prices in 27 years; the lowest hog prices since the Great Depression; 
and the steepest decline in milk prices in history. Even cranberries, 
which are known in my home State as the Massachusetts mortgage lifter, 
have plunged from $65.90 a barrel in 1996, to $38.80 a barrel in 1998--
down some 37 percent.
    And, to make matters even worse, Mother Nature has added to 
farmers' problems with continuing bad weather in broad areas of the 
country, including hurricanes, tornadoes, and the recent drought that 
plagued virtually the entire East Coast.
    This situation has put USDA and its support programs in the 
spotlight. As you are aware, domestic farm commodity loan and income 
support programs are administered by the Farm Service Agency (FSA) and 
financed through the Commodity Credit Corporation (CCC), a government 
entity for which FSA, as well as certain other agencies, provides 
operating personnel. The CCC is also the source of funding for the 
Conservation Reserve Program (administered by FSA) as well as many of 
the conservation programs administered by the Natural Resources 
Conservation Service (NRCS), and it funds many of the export programs 
administered by the Foreign Agricultural Service (FAS). When called 
upon, CCC also finances various disaster assistance programs authorized 
by Congress. Funds are borrowed by the Corporation from the Treasury to 
finance CCC programs. Commodity support operations, handled primarily 
through loans, payment programs and some limited purchase programs, 
currently include those for wheat, corn, soybeans, minor oilseed crops, 
cotton (upland and extra long staple), rice, tobacco, milk and milk 
products, barley, oats, sorghum, peanuts and sugar.
    Fiscal year 1999 CCC net outlays totaled over $19 billion, and net 
outlays in 2000 are expected to reach an all-time high of $27 billion. 
The historical CCC outlay trend is shown on the following graph:



    When you look at these trends, they are particularly ironic, 
especially given that the thrust of the provisions of the 1996 Farm 
Bill was aimed at distancing government from providing disaster 
assistance. In an effort to address a looming farm crisis, Congress has 
had to provide ad-hoc assistance, time and again.
    But why is the farm economy in crisis? Can you lay all the blame on 
the Federal Agriculture Improvement Act and Reform of 1996? No, in 
large part, the crisis is being fueled by 4 consecutive years of record 
global grain production and weak export demand--both of which are 
beyond the scope of the 1996 Act. U.S. agricultural exports are 
projected to be only $49.5 billion this fiscal year after reaching a 
record high of nearly $60 billion in fiscal year 1996. Large global 
production, the Asian and Russian economic crises, and a strengthening 
dollar, have all contributed to a weakening in our exports.
    The more appropriate question is: Is the 1996 Act doing what farm 
policy should to help deal with the problem and help with the recovery? 
Clearly the answer to that question is no.

       PRESIDENT'S 2001 BUDGET PROPOSALS FOR AMERICAN AGRICULTURE

    Last month, in his State of the Union Address, the President made 
clear his commitment to this country's farmers. The President said ``We 
must work together to strengthen the farm safety net, invest in land 
conservation, and create new markets by expanding our program for bio-
based fuels and products.'' This Administration has put forward a set 
of proposals that will address the shortcomings of the 1996 Act 
directly.
    Let me be clear today, the President's proposal reaffirms that 
Government farm policy cannot simply keep lurching from one expensive 
bailout to another. Ad-hoc assistance is expensive; it's inefficient; 
it's hard on our farmers; its hard on our over-worked USDA staff; and 
it's hard on the taxpayers. It is time to move beyond annual ``damage 
control,'' and to a stable policy that helps farmers prepare for 
disasters and price downturns, invest in long-term market development 
and export promotion programs, and gives them the tools they need to 
thrive--not just survive.
    This set of proposals will focus the spotlight on our mission 
area--Farm and Foreign Agricultural Services. The Farm Service Agency, 
Risk Management Agency, and the Foreign Agricultural Service will have 
the lead in administering the President's package.
    When I've spoken with various farm groups, I've likened this 
proposal to the solid kitchen chairs that my family used to have at the 
farm house, with four firm legs and a well-built back.
  --The first leg is a counter-cyclical income support for the basic 
        program crops--which we estimate at approximately $6 billion 
        over 3 years.
  --The second is the reformed and broader risk management/crop 
        insurance package.
  --The third leg is a creative conservation package ($4.8 billion 
        through 2005) that expands CRP to 40 million acres, provides 
        for a conservation security reserve investment, and provides 
        for farmland protection cost sharing.
  --Leg four is an expanded trade initiative that aggressively uses all 
        of our export programs and in addition requests authority to 
        use any unobligated Export Enhancement Program (EEP) funding 
        for long-term investment in trade promotion as well as for food 
        aid.
  --Equally important is the back of the chair, which supports the 
        farmer when the farmer leans back on the back legs of the 
        chair. This chair back includes proposals for stabilizing the 
        crucial USDA workforce that has become over-stressed the past 3 
        years, farm loan programs, a bio-fuels initiative, the freezing 
        of loan rates, and an extension of the dairy program.
    The Administration package has a number of benefits: it is 
flexible; it benefits farmers in all regions (of vital importance 
following 1999 eastern droughts and floods and California freezes); it 
is targeted; it continues to provide planting flexibility; it has 
conservation initiatives benefitting all farmers in all regions; it is 
on budget and funded within the President's balanced budget that 
preserves the Social Security surplus; it is consistent with our trade 
commitments; and most importantly, it provides some stability--and a 
consistent framework--for a new farm bill in 2002.

Counter-Cyclical Income Support

    It seems like a pretty common-sense notion--that those who are 
struggling the most deserve the most help. But the AMTA formula that 
we've been living by for nearly 4 years, with its fixed payments, has 
no such logic. Thanks to AMTA, recent supplementary farm payments 
haven't been tied to need, to size, or to current production.
    The Administration proposes supplemental income assistance for crop 
years 2000 and 2001, to eligible producers of wheat, feed grains, rice, 
upland cotton and oilseeds. The payments would be made only if 
projected gross income--including other Government payments--from the 
crop falls below 92 percent of the preceding 5-year average. These 
payments would be crop-specific and would be based on actual production 
rather than some historical base. The proposed program will provide 
payments only to current producers of those crops with low prices and 
income. It is estimated that $600 million in assistance will be 
provided in fiscal year 2000, $2.5 billion in fiscal year 2001 and $2.5 
billion in fiscal year 2002.
    Still, we're not looking to replace AMTA with our plan. We are 
letting the basic principles of the FAIR Act live on through the life 
of the bill. The new income assistance will come on top of--not in 
place of--AMTA payments and other 1996 Farm Bill payments. AMTA 
participants would continue to receive their full payments, and 98 
percent of them would also be eligible for an additional check under 
this proposal. However, we believe this counter-cyclical method of 
income assistance should form the basis for how the next farm bill 
proposal should be structured.

Crop Insurance Reform

    Even with such improvements in our farm programs, we know that we 
will continue to need strong risk management programs. That brings me 
to our efforts to reform our crop insurance programs. Crop insurance is 
and will continue to be USDA's primary means of helping farmers survive 
major production losses. In 1999, American farmers purchased some 1.3 
million crop insurance policies covering 196 million acres. Liability 
coverage rose from just $14 billion in 1994 to more than $30 billion in 
1999, with indemnity payout in 1999 at $2.2 billion.
    Past reform of the crop insurance program was made in the context 
of an agricultural program that no longer exists. Plunging prices, the 
effects of multiple years of crop losses, and under-insured farmers 
have prompted us to develop an aggressive crop insurance reform 
proposal.
    While crop insurance hasn't been the panacea for all our producers' 
problems, there is a certain irony about the crop insurance program: 
When people say the system is broken, what they mean is there isn't 
enough crop insurance coverage.
    Today's crop insurance program was designed to work in tandem with 
our farm programs. We need a program with sturdy underpinnings, solid, 
steady, reliable legs, that can withstand price and weather volatility.
    We need a strengthened crop insurance program, a program that 
provides premium discounts, a strong risk management education effort, 
new product development, assists livestock producers, provides multi-
year loss coverage, and lifts the Non-insured Assistance Program (NAP) 
area trigger. I understand the Senate Agriculture Committee will 
conduct markup on risk management in early March 2000, with the House 
of Representatives having already passed its version on voice vote in 
1999. Some Senators favor a direct payment approach, while others like 
the alternative of enhanced coverage for all producers. Crop insurance 
has become a hot political item. There are high expectations that 
cannot be met by current resources.
    The Administration also proposes to modify the Non-insured 
Assistance Program area-wide trigger requirement, so that producers 
with individual qualifying losses in areas that have been designated 
for natural disasters are able to receive program assistance. This 
change will provide an additional $110 million of assistance in fiscal 
years 2000 and 2001.

Conservation Initiatives

    The Administration believes that any reform initiatives should 
promote conservation. The 2001 President's Budget seeks an additional 
$1.3 billion in budget authority for a Conservation Programs 
Initiative. This is a key component of the Administration's Farm Safety 
Net Proposal to strengthen farm family income while promoting 
environmentally sound land management. Within the $1.3 billion, 
increases are provided for five ongoing CCC-funded conservation 
programs: the Environmental Quality Incentives Program (EQIP); Wetlands 
Reserve Program (WRP); the Conservation Reserve Program (CRP); Farmland 
Protection Program (FPP) and the Wildlife Habitat Incentives Program 
(WHIP). Under current law, an additional $125 million in bonuses will 
also be offered to producers who enroll in CRP through the continuous 
signup.
    For EQIP, part of the President's Clean Water Action Plan, the 
annual authorized funding level would be increased from $200 million to 
$325 million. This program provides financial, technical, and 
educational assistance to farmers and ranchers who wish to implement 
conservation practices for land currently in production.
    Under WRP, which offers technical and financial assistance to 
farmers who wish to restore and protect agricultural wetlands, the 
initiative would remove the current cumulative acreage cap of 975,000 
acres and enroll an additional 210,000 acres in 2001, and an additional 
250,000 acres in each subsequent year.
    The Conservation Reserve Program provides farmers with technical 
and financial assistance in exchange for removing environmentally 
sensitive land from production for a 10-15 year period and implementing 
conservation practices. The CRP currently allows for up to 36.4 million 
acres to be enrolled. The President's Initiative would increase the 
enrollment cap by another 3.6 million acres to 40 million. Bonuses 
totaling up to $100 million in 2000 and up to $125 million each year in 
2001 and 2002 would also be offered to producers who enroll land in CRP 
through continuous signup. These bonuses are expected to encourage 
enrollment of high environmental-value acreage, and are included in the 
CCC baseline. Legislation is also being proposed to provide $75 million 
in additional technical assistance funding for the CRP and WRP for 
2001.
    CRP is USDA's largest environmental program. The purpose of CRP, 
administered by FSA, is to cost-effectively assist farm owners and 
operators in conserving and improving soil, water, air, and wildlife 
resources by converting highly erodible and other environmentally 
sensitive acreage normally devoted to the production of agricultural 
commodities to a long-term resource-conserving cover. CRP participants 
enroll contracts for periods from 10 to 15 years in exchange for annual 
rental payments and cost-share and technical assistance for installing 
approved conservation practices. CRP acreage also contributes to the 
USDA Conservation Buffer Initiative, the Conservation Reserve 
Enhancement Program, and the Administration's Clean Water Action Plan, 
which are estimated to enroll 4.2 million acres through 2002. Also, in 
rules adopted after the 1996 Act, USDA reinstated the eligibility of 
certain cropped wetlands.
    In 1999, a general CRP signup was held (signup 18) from October 26, 
1998, through December 11, 1998. Of the 7.1 million acres offered, a 
total of 5 million acres were approved for enrollment beginning in 
2000. The national average annual rental payment for this acreage is 
estimated to be about $46 per acre. Technical assistance for this 
signup was funded with unobligated appropriated funds and authorized 
CCC funds. Rental payments for signup 18 begin in 2001.
    Another general CRP signup began on January 18, 2000, and continued 
through February 11, 2000. We are in the process of collecting bid data 
from our field offices, and expect to make final enrollment decisions 
and offers in April.
    In 2000, CCC made payments of approximately $1.450 billion for 
rental costs and will make payments of about $124 million for sharing 
the cost of permanent cover on replacement acres. For 2001, the Budget 
projects CCC program costs of approximately $1.690 billion, consisting 
of $1.567 billion for rental payments on previously enrolled and 
extended acres and $123 million for cost-share assistance for permanent 
cover on enrolled acres. Rental payments for 2001 are not affected by 
the 20th signup which just concluded, since rental payments are not due 
until 2002.
    The Initiative proposes a new $600 million Conservation Security 
Program (CSP), which would provide annual payments to farmers and 
ranchers who implement certain conservation practices including 
practices related to such matters as nutrient management, grazing, 
grassed waterways and windbreaks. Payments would be based on the 
comprehensiveness of the farm's conservation plan. Of the $600 million, 
$90 million (15 percent of the program) will be used by the NRCS to 
provide necessary technical assistance to farmers and ranchers.
    Funding provided by the 1996 Farm Bill for both the FPP and the 
WHIP has been exhausted. Under the conservation initiative, the FPP, 
which is also part of the President's Lands Legacy Initiative, would be 
funded at $65 million annually. This program provides matching funds to 
State, local, and Tribal governments to purchase permanent easements 
and thereby protect farmland which may otherwise be threatened by urban 
and suburban sprawl. The initiative also proposes $50 million annually 
for WHIP, which offers cost-share assistance to farmers and landowners 
for habitat restoration and technical assistance.
Successes in Food Aid, and Export Promotion
    The last leg of our chair will be provided by our initiatives in 
food aid and export promotion.
    With domestic supplies high, one can only imagine how much worse 
the situation would be if we had not continued the vigorous use of our 
long-standing food aid programs. With large surpluses and rock-bottom 
prices here at home, we have actively used food aid to move commodities 
out of the U.S. marketplace to needy areas around the world. Under 1999 
food aid programs, including the President's Wheat Initiative, USDA 
programmed nearly 8 million metric tons of U.S. commodities--close to 
five times the previous year's shipments and the largest tonnage in 
many, many years.
    American commodities went to around 50 countries last year--from 
the unprecedented assistance package for Russia to food relief for 
Kosovo refugees, famine victims in North Korea, and hurricane victims 
in Central America and the Caribbean. Under the authority of Section 
416(b) of the Agricultural Act of 1949, as amended, CCC donated nearly 
$800 million worth of commodities, including 5.2 million tons of wheat 
and wheat products, 274,000 tons of corn, and about 23,000 tons of dry 
milk. These U.S. surpluses were taken off the market and put to good 
use, helping to relieve hunger and suffering abroad.
    Our export credit guarantee programs facilitated sales of more than 
$3 billion in U.S. agricultural products. Our GSM-102 program helped 
U.S. exporters overcome disadvantages in Turkey, and make record sales 
of over $1.2 billion in Mexico. The program helped U.S. oilseed 
exporters sell more than $19 million worth of oilseeds to Uzbekistan, 
traditionally a buyer of South American oilseeds. Our GSM-103 program 
helped U.S. exporters sell over $14 million worth of wheat to Jordan. 
The Supplier Credit Guarantee Program was used for the first time by 
importers in the Baltic Region, Georgia, and Turkey, resulting in sales 
of nearly $1 million worth of meat products to buyers in the Baltic 
Region, and nearly $3 million worth of poultry products and other 
products to buyers in Georgia and Turkey.
    With the aid of the Dairy Export Incentive Program (DEIP), U.S. 
exporters sold more than 136,000 tons of dairy products valued at $337 
million. USDA awarded more than $145 million in bonuses to help U.S. 
dairy exporters meet prevailing world prices and develop foreign 
markets.
    The Export Enhancement Program was used only sparingly in 1999 
because of market conditions, with bonuses of about $1.4 million 
awarded for sales of more than 2,000 tons of frozen poultry.
    We continue to stress the importance of market development. In 
1999, we allocated $90 million to 65 U.S. trade organizations, State 
regional groups, and cooperatives for export promotion activities under 
the Market Access Program (MAP), and approved allocations of $27.5 
million for 26 trade organizations under the Foreign Market Development 
(FMD) program.
    And, through the Cochran Fellowship Program, USDA introduced nearly 
800 participants from 70 emerging markets to U.S. products and policies 
in 1999, and plans to meet and exceed that record this year.

                        TRADE POLICY INITIATIVES

    On the trade policy front, USDA worked successfully to open, 
expand, and maintain markets for U.S. agriculture. For example, last 
April, the United States and China signed the Agreement on U.S.-China 
Agricultural Cooperation, an unprecedented step in U.S.-China 
agricultural trade relations. With this agreement, China finally 
removes the longstanding bans on exports of U.S. wheat, citrus, and 
meat and poultry to China, and calls for China's commitment to the 
application of sound science, a key principle of the Uruguay Round 
Sanitary and Phytosanitary (SPS) Agreement. The agreement confirms a 
U.S.-China agricultural partnership in achieving some key objectives: 
resolving trade barriers, increasing technical cooperation and 
scientific exchanges and further developing our agricultural sectors.
    In addition, we negotiated an agreement with China regarding its 
membership in the World Trade Organization (WTO). Implementing that 
agreement could add an estimated $1.6 billion annually to U.S. exports 
of grains, oilseeds and products, and cotton by 2005, and could grow to 
nearly $2 billion as the Chinese reduce their tariffs on other 
products. These gains will mean higher prices for farmers and, 
ultimately, higher U.S. farm income. Of course, the first step toward 
realizing these gains would be Congressional approval of permanent 
Normal Trade Relationship status for China.
    USDA continues to monitor aggressively foreign countries' 
compliance with Uruguay Round Agreement commitments. For example, a WTO 
dispute settlement panel is examining Korea's import and domestic 
support programs for beef. As a result of Korea's failure to meet 
minimum import quotas under its Uruguay Round commitment in 1997 and 
1998, it became clear that numerous market access barriers exist, and 
threaten to inhibit full market liberalization. We will continue to 
insist on compliance in this and all cases where access to U.S. 
agriculture is at stake.
    For example, at 1999 meetings of the Committee on Agriculture, USDA 
analysts reviewed and raised questions on over 250 WTO notifications. 
The value of trade addressed through U.S. vigilance of commitments is 
over $500 million. This was achieved through questioning member's 
domestic grain purchasing policies that appeared to violate export 
subsidy commitments; challenging the discriminatory issuance of import 
licenses for dairy products, pork and poultry; questioning the WTO-
inconsistent execution of a preferential trade arrangement that harmed 
U.S. apple exports; and questioning low tariff rate quota (TRQ) 
application for a range of commodities. These efforts contributed to 
several members halting implementation of or modifying WTO inconsistent 
practices.
    Exports have played, and will continue to play, a key role in the 
health of our farm economy, and we intend to step up our efforts in the 
near future, ensuring that U.S. agriculture is competitive around the 
globe.
``The Chair Back''
    Mr. Chairman, meeting sharply growing workload demands within 
existing resources is having a profound affect on the working 
environment in my mission area. FSA is implementing over 20 new or 
additional emergency related programs that were enacted by Congress 
this year--more than twice the number of such programs it had to 
deliver in 1999. Unbudgeted costs associated with the Consent Decree--
which came out of the lawsuit filed by African-American farmers against 
USDA--have also added to FSA's administrative expenses and workload in 
2000. Similarly, the Risk Management Agency has been undertaking new 
initiatives to strengthen our risk management services for producers.
    In the case of the Foreign Agricultural Service, its workload has 
increased dramatically as a result of record levels of food assistance 
we are providing. The Agency also is deeply immersed in a number of 
critical trade policy matters, including the accession of China to the 
WTO, the new round of multilateral trade negotiations, as well as trade 
issues related to biotechnology and food safety.
    I point out these workload concerns in order to stress the 
importance of working with you and the committee to ensure that 
adequate resources are made available to these agencies. It is vitally 
important that the work of the FFAS mission area, which is critical to 
the future of American agriculture, can continue.
    I would like to review with you some of our projected outlays, so 
that you can fully appreciate the magnitude of the workload.

                          CCC PROGRAM OUTLAYS

    The current 2001 budget estimates largely reflect estimated supply 
and demand conditions for the 2000 crop based on November data. 
Commodity Credit Corporation net expenditures for 2001, including 
proposed ``Safety Net'' legislation outlays of $3.6 billion, are 
estimated at $19.0 billion, down $8.7 billion from a record high 
expenditure level of $27.7 billion--including $700 million in proposed 
legislation outlays--in 2000. The previous record CCC expenditure level 
occurred in 1986, when net outlays were $25.8 billion.
    The net decrease of $8.7 billion in projected 2001 CCC expenditures 
reflects decreases which include the ending of the $5.8 billion of 2000 
market loss assistance payments, the ending of $1.3 billion in 2000 
crop loss assistance, the ending in $210 million of 2000 emergency 
livestock assistance, a decrease in production flexibility payments of 
$992 million, a decrease in commodity net lending of $595 million, a 
projected decrease in of $848 million in loan deficiency payments from 
the huge levels of 2000, a decrease of $130 million in Section 416(b) 
ocean transportation expenses, a decrease in other direct producer 
payments and expenditures of $369 million.

Other Initiatives

                FUND COOPERATIVE DEVELOPMENT INITIATIVES

    Total funding proposed for cooperative development for new 
livestock and other processing cooperatives includes $80 million in 
2001 and $50 million in 2002. These funds would be used to provide 
equity capital for new livestock and other cooperatives to help 
finance, for example, the construction of cooperative-owned, value-
added, meat processing facilities that would help counter concentration 
and retain income in rural areas.

                 EXTEND THE DAIRY PRICE SUPPORT PROGRAM

    The Administration also proposes the extension of the dairy price 
support program. Current appropriations language extended the dairy 
price support to December 1, 2000; however, this proposal further 
extends the dairy price support program to December 2002. Under this 
proposal, $150 million is estimated to be needed to support dairy 
prices in each of fiscal years 2001 and 2002.

                   CCC AUTOMATED DATA PROCESSING CAP

    In April 1996, a cap of $275 million for CCC-funded automated data 
processing (ADP) obligations for 1997 through 2002 was mandated by the 
1996 Act. Subsequently, the Agricultural Research, Extension, and 
Education Reform Act of 1998 reduced the CCC ADP cap to $193 million. 
Finally, the Fiscal Year 1999 Agriculture Appropriations Act (Public 
Law 105-277) again reduced the CCC ADP cap to $188 million. As last 
year, legislation is again proposed to provide annual funding of $35 
million in 2001 and 2002 for Farm Service Agency computer systems to 
ensure essential system availability and continued ADP services in 
headquarters and field offices at bare minimum levels. This funding is 
critical because such expenditures were formerly made using the CCC's 
general funds subject to the mandated ADP limit. The funds available 
under that limit were depleted in early fiscal year 2000. Without 
further new funding, Mr. Chairman, it will be virtually impossible for 
FSA to adequately respond to the thrust of Service Center modernization 
or to ensure the continuity of uninterrupted program delivery.

                   REIMBURSEMENT FOR REALIZED LOSSES

    Mr. Chairman, the 1999 appropriation for reimbursement of CCC net 
realized losses was $8.4 billion. This appropriation reflected 
reimbursement for net realized losses which covered the actual amount 
of unreimbursed losses incurred 2 years earlier.
    The 2000 appropriation for reimbursement of net realized losses was 
$30.037 billion, an increase of $21.637 billion from the 1999 
appropriation of $8.4 billion. The appropriation reimbursed CCC for the 
remaining unreimbursed net realized losses for 1997 and 1998, and all 
of 1999 actual losses. The appropriation to reimburse the Corporation 
for net realized losses enacted by Congress for 2000 was a current, 
indefinite appropriation. This provided CCC with the flexibility to 
request funds as needed from Treasury, up to actual losses recorded for 
the most recent actual year. Without this current, indefinite 
appropriation, CCC would have been unable to fully replenish its 
borrowing authority at the beginning of 2000, and timely assistance to 
farmers would have been jeopardized due to insufficient borrowing 
authority. Mr. Chairman, we appreciate your help in providing that 
critical funding authority.
    The 2001 budget reflects a request to once again enact 
appropriation language to eliminate the requirement that only allows 
reimbursement for actual realized losses recorded in CCC books as of 
the end of the preceding year. Our request is that you provide a 
current, indefinite appropriation to reimburse the Corporation for all 
actual net realized losses, even if incurred in the current fiscal 
year.

                           FARM LOAN PROGRAMS

    The loan programs funded through the Agricultural Credit Insurance 
Fund (ACIF) provide a variety of loans and loan guarantees to farm 
families who would otherwise be unable to obtain credit. In times of 
economic stress, access to adequate farm credit is often the only way 
for some farmers to continue their operations.
    As a result of the continuing financial hardship in much of the 
agricultural sector, the demand for Farm Service Agency loans and loan 
guarantees remains very high in 2000. However, the 2000 subsidy funding 
provides loan levels totaling a record $5.8 billion that are expected 
to meet the strong demand including $2.5 billion through emergency 
funds. The 2001 budget likewise responds to an anticipated high demand 
by providing a total program level of about $4.6 billion in loans and 
guarantees, an increase of $1.6 billion excluding emergency funds The 
largest segment of FSA lending is carried out in partnership with 
private lenders through the guarantee programs, and this budget 
continues strong support for guaranteed loans, with a proposed program 
level of nearly $3.5 billion.
    For direct farm ownership loans we are requesting a loan level of 
$128 million, a decrease of $22 million from the 2000 appropriated 
level (including supplemental funding). The proposed program level 
would enable FSA to extend credit to about 1,250 small and beginning 
farmers to purchase or maintain a family farm, about 500 fewer than 
estimated for the current fiscal year. The agency has established 
annual county-by-county participation targets for members of socially 
disadvantaged groups, based on demographic data. Also, 70 percent of 
direct farm ownership loans are reserved for beginning farmers, and 
about 35 percent are made at a reduced interest rate to limited 
resource borrowers, who may also be beginning farmers. For direct farm 
operating loans we are requesting a program level of $700 million, $200 
million above the 2000 level, excluding supplemental funding, to 
provide over 14,400 loans to family farmers.
    For guaranteed farm ownership loans in 2001, we are requesting a 
loan level of $1 billion, the same as 2000. This program level will 
give over 4,500 farmers the opportunity to either acquire their own 
farm or to save an existing one. For guaranteed farm operating loans we 
propose a fiscal year 2001 program level of nearly $2.5 billion, 
compared to $1.8 billion in 2000 excluding emergency loans. This level 
will enable approximately 16,600 producers to finance their farming 
operations.
    The Budget also proposes $150 million in emergency disaster loans 
in fiscal year 2001, sufficient to provide approximately 1,800 low-
interest loans to producers whose farming operations have been damaged 
by natural disasters. We are proposing to close the ``eligibility gap'' 
between USDA and SBA emergency loans, so that in times of natural 
disaster, every sized farm and ag businesses have a place to turn to 
for emergency assistance. These new loans would be made at higher 
interest rates than our currently authorized borrowers. In addition, 
our budget proposes just over $2 million for Indian tribe land 
acquisition loans and $100 million for boll weevil eradication loans.

                         STATE MEDIATION GRANTS

    Our request of $4 million for State Mediation Grants would assist 
States in developing programs to deal with disputes involving a variety 
of agricultural issues--distressed farm loans, wetland determinations, 
conservation compliance, pesticides, and others. Operated primarily by 
State universities or departments of agriculture, the program provides 
neutral mediators to assist producers, primarily small farmers, in 
resolving disputes before they culminate in litigation or bankruptcy. 
Mediation, at about $500 per case, offers significant savings over 
national level administrative hearings, which cost about $3,000 to 
$4,000 per case in direct costs alone. Authority for State Mediation 
Grants expires at the end of 2000. A legislative proposal is being 
submitted to reauthorize the program through 2005.

                            SERVICE CENTERS

    Another important part of our effort to deliver services to rural 
customers is the initiative to streamline and modernize the field 
offices and create Service Centers. While we have physically 
established these Centers, we still have much work to do to make the 
promise of better service a reality. A key ingredient in providing well 
coordinated, quality assistance at USDA Service Centers is the 
replacement of separate agency, aging information technology systems 
with the common computing environment along with reengineered business 
processes. The USDA Budget proposes $75 million for this effort in 
appropriated funds under the Office of the Chief Information Officer. 
Rural Development will provide additional funding, as necessary, to 
support the modernization plan and service center initiative. 
Additionally, an important part of the efforts to modernize field 
operations is the streamlining of the administrative services for the 
Farm Service Agency, Rural Development, and Natural Resources 
Conservation Service. By conserving resources in this arena, each 
agency will be in a better position to provide greater program support. 
We would like to work with you to see that these administrative 
services can be consolidated.

                               CONCLUSION

    Over the last 60 years, agriculture has been dramatically 
transformed, and yet farm policy has remained relatively stagnant. 
People generally do not and cannot farm the way they did in the 1930s 
and 40s, so government's role in helping them has to change 
accordingly.
    The days when every farmer could survive by simply bringing 
commodities to market are over. That's why a new farm policy must 
change and improve the ways the government provides assistance, and 
highlight new and different ways for farmers to make money and capture 
a greater share of the consumer dollar. That means promoting future 
access to food systems through improved marketing, strong farm 
cooperatives, reinforced direct marketing schemes, innovative use of 
the Internet, and farmers markets. It means encouraging the use of 
crops for energy and bio-based fuels, encouraging the production of 
value-added, consumer-ready goods, organics, aquaculture and so on.
    Of course, traditional row crop farming will continue to be an 
important part of the American agricultural portfolio. And the 
government will continue to support the people who grow traditional 
crops. But a new century calls for a more holistic approach based on 
the understanding that, even if there are fewer farmers, there are more 
kinds of farmers living in more places than ever before.
    In closing, I am reminded of an event at which Secretary Glickman 
was talking about helping farmers through tough times--helping them to 
survive, which is a common theme these days. All of a sudden a farmer 
in the front row stood up and shouted, ``Hey, I don't want to survive! 
I want to thrive!'' We are doing all we can to help American family 
farmers reach that goal. As we work to pull our farm economy up from 
these tough times, I encourage your input and look forward to an 
ongoing dialogue with you.
    Thank you.

                                STAFFING

    Senator Cochran. Thank you very much. I think I will ask a 
couple of questions right away on the staffing issues that you 
raised. You have highlighted the workload demands here with 
this last chart in the Farm Service Agency, administering 
programs, and also the Foreign Agricultural Service, 
administering food aid and trade policy programs. Does the 
Administration's budget request provide adequate resources to 
deal with these requirements that you have outlined?
    Mr. Schumacher. I am going to ask Keith Kelly, with your 
permission, to join me on this issue, and Dennis Kaplan to help 
as well. With your help last year we basically have been able 
to maintain our staffing, and the request this year maintains 
the permanent staffing levels. Where we are going to get some 
problem is on temporary employees. And I mentioned the issue 
that was unexpected, which is the much larger than expected 
budgetary requirements for the consent agreement.
    Keith, do you want to expand a little bit on some of the 
concerns you have on staffing?

                           PREPARED STATEMENT

    Mr. Kelly. Yes, thank you, Senator. With regard to your 
question on staffing in the 2001 budget, the budget proposal 
before you right now would provide for a reduction of actually 
around 622 temporary staff years but leave the permanent 
Federal and non-Federal county staffing at the 2000 level. We 
are committed to carrying out a timely program. And if service 
delays do occur, then we will have to work with you to 
readdress this issue. In the past, you have been helpful to us 
in providing some relief, such as this year's $56 million 
reimbursement from CCC for program delivery. We put that mostly 
into the temporary staffing level, to handle the very, very 
heavy workload related to this agricultural crisis, to get 
those programs out the door.
    [The statement follows:]

                   PREPARED STATEMENT OF KEITH KELLY

    Mr. Chairman and Members of the Subcommittee, I am pleased to 
present the fiscal year 2001 budget for the Farm Service Agency (FSA). 
This budget focuses on a response to the continuing economic hardships 
facing much of agriculture. As you know, fiscal year 2000 is setting 
new records in two major areas: Commodity Credit Corporation (CCC) net 
outlays are expected to reach an all-time high of $27.7 billion, and 
farm loan programs are providing loans and loan guarantees amounting to 
$5.8 billion. While this assistance is enabling most producers to keep 
their farming operations afloat, depressed commodity prices are 
forecast to continue into fiscal year 2001. In this context, the budget 
for fiscal year 2001 emphasizes timely delivery of the programs 
currently in place to assist producers through difficult times, and it 
offers a number of proposals to strengthen the safety net for those in 
the farm sector who are not sharing in the overall prosperity being 
enjoyed across the nation.

                      COMMODITY CREDIT CORPORATION

    Domestic farm commodity price and income support programs are 
administered by the Farm Service Agency and financed through the CCC, a 
government entity for which FSA provides operating personnel. The CCC 
is also the source of funding for the Conservation Reserve Program 
administered by FSA as well as many of the conservation programs 
administered by the Natural Resources Conservation Service (NRCS), and 
it funds many of the export programs administered by the Foreign 
Agricultural Service (FAS). When called upon, CCC also finances various 
disaster assistance programs authorized by Congress. The Corporation 
borrows funds from the Treasury to finance CCC programs. Commodity 
support operations, handled primarily through loans, payment programs 
and some limited purchase programs, currently include those for wheat, 
corn, soybeans, minor oilseed crops, cotton (upland and extra long 
staple), rice, tobacco, milk and milk products, barley, oats, sorghum, 
peanuts and sugar.

Program Outlays

    The current 2001 budget estimates largely reflect estimated supply 
and demand conditions for the 2000 crop based on November data. 
Commodity Credit Corporation net expenditures for fiscal year 2001, 
including proposed ``Safety Net'' legislation outlays of $3.6 billion, 
are estimated at $19.0 billion, down $8.7 billion from a record high 
expenditure level of $27.7 billion--including $700 million in proposed 
legislation outlays--in fiscal year 2000. The previous record CCC 
expenditure level occurred in fiscal year 1986, when net outlays were 
$25.8 billion.
    The net decrease of $8.7 billion in projected fiscal year 2001 CCC 
expenditures reflects the expiration of $5.8 billion of 2000 marketing 
loss assistance payments, the expiration of $1.3 billion of 2000 crop 
loss assistance, the expiration of $210 million of 2000 emergency 
livestock assistance, a decrease in production flexibility payments of 
$992 million, a decrease in commodity net lending of $595 million, a 
projected decrease of $848 million in loan deficiency payments from the 
huge levels of fiscal year 2000, a decrease of $130 million in Section 
416 ocean transportation, and a decrease in other direct producer 
payments and expenditures of $369 million.
    The following ``Safety Net'' legislative proposals are included in 
the budget for commodity, conservation, and other CCC-funded programs.
CCC Program Initiatives
    Supplemental income assistance is proposed for crop year 2000 and 
2001 to eligible producers of wheat, feed grains, rice, upland cotton 
and oilseeds. The payments would be made only if projected gross 
income, including other Government payments, from the crop falls below 
92 percent of the preceding 5-year average. The supplementary payments 
would be crop specific and would be based on actual production rather 
than some historical base. The proposed program will provide payments 
only to current producers of those crops with low prices and income. It 
is estimated that $600 million in assistance will be provided in fiscal 
year 2000, $2.5 billion in fiscal year 2001 and $2.5 billion in fiscal 
year 2002.
    Total funding proposed for cooperative development for new 
livestock and other processing cooperatives includes $80 million in 
fiscal year 2001 and $50 million in fiscal year 2002. The fund would be 
used to provide equity capital for new cooperatives and help finance 
the construction of cooperative-owned, value-added, processing 
facilities needed to counter concentration and retain income in rural 
areas. The fund would provide financing and obtain an equity interest 
in new processing cooperatives.
    The initiatives propose to modify the Non-insured Assistance 
Program areawide trigger requirement so that producers with individual 
qualifying losses in areas that have been designated as natural 
disaster areas are able to receive program assistance. This change will 
provide an additional $110 million of assistance in both fiscal year 
2000 and 2001.
    Extension of the dairy price support program is proposed. Current 
appropriations language extended the dairy price support to January 1, 
2001; however, this proposal further extends the dairy price support 
program to January 2003. Under this proposal, $150 million is estimated 
to be spent to support dairy prices for fiscal years 2001 and 2002.
    Legislation will also be proposed to enable unused balances in the 
Export Enhancement Program during fiscal year 2000 to be transferred to 
other USDA export promotion and food aid programs.
    In April 1996, a cap of $275 million for CCC-funded automated data 
processing (ADP) obligations for fiscal year 1997 through 2002 was 
established by the 1996 Act.
    Subsequently, the Agricultural Research, Extension, and Education 
Reform Act of 1998 reduced the CCC ADP cap to $193 million. Finally, 
the Fiscal Year 1999 Appropriations Act (Public Law 105-277) again 
reduced the CCC ADP cap to $188 million. As it was last year, 
legislation is proposed to provide annual funding of $35 million in 
fiscal year 2001 and 2002 for Farm Service Agency computer systems to 
ensure essential system availability and continued ADP services in 
headquarters and field offices at bare minimum levels. This funding is 
critical because such expenditures were formerly funded under the 
legislated CCC ADP expenditure cap, and the new cap was depleted in 
early fiscal year 2000. Without further funding, Mr. Chairman, it will 
be virtually impossible for FSA to adequately respond to the thrust of 
Service Center modernization or to ensure uninterrupted program 
delivery.

Conservation Programs Initiative

    The fiscal year 2001 President's Budget seeks an additional $1.1 
billion in budget authority for a Conservation Programs Initiative. 
This is a key component of the Administration's Farm Safety Net 
Proposal to strengthen farm family income while promoting 
environmentally sound land management. Within the $1.1 billion, 
increases are provided for five ongoing CCC-funded conservation 
programs: the Environmental Quality Incentives Program (EQIP), the 
Wetlands Reserve Program (WRP), the Conservation Reserve Program (CRP), 
the Farmland Protection Program (FFP), and the Wildlife Habitat 
Incentives Program (WHIP). Also, under current law, an additional $125 
million in bonuses will be offered to producers who enroll in CRP 
through the continuous signup. The Vice President announced these 
proposed conservation program initiatives on January 7. They include 
the following:
    For EQIP, part of the President's Clean Water Action Plan, the 
annual authorized funding level would be increased from $200 million to 
$325 million. This program provides financial, technical and 
educational assistance to farmers and ranchers who wish to implement 
conservation practices for land currently in production.
    Under WRP, which offers technical and financial assistance to 
farmers who wish to restore and protect agricultural wetlands, the 
Initiative would remove the current cumulative acreage cap of 975,000 
acres, under which only 40,000 acres remain, and provide for the 
enrollment of an additional 210,000 acres in fiscal year 2001 and an 
additional 250,000 acres in each subsequent year.
    Funding provided by the 1996 Farm Bill for both FPP and WHIP has 
been exhausted. Under the Conservation Initiative, the FPP, which is 
also part of the President's Lands Legacy Initiative, would be funded 
at $65 million annually. This program provides matching funds to State, 
local, and Tribal governments to purchase permanent easements and 
thereby protect farmland which may otherwise be threatened by urban and 
suburban sprawl. The Initiative also proposes $50 million annually for 
WHIP, which offers cost-share assistance to farmers and landowners for 
habitat restoration and technical assistance.
    The CRP provides farmers with technical and financial assistance in 
exchange for removing environmentally sensitive land from production 
for a 10- to 15-year period and implementing conservation practices. 
The CRP currently allows for up to 36.4 million acres to be enrolled. 
The President's Initiative would increase the enrollment cap by another 
3.6 million acres to 40 million. Bonuses totaling up to $100 million in 
fiscal year 2000 and up to $125 million each year in fiscal year 2001 
and fiscal year 2002 would also be offered to producers who enroll land 
in CRP through continuous signup. These bonuses are expected to 
encourage enrollment of high environmental-value acreage, and are 
included in the CCC baseline. Legislation is also being proposed to 
provide CRP and WRP technical assistance of an additional $75 million 
for fiscal year 2001.
    The Initiative proposes a new $600 million Conservation Security 
Program (CSP), which would provide annual payments to farmers and 
ranchers who implement such conservation practices as nutrient 
management, grazing, grassed waterways and windbreaks. Of the $600 
million, $90 million (15 percent of the program) will be used by the 
NRCS to provide necessary technical assistance to farmers and ranchers.
CCC Outlays
    Fiscal year 1999 net CCC outlays totaled over $19 billion, and 
outlays in fiscal year 2000 are expected to reach an all-time high of 
$27 billion. The historical CCC outlay trend is shown on the following 
graph. 



Emergency Assistance Outlays

    The 1999 appropriations bill provided about $5.8 billion in budget 
authority to support farmers and rural communities with emergency 
assistance. The Fiscal Year 2000 Agriculture Appropriations Act (Public 
Law 106-78) and the Consolidated Appropriations Act (Public Law 106-
113), authorized emergency disaster and market loss assistance to 
producers of almost $9.0 billion in budget authority using several 
programs.

Reimbursement for Realized Losses

    Mr. Chairman, the fiscal year 1999 appropriation for reimbursement 
of CCC net realized losses was $8.4 billion. This appropriation 
reflected reimbursement for net realized losses which covered the 
actual amount of unreimbursed losses incurred two years earlier.
    The fiscal year 2000 appropriation for reimbursement of net 
realized losses was $30.037 billion, an increase of $21.637 billion 
from the fiscal year 1999 appropriation of $8.4 billion. The 
appropriation reimbursed CCC for the remaining unreimbursed net 
realized losses for fiscal years 1997 and 1998, and all of 1999 actual 
losses. The appropriation to reimburse the Corporation for net realized 
losses enacted by Congress for fiscal year 2000 was a current, 
indefinite appropriation. This provided CCC with the flexibility to 
request funds as needed from Treasury, up to actual losses recorded for 
the most recent actual year. Without this current, indefinite 
appropriation, CCC would have been unable to fully replenish its 
borrowing authority at the beginning of fiscal year 2000, and timely 
assistance to farmers would have been jeopardized due to insufficient 
borrowing authority. Mr. Chairman, we appreciate your help in providing 
that critical funding authority.
    The 2001 budget reflects a request to again revise the current 
appropriation language to eliminate the requirement that only allows 
reimbursement for actual realized losses recorded in CCC books as of 
the end of the preceding year. Our request provides a current, 
indefinite appropriation to reimburse the Corporation for all actual 
net realized losses, even if incurred in the current fiscal year.

Conservation Reserve Program

    CRP is USDA's largest conservation/environmental program. The 
purpose of CRP, administered by FSA, is to cost-effectively assist farm 
owners and operators in conserving and improving soil, water, air, and 
wildlife resources by converting highly erodible and other 
environmentally sensitive acreage normally devoted to the production of 
agricultural commodities to a long-term resource-conserving cover. CRP 
participants enroll contracts for periods from 10 to 15 years in 
exchange for annual rental payments and cost-share and technical 
assistance for installing approved conservation practices. CRP acreage 
also contributes to the USDA Conservation Buffer Initiative and the 
Conservation Reserve Enhancement Program, which are part of the 
Administration's Clean Water Action Plan and are estimated to enroll 
4.2 million acres through 2002. Also, in rules adopted after the 1996 
Act, USDA reinstated the eligibility of certain cropped wetlands.
    In fiscal year 1999, a general CRP signup (signup 18) was held from 
October 26 through December 11, 1998. Of the 7.1 million acres offered, 
a total of 5 million acres was approved for enrollment beginning in 
fiscal year 2000. The national average annual rental payment for this 
acreage is estimated to be about $46 per acre. Technical assistance for 
this signup was funded with unobligated appropriated funds and 
authorized CCC funds. Rental payments for signup 18 begin in fiscal 
year 2001.
    Another general CRP signup was held January 18 through February 11, 
2000. We are in the process of collecting bid data from our field 
offices and expect to make final enrollment decisions and offers in 
April.
    In fiscal year 2000, CCC made payments of approximately $1.450 
billion for rental costs and will make payments of about $124 million 
for sharing the cost of permanent cover on replacement acres. For 
fiscal year 2001, the Budget projects CCC program costs of 
approximately $1.690 billion, consisting of $1.567 billion for rental 
payments on previously enrolled and extended acres and $123 million for 
cost-share assistance for permanent cover on enrolled acres. Rental 
payments for fiscal year 2001 are not affected by the 20th signup which 
just concluded, since rental payments are not due until fiscal year 
2002.

                           FARM LOAN PROGRAMS

    The loan programs funded through the Agricultural Credit Insurance 
Fund (ACIF) provide a variety of loans and loan guarantees to farm 
families who would otherwise be unable to obtain credit. In times of 
economic stress, access to adequate farm credit is often the only way 
for some farmers to continue their operations.
    As a result of the continuing financial hardship in much of the 
agricultural sector, the demand for FSA loans and loan guarantees 
remains very high in fiscal year 2000. However, the record $5.6 billion 
loan level that Congress provided for fiscal year 2000 is expected to 
meet the strong demand. The 2001 budget likewise responds to an 
anticipated high demand by providing a total program level of about 
$4.6 billion in loans and guarantees, an increase of $1.5 billion, 
excluding emergency funds. The largest segment of FSA lending is 
carried out in partnership with private lenders through the guarantee 
programs, and this budget continues strong support for guaranteed 
loans, with a proposed program level of nearly $3.5 billion.
    For direct farm ownership loans we are requesting a loan level of 
$128 million, the same as the fiscal year 2000 appropriated level, 
excluding supplemental funding. The proposed program level would enable 
FSA to extend credit to about 1,250 small and beginning farmers to 
purchase or maintain a family farm, about 500 fewer than estimated for 
the current fiscal year. The agency has established annual county-by-
county participation targets for members of socially disadvantaged 
groups, based on demographic data. Also, 70 percent of direct farm 
ownership loans are reserved for beginning farmers, and about 35 
percent are made at a reduced interest rate to limited resource 
borrowers, who may also be beginning farmers. For direct farm operating 
loans we are requesting a program level of $700 million, $200 million 
above the 2000 level excluding supplemental funding, to provide over 
14,400 loans to family farmers.
    For guaranteed farm ownership loans in fiscal year 2001, we are 
requesting a loan level of $1 billion, the same as 2000. This program 
level will give over 4,500 farmers the opportunity to either acquire 
their own farm or to save an existing one. For guaranteed farm 
operating loans we propose a fiscal year 2001 program level of nearly 
$2.5 billion, compared to $2.9 billion in 2000. This level will enable 
approximately 16,600 producers to finance their farming operations.
    The Budget also proposes $150 million in emergency disaster loans 
in fiscal year 2001, sufficient to provide approximately 1,800 low-
interest loans to producers whose farming operations have been damaged 
by natural disasters. We are proposing to close the eligibility gap 
between USDA and Small Business Administration emergency loans so that 
in times of natural disaster every size farm and ag business has a 
place to turn for emergency assistance. In addition, our budget 
proposes just over $2 million for Indian tribe land acquisition loans 
and $100 million for boll weevil eradication loans.

                      OTHER APPROPRIATED PROGRAMS

State Mediation Grants

    State Mediation Grants assist States in developing programs to deal 
with disputes involving a variety of agricultural issues--distressed 
farm loans, wetland determinations, conservation compliance, 
pesticides, and others. Operated primarily by State universities or 
departments of agriculture, the program provides neutral mediators to 
assist producers, primarily small farmers, in resolving disputes before 
they culminate in litigation or bankruptcy. Mediation, at about $500 
per case, offers significant savings over national level administrative 
hearings, which cost about $3,000 to $4,000 per case in direct costs 
alone.
    Participating States certify their programs with FSA annually. In 
fiscal year 2000, 23 certified States have received grants.
    The Budget requests $4 million, an increase of $1 million over 
fiscal year 2000, to help participating States expand the range of 
issues they are able to mediate and to meet the rising demand expected 
as a result of the slump in the farm economy. This year's record volume 
of farm loan activity, particularly in the context of continuing 
economic stress for producers, can be expected to generate an increased 
number of conflicts needing mediation.
    Authority for State Mediation Grants expires at the end of fiscal 
year 2000. A legislative proposal is being submitted to reauthorize the 
program through fiscal year 2005.

Emergency Conservation Program

    The President's Budget requests no Emergency Conservation Program 
(ECP) funding for fiscal year 2001. Although no new funding was 
provided in the Fiscal Year 2000 Agriculture Appropriations Act, the 
Fiscal Year 2000 Consolidated Appropriations Act provided supplemental 
funding of $50 million. With these funds as well as carryover 
unallocated balances remaining from fiscal year 1999 and reallocation 
of unused portions of prior allocations, ECP has allocated about $58.6 
million to States so far in fiscal year 2000. All funding is likely to 
be allocated by the end of the fiscal year.

Dairy Indemnity Program

    The Dairy Indemnity Program compensates dairy farmers and 
manufacturers who, through no fault of their own, suffer income losses 
on milk or milk products removed from commercial markets due to 
residues of certain chemicals or other toxic substances. Payees are 
required to reimburse the Government if they recover their losses 
through other sources such as litigation. The fiscal year 2001 
appropriation request of $450,000 would cover a higher than normal but 
not catastrophic level of claims.

                         ADMINISTRATIVE SUPPORT

    The costs of administering all FSA programs are funded by a 
consolidated Salaries and Expenses (S&E) account. The account is 
comprised of direct appropriation, transfers from program loan accounts 
under credit reform procedures, user fees, and advances and 
reimbursements from various sources.
    The fiscal year 2001 Budget proposes funding of $1.095 billion from 
appropriated sources including credit reform transfers, a net increase 
of about $89.4 million over the fiscal year 2000 level. The largest 
component of the increase reflects a change in source of financing 
rather than an actual increase in funding. Under Section 822 of the 
Fiscal Year 2000 Agriculture Appropriations Act, $56 million was 
reimbursed to the S&E account from CCC for program delivery costs in 
fiscal year 2000. Based on economic assumptions used in the President's 
Budget, we estimated the need for $45.2 million in fiscal year 2001 to 
carry out similar workload, which was expected to decline somewhat. 
Therefore the fiscal year 2001 Budget proposes restoration of $45.2 
million of the one-time CCC funding to the S&E appropriated baseline. 
Other items of increase include pay and related costs, a new funds 
control system for farm loan programs, reengineering of other farm loan 
program systems, and telecommunications costs. These increases are 
partially offset by decreases in some operating costs and a reduction 
in temporary employee staffing. Based on historical trends, the Budget 
also assumes that $16 million in carryover funding from fiscal year 
2000 will be available to support the proposed county office staffing 
level in 2001.
    The Budget also proposes to adjust the proportion of total S&E 
funding that is provided by transfer from the Agricultural Credit 
Insurance Fund in order to accurately reflect the full cost of 
administering the farm loan programs in accordance with the Federal 
Credit Reform Act of 1990. Over the past 5 years, the transfer has 
remained virtually flat and has not reflected approved pay raises and 
rising operating costs or an increase in the number of employees 
actually carrying out the farm loan programs. To rectify the 
accumulated imbalance and bring our accounts into compliance with 
credit reform requirements, we are proposing an increase of $55.5 
million in the ACIF transfer amount for fiscal year 2001. A 
corresponding decrease has been taken from the S&E direct appropriation 
component, although it is not readily discernible due to the 
aforementioned increase for baseline restoration.
    Mr. Chairman, I would like to comment briefly on the current status 
of FSA's program delivery and the outlook for the months ahead.
    As you know, 2000 is expected to be a record high for both CCC and 
farm loan program outlays, and the level of expenditures is mirrored in 
the FSA workload in county offices. We made maximum use of temporary 
employees early in the year to enable county offices to keep up with 
their workload and avoid the delays that were experienced during the 
early months of fiscal year 1999. However, funding to retain these 
temporary employees is insufficient, and it has become necessary to 
begin dismissing many of them. Most will be off the payroll by mid-
March. We have also encountered significant unbudgeted costs during 
fiscal year 2000, including both contractor and in-house costs 
associated with the Pigford Consent Decree. We have also had to pay for 
maintenance of information technology operations from the S&E account 
due to the depletion of the CCC cap on ADP expenditures early this 
fiscal year. The 2001 Budget does propose an increase of $35 million in 
the ADP cap for 2001 and 2002, which would allow us to meet our minimum 
ADP operations requirements. However, in order to make any progress 
toward realizing the considerable benefits of a Common Computing 
Environment (CCE) for the county-based agencies, positive action by the 
Congress is needed on the Department's request for $75 million under 
the Office of the Chief Information Officer for CCE expenditures.
    A key element in the success of this effort is the replacement of 
aging business and technology systems of these partner agencies that 
will allow sharing of data and implementation of streamlined business 
processes. The new technology will also allow these agencies to use 
modern business approaches such as the Internet to provide better 
access to programs for customers. However, until the CCE is fully 
operational, the service center agencies will have to continue to fund 
the outmoded existing systems to provide programs to customers.
    The proposed $75 million in CCE funds for 2001 would fund essential 
capital investments needed to achieve the goal of a fully operational 
common computing environment in 2002 as set forth in the Department's 
Service Center Modernization Plan. These investments are needed to 
integrate the workstations and more fully achieve the benefits of 
shared systems and re-engineered business processes, in order to 
improve service to our customers.
    An important part of the effort to modernize field operations for 
FSA, the Natural Resources Conservation Service, and Rural Development 
agencies is the effective consolidation of three separate and largely 
redundant administrative systems into one under the proposed Support 
Services Bureau. Separate systems constitute a glaring inefficiency 
that needs to be eliminated. Consolidated support would be provided for 
information technology, financial management, travel, procurement, 
civil rights, and human resources management. These services would be 
provided under the direction of an Executive Director who would report 
to a board of directors comprised of the heads of the serviced 
agencies. Unfortunately, language in the Fiscal Year 2000 
Appropriations Act prevented us from implementing our plans for the 
Support Services Bureau. I ask the Committee to take a look at that 
language and work with us to move our operations into the modern world. 
By pooling resources in the administrative arena, each agency will be 
in a better position to provide greater program support.
    Before closing I would like to note that the Administration will 
soon transmit a legislative proposal to convert all non-Federal county 
office employees to Federal status in 2000. This change will allow 
greater accountability of all employees under one personnel system and 
improve efficiency of Agency operations.
    Mr. Chairman, this concludes my statement. I will be happy to 
answer your questions and those of the other Subcommittee Members at 
any time.

                       SUPPLEMENTAL FUNDING NEEDS

    Senator Cochran. We are considering, as you know, a 
supplemental funding bill. You have pointed out these problems 
that you have right now in this fiscal year. Can you identify 
the levels of funding that you need to meet your current 
workload requirements?
    Mr. Schumacher. We have a proposal that Mr. Kelly has 
provided to me that I passed through to the Secretary, and 
Dennis, that we will be hopefully moving forward in an 
expedited fashion. Truthfully, Mr. Chairman, we have basically 
used up most of the support for temporary staffing in the first 
6 months of the year because of the tremendous workload we have 
had. So we are working through a supplemental right now, and 
the exact numbers will hopefully be available very shortly from 
the OMB.
    Senator Cochran. We noticed that in the budget request you 
basically request the amount of money that you have already 
gotten for the next fiscal year in this year's fiscal year 
budget. Is that not true?
    Mr. Kelly. Senator, what you have to look at in the budget 
is that we got----
    Senator Cochran. That is for the Farm Service Agency; let 
me be more specific.
    Mr. Kelly. Correct. The budget request reflects the fact 
that we got Commodity Credit Corporation reimbursement for 
program delivery through the emergency title of the 
appropriation this fiscal year. So of the increase in the 
President's Budget, $45 million is just to get us back to a 
comparable appropriated baseline and prevent the reduction in 
force of about 700 employees, just to hold us completely 
neutral. That is the key part of it. When you see that increase 
in the budget, actually $45 million is to restore the portion 
of the $56 million reimbursement that the President's Budget 
estimated would be needed to carry out similar types of 
workload in fiscal year 2001.

                     STATUS OF FSA COUNTY EMPLOYEES

    Senator Cochran. The budget suggests that the 
Administration will request legislation to convert non-Federal 
Farm Service Agency personnel to Federal employee status in 
2000. Will this have any impact on the Agency's funding 
requirements or affect the staffing levels presented in the 
fiscal year 2001 budget?
    Mr. Schumacher. I do not think so. Keith? I will get back 
to you on that one, Mr. Chairman. I do not believe so, unless I 
stand corrected.
    Mr. Kelly. Mr. Chairman, I can respond on that. The budget 
impact of that conversion is neutral, with the exception of 
some administrative costs of converting people from the county 
system to the GS employment system. We could ensure that those 
employees converting from the county to the Federal system 
would maintain their grades and maintain their seniority and 
all of those things, to leave it relatively neutral other than 
some administrative costs that we would necessarily absorb.

                         FSA TEMPORARY STAFFING

    Senator Cochran. What impact has this had on the delivery 
of payments to farmers under the disaster assistance program? 
You talked about having to reduce the number of temporary 
employees since November of 1999. What impact has that had on 
delivering benefits, ad hoc disaster payments to farmers?
    Mr. Kelly. Senator, if I can comment. First, we are just in 
the process right now of starting to lay off of the temporary 
employees. We started looking at that with all of our States, 
depending on the individual State, right after the 1st of the 
year. As the Under Secretary indicated earlier, we did keep 
people employed on the front end. We have had them employed at 
a very heavy level, to keep us from getting behind in the 
county offices. And one needs to recall only last year, as we 
got so buried with paperwork in the loan deficiency payments 
that we were forever digging ourselves out, which really 
necessitated two supplementals.
    So now we are just getting in. We just closed the signup 
for the crop disaster program last Friday. We have been making 
the advance payments of 35 percent of the projected disaster 
programs payments. We have just about depleted all of the 
resources for temporary help to keep offices current with 
whatever disaster or emergency program or loan deficiency 
payment has been going on.
    We are at a point that we are going to be sending people 
home. This month of March is the targeted date. Some have 
already gone home. And so we will probably be slowing down in 
getting some of these other payments, the remainder of the 22 
programs, out the door.

                              FSA WORKLOAD

    Senator Cochran. Are you going to tell the farmers that 
they are not going to get their payments on time or there will 
be a delay in getting their benefits? How are you all going to 
spin that one?
    Mr. Kelly. Senator, we are doing the best we can with what 
we have out there. We just do not have the ability to go in the 
red. At one time or another it is going to happen. The loan 
deficiency payments, if we get behind on them, farmers are 
going to be banging on our doors. And I believe nobody here has 
been contacted with complaints yet, because at least for all of 
the payments and programs so far, we have been able to keep--I 
guess for lack of a better word--our nose above the water.
    But we have got two major programs still sitting out there 
to finish up--the disaster program and, probably the biggest 
labor-intensive one, the oilseed program. We are going to have 
800,000 to 1 million farmers coming through the door to sign up 
for the oilseed program, for that $475 million of the emergency 
legislation from last year. That is going to be the most labor-
intensive program we have. And we are just going to have to set 
priorities of which programs we get through first.
    Senator Cochran. We want to work with you to help deal with 
that problem. I do not know how quickly we can get the work 
done here and a consensus on the exact amount of money 
available for a supplemental, but we want to support you and be 
helpful to you. Any suggestions that you might have about 
action that we should take to help deal with these shortfalls 
and these problems, we would love to have the benefit of your 
suggestions.
    Mr. Schumacher. This is my seventh hearing before you. You 
have always been very supportive, and I have indicated that in 
my testimony. We would very much like to work with you, Mr. 
Chairman. These are tough times. You know it in your own State. 
Keith and I and Parks and everybody here has worked very hard 
to get this huge level of the emergency payments out the door. 
This year it has been quite difficult with the 22 new programs, 
because it requires training. And I visited with some staff 
just yesterday about the consent agreement. They are just now 
going back to deal with the oilseed program.
    So Keith and I and perhaps your committee and the committee 
on the other side can work together if and when this 
supplemental comes forward on an expedited basis.

                              CCC ADP CAP

    Mr. Kelly. Senator, if I can add one other thing which 
would help us. That is to get the Commodity Credit Corporation 
cap on data processing lifted. Because the same thing with 
those----
    Senator Cochran. Is this the so-called Section 11 cap?
    Mr. Kelly. This is not the Section 11 cap. This is the ADP 
cap.
    Senator Cochran. Another cap. How many caps are there?
    Mr. Kelly. There are two caps that I refer to.
    Senator Cochran. Are these your caps or our caps?
    Mr. Kelly. The caps have come down from the Congress, with 
adjustments over time. I am talking now about the cap on the 
amount that the Commodity Credit Corporation was allowed to 
expend on automated data processing. Last year, we had a 
proposal up for a $35 million increase.
    We had to use some salary and expense money this year just 
to keep the basic core computer operations running. And I know 
that proposal will be before you to raise that cap so we can 
maintain the tools for our employees to do the work. Otherwise, 
we guarantee it will become very, very labor-intensive and 
manual-intensive to do the work.
    Senator Cochran. Thank you for telling us about that.
    Senator Kohl, any comments or questions? You are recognized 
for whatever time you may want.

                     STATEMENT OF SENATOR HERB KOHL

                     DAIRY EXPORT INCENTIVE PROGRAM

    Senator Kohl. Thank you, Senator Cochran.
    In my opening statement, which I will submit for the 
record, I express my disappointment in the lack of any 
meaningful support for dairy in the Administration's farm 
safety net proposal. I will not belabor that point at this 
time. But I do want to focus on other tools that the Department 
has to help dairy farmers address market volatility, to take 
advantage of global markets and to manage financial risk. I 
think even in these categories the Administration is not doing 
all it could to help dairy farmers.
    U.S. milk producers have relied on the Dairy Export 
Incentive Program to help them compete in badly distorted world 
markets. I am concerned, however, about the future of this 
program in fiscal year 2001, given our WTO obligations to 
reduce both the volume and the value of DEIP exports. This is 
particularly a concern given the low milk prices predicted for 
the duration of this year. The dairy industry has often relied 
on DEIP to reduce price depressing surpluses.
    How will our WTO obligations affect exports under DEIP in 
the coming years, and will there be an associated impact on 
milk prices?
    [The statement follows:]

                PREPARED STATEMENT OF SENATOR HERB KOHL

    Welcome Secretary Schumacher, and Mr. Collins, it is good to see 
you again.
    In reviewing your prepared statements, I noticed you have plainly 
stated an unfortunate generalization with which we have all become too 
familiar. In spite of an overall economic boom, the American farmer--
and indeed, people throughout rural America--are suffering through 
difficult times.
    Partially in response to this, Secretary Schumacher, you have 
outlined for us the Administration's proposal for a farm safety net 
initiative. Secretary Glickman provided a similar overview when he was 
before us a few weeks ago. Now, as then, I have to stress the glaring 
omission of any meaningful relief in your proposed package for dairy 
farmers--even though you highlight in your opening statement--in fact 
in your first few paragraphs--that last year dairy prices experienced 
their steepest decline in history. I repeat, in history.
    Yet, your $11.5 billion package only offers an extension of the 
current dairy price support program. While better than nothing, I think 
you would agree, as Secretary Glickman conceded, that it falls far 
short of the type of assistance needed to protect dairy farmers in my 
State and elsewhere. And, I have to restate, the type of assistance you 
are providing for dairy farmers is nowhere close to the types and 
levels of assistance you are proposing for other agricultural 
commodities.
    In my State, agriculture IS dairy. I will not watch another farm 
relief package go by that ignores this important and struggling 
industry.
    Of course, the Farm Safety Net Initiative is only part of the 
President's proposal relating to agriculture. Aside from that 
legislative proposal, we have before this subcommittee a sizable 
request for discretionary and mandatory appropriations to fund a host 
of farm and foreign agricultural trade programs.
    It goes without saying that USDA programs within the Farm and 
Foreign Agriculture mission area are far reaching. These programs range 
from the annual operating loan for a small or beginning farmer to 
humanitarian food assistance needed to feed a starving world. It is 
important that we all work together to make sure these programs 
function as they should. Risk Management must be designed in a way that 
truly manages risk. The Farm Service Agency must have the resources 
necessary to ensure that farmers receive adequate services. Our Foreign 
Market Development programs must truly develop and maintain foreign 
markets.
    I look forward to your remarks.

    Mr. Schumacher. I want to ask Mr. Fritz to join me. He runs 
the Dairy Export Incentive Program. And while he is coming to 
the table let me say that we have used the DEIP program very 
aggressively, Senator. We have also used some of the rollover 
funds, as well, to help dairy farmers as much as possible to 
move some of this product overseas.
    We also, in a related way, used our food aid authorities. 
We donated a substantial amount of nonfat dry milk last year. 
We may have to do more because more of that is coming in now. 
With your permission, I will ask Mr. Fritz to brief you on 
where we are on DEIP for this coming year.
    Mr. Fritz. Yes, sir, we feel we have used the DEIP program 
very aggressively in the last few years. We have used the 
rollover authority that we do have, to get up to over 100,000 
tons of nonfat dry milk last year. But we will be significantly 
constrained due to our WTO commitments in that in 2000, for 
nonfat dry milk, we are going to be at a maximum of 68,000 
tons. And obviously we are not quite sure what the rollover 
level may be from this current year, but it will probably be in 
the neighborhood of 7,000 tons. But our tonnage and our dollar 
values will go down based on the WTO commitment significantly.
    How this will impact dairy prices, I am not sure. Maybe Mr. 
Collins has an answer for that. We are taking in a lot of 
nonfat dry milk in the CCC loan forfeitures. We have put in 
25,000 metric tons into the 416 program. And we will be using 
nonfat dry milk, as well, for PVO donations overseas.
    Senator Kohl. I would like to ask what USDA plans to do to 
mitigate the impact of significant reductions in subsidized 
exports and to aid exports of U.S. dairy products. You have 
said a little bit; is there more you can say?
    Mr. Schumacher. Yes, sir, if I may, Mr. Fritz. Frankly, the 
Dairy Export Council does a terrific job. I think we are now 
providing about $1.5 million to promote their commercial 
exports overseas. And if the Congress were to allow us to use 
any unused Export Enhancement Program funds, we could provide 
further assistance for trade promotion for groups like this and 
your cranberry growers.
    Mr. Collins. Can I make a comment on that, just in answer 
to the price effect question?
    Senator Kohl. Yes, please.

                            NONFAT DRY MILK

    Mr. Collins. I think, in the short term, it would not have 
much effect on prices. And I say that only because, as Mr. 
Fritz pointed out, we are making very substantial purchases 
under the price support program of nonfat dry milk. We could 
buy 300 million pounds of nonfat dry milk this year, probably 
30 percent of the total nonfat dry milk production in the 
United States. So what happens is if you are not moving it out 
through DEIP--and most of the DEIP is nonfat dry milk--with 
prices at support, it is going to end up in the support 
program. So we will just keep prices right at support.
    Now, if prices start to move above support, then the lack 
of having 100,000 tons of nonfat dry milk DEIP, like we had 
last year, then that would have a price reducing effect.
    Senator Kohl. The Department recently announced 3 million 
tons of commodity donations under the Section 416(b) program. 
This program and others, like Public Law 480, have long proven 
to be of vital importance to help combat world hunger. They 
have the added benefit of providing an outlet for U.S. 
production, which will become increasingly important as the 
U.S. complies with its WTO obligations.
    Unfortunately, the recent Section 416 announcement includes 
only 25,000 tons of nonfat dry milk as part of the 3 million 
ton aid package. Since it is clear that the Department will be 
purchasing surplus dry milk throughout much of the year as milk 
prices remain near the price support, why did not the 
Administration include more significant quantities of dry milk 
powder in this aid package?
    Mr. Fritz. If I could address that, Senator. One of the 
difficulties we do have is programming nonfat dry milk in terms 
of finding recipients for such a product. Number one, generally 
it is a non-fortified product, so we have to find people who 
are willing to fortify the product so that it can be used in 
various countries overseas. And, two, it is often used as an 
ingredient for other foods rather than consumed as nonfat dry 
milk. So it is a very difficult item to program in less 
developed and developing countries based on its usage and the 
fact that it is a non-fortified product.
    Senator Kohl. Well, is there something that the Department 
can and will do to increase the proportion of milk powder 
provided in this aid package?
    Mr. Fritz. As we have done in the past, we are trying to do 
something to increase the fortification of the dry product. And 
we are meeting with the dairy industry, as we have with other 
commodities in 416, to try and better target our programming 
both now and in the future.

                      DAIRY OPTIONS PILOT PROGRAM

    Senator Kohl. In addition to viable export markets, dairy 
farmers need risk management tools. That is why I have long 
been an advocate for the Dairy Options Pilot Program. When the 
Secretary was here 2 weeks ago, he told us the Department would 
be ramping up this program. However, I am troubled to learn 
that USDA is significantly limiting program availability in 
round two of the pilot. USDA is not allowing farmers from the 
initial pilot to participate in this program.
    This is of special concern to Wisconsin farmers, where 
participation in round one of the pilot was strong. This 
decision is apparently based on what I believe to be a 
misinterpretation of the authorizing statute. You have 
effectively prevented any individual farmer from participating 
in the pilot more than once. And despite the Secretary's 
commitment to ramp up this program, it appears the program will 
terminate in just over a year.
    Would you please tell this committee what steps the 
Department will take to ensure that this program will continue 
to be a risk management tool available for dairy farmers?
    Mr. Schumacher. Thank you, Senator. I am going to ask Ken 
to join me, Ken Ackerman of Risk Management, and I will 
certainly go back and check with our attorneys. We felt that 
this was a pilot program for 1 year, to help farmers get in to 
use the Dairy Options Pilot Program and it was just for 1 year. 
We will check again with the attorneys on that.
    Ken, do you want to comment on that?
    Mr. Ackerman. Yes, Senator, you are correct. We have been 
operating this program under a legal structure which designed 
it as a pilot program. That structure was created under the 
1996 Farm Act which had limitations on the number of counties 
that can be in the program, limitations on the number of 
counties in each State, and it had a general approach that we 
would use it as an educational tool. A farmer would be in the 
program for 6 months, a limited period of time, during which 
they would have subsidized use of futures or options and then 
they would basically be on their own.

                           PREPARED STATEMENT

    We are planning to roll out Round Two of the program later 
this year. We want to wait until milk prices are a little 
higher, so farmers would be more inclined to lock in a milk 
price rather than do it when prices are very low. But there 
will be these limitations on counties and States because of the 
pilot program structure of the Dairy Options Pilot Program.
    [The statement follows:]

               PREPARED STATEMENT OF KENNETH D. ACKERMAN

    Mr. Chairman and members of the Subcommittee, I am pleased to 
testify in support of the President's fiscal year 2001 budget for the 
Risk Management Agency (RMA). Crop insurance remains USDA's principal 
means of production risk protection for the nation's producers. In 
1999, the program provided farmers with more than $30 billion in 
protection on roughly 196 million acres through approximately 1.3 
million policies. During that time, we and our private-sector partners 
provided hard-hit farmers with nearly $2.2 billion in payments, most 
delivered within 30 days of claims being filed.
    Since 1993, the number of policies, insured acres, and liability 
have increased significantly. Further, the total crop insurance premium 
for 1999 exceeded our estimates by approximately 28 percent, 
representing a sizeable, 24 percent increase over the 1998 level. This 
remarkable increase can be attributed to the approximate 30 percent 
premium discount that was offered in 1999. Producers who have expressed 
concern over the increased cost of higher levels of insurance coverage 
responded to this initiative by enrolling approximately 20 percent more 
acres in buy-up coverage compared to the 1998 level. Emergency funding 
was also provided in 2000 to allow an approximate 25 percent discount 
on buy-up premium rates.
    While impressive results have been achieved in a short period of 
time, rapidly changing events are forcing a hard examination of the 
agricultural safety net. The continuing farm crises have exposed 
weaknesses in the safety net as it too ultimately suffers from 
depressed commodity prices and deals with those areas hit repeatedly by 
crop loss in a depressed economic environment. In addition, crops and 
commodities, like livestock, do not have federally backed insurance 
available to them, and farmers have far too little instruction on the 
risk management tools and strategies that can protect and improve their 
farm revenue.
    The Administration recently announced an $11.5 billion initiative 
to strengthen the farm safety net. This initiative will help thousands 
of cash-strapped producers lay the basis for more permanent and 
effective assistance to be enacted in the next farm bill. Components of 
the reform initiative directly related to the crop insurance program 
include the following:
  --Premium Discounts.--Extends the initiatives taken in 1999 and 2000 
        by offering approximately $400 million in premium discounts on 
        buy-up coverage for crop insurance in 2001. In addition, $200 
        million will be used to pay the delivery costs associated with 
        the increase in coverage this discount will produce and $40 
        million will fund a reserve against under-estimation of 
        increased program participation. Based on past experience, RMA 
        anticipates that farmers will buy even more coverage and become 
        steady customers.
  --Multi-year Coverage.--Includes $100 million to address the problem 
        of production losses and price declines that extend over 
        several years. These funds will be used to provide producers 
        with more options than currently available so that they are not 
        driven out of the program by sharp reductions in their actual 
        production history and allocated deductible.
  --Livestock Insurance Pilot Program.--Funds $100 million to establish 
        a pilot program for insuring livestock. The pilot program would 
        be designed to subsidize producers' participation and establish 
        intermediaries to offer options contracts. Conceptually, this 
        program may be similar to the Dairy Options Pilot Program.
  --Risk Management Education.--Expands risk management education 
        activities through four methods: risk management clubs, direct 
        producer training workshops, agricultural education at 
        community colleges, and technology based information and 
        education. The $40 million initiative would be modified 
        regionally to accommodate the local needs of producers.
  --Research and Development.--Includes $30 million to expand research 
        and development activities through incentives and use of 
        private and public sources utilizing their expertise and 
        resources to address an ever-changing risk environment.
    RMA is committed to helping our private-sector partners build 
participation by providing new crop insurance programs and helping 
producers understand and manage their agricultural risks. Over the past 
several years, this goal has carried RMA into many areas beyond 
providing traditional crop insurance, including the development of 
innovative products and services based on proposals from the private 
sector. As a result of these partnerships, we have developed innovative 
insurance products, a dairy options pilot program, and a wide range of 
projects to help farmers become better risk managers. Today, I'd like 
to briefly highlight some recent initiatives and detail plans for 
fiscal year 2001.

                        RESPONDING TO THE MARKET

    To help farmers manage their risk and diversify their operations, 
RMA has been aggressively creating new programs and expanding the 
availability of existing plans of insurance. For example:
  --New Crop Programs.--For 1999 alone, RMA created new insurance 
        programs to cover avocado, cabbage, cherries, crambe, 
        cultivated wild rice, barley, mustard, rangeland, and winter 
        squash. Crop insurance provides individual risk protection at 
        higher levels than available under the Noninsured Assistance 
        Program (NAP).
    During fiscal year 2001, RMA will be continuing development of 
programs to better protect growers not currently covered by crop 
insurance. For 2000, priorities will be given to the development of 
insurance programs for cultivated clams, chile peppers, processing 
cucumbers, Florida fruit trees, onion stage removal, pumpkins, 
strawberries, and a coverage enhancement option on apples, canola, 
potatoes, grapes, rice, and citrus fruit.
  --Asiatic Citrus Canker (ACC).--Several revisions to the Florida 
        Fruit Tree Pilot Program were announced for the 2000 crop year. 
        One key policy change insures producers against losses of 
        citrus trees to ACC. The ACC coverage is part of the standard 
        policy, not an option that the producer would purchase 
        separately. Counties covered under the Florida Fruit Tree 
        policy for crop year 2000 are: Brevard, Broward, Charlotte, 
        Citrus, Collier, Dade, DeSoto, Glades, Hardee, Hernando, Henry, 
        Highlands, Hillsborough, Indian River, Lake, Lee, Manatee, 
        Marion, Martin, Okeechobee, Orange, Osceola, Palm Beach, Pasco, 
        Polk, Sarasota, Seminole, St. Lucie, and Volusia.
  --Adjusted Gross Revenue (AGR).--The AGR insurance plan is a non-
        traditional, whole farm risk management tool. The AGR concept 
        uses a producer's historic Schedule F tax form information as a 
        base to provide a level of guaranteed revenue for the insurance 
        period. AGR provides an insurance safety net for multiple 
        agricultural commodities in one insurance product, establishes 
        a common denominator for commodity production-cash receipts, 
        makes simple straightforward use of income tax forms, and 
        reinforces program credibility by using Internal Revenue 
        Service tax forms and regulations. Eligible producers may 
        choose one of three coverage levels: 65 percent coverage and 75 
        percent payment rate (65/75), 75 percent coverage and 75 
        percent payment rate (75/75), or 80 percent coverage and 75 
        percent payment rate (80/75).
  --Dairy Options.--Through training and paying a portion of the 
        transaction costs, the dairy options pilot program helps 
        producers create their own financial safety net by purchasing 
        exchange-traded options on the price of their milk. When milk 
        prices fall, producers are able to offset losses based on 
        projected future earnings, in effect putting a ``floor'' under 
        their milk prices. Producers in certain pilot states and 
        counties are now actively using the program.

                      LEVERAGING SCARCE RESOURCES

    RMA is leading a joint effort with the Cooperative State Research, 
Education and Extension Service, the Commodity Futures Trading 
Commission, and a number of private-sector partners to help producers 
become active risk managers. In order to leverage scarce resources, the 
Agency funded approximately $900,000 in grants to diverse partnerships 
all around the country to better equip producers to manage risk. 
Without such partnerships, the cost of meeting our educational mandate 
would increase significantly.
    For fiscal year 2000, under current law, we anticipate that 12,300 
producers will receive direct training through approximately 600 RMA 
coordinated/facilitated risk management education sessions. In 
addition, we anticipate that around 1,000 producers will participate in 
risk management or marketing clubs. These estimates have dropped and 
are likely to continue dropping due to lack of funding.
    RMA places a strong emphasis on reaching small and limited resource 
producers on the topic of risk management. These efforts are carried 
out through partnerships with community based organizations. These 
outreach efforts will be complemented with an information campaign to 
highlight educational themes and opportunities.

              ADMINISTRATIVE AND OPERATING (A&O) EXPENSES

    Discretionary account expenses are estimated to increase by $3.7 
million from the fiscal year 2000 level of $64 million. This increase 
includes: $1.6 million for pay costs, of which $415,000 is for the 
annualization of the fiscal year 2000 pay raise and $1.2 million for 
the anticipated fiscal year 2001 pay raise; $1 million for research and 
development costs related to the study and evaluation of a program for 
biobased products as part of the President's initiatives; $700,000 for 
civil rights activities aimed at increasing the participation of women 
and minorities, and assuring that underserved and socially-
disadvantaged producers/ranchers have full access to RMA programs; and 
an additional $403,000 for information technology costs. Fiscal year 
2001 information technology needs include a wide variety of 
enhancements, additions, services, and maintenance in continued support 
of system integrity to meet the continuing growth and demands of the 
program.

                                FCIC FUND

    Under current law, the budget for the FCIC Fund proposes an 
estimated $1.0 billion increase in program level. This seemingly large 
increase is a result of using a portion of prior years' unobligated 
balances--$953.8 million--to cover indemnities and other expenses in 
fiscal year 2000.
    Premium subsidy is expected to increase by $66.2 million due, in 
part, to an estimated increase in participation. In accordance with the 
Federal Crop Insurance Reform Act of 1994, for the purpose of 
encouraging the broadest possible participation of producers, FCIC pays 
a portion of crop insurance premiums. The $956.1 million in premium 
subsidy, of which $298.6 million is for catastrophic (CAT) coverage and 
$657.5 million is for additional coverage, assists in providing 
producers a cost-effective means of managing their risk.
    Delivery expenses, which represent the amount of administrative and 
operating expense reimbursements provided to approved insurance 
providers for delivering risk management services and products, are 
based on 24.5 percent of estimated total premium for fiscal year 2001 
in accordance with the Agricultural Research, Extension, and Education 
Reform Act of 1998. As a result of increased total premium, RMA 
anticipates delivery expenses in the amount of $507.7 million, compared 
with the fiscal year 2000 estimate of $486.3 million. This increase 
will assure continued effective delivery of risk management products to 
the agricultural community.
    RMA also expects excess losses, which are based on calculations of 
increased premium and program losses, to increase by $13.7 million to a 
level of $298.8 million. This estimate supports a loss ratio of 1.075 
and is authorized under the appropriation language ``such sums as may 
be necessary.'' Without these funds, which directly support the mission 
and goal of the Agency, FCIC would be unable to fully fund expected 
indemnities, thereby weakening the producers' safety net.
    The fiscal year 2001 current law funding request for research and 
development expenses is $3.5 million. No increase or decrease is 
requested. In accordance with the Agricultural Research, Extension, and 
Education Reform Act of 1998, RMA's ability to develop new products, 
support private sector initiatives through section 508(h) products, and 
help farmers become better risk managers was severely limited. Under 
that legislation, RMA's research and education funds were capped at 
$3.5 million per fiscal year, an immediate 67 percent reduction from 
the fiscal year 1998 level of $10.7 million. This reduction has created 
an immediate need for additional funding so that we can continue to 
provide new products, support private sector initiatives, and provide 
educational outreach to farmers. This need is being addressed in the 
Administration's safety net initiative, which provides $30 million for 
research and development activities and $40 million for risk management 
education initiatives in 2001.

                               CONCLUSION

    Mr. Chairman, we must succeed in strengthening the farm safety net 
or we may have a repeat of prior years' emergency spending package. We 
have made a good start by reducing farmer premiums by an estimated 30 
percent in 1999 and an estimated 25 percent in 2000. However, more can 
and must be done.
    I know of no other program in all of government that has produced a 
greater return on the taxpayers' dollar (please see the attached 
graphics.) While proposals to enhance the crop insurance program are 
working their way through Congress, RMA is requesting $3.7 million more 
in discretionary funding. This funding level is essential if RMA's 
infrastructure is to support and leverage the necessary initiatives and 
demands for continued maintenance, growth, and expansion of the 
program. Even at full funding, RMA will only be able to maintain 
products and services at the current level, while slightly increasing 
activities aimed at increasing the participation of women and 
minorities and assuring that underserved and socially-disadvantaged 
producers and ranchers have full access to all RMA programs. In 
addition, RMA would be able to support the Presidential Biobased 
Products/Bioenergy Initiative. Personnel ceilings will continue to hold 
at fiscal year 1999 levels. Mr. Chairman, this concludes my testimony. 
I will be pleased to answer any questions.









    Senator Kohl. So you are saying the program will terminate 
or it will not terminate?
    Mr. Ackerman. The program will have a Round Two later this 
year, but the overall authority for the program I believe, had 
a limit in terms of the number of years that it was available. 
It does phase out, but we are not terminating it at this point. 
Again, we have a Round Two of the Dairy Options Pilot Program 
that we will be rolling out later this year, but it will have 
these limitations on States and counties.

                   CONSERVATION TECHNICAL ASSISTANCE

    Senator Kohl. When Secretary Glickman and Deputy Secretary 
Rominger were before this subcommittee, I raised the question 
about the shortfall in technical assistance for the 
Conservation Reserve Program and the Wetlands Reserve Program 
due to the so-called Section 11 cap. Mr. Rominger indicated 
that despite the supplemental appropriation provided by this 
committee for fiscal year 2000, USDA would still be short of 
necessary funding to deliver technical assistance for these 
important programs this year.
    He stated on the record that a request for additional 
funding would be included in the Administration's supplemental 
request. And so I was dismayed last week to see that the 
Administration's request does not ask for funding to deal with 
this very serious problem. The result could be, Secretary 
Schumacher, that USDA will not be able to deliver these 
important programs.
    So, how do you account for the lack of conservation 
technical assistance funding in the Administration's 
supplemental request?
    Mr. Schumacher. I am going to ask Dennis if he could 
address that.
    Mr. Kaplan. That, like the FSA problem, is still being 
looked at within the Administration, and they will hopefully 
have an answer very soon.

                          FFAS FUNDING ISSUES

    Mr. Schumacher. I indicated on the record just a few 
minutes ago, Senator, we are working through some additional 
issues. I received a request from the Farm Service Agency. That 
has been passed through, and we hope to get that up to 
Congress. Not only the Farm Service Agency, but what we are 
finding is that, in the Foreign Agricultural Service and in the 
Risk Management Agency, this crisis that is upon us more and 
more is being overtaken by events, whether it is the additional 
money for the consent agreement or the need--if we can put that 
other chart up there on Risk Management, Ken--we have gone from 
$14 billion, Senator, to $30 billion in liability coverage, yet 
the Risk Management Agency has been basically straight-lined.
    And similarly in our export programs. So in all three 
agencies we are having some difficulties on the staffing side. 
And included among our concerns is the computer side, because 
the legacy systems have been overused. I heard a figure this 
morning, Senator, that really stunned me at my staff meeting. 
Ken, someone told me you had something like 1.3 billion in 
terms of the numbers of requests, computer transactions, you 
handle in crop insurance on an annualized basis. It was 
absolutely stunning.
    Mr. Ackerman. The number of actual transactions is in the 
billions every year in crop insurance. In the past half a dozen 
years, the program, as Mr. Schumacher points out, has expanded 
by two to three times. We have literally gone from about 20,000 
county crop programs to 35,000 county crop programs. We have 
gone from insuring about 70 crops in the mid-nineties to now 
having 138 different crop insurance programs that we administer 
during a time when our budget has stayed constant.
    So, yes, we, like the Farm Service Agency, are hitting the 
wall in terms of our staffing and our ability to continue to 
expand and grow.

                      CONSERVATION RESERVE PROGRAM

    Senator Kohl. Just in connection with that, we have got 
many farmers in Wisconsin trying to prepare for this growing 
season, and they do not know whether or not they have land 
under CRP contract or not. So when do you expect these farmers 
will receive a decision on their CRP cases from the FSA?
    Mr. Schumacher. Parks Shackelford is with us, as well. He 
is working very hard on the CRP and also the CREP. Maybe he 
could take just a minute to present that to you.
    Mr. Shackelford. I think there is a misunderstanding, 
because all the contracts eligible for renewal during the 
signup that is going on now are in effect until September 30th 
of this year. So land that is under contract will continue to 
be under contract for this growing season. The new contracts 
for the signup that we have just completed will become 
effective on October 1st. We will notify producers, hopefully, 
I believe, in the month of April about the lands that will be 
under contract starting in October.
    Senator Kohl. But there are nine case, I understand, that 
the Wisconsin State FSA office has sent on to headquarters here 
in October and November of last year. And they have not yet 
been specifically addressed.
    Mr. Shackelford. I will have to follow up on those.
    Senator Kohl. Can you follow up on those?
    Mr. Shackelford. I am not familiar with the specific nine 
cases, but we will certainly get you an answer.
    Senator Kohl. Can we do that?
    Mr. Shackelford. Yes, sir.
    Senator Kohl. Excellent. That would be appreciated.
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator Kohl.
    When Senator Gorton was here, he mentioned the agriculture 
trade office in Singapore and the plans to close it. The FAS 
has cited budgetary constraints as the reason. And I note that 
in the fiscal year 2001 budget request, additional 
appropriations for FAS to open three new agriculture trade 
offices in Mexico, Canada and the Philippines are included. Why 
are these three new offices of higher priority than retaining 
the agriculture trade office in Singapore? Did FAS consider 
requesting additional resources to retain the office in 
Singapore. And if not, why not?

                         CLOSING ATO SINGAPORE

    Mr. Schumacher. I am going to ask Tim to expand on that. We 
looked at that pretty hard, Senator, on Singapore. Not only 
Senator Gorton raised that question, but Senator Bond and 
others are raising the issue of Singapore. That is probably one 
of the highest cost cities we have. We looked at the available 
funding and what we could save by closing Singapore and moving 
the local people to Kuala Lumpur. That gave us additional 
resources for more critical offices, where our trade is 
growing.
    But on the broader budget issue, I would like to have Mr. 
Galvin comment. Again, I do not want this to be just staffing 
issue hearing, because we have many more issues to discuss. But 
I am concerned as well about the Foreign Agricultural Service, 
on the overall budgetary issue, in terms of how we can work 
together on that issue.
    Mr. Galvin. Thank you, Mr. Chairman. As Mr. Schumacher 
pointed out, that agriculture trade office in Singapore is one 
of our highest cost operations, about $900,000 a year. We felt 
that if Singapore were to close, we could continue to provide 
marketing services in that region from our other attache 
offices throughout that part of the world. Then, we looked to 
the future and sought budget increases for additional ATO's, 
that would offer us an increased return in terms of market 
development and increased export sales.

                           PREPARED STATEMENT

    I might say that the closure in Singapore was not the only 
action we took. And I can tell you that we took that action 
very reluctantly. But actually, over the past year, we have 
closed offices or reduced our presence in about half a dozen 
locations, including office closures in Milan, in Berne, and 
Jeddah, as well as reducing our presence in Hamburg and Tokyo. 
All together, those actions saved us about $1 million in the 
current year. And as we follow through on our plans to close 
Singapore this year, as I mentioned, that should bring us about 
$900,000 in savings in the coming year.
    [The statement follows:]

                Prepared Statement of Timothy J. Galvin

    Mr. Chairman, members of the Subcommittee, I appreciate the 
opportunity to review the work of the Foreign Agricultural Service 
(FAS) and to present the President's budget request for FAS programs 
for fiscal year 2001.

                          U.S. TRADE PROSPECTS

    Fiscal 1999 was a mixed year for U.S. agricultural trade. Exports 
reached $49 billion--down almost 20 percent from the $60 billion record 
of 4 years ago, and we project that U.S. exports will remain flat at 
$49 billion again this year.
    This past year, we actually saw a gain in export volume of about 15 
percent. However, 4 consecutive years of bumper crops worldwide and the 
slow pace of economic recovery in Asia continue to weigh down prices. 
As a result, much lower prices caused export value to decline this past 
year, and they explain why export value will remain flat this year.
    Also troubling is the steady erosion in U.S. market share of global 
agricultural trade over the past two decades. This could culminate in 
the United States losing out to the European Union (EU) as the world's 
top agricultural exporter sometime in 2000.
    From fiscal year 1981 until the global economic crisis in fiscal 
year 1998, worldwide trade in food and agricultural products nearly 
doubled. While U.S. agricultural exports also grew during this period--
especially over the past decade--the fact is that U.S. export growth 
lagged behind that of its major competitors, resulting in a loss of 
U.S. market share, from 24 percent in 1981 to its current level of 18 
percent.



    The decline in market share seems to defy what we know about the 
strength of the U.S. food production system. After all, the United 
States has the world's most efficient producers, processors, and 
distributors of agricultural products. We have one of the safest food 
supplies in the world. We have an abundance of high-quality bulk 
commodities and world class high-value and consumer-ready food 
products, and we have consistently shared our bounty with less 
fortunate nations through food aid and related assistance.
    However, over the past few years, several factors have contributed 
to the drop in U.S. agricultural export levels and market share.
    First, while U.S. agricultural exports have declined, so has global 
trade in agricultural commodities. The value of global agricultural 
trade shrunk from $302 billion in 1997 to an estimated level of $270 
billion in 1999. The Asian financial crisis and higher production of 
basic commodities worldwide resulted in soft world market prices for 
many agricultural products.
    Second, the U.S. dollar remained strong, making U.S. products more 
expensive relative to competitor countries' products.
    Third, our major competitors--the European Union (EU) and the 
Cairns Group--have outspent the United States in both public and 
private sector market promotion funding by a wide margin. Market 
promotion activities were not disciplined in the Uruguay Round. Our 
competitors were quick to take advantage, increasing spending by 35 
percent, or nearly $1 billion, in the past 3 years. Meanwhile, U.S. 
spending remained flat. Notably, our competitors have directed this 
increase almost exclusively to the high-value and consumer-ready 
product trade, where global import demand is growing fastest.



    Fourth, direct export subsidies, though disciplined under the 
Uruguay Round, are still at formidable levels. The EU was by far the 
largest user of this form of assistance, spending $7.5 billion in 1997, 
the latest year data are available. U.S. direct export subsidies 
contrast sharply with the EU's--$121 million, or 1.6 percent of the EU 
total, in 1997.

                   FAS EFFORTS TO SUPPORT FARM INCOME

    One can only imagine how much worse the situation would be, 
especially for U.S. exports, if we had not continued the vigorous use 
of our long-standing export programs. With large surpluses and rock-
bottom prices here at home, we have actively used food aid to move 
commodities out of the U.S. marketplace to needy areas around the 
world. Under fiscal year 1999 food aid programs, USDA programmed nearly 
8 million metric tons of U.S. commodities--close to five times the 
previous year's shipments and the largest tonnage in many, many years.
    American commodities went to around 50 countries last year--from 
the unprecedented assistance package for Russia to food relief for 
Kosovo refugees, famine victims in North Korea, and hurricane victims 
in Central America and the Caribbean. Under the authority of Section 
416(b) of the Agricultural Act of 1949, as amended (Section 416), CCC 
donated nearly $800 million worth of commodities, including 5.2 million 
tons of wheat and wheat products, 274,000 tons of corn, and about 
23,000 tons of dry milk. These U.S. surpluses were taken off the market 
and put to good use, helping to relieve hunger and suffering abroad.
    Our export credit guarantee programs facilitated sales of more than 
$3 billion in U.S. agricultural products. Our GSM-102 program helped 
U.S. exporters overcome disadvantages in Turkey, and make record sales 
of over $1.2 billion in Mexico. The program helped U.S. oilseed 
exporters sell more than $19 million worth of oilseeds to Uzbekistan, 
traditionally a buyer of South American oilseeds. Our GSM-103 program 
helped U.S. exporters sell over $14 million worth of wheat to Jordan. 
The Supplier Credit Guarantee Program was used for the first time by 
importers in the Baltic Region, Georgia, and Turkey, resulting in sales 
of nearly $1 million worth of meat products to buyers in the Baltic 
Region, and about $2.9 million worth of poultry products and $57,000 
worth of hides and skins to buyers in Georgia and Turkey.
    With the aid of the Dairy Export Incentive Program (DEIP), U.S. 
exporters sold more than 136,000 tons of dairy products valued at $337 
million. USDA awarded more than $145 million in bonuses to help U.S. 
dairy exporters meet prevailing world prices and develop foreign 
markets. The Export Enhancement Program was used only sparingly in 1999 
because of market conditions, with bonuses of about $1.4 million 
awarded for sales of more than 2,000 tons of frozen poultry.
    We continue to stress the importance of market development. In 
1999, we allocated $90 million to 65 U.S. trade organizations, State 
regional groups, and cooperatives for export promotion activities under 
the Market Access Program (MAP), and approved marketing plans of $33.5 
million for 26 trade organizations under the Foreign Market Development 
(FMD) program.
    FAS introduced record numbers of agricultural policymakers to U.S. 
products and policies in 1999, and plans to meet and exceed that record 
this year. Nearly 800 Cochran Fellows from 70 emerging markets 
participated in short-term courses that introduced them to U.S. 
products, ranging from wheat to wine. The Cochran Program provides USDA 
with a unique opportunity educate foreign governments and private 
sectors not only about U.S. products, but also about U.S. regulations 
and policies on critical issues such as food safety and biotechnology.
    On the trade policy front, USDA worked successfully to open, 
expand, and maintain markets for U.S. agriculture. For example, after 
years of negotiations and technical exchanges, Japan lifted its ban on 
several previously unapproved varieties of U.S. tomatoes. We estimate 
that Japan could purchase up to $10 million worth of U.S. tomatoes 
annually as a result.
    FAS played a key role in defending the U.S. position against the 
EU's ban on growth-promoting hormones. FAS directed the interagency 
effort to calculate and then defend before a WTO Arbitration Panel, the 
loss of U.S. beef exports caused by the EU's refusal to remove its WTO-
inconsistent ban on imports of beef produced with growth-promoting 
hormones. The Arbitration Panel awarded the United States $116.8 
million in damages and the United States suspended trade concessions to 
the EU of equal value.
    The 1999 meeting of the U.S.-Mexico Binational Commission (BNC) 
succeeded in achieving additional market access for U.S. exports while 
enhancing long-term market development objectives. Mexico committed to 
improve market access for exports of U.S. wheat, dry beans and 
slaughter hogs, and to reduce costly preclearance inspection for U.S. 
apples and stone fruit. Mexico represents one of the strongest and 
fastest growing markets for these five commodities, with total U.S. 
sales estimated at approximately $400 million in 1998.
    Last April, the United States and China signed the Agreement on 
U.S.-China Agricultural Cooperation, an unprecedented step in U.S.-
China agricultural trade relations. With this agreement, China finally 
removes the longstanding bans on exports of U.S. wheat, citrus, and 
meat and poultry to China. The agreement also calls for China's 
commitment to the application of sound science, a key principle of the 
WTO Sanitary and Phytosanitary (SPS) Agreement. The agreement confirms 
a U.S.-China agricultural partnership in achieving some key objectives: 
resolving trade barriers, increasing technical cooperation and 
scientific exchanges and further developing our agricultural sectors.
    FAS worked to ensure the successful implementation of the U.S.-
Taiwan WTO bilateral market access agreement that was signed in 1998. 
This agreement, which falls under the Taiwan WTO accession 
negotiations, provided immediate access for U.S. pork, poultry and 
variety meat exports. During fiscal year 1999, the United States 
shipped poultry, which had previously been subject to a ban, worth 
about $16 million and pork and beef worth an estimated $60 million. 
These shipments mark the successful implementation of the ``down 
payment'' quotas provided for by the WTO Bilateral Agreement signed by 
Taiwan and the United States. Under the agreement Taiwan also modified 
its administration of the potato quota. This modification led to the 
importation of an estimated $10 million in fresh potatoes.
    In 1999, FAS negotiators helped to conclude important bilateral 
agreements that paved the way for Estonia and the Republic of Georgia 
to join the WTO as full members. The market access agreements require 
Estonia and Georgia to reduce import tariffs on important U.S. farm 
products, which will create greater market opportunities for U.S. 
farmers and ranchers. Both countries agreed to bind tariffs at or below 
10 percent on U.S. priority products and committed to not use export 
subsidies. U.S. agricultural exports to these two countries are 
expected to grow approximately $3-4 million annually following their 
accession into the WTO. FAS negotiators also concluded agricultural 
bilateral accession agreements, worth approximately another $4 million, 
with Albania, Croatia, Oman and Jordan, and continued to work on two 
dozen other accessions including Russia, Saudi Arabia, and Ukraine.
    FAS continues to monitor aggressively foreign countries' compliance 
with Uruguay Round Agreement commitments. For example, at the request 
of the United States, a WTO dispute settlement panel is examining 
Korea's import and domestic support programs for beef. As part of its 
Uruguay Round commitments, Korea agreed to liberalize its beef market 
by January 1, 2001. However, after Korea failed to meet its minimum 
import quotas in 1997 and 1998, it became clear that numerous market 
access barriers exist that are inconsistent with Korea's WTO 
commitments and threaten to inhibit full market liberalization. These 
impediments include restricted sales of imported beef at the retail 
level, a government ``mark-up'' on imported beef, excessive support 
payments to domestic producers, and limitations on import authority. 
Korea's imports of U.S. beef reached $319 million in 1995, before 
dropping to only $140 million in 1998.
    At 1999's meetings of the Committee on Agriculture, FAS analysts 
reviewed and raised questions on over 250 WTO notifications. The value 
of trade addressed through U.S. vigilance of commitments is over $500 
million. This was achieved through questioning member's domestic grain 
purchasing policies that appeared to violate export subsidy 
commitments; challenging the discriminatory issuance of import licenses 
for dairy products, pork and poultry; questioning the WTO-inconsistent 
execution of a preferential trade arrangement that harmed U.S. apple 
exports; and questioning low tariff rate quota (TRQ) application for a 
range of commodities. These efforts contributed to several members 
halting implementation of or modifying WTO inconsistent practices.

                          PRIORITIES FOR 2001

    Faced with continuing budget constraints, a strong U.S. dollar and 
continued aggressive spending on market promotion by our competitors, 
we must redouble our efforts to improve the outlook for U.S. 
agricultural exports. We are closely examining why the United States is 
losing market share in certain markets, and intend to take actions to 
remedy the situation, consistent with our budget resources. For 
example, we plan to continue to:
  --pinpoint constraints to U.S. agricultural, fish, and forest 
        products;
  --work to remove trade barriers and trade-distorting practices;
  --safeguard U.S. agricultural interests by advocating U.S. policies 
        in the international community;
  --help producers, processors, and exporters to strengthen their 
        export knowledge and skills;
  --ensure that the U.S. farm, forest and fishery sectors and our 
        research community have timely and complete intelligence about 
        emerging market opportunities;
  --inform foreign buyers about the superior quality and reliable 
        quantities offered by U.S. agricultural producers, and educate 
        them about how to locate U.S. products;
  --use our export credit guarantee programs to reach new customers for 
        U.S. agriculture;
  --use our food aid authorities to help needy people overseas and 
        farmers here at home;
  --use USDA export assistance programs such as the Foreign Market 
        Development Program and Market Access Program to the maximum 
        extent reasonable to pursue export opportunities; and
  --work with emerging markets and developing countries to promote 
        economic development to help meet the U.S. commitment to reduce 
        by half the number of food insecure persons by 2015.
    As we forge ahead, it is obvious that we need to look at new ways 
of doing business to reduce costs, streamline programs and tap into new 
technologies. In 1999, FAS received two prestigious Hammer Awards from 
the Vice President's office for improving the operational efficiency of 
its programs.
    One was awarded for FAS's development and implementation of a 
``Unified Export Strategy'' (UES). This process reinvented the planning 
and application process for the MAP and the FMD program, dramatically 
reducing paperwork requirements and improving operational efficiency 
for both programs. The UES encourages our strategic partners to 
formulate market-specific strategies for developing or expanding export 
markets. This approach facilitates a more effective use of FAS' full 
arsenal of market development programs.
    The other was awarded for FAS's streamlining of the process for 
advancing funds to Private Voluntary Organizations (PVO) for 
humanitarian food distribution. The streamlined process helped private 
sector partners initiate Food for Progress program activities with much 
greater cost effectiveness and time efficiency. The streamlined process 
resulted in a reduction in average cycle time of transferring funds to 
a PVO from 41 to 7 business days--an 83-percent improvement in the 
delivery of this service.
    These efforts grew out of our strategic planning process that 
integrates all the marketing, credit, and trade policy tools that we 
have available to maximize the market for agricultural products. This 
process lets us review the competition and all FAS-sponsored efforts in 
a given market to determine whether we have the optimal mix of programs 
and funding, given that market's potential as a buyer of U.S. 
agricultural products. It also allows us to step back and review our 
efforts regionally as well as globally.
    I would like to take a few moments to outline our priorities for 
fiscal year 2000.

                           GLOBAL PRIORITIES

    At the top of our list is moving forward in the WTO trade 
negotiations on agriculture. Although agreement on the framework for a 
new round of negotiations was not achieved at the Seattle Ministerial, 
the Seattle meeting is not the end to further negotiations on 
agricultural trade. Because of the ``built-in agenda'' for agricultural 
reform in the Uruguay Round Agreement, work on the new agricultural 
negotiations is continuing. It is clear that we are on the threshold of 
a major new opportunity to advance open markets around the world. And 
as President Clinton has said many times, agriculture is at the center 
of the next round.
    We have been doing a number of things to prepare for the 
negotiations, including 13 public hearings around the country; numerous 
meetings with representatives of the broad agricultural sector; 
periodic sessions of our Agricultural Policy Advisory Committee and our 
several commodity specific Agricultural Trade Advisory Committees; and 
of course regular consultations with Congress.
    We have heard from the agricultural community and members of 
Congress, on a bi-partisan basis, that they are supportive of the goals 
that we have established for the next round: abolishing export 
subsidies, disciplining State Trading Enterprises, increasing market 
access through lower tariffs, reducing trade distorting domestic 
subsidies, defending the sanitary and phytosanitary agreement against 
those who want to weaken it, and opening the door for new technologies, 
such as biotechnology.
    There are very few calls at this point for turning back the clock 
or closing our borders. I believe producers recognize that by and large 
we made progress in the Uruguay Round to begin the process of reducing 
export subsidies, reducing import tariffs, increasing quotas, and 
disciplining domestic subsidies. But because the formula chosen to 
achieve much of this progress relied on percentage adjustments, it left 
those countries--such as the EU--which began the process with higher 
levels of protection or more generous farm support budgets in a better 
position as the end of the Uruguay Round implementation period draws to 
a close. Our farmers clearly understand that reality and, as a 
consequence, I think most of them will judge the outcome of the next 
round on whether we have been successful in bringing greater uniformity 
to the levels of support provided to farmers globally.
    Another priority on the trade policy front is how we deal with the 
issues surrounding products produced through biotechnology. There is a 
lot to say about what is happening in the biotechnology field and how 
it is affecting trade, and I could go on at length to describe our 
efforts at USDA to try to stay on top of the issue or to ensure that 
government actions on labeling and product approval in the EU, Japan, 
Korea, Australia, New Zealand, and elsewhere, do not irrationally 
reduce market access for U.S. commodities.
    But I believe that the past few months have made clear that 
developments in the marketplace are running ahead of where various 
governments are at this point. The result is that the environment for 
biotech products is as unsettled as it has ever been during the short 
commercial life of this new technology. The demand by some users for 
non-biotech commodities only, the resulting calls for segregation by 
some handlers, and the indications that premiums and discounts may be 
appearing for non-biotech vs. biotech commodities are bound to have an 
effect on farmers' decisions regarding what to plant next year.
    The next few months will likely determine whether biotech acreage 
continues to increase in the United States, or whether there is some 
retrenchment. Either way, this issue is likely to be a dominant one for 
U.S. agriculture in the immediate years ahead, whether in the WTO or in 
our bilateral relationships with customer and competitor nations alike. 
That is why we have said that when it comes to biotech and the next 
trade round, our focus will be in making sure that biotech approval 
regimes, wherever they exist, are transparent, timely, predictable, and 
science-based.
    We also will be working to improve the way we carry out our market 
development programs. We have had some notable successes in these 
programs in the past year. For example, last January, the first 
container of U.S. mohair was shipped to Peru, and the Mohair Council of 
America (MCA) expects an additional $400,000 worth of mohair to be 
shipped this year. This initial shipment resulted from a series of FAS 
and MCA activities, funded partly by the MAP.
    A study by the Northwest cherry growers found that for every dollar 
spent in MAP funds for Northwest cherries, there was a $5.54 return per 
20-pound case in terms of state and federal tax revenues in 1998. 
Northwest cherry export sales for 1998 were valued at $75 million with 
an impact on the local community of $330 million in tax revenues. In 
addition, over 18,000 jobs were associated with Northwest cherry 
exports.
    A San Diego-based company used MAP funds to reach out to Mexican 
consumers. This company saw its export sales grow by 60 percent in 1998 
and by 34 percent in 1999. To handle the increased workload created by 
additional export sales, the business hired two new employees. In 
addition, local warehouses added employees to keep pace with this 
higher volume. The company averages 25 truckloads of product to Mexico 
daily (half by U.S. truckers). These shipments keep a minimum of three 
truck drivers and three warehouse workers employed yearly.
    As part of an extensive trade servicing effort in Latin America, 
the USA Rice Federation successfully expanded U.S. rice exports to 
Colombia and Ecuador. Using FMD funds, the federation sponsored visits 
by Ecuadorian and Colombian rice trade delegations to the United 
States. The delegations included importers who had not purchased U.S. 
rice in the past and were not familiar with the U.S. industry. Several 
importers purchased U.S. rice for the first time. With these new sales, 
U.S. rice exports to Colombia and Ecuador rose to $74.0 million and 
$28.0 million, respectively.
    These are just some of the successes we have seen through our 
market development programs. During the next 18 months, we hope to 
build on these successes by completing the Unified Export Strategy 
system. The next step is to implement a standardized evaluation process 
to measure program performance and effectiveness. This will help ensure 
that program allocations will have the greatest impact. We also will 
incorporate into the UES data base all FAS and private sector 
(including universities, profit, and non-profit enterprises) market 
development efforts and results including those under the Emerging 
Markets, Section 108 and Quality Samples programs. Together, these 
steps will provide a comprehensive view of all market development 
activities funded by FAS and provide a means to evaluate them.
    We also expect to review the effectiveness of our first efforts 
under the Quality Samples Program. We announced the Quality Samples 
Program (QSP) last November and, to date, CCC has accepted proposals 
totaling $1.2 million for this pilot program. The QSP provides funds to 
private sector recipients so they can showcase the quality of U.S. 
agricultural products to foreign buyers.
    We also will continue work on a Clean Wheat Initiative. Under this 
effort, we asked for public comment on a question first posed by U.S. 
wheat producers--whether CCC should finance the installation of grain 
cleaners at certain elevators around the country. At a January 28th 
public hearing, testifiers included U.S. wheat growers and exporters--
and more importantly, buyers of U.S. wheat from Brazil, Colombia, and 
Nigeria.
    The hearing was a sobering one, especially as we heard our 
customers describe the noticeably cleaner wheat offered by some of our 
major competitors, including countries that clean their wheat at export 
as a matter of policy.
    Just 10 years ago, less than 25 percent of the world's wheat was 
purchased by private buyers; today that percentage has jumped to nearly 
60 percent, or about 25 million more tons than a decade ago. Private 
buyers tend to have tighter quality and cleanliness specifications on 
the wheat they purchase, so the question is, are we in the United 
States going to respond to the apparent demand by our customers?
    A number of interesting options were aired at the hearing, 
including:
    (1) whether CCC should specify cleaner wheat in making purchases 
for our humanitarian donations overseas; that could help to set an 
industry standard;
    (2) whether the CCC should develop, for the first time, a standard, 
comparable to that established by Canada and Australia, for the amount 
of dockage in our wheat;
    (3) whether CCC should offer, under the EEP program, bonuses for 
those who deliver cleaner U.S. wheat; and
    (4) whether CCC should carry out the original proposal to finance 
the installation of grain cleaning facilities.
    These are the options that we will be reviewing as we work toward a 
final decision.
    To further increase our chances of expanding market share, we will 
continue to seek new partners through our outreach efforts to state 
government officials, small and minority businesses, and first-time 
exporters. We must increase the awareness, at all levels, of the 
importance of trade and increased exports to the health of U.S. 
agriculture. For example, FAS has encouraged the four State Regional 
Trade Groups (SRTGs) to increase the number of small companies 
exporting. Last year, the state groups worked with over 400 MAP 
participants, educating them about the growth potential of export 
markets and how to take advantage of the opportunities. By providing 
export education and sponsoring trade shows and missions, the SRTGs 
have played a significant role in increasing the number of small firms 
participating in the MAP branded program. The resulting increases in 
sales generated by these new exporters have contributed to local 
revenues and employment.
    Together our outreach efforts and the MAP were instrumental in 
making FOODEX '99, the major food trade show in Japan, a success for 
the Intertribal Agriculture Council. Five American Indian tribes were 
represented at the show--Quinault Pride Enterprise representing 
traditional smoked seafood products, Seminole Indians of Florida with 
food seasoning, Gila River Far Board displaying grapefruit and 
tangelos, Navajo Agricultural Products Industry (NAPI) with pelletized 
alfalfa and pinto beans, and Yakima Land enterprises showcasing 
cherries and fresh vegetables. Quinault Pride Enterprise confirmed 
sales of nearly $200,000 of fresh seafood products and established a 
new market outlet for a smoked shellfish product with a Tokyo retailer 
operating 33 upscale sushi restaurants. The Seminole Tribe met with two 
food distributors who made offers to distribute ``Seminole Swamp 
Seasoning'' in their respective supermarket chains.

                          REGIONAL PRIORITIES
Asia

    With the conclusion of bilateral negotiations with China over its 
WTO accession, our work will shift toward implementation of the 
agreements and establishing permanent normal trade relations with 
China. This is our top priority in this region and we will be working 
tirelessly on this effort. Chinese concessions will be important for 
improved access opportunities, but we must remain vigilant and work 
with Chinese officials to ensure market opening.
    With more than 1.2 billion people or one-fifth of the world's 
population, China's accession to the WTO will give U.S. agriculture 
access to the world's second largest economy in terms of domestic 
purchasing power. This could result in at least $2 billion in 
additional U.S. agricultural exports by 2005.
    China's WTO accession will strengthen the global trading system, 
slash barriers to U.S. agriculture, give U.S. farmers and 
agribusinesses stronger protection against unfair trade practices and 
import surges, and create a more level and consistent playing field in 
this market.
    In order to realize these gains, we will be vigilant to ensure that 
China lives up to its WTO commitments, effectively administers tariff-
rate quotas, eliminates discriminatory licensing, and fully implements 
last April's Agricultural Cooperation Agreement reducing phytosanitary 
barriers for citrus, wheat, and meat.
    The full impact of the China accession agreement will be 
significant for U.S. agriculture by accelerating some of the policy 
changes apparently already underway in China. If our experience of the 
past few years has made one thing clear, it is that China is an 
important factor in the world trading picture. China's relative 
presence as an importer or exporter has a very direct impact on U.S. 
sales and on the bottom line of American producers.
    China seems to have recognized that the policy of self-sufficiency 
that it had embarked on for the past many years was costly, wasteful, 
and not in its own best interests. The result of this new agreement, 
hopefully, will be a more market-based system and greater opportunities 
for efficient exporters, including the United States.
    The U.S.-China Scientific Cooperation Program continues to be a 
strong element in our relationship with China, since this program 
focuses on research issues of mutual benefit to both countries. Among 
priorities identified at the January 2000 U.S.-China Joint Commission 
and Science and Technology Meetings were dryland agriculture, water and 
soil conservation and management, germplasm exchange, and plant and 
animal disease resistance.
    Also in this region, our efforts to monitor and enforce our trading 
rights continue, especially in markets such as Korea, Japan and Taiwan 
where we continue to work to prevent the erosion of previous trade 
concessions.
    Finally, our participation in the Asia Pacific Economic Cooperation 
(APEC) forum supports trade liberalization efforts in this region. 
While APEC itself is not a negotiation structure, it allows us to work 
with other members to advance our goals in the WTO and other fora.

                 RUSSIA AND THE NEW INDEPENDENT STATES

    Our top priority in this region is the implementation of food aid 
agreements with Russia. As negotiated, last year's final package 
totaled 3.7 million tons of U.S. commodities valued at $1.2 billion, 
including transportation costs. We donated more than half the aid, and 
once completed, Russia will have purchased more than 1.8 million tons 
under Public Law 480, Title I. We are also undertaking a 500,000-ton 
humanitarian food aid initiative in Russia this year.
    USDA staff continues to closely monitor the final stages of 
implementation. We also have received a formal request from the Russia 
government for another substantial food assistance package for this 
year; this is separate from the humanitarian program mentioned above. A 
number of considerations have come into play in reviewing this request.
    Our assessment of Russian food needs and our experiences with the 
current program are key. If an agreement is reached on additional aid, 
we will insist on similar monitoring measures. There are a number of 
other considerations as well. For example, we have to be careful not to 
reduce incentives for Russian farmers. We also have an obligation to 
other trading nations to avoid actions that would disrupt international 
markets, and we would consult closely with the EU and other major food 
exporters.
    Our trade policy focus in this region is to help a number of these 
countries join the WTO. While membership in the WTO is a high priority, 
we will continue to insist that these accessions be made on 
commercially viable terms that provide trade and investment 
opportunities for U.S. agriculture. This means that the acceding 
countries will need to continue the transition from centrally planned 
to full market economies by implementing new trade policies and 
regulations that are fully consistent with WTO rules and obligations.
    FAS will continue to work with officials in these countries to help 
them make the necessary changes in their countries' trading regimes. We 
plan to do this through bilateral and multilateral discussions, as well 
as direct technical assistance programs. For example, FAS is presently 
providing assistance to the Ministry of Agriculture in Turkmenistan to 
encourage that country to move toward open market policies. FAS will 
place a high priority on compliance with the WTO SPS measures and 
Technical Barriers to Trade (TBT) Agreements given the growing number 
of bilateral issues in this area. While we anticipate that these 
reforms will create new market opportunities for U.S. exporters, we 
will also emphasize to officials in these countries the importance of 
the changes in terms of revitalizing their economies, attracting 
foreign investment, and using international trade as an engine for 
economic growth.
    A more long-term FAS goal is our continued participation in 
international agricultural research studies to expand and improve crop-
assessment resources for estimating wheat production in Russia and 
Kazakstan.

Europe

    Within Europe, maintaining market access and trade policy issues 
dominate our list of priorities. We will continue to monitor the 
reforms to the EU's Common Agricultural Policy (CAP), evaluating how 
the current set of reforms will affect U.S. agricultural 
competitiveness not only inside the EU, but also in third countries. In 
addition, we are closely monitoring the EU's implementation of 
bilateral agreements on rice and oilseeds.
    After 6 years of difficult negotiations, the United States and the 
EU signed the Veterinary Equivalency Agreement in July 1999. The 
Agreement went into force in August. We expect to have the first 
meetings of the joint management committee later in 2000. The first 
issue we expect to be addressed will be the equivalency of the U.S. and 
EU residue testing programs.
    At the request of the EU, a WTO panel was formed in 1999 to 
investigate the procedures used in establishing the safeguard action 
protecting the U.S. wheat gluten industry. We are working closely with 
the U.S. Trade Representative's office to defend this action. In 
addition, we are evaluating options identified by the International 
Trade Commission in its mid-quota review that will maintain and 
increase the effectiveness of the quotas operation.
    We continue to work with the European Commission and member state 
governments on the bilateral market access issues regarding 
agricultural products produced with biotechnology. Current issues 
include proposed EU labeling regulations, amendments to the EU approval 
process, and identification of options to re-open the EU corn market to 
U.S. exports. Furthermore, we are currently engaged in a pilot project 
with the EU and member states to compare data requirements for biotech 
product approvals.
    FAS, in cooperation with the Agricultural Marketing Service, will 
continue to work with the EU and member state governments to fully 
implement an International Standards Organization (ISO) accreditation 
program developed by USDA in 1999. This program allows qualified U.S. 
exporters of organic products to maintain and expand their estimated 
$200 million in annual exports to the EU.
    After opening negotiations in 1999, we continue to work towards 
negotiating a new bilateral wine agreement with the EU. In addition, we 
are working closely with other wine exporting countries to maximize 
opportunities in global market access for wine exports.
    In the Baltics, we will continue to deliver an agriculture 
improvement and agribusiness program under the President's Northern 
Europe Initiative. We will follow up on our dairy sector improvement 
seminar with continuing links between participating U.S. universities 
and the Baltics dairy industry. Additional programs will enhance 
agribusiness investment and trade opportunities, particularly in the 
forestry and pork sectors.
    FAS will continue to monitor developments as several countries 
proceed with plans to join the EU. While we support this next round of 
accessions, the change could have a significant effect on U.S. 
agricultural exports to the region. The EU is already putting 
increasing pressure on the candidate countries to adopt EU regulations, 
particularly in the area of SPS measures and technical barriers to 
trade (TBT). In response, FAS will continue to work to ensure that the 
acceding countries do not adopt SPS/TBT policies or regulations that 
will disadvantage U.S. exporters during the transition period leading 
to full EU membership. In addition, FAS will focus particular attention 
on areas where the United States would be entitled to compensation from 
the EU for market losses attributable to higher border protection 
resulting from EU accession. We will also look for opportunities during 
the new round of WTO negotiations to maintain or improve market access 
for U.S. agriculture in this region.
Americas
    We are active in negotiations to establish a free trade zone in the 
Western Hemisphere, under the proposed Free Trade Area of the Americas. 
The FTAA negotiators are meeting regularly with the goal of achieving a 
new hemispheric trade agreement by 2005.
    Also in this region are two of our three largest agricultural 
markets--our neighbors and partners in the North American Free Trade 
Agreement (NAFTA), Mexico and Canada. Trade into these countries often 
faces a plethora of policies and programs potentially detrimental to 
continued access. We will continue to monitor and enforce our rights 
under the NAFTA and various side agreements as well as coordinate 
compliance with our obligations under these accords.
    Other trade policy activities will include monitoring the tendency 
of several countries in the region to introduce ``price bands'' on 
primary commodities (a form of a variable levy), as well as unjustified 
phytosanitary restrictions on our wheat in Brazil. We will use the 
Cochran Fellowship Program to reinforce the U.S. position on these 
issues to senior level Latin American agricultural policy makers.
    We also will continue to alert exporters to the potential of the 
Latin American market, the fastest growing region for U.S. agricultural 
exports, by stepping up our marketing activities. Efforts by our 
offices in this region last year met with great success and high praise 
from participants.
    FAS will continue to build relationships in the Caribbean through 
its Cochran Fellowship Program, which offers technical assistance and 
training activities for potential foreign buyers. Following a Cochran 
training activity in 1999, the U.S. Meat Export Federation reported 
sales of U.S. lamb to Barbados, a market that has been essentially 
closed to U.S. food and agricultural products because of its close ties 
to France.
    In Central America, FAS is monitoring reconstruction and 
agricultural production in the aftermath of Hurricane Mitch. We will 
improve our monitoring of the reconstruction of the agricultural 
sectors, which affects regional food security. We will also be 
providing critical food safety improvement assistance to help these 
countries build their food distribution and processing centers so that 
they agree with U.S. standards.
    Last year, FAS administered CCC donations of wheat under Section 
416(b) totaling 200,000 metric tons and valued at $31 million to the 
Governments of Honduras, Nicaragua, El Salvador, and Guatemala. An 
additional 45,000 metric tons of corn valued at $6 million also was 
donated to the region under Section 416(b). Sales proceeds are being 
used by the governments for post-hurricane reconstruction efforts.
    In Brazil, USDA will monitor and report on the expansion of crop 
areas into the Cerrados region of Brazil's Center West. Farmers in this 
region are rapidly expanding soybean area, which will have a 
substantial effect on U.S. soybean production, prices and trade.
Africa
    FAS will continue to encourage economic reform, market 
liberalization, and infrastructure development in the African 
countries, emphasizing to African officials the importance of meeting 
their current WTO obligations and commitments. We will also look for 
common interests during the new round of WTO negotiations and work 
together to improve global market access for agriculture.
    In particular, FAS will address the growing number of sanitary and 
phytosanitary (SPS) issues with our African trading partners, stressing 
the important difference between justifiable science-based food safety 
measures and protectionist non-tariff barriers. Efforts will be made to 
demonstrate how science-based measures can protect human, animal, and 
plant health with minimal trade disruption. In addition, we will offer 
technical assistance on understanding and complying with the WTO SPS 
Agreement to enable these countries to have improved access to world 
markets.
    FAS will also continue to engage African countries in a dialog on 
the important advantages of biotechnology in agriculture. We will 
encourage discussions at several levels, from broad high-level reviews 
to detailed working-level scientific exchanges.
    Of all of the regions of the world, Africa remains the most 
threatened by food insecurity. FAS has, with USAID and the Department 
of State, developed a three pronged approach to implement the U.S. 
Action Plan on Food Security, released in 1999. FAS will initiate a 
pilot project on food security in Sub-Saharan Africa. This will include 
providing U.S. technical and policy assistance to Ethiopia/Eritrea to 
expand the United Nation's Food and Agriculture Organization (FAO) 
Special Program on Food Security. FAS will also be helping local 
governments create national food security plans to promote long-term 
rural development, improve trade, and reduce malnutrition.
    On the market development side, FAS plans to expand the Cochran 
Fellowship Program to three new countries in the Sub-Saharan Region, 
bringing the total number of Sub-Saharan participants to11. The goals 
are to develop agricultural systems to help these nations meet domestic 
food needs, and to strengthen trade linkages with the United States.
    These endeavors are paying off in terms of U.S. trade. For the 
first time in 1999, a Senegalese company imported U.S. frozen chicken 
and meat. The participant intends to purchase two containers per month, 
the value of which is estimated at over $200,000 per year.
    In Africa, USDA will increase its monitoring of agricultural 
sectors to enhance the USAID's Famine Early Warning System. This will 
help us assist these countries make the transition form subsistence to 
market economies. And we will continue to coordinate our food aid 
programs with USAID's Public Law 480, Title II programs.
    We will continue to foster research and scientific exchanges in 
this region. Both the United States and countries in Africa benefitted 
last year from 24 research and scientific exchanges under the FAS-
administered Scientific Cooperation Research Program involving U.S. 
scientists and 11 African countries. Projects include providing 
alternatives for small farmers; improving seedless mandarins for new 
domestic and international markets; using natural enemies for 
biological control of stemborers, which cause more than $1 billion in 
damages to U.S. crops each year; and preventing introduction of exotic 
pathogens on the Protea flower in a multi-million dollar industry with 
tremendous growth potential for farmers in both the United States and 
Africa.

                             BUDGET REQUEST

    There is no question that today's budget environment requires us to 
prioritize our activities. Adjusted for the ICASS base transfer, which 
was implemented in fiscal year 1998, the level of funding available to 
FAS has essentially remained unchanged from fiscal year 1997, forcing 
FAS to again absorb unavoidable wage and price increases in fiscal year 
2000. The combined impact of the fiscal year 2000 Federal pay raise and 
higher overseas costs resulted in a $5.6 million shortfall in the FAS 
operating budget. Addressing this shortfall required FAS to adopt the 
following stringent fiscal measures:
  --Savings of $1.0 million from closing or downsizing six overseas 
        offices. (Closing Bern and Agricultural Trade Offices (ATOs) 
        Milan and Jeddah, and downsizing Ukraine and ATOs Hamburg and 
        Tokyo. Additionally, ATO Singapore will be closed at the end of 
        this fiscal year which will save $.9 million in fiscal year 
        2001);
  --Savings of $1.6 million from a 50-percent reduction in marketing 
        activities conducted through FAS offices overseas;
  --Savings of $2.0 million from a 25-percent reduction in domestic 
        discretionary spending such as travel, training, supplies and 
        equipment; and
  --Savings of $1.0 million from up to a 5 percent reduction in current 
        U.S. employment levels to be achieved by continuing a hiring 
        freeze and offering an early retirement opportunity.
    Mr. Chairman, the fiscal year 2001 budget proposes a funding level 
of $117.9 million for FAS, excluding $27.5 million for the Cooperator 
Program, which is now funded through CCC. In addition to partially 
funding the fiscal year 2001 pay raise, the budget proposes a modest 
increase to support several agency initiatives including:
  --$750,000 and 8 staff years for market access compliance and 
        negotiation activities. U.S. agriculture made groundbreaking 
        progress in the Uruguay Round of multilateral trade 
        negotiations, improving world market opportunities for U.S. 
        agricultural products by an estimated $5.17 billion during the 
        implementation period. However, this has led to a sharp 
        increase in FAS' trade compliance workload including monitoring 
        implementation of numerous trade liberalization provisions by 
        other countries and ensuring their compliance, negotiating 
        agreements with countries seeking to accede to the World Trade 
        Organization, and developing harmonized rules of origin for 
        customs purposes. The onset of new multilateral negotiations on 
        agricultural trade is expected to increase our current market 
        access workload even further.
    The requested funds will support additional staffing needed to meet 
this heavier workload and to fund technical expert participation from 
other USDA agencies in international consultations, particularly 
related to food safety and biotechnology issues, and to contract for 
technical expertise as needed to work effectively with foreign 
regulators.
  --$1,500,000 and 12 staff years to open three new ATOs in priority 
        markets that offer significant growth for U.S. exporters over 
        the next 5 to 10 years. These markets include:
    --Mexico (a new ATO in Monterrey and an ATO satellite office in 
            Guadalajara $400,000) Increased FAS representation in the 
            banking and northern trade center of Mexico will allow the 
            United States to take advantage of U.S. exporters' 
            proximity and the market access provisions of NAFTA. A 
            presence in western Mexico will allow the United States to 
            take advantage of the expanding hotel, restaurant, and 
            institutional trade in the region and in Mexico's second 
            largest city. Mexico is currently the third largest, single 
            country market for U.S. agricultural exports.
    --Canada (new ATO in Toronto $550,000): Significant trade 
            opportunities exist for small-to medium-sized U.S. 
            exporters in our second largest, single country market. 
            This new office would form the hub for an enhanced market 
            development effort targeting new exporters in the United 
            States.
    --Philippines (new ATO in Manila--$550,000): The Philippines is the 
            9th largest foreign market for U.S. agricultural goods, 
            importing $730 million of U.S. agricultural products in 
            fiscal year 1999. An ATO in Manila will make further 
            inroads into this major market and protect U.S. interests 
            from major nearby competitors such as Australia.
  --$618,000 for funding of the FAS attache office in the American 
        Institute in Taiwan (AIT). Citing budgetary pressures, AIT is 
        proposing to shift the funding responsibility for direct and 
        indirect costs to resident agencies that historically have been 
        funded through the AIT contract with the Department of State 
        (DOS). The AIT contract is funded through appropriations made 
        to DOS. Because DOS will no longer fund the costs of other 
        agencies through its contract with AIT, an additional $618,000 
        will be needed to maintain the FAS Agricultural Attache Office 
        at the AIT.
    Responding to conference report language directing the Department 
to develop a plan for establishing an account to manage overseas 
currency fluctuations, the budget proposes the establishment of an 
overseas buying power maintenance account. Under this proposal, up to 
$2 million of the FAS annual appropriation shall remain available until 
expended solely to offset fluctuations in international currency 
exchange rates.

                            EXPORT PROGRAMS

    Mr. Chairman, the export promotion, food assistance and foreign 
market development programs administered by FAS are key to expanding 
global market opportunities for U.S. agricultural producers. Our 
program proposals provide the tools to meet these new sales 
opportunities.
    Export Credit Guarantee Programs.--The budget includes a projected 
overall program level of $3.8 billion for CCC export credit guarantees 
in fiscal year 2001. As in previous years, the budget estimates reflect 
actual levels of sales expected to be registered under the programs 
rather than authorized program levels. Of the total program level, $3.5 
billion will be made available under the GSM-102 program and $101 
million will be made available under the GSM-103 program. For supplier 
credit guarantees, the budget includes an estimated program level of 
$150 million and an estimated program level of $40 million for facility 
financing guarantees.
    Foreign Market Development.--The budget includes $27.5 million for 
the Foreign Market Development (Cooperator) Program, unchanged from 
last year. As a means of providing stability for future program 
activities, funding for the Cooperator Program is now provided through 
CCC rather than the FAS appropriation.
    The budget also proposes $2.5 million in funding from CCC for the 
Quality Samples Program. Under this program, samples of U.S. 
agricultural products are provided to foreign importers in order to 
promote a better understanding and appreciation of their high quality. 
The Quality Samples Program is carried out through private sector 
organizations.
    Market Access Program (MAP).--The budget provides funding for MAP 
in fiscal year 2001 at the maximum authorized level of $90 million, 
unchanged from fiscal year 2000.
    Public Law 480.--For fiscal year 2001, the budget includes a total 
program level for all titles of Public Law 480 food assistance 
activities of $1.017 billion, which is expected to provide 
approximately 2.9 million metric tons of commodity assistance. As was 
the case last year, the budget requests no specific level of funding 
for Title III grants; however, current authorities provide that up to 
15 percent of the funds of any title of Public Law 480 may be 
transferred to carry out any other title.
    Export Enhancement Program (EEP).--World supply and demand 
conditions have limited EEP programming in recent years. However, the 
fiscal year 2001 budget does include a program level of $478 million 
for EEP, the maximum level authorized by the Agricultural Trade Act of 
1978. In addition, proposed legislation will be submitted in 
conjunction with the budget that will authorize the Secretary of 
Agriculture, in the last quarter of the fiscal year, to reallocate 
unobligated EEP funding for use in carrying out U.S. foreign food 
assistance activities, including Public Law 480 and Food for Progress 
programs, and for purchasing commodities to replenish the Food Security 
Commodity Reserve, and to assist the CCC in conducting market 
development activities.
    Dairy Export Incentive Program (DEIP).--The budget assumes a DEIP 
program level of $66 million for fiscal year 2001, below the current 
estimate for fiscal year 2000 of $119 million. The projected decline in 
DEIP programming is the result of two factors: full implementation of 
the Uruguay Round export subsidy reduction commitments and the phase 
out in June 2000 of the so-called ``rollover authority'' that allows 
countries under certain conditions to exceed their annual export 
subsidy commitments by drawing on unused subsidy authority from 
previous years.
    This concludes my statement, Mr. Chairman. I will be glad to answer 
any questions.

                       COCHRAN FELLOWSHIP PROGRAM

    Senator Cochran. I appreciate your comments on that issue. 
While you are at the table, I noticed in your prepared 
statement, which we have included in the record now, you talked 
about introducing record numbers of agricultural policymakers 
around the world to U.S. products and policies during this last 
fiscal year, and you plan to meet and exceed that record this 
year. You mentioned the Cochran Fellowship Program. And I must 
say that I had an opportunity to meet with agriculture consuls 
or attaches in two North African countries, where I travelled 
with Senator Stevens and other members of the Appropriations 
Committee recently.
    They were telling us how effective that program has become. 
It was a new program in those areas and they were very excited 
about the prospects for developing new relationships and using 
that as a way to improve cooperation in a number of different 
areas of interest with those countries and people and 
businesses in those countries.
    You point out that 800 Cochran fellows from 70 emerging 
markets participated in courses that introduced them to U.S. 
products. And I assume that is an annual figure, is it not? And 
that was just in 1999?
    Mr. Galvin. Yes, sir, just in 1999. That was a record year. 
You are correct, it has been a very successful program for 
about 15 years now. It has led, I think, to a lot of examples 
where we have seen increased U.S. exports and benefits in the 
area of trade policy. One thing that we have seen in the last 
couple of years is that we have really been able to use the 
program in an effort to help us address some of the pressing 
trade policy problems that we face today. And I think, in 
particular, of the biotech issue that continues to cause us 
great problems.
    To give a specific example there, we used the Cochran 
program last year to bring in 15 technical specialists, 
scientists and policymakers, from Eastern Europe, to educate 
them on our system here in the U.S. for ensuring that biotech 
products are safe and offer substantial benefits and that sort 
of thing. We currently have in the planning stage a similar 
type effort directed toward Southeast Asia. That part of the 
world is still somewhat open to biotech, and we want to make 
sure that we meet with the appropriate policymakers there to 
ensure that the door remains open to biotech products.
    I should also mention that one of the other current major 
topics that we face right now is in the area of food safety, 
not just in the U.S. but of course worldwide as well. We 
currently have in this country a Cochran team of 15 or 20 
individuals from more than seven countries. They are here to 
learn about the U.S. food safety system, learning about things 
such as the HACCP approach to inspection and that sort of 
thing. That delegation arrived here about a week ago, and they 
will be here through much of March, learning about the U.S. 
food safety system and hopefully taking those lessons back to 
their own countries.
    Senator Cochran. That is interesting. And I wonder if you 
could, for the record, give us a report, over the period of 
time that the program has been in operation, what the figures 
are in kind of a summary form. I do not want to put anybody to 
any extra trouble, but if you have those in your computers and 
can press a button and gin them up without too much difficulty, 
that would be helpful to have in the record.
    Mr. Galvin. Yes, sir, we would be glad to try to do that.
    [The information follows:]

                       COCHRAN FELLOWSHIP PROGRAM

    The Cochran Fellowship Program has received funding from three 
sources: direct appropriations, funds from FAS' Emerging Market Program 
for specific countries, and funding from USAID for activities in the 
New Independent States. The following table provides the number of 
participants by country and by funding source since the program started 
in 1984.

                         PARTICIPANT LEVELS BY COUNTRY AND BY FUNDING SOURCE, 1984-1999
----------------------------------------------------------------------------------------------------------------
                                                                             Emerging      USAID
                                                           Appropriations     market      Freedom       Total
                                                                             program    Support Act
----------------------------------------------------------------------------------------------------------------
Asia:
  China..................................................            283             4  ...........          287
  Hong Kong..............................................             47   ...........  ...........           47
  Indonesia..............................................             68   ...........  ...........           68
  Korea..................................................            211   ...........  ...........          211
  Malaysia...............................................            191   ...........  ...........          191
  Philippines............................................             88   ...........  ...........           88
  Singapore..............................................            113   ...........  ...........          113
  Taiwan.................................................             99   ...........  ...........           99
  Thailand...............................................            171   ...........  ...........          171
  Vietnam................................................              2            68  ...........           70
                                                          ------------------------------------------------------
      Subtotal...........................................          1,273            72  ...........        1,345
                                                          ======================================================
Non-EU Europe:
  Albania................................................  ..............           54  ...........           54
  Bosnia.................................................              6   ...........  ...........            6
  Bulgaria...............................................             54            64           81          199
  Croatia................................................             22            22  ...........           44
  Czech Republic.........................................             56            57          119          232
  Estonia................................................             27            19  ...........           46
  Hungary................................................             85            41           34          160
  Latvia.................................................             24            21  ...........           45
  Lithuania..............................................             21            20  ...........           41
  Malta..................................................              2   ...........  ...........            2
  Macedonia..............................................              3   ...........  ...........            3
  Poland.................................................            212           137          200          549
  Romania................................................             31            26  ...........           57
  Slovakia...............................................             45            64  ...........          109
  Slovenia...............................................             36            37  ...........           73
  Turkey.................................................            359   ...........  ...........          359
  Yugoslavia.............................................             94   ...........  ...........           94
                                                          ------------------------------------------------------
      Subtotal...........................................          1,077           562          434        2,073
                                                          ======================================================
Latin America and Caribbean:
  Brazil.................................................  ..............           13  ...........           13
  Caribbean Islands......................................             68   ...........  ...........           68
  Colombia...............................................            130   ...........  ...........          130
  Costa Rica.............................................             12   ...........  ...........           12
  Chile..................................................             16   ...........  ...........           16
  El Salvador............................................              2   ...........  ...........            2
  Guatemala..............................................              8   ...........  ...........            8
  Mexico.................................................            639   ...........  ...........          639
  Nicaragua..............................................              5   ...........  ...........            5
  Panama.................................................             57   ...........  ...........           57
  Trinidad/Tobago........................................             96   ...........  ...........           96
  Venezuela..............................................            283   ...........  ...........          283
  Other LA Countries.....................................              2   ...........  ...........            2
                                                          ------------------------------------------------------
      Subtotal...........................................          1,318            13  ...........        1,331
                                                          ======================================================
Africa and Middle East:
  Algeria................................................             82   ...........  ...........           82
  Cote d'Ivoire..........................................            162             2  ...........          164
  Ghana..................................................              5             1  ...........            6
  Iraq...................................................             78   ...........  ...........           78
  Kenya..................................................             17             3  ...........           20
  Morocco................................................              1   ...........  ...........            1
  Namibia................................................  ..............            6  ...........            6
  Nigeria................................................              2             3  ...........            5
  Oman...................................................              4   ...........  ...........            4
  Senegal................................................             14             3  ...........           17
  South Africa...........................................              5           104  ...........          109
  Tanzania...............................................              3             2  ...........            5
  Tunisia................................................             46   ...........  ...........           46
  Uganda.................................................             11             3  ...........           14
  Other Africa Countries.................................  ..............           17  ...........            3
                                                          ------------------------------------------------------
      Subtotal...........................................            430           144            2          560
                                                          ======================================================
NIS:
  Armenia................................................  ..............           25           55           80
  Azerbaijan.............................................  ..............  ...........           33           33
  Belarus................................................  ..............           20           20           40
  Georgia................................................  ..............           16           38           54
  Kazakstan..............................................  ..............           60           88          148
  Kyrgyzstan.............................................  ..............           24           69           93
  Moldova................................................  ..............           11           87           98
  Russia.................................................              3           297          245          545
  Tajikistan.............................................  ..............            2           42           44
  Turkmenistan...........................................  ..............           15           50           65
  Ukraine................................................  ..............          114          121          235
  Uzbekistan.............................................  ..............           20           83          103
                                                          ------------------------------------------------------
      Subtotal...........................................              3           604          931        1,538
                                                          ======================================================
  Total..................................................          4,101         1,379        1,367        6,847
Percent of total.........................................             60            20           20  ...........
----------------------------------------------------------------------------------------------------------------

    Mr. Galvin. I should mention that the total funding for the 
program is about $5 million. About half of that comes from 
direct appropriations, another million or so comes from our 
emerging markets program. That is, I think, an example of where 
we have really married the two programs in a very positive way. 
The balance comes from AID funding.
    Mr. Schumacher. If I may, Tim.
    Senator Cochran. Mr. Secretary?
    Mr. Schumacher. Since 1984, nearly 7,000 mid- and senior-
level people have participated in this program from over 70 
countries. And of course, as I travel around, I see the 
extraordinary benefit.
    But I want to emphasize again what Tim said on the 
biotechnology and food safety issues, which are going to be so 
important in the future for our trade. More and more of these 
have been coming in. And studying our HACCP systems, studying 
how the biotechnology is benefitting not only our country but 
how it could benefit their countries' food needs, as Senator 
Durbin so eloquently put it, they are going to be ratcheting up 
in many of these countries, they need to adapt and adopt some 
of these new technologies for the future. Coming here, with the 
Cochran program, has worked really well--7,000 have benefitted.
    Senator Cochran. I have received word from some other 
members of Congress, who have been in these countries who are 
participating in the program, how some have formed what they 
call Cochran clubs. And they bring together on a regular basis 
the alumni who have participated in the program and they talk 
about their experiences and also just stay in touch. And they 
are serving as catalysts for better communication and 
understanding of the U.S. and its market economic system and 
our democracy and food production techniques that can help 
improve trade for us and also benefits that are widely shared 
because of the program throughout the world.
    Well, I appreciate your work on the program and your 
continued support for looking for ways to use it to benefit our 
interests as well as the interests of the countries that are 
participating.

                           CAPACITY BUILDING

    Mr. Galvin. If I may, Mr. Chairman, just one other example, 
because this is an issue that we hear a lot about from 
developing countries. And that is the whole issue of capacity 
building. It is an issue that we hear quite often in the WTO 
context, when developing countries say they are a little bit 
leery of trade liberalization because they just do not have the 
capacity to implement TRQ's and tariff reduction schedules and 
that sort of thing.
    Last year, we also had a very good program in Africa on the 
WTO and the Codex system and how these developing countries can 
come to have a better understanding of how to implement their 
obligations as WTO members or as Codex members. And it was 
extremely successful and one that we would like to continue as 
well.

                     COTTONSEED ASSISTANCE PROGRAM

    Senator Cochran. Thank you very much.
    Mr. Secretary, I was pleased with your announcement that 
you are going forward with the cottonseed assistance program. 
You mentioned that just before the hearing began. Could you 
tell us how the Department intends for the program to work and 
when the signup will occur and what the payments are that can 
be expected?
    Mr. Schumacher. Yes. I would ask Parks if he could come to 
the table. He has worked very hard, with Keith Kelly, to get 
this up and running in a timely fashion. And maybe he could 
just take us through briefly how the program is going to 
operate.
    Mr. Shackelford. Well, sir, as the release carefully 
states, until we have the regulations out, this is not final. 
However, I can at least talk about what we propose to do.
    This year is somewhat unique in that virtually all of the 
cotton gin in the U.S. was classed by the AMS. So we hope to be 
able to run this program in a much simpler manner than some of 
the programs where we have to go through major signups. We hope 
to take the AMS data, which is provided in specific form, use 
that to determine basically a list of the bales, provide that 
data in letter form to the gins, get them to verify it, and 
then make the payments based on that data. So it should be very 
simple, and we should not have to go through the whole signup 
process and much of the trouble we have had before.
    We will estimate a seed-to-lint ratio to basically 
determine the tons of seed per bale and probably just make 
those payments based on the number of bales ginned by each 
particular gin. The payments will go to the gins, to the first 
handlers, with the understanding that they will be shared with 
the producers where it is appropriate, where ginning charges 
were increased, for example.
    Senator Cochran. We appreciate that information, and we 
hope you will let us know if you encounter any problems, just 
like we will let you know if we hear of any problems.
    Mr. Shackelford. Yes, sir, you will. Thank you.

                     EMERGENCY ASSISTANCE PAYMENTS

    Senator Cochran. Mr. Secretary, as you know, we had a $9 
billion emergency assistance package last year, signed by the 
President. What are the expectations on when the final payments 
are going to be made and whether progress is being made as you 
envisioned in getting the funds out to the producers and those 
who are beneficiaries of this program?
    Mr. Schumacher. I am going to ask Keith to comment. But I 
think what I would like to do is just summarize very briefly. 
And if I may, I will give you a written report tomorrow or the 
next day, because we have 22 programs and it would take a fair 
bit of time to go through all of them.
    Senator Cochran. That is fine.
    [The information follows:]

          FSA Implements New and Ad Hoc Assistance for Farmers

                          NEW PROGRAMS IN 2000

Supplemental PFC
Crop Disaster Program (CDP)
Rice LDP
1 Year Honey Recourse Loan Program
1 Year Mohair Recourse Loan Program
Mich. Peaches
Peanut Program
Tobacco Program
Livestock Assistance Program (LAP)
Livestock Indemnity Program (LIP)
Dairy Market Loss Assistance Program II
Tobacco Warehouse Disaster Comp.
LIP for Contract Growers (CG-LIP)
NAP Non-Trigger Areas
Harney County, Oregon Flood Comp.
Florida Citrus Canker
Cottonseed
Oilseed
Pasture Restoration Program (PRP)
Farm Storage Facility Loan Program
Commodity Certificates
Lamb Program

    Mr. Schumacher. Of course, the AMTA payments went out very, 
very quickly last fall. We have closed the signup now on the 
disaster payments. We will be uploading those in the next few 
weeks. Advance payments are going out on the disaster programs 
for that. And let me just look at my notes.
    Senator Cochran. When do you expect those payments would go 
out?
    Mr. Schumacher. In about 3 or 4 weeks, I hope. As soon as 
we can get the upload done and we get the factor, we can get 
those payments out. Farmers have received, according to my 
notes here, advance disaster payments of about $170 million so 
far. But that does not reflect a lot of the late signups. So 
when we go through the register I expect that will be much more 
as we process the last filers, the people who registered last 
Friday. We will finalize their paperwork this week.
    I think honey and mohair have gone very well. We are 
working well on the tobacco and peanuts. And tobacco in 
Kentucky is 96 percent paid out. In the livestock assistance 
program, we have got 80,000 farmers that have applied for $141 
million, as of January 18th. So that is working reasonably 
well.
    In the livestock indemnity program, the dairy market loss, 
we hope to get that out in mid-March. Those are the major ones. 
We have just discussed cottonseed. The oilseed program, that is 
a difficult one. Signup is now under way. The postcards have 
gone out already and we have got the training done. That is 
moving forward.
    I have talked about the farm storage and the pasture 
restoration. So, by and large, I think we are reasonably well 
on schedule. I think oilseeds will be the one that will be most 
difficult to administer. We have done the training. The staff 
are going to be working on that. The farmers will be coming in 
to get signed up.
    Senator Cochran. Can you provide an estimate of the 
percentage of qualifying losses that will be covered by the 
crop loss portion of this package?
    Mr. Schumacher. Not at this time, sir.

                     IMPACT OF DISASTER ASSISTANCE

    Senator Cochran. Dr. Collins, I know you are the 
prognosticator here. Where would our farm economy be if these 
funds had not been made available to producers?
    Mr. Collins. Well, over the past 2 years we have made 
available a total of some $15 billion, which represents a 
tremendous portion of what people had as net farm income. 
Without that--kind of the obvious--we would have had a credit 
crisis.
    Senator Cochran. A lot of bankrupt producers?
    Mr. Collins. Absolutely. In fact, we saw a surprising thing 
over the last couple of years. We have seen the number of farms 
in the United States actually go up, in 1998 and 1999. I do not 
think we would have seen that. And I think particularly among 
the commercial operations, we would have seen a sizable 
decline.
    It is hard to correlate credit stress with declines in farm 
numbers, because sometimes it takes several years, because 
people will pay out of their savings account, they will sell 
off assets, and so on. But I think, if not in 1999 or 2000, 
certainly in 2001 or 2002 we would have seen a sharp drop in 
farm numbers had we not made the kind of payments that were 
made over the last 2 years. There is no doubt that a lot of 
people would not have been able to extend their loans or 
qualify for credit, particularly in 1999, had we not made these 
payments.
    Senator Cochran. Yes, sir, Mr. Secretary, go ahead.
    Mr. Schumacher. A lot of those payments, of course, went 
out to program crops. But if I may add, Senator Gorton 
mentioned the apple industry. For example, in a number of 
Eastern States, there were difficulties in 1998 with 
pollination, and farmers have written me personal letters 
indicating that if it was not for the disaster program passed 
by your committee and Congress in 1998, tens of those family 
apple orchards would have gone out of business, and were 
basically saved by the disaster program that was put in place.
    Senator Cochran. You were maybe both here when Secretary 
Glickman discussed whether the countercyclical payments 
proposed by the Administration as part of this budget would be 
beneficial as the disaster programs that we already passed. Dr. 
Collins specifically testified that no analysis had been 
conducted on whether there would be any geographical bias in 
the distribution of payments. That was a concern that I had at 
the time.
    I wonder if you have had an opportunity to look further at 
that question. I was suggesting that with the payment 
limitations specifically that cotton and rice producers were 
going to be treated unfairly under this Administration's 
proposal. Have you had a chance to look at that and do any 
analysis of it?
    Mr. Schumacher. I have not done a geographic analysis but I 
have done a commodity analysis and a farm size analysis. And I 
would say that probably I would not use the word bias, I would 
say that the distributions would be different than they would 
be under an AMTA payment payout, for example. Your sense about 
cotton and rice I think is accurate. One of the things that we 
reported under our supplementary assistance proposal was that 
there are about 30,000 entities, persons, in the United States 
that would not be eligible for payments under that proposal 
because of the $30,000 payment limit. That is about 2 percent 
of all the persons in the United States.
    However, for cotton, it would be about 7 percent of all the 
cotton persons, of which there are over 100,000. And for rice, 
it would be about 22 percent of all the rice persons who would 
not be eligible because they already get $30,000 or more in 
payments. So it certainly hits differentially cotton and rice, 
a problem that regular payment limits would have for cotton and 
rice, as well.
    Secondly, I would say that if you compare the distribution 
of payments under the supplementary assistance proposal to that 
under AMTA payments, you would find that proportionally more 
payments would go to wheat, slightly more to rice, and fewer 
payments would go to feed grains and cotton under the 
Administration's proposal as opposed to AMTA payments. That 
reflects the changes in farm income from one crop to another 
crop, and with wheat and rice having sharper drops in farm 
income, that triggers a little bit higher proportion of the 
payments going to them.
    Senator Cochran. Has there been any analysis of farm size 
and efficiencies and whether or not that ought to be considered 
when a program of this kind is developed? Are you going to 
legislate some sort of government policy on farm size by 
imposing a limitation as suggested by this program?
    Mr. Collins. I do not see how this legislates a farm size. 
I think we have payment limits now for AMTA payments, for 
marketing loan gains and LDP's. We have had payment limits for 
other programs as well. This simply is another payment limit in 
the longstanding tradition of payment limits on payment 
programs. The difference here is that this one tends to be a 
little bit tighter.
    That means that large producers that were receiving fairly 
large payments would not be eligible. I do not know that that 
mandates a particular farm size. It turns out, if you look at 
the data, those producers that get the largest payments also 
tend to have the highest farm incomes. And so, to some extent, 
they have deeper pockets for dealing with a downturn in the 
farm economy than some of the medium-sized producers.
    I think the issue here was that there was a finite amount 
of money to spread around. And for that reason, a little bit 
tighter payment limit was advocated.

                 PRICE IMPACT OF CONSERVATION PROGRAMS

    Senator Cochran. The Administration's proposal includes 
expansion of a number of different reserve programs, like the 
conservation reserve, wetlands reserve, other environmental and 
conservation programs, all of which are good programs, and some 
of which I authored. The WHIP program, for example, was 
authorized by Congress based on legislation that I had 
introduced. So I am in favor of these programs.
    My question is: What impact would you predict the expansion 
of these programs in the way the Administration requests would 
have on commodity prices, if any?
    Mr. Schumacher. Can I address part of that, and then 
perhaps Keith Kelly and Keith Collins can expand.
    There are five programs that we have asked for, and I will 
walk through them very quickly. Concerning the farmland 
protection program, we have asked for $65 million to cost-
share. Many parts of the country are really pushing very, very 
hard. Whether it is California or some of the mid-Atlantic 
States or the Northeast, they were putting in substantial 
amounts. And they would like some cost-share, in a modest 
sense, for farmland protection. I do not see that having any 
major impact on commodity prices. It will most certainly help 
family farmers stay in business during tough times.
    Neither the WHIP nor the EQIP would have a significant 
impact on commodity prices. Perhaps, Parks, you can assist me 
on the wetlands reserve, a modest program; and, Keith, on the 
4-million-acre expansion of CRP, a fairly modest impact, I 
would think, if any.
    Mr. Collins. Probably about half of that acreage, half of 
the 4 million, would compete with the principal eight program 
crops. And so you might be talking about a reduction in 
plantings of a million or two acres at the most. And, that 
would be phased in over a multi-year period as well. So I think 
the impact of that is quite small. There would be some, but it 
would be pretty small.
    Mr. Schumacher. And the additional one, of course, is the 
conservation security program that we propose for $600 million 
in this budget. And that I think is a very important issue that 
we would like to continue to work with you on. Because I think 
that, as I indicated earlier, would not only help heartland 
agriculture, including rice and cotton, but also help dairy 
farmers as they try and deal with plunging prices, in terms of 
giving them some support for runoff control. It would help 
livestock operators as well. So I would hope you would consider 
that as you do your markup, Senator.
    Senator Cochran. So the benefits would be in spending that 
would go to farmers or landowners that are controlled in these 
conservation programs? They would not get any benefit from 
increased commodity prices, then, would they?
    Mr. Collins. I think the price effects would be quite 
small. I think the main benefits would be to help producers be 
better stewards of the land, to promote sustainable agriculture 
objectives, and to lower their costs of production in doing so. 
And in the case of the conservation security program, probably 
provide producers some benefit over and above and beyond the 
mitigation costs of environmental problems. So there would be 
some direct income effect from the conservation security 
program, cost-reducing effects from the other programs, and a 
very, very limited effect on prices from the CRP program.

                  PROPOSED CROP INSURANCE LEGISLATION

    Senator Cochran. Let me ask you about crop insurance. I 
know Mr. Ackerman was up a little while ago answering questions 
from Senator Kohl and maybe others. But the Agriculture 
Committee here in the Senate is going to consider legislation 
regarding crop insurance. We have a number of bills pending 
before the committee. I have cosponsored a couple of them, so I 
have got two bases covered anyway.
    What have you concluded with respect to the legislation 
that we are going to be considering? And do you have any 
favorites among the three? I guess there are three major bills, 
the Lugar bill, then there is the Kerrey-Roberts bill, and 
there is the Cochran-Blanche Lincoln bill. And I am sponsoring 
also the Lugar bill. I do not want to get crossed up with the 
chairman here right off the bat.
    Mr. Ackerman. Well, Senator, it has been a little hard to 
keep score of all of them, and they have been changing a lot 
the last couple of days. We have seen some drafts that have 
come out just within the last day on some of these different 
proposals. I understand there will be meetings going on up 
until the 11th hour before the markup.
    Generally what we would like to see is certain basic 
objectives accomplished in a crop insurance bill. We put our 
proposals on the table, because after the last couple of years, 
there have been problems with crop insurance. I have been at 
farmer town meetings in about 20 different States, and you hear 
certain problems repeated time and time again about the crop 
insurance program--that the buy-up policies are too expensive, 
that we do not cover enough crops, that there is a problem when 
farmers have multi-year losses, that we do not cover enough of 
the specialty crops, that farmers do not have enough 
information to make good decisions, that there are problems 
with the NAP program.
    Those half dozen themes get repeated time and time again on 
crop insurance, even with the gains we have made. What we would 
like to see is a bill come out of this process. I should say 
that, number one, we would like to see a bill come out of this 
process that will actually deal with the issues. And number 
two, for that bill to deal with those half dozen key problems 
with crop insurance--making it more affordable, dealing with 
the multi-year issue, providing more funding for research and 
development for specialty crops and new programs, risk 
management education, fixing the NAP program, and so on.
    In the different bills before the committee, some deal with 
these problems more than others--some have different focuses. 
We have tried to avoid getting too hung up on which vehicle the 
committee is going to mark up because there are a lot of 
factors the committee is looking at. But we are looking at 
something that will accomplish these objectives.

                    IMPACT OF LEGISLATION ON BUDGET

    Senator Cochran. What impact would the passage of any of 
these bills have on the budget request for the Risk Management 
Agency and the Farm Service Agency?
    Mr. Ackerman. I could tell you that for the Risk Management 
Agency, it would have a very significant impact. For example, 
just taking one provision by itself, the research and 
development for specialty crops--and all of the bills are very 
similar on this one point--the vision is to make available $10 
million, $20 million, or $30 million for researching new 
programs. All of those programs, once they are developed and 
they come in, will have to be processed by RMA. They will have 
to be reviewed, will have to be added into our computer systems 
and we will have to develop accounting systems for them.
    That will create need for more administrative budget. What 
the exact numbers are, we have not calculated because the bills 
are a moving target. But clearly it will have an impact.
    Mr. Schumacher. The same thing on FSA. I think some of the 
language we have seen has some requirements for the Farm 
Service Agency and I understand, Dennis, there has been no 
provision made for assisting on the staffing for that either. 
So on both RMA and FSA, in the language I have seen so far, 
there has been no provision to assist in any implementation of 
this.

                       ADMINISTRATIVE CONVERGENCE

    Senator Cochran. Let me ask about the issue of 
administrative convergence of the Farm Service Agency, Rural 
Development, and the Natural Resources Conservation Service. In 
your written statement to the committee, you state that by 
streamlining the administrative services for these three 
agencies, the Department will be able to conserve resources. In 
what dollar amounts are these savings going to be realized? Do 
you expect to achieve predictable or concrete savings by this 
convergence?
    Mr. Schumacher. Certainly in the longer term. And Dennis, 
maybe you and Keith can outline where we are on the support 
services. In the effort we have been making to get savings, for 
example, in Iowa or Alabama, where we have some procurement of 
vehicles, we can share vehicles among all three agencies, and 
it would be very helpful indeed. Just saving the procurement 
costs would be of great benefit. That will take some time to 
work through. We think there will be some significant savings 
over time through administrative convergence.
    And perhaps, Keith, you can expand on that.
    Mr. Kelly. Senator, since FSA has been right up against a 
wall with employment, we have been a strong advocate of 
administrative convergence all along because we have been 
struggling for the last couple of years to deliver programs. 
And what we saw, and we still see, is the advantages of 
administrative convergence to do all of the back room type 
things. It is hard to understand why we and RD and Natural 
Resources cannot use the same documents for procurement and for 
some of these other things. That has to have some major cost 
savings, especially with regard to a common computing 
environment. I think the CCE would be the most obvious example 
of that.
    And those efficiencies have to get translated back into 
savings, with the idea that they are going to free up resources 
and give us some help to do a better job in the struggle that 
we have had on the program side. So, yes, I clearly do think 
that there would be some cost savings all the way through on 
this.
    Senator Cochran. But has anybody quantified it?
    Mr. Kelly. Senator, there were efforts to quantify it 
during the development of the Support Services Bureau, in the 
report that was brought up here last year. It was quantified at 
the same time we were doing the downsizing. The quantification 
really was showing us trying to stay within the employment 
targets. As far as an exact dollar estimate, we would have to 
get that for you if there was one, because I do not know if 
there were any specific dollar figures for that.
    Senator Cochran. What is the status of the initiative? 
Where are we? What have you done?
    Mr. Kelly. As you can see in the statement that I have 
presented for the record, we are still supportive of moving 
forward with this. And we are asking the committee to take a 
look at that language and work with USDA, again, across all 
three mission areas, to try and see if we cannot join the 
modern world. And again, the IT, the computer information 
technology, is clearly our biggest concern because we do not 
have a very good common computing or a current computing 
environment out there at all.
    And the lack of that is very costly and inefficient for us 
in whatever we do. I think that was discussed in some hearings 
up here last year, the idea of e-commerce and e-trade and e-
mail and things like this that we can do over the computer 
network--we are a long ways from that.
    Mr. Schumacher. We were disappointed, quite honestly, Mr. 
Chairman, that it was taken out of the budget last year. It was 
not authorized and appropriated. We just think it is good 
business practice, when you have people serving the same 
farmers, to be in the same offices and to have some cost 
savings just by merging the administrative units there. There 
was some opposition to that. You and I both know where the 
opposition was. There was opposition in a number of areas.
    But I think we just have to move forward and, in the 21st 
century, look at these new management techniques for keeping 
costs down.

                    DONATIONS OF SURPLUS COMMODITIES

    Senator Cochran. With more than a third of the fiscal year 
gone, why is USDA not moving more aggressively to exercise its 
authority under the CCC Charter Act to provide donations of 
surplus commodities to countries in need? With commodity prices 
still as low as last year and financial difficulty for farmers 
as severe as ever, why should USDA hold back or be reluctant to 
act? Will USDA reach last year's Section 416(b) levels?
    Mr. Schumacher. We have worked very hard on that. I am the 
chairman of the Food Aid Policy Council. We have had a number 
of interagency meetings to move this agenda. We announced a 
month or so ago the 3 million ton 416(b) allocations. I 
outlined those earlier in my testimony.
    If we have additional demands on the 416(b), where we can 
place the humanitarian need, we will certainly do that. And I 
have outlined, for example, that Mozambique may be one area. We 
are going to monitor that very, very carefully. We will come 
back to meetings of the Food Aid Policy Council when we see 
additional demands being made and to utilize the 416(b) 
effectively and efficiently.

                             PUBLIC LAW 480

    Senator Cochran. This is a question that relates to the $1 
billion appropriations level for Public Law 480 Title II. 
Current year funding is estimated to be $967 million, and the 
average amount disbursed for Title II since fiscal year 1993 is 
$906 million. Section 416 cannot be relied upon to make up the 
difference, since the types and levels of commodities vary year 
to year and often are not available at all. Yet the 
Administration is requesting only $837 million for Title II for 
fiscal year 2001.
    How will the U.S. maintain its commitments and be prepared 
to meet emergency needs without higher Title II appropriations?
    Mr. Schumacher. Well, as we indicated earlier, we used 
quite a bit of 416(b) this last year for wheat, and that 
diminished the need for a call on the Public Law 480. So we 
have some rollover. Maybe, Mr. Fritz, you could expand further 
on how we see that in the future.
    Mr. Fritz. If I may, Mr. Chairman, going back to your 
earlier question, I will tell you that we are in the process of 
negotiations with recipient countries and the World Food 
Program on the 416(b) programs that were approved recently. 
Some of those agreements will be signed very soon. Others, of 
course, will take further negotiations and stretch out into the 
spring and summer. But that process has actually begun with a 
number of countries and organizations, as well as the PVO's.
    With regard to Title I and Title II of Public Law 480, as 
Mr. Schumacher pointed out, we have used 416 in place of Title 
I, especially to meet our needs. For Title II, which is 
administered by AID, there is sufficient money to meet this 
year's obligations. There is also the ability to transfer some 
money between Titles, including Title III which was zeroed out 
within the budget. But we feel we are sufficient for this year 
and, if need be, would come back and, with the further 
indulgence of the Congress, look at funding levels for outyears 
when 416 is not available.

                     ADDITIONAL COMMITTEE QUESTIONS

    Senator Cochran. I appreciate very much your cooperation 
with our committee. We have been here a couple of hours now and 
we thank you for your patience and your handling of all of our 
questions. I know there will be additional questions we will 
submit. We hope you can respond to them in a timely way.
    [The following questions were not asked at the hearing, but 
were submitted to the Agencies for response subsequent to the 
hearing:]

             QUESTIONS SUBMITTED TO THE FARM SERVICE AGENCY

              QUESTIONS SUBMITTED BY SENATOR THAD COCHRAN

                         CONSERVATION PROGRAMS

    Question. The Department will propose legislation to expand the 
Wetlands Reserve Program (WRP), the Wildlife Habitat Incentives Program 
(WHIP), the Environmental Quality Incentives Program (EQIP), the 
Farmland Protection Program (FPP) and the Conservation Reserve Program 
(CRP). This proposed ``Farm Safety Net Initiative'' includes an 
additional $1 billion in mandatory spending over authorized levels to 
enhance these conservation programs. Currently Commodity Credit 
Corporation (CCC) funds for administrative support services is capped 
at the 1995 level of total allotments and transfers to Federal and 
State agencies (the so-called Section 11 ``cap''). This limitation 
affects the amount of dollars used for conservation technical 
assistance. How does this limitation affect the conservation technical 
assistance currently available for each of the mandatory conservation 
programs?
    Answer. The Section 11 cap severely restricts CCC's ability to fund 
technical assistance for conservation programs. Proposals in the Farm 
Safety Net Initiative reflected in the fiscal year 2001 President's 
Budget total nearly $1.3 billion in fiscal year 2001. Funds for 
technical assistance are included in most program levels and would not 
be subject to the Section 11 cap, such as for EQIP and the Conservation 
Security Program. As part of this legislative proposal, funds for 
Conservation Reserve Program, Farmland Protection Program, and Wetlands 
Reserve Program technical assistance, to be exempt from the CCC Charter 
Act Section 11 cap, in the amount of $75 million, are requested for 
fiscal year 2001.

                            EMERGENCY LOANS

    Question. The President's fiscal year 2001 budget request for 
emergency loans is $150 million. According to the U.S. Department of 
Agriculture's 2001 Budget Summary, this proposal reflects funding to 
accommodate the expansion of eligibility to larger farms through 
Treasury loans, and to close the eligibility gap with the Small 
Business Administration (SBA) emergency loans. What is the current gap 
in eligibility for emergency loans between the USDA and SBA programs?
    Answer. Existing statutes prohibit the SBA from providing disaster 
loans to any agricultural enterprise. The FSA emergency loan program is 
presently limited to family farms. The net result is that larger than 
family farms (those farms which require substantial labor beyond that 
required by the family and exceed the size of a typical farm in the 
community) and certain agricultural-related businesses cannot receive a 
disaster benefit that smaller farms receive.
    Question. Does this legislative proposal have a related cost?
    Answer. A major component of the program cost is the subsidizing of 
the difference between the interest rate charged to the borrower and 
the Government's cost to borrow. All borrowers in the current program 
pay a subsidized interest rate of 3.75 percent. Under the proposed 
legislation an estimated 30 percent of borrowers (large farmers) would 
pay an interest rate equal to the Government's cost of borrowing, and 
small farmers (70 percent of borrowers) would continue to pay a 
subsidized interest rate of 3.75 percent. As a result, the subsidy cost 
of the program would be reduced by a small amount.

                               FARM LOANS

    Question. Mr. Secretary, in your opening statement, you mention 
that USDA has streamlined its guaranteed loan making regulations in 
order to encourage more private lenders to participate in the program. 
What is the difficulty that private lenders have had with participating 
in the guaranteed loan program?
    Answer. In the past, lenders have been hesitant to participate in 
FSA's guaranteed loan program because of the perception that the 
program was cost prohibitive due to the time and paperwork required to 
apply.
    Question. What changes did the Department make in the regulations 
that will encourage increased private lender participation?
    Answer. The streamlined guaranteed loan regulations give lenders 
increased flexibility and make the rules more consistent with standard 
procedures in the banking industry. The new regulation reduces 
requirements for loans of $50,000 or less. For these applications, FSA 
requires limited supporting documentation and historical data. The only 
forms needed to apply are an FSA application, balance sheet, and cash 
flow statement.
    We also implemented a Preferred Lender Program (PLP) for lenders 
experienced with the FSA guaranteed loan program. Under PLP, FSA 
approves the lender's system of credit management, and the lender is 
then able to obtain a guarantee under a simplified process tailored to 
each lender's own policies. To apply for an FSA guarantee, the PLP 
lender submits only a one-page signed form and a narrative addressing 
certain credit criteria. The guarantee is automatically approved if FSA 
does not take any action within 14 days of receiving a complete 
application.
    We also increased flexibility in our collateral and servicing 
requirements. We now permit the subordination of direct loan security 
in favor of a guaranteed loan when specific indicators, such as cash 
flow and equity, are at a level that indicates sufficient financial 
strength. In addition, we allow the subordination, exchange, or release 
of collateral when in the borrower's and Government's best interest.
                                 ______
                                 

              QUESTIONS SUBMITTED BY SENATOR SLADE GORTON

    Question. Apples were mentioned specifically in the $1.2 billion 
disaster package of last year, but unfortunately for many, the loan 
program instigated and proposed by the USDA did not provide the kind of 
aid some apple producers sought. In most cases, Washington growers were 
facing a surplus of commodity and therefore a surplus purchase by USDA 
would have proved beneficial. Instead, the Department imposed a ``one-
size-fits-all'' loan program to all producers nationwide who 
experienced disaster. Unfortunately, it was brought to my attention 
recently that USDA is not honoring loan applications submitted by apple 
growers for ``quality loss'', although that provision was stipulated in 
the law. Can you respond to the concern by orchardists that this is the 
case?
    Answer. The 1999 Crop Disaster Program compensated producers for 
crop losses due to adverse weather conditions. The program did not 
authorize payments to producers in compensation for low prices due to 
``flooded'' markets. The 1999 program is a ``production and quality'' 
loss program as opposed to a ``market loss'' disaster program.
    FSA pays apple producers for quality losses under the 1999 Crop 
Disaster Program (both insured producers and those without apple 
insurance). Producers who market apples in the lower priced 
``processed'' market receive credit for the difference in price. 
Quality losses count toward the minimum 35 percent loss threshold under 
the disaster program.
    In Washington State, the disaster payments are based on prices for 
fresh apples of $4.25 per box and for processed apples of $1.19 per 
box. The prices used under the 1999 Crop Disaster Program are 
historical averages and may not always be reflective of current market 
prices.
    Question. Also included in the disaster package last year was a 
specific call to the Farm Service Agency to review all loan programs 
that could be utilized by apple growers and report back to Congress 
what, if any, changes needed to be made in order to assist these 
producers. How is that review coming and when should we receive a 
response?
    Answer. We have created an interagency team to review the 
Department's programs for the apple industry. As soon as this review is 
completed, we will provide you the results.
                                 ______
                                 
              QUESTIONS SUBMITTED BY SENATOR CONRAD BURNS

    Question. Projections are dismal at best for the vast majority of 
America's farmers and ranchers. The Supplemental Income Assistance 
Program appears to take a heavy amount of analysis. Is this a long-term 
program, and will it go away when prices return?
    Answer. The supplemental income assistance program, by its design, 
is a long-term program that only provides benefits when revenues are 
low. When prices are relatively high, there would be less need for the 
program, unless widespread crop losses reduced revenues beyond the 
proposed threshold of 92 percent of the 5-year average.
    Question. When producers seem to prefer the Marketing Loan 
Assistance programs, why isn't that a viable option?
    Answer. The supplementary payments were designed to supplement the 
marketing loan assistance program.
    Question. You have likened your proposal to a chair with four solid 
legs. I don't think this counter-cyclical income support plan has a leg 
to stand on. It provides only $6 billion over the next 3 years. Last 
year alone, the emergency package totaled $8.5 billion. Prices are not 
expected to go up. How do you expect $6 billion to help all the farmers 
in this country?
    Answer. I am willing to work with Congress on funding levels given 
current budget constraints.
    Question. This plan is not designed to replace AMTA. It's a good 
thing. With the $40,000 payment limit in effect already, many of my 
Montana farmers are not eligible. I know my State is not alone in that 
problem. When 18 percent of farmers in this country account for 85 
percent of production, you simply cannot cut them out of the plan. I 
realize this plan is designed to help the small farmer. I am all for 
that. But don't eliminate the agricultural producers who are producing 
the lion's share of commodities. How did USDA arrive at the assumption 
that only 8 percent of producers in this country would not be eligible 
for this program?
    Answer. The Administration's $30,000 payment limit proposal would 
limit supplemental assistance to some very large family and non-family 
farms. We estimate that the payment limit would make about 2 percent of 
all producers ineligible to receive supplemental assistance under the 
Administration proposal and an additional 6 percent of producers would 
have their supplemental assistance reduced. By reducing payments to the 
very largest producers, more payments can be targeted to smaller 
producers that are generally more financially vulnerable and have lower 
incomes. The Administration's payment limit proposal could increase the 
amount of supplemental assistance going to small- and medium-size 
family farmers by more than 20 percent.
    Question. USDA's new farm income proposal is supposed to be 
designed to help small farmers, saying the majority will be eligible 
for payments up to $30,000. The majority of farmers in Montana are NOT 
going to be eligible for that payment. Why is the Administration trying 
to push out the medium-sized farmer?
    Answer. The Administration's proposal is targeted at both small- 
and medium-size farms. Most producers in Montana will receive 
supplemental payments, even though farms tend to be large in this 
State.
    Question. You say in your testimony that government farm policy 
cannot keep lurching from one expensive bailout to another. I agree 
with you 100 percent. However, I fail to see how this proposal prevents 
another bailout. What assurances do farmers have that this proposal 
will protect their income and keep them farming?
    Answer. No proposal can offer farmers a guarantee that they will 
remain in business. This proposal does offer farmers the assurance 
that, on average, payments will be made when gross revenue falls below 
92 percent of historical levels.
    Question. This proposal increases CRP acres from 36.5 million acres 
to 40 million acres, meaning there will be more contracts to 
administer. The staff levels allocated will not be able to handle that 
increased workload. How does USDA intend to cover the shortage in 
staff?
    Answer. Expansion to 40 million acres would require some additional 
workload requirements at county offices. However, using the projected 
end-of-year acreage enrollments under the proposal, annual acreage 
increments do not reflect large signups in any one year, and FSA 
staffing impacts would likely be minimal, or could be absorbed. The 
Administration has proposed increased NRCS technical assistance funding 
to administer the higher CRP enrollments.
    Question. It appears that the Administration is putting a heavier 
emphasis on the conservation side of their proposal, when we more 
truthfully have an economic emergency across the countryside. Why is 
this emphasis so heavy when we need to spend our time and money on 
trade and economic issues?
    Answer. An enhanced conservation initiative, which proposes to 
increase conservation spending by $1.3 billion in fiscal year 2001, is 
included as part of the Administration's proposal to strengthen the 
farm safety net. This represents 23 percent of total farm safety net 
spending proposed by the Administration for fiscal year 2001. The 
Administration believes this to be a crucial part of achieving the dual 
objectives of protecting this country's precious resources for our 
future generations, while improving the income security of farmers 
during these troubling economic times. Through these USDA programs, 
farmers and ranchers can receive cost-share assistance, technical 
assistance, and annual payments for installing and maintaining high-
priority conservation activities, such as soil and water quality 
protection, wetland restoration, wildlife habitat enhancement, farmland 
protection, and comprehensive nutrient management.
    Question. You have said that this proposal contains a plan for 
stabilizing the crucial USDA workforce that has become over-stressed 
the last 3 years. I haven't seen any evidence that it will lessen 
workloads or increase staffing levels. How does it stabilize the 
workforce?
    Answer. The budget provides for maintenance of current levels of 
permanent full-time staff in FSA for 2001, with some reduction in 
temporary staff. Funds for continued modernization of our information 
systems and business processes are also requested to improve program 
delivery productivity in the long term. Fluctuations in workload due to 
emergency conditions and new programs will require adjustments in the 
level of temporary staffing, however.
                                 ______
                                 

                QUESTIONS SUBMITTED BY SENATOR HERB KOHL

    Question. The high capital costs of farming coupled with the 
current low market prices is creating extreme difficulty for young 
people wishing to enter farming. In addition, census information has 
shown that the average age of today's farmers is rapidly approaching 
that of retirement. Please describe the activities of the Department, 
including loan programs, to assist beginning farmers.
    Answer. FSA is providing substantial financing to beginning 
farmers. In fiscal year 1999, the number of direct and guaranteed loans 
provided to beginning farmers increased by 25 percent compared to 
fiscal year 1998. FSA assisted over 8,400 beginning farmers with loans 
and loan guarantees in fiscal year 1999. Between fiscal years 1994 and 
1999, FSA provided loans totaling $2.5 billion to more than 34,000 
beginning farmers.
    In addition, the Secretary has established an Advisory Committee on 
Beginning Farmers and Ranchers which will provide counsel to the 
Secretary on ways to coordinate financial assistance (Federal and State 
programs) to beginning farmers, encourage State participation, and 
maximize the number of new farming and ranching opportunities.
    Question. To what extent and in what way do these programs work to 
encourage non-traditional farming activities?
    Answer. FSA encourages family farmers to utilize all available 
resources to maximize their farm income. An example of this was the 
policy decision to allow FSA loans to be made for the production of 
ratites. FSA does not preclude the financing of other enterprises for 
which a reliable market exists and the farm customer has the necessary 
training, experience, or educational background to ensure a reasonable 
prospect of success.
    Question. Do demographic indicators suggest that introduction of 
new farmers to farming is keeping pace with the number of farmers who 
are either retiring or simply leaving the occupation and if not, in 
what ways do you think this condition will alter the structure of U.S. 
agriculture?
    Answer. Despite the achievements of FSA in assisting beginning 
farmers with loan assistance to purchase and maintain farming 
operations, regrettably, the number of new entrants into farming is 
falling over time. This shrinkage is attributable to the depressed 
economic conditions in the farm economy, increased productivity of 
farmers that requires fewer producers to maintain the same production, 
and better employment opportunities in today's strong general economy. 
Still, the typical path to farming is entry through the family farming 
business.
    As you know, the Secretary has expressed strong concern about the 
need for strong, diverse family farm agriculture. Current economic 
conditions and trends combined with governmental policies appear to be 
driving the industry in the opposite direction, toward fewer, larger 
farms. The result has significant implications for the farm economy, 
rural America, and the Nation's food supply. These implications are too 
extensive to discuss here, but I would hope as the authorizing 
committees review the Secretary's proposals and conduct hearings, a 
policy consensus will emerge. Hopefully, these policies will encourage 
and promote entry into farming by young people.

                         STATE MEDIATION GRANTS

    Question. The budget includes an increase for the State Mediation 
Program. Please provide information that suggests the level of savings 
to both the public and private sector that has been achieved through 
the use of this program.
    Answer. The majority of cases handled by mediation would have gone 
directly to the appeals process or civil courts if certified mediation 
had not been available. Savings to the Federal Government is apparent 
when mediation results in a restructured loan which offers a greater 
return than net recovery buyout. Mediation also saves staff time and 
effort by quickly resolving the dispute outside of the appeals or court 
system. The National Appeals Division (NAD) published its 1999 budget 
to be $13.363 million to administer its typical 3,500 cases. Those 
figures suggest that NAD's cost per case is approximately $3,817. The 
average cost of a mediation case is $500.
    The Marketing and Economics Division at the Alabama Department of 
Agriculture and Industries reported in its annual report that their 
benefit-to-cost ratio for agricultural mediation is estimated to be $8 
in benefits for every $1.00 of mediation costs. The Oregon Department 
of Agriculture reported in its annual report that the benefit-to-cost 
ratio was estimated at $2.56 to $1.00 for mediation program 
expenditures. The annual funding for mediation has been $2 million to 
$3 million for the State Mediation Program. A high range of annual 
Federal savings, using the Alabama benefit-to-cost of 8 to 1, is $21 
million. A low range of annual Federal savings, using the Oregon 
benefit-to-cost of 2.56 to 1, is $3.12 million.
    Legal fees and costs for administering or selling a property 
through foreclosure or bankruptcy and the added costs of maintaining a 
non-performing asset on the books that are often avoided by mediation 
are difficult to estimate and are not included in these estimates. The 
Nebraska Department of Agriculture Farm Mediation Program reported in 
its annual report that ``A significant amount of money is saved by the 
parties using mediation (the attorney fees, alone, for a person in 
bankruptcy average between $3,500 and $7,500)''. The Iowa Mediation 
Service (IMS) reported in its annual report that savings for other 
creditors can also be presented in terms of legal savings. Using a cost 
projected at $75 per hour for legal fees, IMS reported that the savings 
on each case exceed $350. Similarly, IMS reported that farmers are not 
using lawyers for many of these cases and the savings can be applied to 
debt service.
    Question. Given the current state of the farm economy, can you 
quantify an increase in the demand for this program?
    Answer. In fiscal year 1999, 22 States requested $3,703,508 in 
matching mediation grant funds. Only $2 million was available and 
qualifying States received a pro-rated share, or about 60 percent of 
their request. This fiscal year, 24 States requested $4,106,526 and 
received 79 percent of their request from the $3 million appropriated. 
State mediation programs continue to be bare-bones operations that 
depend on the mediation grants to operate. Adding to the financial 
restrictions is an increased case load for the program. The additional 
case load will place a greater burden on existing funds and the ability 
of the States to effectively and efficiently provide mediation services 
to USDA.
    FSA has received inquiries from new States interested in obtaining 
USDA certification and funding, including Pennsylvania, New Jersey, 
Kentucky, Louisiana, Mississippi and Montana. We anticipate certifying 
at least five additional State mediation programs if funds are 
available. Because of the potential and need for new certified State 
mediation programs and the additional case load USDA is experiencing, 
the demand can be estimated at $4.95 million. That figure is based on 
the following:

                        [In millions of dollars]

Existing State requests...........................................  4.10
New State mediation programs......................................   .85
                                                                  ______
      Total.......................................................  4.95

    Question. The budget request for fiscal year 2001 calls for a 
substantial decrease in the program level of USDA farm credit programs. 
Although part of the loan levels for fiscal year 2000 were included as 
part of an emergency farm package, the farm economy has not recovered 
and it is reasonable to assume that credit needs are no less than they 
were a year ago. Please provide information, by type of farm loan 
activity, on the backlog of credit applications on hand.
    Answer. Supplemental appropriations for fiscal year 1999 and fiscal 
year 2000 have allowed FSA to fund all viable applications and to fund 
new requests as they are received. There is no backlog of approved 
applications awaiting funding. Since FSA anticipates entering fiscal 
year 2001 without a backlog of applications, the budget request is 
expected to be sufficient.
    Question. Please provide a projection of the actual farm credit 
needs for which USDA programs could be utilized in fiscal year 2001.
    Answer. The following table provides farm loan program needs and 
proposed funding in the President's Budget for fiscal year 2001.
    [The information follows:]

Direct Farm Ownership...................................    $128,000,000
Guaranteed Farm Ownership...............................   1,000,000,000
Direct Farm Operating...................................     700,000,000
Guaranteed Farm Operating...............................   3,000,000,000
Emergency Disaster......................................     150,000,000
Indian Land Acquisition.................................       2,000,000
Boll Weevil Eradication.................................     100,000,000

                     SHARED APPRECIATION AGREEMENTS

    Question. Farmers in Wisconsin are concerned that certain Shared 
Asset Appreciation (SAA) agreements which they entered into as a 
condition of credit relief during the farm crisis of the 1980's may be 
especially burdensome now during the current price downturn. I 
understand that an extension has been granted in some of these cases 
until 2002 and that a further rule on the subject is nearing 
publication. Please provide an overview of the status of SAA claims.
    Answer. Currently, over 10,600 debt writedowns with Shared 
Appreciation Agreements (SAA) have been processed since 1989. Of this 
total amount, over 4,200 agreements have been triggered or matured. The 
debt to be recaptured from SAAs must be suspended, amortized, or repaid 
at maturity if other factors have not previously made the recapture 
amount due. Approximately 1,200 SAAs will mature in 2000 and 
approximately 388 will mature in 2001. Regulations are in effect that 
permit a 1- to 3-year deferral of SAA obligations. Further, proposed 
regulations permitting non-program loans to repay SAA obligations at 
concessional interest rates were published in November 1999.
    Question. If the soon-to-be-published rule includes an elimination 
of capital improvements from the calculation of appreciation, will such 
a provision be retroactive for capital improvements that were incurred 
since execution of the original SAA agreement?
    Answer. Yes the provisions will be retroactive for capital 
improvements made since the original SAA agreement was entered into. 
However, the new rule will apply only to SAA's which are currently 
suspended or not yet due. The new rule will not apply to SAA's which 
have already been repaid.
    Question. When do you expect publication of the final rule?
    Answer. It is in the Agency and Departmental clearance process and 
will be published on or about May 31, 2000.
    Question. What is USDA doing in anticipation of the expiration of 
the current extension in the event the farm economy has not properly 
recovered or that enforcement of the agreements then would place an 
undue hardship on farmers?
    Answer. SAAs maturing in the year 2000 may be suspended for up to 3 
years if necessary because of the borrower's inability to make the 
payments due to low commodity prices or natural disasters. Also, the 
balance owed may be amortized over a period of 25 years. The rate of 
interest equal to 25 basis points above the cost of money to the 
Government (also known as the Homestead Protection Rate) will be used 
once the new rule is published.

                 USDA/SBA EMERGENCY ``ELIGIBILITY'' GAP

    Question. Secretary Schumacher's statement mentions a proposal by 
USDA to close the ``eligibility'' gap between USDA and SBA emergency 
programs. Please provide details of this proposal and your definition 
of the ``eligibility'' gap.
    Answer. In recent years agriculture has experienced significant 
consolidation, with a net result of fewer, larger farmers. Most of 
these farms are family owned, even though the operation has grown 
beyond the point that the family can operate the farm by themselves. 
Current statutes require that FSA lend to only family size farmers. 
Therefore, when natural disasters occur, these larger operations are 
precluded from receiving FSA loan assistance. The Small Business 
Administration (SBA) is statutorily prohibited from lending to 
agricultural enterprises in disaster areas. Thus, larger than family 
size farms (those farms which require substantial labor beyond that 
required by the family and exceed the size of a typical farm in the 
community) are unable to receive disaster benefits that smaller farms 
receive. Most of these larger farms would receive SBA disaster loans if 
they were any other kind of business. Additionally, SBA classifies any 
business with a Standard Industrial Classification (SIC) code of 
agriculture as ineligible for SBA disaster loans. Any business dealing 
with animals including tropical fish, dog kennels, and horse boarding 
and riding operations are currently ineligible under SBA guidelines and 
FSA does not consider them to be eligible operations either. There are 
a large number of businesses which are not farming operations but have 
a SIC code of agriculture and therefore no disaster assistance is 
available to them. For the two reasons cited above, a gap exists 
between the eligibility requirements of the two programs.
    FSA has drafted legislation which would allow emergency loans to 
larger than family size farms and certain agriculture-related 
businesses. Financing non-agricultural businesses even if animals are 
involved, such as dog kennels or production of lab animals, is being 
refused on both legal and programmatic grounds by SBA. Congress could 
aid this process resolving this issue explicitly in the law once it is 
proposed.
    Question. Is the provision in the Administration's fiscal year 2000 
supplemental request which calls for language to allow Emergency 
Conservation Program funds to be used for farm structure repair fall 
into that category since that has been a discrepancy between USDA and 
SBA programs?
    Answer. The Administration proposed language allowing ECP to be 
used to repair farm structures and equipment to address the unmet needs 
of farmers that suffered damages from Hurricanes Floyd, Dennis, and 
Irene. Many of the producers affected by these natural disasters are 
low-income and lack sufficient financial resources to purchase 
insurance on farm structures and equipment. Most farm structures and 
equipment are covered by USDA loans (damage to non-agricultural 
equipment and buildings are covered by SBA loans), but many of the 
affected producers run small operations or are low income and cannot 
assume additional debt in addition to the losses they already have 
sustained.
    Question. Why does the supplemental request to allow ECP funds for 
structure repair apply only to damages relating to Hurricanes Dennis, 
Floyd, or Irene and not other similar needs resulting from other 
natural disasters that have occurred since these hurricanes?
    Answer. No other recent natural disaster has affected as many 
producers and caused as much damage as Hurricanes Dennis, Floyd, and 
Irene. These hurricanes created an enormous need for many different 
types of assistance, including financial assistance to repair 
structures and equipment. Because many producers were already facing 
significant crop and livestock losses, the Administration believes that 
additional assistance to repair structures and equipment is necessary 
to protect these farms' viability, many of which are small, family 
operations.
    Question. The President's budget request includes $11.5 billion in 
new farm spending through 2002 of which a sizable portion is identified 
for obligation in the current fiscal year. Has legislative language for 
this initiative been forwarded to the Congress and if not, when do you 
expect to propose it?
    Answer. Our target was to get a first draft of the legislative 
language by March 1st. We were able to accomplish that, and now the 
language is in final clearance within the Department. I cannot 
specifically say when you will receive the language, but I can tell you 
that you will have the language in time to act on our proposal. Our 
overriding goal is to provide Congress with a useful document and to 
get this legislation in your hands in a timely fashion.
    Question. Since fiscal year 2000 is nearly half over, what strategy 
do you intend to employ to see that farm benefits related to the Farm 
Safety Net Initiative will be available to farmers yet this year?
    Answer. If the necessary legislation is enacted timely for the 
Supplemental Income Assistance Program, we will begin to make payments 
this summer.

                       GRAIN STORAGE LOAN PROGRAM

    Question. Earlier this month Secretary Glickman announced a Grain 
Storage Loan Program. However, I understand publication of the final 
rule for this program is some time away even though harvests are not 
far off. How soon does USDA plan to have this program implemented?
    Answer. Our target implementation date is June 1, 2000.
    Question. In order to make this program available in a timely 
fashion, is it anticipated that it may be made retroactive in order to 
cover construction of storage facilities that may occur between now and 
publication of the final rule?
    Answer. We are publishing an interim rule with a request for 
comments. We cannot make the program retroactive to cover any storage 
structure that has been started before publication of the interim rule.
    Question. If the program is made retroactive, how will farmers be 
informed of the opportunity?
    Answer. The program will not be retroactive.

                       DAIRY ASSISTANCE PAYMENTS

    Question. $125 million was provided as emergency payments to dairy 
producers in the Fiscal Year 2000 Apropriations Act. I understand that 
these payments are to be distributed in a manner similar to payments 
for dairy producers last year. However, I am aware of certain instances 
in which the program, as announced by USDA for fiscal year 2000, 
presents some inequitable results.
    For example, I am aware of a farmer in Wisconsin who began milking 
cows in the last few weeks of 1998. Therefore, USDA does not view him 
as a new farmer in 1999. However, as a result of this determination, 
his production for 1999 will be based only on what he produced in 1998. 
In other words, USDA will not consider him a new farmer in 1999 (and 
therefore eligible for special treatment under this program for 
purposes of his actual 1999 production) but will instead consider his 
production for all of 1999 to be the same as the previous year. In this 
case, he will be given credit for production in 1999 of only a few 
weeks of production when, in fact, he has been in production all 52 
weeks. Does USDA have plans to provide relief for a farmer in 
situations as the one I described above and if so, what form of relief 
and in what fashion?
    Answer. USDA has become aware of what appears to be an inequitable 
circumstance with regard to the Wisconsin dairy farmer who began 
production in December 1998. The affected farmer's case is under review 
and a decision will be made shortly.

                            FSA OFFICE SPACE

    Question. As the USDA field structure continues to reorganize, the 
relocation of office space is inevitable. I am aware of an instance in 
Winnebago County, Wisconsin, in which a previous contract for 
relocation of USDA offices had been executed with local authorities 
which was going to result in savings for all agencies involved. 
However, I understand a subsequent ruling was made by the Department 
regarding a limitation of space within an office which would disqualify 
the arrangement already made between FSA and others in the county. 
Consequently, higher costs, disruption of services, and frustration 
with federal agencies by the community will all result.
    In addition, the square footage requirements for USDA Service 
Centers also do not account for the space needs of temporary employees. 
This is an increasing concern given the growing importance of temporary 
employees as permanent service center staff are reduced just as program 
demand is growing. Please explain if the physical space limitation is 
purely arbitrary or if there are allowances for exceptions in special 
cases.
    Answer. USDA space standards (DR-1620-2) are mandated by the 
Department and are an attempt by the Department to ensure a consistent 
policy for all USDA agencies. Due to feedback from our field offices, 
FSA has been working with the Department and other USDA Agencies to 
amend DR-1620-2 and develop USDA space requirements that are more 
realistic. Until the Department publishes these revised guidelines, FSA 
has developed an interim policy to offer immediate relief to the 
current overcrowding in field offices. FSA has delegated authority to 
its State Offices allowing them to grant individual county offices an 
exception to the current USDA space standards.
    Question. Has USDA considered allowing flexibility in square 
footage requirements under lease agreements to account for space 
requirements for temporary employees?
    Answer. FSA does allow flexibility and changes within their space. 
FSA space standards for county offices allow each office to acquire 
office space for temporary and part-time employees.

                         COUNTY OFFICE STAFFING

    Question. For fiscal year 2000, Congress provided the budget 
request for FSA salaries and expenses and provided up to an additional 
$56 million to assist in the delivery of the farm emergency package 
approved last year. Please describe the current needs of FSA staffing 
in completing the fiscal year 2000 activities including both those of 
permanent and temporary employees.
    Answer. FSA funding for fiscal year 2000 is sufficient to maintain 
all Federal employees and county level non-Federal permanent staff. 
However, in an effort to provide timely delivery of programs and to 
handle producer requests, FSA will likely spend most funding available 
for temporary staff years in the first 6 months of the fiscal year, and 
a majority of these employees will be off the rolls by mid-March. 
Although these temporary employees have allowed the Agency to remain 
current on most workload, we expect continued high program and payment 
workload during the last 6 months of the fiscal year. FSA is working 
with the Department to review additional fiscal year 2000 supplemental 
funding. Supplemental funding would permit the Agency to pay for more 
temporary staff years to assist in implementing over 20 new emergency 
disaster provisions and also to possibly increase the speed in which 
producer payments, including loan deficiency payments, are made timely 
in coming months.
    Question. To what extent is the need for improved information 
technology essential to the delivery of farmer services at the county 
level and how does that need compare to that of retaining personnel?
    Answer. Improved technology is essential to improving and speeding 
the delivery of farmer services at the county level. FSA currently 
spends about $35 million per year operating and maintaining its 
``legacy'' A/36 computers. These computers were a sound investment 
which have served America's ranchers and farmers well over the years, 
but are unable to meet today's program requirements. These machines 
were designed before the Internet and before databases were common in 
mid-range computers. As a result, the data on these computers are 
isolated. They are not directly available to the Service Center partner 
agencies, other USDA, Federal or State agencies and they are not 
available to the public. As a result, these computers will not support 
E-commerce and are not capable of otherwise taking advantage of the 
common computing environment investments already made and those to be 
made soon. These operating system concerns are as critical as our need 
to retain FSA personnel to carry out ongoing and ad hoc workload 
associated with the continued farm crisis.
                                 ______
                                 

             QUESTIONS SUBMITTED BY SENATOR ROBERT C. BYRD

                        CATTLE FARMER AMENDMENTS

    Question. An $8.7 billion emergency assistance package was attached 
to the Fiscal Year 2000 Agriculture Appropriations bill. A portion of 
these funds were intended for a Livestock Assistance Program, a 
Livestock Indemnity Program, a Dairy Indemnity Program, and a pasture 
revegetation program. When can farmers expect to receive assistance 
from these programs?
    Answer. LAP and LIP payments have been distributed with a payment 
factor established at .46 of the eligible payment amount. Original 
funding for LIP would have been adequate to pay all claims. LAP funding 
was insufficient to cover all claims and pooling of LIP and LAP 
resulted in the payment factor of .46 for all claims under both 
programs.
    The Pasture Recovery Program signup period is March 20-April 14. 
Payments can be made upon certification of completion of reseeding 
which must take place after signup. No payments will be made until it 
is determined if a payment factor will need to be applied. Signup 
reports are expected to be received on April 21. Funding would cover 
maximum allowable payments to about half of the eligible producers.
    The 2000 Dairy Market Loss Assistance Program is an extension of a 
similar program from fiscal year 1999. Additional signup was taken 
through February 28, 2000, with participants of last year's program 
automatically included in the extension of the program. Determination 
of a payment factor should be in process and payment distribution 
should begin soon.
    Question. Has a sufficient sum of money been provided for these 
programs to ensure that farmers will receive the full amount that they 
are eligible to receive under these programs?
    Answer. LIP had sufficient funding. LAP did not. PRP and DMLA 
funding adequacy is not known yet.
    Question. Does the amount of funding for these programs meet the 
need for these programs?
    Answer. Funding for the LAP program does not appear to have been 
adequate to compensate for the feeding needs to make up for large 
losses of grazing forage due to drought. LIP funding was adequate 
because much of the livestock lost was owned by contract production 
firms that do not meet the gross annual income limitation for program 
eligibility.

                                DROUGHT

    Question. In 1999, all 55 counties in West Virginia were declared 
disaster areas due to losses caused by drought. Nationwide, 1,942 
counties have been declared disaster areas due to losses by drought, 
with the most recent declarations occurring in Kansas and Texas. What 
progress is the U.S. Department of Agriculture Farm Service Agency 
making to update national drought loss estimates?
    Answer. FSA does not formally estimate future crop year losses by 
disaster program. FSA does monitor drought conditions and attempts to 
anticipate funding needs for Emergency Conservation Program and 
Emergency (EM) loans plus human resource needs to staff service centers 
and perform crop loss appraisals in impacted areas.
    Question. When will updated drought loss estimates be made 
available to Congress?
    Answer. FSA does not formally estimate future crop year losses by 
disaster program. FSA does monitor drought conditions and attempts to 
anticipate funding needs for Emergency Conservation Program and 
Emergency (EM) loans plus human resource needs to staff service centers 
and perform crop loss appraisals in impacted areas.
    Question. Will the U.S. Department of Agriculture be submitting a 
request for additional emergency assistance for farmers suffering 
drought-related losses?
    Answer. It is premature to address this issue. Only if a drought 
develops during the growing season and as the extent of losses become 
more apparent can this question be answered.
    Question. What preparations are being made should there be a 
drought again this year?
    Answer. Standing FSA-administered programs are available and 
currently being utilized by producers in geographic areas with recently 
planted or maturing crops impacted by drought. Available programs 
include: Emergency Conservation Program, Emergency Haying and Grazing 
of CRP lands, Noninsured Crop Disaster Assistance Program, American 
Indian Livestock Feed Program and Emergency Loans. We would also expect 
prudent farmers to practice good risk management by buying crop 
insurance and planting drought resistant varieties.
    The National Drought Policy Commission (Commission), chaired by 
Secretary Glickman, will be submitting a report to the President and 
Congress to provide advice and recommendations on the creation of an 
integrated, coordinated Federal policy designed to prepare for and 
respond to serious drought emergencies. The Commission's draft report 
is currently available on the Commission's website, http://
www.fsa.usda.gov/drought, for public review and comment. The comment 
period will close on March 31. The final report will be submitted in 
May to give this Congress the opportunity to propose meaningful 
legislation that will help to reduce and mitigate the impacts of 
drought.
    Question. Farming in the Northeast (USDA's definition of Northeast 
includes West Virginia) accounts for 6 percent of U.S. farm numbers and 
8 percent of rural agricultural production values but receives just 1 
percent of direct payments and Federal crop insurance payments to 
producers. I am concerned that the hardworking West Virginia farmer is 
not receiving a fair portion of assistance provided by the U.S. 
Department of Agriculture. What factors contribute to the discrepancy 
between amount produced and assistance received?
    Answer. As you indicated, West Virginia receives a relatively small 
portion of Federal assistance payments to farmers compared with other 
States based on the total value of agricultural output. Over the 
previous 5 years, the total value of agricultural output has averaged 
$504 million, which is 0.23 percent of the national total. For the 
value of crop production, the relative total is only 0.07 percent of 
the U.S. total because the crop portion of total agricultural output in 
West Virginia averaged 14 percent, compared with the U.S. average of 42 
percent. However, because most of the direct payments made to producers 
are made to crop commodities, West Virginia's share will be relatively 
low. Further, crop insurance participation in West Virginia is low 
relative to the rest of the country. In 1999, only 51 percent of 
eligible acres were insured.
    Historically, direct payments to producers in West Virginia have 
reflected the relative value of crop production. That is, West Virginia 
crop producers have received 0.07 percent of the direct payments which 
mirrors the relative proportion of the crop value output indicated 
above. Further, the 1997 to 1999 history of loan deficiency payments, 
marketing loan gains, production flexibility contract payments and 
market loss assistance payments shows that the payments made on 
eligible acres in West Virginia are commensurate with the national 
level. (See Tables 2 and 3, attached.) For instance, in 1998, West 
Virginia had LDP's paid on 0.023 percent of the national total LDP 
payment acres for wheat, corn, barley, oats and soybeans. Meanwhile, it 
received 0.025 percent of the total national LDP payments (Table 2). 
Likewise, in both 1998 and 1999, West Virginia had PFC payments made on 
.042 percent of total U.S. PFC payment acres and received .039 percent 
of the total national PFC payment (Table 3). In other words, given the 
amount of acreage that qualifies for these government benefits, West 
Virginia is, in fact, receiving a proportionate share of the payment 
pie.
    [The information follows:]

                                         TABLE 2.--A COMPARISON OF LDP AND MLG QUANTITIES AND PAYMENTS BETWEEN WEST VIRGINIA AND THE UNITED STATES TOTAL
                                                                                         [In thousands]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                     1997 LDPs                1997 MLGs                  1998 LDPs                   1998 MLGs                    1999 LDPs                    1999 MLGs
                             -------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                 Total       Total        Total        Total        Total         Total         Total         Total                         Total         Total         Total
                               Quantity     Payment     Quantity      Payment     Quantity       Payment      Quantity       Payment    Total Quantity     Payment      Quantity       Payment
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
West Virginia:
    Wheat...................  ..........  ..........          9.27       $0.74        281.95       $114.89         62.46        $35.78          298.17       $191.96         12.85         $4.89
    Corn....................  ..........  ..........        230.69       66.28       1486.73        331.19        372.17         41.06         2180.90        523.80          4.00          0.12
    Barley..................  ..........  ..........  ............  ..........         98.94         17.23         34.14          7.34          134.65         27.87         19.95          1.38
    Oats....................  ..........  ..........  ............  ..........        117.49         52.29  ............  ............           48.74         23.93  ............  ............
    Soybeans................  ..........  ..........         29.12       12.23        232.73         85.60         98.67         87.53          348.63        347.45  ............  ............
                             -------------------------------------------------------------------------------------------------------------------------------------------------------------------
      Total West Virginia...  ..........  ..........        269.08       79.25      2,217.84        601.20        567.44        171.71        3,011.09      1,115.01         36.80          6.39
                             ===================================================================================================================================================================
Total United States:
    Wheat...................       94.70      $23.78     56,888.04   15,662.08  1,412,674.31    413,951.80    229,846.76     62,220.62    1,881,256.17    881,392.23     42,263.75     19,808.97
    Corn....................        5.16        1.39    420,455.66   97,927.04  5,692,310.65  1,001,809.02  1,424,442.93    378,573.46    7,104,468.61  1,956,919.37    192,474.22     35,358.93
    Barley..................       63.09        6.53     12,810.41    2,062.86    258,999.21     78,609.63     20,274.65      3,920.56      198,190.97     36,208.97      4,183.76        595.60
    Oats....................        4.86        0.58        443.85       69.84    105,149.07     19,096.87      3,198.84        489.66      119,547.54     27,653.09        615.87        138.53
    Soybeans................        0.43        0.18     53,031.06   15,804.35  2,130,748.35    882,537.48    317,066.37    336,878.17    2,233,327.99  2,053,857.98     57,655.11     54,372.89
                             -------------------------------------------------------------------------------------------------------------------------------------------------------------------
      Subtotal..............      168.24       32.46    543,629.02  131,526.17  9,599,881.59  2,396,004.80  1,994,829.55    782,082.47   11,536,791.28  4,956,031.64    297,192.71    110,274.92
                             ===================================================================================================================================================================
    Other...................  153,426.29    2,781.07  1,200,619.45   28,049.09  4,141,428.17    404,105.40  2,329,044.18    259,274.20    3,746,484.29  1,125,797.24  3,961,569.96    896,831.31
                             ===================================================================================================================================================================
      Total United States...  ..........    2,813.53  ............  159,575.26  ............  2,800,110.20  ............  1,041,356.67  ..............  6,081,828.88  ............  1,007,106.23
                             ===================================================================================================================================================================
Percent, West Virginia/Total  ..........  ..........         0.049       0.060         0.023         0.025         0.028         0.022           0.026         0.022         0.012         0.006
 United States for Wheat,
 Corn, Barley, Oats,
 Soybeans...................
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


  TABLE 3.--A COMPARISON OF PRODUCTION FLEXIBILITY CONTRACT (PFC) ACRES AND PAYMENTS AND MARKET LOSS ASSISTANCE
                             (MLA) PAYMENTS BETWEEN WEST VIRGINIA AND THE U.S. TOTAL
                                                 [In thousands]
----------------------------------------------------------------------------------------------------------------
                                     1997 PFC                1998 PFC                            1999 PFC
                             ------------------------------------------------  1998 MLA  -----------------------
                                 Total       Total       Total       Total       Total       Total       Total
                               Quantity     Payment    Quantity     Payment     Payment    Quantity     Payment
----------------------------------------------------------------------------------------------------------------
West Virginia...............          76      $2,813          76      $2,229      $1,107          75      $2,117
Total United States.........     176,612  $6,288,268     180,872  $5,661,756  $2,811,280     180,988  $5,477,290
                             ===================================================================================
Percent West Virginia/United       0.043       0.045       0.042       0.039       0.039       0.042       0.039
 States.....................
----------------------------------------------------------------------------------------------------------------

    Question. What can be done to ensure that a farmer who does 
not live in a larger ``farm-state'' receives an equitable 
portion of the assistance available to his fellow farmers?
    Answer. West Virginia appears to be receiving a 
proportionate share of Federal payments to producers based upon 
current program availability. Communicating program 
availability through media, mail, and outreach programs appears 
to have been equally effective in West Virginia compared with 
the national results. Efforts by FSA will continue in all State 
and county offices to inform all producers of Federal 
agricultural assistance programs.
    Federal assistance to livestock producers has historically 
been based on the occurrence of disasters. As a result, 
relatively few Federal dollars are paid to West Virginia 
farmers because the livestock sector is the predominant source 
of agricultural output in West Virginia. Further, livestock 
producer groups in the past have preferred not to have major 
price and income support programs which helps explain why 
livestock producers nationally receive relatively few Federal 
payments.
                                ------                                


        QUESTIONS SUBMITTED TO THE FOREIGN AGRICULTURAL SERVICE

              QUESTIONS SUBMITTED BY SENATOR THAD COCHRAN

    Question. Secretary Schumacher, you recently submitted a letter to 
me, dated February 17, 2000, on Public Law 480 Title I and Title II 
unobligated balances. That letter explains only the reasons for the 
unobligated balances carried over from fiscal year 1999 to fiscal year 
2000. Please explain the reasons for the Title I unobligated balances 
carried over from each of the fiscal years 1996, 1997, and 1998, and 
projected to be carried over at the end of fiscal year 2000.
    Answer. The Title I unobligated balance carried into 1996 was $9.5 
million; into 1997, $6.8 million; into 1998, $68.4 million and into 
1999, $58.3 million. The unobligated balances carried into 1996 and 
1997 were the result of allocations being withdrawn at the end of the 
fiscal year without adequate time to reprogram the funds. The 
unobligated balances carried into 1998 were due to the following: a $10 
million Title I allocation was withdrawn from Angola because reporting 
responsibilities relating to previous Title I shipments were 
unresolved; the $5 million allocation to the Congo was withdrawn due to 
the civil war and subsequent government disarray; the $5 million 
allocation to Guatemala was withdrawn when the Guatemalan government 
ministries did not come to agreement among themselves on commodities to 
be included in the program and on whether to exempt Title I importers 
from a newly-levied import tax before the signature deadline for the 
agreement; in Moldova the $10 million allocation was withdrawn due to 
lack of interest among government ministry officials caused by a change 
in focus, within the Government of Moldova, on the use of proceeds from 
the sale of program commodities; in the Philippines the $10 million 
allocation was withdrawn because the Government of the Philippines was 
unable to complete the agreement before the signature deadline due to 
internal disagreements on administrative matters; and the $5 million 
allocation to Suriname was withdrawn because the Government of Suriname 
decided not to purchase commodities through Public Law 480.
    In addition to allocations that were withdrawn, some countries did 
not purchase all the commodities allocated in their agreements. For 
example, Jamaica was allocated $10 million to purchase rice but only 
used $5.3 million. Lithuania was allocated $10 million to purchase 
soybean meal but only purchased only $7.6 million. Some of these unused 
allocations were offset by increased allocations to other countries 
such as Pakistan. However, the end result was a rather large carryover 
of funds into fiscal 1998.
    Unobligated balances carried into fiscal 1999 were also primarily 
due to countries deciding not to purchase commodities through Public 
Law 480 Title I and other countries not purchasing all of the 
commodities allocated in their agreements. For example, Cote d'Ivoire 
and Pakistan decided not to purchase commodities and Albania, Angola, 
Bangladesh, Bolivia, Bosnia-Herzegovina, El Salvador, Guyana, 
Kyrgyzstan, Moldova, Mozambique, and Tajikistan did not purchase all of 
the commodities allocated in their agreements. In addition, 
approximately $20 million was allocated to develop private trade 
agreements. These agreements did not materialize and it was too late in 
the fiscal year to reprogram the funds. Some of these unused 
allocations were offset by increased allocations to other countries 
such as Nicaragua. However, the end result was a rather large carryover 
of funds into fiscal 1999.
    At the current time, we are not projecting any significant 
carryover of fiscal year 2000 unobligated balances into fiscal year 
2001.

                               FAS HOUSES

    Question. I understand that in the mid-1950's the Department of 
Agriculture purchased residences for FAS Agriculture Attaches with the 
proceeds of Public Law 480 purchases in approximately 12 countries. 
While USDA purchased the property, by law it could not hold legal title 
for the property so the Department of State took title to these homes. 
I am told that now the Department of State is in the process of selling 
these homes and retaining the proceeds, forcing FAS to incur the cost 
of providing housing for attaches in these countries. Is this accurate? 
What is USDA doing to resolve this situation and what additional costs 
is FAS facing if it is not resolved? What legislative solution might be 
appropriate to ensure that the USDA either receives the proceeds from 
the sale of this property or is provided with comparable housing at the 
same cost?
    Answer. Through the foresight of the Congressional Agriculture 
Committees, legislation was included in various DOS appropriations 
authorizing the acquisition of residences for Agricultural Attaches. 
Seventeen properties were purchased by the Department of State (DOS) 
during the years from 1957 to 1979 to provide housing for Agricultural 
Attaches in specific countries.
    Congressional testimony by State's Office of Foreign Buildings 
Operations (FBO) during those years reflects their intent to acquire 
pieces of property for the use of these Attaches. Both DOS appropriated 
funds and excess Public Law 480 currencies were used to acquire the 
specific properties. The DOS's use of funds to acquire these properties 
was based on priorities in agreement with USDA for acquisition of a 
number of residences for occupancy by the senior Attache of the agency.
    In the early 1990's, FBO claimed that it could sell some of those 
residences although they had been occupied by Agricultural Attaches 
since their purchase, in some cases for more than 40 years. Although 
FAS contested this view, FBO has subsequently sold four of these 
residences (in Lima, Peru; Quito, Equador; Santiago, Chile; and Rabat, 
Morocco) and retained the proceeds for its own purposes. FAS no longer 
has an Attache in Quito and was granted another government-owned house 
in Rabat; however, FAS now pays over $85,000 annually for leased 
housing for Lima and Santiago. In addition, two FAS residences have 
been put into embassy housing pools, thus requiring FAS to pay for 
leased housing. These are in Nairobi, Kenya (annual leasing cost in 
excess of $26,000) and Warsaw, Poland ($43,000).
    In total, the impact of the loss of these residences has been 
additional costs of $680,000 to the FAS budget over the past 5 years. 
Since the FAS administrative budget has been frozen during the past 3 
years, these increased costs have had to come from other FAS programs 
and activities.
    During the past 2 years, FBO has announced that it intends to sell 
two additional FAS occupied houses, in Vienna, Austria and Stockholm, 
Sweden. If FBO succeeds in this, FAS will face annual leased housing 
costs estimated at $70,000 for these two posts. Finally, FBO now claims 
that FAS has no rights for continued assignment to two long-term FAS 
houses, in Bangkok, Thailand and Cairo, Egypt. If FAS is forced out of 
these residences, leased housing costs for the two posts are estimated 
at over $120,000 annually.
    Although FAS has contested this FBO policy for nearly 10 years, we 
have been unable to deter the plan to sell off FAS houses. Most 
recently, on December 7, 1999, Secretary Glickman wrote a letter to 
Secretary Albright regarding the sale of the house in Vienna. The 
Secretary asked that the proceeds of the sale be used to purchase 
replacement housing for the FAS officer. In addition, Secretary 
Glickman asked that he be advised of any actions which State might take 
for other dedicated FAS housing. On February 18, 2000, Patrick Kennedy, 
Assistant Secretary of State for Management, responded to Secretary 
Glickman's letter, noting that State had no record that Department of 
Agriculture funds were used to purchase or maintain the residence in 
Vienna.

                    BUYING POWER MAINTENANCE ACCOUNT

    Question. The FAS is requesting authority in fiscal year 2001 to 
establish a Buying Power Maintenance Account to manage overseas 
currency fluctuations. Please detail for each of the past 5 fiscal 
years what impact overseas currency fluctuations have had on FAS' 
direct appropriation as compared to the amount budgeted for these costs 
in each of these years.
    Answer. The information below compares the amount estimated at the 
beginning of the fiscal year and the actual annual costs of maintaining 
FAS overseas offices for the last 5 fiscal years. While not all the 
differences can be attributed to just exchange rate movement, the data 
is representative of general currency fluctuation trends.

----------------------------------------------------------------------------------------------------------------
                           Fiscal year                                Budget          Actual        Difference
----------------------------------------------------------------------------------------------------------------
1995............................................................         $22,963         $23,842          ($879)
1996............................................................          25,354          24,605            749
1997............................................................          24,912          24,915              3
1998............................................................          25,841          24,092          1,749
1999............................................................          25,678          24,240          1,438
----------------------------------------------------------------------------------------------------------------


                               PAY COSTS

    Question. The fiscal year 2001 request includes a total $1,533,000 
increase to partially offset the fiscal year 2001 pay raise. What 
increases in mandatory pay costs does the budget assume FAS will absorb 
in fiscal year 2001 and how will FAS meet these costs?
    Answer. The fiscal year 2001 budget request for pay costs reflects 
half the amount actually estimated to be needed. Absorbing the $1.5 
million balance could require the elimination of up 20 staff years.

                        AGRICULTURAL TRADE OFFICE

    Question. FAS has cited budgetary constraints as the reason for 
having to close its Agricultural Trade Office (ATO) in Singapore at the 
end of the year. I note that the fiscal year 2001 budget requests 
additional appropriations for FAS to open three new ATOs in Mexico, 
Canada and the Philippines. Why are these three new offices of highest 
priority? Why establish ATOs in Mexico and Canada which are currently 
our largest agricultural markets and are in close geographic proximity 
to the United States, rather than in countries/regions with market 
access/expansion potential?
    Answer. The three proposed ATOs were chosen on the basis of their 
market potential. The Philippines, with a population of 80 million, has 
a rapidly growing economy which has largely escaped the financial 
downturn suffered by many other Asian economies over the past 2 years. 
While Philippine consumers often favor U.S. products, they also have 
ready access to products from China and Australia, which are very 
active in that market. ATO Manila should be able to provide a showcase 
for a wide range of products in this growing market with major 
potential.
    Mexico is the third largest market for U.S. agricultural products, 
and while nearby, it is not an easy one for U.S. exporters. The 
proposed ATO in Monterey would provide support for exporters in 
developing markets in the border region of Northern Mexico, which has 
had the most dynamic economy in the country. With higher incomes, this 
region has expanded demand beyond the traditional bulk commodities and 
is taking increasing quantities of processed and consumer ready goods. 
Besides working with U.S. suppliers of these products, ATO Monterey 
would also focus on the problems of moving goods across the border. 
Such problems often require some U.S. government intervention in 
resolving issues of food inspection or safety.
    Canada, the second largest destination for U.S. agricultural 
products, has provided a particularly strong, consistent and growing 
market for high value and processed foods. Although Canada is often 
viewed as an easy nearby market, there are significant hurdles for 
first-time exporters. The proposed ATO Toronto would focus on the 
thousands of U.S. food producers who have never exported and who should 
view Canada as a good ``starter'' market. In this context, the ATO 
would provide specialized services for new exporters, providing them 
with a higher level of support than would normally be offered. The ATO 
would also play an active role in outreach in the Upper Midwest, 
encouraging companies in the region to get involved in the Canadian 
market.
    Question. Did the Department consider retaining the Singapore ATO, 
despite the higher cost of this office, given Singapore's strategic 
prominence in the Southeast Asia region?
    Answer. When the Agricultural Trade Office (ATO) was opened in 
Singapore 21 years ago, the city was the major transshipment point for 
agricultural trade with Southeast Asian countries, particularly nearby 
Malaysia and Indonesia. Since that time, however, the city's share of 
trade tonnage for the region has been eroding, a trend that is likely 
to accelerate in the future. In Malaysia, for example, the opening of 
Port Klang in 1996 (the first in the country which could handle the 
larger, Panamax-sized vessels) and of the new Kuala Lumpur 
International Airport in 1998 have stepped up the trend in displacing 
transhipments that previously went through Singapore. Upgrades in port 
and transportation facilities in Indonesia are also displacing trade 
through Singapore. Indeed, the governments of both Malaysia and 
Indonesia are pursuing policies which will further favor the use of 
their own transportation facilities.
    FAS has also made substantial gains in its staffing in Southeast 
Asia during the past few years, opening an Attache Office in Hanoi, 
Viet Nam in 1996, an ATO in Jakarta, Indonesia in 1997, and an office 
in Ho Chi Min City, Viet Nam in 1997. Two additional Malaysians were 
added to staff of the Agricultural Attache's Office in Kuala Lumpur in 
1997. Consequently, many of the services previously offered by the ATO 
in Singapore to these countries are now handled in-country by local 
staff.
    FAS recognizes the continuing importance of Singapore as a regional 
financial and commodity trading center and will continue to maintain an 
office with a staff of two Singaporeans to cover these issues as well 
as trade servicing for this city of 4 million. This office will be 
supervised by the Agricultural Attache in nearby Kuala Lumpur. In 
addition, FSN staff from Kuala Lumpur will travel to Singapore to 
support major events, such as regional trade shows.
    With an annual budget of $900,000, ATO Singapore is the sixth most 
expensive FAS office in the world. Its annual cost is higher than that 
of several of our most critical posts, including the Minister 
Counselor's offices in Beijing and in Mexico City. With a budget for 
administrative costs frozen for the past 3 fiscal years, FAS has been 
forced to absorb rising costs and to close posts whose cost exceed 
their contribution to the agency's mission. For the reasons stated 
above, we believe that Singapore is one of these posts and that the 
resources expended there can be better used to support critical needs 
in other areas.
    Question. Mr. Galvin, in the prepared statement you submitted to 
the Committee, you indicate that the ATO in Singapore will be closed at 
the end of this fiscal year and you will save $0.9 million in fiscal 
year 2001. For what specific purposes will the $0.9 million in saving 
from the Singapore ATO be utilized in fiscal year 2001?
    Answer. Savings from closing ATO Singapore will be utilized to 
offset unavoidable wage and price increases. As a result of straight-
lined budgets for the past 3 fiscal years, FAS has been closing and 
downsizing overseas offices and reducing marketing activities as the 
means of offsetting these unavoidable cost increases. The fiscal year 
2001 budget again requires FAS to absorb a significant portion of these 
estimated costs.

                           COOPERATOR PROGRAM

    Question. Beginning in fiscal year 2000, the Cooperator Program is 
being funded through the Commodity Credit Corporation rather than 
through FAS's direct appropriation. In shifting funding to the CCC, 
$500,000 was retained in FAS's direct appropriation for fiscal year 
2000 to cover the costs of administering the program. What was the cost 
to FAS of administering the Cooperator Program in fiscal year 1999 and 
is the full $500,000 being used for this purpose for fiscal year 2000. 
Can CCC funds be used to administer the Cooperator Program. What level 
of funding is included in the fiscal year 2001 appropriations request 
to administer the Cooperator Program.
    Answer. The cost of administering the Cooperator Program in fiscal 
year 1999 was approximately $2.1 million. For fiscal year 2000, the 
full $500,000 retained in the FAS appropriation will be used for this 
purpose. For fiscal year 2001, the budget includes approximately $2.3 
million for administration of the Cooperator Program.
    While the program costs of the Cooperator program have shifted to 
the CCC, CCC funds cannot be used to finance the costs of administering 
the program.

                SCIENTIFIC COOPERATION RESEARCH PROGRAM

    Question. Please describe briefly each of the research and 
scientific exchanges being carried out under the FAS administered 
Scientific Cooperation Research Program in fiscal years 1999 and 2000 
and the sources of funding for each. Does the fiscal year 2001 FAS 
request include funding for this program? If so, what level of funding 
is requested?
    Answer. The FAS Scientific Cooperation Research Program is funded 
from the annual appropriation made available to FAS. In fiscal year 
1999, the program level totaled $1.8 million. The budgets for fiscal 
years 2000 and 2001 include $1.9 million annually for these activities. 
We will provide Research and Exchange Project Abstracts by Country for 
both fiscal years 1999 and 2000 for the record.
    [The information follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                       FOREIGN MARKET DEVELOPMENT

    Question. Please provide a breakout of how FMD Foreign Market 
Development Cooperator Program funds were allocated in each fiscal 
years 1999 and 2000.
    Answer. The FMD approved marketing plan levels for fiscal years 
1999 and 2000 are as follows:

                       FMD APPROVED MARKETING PLAN
------------------------------------------------------------------------
               Cooperator                   1999 budget     2000 Budget
------------------------------------------------------------------------
Cotton Council International............      $1,853,934      $1,953,000
American Peanut Council.................         572,123         561,945
American Seed Trade Association.........         260,197         272,163
American Soybean Association............       6,977,863       7,081,782
National Cottonseed Products Association         139,846         140,374
National Sunflower Association..........         269,604         265,871
Leather Industries Association..........         196,915         198,069
U.S. Dairy Export Council...............         601,135         708,348
American Sheep Industry Association.....         163,316         167,537
U.S. Hide, Skin & Leather Association...          85,489          85,759
Mohair Council of America...............          30,020          26,129
U.S. Livestock Genetics Export Inc......         774,145         801,336
National Renderers Association..........       1,123,589       1,009,044
USA Poultry & Egg Export Council........       1,564,498       1,512,990
U.S. Meat Export Federation.............       1,423,672       1,528,287
U.S. Beef Breeds Council................          73,083  ..............
American Seafood Institute..............          79,403          80,069
American Forest & Paper Association.....       2,836,132       2,851,287
North American Millers Association......          81,215          81,528
National Hay Association................          46,000          55,345
National Dry Bean Council...............          98,038         122,103
USA Dry Pea & Lentil Council............         161,036         187,890
USA Rice Federation.....................       1,657,709       1,739,535
U.S. Grains Council.....................       5,676,788       5,709,387
U.S. Wheat Associates...................       6,789,084       6,394,954
California Agricultural Export Council            11,167          11,269
 (Western Growers Association)..........
                                         -------------------------------
      Grand Total.......................      33,546,001      33,546,001
------------------------------------------------------------------------

                              ALLOCATIONS

    Question. Please provide the Public Law 480 funding allocations, by 
title, and by country and commodity for each of fiscal years 1999 and 
2000 to date.
    Answer. [The information follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                 FUNDING FOR COCHRAN FELLOWSHIP PROGRAM

    Question. The fiscal year 2001 budget proposes to maintain FAS 
funding for the Cochran Fellowship Program at a level of $3.5 million. 
Are available resources sufficient to extend fellowships to all 
countries which seek to participate in the program? If not, what 
additional funding would be required to meet these requests?
    Answer. The success of the Cochran Fellowship Program to initiate 
and pursue short- and long-term trade objectives and to influence 
public- and private-sector decision makers has led to increased 
requests to initiate the program in numerous countries around the 
world. For fiscal year 2001, we have had requests from Agricultural 
Affairs Offices and U.S. Embassies to start a Cochran Program in Egypt, 
Jordan, Peru, Ecuador, Argentina, Uruguay, Mongolia, and Cambodia, and 
expect requests for several additional African countries. The most 
frequent requests for the Cochran Program is to provide training in 
areas related to WTO/CODEX agricultural issues, food safety, sanitary 
and phytosanitary (SPS) issues, genetically modified organisms (GMOs), 
and biotechnology. In general, one of every four candidates that apply 
for the program are selected.
    Question. Please provide fiscal year 1999 and fiscal year 2000 
Cochran Fellowship Program participant levels by country and region, 
along with the projected participant levels for fiscal year 2001.
    Answer. In fiscal year 1999, a total of 797 participants from 65 
countries received training under the Country Fellowship Program. 
Participant numbers by region and by country follow:
  --Asia: 131 participants from seven countries: Korea (1 participant), 
        Malaysia (11), China (37), Thailand (18), Indonesia (25), 
        Philippines (11), and Vietnam (28).
  --Eastern Europe: 215 participants from 15 countries: Turkey (23), 
        Poland (47), Hungary (15), Czech Republic (16), Slovakia (14), 
        Albania (5), Bulgaria (15), Slovenia (8), Croatia (8), Latvia 
        (14), Estonia (13), Lithuania (12), Romania (20), Bosnia (2), 
        and Macedonia (3).
  --Latin America and Caribbean: 149 participants from 14 Latin 
        American and Caribbean countries: Mexico (42), Venezuela (6), 
        Trinidad & Tobago (5), Caribbean Islands (44), Panama (8), 
        Colombia (17), Chile (1), Guatemala (3), Costa Rica (9), 
        Nicaragua (5), Brazil (5), El Salvador (2), Suriname (1), and 
        Guyana (1).
  --Africa and Middle East: 113 participants from 18 African and Middle 
        Eastern countries: Cote d' Ivoire (9), Ghana (6), Senegal (10), 
        Nigeria (5), South Africa (22), Namibia (1), Kenya (12), Uganda 
        (9), Tanzania (5), Tunisia (12), Morocco (1), Oman (4), and 17 
        participants from 6 additional countries.
  --New Independent States: 189 participants from 11 countries of the 
        New Independent States: Russia (53), Ukraine (21), Kazakstan 
        (17), Kyrgyzstan (13), Uzbekistan (20), Turkmenistan (13), 
        Tajikistan (3), Armenia (16), Moldova (15), Georgia (9), and
      --Azerbaijan (9).
    The selection of participants for fiscal year 2000 has not yet been 
completed, thus we cannot provide exact Cochran participant levels by 
country for fiscal year 2000. We expect, however, to provide training 
to about 750 to 800 participants--roughly the same level as in fiscal 
year 1999. We will extend the program to six new countries in fiscal 
year 2000 (India, Sri Lanka, Pakistan, Botswana, Zimbabwe, Mozambique).
    In fiscal year 2001, we estimate that we will again provide 
training to about 750-800 participants if funding levels remain at 
present levels.
    Question. Please provide examples of the benefits of the fiscal 
year 1999 Cochran Fellowship Program to U.S. agriculture.
    Answer. Cochran Fellowship Program participants attend trade shows, 
seminars, and meet with public and private sector contacts to pursue 
the objectives of their training. Several examples of fiscal year 1999 
programs that had immediate benefits to U.S. agriculture include:
  --The Cochran Program joined with FAS International Trade Policy and 
        FAS Emerging Markets program areas to develop a U.S.-sub-
        Saharan Africa Workshop on Codex Alimentarius and the World 
        Trade Organization involving 37 participants from 17 African 
        countries. The training improved participants' understanding of 
        the processes at work in the WTO and the international standard 
        setting bodies. Most importantly, the discussions pointed out 
        areas of shared interests, including mutual concerns in the 
        next round of multilateral negotiations. The participants 
        agreed that there are significant areas in which the U.S. and 
        sub-Saharan African countries can cooperate in international 
        trade and the work of the international standard setting 
        bodies.
  --The Cochran Program sponsored a Biotechnology and Genetically 
        Modified Organism (GMO) training activity for 15 experts from 
        five Central European countries Czech Republic, Hungary, 
        Slovenia, Croatia, and Slovakia. The program provided a 
        balanced U.S. viewpoint of this topic to Eastern European 
        policy makers. A film on U.S. biotechnology has been developed 
        by a Czech researcher from Prague Agricultural University and 
        is now available to Central and Eastern Europe audiences.
  --The FAS Agricultural Offices in China reports that fiscal year 1999 
        Cochran teams have led to sales of: U.S. frozen seafood (2 
        containers of conch, 3 containers of squid, and 5 containers of 
        scallops), live seafood (geoduck clams, crabs, Maine lobster 
        and abalone), french fries (4 containers), and pistachios (over 
        10 containers) to date.
  --The FAS Agricultural Officer covering Senegal reported that a 
        fiscal year 1999 participant purchased two containers one each 
        of frozen poultry and frozen meat. This was the first U.S. 
        export of frozen chicken and meat to Senegal. The participant 
        intends to purchase two containers per month, the value of 
        which is estimated at over $200,000 per year.
  --Despite the slowdown in the Indonesian economy, fiscal year 1999 
        participants report they purchased U.S. supplies of raw 
        popcorn, almonds, prunes, dried fruits, walnuts, organic 
        vegetables, wheat flour, and skim milk powder, as a result of 
        their fiscal year 1999 Cochran training programs.
  --The U.S. Meat Export Federation reports sales of U.S. lamb to 
        Barbados after a Cochran training activity.
  --The FAS Agricultural Trade Office in Miami states that: ``The 
        Cochran Fellowship Program continues to be the most effective 
        FAS program used by our office in fiscal year 1999. The 
        constraints in the Caribbean of limited training opportunities 
        and some resentment of U.S. government policy continue to be 
        issues for our office. The ability to offer training 
        opportunities to persons in our sector is a powerful tool for 
        us to use in our efforts to expand our exports in the 
        Caribbean.''
  --The Agricultural Officer in Costa Rica reports pilot sales of 190 
        cases of US wine following a Cochran Wine Merchandising 
        program.
  --FAS Agricultural Attaches and former Cochran participants from 
        Central and Eastern Europe report that Cochran training 
        activities led to sales in fiscal year 1999 of: soybeans and 
        wheat to Albania; wild rice to Czech Republic; tofu grade 
        soybeans to Slovakia; almonds and walnut meal to Hungary; the 
        first ever direct sale of Florida citrus and U.S. walnuts to 
        Poland, and meat to Romania. We have heard that citrus and 
        walnut sales continue through the present.
  --The FAS Agricultural Affairs Officer in Vietnam states that all the 
        fiscal year 1999 Cochran Programs were useful: ``. . . the two 
        programs in Animal Health helped stave-off a possible ban on 
        all beef imports (i.e., dioxin scare in EU) and greased the 
        skids on the quarantine period for 309 U.S. breeding hogs. 
        Moreover, the participant who attended the Grain Purchasing 
        program actually bought 10,000 MT of wheat last week. The 
        Agricultural Banking Team has been brought up to speed on GSM-
        102, and will be very useful in the event of a Vietnam-specific 
        GSM program.''
  --The Texas Grain Sorghum Board reports that over 126,000 metric tons 
        of South Texas grain sorghum was sold to Mexican buyers as a 
        direct result of a Cochran activity in June 1999.
  --Natalia Markelova from the Samara region of Russia purchased 54 
        pregnant dairy goats at a value of $50,000 from an Illinois 
        company during her fiscal year 1999 Cochran program. She plans 
        to introduce goat milk into the domestic market and offer goat 
        milk as an option for baby formula.
  --The FAS Agricultural Specialist in Uzbekistan states: ``The five 
        participants from the oilseed industry found the Cochran/
        American Soybean Association training to be very professional 
        and effective. They established many useful contacts with U.S. 
        producers and processors of soybeans. Following the training, 
        Uzbekistan imported a total of 123,000 tons of US soybeans 
        under GSM-102 and Public Law 480 Title I programs. We strongly 
        believe that Cochran training was one of the effective tools 
        which positively affected Uzbekistan's decision to import US 
        soybeans for the first time. Post anticipates that Uzbekistan 
        is likely to continue to import U.S. soybeans.''
    Question. Please provide the total amount of funding made available 
for the Cochran Fellowship Program, including any funding made 
available by other Federal agencies and the CCC, for each of the fiscal 
years 1995-2000.
    Answer. The Cochran Fellowship Program receives funding from three 
sources: direct Congressional appropriations, funding from the FAS 
Emerging Markets Program (EMP) for Cochran activities in specific 
countries, and from the U.S. Agency for International Development 
(USAID) under the Freedom Support Act for Cochran activities in the New 
Independent States (NIS). The following lists funding levels from these 
sources, 1995 to 2000.

----------------------------------------------------------------------------------------------------------------
                      Year                        Appropriations        EMP          FAS USAID         Total
----------------------------------------------------------------------------------------------------------------
1995............................................      $2,178,000      $2,100,000      $2,250,000      $6,528,000
1996............................................       2,428,000       1,800,000       1,500,000       5,728,000
1997............................................       2,428,000         945,000       1,800,000       5,173,000
1998............................................       3,000,000       1,120,000       1,800,000       5,920,000
1999............................................       3,500,000       1,834,000       1,846,000       7,180,000
2000............................................       3,500,000         ( \1\ )       1,562,000       5,062,000
----------------------------------------------------------------------------------------------------------------
\1\ Not yet determined.

                               ALLOCATIONS
    Question. Please provide the Market Access Program allocations for 
fiscal year 1999, including the amount of the grant, the recipient 
company, commodity, and targeted markets.
    Answer. The information is provided for the records.
    [The information follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                            OVERSEAS OFFICES

    Question. Please provide a list of FAS overseas counselor/attache 
and trade offices for fiscal year 1999 and 2000, and proposed for 
fiscal year 2001, and the amount of funding and full-time equivalent 
staffing levels provided for each.
    Answer. A list of FAS overseas counselor/attache and trade offices 
and the amount of funding and full-time equivalent staffing levels is 
provided.
    [The information follows:]

    
    
    
    
    
    
    
    
                   EXPORT CREDIT GUARANTEE ACTIVITIES

    Question. Please provide a listing of the activities supported 
under each of the four export credit guarantee activities in fiscal 
year 1999 and in fiscal year 2000 to date: Supplier Credit Guarantees, 
Facilities Guarantees, GSM-102, and GSM-103.
    Answer.
    [The information follows:]
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
                              SECTION 108

    Question. It has come to my attention that ``Section 108'' 
resources are being utilized to supplement FAS's resources for market 
development. Please provide for the record a description of what 
``Section 108'' is; what level of ``Section 108'' resources are 
available to the FAS for each of the fiscal years 1999, 2000, and 2001; 
and for what specific purposes and in what amounts Section 108 funds 
are being utilized in each of fiscal years 1999, 2000, and 2001?
    Answer. ``Section 108'' refers to foreign currency accruing from 
the repayment provision of Public Law 480 Title I agreements which 
financed the sale and exportation of agricultural commodities to Costa 
Rica, Dominican Republic, Guatemala, Jamaica, Morocco, Sri Lanka, and 
Tunisia prior to November 22, 1990. At that time, certain Public Law 
480, Title I agreements permitted foreign countries to repay the United 
States in local currencies. The law required that up to 95 percent of 
these foreign currencies be loaned to financial institutions within the 
foreign country to support productive private enterprise development, 
and up to 5 percent be made available to the Secretary of Agriculture 
for agricultural technical assistance including market development 
activities that would ultimately increase the consumption of and 
markets for U.S. agricultural commodities and products. The Agency for 
International Development (U.S.A.I.D.) carried out this loan program. 
After the local financial institutions repaid the loans, the law 
stipulated that the United States could only use the foreign currencies 
for the following purposes:
    (1) to make additional loans to local financial institutions;
    (2) to develop new markets for U.S. agricultural products;
    (3) to repay U.S. government obligations, e.g., embassy expenses; 
or
    (4) be converted to dollars. However, 10-years after the last 
delivery of the commodity for which the Public Law 480 loan was made, 
any unobligated foreign currencies must begin to be converted to 
dollars and turned over to the U.S. treasury.
    Examples of activities for which Section 108 funds were used 
include local travel and per diem for trade teams, consultants and 
technicians or local consultant fees, development, translation and 
publication of printed material, point of sale promotional items, FAS 
trade promotion activities, market potential surveys, and MAP/FMD 
related cooperator activities.
    Examples of activities for agricultural technical assistance 
include construction of feed lots, in-country trade and technical 
symposia, demonstrations, and training seminars or construction, 
curricula development, and purchase or upgrading of equipment for 
demonstration projects, baking schools and other training or 
demonstration facilities.
    The Office of the General Counsel for the Department of Agriculture 
has determined that FAS may use the Section 108 foreign currencies for 
market development and agricultural technical assistance in addition to 
any other funds available to it for this purpose. These currencies 
allow FAS to support market development activities which they would 
otherwise not be able to support with existing resources.
    It is difficult to place an accurate value on these resources 
because they exist in seven different countries with volatile exchange 
rates. However, the most accurate assessment of the total accrued value 
of the foreign currencies in the seven countries amounted to 
approximately $56 million in U.S. equivalents in October of 1999. 
Obligations for these funds for 1999 and 2000 were $1.5 million and 
$5.3 million respectively. There are no funds yet obligated for 2001.
                                 ______
                                 

              QUESTIONS SUBMITTED BY SENATOR SLADE GORTON

                        WHEAT SALES TO PAKISTAN

    Question. Can you explain why wheat sales to Pakistan are at half 
the levels they were a year ago? According to the statistics I've 
reviewed, sales to Pakistan in 1998 hovered around 793,000 metric tons, 
whereas this year it's projected that the U.S. has sold only 400,000 
metric tons. Of the top 10 countries the U.S. promotes and sells wheat 
to overseas, Pakistan was the one country that dipped so low in sales. 
Can you explain why sales to Pakistan have slipped? Because Washington 
soft white wheat is the premier choice of Pakistan purchasers, I am 
obviously concerned.
    Answer. In recent years, Pakistan has usually been a 1.5 to 2.0 
million ton market for U.S. wheat producers in the Pacific Northwest. 
However, so far in the current marketing year, we've only sold about 
400,000 tons. It is essentially because Australia has been particularly 
aggressive in light of a record wheat crop this year which has resulted 
in enormous exportable supplies. In addition, the country has increased 
its credit offering to Pakistan and is able to make use of a 
significant freight advantage to the Pakistan market. Finally, 
Pakistan's military government appears to be drawing down stocks in 
anticipation of a good harvest this year, reducing total import needs 
by 25 percent.
    FAS will make maximum use of food aid donations and concessional 
sales of wheat in order to keep U.S. wheat in Pakistan. In January, we 
extended the term of our current GSM-102 offering from 2 years to 3 
years as a means of increasing our competitiveness against Australia.
    Question. Potato growers and other high value and specialty crops 
in the Pacific Northwest are very concerned about the potential closure 
of the FAS office in Singapore. Because growers in my state consider 
Singapore as the gateway into other Asian markets, can you explain why 
such an invaluable office is being eliminated? As a follow up, I 
understand USDA might be considering opening other offices in the 
region?
    Answer. When the Agricultural Trade Office (ATO) was opened in 
Singapore 21 years ago, the city was the major transshipment point for 
agricultural trade with Southeast Asian countries, particularly nearby 
Malaysia and Indonesia. Since that time, however, the city's share of 
trade tonnage for the region has been eroding, a trend that is likely 
to accelerate in the future. In Malaysia, for example, the opening of 
Port Klang in 1996 (the first in the country which could handle the 
larger, Panamax-sized vessels) and of the new Kuala Lumpur 
International Airport in 1998 have stepped up the trend in displacing 
transhipments that previously went through Singapore. Upgrades in port 
and transportation facilities in Indonesia are also displacing trade 
through Singapore. Indeed, the governments of both Malaysia and 
Indonesia are pursuing policies which will further favor the use of 
their own transportation facilities.
    FAS has also made substantial gains in its staffing in Southeast 
Asia during the past few years, opening an Attache Office in Hanoi, 
Viet Nam in 1996, an ATO in Jakarta, Indonesia in 1997, and an office 
in Ho Chi Min City, Viet Nam in 1997. Two additional Malaysians were 
added to staff of the Agricultural Attache's Office in Kuala Lumpur in 
1997. Consequently, many of the services previously offered by the ATO 
in Singapore to these countries are now handled in-country by local 
staff.
    FAS recognizes the continuing importance of Singapore as a regional 
financial and commodity trading center and will continue to maintain an 
office with a staff of two Singaporeans to cover these issues as well 
as trade servicing for this city of 4 million. This office will be 
supervised by the Agricultural Attache in nearby Kuala Lumpur. In 
addition, FSN staff from Kuala Lumpur will travel to Singapore to 
support major events, such as regional trade shows.
    With an annual budget of $900,000, ATO Singapore is the 6th most 
expensive FAS office in the world. Its annual cost is higher than that 
of several of our most critical posts, including the Minister 
Counselor's offices in Beijing and in Mexico City. With a budget for 
administrative costs frozen for the past 3 fiscal years, FAS has been 
forced to absorb rising costs and to close posts whose costs exceed 
their contribution to the agency's mission. For the reasons stated 
above, we believe that Singapore is one of these posts and that the 
resources expended there can be better used to support critical needs 
in other areas.
    FAS recognizes the fact that East Asia is likely to be the major 
growth market for agricultural trade in the next few years and is 
prepared to add more staff and to open additional offices in the region 
if its budget is increased enough to support these openings. As you are 
aware, the 2001 budget proposes increased funding for FAS to support 
the opening of a new ATO in Manila, the Philippines, one of the most 
promising growth markets in that region.
                                 ______
                                 

               QUESTION SUBMITTED BY SENATOR CONRAD BURNS

    Question. The expanded trade initiative portion of this plan is 
supposed to use all of the export programs and to utilize EEP funds and 
food-aid programs. Yet, almost every single export program received a 
budget cut this year. How can the USDA promote a trade initiative that 
does not contain adequate funding?
    Answer. While the President's fiscal year 2001 budget does project 
lower levels of food assistance for fiscal year 2001, this largely 
reflects the assumption of a return to more traditional program levels 
after the unprecedented volume of activity in fiscal years 1999 and 
2000. The fiscal year 2001 budget continues credit guarantee and market 
development programs at fiscal year 2000 levels. Additionally, the 
budget includes increases totaling $4.4 million for FAS, including $.8 
million for market access compliance and negotiation activities. If we 
are to meet the workload challenge facing FAS, it is crucial that FAS 
receive funding at the level requested in the President's budget.
                                 ______
                                 

                Questions Submitted by Senator Herb Kohl

                      FOREIGN TRADE AND ASSISTANCE

    Question. U.S.-China WTO Accession Agreement. The Congress may be 
asked to consider the U.S.-China WTO Accession Agreement later this 
year. The impact of this agreement on agriculture will play a strong 
role in my position on this issue.
    I know there is a great deal of support for this agreement within 
agriculture. But I have to say, I am concerned about whether or not at 
least with respect to dairy the opening of markets in China will 
necessarily benefit U.S. agriculture.
    The U.S. dairy industry has long been concerned about the impact of 
state trading enterprises namely the New Zealand Dairy Board on free 
trade. While I know this Administration has made State Trading 
Enterprises a top negotiating priority, to date, you've not made much 
progress in reducing the trade distorting effects of these 
organizations.
    Despite the optimism about the China WTO Accession Agreement, what 
can U.S. dairy farmers reasonably expect in terms of access to China 
until we can fully reduce existing trade distortions?
    Answer. The direct impact of WTO membership for China on U.S. dairy 
exports is likely to be relatively modest at least for the first 5 or 
so years. China has a rapidly expanding domestic dairy industry, but 
compared to the potential size of the market for dairy products, the 
domestic industry is very small. Demand is expanding and dairy product 
imports are growing rapidly. The major items imported on both a volume 
and value basis are milk powder and dried whey. China's WTO package 
does not call for reduced tariffs for milk powder and dried whey since 
duties on whey are already relatively low (6 percent) while 
domestically produced powder tends to be in surplus at times.
    Cheese, ice cream, and lactose are three products where imports 
have been rapidly increasing and where reduced tariffs might be 
expected to cause a further acceleration in demand. China's tariff on 
cheese imports is to drop from 50 to 12 percent and with expanding 
pizza and fast food restaurants, imports should grow rapidly.
    Availability and consumption of ice cream is growing rapidly in the 
large cities but penetration of more rural markets is difficult. 
Expanding markets are expected to create demand both for direct imports 
of ice cream and more imports of ice cream ingredients. The tariff for 
ice cream is to drop from 45 to 19 percent. A similar situation exists 
for yoghurt where the tariff will drop from 45 to 10 percent.
    A large population with limited incomes means China's food industry 
is always very interested in sources of low-priced high-quality food 
ingredients. The already-low tariff on whey products, plus the 
scheduled reductions for lactose (35 to 15 percent) and dairy based 
food preparations (25 to 10 percent) should result in a big boost for 
dairy product imports.

         MARKET ACCESS AND FOREIGN MARKET DEVELOPMENT PROGRAMS

    Question. Beginning in fiscal year 2000, the Foreign Market 
Development Program was to secure funding through mandatory spending at 
levels no less than that available in fiscal year 1999. What levels of 
funding did the Foreign Market Development Program receive in fiscal 
year 1999 and what are your estimates for 2000 and 2001?
    Answer. The Foreign Market Development Program was funded at $27.5 
million for both fiscal year 1999 and 2000, and we anticipate $27.5 
million for 2001.
    Question. Please provide the levels and description of activities 
through both the Market Access and Foreign Market Development Programs 
related to dairy products.
    Answer. The U.S. Dairy Export Council (USDEC), has received 
$703,348 in fiscal year 2000 Foreign Market Development funds, and 
$1,699,394 in fiscal year 1999 Market Access Program funds. USDEC is a 
nonprofit industry trade membership organization representing 
processors, exporters, producers and suppliers to the dairy industry. 
The Council's activities include market research, technical seminars, 
trade shows, product literature, and in-country trade servicing. 
Promoted products include cheese, whey, yogurt, ice cream, milk powder, 
and fluid milk. USDEC's efforts are concentrated in Japan, China, 
Korea, Mexico, and Brazil.

                      WORLD HUNGER/U.S. ASSISTANCE

    Question. World news too often reminds us of the tragic 
consequences of human events and those of nature that take the form of 
malnutrition and starvation, especially among children. U.S. food 
assistance provides the double benefit of offering food to those in 
need and establishing an outlet for U.S. production. It has been 
suggested by some, such as former Senator and now U.S. Ambassador to 
the United Nations for Food and Agriculture, George McGovern, that the 
time has come for the U.S. to provide leadership in the creation of a 
world-wide program modeled after the School Lunch and WIC programs 
designed to curb child hunger. Ambassador McGovern has suggested the 
initial U.S. cost in such an endeavor would be in the $1 billion range. 
Does such a proposal fit within USDA's vision of providing humanitarian 
food assistance.
    Answer. USDA is a primary agency in the United States' efforts to 
combat both domestic and international hunger and food security. This 
effort goes beyond just humanitarian food assistance to development 
assistance and policy interventions that will create sustainable food 
security around the world. Last year, in March 1999, we released the 
U.S. Action Plan on Food Security. This document provides a long-term 
road map for the efforts of both the U.S. Government and civil society. 
School feeding programs around the world are an important intervention 
that can help build food security and end hunger, not just for those 
who attend school, but for the households and the communities in which 
children live over the long term. These types of programs help address 
many of the root causes of food insecurity, as well as its most obvious 
symptom: malnutrition.
    School feeding programs encourage school attendance, particularly 
among women and girls, and when properly structured, can help reduce 
the costs associated with rural families sending their children to 
school rather than putting them to work by providing supplemental food 
for the household. We know that women's education is one of the most 
important elements in reducing population growth. It also provides 
greater economic opportunities.
    It is difficult to accurately estimate the cost of a global program 
because it will take a different shape in each country, depending on 
local conditions and the strength of existing infrastructure.
    Question. Assuming a large share of such assistance would serve as 
an outlet for U.S. agricultural products, what effect, if any, would 
such a proposal have on U.S. commodity prices?
    Answer. To the extent that these programs lead to increased U.S. 
agricultural exports, this should lead to increases in U.S. commodity 
prices. This impact, of course, would vary by commodity and would be 
dependent upon other dynamics taking place in the market. Additional 
food assistance programs can also support the development of U.S. 
export markets over the longer term, with an ongoing positive effect on 
U.S. commodity prices.

                       EXPORT ENHANCEMENT PROGRAM

    Question. Secretary Schumacher's statement suggests that the Export 
Enhancement Program (EEP) might be a more appropriate tool for U.S. 
producers should market conditions change. Given the current commodity 
surpluses and ongoing trade disputes with many of our trade partners, 
what change in market conditions need to occur in order to make better 
use of EEP?
    Answer. In order for EEP to be beneficial to U.S. producers, it 
must be used in a market environment where it would lead to significant 
improvement in wheat prices without greatly depressing feed grain 
prices. In the current market environment of large global supplies and 
low prices for wheat and feed grains, the use of EEP would likely 
result in only a modest boost in U.S. wheat prices and would 
undoubtedly lead to increased imports of wheat from Canada and lower 
U.S. feed grain exports. Furthermore, any increase in wheat producers' 
incomes would be slight, since higher wheat prices would reduce loan 
deficiency payments and marketing loan gains. EEP is most effective 
when feed wheat does not compete with feed grain exports, and Canada, 
and to a lesser extent Australia, do not have large crops. Under these 
conditions, EEP would enable us to compete directly against EU 
subsidized exports and lower world wheat prices would not displace feed 
grain exports. In addition, reduced crop supplies in Canada and 
Australia would lessen the displacement in U.S. export sales in non-EEP 
markets and reduce the surge in imports from Canada following the 
resumption of EEP. Of course, resumption of EEP has international trade 
implications that also would have to be considered along with the 
market environment for wheat and feed grains.

                              FAS HOUSING

    Question. I understand some FAS Agriculture Attaches in foreign 
missions reside in housing acquired through the use of Public Law 480 
proceeds, yet the title for these properties is held by the U.S. 
Department of State. I further understand that under State Department 
policy, some of these properties are in the process of being sold with 
the proceeds not accruing back to USDA from which they came. Please 
explain how proceeds from these sales will be distributed. Please 
explain the effect these sales will have on the housing needs of 
foreign FAS personnel and on other agency's budget. If these sales will 
have an adverse effect on agency activities, what is USDA doing to 
negotiate an arrangement with the State Department or elsewhere within 
the government to correct this problem?
    Answer. Through the foresight of the Congressional Agriculture 
Committees, legislation was included in various DOS appropriations 
authorizing the acquisition of residences for Agricultural Attaches. 
Seventeen properties were purchased by the Department of State (DOS) 
during the years from 1957 to 1979 to provide housing for Agricultural 
Attaches in specific countries.
    Congressional testimony by State's Office of Foreign Buildings 
Operations (FBO) during those years reflects their intent to acquire 
pieces of property for the use of these Attaches. Both DOS appropriated 
funds and excess Public Law 480 currencies were used to acquire the 
specific properties. The DOS's use of funds to acquire these properties 
was based on priorities in agreement with USDA for acquisition of a 
number of residences for occupancy by the senior Attache of the agency.
    In the early 1990's, FBO claimed that it could sell some of those 
residences although they had been occupied by Agricultural Attaches 
since their purchase, in some cases for more than 40 years. Although 
FAS contested this view, FBO has subsequently sold four of these 
residences (in Lima, Peru; Quito, Equador; Santiago, Chile; and Rabat, 
Morocco) and retained the proceeds for its own purposes. As a 
consequence, FAS now pays over $85,000 annually for leased housing for 
these posts. In addition, two FAS residences have been put into embassy 
housing pools, thus requiring FAS pay for leased housing. These are in 
Nairobi, Kenya (annual leasing cost in excess of $26,000) and Warsaw, 
Poland ($43,000).
    In total, the impact of the loss of these residences has been 
additional costs of $680,000 to the FAS budget over the past 5 years. 
Since the FAS administrative budget has been frozen during the past 3 
years, these increased costs have had to come from other FAS programs 
and activities.
    During the past 2 years, FBO has announced that it intends to sell 
two additional FAS occupied houses, in Vienna, Austria and Stockholm, 
Sweden. If FBO succeeds in this, FAS will face annual leased housing 
costs estimated at $70,000 for these two posts. Finally, FBO now claims 
that FAS has no rights for continued assignment to two long-term FAS 
houses, in Bangkok, Thailand and Cairo, Egypt. If FAS is forced out of 
these residences, leased housing costs for the two posts are estimated 
at over $120,000 annually.
    Although FAS has contested this FBO policy for nearly 10 years, we 
have been unable to deter the plan to sell off FAS houses. Most 
recently, on December 7, 1999, Secretary Glickman wrote a letter to 
Secretary Albright regarding the sale of the house in Vienna. The 
Secretary asked that the proceeds of the sale be used to purchase 
replacement housing for the FAS officer. In addition, Secretary 
Glickman asked that he be advised of any actions which State might take 
for other dedicated FAS housing.

                             PUBLIC LAW 480

    Question. The budget request for fiscal year 2001 reflects a drop 
in the program level of all Public Law 480 programs. Title II, for 
example, drops from $962 million for the current year to $837 million. 
In addition, the level for fiscal year 2001 is more that $100 million 
below the level in fiscal year 1999. While use of the 416(b) program 
has been used in the past to supplement the assistance of Title II, 
that program can not be relied on as a permanent tool to complement 
Title II. In fact, use of 416(b) now seems to be quite less aggressive 
than a year ago. What are the anticipated needs of international food 
assistance programs for fiscal year 2001 and do the World Food Program 
or other international organizations concur with those estimates?
    Answer. The only annual assessment of future international food aid 
needs we are aware of is the one prepared by the Economic Research 
Service. And we believe this assessment is generally accepted by those 
working in the field of international food aid. The World Food Program 
provides to donors its estimates of the commodity needs of the projects 
it is supporting, as well as estimates of emergency needs as they 
arise.
    Question. Why is 416(b) not being more aggressively used now?
    Answer. We believe Section 416(b) authority is being both 
aggressively and responsibly used. At the present time, we expect to 
program about 4 million tons of food aid under this authority this 
fiscal year; of this total, 500,000 tons will benefit needy people in 
Russia. Last year, we programmed about 5.5 million tons, of which 1.7 
million tons went to people in Russia.
    Question. In the event 416(b) is not practically available, how 
does the U.S. plan to meet its world assistance obligations in fiscal 
year 2001 with a reduced program for Title II?
    Answer. The United States' international commitment to provide food 
aid is our commitment to the Food Aid Convention; this commitment is 
2.5 million tons on a 12 month basis. Therefore, the combination of 
Public Law 480 and Food for Progress programs assures that this 
commitment is met. As is always the case, international food aid needs 
will vary depending on weather, unforeseen natural disasters, and 
unfortunately, often man-made disasters. The availability of Section 
416(b) commodities does help the United States respond to such 
situations. However, in addition to the Public Law 480 and Food for 
Progress programs, there are commodities held by the Commodity Credit 
Corporation in the Bill Emerson Humanitarian Trust--the Food Security 
Commodity Reserve--which can also be used to help meet such needs.

                                  DEIP

    Question. In my oral questions I expressed concern about the impact 
of DEIP volume and value reductions resulting from our WTO commitments. 
I am concerned that the Department hasn't taken steps to ensure the 
full use of DEIP tonnage by reallocating canceled DEIP tonnage from 
previous years. This is particularly troubling given that milk prices 
have fallen to 20 year lows. What are the Department's plans to utilize 
the canceled tonnage in order to maximize DEIP exports and help relieve 
price depressing surpluses of milk powder?
    Answer. To utilize the DEIP program to the maximum extent possible, 
and consistent with our WTO commitments, USDA has used the rollover 
provision in the Agreement on Agriculture to bring tonnage forward from 
past years. We have reprogrammed an additional 74,861 metric tons of 
nonfat dry milk powder and 7,500 metric tons of whole milk above our 
annual WTO commitments during 1997/1998, 1998/1999 and 1999/2000. In 
using this rollover tonnage, we have fully exhausted our flexibility to 
program canceled tonnage.
    The additional canceled tonnage that the industry is now seeking 
would require changing the U.S. methodology for reporting our WTO 
export subsidy commitments. We established and committed to an 
accounting methodology with respect to our subsidy reduction 
commitments and should uphold this methodology, just as we would expect 
other members to do. Changing in the final year of the implementation 
period would be viewed as disingenuous, and probably subject to 
challenge by other members. Finally, we believe such an action would 
undermine our position of leadership as we enter a new round of global 
negotiations that are of great importance to all of U.S. agriculture.
                                 ______
                                 
             QUESTIONS SUBMITTED BY SENATOR ROBERT C. BYRD

                             FOREIGN TRADE

    Question. What steps has the U.S. Department of Agriculture taken 
to expand markets for West Virginia agricultural products?
    Answer. Through the Market Access Program (MAP), funding for 
international market promotion activities to export-ready companies is 
offered through the Southern U.S. Trade Association (SUSTA) in 
marketing SUSTA regional products. West Virginia, 14 other southern 
states, and the Commonwealth of Puerto Rico are included in the SUSTA 
region. West Virginia through its representation on SUSTA's Board of 
Directors and its international marketing representatives, is involved 
in the development and management of these activities.
    FAS also provides MAP support funds through the National 
Association of State Departments of Agriculture (NASDA) for the U.S. 
Food Export Showcase (USFES). The USFES is part of the Food Marketing 
Institute (FMI)'s major trade show for U.S. food products, held in 
Chicago annually in May. NASDA organizes and supports individual 
pavilions for State Departments of Agriculture at the USFES every year, 
including West Virginia, at reduced rates.
    Question. What has been the result of these efforts?
    Answer. SUSTA has actively recruited in West Virginia to assist the 
West Virginia Department of Agriculture's Market & Development Division 
in a renewed effort to take advantage of MAP funding for export-ready 
companies.
    NASDA has assisted West Virginia with its individual pavilion 
within the Food Export Showcase during the last 3 years. At the 
Showcase 8-10 West Virginia companies have been participating, and 
sales have resulted.
    Through the Southern U.S. Trade Association (SUSTA) last November, 
West Virginia contacted FAS about other potential USDA programs 
concerning its agricultural products. Robert Williams, Director of West 
Virginia's Market & Development Division, has worked with a program (WV 
Jobs Investment Trust) in moving foreclosed aquaculture farms in its 
state and possibly other related entities into an independent 
cooperative. He submitted a summary of the ``High Appalachian Project'' 
to FAS and USDA/Rural Business--Cooperative Service in February. 
Cooperative Service reviewed this summary in early March, and this 
group may independently request technical assistance (i.e, business 
planning, market strategy development) in the near future.
                                 ______
                                 
           QUESTIONS SUBMITTED TO THE RISK MANAGEMENT AGENCY

              QUESTIONS SUBMITTED BY SENATOR THAD COCHRAN

                       RISK MANAGEMENT EDUCATION

    Question. What amount of current funding is devoted annually to 
risk management education activities? Are all of these funds 
discretionary, or are there available funds for these activities in the 
FCIC Fund? If so, please delineate these.
    Answer. During fiscal year 2000, RMA plans to devote $1 million to 
Risk Management Education (RME) initiatives. All of these funds will be 
obligated from the mandatory Federal Crop Insurance Corporation (FCIC) 
Fund.
    Question. Please provide a list of outside organizations with which 
RMA has contracts or cooperative agreements for risk management 
education activities and the value of each.
    Answer. As of February 29, 2000, RMA has obligated $118,874.40 to 
outside organizations in the form of contracts or cooperative 
agreements to support RME activities. RMA plans to obligate remaining 
RME funds over the next 6 months. Please see the attached table.
    [The information follows:]

RISK MANAGEMENT AGENCY--RISK MANAGEMENT EDUCATION CONTRACTS AND 
COOPERATIVE AGREEMENTS FISCAL YEAR 2000

                             [As of 2-29-00]

 Cooperative Agreements: Foreign Agriculture Service 
    with the National Future Farmers of America 
    Foundation................................................$40,000.00
Purchase Orders/Contracts:
    Pennsylvania Farm Bureau....................................7,000.00
    National Introducing Brokers Associ...........................800.00
    Montana Grains Foundation...................................7,500.00
    University of Nevada........................................2,000.00
    University of Arizona.......................................1,500.00
    University of Arizona.......................................4,500.00
    University of California....................................1,000.00
    Futures Industry Institute.................................15,000.00
    Oregon State University/Ag Resear...........................3,000.00
    Country Hedging, Incorporated...............................5,000.00
    Washington Association of Wheat G...........................2,000.00
    Oregon Wheat Growers League.................................7,000.00
    University of Idaho Cooperative E...........................3,000.00
    Ohio State University.......................................2,850.00
    Illinois Farm Bureau........................................1,734.40
    Purdue University...........................................5,000.00
    Financial Ag Risk Management Serv...........................2,500.00
    Alabama Farm Bureau Federation..............................4,490.00
    1Ft. Valley State University................................2,000.00
    Georgia 4-H Foundation......................................1,000.00
                    --------------------------------------------------------
                    ____________________________________________________
      Total..................................................$118,874.40

                   INFORMATION TECHNOLOGY (IT) COSTS

    Question. The budget includes an increase of $3,717,000 for RMA 
administrative and operating costs, of which $403,000 is for 
information technology costs. How much funding is included in the 
discretionary base for IT costs? In the mandatory base?
    Answer. The fiscal year 2001 discretionary base includes $22.1 
million for IT costs. A portion of the IT base includes projects that 
have been unfunded in prior years due to cuts in the budget process. 
The fiscal year 2001 funding base for IT costs in the mandatory FCIC 
Fund is $1.5 million.

                       COMPANY UNDERWRITING GAINS

    Question. The budget estimates delivery expenses for fiscal year 
2001 of $507,679,000. What are the estimated underwriting gains for 
fiscal year 2001 between buy-up coverage and catastrophic coverage? 
What were the underwriting gains for fiscal year 2000?
    Answer. Based on the fiscal year 2001 President's Budget, RMA 
estimated company underwriting gains of $156.5 million for fiscal year 
2000 and $163.8 million for fiscal year 2001.
                                 ______
                                 
               QUESTION SUBMITTED BY SENATOR CONRAD BURNS

    Question. The emphasis the Administration has put on conservation 
in their latest budget proposal appears to leave any real commitment to 
Risk Management reform out of picture, which is sorely needed across 
the nation. What changes are you proposing that are significant, and 
capable of breaking the stagnation we current see occurring? What was 
the budget score on this proposal?
    Answer. The Administration continues its strong desire to improve 
crop insurance participation and farmer applied risk management tools. 
The Administration has continued to work closely with Congress to 
ensure that significant improvements are achieved. Recently, the Senate 
Agriculture Committee, working closely with the Administration, took a 
significant step forward by approving its version of a Risk Management 
improvement bill. The bill was approved by the Senate.
    In fact, this Administration's budget request included a 
continuation of discounts on crop insurance premiums paid by farmers 
begun in fiscal year 1999 (this year, the administration assumes the 
cost of these premium discounts to be about $400 million), a proposal 
that reaffirms our commitment to increasing crop insurance coverage and 
participation levels. Additionally, the Administration continues to 
support insurance coverage to support farmers who have suffered 
multiple years of losses at a level of $100 million, expanding crop 
insurance to cover livestock at a cost of $100 million, budget to make 
more flexible NAP, costing $110 million, by eliminating the area 
trigger and by requesting $40 million of Congress to improve Risk 
Management Education and $30 million in additional funds for product 
research and development.
    Most of these proposals are contained in all the crop insurance 
improvement bills under consideration by Congress. All, these proposals 
could be considered significant by themselves, however, this 
Administration believes this basic package critical for Congress to 
enact this year.
                                 ______
                                 
               QUESTIONS SUBMITTED BY SENATOR TED STEVENS

    Question. As you are aware, last year, at my request, Congress 
directed the Risk Management Agency to perform an actuarial study to 
determine the feasibility of including salmon in the Federal crop 
insurance program. I understand that the Agency is proceeding with this 
study. What is the status of the study?
    Answer. Risk Management Agency (RMA) personnel contacted Dr. Ray 
Ralonde of the University of Alaska, Marine Advisory Program, to review 
the Alaskan salmon industry and gain an overview of the economic risks. 
Dr. Ralonde provided information and suggested RMA contact Dr. Terry 
Johnson, State Extension Agent for the National Marine Fisheries 
Service, and Dr. Gunner Knapp, Professor of Economics, University of 
Alaska. RMA also contacted Dr. Johnson and Dr. Knapp to discuss 
industry concerns as well as the feasibility of developing a crop 
insurance program based on sound actuarial risk management principles.
    Dr. Knapp & Dr. Johnson both verified they would be available and 
interested in conducting such a study. Dr. Ralonde also expressed 
willingness to help in whatever way he could but expressed that the 
study was probably less within his areas of focus. Funds have been 
budgeted to conduct the study this year.
    Question. I want the Risk Management Agency to conduct a pilot 
program to determine the feasibility of including salmon within the 
crop insurance program. If it met the actuarial soundness requirement 
are you prepared to initiate this pilot program also?
    Answer. RMA has initiated discussions with several industry experts 
in terms of identifying sources of both production & economic risks 
associated with producing salmon.
    We are gathering information concerning the main areas of interest 
so RMA can accurately direct our focus and resources. The results of 
the feasibility study will determine what crop insurance plan to offer 
and if any legislative authority is required.
    After discussions with your staff (Mr. Butzlaff), RMA is proceeding 
toward developing a feasibility study and pilot program which focuses 
our efforts on the commercial fisheries area of Bristol Bay. RMA has 
advised your office that a change in the Federal Crop Insurance Act is 
likely necessary for RMA to implement a pilot program that includes 
premium subsidies. Your office has been furnished information from 
USDA's Office of General Counsel on this matter.
    Question. What funds will the Risk Management Agency need to 
complete this study and a subsequent pilot program in Alaska?
    Answer. RMA is using $75,000 from the fiscal year 2000 Research and 
Development fund Section 516(b)(2) of the FCIC Act to complete the 
initial feasibility study. Budget requirements for subsequent fiscal 
years for pilot program research, development and implementation are 
estimated at $800,000, however, no commitment of funds have been 
allocated at this time pending numerous other program requests of RMA 
and the annual spending limitation placed on these funds within the 
Act.
                                 ______
                                 
                QUESTIONS SUBMITTED BY SENATOR HERB KOHL

                       DAIRY OPTIONS PILOT PROGRAM
    Question. During the hearing I asked what the Department is 
planning to do to ramp up the Dairy Options Pilot Program consistent 
with Secretary Glickman's commitment on February 10. I am concerned by 
the Department's response that dairy farmers should be able to 
participate in the program for no more than one round.
    RMA has operated multi-year pilot programs for many other 
commodities. Moreover, given the complexity of using the options market 
as a risk management tool, it is reasonable to expect that dairy 
farmers and USDA would need more than one round to determine the 
benefits and short comings of options markets as risk management tools 
in dairy. Finally, it is clear that Congress envisioned the options 
pilot program operating in a county for multiple rounds since the 
statute limits participation to no more than 3 years. Congress limited 
participation to 100 counties concurrently, not in total.
    How can RMA resolve the inconsistency between its operation of the 
DOPP and its unnecessarily narrow interpretation of the authorizing Act 
with the statements made by Secretary Glickman regarding the 
Department's efforts to increase use of DOPP?
    Answer. The Federal Agriculture Improvement and Reform Act of 1996 
says that ``the Secretary may operate the pilot program in not more 
than 100 counties . . . . '' It does not say ``not more than 100 
counties at any one time''. The intent of Congress is unclear. As a 
result, RMA has been advised by USDA's Office of General Counsel that 
legislative action will be required to expand into more than 100 
counties. RMA is currently reviewing ways to expand the Dairy Options 
Pilot Program.
                                 ______
                                 
              QUESTION SUBMITTED BY SENATOR ROBERT C. BYRD

                      IMBALANCE OF USDA ASSISTANCE

    Question. Farming in the Northeast (USDA's definition of Northeast 
includes West Virginia) accounts for 6 percent of U.S. farm numbers and 
8 percent of rural agricultural production values but receives just 1 
percent of direct payments and federal crop insurane payments to 
producers. I am concerned that the hardworking West Virginia farmer is 
not receiving a fair portion of assistance provided by the U.S. 
Department of Agriculture.
    What factors contribute to the discrepancy between amount produced, 
and assistance received?
    Answer. There could be several reasons for differences between the 
Northeast and the rest of the country. These other reasons would argue 
against the premise ``that the hardworking West Virginia farmer is not 
receiving a fair portion of the assistance provided by USDA.'' For 
example:
    1. Crop income versus livestock income.--The share of agricultural 
income derived from crops versus livestock and livestock products 
(e.g.--meat and milk). Both direct payments and crop insurance focus on 
crop production rather than livestock production. If the Northeast has 
relatively more income from livestock than rest of the country, then 
its share of direct payments and crop insurance, by definition, will be 
lower than the national average, when measured as a percent of the 
value of agricultural production.
    2. Crops produced.--Direct payments are focused on the loan 
commodities that are of lesser importance to the agriculture of the 
Northeast than to rest of the country. Crop insurance is not yet 
available on all crops produced in the Northeast, but RMA's Adjusted 
Gross Revenue (AGR) insurance program, which is currently in the very 
early pilot stages, does cover all vegetative crops and provides 
limited coverage for livestock.
    3. Farmers' choices of coverage levels.--The portion of farmers who 
chose to sign up for FCIC's free, basic crop insurance product--called 
CAT, for catastrophic coverage--compared to the higher coverage levels 
for which a premium is charged, is higher in the Northeast than the 
rest of the country.
    4. Participation in crop insurance program.--If farmers elect not 
to sign up for crop insurance--for whatever reason--then they and the 
region in which they farm will have a lower share in the benefits of 
the crop insurance program.
    Question. What can be done to ensure that a farmer who does not 
live in a larger ``farm-state'' receives an equitable portion of the 
assistance available to his fellow farmers?
    Answer. It is helpful to think of this problem both from two 
perspectives--the farmers' and Governments'. One must try to ``push'' 
crop insurance benefits to areas of need, the other must try to pull 
them from the center.
    The most important actions from the ``pull'' side would be for 
farmers to sign up for the various crop insurance programs that are 
available and to sign up at higher coverage levels. This, of course, 
immediately causes the desired benefits to flow. But it also converts 
potential demand into effective demand and makes money for agents' 
commissions and insurance company underwriting profits to become 
available.
    On the ``push'' side, it is important to note that FCIC uses a 
``for-profit'' delivery system--private insurance companies and their 
agents--to deliver its products to farmers. An increase in effective 
demand from the ``pull'' side, as suggested above, convince companies 
and their agents to be more aggressive in pushing products in 
agriculturally sparse areas such as the Northeast.

                          SUBCOMMITTEE RECESS

    Senator Cochran. We will have our next hearing on Tuesday, 
March, in this same room, 138, Dirksen Senate Office Building. 
At that time, we will review the President's budget request for 
the programs and activities of the Food and Drug 
Administration. Until then, the committee stands in recess.
    [Whereupon, at 4 p.m., Tuesday, February 29, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2001

                              ----------                              


                         TUESDAY, MARCH 7, 2000

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.
    The subcommittee met at 10:08 a.m., in room SD-138, Dirksen 
Senate Office Building, Hon. Thad Cochran (chairman) presiding.
    Present: Senators Cochran, Gorton, Stevens, Harkin, and 
Durbin.

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                      Food and Drug Administration

STATEMENTS OF:
        HON. DONNA E. SHALALA, SECRETARY, DEPARTMENT OF HEALTH AND 
            HUMAN SERVICES
        JANE E. HENNEY, M.D., COMMISSIONER
ACCOMPANIED BY:
        BERNARD SCHWETZ, D.V.M., PH.D., ACTING DEPUTY COMMISSIONER
        ROBERT J. BYRD, DEPUTY COMMISSIONER FOR MANAGEMENT AND SYSTEMS, 
            CHIEF FINANCIAL OFFICER
        DENNIS P. WILLIAMS, DEPUTY ASSISTANT SECRETARY FOR BUDGET, 
            DEPARTMENT OF HEALTH AND HUMAN SERVICES
        JOSEPH A. LEVITT, DIRECTOR, CENTER FOR FOOD SAFETY AND APPLIED 
            NUTRITION
        MITCHELL R. ZELLER, DIRECTOR, OFFICE OF TOBACCO PROGRAMS

               OPENING STATEMENT OF SENATOR THAD COCHRAN

    Senator Cochran. The subcommittee will please come to 
order.
    Today we continue our hearings reviewing the President's 
budget request for fiscal year 2001 for the subjects that come 
under the jurisdiction of this subcommittee. This morning we 
are pleased to have witnesses from the Department of Health and 
Human Services, the Secretary, as well as the Commissioner of 
the Food and Drug Administration. We appreciate very much your 
being here. We understand that accompanying the Secretary and 
Commissioner are Dr. Bernard Schwetz, who is Acting Deputy 
Commissioner of the Food and Drug Administration, and Mr. 
Robert J. Byrd, Deputy Commissioner for Management and Systems 
and Chief Financial Officer of the Food and Drug 
Administration, and Mr. Dennis Williams, who is Deputy 
Assistant Secretary for Budget at the Department of Health and 
Human Services.
    We notice from reviewing the statements that have been 
submitted, which will be made a part of the record, that the 
FDA has some high priorities, and we are looking forward to 
hearing more about those in the testimony this morning.
    One area that we are aware of that causes particularly 
difficult challenges for the agency is the technological 
advances that continue to be made that have resulted in a 
proliferation of new products and devices that are designed to 
benefit the American public in our quest for health and safety. 
We appreciate the challenge this creates for the Food and Drug 
Administration. We want to allow safe and effective products to 
reach the marketplace as quickly as possible, but we realize at 
the same time that the potential risks have to be monitored, as 
well as for products that are already on the market.
    We will be carefully considering the budget request in this 
area, along with the other priority areas, and consider the 
need for adequate resources to inspect more products on the 
market, to further reduce product approval times, to strengthen 
adverse events reporting systems, to ensure the safety of foods 
and imports, and to meet the new challenges, such as the 
illegal sale of drugs over the Internet.
    We are particularly pleased that the Secretary is here this 
morning. We want to assure her that we will work with her and 
her Department to address this agency's most critical needs.
    We also want to take this opportunity to commend the 
Commissioner, Dr. Henney, for her excellent service as 
administrator of the Food and Drug Administration.
    Madam Secretary, we invite you to proceed. We look forward 
to your statement. We will then hear from Dr. Henney. You may 
proceed.
    Secretary Shalala. Thank you very much, Mr. Chairman. I 
appreciate the invitation to be here. Chairman Stevens, Senator 
Gorton, Senator Durbin. I am delighted to join our very 
distinguished Commissioner who will describe in more detail 
FDA's first budget of the 21st century.
    FDA has earned worldwide respect as a premier public health 
agency, and the members of this subcommittee know the extensive 
responsibilities FDA has to ensure the safety of our food, our 
lifesaving drugs, and medical devices. And you know the work of 
this agency has created a quality and safety standard that many 
similar agencies around the world use as a benchmark.
    I would like to discuss with you today some of the specific 
areas where FDA is an essential partner in the progress we hope 
to achieve.
    First, we have made great progress on a bipartisan basis to 
improve the safety of our food supply, but we have farther to 
go. I look forward to your continued support on this critical 
issue.
    Second, the Nation faces a potentially dangerous threat 
from terrorists who would use disease agents rather than 
bullets or explosives to harm us. The administration and the 
Congress have been working to guard against this threat. We 
need the Food and Drug Administration to ensure that we have 
new vaccines to protect against these threats and powerful 
pharmaceuticals to protect us in the event of an attack.
    Third, we need a bipartisan effort to reduce the 
preventable deaths and injuries resulting from medical errors. 
We need better information on which drugs and medical devices 
are the most prone to error so that we can help physicians and 
medical personnel to use them more effectively and safely. A 
stronger adverse event reporting system at FDA is essential to 
our success in the area of medical errors.
    Fourth, we know that the Internet can help us to improve 
health and medicine. But we want to make sure that when 
Americans use the Internet to order pharmaceuticals, they can 
be sure that the drugs they receive are safe and effective and 
that they are the drugs they need. I hope you will support our 
initiative to make Internet drugs safe.
    Fifth, assuring products are safe and effective before they 
get to market is essential to our public health. Doing so 
quickly is necessary to a strong and innovative medical 
industry. We need to increase the resources that we make 
available for premarket review.
    We also request funding to support compliance checks of 
those who would sell tobacco products to our children.
    Sixth, one of my top priorities this year is to ensure that 
our scientists have the facilities they need. I have made 
similar requests for the Centers for Disease Control, for 
example, and the NIH. For FDA, this means replacing the 
dilapidated laboratory in Los Angeles with a state-of-the-art 
facility on the campus of the University of California at 
Irvine.
    Finally, Mr. Chairman, during his State of the Union 
address last month, the President noted that innovations in 
science and technology will be the key to miraculous 
improvements in the quality of our lives and advances in the 
economy. He discussed the remarkable fruits of the major 
expansion we have provided in taxpayer funded research that 
promises to improve our health and the way health care is 
delivered.
    However, as you know, these new breakthroughs, whether 
drugs or vaccines or medical devices or food additives, must 
come through the FDA review process to ensure their safe and 
effective exposure to millions of Americans who will use them. 
So, I would ask you to consider how we can strengthen FDA's 
capacity to oversee the entry of these products to market.
    These new products will change health care in America 
forever and will help us all to lead longer and healthier 
lives. In other words, Mr. Chairman, this is really a warning, 
perhaps the last one that I will give to this Congress. This is 
possibly my last testimony. We are about to see breakthroughs 
in American science that were unbelievable decades ago, but 
they will get clogged up in the FDA process if FDA does not 
continue its modernization process. So, investing in the 
science at FDA and smoothing out the review processes and 
making sure FDA has the kind of facilities it needs will be 
important so that there is a seamless system of the 
breakthroughs in basic science to the development of product to 
approval by FDA.
    Both Republicans and Democrats in this Congress have worked 
very hard on FDA reform. We have, in fact, made FDA the model 
agency of the world from the point of view of scientists around 
the world, but also from the point of view of those that 
produce the products that get to market that improve our 
health. But we are in danger in this age of breakthroughs in 
biomedical science of again getting clogged up in the process 
unless FDA also has the proper investments. That is what we 
need to do and that is what I believe this committee will see 
as one of its major priorities.

                           PREPARED STATEMENT

    Mr. Chairman, again I want to thank you and members of this 
committee for your past support for FDA funding, and again 
thank you for considering the important investments we have 
proposed for the agency for the next fiscal year.
     [The statement follows:]

              PREPARED STATEMENT OF HON. DONNA E. SHALALA

    Mr. Chairman, Senator Kohl and members of the subcommittee, I am 
delighted to join Commissioner Henney, who will describe in more detail 
FDA's first budget of the 21st century.
    FDA has earned worldwide respect as a premier public health agency. 
The members of this subcommittee know the extensive responsibilities 
FDA has to ensure the safety of our food, lifesaving drugs and medical 
devices. And you know that the work of this agency has created a 
quality and safety standard that many similar agencies around the world 
use as their benchmark.
    I would like to discuss with you today some of the specific areas 
where FDA is an essential partner in the progress we hope to achieve.
    We have made great progress on a bipartisan basis to improve the 
safety of our food supply. But we have farther to go. I look forward to 
your continued support on this critical issue.
    The nation faces a potentially dangerous threat from terrorists who 
would use disease agents rather than bullets or explosives to harm us. 
The Administration and the Congress have been working to guard against 
this threat. We need the FDA to ensure that we have new vaccines to 
protect against these threats, and powerful pharmaceuticals to protect 
us in the event of an attack.
    We need a bipartisan effort to reduce the preventable deaths and 
injuries resulting from medical errors. We need better information on 
which drugs and medical devices are the most prone to error, so that we 
can help physicians and medical personnel to use them more effectively 
and safely. A stronger adverse event reporting system at FDA is 
essential to success.
    We also know that the Internet can help us to improve health and 
medicine. But we want to make sure that when Americans use the Internet 
to order pharmaceuticals, they can be sure the drugs they receive are 
safe and effective, and that they are the drugs they need. I hope you 
will support our initiative to make Internet drugs safe.
    Assuring products are safe and effective before they get to market 
is essential to our public health; doing so quickly is necessary to a 
strong, innovative medical industry. We need to increase the resources 
that we make available for premarket review.
    We also request funding to support compliance checks of those who 
would sell tobacco products to children.
    One of my top priorities this year is to ensure that our scientists 
have the facilities they need. For FDA, this means replacing the 
dilapidated laboratory in Los Angeles with a state-of-the-art facility 
on the campus of the University of California at Irvine.
    Mr. Chairman, during his State of the Union address last month, the 
President noted that innovations in science and technology will be the 
key to miraculous improvements in the quality of our lives and advances 
in the economy. He discussed the remarkable fruits of the major 
expansion we have provided in taxpayer-funded research that promises to 
improve our health and the way health care is delivered.
    However, as you know, these new breakthroughs--whether drugs or 
vaccines or medical devices or food additives--must come through FDA's 
review process to ensure their safe and effective exposure to the 
million of Americans who will use them. So I would ask you today to 
consider how we can strengthen FDA's capacity to oversee the entry of 
these products to the market.
    These new products will change health care in America and will help 
us all to lead longer, healthier lives. They also will bring enormous 
economic benefits, both in lowering health care costs and in returning 
profits on the investments that are being made in research. And these 
advancements are not just theoretical. They are moving--now--from the 
laboratory into clinical trials and on to general availability. But if 
FDA does not have the increasingly complex scientific capacity needed 
to get safe and effective technologies to the market expeditiously, and 
monitor their safe use after approval, both patients and the industry 
will suffer.
    Again, I want to thank you for your past support for FDA funding. 
And thank you for considering the important investments we have 
proposed for the Agency for the next fiscal year.

    Senator Cochran. Thank you very much, Madam Secretary.
    We know you have another commitment, but before you leave, 
I am going to give Senators an opportunity to make any comment 
or reaction to your statement. Senator Durbin.
    Senator Durbin. Mr. Chairman, I have several questions I 
would like to save the time for those questions and waive an 
opening statement. I would like to thank the Secretary and Dr. 
Henney for being with us today.
    Senator Cochran. Senator Gorton.

                   STATEMENT OF SENATOR SLADE GORTON

    Senator Gorton. Mr. Chairman, my statement is directed more 
at Commissioner Henney than it is at the Secretary. But, of 
course, it has to do with what seems to me to be the emergent 
and most troubling issue of all, and that is the price of 
prescription drugs to the citizens of the United States, 
something that I know that these two heard and discussed when 
they were before the House committee.
    We are the only free market in the world in prescription 
drugs, and other countries have imposed the kind of price 
controls that cause Americans to bear overwhelmingly the burden 
of cost for the research and development of new drugs. I think 
it is absolutely unconscionable, Mr. Chairman, that the 
American taxpayer essentially subsidizes the research and 
development of new drugs for other countries in three ways.
    First, we put almost $18 billion a year through the NIH.
    Second, we of course grant a very important research and 
development tax credit.
    And finally, we subsidize a third time around at the 
pharmacy in the form of higher prices.
    Prescription drug costs, as the Commissioner and the 
Secretary well know, are becoming an increasingly important 
part of the cost of health care, and we need all of our best 
possible thoughts put to the proposition as to how we at least 
equalize this burden and cause our neighbors, both to the north 
and south, to pay their fair share of those costs.
    I represent a border State, bordering on Canada. A family, 
noted in the newspapers recently, from Tacoma saved $600 by 
going to Canada to buy a 3-month supply of blood pressure, 
stomach, and sinus medications. One of the cancer treatments 
cost $15 for a 1-month supply in Canada, $95 if you are simply 
on our side of the border. I may say I myself take Zocor, very 
much advertised; $3.16 a pill here, $1.65 in Canada. Other 
different prices are as much as 5 or 6 to 1 between the United 
States and Canada or the United States and Mexico.
    I think this is just simply unconscionable. At this point I 
am not aiming my comments so much at the drug companies that 
obviously have to pay at least their share of these development 
costs, but it seems to me entirely and totally unfair and 
inappropriate that our drug developers and manufacturers--and I 
am sure Commissioner Henney can speak to this, if she will--who 
do the overwhelming lion's share of the research and 
development throughout the world, that we are, in effect, 
letting almost every other foreign country ride on that 
research, sell these prescription drugs at much lower prices 
than are charged to people here in the United States.
    We hear much about this being a problem for seniors, and of 
course, it is. But it is a problem for everyone, not only 
everyone who pays cash for prescription drugs, but it is 
reflected undoubtedly in the cost of health insurance where 
health insurance plans in the United States provide for a drug 
benefit. I very much hope that Commissioner Henney will speak 
to this issue during the course of her testimony.
    Senator Cochran. Thank you very much, Senator Gorton.
    Senator Stevens.
    Senator Stevens. Well, I do want the Secretary to be able 
to leave and make her other appointment.
    I am constrained to say, do you know something I do not 
know? You said this may be your last appearance before our 
committee.
    Secretary Shalala. I have finished my appropriations 
testimony for this year, and I do not expect to be here next 
year, Senator.
    Senator Stevens. I expect you to be back before us this 
year.
    Secretary Shalala. Senator, at your request, I will always 
be there.
    Senator Stevens. We look forward to that pleasure.
    I do thank you both for the work you are doing. I will have 
some comments later, but I am extremely pleased, as I told you 
personally, with the progress now being made on the PET scan 
and other imaging systems and having them being properly 
considered by the Medicare and Medicaid programs.
    I do have a comment later addressed to Dr. Henney about the 
seafood monitoring provision in this bill, but for now, thank 
you very much for being here, Madam Secretary.
    Secretary Shalala. Thank you.

                           PREPARED STATEMENT

    Senator Cochran. Thank you, Madam Secretary. We appreciate 
your presence and we look forward to working with you on these 
proposals.
    Senator Stevens. Senator Cochran and I can arrange for you 
to have a trip here for other activities whenever you are 
ready. She is one terrific tennis player, I will tell you.
    [The statement follows:]

               PREPARED STATEMENT OF SENATOR TED STEVENS

    Good morning Secretary Shalala and Commissioner Henney (Hay-nee). 
It's a pleasure to have you here today before the subcommittee. The 
FDA'S budget request for fiscal year 2001 of $1.4 billion is a 13 
percent increase over fiscal year 2000. I certainly appreciate the 
importance of the work that the FDA does, but, as I have said in other 
budget hearings, I believe the President's budget request represents an 
unrealistic spending level when we consider Congress' commitment to 
keep a balanced budget and to not dip into the Social Security surplus 
to finance current government operations.
    I note that the administration will be proposing legislation to 
consolidate the seafood monitoring activities of the Federal Government 
in the FDA, including the Commerce Department's Seafood Inspection 
Program. That program provides voluntary inspections and certification 
services for fish and fishery products on a fee-for-service basis. The 
seafood industry is of critical importance to Alaska, and I will be 
watching carefully how this proposal develops.
    On another subject, I'd like to commend Commissioner Henney and the 
Secretary for the way that FDA has worked cooperatively with the pet 
community to come up with a reasonable framework for regulating the 
radiopharmaceuticals used in pet scans. I understand that FDA will be 
issuing a notice within the next couple of weeks approving the 
radiopharmaceutical ``FDG'' for use in pet scans to diagnose a wide 
range of cancers and heart disease. I'm pleased at FDA'S cooperation 
with the pet community.
    I know that both the Secretary and Commissioner Henney are aware of 
my strong support for pet and for obtaining broad coverage for pet 
scans under the Medicare program. I would urge both of you to help FDA 
and HCFA work more closely together so that we can bring new 
technologies into the Medicare program to benefit seniors much more 
quickly than is the case today. I ask you both to join me in working 
towards this goal.

    Senator Cochran. Dr. Henney, we are prepared to hear your 
statement now. We welcome you to the committee, and thank you 
for your cooperation with us.

                      STATEMENT OF JANE E. HENNEY

    Dr. Henney. Thank you, Mr. Chairman and members of the 
committee. It is a privilege today, as Commissioner of Food and 
Drugs, to present FDA's plans and expectations as reflected in 
the administration's proposed budget for fiscal year 2001.
    Patients, researchers, health professionals, manufacturers, 
educators, grocers, public sector administrators, or just 
ordinary citizens want a public health regulatory agency such 
as the FDA to be fair, competent and, above all, credible. I 
have heard this message in different words on many occasions in 
many settings this past year. I believe that the 
accomplishments of this year will demonstrate that FDA has done 
a remarkable job in maintaining the public's confidence and 
credibility even though we face numerous unpredictable issues 
on a day-to-day basis.
    It may be far too easy for Americans to assume FDA's 
competence and credibility because we have long enjoyed public 
confidence in the past. However, from listening to my European 
counterparts, public confidence, once lost, is not easily or 
quickly restored. A series of highly publicized crises in 
Europe over the past several years have caused my counterparts 
to ask: What is FDA's secret and how does FDA utilize science 
and build consensus answers to so many inherently contentious 
issues? The answers are not found in FDA's organizational 
diagrams or job titles.
    We find ourselves explaining modern versions of two very 
old history lessons, what Alexis de Toqueville reported long 
ago in Europe about the uniquely open processes of American 
lawmaking and its modern derivative, rulemaking; and Dr. Harvey 
Wiley's discussions with President Theodore Roosevelt at the 
beginning of the last century about the importance of science-
based regulatory decisions. From a world perspective, FDA's 
utilization of public issue meetings, access to agency 
information, voting advisory committees, requirements for 
scientific evidence and reliance on scientific facts in its 
decisionmaking processes are more uniquely American than we may 
realize. The interplay of these features into an independent 
regulatory function that coexists with prescribed congressional 
and judicial roles constitutes the most envied regulatory model 
in the world.
    Today I want to share with you my priorities for preserving 
this capability and for preserving the agency's commitments to 
and credibility with the American public. As we begin the 21st 
century, fiscal year 2001 will be critically important for FDA 
because so much of our environment is changing rapidly and our 
capability to understand, adapt, and respond will be stretched 
to new limits. To maintain our strength, we must strengthen our 
science; we must address the highest priority risks; we must 
engage in effective collaborative and leveraged activities; and 
we must design ever more predictable, timely, and transparent 
regulatory processes.
    Stronger science. FDA's commitment to assuring safe 
products rests squarely on our ability to keep pace with the 
explosion in scientific advances and then to use our knowledge 
to assure safe products. We must apply our intellectual capital 
at every point in the life cycle of the product. We can apply 
this science at the point when the new technology arrives and 
when it is absolutely essential to steward these products, many 
of them lifesaving, to the market.
    FDA is the regulatory gateway through which an estimated 
$50 billion in annual biomedical research and development 
investment must pass and be judged. You and your colleagues in 
the Congress have overseen a major expansion of Federal 
research, biomedical research in recent years, and those 
investments will pay dividends many times over for all of us.
    FDA can deliver when properly resourced. Congress' 
authorization and support of the Prescription Drug User Fee Act 
and its recent reauthorization is a prime example. Review of 
drugs and biologics in the United States is now as fast or 
faster than anywhere in the world and this has been 
accomplished without lowering our very high standard for safety 
and effectiveness. We want to be able to perform this well in 
all of our products that require premarket evaluation. But this 
will require being adequately resourced.
    Assuring safety by managing risk. A strong FDA science 
capability is equally critical in understanding and managing 
risks associated with products that are already in the 
marketplace. Each year hundreds of thousands of adverse 
experiences are reported in association with foods, drugs, and 
medical devices. In managing risk, FDA has always adhered to 
the principle that the most serious risks should be addressed 
first. The idea takes on added meaning, given the complexities 
of our 21st century environment. You will see evidence 
throughout our budget that the most serious problems are on the 
top of the list.
    To illustrate, the medical error initiative in the budget 
emphasizes FDA working with other agencies across the 
Government as part of the President's new and comprehensive 
plan to improve health care through the prevention of medical 
errors or misadventures.
    Second, drugs marketed and sold from rogue Internet 
pharmacy sites present real risk for the American consumer. 
These have been made a priority for fiscal year 2001.
    And we have addressed the most serious risks first as part 
of the Food Safety Initiative. If provided the funding 
requested, we will be able to inspect the high risk food firms 
at least once a year. We would continue the work supported by 
the Congress in the past which focuses our efforts in the 
import arena by targeting imported produce that contain 
microbiological pathogens.
    Let me speak for just a moment about collaboration and 
leveraging opportunities. Working with FDA's assets alone is 
not sufficient to address the complex risk management 
challenges that we face. Many of the initiatives in our budget 
require our agency to work in concert with a broad spectrum of 
stakeholders to strengthen the safety net for the American 
consumer.
    Because we regulate in a global marketplace, our 
collaborative efforts must extend beyond our domestic borders. 
In this regard, we collaborate with our foreign regulatory 
counterparts in joint efforts that include setting standards to 
reduce the risk of products to the consumer. Whether it is 
within our domestic border or beyond, FDA undertakes 
collaborative initiatives because all parties can unify behind 
goals that are in the best interest of public health and 
safety. With such efforts, we will be able to move our world to 
better health outcomes.
    Open, transparent, and predictable regulatory processes. 
Another key provision of the FDA Modernization Act of 1997 
directed our agency to consult with our many stakeholders on an 
ongoing basis, to keep them apprised of our strategies and new 
product decisions, and to generally make them an informed 
participant in our regulatory processes. The relevant principle 
here is that a confident and well-informed individual or 
industry also becomes a partner in shouldering the management 
of risks.
    We intend to keep these communication channels alive and 
humming. This spring we will listen at two additional formal 
stakeholder forums, the first at Stanford University in March 
and the second at Duke in April. At both of these sessions, we 
will no doubt receive suggestions on how to improve our 
programs and further strengthen our working relationships with 
our constituencies.
    These 21st century ways of doing business--strengthening 
science, addressing the highest risk priorities, collaborating 
effectively with our partners and leverage our resources, and 
using open, transparent regulatory processes--must be applied 
across the entire spectrum of product development, review, and 
post-market monitoring. When we are able to play all these 
roles effectively, bolstered by science and augmented by 
partners who share our goals, American citizens can be 
confident that an effective safety assurance system is in 
place. FDA's budget proposals for fiscal year 2001 move us 
toward that desirable state of affairs.
    Before I close my remarks, I would just like to briefly 
highlight for you the key elements of our budget request.
    $42 million to enhance the science-based review of new 
health-giving products so that they can more rapidly enter the 
marketplace.
    $30 million to enhance the safety of the food supply 
through strengthening the key elements of the President's Food 
Safety Initiative.
    $20 million to replace the FDA's obsolete Los Angeles 
laboratory facility. I would contrast the pictures before you. 
Our L.A. lab with a modern facility of Cincinnati that you 
provided the funding for us a few years ago. We need this kind 
of facility in Los Angeles. This lab is the critical linchpin 
in assuring the safety of a major portion of the U.S. imports, 
particularly food, that enter this country.
    $15.9 million to strengthen our systems which report on and 
correct medical errors. This is an interagency cooperative 
effort designed to reduce those 100,000 annual deaths that 
occur from medical misadventures or mistakes.
    $13.5 million to focus on domestic inspections of our firms 
in order to target high risk violators and come closer to 
meeting the agency's statutory inspection requirements.
    $10 million to stop the illegal sale of drugs over the 
Internet.
    And $11.5 million as part of the President's comprehensive 
response to possible bioterrorist attack.
    $5 million to further the administration's efforts to 
reduce smoking by the youth of our Nation.
    In summary, Mr. Chairman and members of the committee, 
fiscal year 2001 is the year in which FDA must cope with the 
maturation of two of the most massive and significant change 
forces the agency has ever faced. In 2001, the increasing 
impact of molecular science, genetics or genomics in 
particular, and the information revolution, especially the 
Internet and its linkage to an array of real-time data and as a 
new vehicle of commerce will combine their forces to change how 
FDA regulated products are discovered, researched, 
manufactured, distributed, marketed, and advertised. When the 
world around us changes this much, we must be prepared to 
respond in order to assure that products are still safe for 
American consumers. Our credibility to provide valid assurance 
is at risk without strong science, effective collaborations and 
consultation, and even greater openness and transparency in our 
processes.
    I wish to thank the members of this committee, their staff, 
and the staff of the individual subcommittee members for your 
support during this past year. This committee has many legacies 
from improved agricultural production to safer consumer 
products to protection of the American farmer. I ask you to add 
another critically important one to the list, bringing forth 
the technological promise of the 21st century. If you provide 
FDA the resources to do the job, I will commit to you that 
those funds will be well and wisely spent.

                           PREPARED STATEMENT

    I look forward to our discussions with this committee today 
to ensure that we are able to fulfill our mission in this ever-
changing and challenging environment.
    Thank you.
    [The statement follows:]

                  PREPARED STATEMENT OF JANE E. HENNEY

    Mr. Chairman and members of Congress, it is my privilege today as 
Commissioner of Food and Drugs to present FDA's plans and expectations 
as reflected in the Administration's proposed budget for fiscal year 
2001. One year ago, I told you that I was lured to renewed public 
service by the dedication, energy and commitment of the talented people 
in FDA. I was equally attracted by the enormity of the changing demands 
upon the Agency and the difference this agency can make in improving 
the public health.
    Patients, researchers, health professionals, manufacturers, 
educators, grocers, public sector administrators or just ordinary 
citizens want a public health regulatory agency such as the FDA to be 
fair, competent and, above all, credible. I have heard this message in 
different words on many occasions in many settings this year. I believe 
that the accomplishments of the past year will demonstrate that FDA has 
done a remarkable job in maintaining the public's confidence and 
credibility even though we face numerous unpredictable issues on a day-
to-day basis.
    It may be all too easy for Americans to assume FDA's competence and 
credibility because we have long enjoyed public confidence in the past. 
However, from listening to my European counterparts, public confidence, 
once lost, is not easily or quickly restored. A series of highly 
publicized crises in Europe over the past several years have caused my 
counterparts to ask: What is FDA's secret and how does FDA utilize 
science and build consensus answers to so many inherently contentious 
issues? The answers are not found in FDA's organizational diagrams or 
job titles.
    We find ourselves explaining modern versions of two very old 
history lessons--what Alexis de Toqueville reported long ago to Europe 
about the uniquely open processes for American lawmaking (and in its 
modern derivative--rulemaking), and Dr. Harvey Wiley's discussions with 
President Theodore Roosevelt at the beginning of the last century about 
the importance of science-based regulatory decisions. From a world 
perspective, FDA's utilization of public issue meetings, access to 
agency information, voting advisory committees, requirements for 
scientific evidence and reliance on scientific facts in its decision-
making process are more uniquely American than we may realize. The 
interplay of these features into an independent regulatory function 
that coexists with prescribed Congressional and Judicial roles 
constitutes the most envied regulatory model in the world.
    Today, I share with you my priorities for preserving this 
capability and for preserving the agency's credibility with the 
American public. As we begin the 21st Century, fiscal Year 2001 will be 
critically important for FDA because so much of our environment is 
changing rapidly and our capability to understand, adapt and respond 
will be stretched to new limits. To maintain our strength: We must 
strengthen our science; we must address the highest priority risks; we 
must engage in effective collaborative and leveraged activities; and, 
we must design ever more predictable, timely and transparent regulatory 
processes.
    Stronger science.--FDA's commitment to assuring safe products rests 
squarely on our ability to keep pace with the explosion in scientific 
advances--and then to use that knowledge to assure safe products. We 
must apply our intellectual capital at every point in the life cycle of 
the product. When consumers buy food items, drugs or medical devices, 
they're purchasing not only the product itself, but FDA's implicit 
assurance that the product is safe. To give them such assurance in a 
world with so many new products, FDA must quickly understand these 
sophisticated new products and the science within them and judge their 
suitability for the market place. Timing is everything! Wayne Gretzky, 
of ice hockey fame, was asked to tell what made him a successful 
player. He said: ``I skate to where the puck will be.'' FDA is in a 
similar position. We must be able to anticipate and access the cutting-
edge science that will be needed to regulate the products of future 
technology. When this is possible, we can apply this science at the 
point when the new technology arrives, and when it is absolutely 
essential to steward these products, many of them lifesaving, to the 
market.
    FDA is the regulatory gateway through which an estimated $50 
billion in annual biomedical research and development investment must 
pass and be judged. During the President's State of the Union address 
last month, he noted that innovations in science and technology will be 
the key to miraculous improvements in the quality of our lives and 
advances in the economy as we enter the 21st Century. He discussed the 
remarkable fruits of research--much of it taxpayer funded--that promise 
to improve both our health and the way health care is delivered. You 
and your colleagues on other appropriations committees have overseen a 
major expansion of Federal research in recent years, and those 
investments will pay dividends many times over for us all.
    If FDA is not in a state of scientific readiness when applications 
are received, then we must either delay regulatory decisions on 
important new applications until we have adequate knowledge or make 
very conservative decisions in order to err on the side of caution. 
Neither of these choices is good for the American people because they 
delay the availability of critically needed treatment as well as result 
in increased health and economic costs. A recent industry survey by 
Pricewaterhouse Coopers concerning FDA's relationships with its 
regulated industries reinforces the need for FDA to be scientifically 
prepared. The survey concludes that FDA must invest in recruiting and 
training exceptionally qualified personnel at all levels. So I would 
urge your careful consideration of our resource needs as they relate to 
FDA's scientific strength.
    FDA can deliver when properly resourced. Congress' authorization 
and support of the Prescription Drug User Fee Act and its 
Reauthorization in the FDA Modernization Act is a prime example. Review 
of drugs and biologics in the U.S. is now as fast or faster than 
anywhere in the world and this has been accomplished without lowering 
our very high standard for safety and effectiveness. We want to be able 
to perform this well in all of our products that require premarket 
evaluation.

                    ASSURING SAFETY BY MANAGING RISK

    A strong FDA science capability is equally critical in 
understanding and managing risks associated with products that are 
already in the market place. Each year, hundreds of thousands of 
adverse experiences are reported in association with foods, drugs and 
medical devices. When we can apply cutting edge science to these 
problems, particularly in cooperation with our health and regulatory 
partners, as well as those in the regulated industry, we can quickly 
identify significant risks and minimize them.
    In managing risk, FDA has always adhered to the principle that the 
most serious risks should be addressed first. This idea takes on added 
meaning, given the complexities of our 21st Century environment. You 
will see evidence throughout our budget that the most serious problems 
are at the top of our list. To illustrate:
    The medical error initiative in our fiscal year 2001 budget 
emphasizes FDA working with other agencies in the Department of Health 
and Human Services and with Departments across the Federal government 
as part of the President's new and comprehensive plan to improve health 
care through the prevention of medical errors and enhancement of 
patient safety.
    Drugs marketed and sold from illegitimate Internet pharmacy sites 
present real risk for the American consumer. These have been made a 
priority for fiscal year 2001. FDA will use prevailing Internet 
hardware and software to focus on suspect web sites, and will convey a 
rapid response team to deal with these sites. FDA also intends to work 
very closely with State authorities and other Federal agencies in order 
to expedite the elimination of this fraudulent activity. We also plan 
to step up our efforts to educate consumers about the risks involved 
and what types of sites or practices they should avoid.
    Again, we have addressed the most serious risks first as part of 
the Food Safety Initiative. If provided the funding requested, we will 
be able to inspect the high risk food firms at least once a year. We 
would continue the work supported by the Congress in the past which 
focuses our efforts in the import arena by targeting imported produce 
that contain microbiological pathogens. Your support has also allowed 
us to invest in new science-based tools like PulseNet, a collaborative 
project between CDC, FDA, USDA and state health departments, which uses 
rapid analysis of bacterial DNA fingerprints to pinpoint the exact 
source of food borne illness outbreaks. More of these detection tools 
will revolutionize our ability to detect and prevent a wide range of 
adverse experiences and to focus on the most serious ones first; but we 
need resources to do this.
    While we have identified the aforementioned as investments that 
would be focused on high risk in each of our product review centers, we 
must also focus and invest in applications that have the greatest 
potential for providing widespread health benefits. A critical 
provision provided by FDAMA is our ability to delegate to third parties 
the responsibility for reviewing medical device applications in lower 
risk categories. In this year's budget request, a Device user fee is 
proposed to further encourage reviews to be performed by third parties 
which will result in greater efficiencies for both FDA and the 
industry. This allows our Agency's scientific review resources to be 
dedicated to the more complex new products that often carry significant 
risks but have the potential for great health benefits.

               COLLABORATION AND LEVERAGING OPPORTUNITIES

    Working with FDA's assets alone is not sufficient to address the 
complex risk management challenges that we face. Many of the 
initiatives in the fiscal year 2001 budget require our Agency to work 
in concert with a broad spectrum of stakeholders to strengthen the 
safety net for the U.S. consumer. A prime illustration of this approach 
is in Food Safety.
    Because we regulate in a global market place, our collaborative 
efforts must extend beyond our domestic borders. In this regard, we 
collaborate with our foreign regulatory counterparts in joint efforts 
that include setting standards to reduce the risks of products to the 
consumer. Whether it's within our domestic boundaries, or beyond, FDA 
undertakes such collaborative initiatives because all parties can unify 
behind goals that are in the best interest of public health and safety. 
With such collective efforts we will be able to move our world to 
better health outcomes.
    Open, transparent and predictable regulatory processes.--Another 
key provision of the FDA Modernization Act of 1997 directed our Agency 
to consult with our many stakeholders on an ongoing basis, to keep them 
apprised of our strategies and new product decisions, and to generally 
make them an informed participant in our regulatory processes. The 
relevant principle, here, is that a confident and well-informed 
individual or industry also becomes a partner in shouldering the 
management of risks.
    A recent example of this principle in action is the success FDA is 
enjoying in the ``Take Time to Care'' Initiative. This involves a 
partnership between FDA, the National Association of Chain Drug Stores, 
senior citizen groups, professional associations, business/labor 
women's organizations and other health organizations. This partnership 
effectively delivered an important message about safe drug use by 
distributing a brochure titled ``My Medicines'' through more than 
20,000 pharmacy outlets to millions of citizens. The intent was to 
positively affect their use of medications. A national evaluation has 
revealed that 99 percent of both men and women found the drug 
information they received to be useful and 86 percent indicated an 
intention to speak with their physician or pharmacist about their 
medication.
    We intend to keep these communication channels alive and 
``humming.'' This Spring we will listen at two additional stakeholder 
forums--the first at Stanford University in March, and the second at 
Duke University in April. At both of these sessions, we will no doubt 
receive suggestions on how to improve our programs and further 
strengthen our working relationships with our constituencies.
    These 21st Century ways of doing business--strengthening science; 
addressing the highest risk priorities; collaborating effectively with 
our partners and leveraging our resources; and using open, transparent 
regulatory processes--must be applied across the entire spectrum of 
product development, review and postmarket monitoring. The total safety 
assurance system requires FDA's best performance at several critical 
points. It starts with effective communication with industry prior to 
the submission of applications, thus improving the quality of 
submissions received and helping to reduce product development times. 
Next, we must monitor the progress of new therapies as they are 
developed, including the important responsibility of overseeing 
clinical trials. Once a product is approved for the market place, we 
must continue to assess and manage risk through regular plant 
inspections and analysis of adverse event reports. Feedback from our 
monitoring and analysis activities also influences future pre-market 
review decisions and appropriately informs us so that directed 
intervention can take place in the postmarket arena should threats to 
the public health and safety arise. Interventions can take several 
forms, including education, technical assistance and when necessary, 
enforcement actions and product removals. When we are able to play all 
of these roles effectively--bolstered by science and augmented by 
partners who share our goals--American citizens can be confident that 
an effective safety assurance system is in place. FDA's budget proposal 
for fiscal year 2001 moves us toward that desirable state of affairs.

FDA Accomplishments

    When I appeared before you last year I outlined five issues that I 
considered to be my highest priorities. These were implementation of 
FDAMA, strengthening the Agency's science base, implementing the Food 
Safety initiative, assuring the safety of the U.S. blood supply, and 
reducing young people's use of tobacco products. I am pleased to report 
to you today that thanks to your continued support we have made 
significant progress in each of these priority areas:

                          FDAMA IMPLEMENTATION

    Last year I committed to you that FDA's energies would be dedicated 
to carrying out both the spirit and letter of the Law. I am pleased to 
report another year of exceptional accomplishments in this regard.
    To meet the letter and spirit of FDAMA, a scientifically strong and 
efficient FDA must join forces with other organizations to address 
increasingly complex challenges in order to protect the public health. 
While consultation and collaboration with our constituents is not a new 
practice for FDA, the FDA Modernization Act made the collaborative 
principle so central to the agency's operations that its implementation 
required a fresh look at some of our long-standing practices. The 
Agency's record this past year provides demonstrable evidence that FDA 
is meeting FDAMA's expectations for outstanding effort and bold new 
thinking.
    FDA has continued working to implement the many specific 
requirements of FDAMA. Last year I reported that the Agency had 
completed over 80 FDAMA-related actions. To date, the Agency has 
completed over 110 FDAMA-related actions with more expected; all within 
statutory deadlines. Some of the initiatives completed within the past 
year include: the OTC final monograph for sunscreens, a final rule to 
exempt selected class I medical devices from pre- market notification, 
a final rule that governs requirements associated with reporting 
adverse events for medical devices, and guidance that grants market 
exclusivity to drug sponsors who provide information relating to the 
use of the drug by children.
    Another key provision of the FDA Modernization Act was the 
reauthorization of the Prescription Drug User Fee Act of 1992. I am 
proud to report once again that FDA has met or exceeded practically all 
performance goals required. As I mentioned earlier, FDA has 
demonstrated that if we are provided adequate resources, we meet or 
exceed our goals.
    Patients receiving safe and effective therapies they need in a 
timely fashion is the primary public health benefit of this program. 
The median approval times for NDA submissions in calendar 1999 was 13.8 
months, but if the current rate of first review approvals is sustained, 
2001 and 2002 median approval times may drop significantly. Median 
approval times for priority applications submitted in calendar 1999 
dropped to 6 months, which is more than twice as fast as the 
corresponding times before PDFUA.
    This shortening of development times also results in incredible 
savings to the pharmaceutical industry. A report released this past 
summer by the Tufts University Center for the Study of Drug Development 
shows that clinical development times for new drugs in 1996-1998 
dropped 18 percent from the period of 1992-1995; thus saving industry 
up to $2 billion for the $140 million annual PDUFA investment. This 
savings is realized not only because important new products go to 
market more rapidly, but also because drug firms are able to operate in 
a more predictable regulatory climate--one that makes their own product 
development planning more efficient.
    It is also heartening to note that several new products that 
received approval this past year represented significant advances over 
those previously available.
    For patients with HIV and AIDS FDA's work in 1999 added several new 
products to the growing number of treatments. One of them is Amprenavir 
(Agenerase), a new protease inhibitor that received an accelerated 
approval for use in children as young as four. Amprenavir attempts to 
prevent HIV from making new copies of itself by interfering with HIV 
protease enzyme.
    For the elderly FDA approved new medications and indications added 
to the treatment options for many of the 18 million Americans--mostly 
senior citizens--affected with rheumatoid arthritis and osteoarthritis. 
The Agency also approved a combination of aspirin and extended- release 
dipyridamole (Aggrenox) to reduce the risk of stroke.
    For people with diabetes three new products approved last year will 
bring benefits to many of the 16 million Americans affected by 
diabetes, a disease that can cause damage to the eyes, kidneys, heart 
and peripheral circulation.
    For people with hepatitis C FDA approved several new treatments for 
the almost four million people in the U.S. who suffer from this 
disease. Hepatitis C, is the nation's most common blood-borne infection 
that poses a serious risk of cirrhosis, liver cancer and liver failure.
    For people with rare diseases I am pleased, also, to report major 
progress in our Orphan Products Program, a key program developed after 
the passage of the Orphan Drug Act of 1983. Orphan products are those 
that treat diseases or conditions affecting fewer than 200,000 people. 
That program reached a major milestone last year by approving the 200th 
designated orphan product. In 1999, 78 drugs and biological products 
received designation as orphan products--a 16 percent increase over 
1998. We estimate that past levels of sponsor orphan designation 
applications may soon be doubled. Nineteen designated orphan drugs were 
approved for marketing in 1999, including treatments for neoplastic 
meningitis, ovarian cancer and hemophilia.

                    STRENGTHENING FDA'S SCIENCE BASE

    As I have mentioned previously, strong science is critical for FDA 
to safeguard the credibility of its regulatory decisions made at every 
stage during the life span of the product. Science must underpin every 
one of our activities including our consultation with product sponsors, 
review of commercial applications, the establishment of product and 
process standards, and the identification and correction of hazards in 
the market. FDA science must also provide the foundation for all of the 
Agency's negotiations on product standards in the international arena. 
In each of these facets of FDA responsibility, the Agency must keep 
pace with the incredible pace and complexity of new science 
developments. The biomedical science community is developing novel 
approaches to detect, treat, and prevent disease. If FDA does not keep 
pace, our judgements and decisions may become risk averse and at times 
slow, possibly wrong--or both. Neither of these is an acceptable 
outcome. The Agency must build its own capabilities and have the 
ability to leverage talents and expertise of scientists and scientific 
organizations outside of the organization.
    Let me provide a few examples of the importance of science to our 
regulatory role:
    FDA scientists have developed a single rapid technique (rapid 
screen) that identifies as many as 13 common foodborne pathogens, 
including Salmonella spp., Shigella spp., and Escherichia coli 0157H7 
from one sample in a test that takes only 8 hours to complete. This 
method is permitting faster hazard detection and removal of potentially 
dangerous foods from the marketplace.
    Our scientists also developed a test system that would help to 
determine the extent of interference of cardiac pacemakers caused by 
cellular telephones. This research has formed the basis of a standard 
for implantable cardiac pacemakers and defibrillators that are being 
proposed by the Association for the Advancement of Medical 
Instrumentation.
    FDA scientists have developed a transgenic model that can be used 
to screen for toxicities. By using this model, scientists are learning 
more about how specific chemicals cause toxicity in humans, and how to 
extrapolate results from animal species to the human. Some of our 
molecular epidemiologists have also worked with academia and industry 
to develop and validate a microchip product designed to identify 
individuals at risk for cancer and/or adverse drug interactions. The 
significance of this chip technology is that it allows for researchers 
to screen large numbers of people simultaneously for different types of 
biomarkers, or potential disease vulnerabilities.
    FDA has successfully launched the Product Quality Research 
Institute Initiative (PQRI). PQRI is a non-profit corporation whose 
mission is to conduct research to support science-based regulatory 
policy regarding product quality.
    FDA has also taken action to assure that our scientists keep pace 
with and effectively monitor products that are produced by state-of-
the-art manufacturing and quality control technologies. This past fall 
FDA launched a new joint training program focused on emerging 
technologies of relevance to the Agency. The training is conducted in 
cooperation with the regulated industry. The first of these courses 
brought together more than 30 FDA field investigators, Center 
scientists and field lab analysts to a Merck manufacturing plant in 
Pennsylvania to address state-of-the-art sterilization methodologies. 
Similar advanced courses are planned for the future.
    These selected examples illustrate the direct and immediate value 
of applying FDA's science expertise at critical junctures in the 
regulatory process.
    To remain a strong science-based agency, we must continue to assess 
emerging technologies well in advance of their arrival on FDA's 
doorstep. We must prepare for and remain prepared to meet not only the 
public health challenges of today, but also the future challenges of a 
rapidly changing science and technology environment.

                         FOOD SAFETY INITIATIVE

    FDA, in collaboration with the Centers for Disease Control and 
Prevention (CDC), the U.S. Department of Agriculture (USDA), and State 
and local governments, continued progress towards developing an 
integrated national food safety system. Your support has also provided 
for mechanisms in the shortening of several significant outbreaks of 
food borne illness, translating into fewer deaths and illnesses. In 
1999, FDA placed particular emphasis on enhancing the safety of 
imported food products. At the border, FDA initiated a 1,000-sample 
survey of high volume fresh produce imports. Overseas, FDA doubled the 
number of foreign food establishment inspections, conducted five 
assessments of foreign food safety systems, and provided extensive 
education and technical assistance on use of the Good Agricultural 
Practices/Good Manufacturing Practices guidance for produce.
    Other accomplishments in the food safety arena include the 
following:
    FDA and the U.S. Customs Service developed an Imported Foods Action 
Plan to further enhance border surveillance. The Plan will be 
implemented this year.
    FDA conducted the second year of seafood HACCP inspections, with 
priority to processors with implementation problems. FDA found clear 
progress by most seafood processors, but also issued warning letters to 
those firms with significant, unaddressed deficiencies.
    FDA issued two guidance documents to enhance the safety of sprouts, 
including guidance for microbiological testing.
    FDA published a proposed rule that would require refrigeration of 
shell eggs at retail and safe handling statements on labels of shell 
eggs.
    In collaboration with USDA, EPA and the Department of Commerce, FDA 
completed an Egg Safety Action Plan that identifies the systems and 
practices that need to be implemented to sharply reduce eggs as a 
source of human Salmonella enteritidis illness. Implementation will 
begin in fiscal year 2000.
    FDA completed revisions to the Food Code to enhance the safety of 
food prepared outside the home, including restaurants, nursing homes, 
hospitals, and day care centers. The Food Code was adopted by agencies 
in 15 states.
    FDA continued the expansion of the National Antimicrobial 
Resistance Monitoring System (NARMS), a collaborative effort among the 
FDA, USDA, and CDC that monitors susceptibility to 17 antimicrobial 
drugs in food borne pathogens from human and animal clinical specimens, 
healthy farm animals, and carcasses of food-producing animals at 
slaughter. Important augmentations of the NARMS were funded from the 
Food Safety Initiative during fiscal year 1999.
    FDA also provided educational materials to farmers regarding how to 
prevent future outbreaks and the spread of the multi-resistant 
organism, Salmonella typhimurium DT104, among animals and to human 
beings. This was accomplished through collection of information from a 
field study, several farm-based efforts, and molecular genetic research 
on a Vermont dairy farm. On-farm poultry studies were initiated in five 
States in collaboration with USDA to determine the management, 
production, and drug use practices that influence the development of 
resistant zoonotic pathogens. Studies examining the effect of the 
prudent use of antimicrobials on chicken farms began in association 
with the University of California and Michigan State University.
    FDA and USDA collaborated with medical microbiologists from 
hospitals in Mexico and Guatemala who are interested in initiating an 
antimicrobial resistance monitoring program. This collaboration between 
the U.S. NARMS officials and the Mexican antimicrobial surveillance 
group represents the beginning of the first international human and 
animal monitoring system for food borne antimicrobial drug 
susceptibility surveillance in the Americas. The collaboration will 
lead to improvements in the Mexican Surveillance Program, which will 
reduce the possibility that contaminated food products will be shipped 
to the U.S.

                ASSURING SAFETY OF THE U.S. BLOOD SUPPLY

    Last year I shared with you that more than 3.5 million Americans 
receive blood from volunteer donors. The most serious risk that these 
citizens face is the possibility of transmitting undetected diseases. 
Blood shortages, however, can also present a life-threatening 
situation. In February 1999, the National Blood Data Resource Center 
(NBDRC), a corporation affiliated with the American Association of 
Blood Banks, published a projection that the Nation's demand for blood 
could exceed the available supply in the foreseeable future. FDA has 
the responsibility for balancing the need for greater blood supplies 
with the increased risk associated with more diverse sources of blood 
and wider access.
    Last year I indicated that FDA had developed a Blood Action Plan to 
address these issues. I can report to you now that with your support 
the Agency has continued successful implementation of that Plan. The 
Plan is being jointly carried out by FDA, the Centers for Disease 
Control, the National Institutes of Health, and the Health Care 
Financing Administration. The Plan addresses highly focused areas of 
concern such as emergency operations, response to emerging diseases, 
updating and reinvention of regulations, monitoring the blood supply, 
and ensuring compliance with blood regulations. Last fiscal year, the 
Agency satisfied several key elements of the Plan:
    The Agency completed a systematic update of the blood regulations. 
As a result of this update, obsolete blood regulations were eliminated; 
and guidance documents are now focused on those standards that are 
enforceable.
    Under the Blood Action Plan, FDA is harmonizing its new Biologics 
License Application for blood products with its New Drug Application. 
In addition, FDA, CDC, and NIH representatives have formed an Emerging 
Infectious Diseases Committee that has developed plans for responding 
to emerging infections that threaten the blood supply.
    The Agency met its statutory requirement of inspecting all 
registered blood banks and source plasma operations within the past two 
years. Compliance of these establishments with current Good 
Manufacturing Practice requirements now exceeds 95 percent.
    Agency scientists responded to challenges by blood-borne pathogens 
for which there are no vaccines or adequate therapies. Blood supplies 
are often exposed to the dangers posed by such pathogens as HIV, 
Hepatitis B & C, and Transmissible Spongioform Encephalopathies (TSE). 
Because these pathogens have evaded known therapies, our strategy is to 
test and disqualify donors and blood donations found to be contaminated 
with these pathogens.
    Assuring the safety of the blood supply is paramount; but FDA also 
recognizes that assuring the availability of safe blood is also a major 
public health challenge. To that end, FDA participated in a workshop 
this month sponsored by the National Heart Lung and Blood Institute, 
entitled: ``National Strategy to Increase Blood Donation.'' Several 
initiatives were reviewed at this workshop, including: considering the 
use of previously deferred blood donations--e.g., therapeutic 
hemochromatosis donations, using computers to simplify blood donor 
interviews, and generally increasing donor incentives for 
participation.
    Challenges to the safety of the U.S. blood supply remain ongoing. 
One of the Agency's most effective responses is to join forces with its 
fellow health and regulatory partners to stem these threats. The Blood 
Action Plan demonstrates such a united effort. I will keep you apprised 
of further developments fulfilling this critical Agency priority.

                 REDUCING YOUNG PEOPLE'S USE OF TOBACCO

    I reported to you last year that over 400,000 Americans die from 
tobacco-related illnesses each year. Virtually all of these people 
began the use of tobacco as children. Thanks to funds you and your 
colleagues appropriated in fiscal year 1998 and fiscal year 1999, FDA, 
in cooperation with its federal and state partners, and with the retail 
community, has been able to launch an effective enforcement and 
outreach effort. We have early indications that these combined efforts 
are starting to have an effect. The University of Michigan's Institute 
for Social Research reported that although accessibility to cigarettes 
by 8th graders was still very high (72 percent) that figure has been 
falling since 1996.
    Let me cite a few highlights of the program efforts in 1999 that 
are contributing to this hopeful turn-around in youth smoking:
    In the enforcement area, FDA now has contracts in place with all 50 
states and 3 territories to conduct compliance checks of retail 
establishments. This establishment of a comprehensive compliance 
network exceeded all of our expectations. As a result, in 1999 we 
achieved a 166 percent increase in the number of compliance checks 
conducted. Existing contracts resulted in a total of 107,200 compliance 
checks completed.
    We also provided retailers with a mediation procedure to resolve 
civil monetary penalty complaints and avoid litigation. Many of the 
violators were small businesses such as convenience stores or gasoline 
stations. During a mediation conference call, the mediator offers the 
retailer suggestions for preventing future violations. This process has 
resulted in almost all cases being settled to the satisfaction of the 
retailer. They have been very favorably impressed. FDA has also 
capitalized on information technology by designing and installing a 
computer system to automate the program's processes and to develop and 
maintain a list of retailers selling tobacco in each state. This is of 
tremendous benefit to the states because it gives them a way of 
tracking up to 1.5 million retailers who may be selling tobacco. It 
also provides the States with the legal record that may be necessary 
for later civil monetary penalty proceedings.
    FDA has also been active in attempting to reach retailers through a 
broad scoped advertising and education campaign. In addition to 
reminding retailers and sales clerks not to sell to minors and to check 
young peoples' photo identification, the campaign also urges customers 
to cooperate with retailers to help keep young people tobacco-free. 
Last year, FDA received the marketing industry's highest honor for 
effective advertising, the EFFIE Award, for its advertising and 
education campaign.
    In addition to the priority areas I have outlined above, we have 
also undertaken work in a variety of high profile and controversial 
areas--bioengineered foods and dietary supplements, to name a few. We 
are making strides in these areas, but each is a work in progress.
    A final issue I raised with the Committee last year as a recently 
confirmed Commissioner, was my desire and intention to restructure and 
streamline the Office of the Commissioner in order to realign resources 
and functions. I appreciate the Committee's support of my plans. The 
reorganization is now complete. We are now undertaking an additional 
step to reinvent many of our processes to make the Office of the 
Commissioner and the Agency programs which it supports operate in an 
efficient and effective manner. During the course of this past year I 
appointed two people to key leadership positions in the Agency. Dr. 
David Fiegel is our new Director of the Center for Medical Devices and 
Radiological Health. He brings with him an extensive background in the 
academic sector as well as managerial experience in two of our other 
product centers--Biologics and Drugs; Dennis Baker is our Associate 
Commissioner for Regulatory Affairs. Mr. Baker was Chief of the Bureau 
of Food and Drug Safety within the Texas Department of Health . and 
while he was in that position he established a strong reputation for 
being a regulatory `reinventor.' He will be a very valuable resource to 
me as we work closely with the states to achieve our mutual public 
health and safety goals.
    Now, let me discuss our fiscal year 2001 request before you for 
your consideration.

                    FISCAL YEAR 2001 BUDGET REQUEST

    No matter how many or laudable our accomplishments may be, there 
still is much to do. This year's budget is reflective of the high 
priority areas where we need your support to assure that strong science 
will guide our decisions and ensure a strong safety net is in place for 
the American Consumer. The fiscal year 2001 President's budget request 
for FDA is $1,390,831,000--an increase of $176 million over FDA's 
fiscal year 2000 enacted level. This budget targets improvements that 
will: bring new products to market through strong science; and assure a 
strong safety net for products on the market through strong science.
    By strengthening both of these areas, FDA is assuring safety 
throughout the life cycle of the product.
    In addition, the budget identifies major initiatives of special 
note and interest to the President and the Congress including Food 
Safety, Youth Tobacco Prevention and Bioterrorism. The budget also 
targets critically needed improvements to FDA's Infrastructure--
specifically replacement of the Agency's Los Angeles regional 
laboratory facility, completion of the Center for Food Safety and 
Applied Nutrition in College Park, Maryland and continued support for 
the Arkansas Regional Laboratory.
    Let me briefly highlight our major initiatives in each of these 
areas:

Bringing New Products to Market Through Strong Science

    (1) $42 million to enhance the science-based review of new health-
giving products so that they can more rapidly enter the market place.
    (2) Improving pre-market review of products submitted and 
accelerating the process of generic drug review thereby reducing the 
cost of medical care to the public.
    (3) Expanding the scientific expertise to meet increasing demands 
while maintaining FDA's high standards.
Assuring A Strong Safety Net Through Strong Science
    (4) $15.9 million to reduce the number of Americans who die 
annually from medical errors, currently estimated at 100,000. We would 
significantly upgrade and make more comprehensive our adverse event 
report systems, including those for dietary supplements and animal 
drugs. With our labeling initiative we would also be able to reduce the 
errors made because names of drugs sound similar.
    (5) $13.5 million to better ensure the safety of products on the 
market by conducting more inspections to support statutory compliance.
    (6) $10.0 million to protect consumers from illegitimate Internet 
pharmacies that inappropriately prescribe medications, increase the 
risk of dangerous drug interactions or sell potentially counterfeited 
or contaminated drugs. Our rapid response team would be supported with 
upgrades to our computer technology used to identify, investigate, and 
prosecute illegitimate Internet pharmacies. In addition, we would 
enhance our public education campaign on safe ways to purchase 
pharmaceuticals over the Internet.

Initiatives of Special Note and Interest to the President and the 
        Congress

    (7) $30.0 million to enhance the safety of the food supply through 
strengthening key elements of the President's Food Safety Initiative by 
increasing inspection frequency for high risk food firms; 
implementation of an Egg Safety Action Plan; developing nation-wide 
standards for food safety; and expanding the research activities 
necessary to support the entire initiative.
    (8) $11.5 million to ensure expeditious development and licensure 
of vaccines to be used in response to possible bioterrorist attacks; 
and to respond to foodborne contamination.
    (9) $5.0 million to promote and protect the health of our nation's 
youth by reducing the number of young people who begin to use tobacco 
products. Compliance checks and compliance-based outreach efforts would 
increase with these funds.
FDA Infrastructure Improvements
    (10) $20.0 million to replace our outdated and unsafe Los Angeles 
laboratory facility. This facility is the site that must test many of 
the products imported from foreign countries, particularly food 
products.
    (11) $5 million in one-time costs to move the Center for Food 
Safety and Applied Nutrition into a new facility at the University of 
Maryland in College Park.
    (12) $3 million to continue the next phase of the plan for the 
Arkansas Regional Laboratory.
    In addition, the Agency is requesting $14.2 million in proposed 
existing user fees; and $19.5 million in proposals for new user fees.
    Each of these requests is described in more detail which follows:

         BRINGING NEW PRODUCTS TO MARKET THROUGH STRONG SCIENCE

    New products entering the marketplace will change the face of 
health care and will help us lead longer, healthier lives. They will 
also bring enormous economic benefits, both in lessening the cost of 
health care and in returning profits on the investments that are being 
made in research.
    We are requesting $42 million to enhance the review of new health-
giving products so that they can be considered in a timely fashion for 
entry into the market place. FDA efforts will focus on: direct food 
additive petitions; generic drugs; animal drugs; children's vaccines; 
the blood supply; pandemic flu; and medical device re-use. The 
requested funding for direct food additive petitions, together with 
funds provided in fiscal year 2000, would provide full funding for this 
important program.
    FDA will use new funding to develop a focused effort in the rapidly 
evolving field of food biotechnology. FDA requires scientific expertise 
capable of reviewing products developed through the tools of 
biotechnology and for providing public assurance of their safety.

          ASSURING A STRONG SAFETY NET THROUGH STRONG SCIENCE

    Medical Errors ($12.8 million).--One of my first initiatives as 
Commissioner was to establish a Task Force to evaluate the system for 
managing the various risks of FDA-approved medical products. The task 
force issued a report in May 1999, entitled, ``Managing the Risks from 
Medical Product Use''. The report confirmed that the high standard of 
premarket review has been maintained even as our reviews have become 
more timely. However, several key areas were identified where the 
safety net for consumers and patients could be strengthened. This 
report has led to a bold initiative in which FDA is a key participant 
along with other major health agencies in the public sector as well as 
health practitioners, hospitals, and states. In a related study the 
Institute of Medicine (IOM) estimates that close to 100,000 Americans 
may be dying each year as a result of preventable medical errors 
because of failures within the complex systems of modern health care. 
The aim of FDA's initiative in response to its own report and the IOM 
study is to aggressively deal with the medical errors and adverse 
events that are reported annually in the U.S.
    Patients, doctors, nurses and other health professionals represent 
a key human component of our health care delivery system. This same 
system also includes a vast array of drugs, medical devices, blood and 
other biological products that are regulated by FDA. While the causes 
of medical error cover a broad spectrum, many involve the use of 
medical products. Preventing the errors can save people's lives and the 
health care system and society billions of dollars annually in 
unnecessary costs. FDA is working with agencies within DHHS and across 
the Federal government to develop and implement strategies to prevent 
medical errors.
    Features that contribute to errors in actual product use are not 
always identifiable before FDA approval. Once products are widely used 
in today's complex and fast-paced healthcare delivery system, these 
``human factors'' can emerge as safety risks. The Agency has a number 
of surveillance systems to identify harm resulting from use of FDA-
regulated products. We receive problem reports from hospitals, other 
health-care facilities and individual health care professionals. When 
the FDA is alerted to problems with a medical product, we conduct a 
thorough safety analysis using medical and scientific experts to 
identify critical factors causing the problem, and to identify 
problematic product features and safety procedures. To prevent further 
harm to patients, FDA takes actions necessary to minimize problems 
including communicating with doctors, other health professionals, and 
patients and requiring changes to the medical product. The ``lessons 
learned'' about safe product features are incorporated into the 
Agency's review of future products.
    Recent and dramatic increases in the complexity and numbers of 
newly-approved medical products, the trend toward their increased 
patient use, and increased time and cost pressures on health care 
providers, have raised the level of risk for human error in the use of 
medical products. While FDA receives over 300,000 reports each year, it 
is known that the vast majority of incidents are not reported.
    The estimated costs for these medical errors are as high as $29 
billion a year. Increased resources will allow the agency to elicit 
more complete reporting as well as analyze report data in a timely 
manner and to invest in information technology to develop more 
effective systems. The Administration has set the goal to reduce 
preventable medical errors by 50 percent within the next 5 years. FDA's 
request includes an additional $12.8 million. If provided these funds 
we will:
    (1) Improve the reporting systems for blood errors and accidents.
    (2) Implement Phase II pilot of the Medical Device Surveillance 
Network (MeDSuN) to address under-reporting and incomplete user 
facility reporting of medical device errors. To accomplish this, FDA 
will recruit over 150 hospital reporting sites into a national 
reporting network. This system has the potential to be extended to 
drugs and other areas in future years.
    (3) Increase FDA's capacity to conduct multi-factor analyses to 
correctly identify the sources of safety problems and potential 
solutions. This includes establishing links to safety databases 
maintained within community healthcare delivery systems and regional 
safety surveillance systems as well as augmenting our expertise in 
medical epidemiology and statistical analysis.
    (4) Develop new standards to ensure that pharmaceuticals are 
packaged and labeled in a manner that promotes patient safety.
    (5) Increase FDA's capacity to act on safety findings, through 
better risk communication to providers and patients who use medical 
products; and partnerships with other health agencies and health care 
organizations.
    Adverse Event Reporting Systems ($3.1 million).--In addition to the 
adverse events discussed as part of medical errors, FDA monitors 
adverse events related to dietary supplements and animal drugs.
    The dietary supplement industry is one of the fastest growing 
industries in the world. Dietary supplement sales have nearly doubled 
in the past five years and one study estimates that sales will increase 
by over 90 percent over the next six years. Surveys show that over half 
of the US population now uses some type of dietary supplement, spending 
over $12 billion per year for these products. FDA estimates that the 
industry markets approximately 29,000 of these products which are sold 
under 75,000 distinct labels.
    The number of adverse event reports related to animal drug products 
has risen from about 1,000 per year in the early nineties to over 
12,000 for 1999. Because FDA does not have the resources to process 
these reports in a timely manner, they must be triaged and only those 
showing the most serious health hazards are evaluated.
    Consequently, a substantial backlog exists in reviewing adverse 
event reports in both of these important areas. This budget request 
will improve our Adverse Event Reporting System (AERS) for animal drugs 
and dietary supplements. This will enable us to provide greater 
assurances to consumers that problems will be identified and action 
taken promptly.
    Inspectional Activities ($13.5 million).--FDA inspections, 
laboratory analysis, and related surveillance activities are the 
primary means of assuring industry compliance and thus consumer safety 
once products are in use. New technologies, international regulatory 
commitments, and increasing coordination with State partners require 
new and challenging expansions of FDA's traditional inspection role.
    FDA's ability to physically verify the safety of domestic and 
imported products has eroded considerably in all product areas, even as 
consumer expectations continue to rise. We are falling significantly 
short of the minimum inspection obligations required by the FDC Act.
    Import entries alone increased 14 percent in fiscal year 1999, and 
over all, less than 1 percent of import entries are physically 
examined. Even in conjunction with its State regulatory partners, FDA 
is able to annually inspect less than a third of the domestic firms 
within its purview. The number of foreign and domestic inspections for 
foods, drugs, and devices (excluding mammography), has decreased from 
28,000 to 22,000 between 1991 and 1999. This decrease of 6,000 
inspections, or 21 percent, is due to the impact of the time required 
to perform the increasingly complex science based inspections, the 
almost static level of investigative personnel in the past eight years, 
and the increases in imports. The total volume of FDA-regulated imports 
is estimated to exceed $50 billion per year and imports continue to 
grow in volume, complexity, and diversity of sources.
    FDA requests $13.5 million in additional funding to improve 
statutory inspection coverage for Human Drugs, Biologics, Animal Drugs 
and Medical Devices, where the law requires specific inspection 
frequency. The requested funds will keep the FDA from falling behind 
the fiscal year 2000 level of inspectional effort. Through the use of 
leveraging and expanding existing state contracts, FDA will make modest 
gains in inspection coverage. Specific performance improvements are 
identified in FDA's fiscal year 2001 Performance Plan. These funds will 
also allow FDA to enhance laboratory testing for pesticides, chemical 
contaminants and dietary supplements.
    Internet Sales of Drugs ($10 million).--The number of people who 
use the Internet for the purchase of medical products is growing 
rapidly. Many consumers, including those in rural or remote areas, 
those that can not leave their homes because of disabilities or who are 
elderly, greatly benefit from the access and convenience features of 
this option. However, on-line sale of prescription drugs also poses 
risks for the consumer. When buying from a brick and mortar pharmacy, a 
corner drug store, a strong safety net of State and Federal laws 
exists. Prescription drugs are to be dispensed only with a valid 
prescription, because they are not safe for use without the supervision 
of a licensed health care practitioner and dispensed from a licensed 
pharmacy. The availability of pharmaceuticals from the Internet can 
greatly disrupt this safety net. Patients who buy prescription drugs 
from Internet websites operating outside the law are at increased risk. 
During fiscal year 1999, illicit or illegal operated sites grew 
dramatically and we anticipate this trend to increase. This initiative 
will enable us to track down illegitimate operations and educate 
consumers by coordinating efforts with the states.
    For fiscal year 2001, FDA seeks $10 million primarily to conduct 
investigations and to carry out a public education campaign on safe 
ways to purchase pharmaceuticals over the Internet. FDA would use part 
of this request to support a rapid response team and to upgrade our 
computer technology to identify, investigate and prosecute illegitimate 
Internet pharmacies.

   INITIATIVES OF SPECIAL NOTE AND INTEREST TO THE PRESIDENT AND THE 
                                CONGRESS

    Food Safety Initiative ($30 million).--The world of food has 
changed significantly over the past 50 years. Consumers' diets are more 
varied and include foods that are more susceptible to foodborne 
pathogens. A much larger percentage of meals are prepared and consumed 
outside the home. Vulnerable populations have increased by as much as 
25 percent of the U.S. population to include pregnant women, children, 
the elderly, and immuno-compromised persons. Finally, the number of 
identified pathogens found in food has more than tripled. More to the 
point, these pathogens are more deadly.
    The Food Safety Initiative represents a multi-year, inter-agency 
effort to respond to these changes and to improve food safety for the 
Nation. This initiative has successfully built a strong foundation for 
a state-of-the-art, science-based food safety system, and has promoted 
partnering among the key Federal agencies (FDA, USDA, and CDC), States, 
academia, industry, and consumers. A total of $218 million, 
representing a $30 million increase, is requested for FDA for fiscal 
year 2001. With this $30 million increase in funding we will:
    (1) Expand research and risk assessment activities that provide the 
cornerstone for a science-based food safety system. Food safety 
research is critical for the rapid and accurate identification of 
foodborne hazards; for regulatory enforcement; for the development of 
effective intervention techniques; and for better detection of 
antibiotic resistance. Risk assessment activities provide the 
information necessary to allocate food safety resources to the highest 
risks in the food supply.
    (2) Develop consistent nationwide food safety standards. Standards 
development includes technical standards for particular products or 
processes, as well as product and/or process-specific guidance 
documents and regulations. Such standards provide consumers with 
increased assurance regarding the uniformity and safety of the food 
they consume. In addition, by providing current, clear and 
understandable expectations for industry, food safety standards provide 
a ``level playing field'' for food producers and processors.
    (3) Begin implementation of the Egg Safety Action Plan to sharply 
reduce eggs as a source of human Salmonella enteritidis (SE) illness in 
the U.S. While eggs are an important source of protein in the diet, an 
estimated 1 in 20,000 eggs in the U.S. contain the SE bacteria and can 
cause illness if eaten raw in food or not thoroughly cooked before 
consumption. The Egg Safety Action Plan presents a comprehensive 
nationwide strategy to address this important food safety and public 
health concern.
    (4) Expand domestic inspections to ensure annual inspection of all 
establishments producing food that is at high risk of microbiological 
contamination or high risk of causing severe disease. There are 
approximately 6,250 such firms. By ``high risk'' we mean: infant 
formula; ready-to-eat foods; heat and serve products; seafood; and low 
acid canned foods and acidified foods. The new resources would also be 
used to enhance FDA's oversight of state inspection programs, as well 
as to enhance laboratory capabilities for the analytical support 
associated with these inspections.
    (5) Complete the National Antimicrobial Resistance Monitoring 
System (NARMS) by adding national and international data collection 
sites. At this fully operational level, NARMS will provide an effective 
early warning system to detect the emergence of antimicrobial 
resistance among foodborne pathogens. Also, develop new methods for 
routine surveillance of fluoroquinolone resistant Salmonella and 
Camploybacter to gather the data needed to make informed risk decisions 
concerning the use of quinolone-based antimicrobials in poultry and 
antibiotic resistance.
    (6) Develop new methods for routine surveillance of fluoroquinolone 
resistant Salmonella and Campylobacter to gather the data needed to 
make informed risk decisions concerning the use of quinolone-based 
antimicrobials in poultry and antibiotic resistance.
    Food Safety Initiative investments for the past three years have 
paid tremendous dividends. Foodborne outbreaks have been shortened. The 
risk of foodborne illness and death related to microbiological 
contamination of both domestic and imported foods has decreased. With 
the resources requested in fiscal year 2001, we will continue to 
provide the U.S. with a consistent, uniform system to respond to 
foodborne illness that will contribute significantly to shortened 
outbreaks and reduced incidence of illness and death.
    Countering Bioterrorism ($11.5 million).--Preparing for and 
responding to an attack involving biological agents is critical. Our 
task is made more complex by the large number and characteristics of 
many of the potential agents, many of which are rarely encountered 
naturally and have the ability to remain undetected for long periods of 
time. There is often potential for secondary transmission as they could 
be genetically engineered to resist current therapies and evade 
vaccine-induced immunity. While there is a clear and unquestionable 
need to develop specialized vaccines for these biological agents, there 
are limited commercial interests or market incentives addressing this 
problem. Thus, it falls upon the Federal government to ensure that such 
vaccines are developed.
    FDA is an important contributor to the Nation's capability to 
respond to potential chemical and biological threats from bioterrorism. 
The FDA's critical role in bioterrorism includes assuring that new 
vaccines and drugs are safe and effective, safeguarding the food 
supply, and conducting research for diagnostic tools and treatment of 
disease outbreaks. Whether the issue is the development and use of 
rapid diagnostics to quickly identify a suspected biological agent or 
the capability to make available and administer large quantities of a 
vaccine, immune globulin, or drug to counter the effects of a 
bioweapon, FDA's research is the linchpin that makes it possible for 
the Centers for Disease Control and Prevention (CDC), the National 
Institutes of Health (NIH), the Office of Emergency Preparedness (OEP), 
the Department of Defense (DOD), and others to effectively respond.
    FDA's research includes the development of new analytical 
approaches and methodologies to determine if new products provide 
needed benefits without causing adverse side effects that would 
outweigh those benefits. This research includes both laboratory and 
non- laboratory investigations to address FDA's regulatory 
responsibilities.
    Due to the highly toxic nature of the agents identified as 
potential bioterrorist agents, specialized equipment and facilities are 
necessary and needed in the FDA to understand these agents to prevent, 
diagnose and treat outbreaks.
    Other Bioterrorism activities that support FDA's efforts are:
    (1) Vaccine development in collaboration with NIH, CDC, DOD, 
academia, and private industry to ensure expeditious development and 
licensure of vaccines for smallpox, anthrax, plague, tularemia, Q-
fever, encephalitis-causing alpha viruses, and botulinum; Coordination 
of vaccine, drug and device stockpiling and preparation for emergency 
response including rapid detection and decontamination procedures.
    (2) Development of new diagnostic products, rapid methods 
development, and comprehensive reviews for new drugs, therapeutics, and 
vaccines including new uses of existing products; development and 
stockpiling of specialized immune globulins; expansion of research to 
identify toxicity indicators associated with biological warfare agents; 
and, initiation of a monitoring system for chemical and biological 
agents in feed for food-producing animals.
    *(3) In collaboration with NIH, CDC, DOD, academia and private 
industry, ensure that rapid methods are developed to detect biological 
agents that may contaminate the food supply.
    The fiscal year 2001 request is $11.5 million. This funding will 
allow the Agency to expeditiously review and approve every drug, 
therapeutic, vaccine, and anti-toxin to be administered to humans; 
complete the FDA review process for safety and efficacy of the 
pharmaceuticals, rapid diagnostics, and vaccines that are needed in the 
event of a bioterrorist attack; and, to educate vaccine manufacturers 
on the information needed for FDA approval.
    Preventing Tobacco Use Among Children ($5 million).--Tobacco 
products are responsible for more than 400,000 deaths annually due to 
cancer, respiratory illness, heart disease, and other health problems, 
representing five million years of potential life lost each year. Each 
day, nearly 3,000 young people across the country begin smoking 
regularly. Of these 3,000 young people, 1,000 will die prematurely 
because as a child they decided to smoke. Conservative estimates are 
that children and adolescents illegally purchase tobacco products 250 
million times each year.
    The Agency has devised a three-pronged approach of enforcement and 
evaluation, compliance outreach, and product regulation. The $5.0 
million in this request will be used to increase leveraging contracts 
with State and local tobacco stakeholders to allow more compliance 
checks of age and ID restrictions, and 100 percent re-checks of 
violators. It will also be used to develop a reliable, national list of 
tobacco retailers and complete installation of an information 
technology system to automate the program's business and communications 
processes, as well as increase the scope of the media campaign aimed at 
increasing retailer awareness of, and compliance with, the tobacco 
regulation.
    Our overall goal--to reduce young peoples' use of tobacco--is a 
goal upon which we can all agree. We will continue to work with other 
organizations within the Department of Health and Human Services, other 
agencies, the States, and other stakeholders.

                           FDA INFRASTRUCTURE

    Los Angeles Laboratory ($20 million).--FDA's field laboratories 
provide critical laboratory and analytical support to the domestic and 
import inspection effort and are a key element in the science base of 
FDA. The Los Angeles District annually reviews nearly 1.2 million 
import line entries, almost 24 percent of the Agency total. In fiscal 
year 1999 alone, the Los Angeles laboratory analyzed 22.9 percent of 
the imported Foods samples taken by FDA. This laboratory facility is 
over 40 years old, outmoded and unsafe.
    FDA simply cannot remain in the present Pico Boulevard facility in 
Los Angeles. We have the land and construction plans to relocate the 
laboratory to Irvine, California. This will assure that products are 
safe, provide the ability to partner more effectively with State 
laboratory personnel, and provide a safe working environment for FDA 
employees.
    FDA requests $20.0 million to fund a portion of the construction of 
the Los Angeles Laboratory and Office project. The request also 
includes $23.0 million as an advance appropriation in fiscal year 2002 
to complete the project. This construction will consolidate all three 
Los Angeles district sites into one location, replacing three existing 
leases totaling $2 million annually. The new construction will 
concentrate the scientific talent available to permit better management 
of the analytical workload and will provide significant improvement in 
operational efficiency, especially during emergencies.
    If funding is not provided, the Agency will be forced to shift work 
to labs in other states, further from the point of entry. This will 
obviously have an impact on FDA's import surveillance capability, the 
southern California food import industry and our consumers.
    College Park Relocation ($5 million) and Arkansas Regional 
Laboratory ($3 million).--In 2001, the Center for Food Safety and 
Applied Nutrition (CFSAN) will be moving to a newly constructed 
facility in College Park, Maryland. Funds are needed to pay for one-
time costs associated with equipping and occupying this facility. The 
fiscal year 2001 funding will support: telecommunications equipment and 
necessary network connections, files consolidation and moving costs. We 
will also continue construction of the next phase of the Arkansas 
Regional Laboratory.

                               CONCLUSION

    In summary, Mr. Chairman, fiscal year 2001 is the year in which FDA 
must cope with the maturation of two of the most massive and 
significant change forces the agency has ever faced. In 2001, the 
increasing impact of molecular science--genomics in particular--and the 
information revolution--especially the Internet and its linkage to an 
array of real-time data that was unimaginable only a few years ago--
will combine their forces to change how many FDA regulated products are 
discovered, researched, manufactured, distributed, marketed and 
advertised. When the world around us changes this much, we must be 
prepared to respond in order to assure that products are still safe for 
American consumers. Our credibility to provide valid assurance is at 
risk without strong science, effective collaborations and consultation, 
and even greater openness and transparency in our processes.
    I wish to thank the members of this Committee, their staff and the 
staff of the individual subcommittee members for their support this 
year. This subcommittee has many legacies, from improved agricultural 
production to safer consumer products to protection of the American 
farmer. I ask that you add another critically important one to the 
list--bringing forth the technological promise of the 21st century. If 
you will give FDA the resources to do the job I will commit to you that 
those funds will be used wisely. I look forward to discussions with 
this committee to ensure that we are able to fulfill our mission in 
this challenging environment.

                        RECRUITMENT AND TRAINING

    Senator Cochran. Thank you very much, Dr. Henney, for your 
statement.
    I noticed that the first point you make in your statement 
is about the scientific strength of the agency and how 
important it is to maintain that strength and to be prepared to 
deal with the challenges of regulating industries who are 
utilizing the newest developments in science. You also point 
out that there was a study by an independent industry with 
regard to the relationship of FDA and its regulated industries 
and concluding that FDA must invest in recruiting and training 
exceptionally qualified personnel at all levels.
    My question is, is FDA successful in its recruiting and 
training efforts?
    Dr. Henney. Well, Mr. Chairman, I would say that when 
provided the funds, we have been very successful in recruiting 
the kind of scientists and medical officers we need into the 
agency. I would cite in particular those funding patterns 
provided by the Prescription Drug User Fee Act and those 
provided particularly through the Food Safety Initiative. In 
very short periods of time, we have been able to recruit very 
highly qualified people.
    The trick is retaining them and keeping them at the top of 
their game because this requires close attention to 
professional development while they are with us. I would say 
that particularly in the area of drugs and biologics reviews, 
to meet those very tight performance standards that we are held 
to, it becomes somewhat of a sweatshop for our reviewers to 
keep to those time constraints, and the limitations on time 
away to do the kind of training and reinvestment we need has 
not been adequate in the past. Across the board in the agency 
science is needed in our other centers, our Center for Devices, 
our Center for Foods and other parts of the Center for 
Biologics as well.
    This, therefore is an overall issue for the agency in terms 
of a time commitment and a funding commitment. We really have 
to think about our reviewers as a 110 percent FTE, if you will, 
rather than a 100 percent FTE if you are going to provide them 
with time away for sabbaticals, retraining courses, and the 
like so that they keep current.

                       STRENGTHENING SCIENCE BASE

    Senator Cochran. You mentioned in your statement that you 
have launched a product quality research institute initiative. 
That is a training program focused on emerging technologies of 
relevance to the agency. How are these initiatives working to 
strengthen the agency's science base?
    Dr. Henney. Those are two separate initiatives, Mr. 
Chairman. The product quality research institute was launched 
this past year. It really is a leveraged or a partnership 
opportunity that we have entered into with both professional 
groups and industry to investigate more efficient methods of 
answering research questions about drug quality and 
manufacturing. They are particularly looking at issues related 
to stability studies and bioequivalence measures. So, this is 
using our resources in a leveraged capacity to look at issues 
that benefit all parties.
    We have also launched this past year, after the appropriate 
reviews for conflict of interest and the like, educational 
sessions, training sessions, if you will, jointly with 
industry. We have had two successful training sessions where we 
have taken investigators and reviewers from several of our 
centers to an on-site location within industry that is looking 
at an emerging technology so we will know what is going on in 
their plant operations and that they will know what we will be 
looking for as we would develop or inspect against standards. 
These have been extremely productive sessions and we plan to 
continue them in the future. One was held at Merck on barrier 
isolation technology and one was held in Minnesota on issues 
related to food and food safety.

                          PREPARED STATEMENTS

    Senator Cochran. I am going to yield to other Senators for 
questions at this point, and I am going to recognize Senators 
for questioning in the order at which they arrived at the 
hearing. My notes indicate Senator Gorton arrived first, 
Senator Durbin, and Senator Stevens who has left his opening 
statement for inclusion in the record and already made one 
comment, and Senator Harkin.
    Senator Kohl and Senator Burns have previous engagements to 
attend, therefore I will submit each of their respective 
statements for the record.
    [The statements follow:]

                PREPARED STATEMENT OF SENATOR HERB KOHL

    Mr. Chairman: I am glad to welcome our distinguished guests this 
morning. Secretary Shalala, I am especially pleased to see you here 
today. While most of the agencies under the jurisdiction of your 
Department are funded through appropriations subcommittees other than 
this one, the Food and Drug Administration is, of course, an exception. 
Still, in all the years I have served on this subcommittee, the 
Secretary of the Department of Health and Human Services has never 
appeared before us. I interpret your being with us today a welcome 
departure from protocols of the past and a statement on your part of 
the growing importance of programs under the purview of the FDA.
    Dr. Henney, it is good to welcome you back. A year ago you appeared 
before us not long having been appointed as Commissioner of the Food 
and Drug Administration. Since that time, you have made great progress 
settling in as head of that agency. My congratulations to you.
    I will not here go into all the programs under the FDA nor attempt 
to catalogue their importance for maintaining the health and safety of 
the American people. The evidence of that is apparent on its face. I 
would mention, however, the changing nature of the challenges before 
your agency. A global economy means a greater chance that food or 
disease harmful to us may be introduced on our shores either 
inadvertently or otherwise. The ever-rising costs of health care, 
prescription drugs in particular, is fast becoming one of the highest 
priorities of an aging and demanding public. Even the unfortunate 
specter of bioterrorism now hangs over our heads with new demands for 
proper and rapid responses in the event such a cataclysm should ever 
occur.
    Your budget request calls for an increase above last year. I hope 
we will be able to accommodate that need. As we proceed through this 
year's budget process, and as we establish the level of resources 
available to this subcommittee for all our responsibilities, I will 
continue to place a focus on the importance of your mission.
    I look forward to your comments.
                                 ______
                                 
               PREPARED STATEMENT OF SENATOR CONRAD BURNS

    Mr. Chairman, Thank you. I would like to first thank those who are 
presenting testimony before the Committee today. We all appreciate you 
taking the time to be here today.
    It is quite possible that the Food and Drug Administration plays a 
larger role in day-to-day life in America than any other government 
entity. For this reason it is vital that we regularly re-evaluate the 
methods and practices of the FDA to ensure the best interests of 
Americans are being appropriately addressed.
    Prescription drugs present ever-expanding medical opportunities. 
The advances in medications mean continued development of non-invasive 
treatments, enhanced quality of life, and expanded options in 
preventative medicine. Just reading over short descriptions of today's 
research initiatives gives us a glimpse of the future of patient care, 
disease treatment and, most importantly, even the elimination of the 
illnesses that have plagued us for centuries. It is truly exciting.
    But is this to be a future that all Americans can afford? Is 
Montana going to have the opportunity to take advantage of cutting-edge 
advances in medicine? Our current course leaves behind those who lack 
the financial resources to purchase the new generation of 
pharmaceuticals. The same holds true for those who live in rural areas. 
The pharmaceutical revolution is leaving them behind.
    I am encouraged to see that the average time period for FDA 
approval of a new drug has decreased since the enactment of the 
Pharmaceutical Drug User Fee Act. But in the aftermath of PDUFA, just 
as approval times have dropped the costs of drug approval have 
increased. These increases are, of course, passed on to consumers, with 
Senior Citizens bearing the brunt of the increasing prices.
    I am very concerned about access to affordable drugs. Every day 
there are new stories about people choosing between food and 
pharmaceuticals. I represent a district where these problems aren't 
just stories in the newspaper but reality. I don't think that Americans 
should have to make this choice.
    Generic competition makes drugs more affordable. They are as safe 
and effective as brand name drugs, but cost much less. My concern is 
that FDA is not helping to bring these products to the market as 
expeditiously as possible. In fact, the statutory review time for 
generic drugs is 6 months, but your actual review is 19.9 months. 
Review of pharmaceuticals in a timely fashion is a central part of 
FDA's core mission, but FDA is not meeting that mission. This is very 
worrisome, especially when I hear that the review process is predicted 
to lengthen to almost 21 months. How will FDA address this problem?
    I believe it is time to change the system of dis-incentives which 
discourage FDA approval of new, innovative drugs. I call for a return 
to the concentration on the most important person in the health care 
equation--the patient. I look forward to seeing these changes and the 
positive results they will carry for all Americans.

    Senator Cochran. Senator Gorton.

                       IRRADIATED FOODS--LABELING

    Senator Gorton. Thank you, Mr. Chairman.
    Before I get to the subject of my opening statement, a 
couple of questions on your direct responsibilities. As I had 
worked in that direction for more than a decade myself, I was 
delighted when the Food and Drug Administration approved the 
petition to irradiate red meat. Even more satisfying is the 
fact that the petition just reached the implementation phase 
and several beef processors have employed that technology.
    As prescribed by law, your agency was to formulate a new 
label for irradiated food at the inception of implementation, 
but that has not happened. Why not?
    Dr. Henney. Mr. Gorton, we have, as you note, been working 
in this issue of irradiation and labeling for some time. If you 
will indulge me, I will ask Mr. Levitt to join me--he is the 
Director of the Center for Food Safety and Applied Nutrition--
to give you an update of where we are on that issue.
    I think that we have also, in addition to this labeling 
issue, been trying to attack another problem that may be 
related and that is consumer confidence in irradiated products. 
To that effort, we have joined with many partners in terms of 
developing educational and informational material about that, 
and perhaps Mr. Levitt could share both of those initiatives 
with you.
    Mr. Levitt. Thank you.
    In terms of food irradiation, we did put out a brochure, 
which really is an interim measure, not the rule you are 
speaking of, jointly with a number of private organizations, 
the American Meat Institute, the Food Marketing Institute, the 
Grocery Manufacturers Association, the National Food Processors 
Association, among others, to be sure that we educate consumers 
about this important technology, what it is, why it is safe, 
and why we believe it is making food safer for the American 
public. This will be distributed widely throughout the country 
as a way to get the communication to consumers, which really is 
what the rule was trying to get at.
    We did put out, as directed by the Congress, an advance 
notice of proposed rulemaking last year to solicit public 
comments and get the right views. Really the issue is should we 
call it ``food irradiation'' on the label or should we use an 
alternative term. Things like ``cold pasteurization'' have been 
suggested.
    What we found from the public comments is we really have 
widely divergent views. There is one view that we ought to use 
alternative terms because they view food irradiation as too 
scary. The alternative is, as Dr. Henney said, in terms of 
public confidence. We get a lot of comments from consumers. 
They say, no, please tell us what it is. Tell us what it is, 
educate what it is, and let us make our choice. So, I think we 
are struggling, in terms of going ahead with a final rule 
exactly, with what the right balance is to strike. That is why 
the interim measure. We are working jointly with other groups, 
as I said, on consumer education.
    We also have instituted our expedited review for new 
technologies, including irradiation, and we have a number of 
petitions before us that we are trying to move through rapidly.
    Senator Gorton. You are working hard on this then.
    Mr. Levitt. Yes.

                             GENERIC DRUGS

    Senator Gorton. Good. Thank you.
    Again, Dr. Henney, on another subject, perhaps the single 
step that FDA has taken in the last decade and a half has been 
to implement the Hatch-Waxman Act on generic drugs. Obviously, 
our people have saved billions and billions of dollars on this.
    You were directed, as I understand it, to get the time for 
moving drugs from a laboratory to patients down to 6 months. It 
has come down, but it is still three times that length of time. 
What is being done to reduce that time lag even further?
    Dr. Henney. Mr. Gorton, actually I think this speaks well 
or a bit to the first point and statement that you gave because 
I have long learned that there are some things I can control 
and others that I can only try to influence. On the issue of 
pricing in the marketplace and making sure that there are 
alternatives out there, this is one way in which FDA can be 
exceedingly helpful to the American consumer who is concerned 
about the price of prescription drugs; that is by running an 
efficient and effective generic drug program.
    I think that we have invested over the last 2 years in 
terms of increasing our staffing in this area by some 15 
percent. Some 10 FTEs were added in fiscal year 1999 and 
another 11 this past year. I think you should also know that we 
approved nearly 198 generics last year. 40 were first-time 
generics, and we have some 68 sort of waiting in the pipeline 
for other products to go off patent. So, this is a very 
vigorous program.
    Could it be better? Certainly any system always can be. It 
always takes resources to do that.

                       PRESCRIPTION DRUG PRICING

    Senator Gorton. Well, let us go on to the other question 
then. Obviously, this is not your direct responsibility, but 
speak to me to this price discrimination and to the most unjust 
burden, it seems to me, that is being imposed on all Americans 
in the cost of their prescription drugs by the kinds of price 
controls in other countries that simply seem to me to be 
designed to say that they will not contribute to the research 
and development. They will pay the cost of the pill after it 
has been developed and not much more than that. We do all the 
work in the United States and our reward is that our people 
either pay way more for many prescription drugs at least or, if 
they are fortunate and live close to a border, they can get 
onto a bus and go to Canada or Mexico and come back with those 
drugs at a much lower price. Just speak to that proposition in 
general, will you? It is hard to come up with a greater 
injustice in the field of health care than that one.
    Dr. Henney. Mr. Gorton, I would speak to you in two ways. 
As a doctor and as a daughter, I am very concerned about this 
pricing issue. I see its impact not only on the patients that I 
used to care for that would make not good decisions because of 
the price of medication, and as a daughter who has--I cannot 
classify them as elderly parents, even though they are both in 
their eighties. They run around too much to be called elderly 
but they are concerned about this whole issue of the price of 
prescription drugs and the constraints that it puts on 
decisionmaking.
    But speaking to you as both a doctor and a Commissioner, I 
also have to be concerned about safety, particularly as people 
make choices about purchasing products from other countries and 
whether that is a safe practice or not. So, I would just get 
that out as a general premise.
    I would also say that while the FDA Commissioner is given a 
lot of responsibility and much authority, pricing is not one of 
those issues that we play in directly except in the area of, as 
I have said, generics and, except in the area of our support of 
the administration's position on a prescription drug benefit. 
We can only try to influence some of the other areas. What goes 
into drug companies' decisions as they set their price on any 
particular product is not something that we are necessarily 
privy to, nor do we have much influence on.
    But I would agree with your statement that there is much to 
be questioned here in terms of the impact that pharmaceutical 
drug prices ultimately have on the American consumer who needs 
these products.

                 FOREIGN PURCHASE OF PRESCRIPTION DRUGS

    Senator Gorton. I have one more followup then. Is there a 
question of safety with respect to people who cross, let us 
just say in this case, the Canadian border and buy a 
prescription drug by its brand name? Is there any question as 
to whether that is not identical to what is manufactured and 
sold in the United States?
    Dr. Henney. Mr. Gorton, I think when people point to Canada 
as a possible purchase site for products, and knowing the 
strength of their regulatory system as well in our interactions 
with them, there is perhaps a lessened concern about safety, 
but still a concern. We do know that in Canada some medications 
that are manufactured are manufactured at a different potency 
or equivalence than they might be here. That could cause a risk 
for an American consumer.
    The trackability of a pedigree of a drug is more than in 
question. Where did bulk product come from? How was it 
manufactured? One is just put at increased risk when you do not 
know all of those things.
    I think as we have listened to our Canadian counterparts--
and it had already been a concern of our own--there is this 
whole issue driving Canada to somehow be used as a front port, 
if you will, for counterfeit or, in many ways, contaminated 
product becoming available. So although I could not point to 
any statistics in this regard, one has to be concerned about a 
safety issue here.
    Senator Gorton. Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator Gorton.
    Senator Durbin.

                          BIOTECHNOLOGY FOODS

    Senator Durbin. Thank you, Mr. Chairman.
    I have a series of questions and I will try to make them 
concise and hope that we can elicit some answers for better 
understanding. But let me start by thanking you, Dr. Henney, 
and your team at the Food and Drug Administration. I have the 
highest respect for your agency and your leadership. The 
American taxpayers and consumers are well served by what is, by 
Federal standards, a relatively small agency with a huge impact 
on everyone's life in our country and beyond. So, thank you 
again for dedicating your time to public service, as well as 
the people who join you today.
    We are blessed in this country to have a Food and Drug 
Administration. Europe is now talking about establishing one 
and it is long overdue. They are in the midst of an 
international panic within Europe over genetically modified 
organisms that find their place in the food supply. It has 
created a ripple effect across the globe. The farmers in 
Illinois and Iowa and other places are planting their crops 
based on the concerns of European consumers.
    I guess the bottom line question, since the FDA also 
considers food safety is this, do you have any indication or 
evidence that any genetically modified organism in America's 
food supply is unsafe?
    Dr. Henney. Mr. Durbin, I would respond to you by agreeing 
that some of the issues that have been very hot items in 
Europe, specifically with respect to food safety and now to the 
issue of does the technology also create an issue of food 
safety, have drifted a bit into our own country, although 
coming to us first because of the trade issues that you 
implied.
    When we started hearing this level of concern last summer, 
we decided to hold a series of three public meetings to 
reexamine whether our policy, with respect to foods developed 
using the tools of biotechnology, appropriately serves us. We 
heard much at those meetings. We received over 25,000 comments 
from those sessions. And we are now weighing all of those 
things.
    Let me just give you a glimpse I think of what we heard. We 
essentially posed two issues.
    One: Was there any science out there that should give us a 
pause or cause for concern that would lead us to change our 
current policy, which in essence has companies coming to us in 
a consultative process if they intend to market a food that has 
been developed using the tools of biotechnology? To date, our 
experience had been that we have seen over 40 such products. 
Issues that were raised were resolved, and we do not see any 
issues with respect to safety of those that have been reviewed 
and are on the market.
    I think with respect to new safety issues, in general there 
were none raised at these meetings, but I think that there was 
some consistency of thought that the complexity of the science 
that will be used in the future should be weighed as we 
reevaluate this policy. And we are doing that.
    The second series of issues really revolves around how does 
one communicate best to consumers information that they may 
want to know. Is an appropriate way through a website, through 
disclosures at a point of purchase; or is it through a labeling 
kind of process? Therefore, we opened up that question.
    Again, just to give you a thumbnail sketch of what we 
heard: We have heard four distinct messages.
    One message was from one group who felt that it was not a 
matter of food safety necessarily, but this group wants to do 
anything they can to make sure that the environment is safe, 
and because of environmental concerns more than food safety 
concerns, want this kind of information available to them so 
they can make those choices.
    A second group clearly was more concerned about food 
safety, and it was expressed not in terms of evidence that 
could be pointed to in terms of an ongoing food safety issue, 
but what might potentially happen in future generations. This 
is a much more precise concern, but still more ill-defined in 
terms of scientific basis.
    A third group basically was saying--and this is a less 
vocal group and yet a fairly sizable group--I am not really 
concerned about a food safety issue here, but I am an American 
who likes information. If there is some information out there, 
I would like to have it. In some way I would like to know more 
about these products.
    A fourth group represented a minority at our meetings and 
in our responses, and yet I hear, as I have traveled in Europe 
and many of my colleagues have as well, that voice as a strong 
voice from the developing countries who say do not do anything 
to limit or constrain this technology. We need this technology 
to bring both real health to our people and economic health to 
our countries.
    That gives you a glimpse into what we heard. We are still 
looking at our policy knowing this kind of information.

                          DIETARY SUPPLEMENTS

    Senator Durbin. Your answer, I am sure, reflects the 
attention that you have given to this issue. I do not know of a 
Senator or a Member of the House or anyone in public service 
who would compromise the safety of our food supply. I am 
looking to your agency, as I have for so many years, to lead 
the way in telling us the bottom line. If there is danger 
attached to genetically modified organisms of any kind, I trust 
that your agency is prepared to tell us as much, and if so, to 
take action against such things in our food supply.
    I have a series of questions, and I am sorry I do not have 
more time. I promise the chairman I will be as concise as I can 
be.
    Let me address another issue that is growing in interest 
among American consumers: dietary supplements. In 1994, we 
changed the law. We basically changed your responsibility in 
the Food and Drug Administration. Dietary supplements are now 
extremely popular in the United States--their sales have nearly 
doubled in the past 5 years, and estimates are that they will 
grow by over 90 percent over the next 6 years. Over half of the 
American people now take some form of dietary supplement.
    We changed the law in 1994 and said that basically your 
agency did not have the authority to decide before these 
supplements were put on the market as to whether they were 
safe, but rather to monitor any reported bad incidents or bad 
experiences.
    You also, under that law, do not have the authority, as I 
understand it, to establish a production or good manufacturing 
standards. So, those who want to advertise that they are 
selling certain supplements really do not have to prove at any 
point along the process that they are, in fact, selling what 
they purport to sell, the purity of what they sell, for 
example.
    I would like to know what you think about instituting 
production standards or good manufacturing standards for 
dietary supplements so that consumers would, in fact, be at 
least getting a known product of a known standard without 
potential contamination.
    Dr. Henney. Mr. Durbin, yes, the Congress did pass in 1994 
the Dietary Supplement Health Education Act, and it was signed 
into law. As with any law that you pass, we must develop an 
appropriate regulatory framework for that law, and we are busy 
about the business of doing that. We have completed this past 
year, under Joe Levitt's direction a comprehensive strategy 
that looks at how we put in place an overall regulatory 
framework for dietary supplements. It will take some time to 
complete that work.
    I would just give you an example. When we were given the 
Safe Medical Devices Act in the early 1990's or the Medical 
Device Amendments of the 1970's, it took nearly 15 years to see 
the full impact of that law in place. So, we are working on 
this, slogging it out bit by bit in terms of putting this into 
place.
    The issue with respect to GMP is that it is on our A list 
for this year, and we intend, by the end of this year, to have 
such a proposal completed.

                       SINGLE USE MEDICAL DEVICES

    Senator Durbin. Thank you.
    One of the issues that I raised at last year's hearing and 
you responded to was the question of the reuse of single-use 
medical devices. For those who are not familiar with it, there 
are many hospitals across America which buy such important and 
medically sensitive devices as heart catheters which are 
labeled for single use only. Of the hospitals across America 30 
percent pay no attention to that label and reuse that device, 
sometimes on five and six occasions. In between, it is to be 
sterilized and reprocessed, but patients are totally unaware of 
the fact that the device in most instances was sold to be used 
once and is being used over and over again.
    A 32-year-old woman in Kansas had a heart catheter which 
had been reused multiple times. In the course of a procedure, 
the tip broke off and is now lodged in the right atrium of her 
heart. The manufacturer of the catheter had never before had to 
report one of the catheters breaking.
    Now, what we tried to get across to you at the last hearing 
was the importance of collecting data on how often this happens 
across America with the thousands of single-use medical devices 
that are being reused mainly without the patient's consent or 
knowledge. Your MedWatch form, which your agency has produced, 
is designed to really, on a voluntary basis, collect this 
information as it relates to medications and medical devices. 
And we asked if you could make special note of this on future 
forms so that we could collect the data. But I am sorry to 
report, doctor, that we have not quite reached that point. I 
wonder how soon will your MedWatch form include a request for 
information as to whether the faulty medical device was in fact 
a single-use device that had been reprocessed and reused.
    Dr. Henney. Mr. Durbin, with respect to the forms, when a 
device is faulty, it clearly is reported to us. Although it 
sounds simple, the issue of revising the form is not easily 
done. We have taken the burden really on ourselves to track 
back and see if a device was originally labeled for single use 
or not. We still take your point that this change might be 
helpful, but in the meantime, we are tracking back to see what 
the labeling might have implied before.
    Senator Durbin. I will suggest to you that since we had our 
last hearing, you--at least your agency has exchanged 
correspondence with the association representing these medical 
device reprocessors, really admonishing them that they have 
overstated the FDA's approval of their processing. So, at least 
it is fair warning that this industry may not be following 
standards that we would like. Consumers are totally vulnerable, 
unaware of the fact that these devices are being used 
repeatedly, and we have had some awful experiences. I do not 
know what it takes, but I hope that we can move more quickly to 
at least start reporting whether these are single-use devices 
being reprocessed, reused at the peril of the patient that is 
involved.
    Dr. Henney. Mr. Durbin, I was only speaking to your issue 
about the form. FDA has been quite active in this area during 
the past year. We have developed a strategy which has been 
published to look at the different risk levels of reuse. We 
have published two companion guidances, one looking at this 
whole issue of reprocessing and reuse, looking at the high, 
moderate, or lower risk issues such as the likelihood of 
disease transmission, and the likelihood of a performance 
deterioration with reuse.
    We also have guidance out with respect to our enforcement 
priorities in this area, and we have been issuing warning 
letters to reprocessors as well.
    We have worked very actively with the Joint Commission on 
Hospital Accreditation to engage their involvement with us in 
this whole area of reuse. There are many activities going on 
with respect to reuse and its appropriate use.
    Senator Durbin. I am going to quit at this point but tell 
you that I have two questions or observations that I will make 
a matter of record here. One relates to the orphan drug 
program, which I believe needs additional funding. I hope to 
persuade my fellow members of the subcommittee to join me in 
seeking that and, secondly, to some language that I included 
when I was a Member of the House on this same subcommittee in 
1994, when it came to the question of clinical trials. My 
particular interest now is in gene therapy and the requirement 
that was included in our report to your agency many, many years 
ago that you track the individual patient data on these 
clinical trials. I think that the emergence of this issue of 
gene therapy and some of the sorry or sad results of the last 
few months really, I think, call into question whether we 
should revisit that and whether the 1994 advice to your agency 
should be followed.
    Thank you, Mr. Chairman.
    Senator Cochran. Thank you, Senator Durbin.
    Senator Harkin.
    Senator Harkin. Mr. Chairman, I just first thank you and 
ask that my statement be made a part of the record.
    Senator Cochran. It will be, without objection.
    [The statement follows:]

                PREPARED STATEMENT OF SENATOR TOM HARKIN

    Thank you, Mr. Chairman, and thank you, Secretary Shalala and 
Commissioner Henney, for being here today to discuss the Food and Drug 
Administration's appropriations for fiscal year 2001. I am looking 
forward to hearing your priorities for the year.
    I would like to especially thank FDA for its quick turn around on 
FSIS's request to allow the use of plastic packaging for e-beam 
pasteurization on an experimental basis. I think this is an excellent 
sign of FDA's commitment to making new food safety technologies 
available as rapidly as possible. I trust that FDA will continue to 
move as efficiently on the other petitions for new food safety 
technologies it has before it.
    On FDA's budget requests, I am pleased to see that the 
Administration has requested an additional $30 million in funding for 
FDA under the President's food safety initiative. This funding is 
absolutely vital to increasing FDA's food safety inspection and 
research activities. My staff has been visiting border inspection 
facilities and FDA-inspected establishments, and I can tell you that 
FDA is still greatly underfunded relative to the number of food 
products it covers. This money will be another step towards giving FDA 
the resources it needs.
    I note that FDA also has requested $20 million for renovation and 
relocation of its Los Angeles laboratory facility. This facility 
analyzes 23 percent of all the imported food samples taken annually by 
FDA. It is the primary laboratory for all produce coming across the 
border from Arizona and southern California, and is therefore very 
important to ensuring the safety of imported produce coming into the 
U.S. My staff has visited this facility as well, and I can vouch that 
this request is greatly needed.
    Lastly, I am also happy to see the President's budget request 
includes a $5 million increase for the FDA's tobacco program. This 
critical program does an excellent job getting enforcement dollars to 
local law enforcement to reduce tobacco purchases among teenagers, and 
includes important outreach and education efforts for retailers.
    I look forward to working with the Chairman and members of the 
Committee to ensure that the FDA's efforts in these areas are funded at 
the President's request.

                      FDA-TYPE STRUCTURE IN EUROPE

    Senator Harkin. I appreciate that.
    Commissioner Henney, again I first want to thank you and 
the FDA for its quick turnaround on the Food Safety and 
Inspection Service's request to allow the use of plastic 
packaging for e beam pasteurization on an experimental basis. I 
think this is an excellent sign of FDA's commitment to making 
new food safety technologies available as rapidly as possible. 
I trust that FDA will continue to move as expeditiously on the 
other petitions for new food safety technologies before it. But 
I want to thank you for that rapid response on that.
    A couple of questions I was going to ask have been covered 
basically by Senator Gorton and Senator Durbin.
    I am very happy to see that you are looking at, as you 
testified, new terminologies and new phraseologies and how that 
might work with respect to food irradiation. I think that is 
also very encouraging.
    Last fall a number of us met. I think you were there too, 
Mr. Chairman, with Mr. Prodi, the president of the EU 
Commission, and a number of us I know met with him, and the EU 
trade minister from France, Mr. Lamy. But anyway, he committed 
to us that they were going to set up an FDA type structure in 
Europe. My question to him was, well, when? 10 years from now? 
No, they were going to move on it right away.
    As I understand, they have sort of moved on setting up an 
FDA type of a structure in Europe, although I understand it is 
going to be just sort of an advisory nature only. It was my 
understanding, when we talked with the members of the EU last 
fall, that it was going to have sort of a jurisdictional 
umbrella over all of the member countries. That does not seem 
to be the way that it is proceeding.
    I am just wondering, have you been consulted? Has the FDA 
been involved at all in helping resolve these regulatory issues 
in Europe as they are trying to wrestle with this new 
structure? Are you involved in that at all?
    Dr. Henney. Senator Harkin, we have been very involved with 
our counterparts in Europe as they started to discuss 
particularly the issue related to food safety or a food agency 
for the EU. I think that they were hoping in large part to 
implement a model like the FDA that has a strong legal 
framework, makes its decisions based on science, has both 
standard setting and enforcement capabilities, and can inspect 
and enforce against those standards.
    As I understand it, their final framework is not reflective 
of all of those elements as you have just stated. I think that 
they at this point want to put this new model to use and modify 
it as they get more experience. But our folks at both a policy 
level, as well as a scientific level, were consulted by the 
Europeans about how we do our business, and we tried to give 
them the best advice that we could give.
    I think the other thing that European countries, as well as 
others in the world, are always struck by is how open our 
processes are in terms of how we go about deliberating and 
decisionmaking. Many of them were in the Washington, DC area 
when we held our hearing on biotechnology or the bioengineered 
food issue. They were the people in the rows with their mouths 
open. They could not really fathom, I think, a governmental 
agency really seeking a wide range of opinions and being 
willing to listen to concerns across the board about a very 
controversial issue. It is just not how they do their business.
    Senator Harkin. So, you have been consulted. They are 
looking at FDA as a model then.
    Dr. Henney. Yes.
    Senator Harkin. That has been done.
    Dr. Henney. We are also supplying to the European Community 
a summary of how we ensure protection at all levels of our food 
safety system so that it is more of an open document rather 
than just a private conversation with them as well.

                      DIETARY SUPPLEMENTS--EPHEDRA

    Senator Harkin. Good.
    The last thing I have a question about that I wanted to 
cover with you is about dietary supplements. I was very pleased 
to see that the agency recently pulled the part of its ephedra 
regulation that was heavily criticized by the GAO, that dealing 
with dosage limits. I know you are planning on shortly 
releasing adverse event reports received since your original 
proposed rule, and I understand that these will be accompanied 
by an analysis of these reports.
    One of the reasons the GAO was highly critical of your old 
proposal is because they found that FDA failed to do causal 
analysis, that is, to ensure that the taking of the ephedra 
had, in fact, caused the adverse event.
    My question basically is, will your new analysis include 
this type of analysis in the new reports?
    I am also told that as many as 3 billion servings of 
ephedra products are consumed each year. Will your analysis 
include this fact to put any adverse events in context? In 
other words, if there are seven adverse events, put it in the 
context of 3 billion servings or however many there are per 
year?
    Dr. Henney. Senator Harkin, as you note, we had a very 
critical report from GAO with respect to ephedra. I think that 
while the report reflected that they agreed that there was a 
public health issue, the methodology that was used could 
certainly use improvement.
    We have, for that reason, undertaken an analysis of the 
adverse events that have been reported since that time, looking 
at them with respect to many of the issues that you raised. We 
do intend to publish those, as well as the analysis that we did 
in-house and was done by consultants to the agency. We then 
intend to hold a public forum on this matter to see what all of 
these analyses mean, not with the intent to have them 
necessarily direct a regulatory action, but to really get this 
information out into the public arena.
    I think with the other point that you raise in terms of 
amount of product consumed, we have widely varying ranges of 
what that might be, and we will try within what we publish to 
give a sense or a feel. But I do not know that we necessarily 
know the right number. We do know that it is an increasing 
amount over time. I would be interested if you could supply us 
with the data that you have and the source of the information.
    Senator Harkin. We can do that. It is again relying upon 
industry tabulations of sales of ephedra-containing products 
every year. I can only take their word for it. They have no 
reason that I can think of to manipulate the figures, but I 
will be glad to give you all that information we have on how 
many servings there are because I think it really should be put 
in a contextual framework.
    Thank you very much, Dr. Henney.
    Thank you, Mr. Chairman.

                             MEDICAL ERRORS

    Senator Cochran. Thank you, Senator Harkin.
    Dr. Henney, with respect to the medical errors initiative 
that Senator Durbin raised, could you tell us what FDA's 
current adverse events reporting systems include and whether 
there are plans in this budget to strengthen the systems to 
prevent medical errors and enhance patient safety?
    Dr. Henney. Mr. Chairman, within the context of our medical 
errors reporting system, we have systems in place at the FDA 
for adverse reports to come into the agency. The systems, 
however, are in serious need of upgrading to make them both 
state-of-the-art and to make them comprehensive throughout the 
agency so that it would include the adverse events that may be 
related to drugs, biologics, blood, and the like.
    Regarding adverse events that may be related to devices, a 
few years ago, we piloted an approach called a Sentinel 
Reporting System. That proved to be a strong and good way for 
us to track adverse events in that area. Unfortunately, because 
of limitations of funding, we did not go forward with expanding 
that program.
    Our request to you this year is really to lay the 
groundwork for developing a comprehensive system. It would call 
for $12.8 million to do that. That would allow us to get the 
kind of systems in place that we need, upgrade some of the 
systems that we have, be able to hire some of the types of 
analysts, epidemiologists or biostatisticians, that we need to 
make sense of the reports so that when we take actions based on 
them that these decisions are wisely made.

                              GENE THERAPY

    Senator Cochran. In light of the recent death of a young 
man who died as a result of gene therapy treatment and the 
admission by the National Institutes of Health that it did not 
track adverse events in gene therapy, what is the FDA doing, if 
anything, to reevaluate its oversight process to ensure safety 
compliance by institutions conducting these trials and to 
expand public disclosure of gene therapy clinical trials?
    Dr. Henney. Mr. Cochran, the events that you cite have 
prompted us to do several things. One is, although we are in 
receipt of adverse events as they relate to many of our gene 
therapy IND's, and we have standard operating procedures for 
our interactions with NIH, we on a routine basis now, are 
sitting down with our colleagues from NIH to make sure that 
they know what we know and can act upon it as they should. We 
are two agencies charged with doing different things, but we 
must interact well to benefit all patients in these trials.
    The other thing that we will be doing specifically with 
respect to gene therapy is requesting that all investigators 
engaged in this scientific area provide us with their plans for 
clinical trials monitoring. We need to assure that they have 
appropriate plans in place for that monitoring.
    We also intend, along with NIH, to hold a series of 
conferences on safety issues specifically related to gene 
therapy. Some of those will be done in concert with their 
Recombinant DNA Advisory Committee. Some of them will also be 
done through our advisory committees within our Center for 
Biologics.
    There are a number of steps I think that both institutions 
are taking to make sure that we do all that we can do and 
should do to assure the safety of these trials and to assure 
that patients have confidence in the system.

                                TOBACCO

    Senator Cochran. In the conference agreement on the 
appropriations bill last year, we included a directive to the 
FDA to evaluate the feasibility of using automated 
identification systems to try to reduce the sale of tobacco to 
minors and the effect of compliance that such automated systems 
might have.
    My question is, what is the status of FDA's compliance with 
this study requirement, and do you expect a report would be 
made to the committee as suggested in the conference report 
within 180 days of the enactment of the law? That would be in 
late April of this year. Or when could we expect to receive the 
report, if you know?
    Dr. Henney. Mr. Chairman, with your indulgence, I would 
like to call on Mitch Zeller who heads our Office of Tobacco 
Programs to respond.
    Mr. Zeller. Mr. Chairman, we put the report into clearance 
and assuming clearance goes smoothly, you should get it 
probably before the deadline.
    Senator Cochran. Just as a matter of curiosity, what does 
that mean, put it into clearance?
    Mr. Zeller. It has to go through clearance within FDA and 
the Department before it can come to Congress. Therefore, we 
are confident that you are going to get it by the deadline or 
you may even get it before.

                          DIETARY SUPPLEMENTS

    Senator Cochran. Great. Thank you. Thank you very much.
    There are questions about the dietary supplements that have 
been raised at this hearing. When you came by the other day for 
a visit prior to the hearing to talk about some of the issues 
that we might ask about, I raised this as a question about 
whether or not it would be appropriate to include in this bill 
some funding for scientific studies on dietary supplement 
products, those that are on the shelf, to assess their quality, 
to strengthen the scientific understanding that we have about 
the overall quality of supplements and how they may affect 
those who are using them.
    Dr. Henney. Mr. Chairman, as we develop the strategic plan, 
if you will, or framework for implementing an appropriate 
regulatory approach to dietary supplements, one of the key 
elements of it was to develop such a capacity. When it came to 
making choices within our budget and picking out the element 
most in need in the dietary supplement arena, what we have 
requested in the context of this budget is to upgrade our 
adverse event reporting systems for dietary supplements.
    Certainly the whole issue of undergirding a science base or 
a research base for this program is something that we support 
in principle. It was a matter of choices and priorities in 
terms of risk that we used when we developed our budget 
proposal.
    Senator Cochran. Could some of these studies be conducted 
by university laboratories that have proven expertise and 
experience in this research area?
    Dr. Henney. Absolutely.
    Senator Cochran. Are you including in this budget request 
any funds specifically for the purpose of exploring possible 
improvements in the quality of dietary supplements or 
understanding about microbiological contamination of dietary 
supplements or related questions?
    Dr. Henney. Most of the money that is in this particular 
budget is directed at the adverse event reporting. I think that 
there is about $200,000 within our total request that would go 
for the kinds of issues that you raise.
    Senator Cochran. Do you have any recommendations that you 
have made to the National Institutes of Health or others for 
funding clinical trials on certain dietary supplements?
    Dr. Henney. Mr. Chairman, we have had, between our Center 
for Food Safety and Applied Nutrition and myself, interactions 
with our colleagues at NIH, particularly through their offices 
or center for alternative medicines to let them know where we 
have issues that might need to be addressed. I would like to 
provide for the record any specifics of those discussions.

                             FEW USER FEES

    Senator Cochran. Thank you very much.
    We notice the proposals in the budget for new user fees. I 
think in this budget you assume the enactment by the Congress 
of legislation to impose user fees that would amount to $19.5 
million for premarket review of direct food additive petitions, 
food export certificates, and the review of medical device 
premarket notifications.
    Do you have any reaction from the industry that they are 
going to support these proposals, or do you know what their 
position is? Are there legislative proposals that have been 
submitted to the Congress on these subjects?
    Dr. Henney. With respect to your last question, there are 
legislative proposals under development. They have not been 
submitted as yet.
    With respect to the first question in terms of industry 
reaction, I do know that they react to the words ``user fees'' 
and like the term ``review fees'' a bit better. I also know 
that they are very hopeful of what we will be able to do with 
respect to food additive petitions overall and probably would 
appreciate a bit more track record on our part before 
additional review fees might be imposed.

                        MEDICAL DEVICE USER FEES

    Senator Cochran. The budget proposal contains a suggested 
device user fee to encourage reviews to be performed by third 
parties. I understand that an obstacle to the success of the 
third party review program is that FDA has made only 154 
product types eligible for the third party program and the list 
of eligible products has not been expanded since May 1999.
    What is the best way for FDA to encourage the industry to 
use third party review? Is it to expand the list of products to 
include more complex devices or not to impose a user fee?
    Dr. Henney. Mr. Chairman, the third party review experiment 
that is really outlined within the Modernization Act is 
something that we are very committed to and want very much to 
work. While the number that you cite is correct in terms of 
categories, there were some 1,200 510(k) applications that we 
received in fiscal year 1999 that would have been eligible for 
third party review, but only a handful of these actually went 
to the third party review. While third party review does 
require a payment on behalf of a company, and there may be some 
issue there, the third party review takes much less time to do, 
some 57 days, as opposed to 107 days if the company chooses to 
come in to the FDA, simply because we are also working on other 
things.
    We are looking at ways to expand the list of devices that 
might be eligible for third party review. We took first the low 
and moderate risk devices, as was intended by Congress, and 
those for which we already had standards developed so that 
those standards could be used by the third party in terms of 
going about their review.
    Our proposal here really looks at FDA in part as a conduit 
for payment of the third party review and then would both 
simplify and reduce our regulatory cost. And it also allows us 
to tap additional expertise from scientists outside the agency.

                           SEAFOOD INSPECTION

    Senator Cochran. The budget request proposes a new 
administrative provision to transfer seafood inspection 
functions and authorities, the personnel of the Seafood 
Inspection Division and all related assets and liabilities from 
the Department of Commerce to the Department of Health and 
Human Services. It seems that this is something that would 
require the approval of the legislative committees of the 
Congress, and I am curious to know why the administration is 
proposing that the authority for the program transfer be 
provided in the appropriations bill and whether the 
administration is also submitting legislative language to the 
Congress to authorize the program transfer.
    Dr. Henney. Mr. Chairman, yes, such a proposal will be 
developed and submitted. This is an administration proposal 
that would consolidate all of the Seafood efforts within the 
authorities of the Food and Drug Administration. I would go on 
the record that I am very interested in the assets, but perhaps 
not the liabilities.
    Senator Cochran. Do you agree with one suggestion we have 
heard that combining these programs might undermine the 
objectivity and credibility of FDA's seafood HACCP program?
    Dr. Henney. I have not heard that. This program has 
traditionally been of a voluntary nature, if you will. I think 
that we would use it to complement what we do in our HACCP 
program.

                          SEAFOOD EQUIVALENCY

    Senator Cochran. Last year FDA indicated that it is working 
to improve the safety and sanitation of imported seafood by 
establishing equivalency agreements to ensure that exporting 
countries have seafood inspection systems equivalent to those 
of the United States. It also indicated it was in the process 
of evaluating submissions for equivalency agreements from 
numerous countries, including the European Union, and had plans 
to visit six countries, including Australia, Canada, Chile, 
Iceland, New Zealand, and the European Union before the end of 
the year.
    What is the status of the FDA's effort with regard to 
seafood equivalency agreements?
    Dr. Henney. Well, Mr. Chairman, as you know, this whole 
issue of equivalency is a very lengthy process. It involves 
doing a preliminary, side-by-side comparison of the different 
regulatory systems to make an initial determination. Many 
countries end up realizing, after they see the system that we 
use, that perhaps they need to upgrade their systems, or if we 
are not equivalent to theirs, we do some work ourselves. It 
usually goes the other way, however.
    The second is when we do an analysis of the two systems. We 
then do this third step of the on-site site visits, which I 
believe you are alluding to. We are required to do a 
preliminary determination and then a final determination, both 
of which need to be published. Then we go into negotiating the 
final agreement.
    Our determinations for Canada, New Zealand, Australia, 
Norway, and Japan are all in their furthest state of 
development, and they have all had their first site visit. 
Canada's has been delayed about a year as they implemented some 
major system changes, but we do intend to site visit and review 
those changes sometime this spring.
    Senator Cochran. Are any additional resources needed to 
complete the planned work? Is the current level of resources 
sufficient for that purpose?
    Dr. Henney. Mr. Chairman, as I alluded to, these do require 
very intense work, but I would ask Mr. Levitt to give you some 
sense of actual resources required and resource needs.
    Mr. Levitt. Congress did provide us, I am sure you will 
recall, some resources specifically for this purpose I believe 
in the 1999 budget. Part of this is that it takes time to go 
through the steps. What we have done in this year's budget 
request is to focus more on coming back to domestic 
inspections, being sure that we are able to do those on an 
annual basis as well, which will in turn help us with the 
equivalency agreements. So, there is nothing in the budget that 
specifically requests an increase in this area, but we do have 
people who are dedicated to this work and will push it ahead as 
the pace will allow.

                          INTERNET DRUG SALES

    Senator Cochran. In the prepared statement submitted, 
Commissioner Henney, you indicate that during fiscal year 1999, 
illicit or illegally operated drug sales sites grew 
dramatically. What was the growth in illicit or illegally 
operated sites?
    Dr. Henney. Mr. Chairman, the area of consumer use of the 
Internet clearly has grown overall in terms of many product 
lines, prescription drugs being one of those. We know that 
there are several hundred sites now offering the sale of 
prescription drugs. How many of them do this illicitly or 
illegally is something that we have under active investigation.
    Senator Cochran. The President announced that he would 
submit new legislative proposals to Congress to address the 
problem of illegal Internet drug sales. I understand the 
proposal will establish a new Federal requirement to enable 
consumers to identify legitimate Internet pharmacy sites, 
strengthen the current penalty structure for illegal 
pharmaceutical sales over the Internet, and provide new 
authority to FDA to ensure rapid and effective investigation of 
on-line sites.
    To what extent is enactment of this new authority required 
before FDA can utilize the $10 million requested in the budget 
for next year, and has the legislative proposal been submitted 
to Congress?
    Dr. Henney. Mr. Chairman, the $10 million request is, in 
essence, to provide us funding for the work we are doing in 
this area already. Because we saw this as an increasing issue 
and a matter of risk, we have been using hundreds of hours of 
investigative time. Our budgetary request before you is to 
focus on this as an identifiable issue and allow our 
investigations to go forward as well. It is largely that.
    There is also part of this program that is education and 
public outreach in terms of the agency providing information to 
the public about how to find a site or what to look for when 
trying to use the Internet to purchase prescription drugs. The 
budget proposal really stands on its own.
    The legislative proposal, which would be forthcoming and 
would have in it many of the elements that you mentioned, 
really speaks to additional tools that we might need either to 
aid our investigations or enhance the consumer's ability to 
find a site that is selling products and is selling them with 
all of the State or Federal laws in place.
    Right now we clearly know that the Internet provides many 
benefits, the access, the convenience, the privacy, but there 
is no easy way for a consumer to tell whether the site they are 
using is complying with all State or Federal laws. It is not 
like going into your corner drugstore where you can see that 
the pharmacy has been licensed, the pharmacist has been 
licensed, and you know the doctor who wrote your prescription. 
The Internet essentially cuts out that part of the safety net 
system. We need to make sure that we have an equivalent safety 
net for those who choose to use the Internet as well as for 
those who choose to go to their corner drugstore to buy drugs.

                           FOOD BIOTECHNOLOGY

    Senator Cochran. Another emerging scientific dilemma that 
you mentioned in your statement is the need for new funding on 
the rapidly evolving field of food biotechnology. What is 
actually planned by the agency for the use of funds that are 
requested in this next fiscal year as compared with what has 
been done in this year for this new effort?
    Dr. Henney. The area of food biotechnology has not been an 
area where we have traditionally done the research. The 
research that has been done to develop specific crops, is 
either supported by the Department of Agriculture or industry.
    As we focus more and more on a stronger regulatory 
position, however, and we have research questions related to 
those regulatory issues and bioengineered foods, we need to 
build this kind of a capacity. This would be done primarily by 
joint efforts between our Center for Food Safety and Applied 
Nutrition and our National Center for Toxicological Research 
where work in terms of regulatory matters related to 
bioengineered foods would be done.

                             GENERIC DRUGS

    Senator Cochran. There is also a suggestion in your 
statement that you propose to accelerate the process of generic 
drug review. I wonder how you propose to accelerate this. Can 
you compare, for example, how you are going to use the 
additional resources that are requested? Are you going to 
increase staffing and funding levels for the generic drug 
review, as compared to the current fiscal year or last year?
    Dr. Henney. FDA is requesting in the drug area $2.3 million 
to improve scientific knowledge and skills across the board. 
That would include the generic drug area. We do not have, 
within the context of our budget, targeted money for the Office 
of Generic Review. We feel that reviewers across the board need 
to be supported because both those medical officers or 
scientific officers in generic drugs or innovator are reliant 
on the capacity of the reviewers. We have not targeted this 
request, but it is a more general request of $2.3 million to 
increase our skill base across the board.

                       IMPORTED FOODS ACTION PLAN

    Senator Cochran. You also mentioned in your statement that 
FDA and the U.S. Customs Service have developed an imported 
foods action plan to enhance border surveillance. Could you 
tell us more about this surveillance effort?
    Dr. Henney. Well, what we have done overall with the 
Customs Service was really modeled by our two agencies at the 
port site in Miami. We had several meetings during the course 
of this past year in terms of what we could do as two 
organizations to use the breadth of our authorities to make 
sure that imported products coming into this country are safe.
    Therefore, using some of Customs authority, we are looking 
at the ability to refuse shipments, to mark shipments so that 
we can decrease what we have faced for many years that is port 
shopping, destruction of food products that pose serious public 
health risk, the standard setting for importers, contractors, 
or private labs that are going to analyze samples. The bond has 
been increased for imported foods to full market value of the 
product to deter illegal entry into the country, and also uses 
of civil money penalties.

                               EGG SAFETY

    Senator Cochran. The budget suggests that an egg safety 
action plan at FDA, just completed in conjunction with the 
Department of Agriculture and the Environmental Protection 
Agency and Commerce, is to be implemented this year. I am 
curious to know how this is going to work to prevent illness 
and what level of funding is included in the FDA budget request 
for next year as compared with the current fiscal year.
    Dr. Henney. Mr. Chairman, within the budget request for 
this year, I believe there is $30 million for our Food Safety 
Initiative, of which $5 million would be targeted toward the 
implementation of the egg program.
    The issue of the safety of eggs and egg products really 
centers around the issue of Salmonella enteritidis. We know 
that there are some 300,000 cases of disease due to Salmonella 
enteritidis every year. We also know that eggs and egg products 
are consumed at quite high volume by the American consumer, 
some 234 eggs per person per year. So, this is a very real 
issue in terms of making sure that eggs and egg products are 
safe.
    We held a public meeting on this last fall. We intend to 
hold two other additional meetings. One will be at the end of 
this month in Columbus, OH and one in Sacramento, CA on April 
6. We are looking at this issue with the USDA, to provide an 
integrated approach to the regulation of egg safety and really 
a farm-to-table approach. We are also looking at how we 
communicate safe practices to the consumers so that they know 
that cooking eggs thoroughly, not using raw eggs, is a strong 
and good preventative practice for this problem.
    Senator Cochran. That was going to be my question. Does it 
take all of this to make us all understand that in order to 
guarantee your safety, you need to cook an egg before you eat 
it, and if it smells bad, do not cook it?
    Dr. Henney. These may seem like very simple messages, but 
clearly we have not gotten these messages across yet because 
there are still many people who like their eggs sunny side up 
and who still like to make their Caesar salad with a raw egg. 
The issue remains.

                              BIOTERRORISM

    Senator Cochran. I know that one of the serious biological 
threats, bioterrorism is causing us to look at how we are 
prepared to deal with this new threat including the development 
of new vaccines and drugs, safeguarding food supplies, research 
into the questions of diagnosing and treating disease 
outbreaks.
    Can you give us an update on your agency's efforts in these 
areas and the level of resources currently being devoted to 
them and whether additional funding is needed in the next 
fiscal year?
    Dr. Henney. Yes, Mr. Chairman. I am glad to. I would point 
out that we got caught a little bit on this issue last year as 
we made our request, through the Department. Clearly it went to 
the labor appropriations committee which did not feel that they 
needed to fund an agency in the agriculture appropriation 
committee. As a result, we did not receive funding in this area 
last year.
    Nevertheless, we have received some one-time funding from 
the Department to proceed with some matters related to vaccine 
research in anthrax, smallpox, and the VIG, or that which is 
associated with immunoglobulin.
    You have in the budget request before you this year--and we 
did convince our colleagues in the Department to let us ask you 
rather than them--an $11.5 million request for our efforts in 
bioterrorism. This would largely go for the vaccine issue and 
vaccine development, but also for the important issue of 
stockpiling antibiotics that would require the efforts of the 
Center for Drug Evaluation and Research and the National Center 
for Toxicological Research in terms of looking at important 
research issues either related to food as a vehicle for a 
bioterrorist attack or neurotoxicity related to some of the 
products that may be used by a bioterrorist.
    Senator Cochran. You mentioned the Department of HHS and 
Labor appropriations bill confusion. I wonder to what extent 
are FDA's activities in this area dependent on those of other 
Federal agencies and the funding that other agencies get for 
their part of the obligation?
    Dr. Henney. Well, in the matter of bioterrorism, we are 
coordinated at really the highest level. But our efforts and 
plans really require us seeking the funding from, of course, 
the appropriate and separate committees of Congress. In terms 
of what we do in this area, however particularly our knowledge 
and interaction with the other agencies of our own Department, 
as well as those of the Department of Defense, is critical if 
we are to make an appropriate response to a bioterrorist attack 
or to prevention of such an attack. Clearly, that kind of 
coordination needs to continue.
    Senator Cochran. Dr. Henney, I do not have any other 
questions. I do want to repeat my commendation of you and the 
work you are doing at the agency. I am impressed with the 
commitment that you have made to improving the work at the 
agency, strengthening the scientific base. I agree with you. It 
has to be a top priority. We hope that we can find funds in the 
budget to help you with some of the laboratory problems that 
you have so graphically demonstrated for the committee this 
morning.
    Secretary Shalala's presence here indicates the commitment 
of the administration and her Department to this area. We agree 
that it is a very high priority for our Government, the many 
areas that come under the jurisdiction of this agency.

                     ADDITIONAL COMMITTEE QUESTIONS

    We will have additional questions to submit that others 
might be interested in learning about. So, we hope that you 
will be able to respond to those written questions in a timely 
way.
    We thank you very much for your continued cooperation with 
our committee.
    Dr. Henney. Thank you, Mr. Chairman.
    [The following questions were not asked at the hearing, but 
were submitted to the Department for response subsequent to the 
hearing.]

              QUESTIONS SUBMITTED BY SENATOR THAD COCHRAN

                    STRENGTHENING FDA'S SCIENCE BASE

    Question. Commissioner Henney, you have stressed the need to 
protect FDA's science base to keep pace with technological advances. 
Please discuss what specific increases are requested in the fiscal year 
2001 budget to do this.
    Answer. FDA needs to be able to respond to a rapidly changing 
environment and maintain the capability to understand, adapt and 
respond. To do this we must we must strengthen our science; address the 
highest priority risks; and engage in effective collaborative and 
leveraged activities, and design ever more predictable, timely and 
transparent regulatory processes.
    We must be able to keep pace with the explosion in scientific 
advances and then use that knowledge to assure safe products. FDA must 
apply our intellectual capital at every point in the life cycle of the 
product. We must be able to anticipate and access the cutting edge 
science that will be needed to regulate the products of future 
technology. When this is possible, we can apply this science at the 
point when the new technology arrives and when it is absolutely 
essential to steward these products, many of them lifesaving, to the 
market.
    A strong FDA science capability is equally critical in 
understanding and managing risk associated with products that are 
already in the market place. When FDA can apply cutting edge science to 
these problems, particularly in cooperation with our health and 
regulatory partners, as well as those in the regulated industry, we can 
quickly identify significant risks and minimize them.
    Congress' authorization and support of the Prescription Drug User 
Fee Act and its reauthorization in the FDA Modernization Act is a prime 
example. Review of drugs and biologics in the U.S. is now as fast or 
faster than anywhere in the world, and this has been accomplished 
without lowering our very strict and high standard for safety and 
effectiveness.
    FDA has always adhered to the principle that the most serious risks 
should be addressed first. To illustrate, the medical errors initiative 
in the budget emphasizes FDA's working with other agencies in the 
Department of Health and Human Services and with other departments 
across government as a part of the President's new comprehensive plan 
to improve health care through the prevention of medical errors and the 
enhancement of patient safety.
    Second, drugs marketed and sold from rogue Internet pharmacy sites 
present real risk for the American consumers. Again, we have addressed 
the most serious risks first as a part of the food safety initiative, 
provided funding, we will be able to inspect high risk food firms at 
least once a year. We would continue to do the work supported by 
Congress in the past which focuses our efforts in the important arena 
of food safety by targeting imported produce that contain 
microbiological pathogens.
    Many of our initiatives in this budget require our agency to work 
in concert with a broad spectrum of stakeholders to create a safety net 
for the U.S. consumer. A prime illustration of this approach is in food 
safety. In this regard, we collaborate with our foreign regulatory 
counterparts in joint efforts that include setting standards to reduce 
the risk of products to the consumer. Whether it is within our domestic 
borders or beyond, FDA undertakes collaborative initiatives because all 
parties can unify behind goals that are in the best interest of public 
health and safety.
    The budget request is for $1.4 billion which is a $176 million 
increase over the fiscal year 2000 enacted level. The request includes 
$42 million to enhance the science based review of new health giving 
products so they can more rapidly enter the marketplace and $30 million 
to enhance the safety of the food supply through strengthening key 
elements of the President's food safety initiatives. These elements 
include increasing inspection frequency for high risk food firms, 
implementation of an egg safety action plan developing nationwide 
standards for food safety, and expanding the research activities 
necessary to support the entire initiative. The request also includes 
$20 million to replace FDA's obsolete Los Angeles laboratory facility. 
$15.9 million is included to strengthen our systems which report on and 
correct medical errors. This is the interagency cooperative effort 
designed to reduce the estimated 100,000 annual deaths that occur 
because of medical misadventures or mistakes. $13.5 million is to focus 
on domestic inspections of our firms in order to target high risk 
violators and to come closer to meeting the agency's statutory 
inspection requirements. $10 million is to help stop the illegal sale 
of drugs over the Internet. And finally, $11.5 million is part of the 
President's comprehensive response to possible bioterrorist attacks.
    Fiscal year 2001 is the year in which FDA must cope with the 
maturation of two of the most massive and significant forces the agency 
has ever faced. In 2001 the increasing impact of molecular science, 
genomics in particular, and the information revolution, especially the 
Internet, and its linkage to an array of real time data and as a new 
vehicle for commerce that was unimaginable only a few years ago, will 
combine their forces to change how products are discovered, researched, 
manufactured, distributed, marketed, and advertised.

                      ILLEGAL INTERNET DRUG SALES

    Question. Commissioner Henney, you indicate in your prepared 
statement that during fiscal year 1999, illicit or illegal operated 
drug sale sites on the Internet grew dramatically. What was the growth 
in illicit or illegal operated sites?
    Answer. In an attempt to better comprehend the universe of web 
sites selling drugs, FDA's Office of Criminal Investigations reviewed 
thousands of web sites early this year and identified approximately 326 
web sites involved in the sale of drug products. Because new web sites 
are put up everyday and old ones are taken down, the total number of 
these sites is subject to change and will not be consistent over time. 
Also, due to differences in methodology and access to advanced 
technology search tools, our information may not coincide with data 
provided in studies produced by other organizations.
    Many sites focus on selling prescription drugs and have been 
referred to by some as ``Internet pharmacies.'' These sites offer for 
sale, in some cases, unapproved, illegal versions of prescription 
drugs. Some drug sale sites offer for sale other unapproved drug 
products, products making fraudulent health claims, drugs for 
recreational use such as products containing gamma hydroxy butyrate 
(GHB), unproven cancer therapies, or drug products illegally marketed 
as dietary supplements. While the increase in ``Internet pharmacy'' 
sites engaged in illegal sales is seen by some as a particularly potent 
threat, FDA considers the non-pharmacy sites to be just as harmful, or 
in some cases more so, and we have made efforts to step up regulatory 
actions taken or initiatives by FDA, which include both civil and 
criminal enforcement actions.
    Question. How many Internet drug sale sites are there currently?
    Answer. FDA's Office of Criminal Investigations reviewed thousands 
of web sites early this year and identified approximately 326 web sites 
involved in the sale of drug products. Because new web sites are put up 
everyday and old ones are taken down, the total number of these sites 
is subject to change and will not be consistent over time. Also, due to 
differences in methodology and access to advanced technology search 
tools, our information may not coincide with data provided in studies 
produced by other organizations.
    Question. Funding of $10 million is requested for FDA to stop 
illegal Internet drug sales. How will this funding be utilized? How 
much will be spent for investigations; how much will be for upgrading 
FDA's computer technology; and how much for a new public education 
campaign on the dangers of buying pharmaceuticals over the Internet? 
Please provide level of funding and full-time equivalent staff years 
included in the request for each.
    Answer. Included in the President's fiscal year 2001 budget is $10 
million for Internet drug enforcement. Because FDA's systematic review 
of Internet websites began in mid-fiscal year 1999, this enforcement 
work is still a relatively new undertaking, and we are learning more 
about our resource requirements as we proceed. Approval of this funding 
request would allow FDA to establish a significant and permanent 
presence concerning Internet drug sales enforcement and redirect its 
current resources back to its other enforcement priorities. Presently, 
FDA supports its Internet investigations and enforcement efforts with 
redeployed resources, at the expense of other critical FDA enforcement 
priorities, and this trade-off cannot continue indefinitely.
    Specifically, the $10 million funding request will be distributed 
as follows: $9.7 million to fund 75 FTE positions in the Center for 
Drug Evaluation and Research--CDER, and the Office of Regulatory 
Affairs--ORA. These 75 FTE would work in field, laboratory, compliance 
and support positions to provide for the investigation and analysis of 
Internet sites suspected of engaging in unlawful drug sales, 
distribution or marketing; take appropriate enforcement actions, as 
required; and carry out public education campaigns on safe ways to 
purchase pharmaceuticals over the Internet. Also included in the $10 
million is $250,000 to fund two FTE positions in the Office of Chief 
Counsel--OCC, to work with CDER, ORA--including the Office of Criminal 
Investigations, or OCI--and the Department of Justice--DOJ, to bring 
civil and criminal enforcement actions involving illegal Internet drug 
activity. FDA has already begun a public education campaign to educate 
consumers on the dangers of buying pharmaceuticals over the Internet 
and will continue this campaign through fiscal year 2001.
    Question. What attention, in terms of dollars and FTEs, is FDA 
currently giving to the problem of illegal Internet pharmaceutical 
sales?
    Answer. Since mid-fiscal year 1999, when FDA began its systematic 
review of Internet web sites, we have identified increases in the types 
of web sites, as well as the range of activities, that appear to 
violate the Federal Food, Drug, and Cosmetic Act. In approximately 6 
months, FDA has devoted almost 40,000 staff hours to investigate 
hundreds of Internet sites. The Food and Drug Administration devoted 
approximately $1.92 million in fiscal year 1999 to investigate internet 
drug sales practices. The Center for Drug Evaluation and Research 
expended approximately $0.2 million and the Office of Regulatory 
Affairs, principally its Office of Criminal Investigations, expended 
approximately $1.7 million. The internet drug work was conducted with 
resources in the Human Drugs program. Therefore, no resources were 
shifted from other FDA programs; these resources were redirected from 
other Human Drugs work.

                     ABSORPTION OF MANDATORY COSTS

    Question. The fiscal year 2001 budget request for FDA salaries and 
expenses requests increased funding to support an additional 416 full-
time equivalent (FTE) positions, yet the budget indicates that FDA will 
have to absorb 106 FTEs as a result of mandatory cost increases for 
which funds are not requested. If the budget request level is 
recommended by this Committee, in what areas will FDA make these 
staffing reductions to protect the priority areas for which funds and 
additional staff positions have been requested? Please indicate 
specific funding and staffing reductions by Center, program and 
activity.
    Answer. Since 1994, the agency has had to absorb pay raise and 
other inflationary costs. The cumulative total through fiscal year 2000 
equals $207 million, including $43.4 million in fiscal year 2001. The 
agency has cut non-payroll operating costs as much as possible, 
limiting travel, supplies, equipment, and significantly reducing 
extramural research and methods development. These actions alone have 
not been sufficient to absorb cost increases and maintain the same 
staffing level. While the agency does use tools like delaying 
recruitment for vacancies, overall the agency has had to cut staffing 
in all programs except those supported by user fees. However, these 
reductions fall far short of making available the amount required to 
maintain staffing levels. From fiscal year 1994 though fiscal year 
1999, non-user fee FTE have declined from nearly 9,000 to about 8,100.
    Although FTE increases were provided in the fiscal year 2000 
appropriation, they were targeted to specific program areas. Current 
services absorption reduces the FTE available to perform at the 
Agency's core activities of premarket review and postmarket assurance. 
This has eroded the agency's ability to assure safety through 
strengthened science and meet our public health mission. The agency has 
had to limit research program and methods, limit staffing that can be 
devoted to new product application review, and particularly in the 
field, to reduce the numbers of inspection and sample analyses that can 
be conducted. As a result, FDA staff, whether they are reviewers or 
inspectors have not kept pace with the knowledge explosion in their 
particular field of expertise.
    The fiscal year 2001 request reflects a reduced staffing level of 
160 FTE. Fewer FTE translate into fewer people to perform FDA's core 
activities of premarket review and postmarket assurance. This hampers 
FDA's ability to assure safety through strengthened science and meet 
our public health mission. For the record we will include a chart which 
depicts FDA's fiscal year 2001 payroll and inflationary costs by 
activity and the FTE absorption.
    [The information follows:]

                       CURRENT SERVICES ABSORPTION
                          [Dollars in millions]
------------------------------------------------------------------------
                                           Total current
                 Project                      service     FTE absorption
                                            absorption         (FTE)
------------------------------------------------------------------------
Foods...................................         $12,289              48
CFSAN...................................           5,257              18
Field Activities........................           7,032              30
Human Drugs.............................          10,250              38
CDER....................................           6,943              24
Field Activities........................           3,307              14
Biologics...............................           4,800              16
CBER....................................           3,810              12
Field Activities........................             990               4
Animal Drugs & Feeds....................           2,478               9
CVM.....................................           1,802               6
Field Activities........................             676               3
Device & Radiological Products..........           7,331              29
CDRH....................................           5,316              20
Field Activities........................           2,015               9
NCTR....................................           1,384               5
Tobacco.................................             978  ..............
Other Activities........................           3,255              15
Other Rent & Rent-related Activities....             609  ..............
Rental Payments to GSA..................  ..............  ..............
Total, Salaries & Expenses..............          43,374             160
Non-Field Activities....................          29,354             100
Field Activities........................          14,020              60
------------------------------------------------------------------------

    Question. What success has PulseNet had in the past year in 
pinpointing the source of food borne illness outbreaks?
    Answer. PulseNet had a very successful year in rapidly identifying 
common source clusters. This faster identification of the problem 
permitted quicker interdiction and regulatory action, hence preventing 
a significant number of additional cases. I would like to tell you 
about some of the more noteworthy successes.
    Pulsed Field Gel Electrophoresis--PFGE, patterns linked the 
Salmonella Munchen isolates from orange juice and illnesses in multiple 
states in 1999. PFGE by Washington State Health Department confirmed 
the link after epidemiology detected the outbreak and the possible 
association. This finding added to the realization that unpasteurized 
juices pose a significant risk and spurred regulatory action in this 
area.
    Epidemiologic investigations linked several clusters of Salmonella 
Munchen to a common seed source used to produce sprouts. Thereafter 
PulseNet confirmed the epidemiology and helped to link other cases. 
This was part of the evidence used to foster the new regulations on 
testing sprouts.
    Public Health Laboratory Information System--PHILIS, and Salmonella 
Outbreak Detection Algorithm--SODA, detected the 70 cases of Salmonella 
Newport illness in 10 states. PulseNet was used to confirm the link. 
This information and additional information obtained by CDC implicated 
imported Mangoes as the source of the infection.
    PulseNet supported the establishment of the connection between 
liver pate and cases of Listeriosis in a number of northeastern states 
while extricating other possible food items.
    In ongoing cases, PFGE technology is being used to determine the 
potential link between recalled product and human illness and death.
    Epidemiologists have used PulseNet to confirm links, and tie in 
other sporadic cases, that have been made with other standard 
epidemiology approaches. It has been useful in providing supporting 
evidence in identifying a common source of infection.
    PulseNet linked Salmonella from ill persons in the USA with those 
found in imported dog treats made from pig ears. This finding 
highlighted the role that certain non-human food items can play in 
foodborne illness and provided direction for FDA's surveillance 
activities.
    The linkage established by PulseNet between lettuce and 
Escherichia. coli O157:H7 infections in elderly humans in two U.S. 
States helped identify the contaminated batches and hence prevent 
further illnesses.

                        MEDICAL ERROR INITIATIVE

    Question. Commissioner Henney, your acknowledge in your prepared 
statement that the complexity and numbers of newly-approved medical 
products have raised the risk for human error and that the majority of 
incidents are not reported. How is FDA proposing to strengthen its 
adverse events reporting to elicit reports and to assure more complete 
reporting?
    Answer. We currently rely on reporting--both mandatory and 
voluntary--to find risk signals. FDA's current programs are designed 
primarily to serve as a ``backstop'' for the approval process--to find 
rare, unexpected side effects that could not be discovered in the 
clinical trials. They are not intended to, and cannot, uncover the 
incidence of adverse events, their prevention, or the overall health 
and economic impact on Americans. Of the 400,000 reports received by 
FDA, 21,000 of these describe fatalities and another 11,000 life-
threatening events. Over 60,000 additional reports describe problems 
that required hospitalization or a prolonged hospital stay and 32,000 
other reports concern medical device malfunctions. Despite the large 
number of reports, studies indicate that 90 percent of adverse events 
are not even reported to FDA at all.
    MedWatch is FDA's program to encourage consumers and health care 
practitioners to report serious and unexpected adverse events 
associated with all FDA-regulated products. MedWatch adds this 
information to the AERS and other databases and, if warranted, 
disseminates new risk information directly to patient organizations and 
subscribers and to the general public through the Internet.
    Ideally, a fully funded program that actively enlists health 
professionals in seeking out and reporting events is needed, as are 
other types of data sources (for example, reports from poison control 
centers). FDA pilot studies indicate that these are high-yield 
strategies for finding product safety risks. Ideally, we believe key 
steps in identifying and quantifying the risks associated with medical 
products require full-scale operation of MedWatch, to include full-
scale, interactive, on-line reporting for health professionals and 
implementation of MedSun, the Congressionally-mandated sentinel program 
for medical devices. MedSun will actively enlist hospitals and 
associated health professionals in problem reporting. Ultimately, 
MedSun should expand to include reporting for all medical products. 
Additional key steps include expansion of reporting to health care 
settings other than hospitals; e.g., outpatient clinics, nursing homes, 
and home health care providers; development of additional data to 
monitor risk: accessing numerous additional sources of data already 
collected for other purposes (e.g., emergency rooms, poison center 
reports, organ transplant databases) to provide insight into the 
clinical context of product use and problems encountered; development 
of specialized systems for particular product risks--establishing 
patient registries for novel products or those with potential long-term 
safety risks; and identification of key obstacles and strategies to 
improve problem reporting--conducting the needed research to lead to 
improved reporting rates and quality. The fiscal year 2001 $12.8 
million request will be used to begin to address this issue.
    Question. You mention that the additional resources requested will 
enable FDA to analyze report data in a timely manner. Is there a 
problem with this currently?
    Answer. The Agency receives about 400,000 reports of adverse events 
associated with medical products yearly; 250,000 reports are for drugs 
alone. We estimate that more than one-third of these adverse events are 
preventable. However, the databases currently in place are not 
sufficient to achieve this task. Current systems are not designed to 
evaluate the rate or the impact of known adverse events. FDA is 
requesting an increase of $12.8 million to address medical errors in 
fiscal year 2001. With this funding, FDA will discover and act to 
prevent more injuries that affect patients. The agency will complete 
construction of its state-of-the-art computerized drug injury reporting 
system. FDA also will begin construction of a hospital-based system to 
detect medical device errors. In addition, the agency will enhance the 
safety of the nation's blood supply by extending error reporting to 
local blood banks.
    Question. You also indicate that FDA will implement Phase II of the 
Medical Device Surveillance Network. When was Phase I of this network 
implemented and what is Phase II? Please describe how the Medical 
Device Surveillance Network works.
    Answer. FDA Modernization Act--FDAMA--allowed the option of 
replacing mandatory user facilities reporting with a National Sentinel 
Reporting Surveillance System, currently referred to as MeDSuN. FDA 
initiated a pilot study to determine whether a select group of highly 
trained reporting facilities could provide a statistical sample of 
adverse event reports that would represent all user facilities. Phase I 
of the network, called DeviceNet, was implemented in September of 1996. 
A small business, CODA Inc., was awarded the contract to conduct the 
study to evaluate the feasibility and effectiveness of a sentinel 
reporting system for adverse event reporting of medical device use in 
user facilities. Phase I involved 24 facilities.
    Under Phase II, the reporting and feedback features of the network 
would be refined and tested. The number of facilities would be expanded 
to approximately 200-250 hospitals in three regions of the country, out 
of 6,000 hospitals currently required to report. The results of Phase 
II would be evaluated before FDA publishes a Proposed Rule, which will 
describe the plan for a national MeDSuN program. The plan for the 
national system will be based on lessons learned from Phases I and II. 
So if refinements need to be made, it will be easier and less expensive 
to make the changes at the initial stages of implementation, before the 
system runs nationally. If MeDSuN is successful, FDAMA authorizes FDA 
to discontinue user facility reporting other than sentinel reporting.
    A comprehensive explanation of Medical Device Surveillance Network 
or MeDSuN, and the Phase I Pilot Study was provided in the September 
1999 Report to Congress ``Designing a Medical Device Surveillance 
Network''. The report also described the goal of MeDSuN, to improve the 
protection of the health and safety of patients, users and others by 
reducing the likelihood of the occurrence of medical device related 
adverse events and, if they do occur, reducing the likelihood that they 
will be repeated. This system would increase both the quantity and 
quality of reporting of adverse events and enable FDA to be proactive 
in preventing injuries from medical devices. Both FDA and users would 
have a better understanding of the causes of adverse medical device 
events and be better positioned to identify ways to minimize their 
occurrence and impact. MeDSuN would also create a two-way channel of 
communication between FDA and the user facility community by enhancing 
the quantity and quality of the reports that came in from designated 
user facilities and by ensuring feedback to reporters.
    A copy of the 1999 Report to Congress ``Designing a Medical Device 
Surveillance Network'' can be found on the Internet at http://
www.fda.gov/cdrh/postsurv/medsun.html.
    Question. How does FDA propose to improve the reporting systems for 
blood errors and accidents in fiscal year 2001?
    Answer. FDA proposes to improve the blood error and accident 
reporting systems in fiscal year 2001 by publishing a final rule that 
will: (1) expand the reporting requirement to include all 
establishments engaged in the manufacture of blood and blood products, 
which includes licensed and unlicensed blood banks, transfusion 
services and Source Plasma collection centers; (2) establish a time 
frame in which reports need to be submitted to FDA; and (3) replace the 
terminology of ``errors and accidents'' with ``biological product 
deviations'' to more clearly describe the types of events that must be 
reported. In conjunction with the final rule, FDA will publish a 
document that provides additional, more specific guidance regarding the 
types of events that must be reported.
    In addition, FDA will provide a web-based electronic standardized 
format for the industry to use in submitting reports to FDA. FDA's 
ability to track and trend events will be enhanced by the use of a 
standardized format, which will assist FDA in providing information to 
industry in an effort to reduce deviations. The information obtained by 
tracking and trending these events will also assist FDA in focusing the 
inspections of the blood industry. FDA will continue to post on its 
website, the summaries of biological product deviation reports.
    Question. The fiscal year 2001 budget proposes to implement adverse 
events reporting systems for both dietary supplements and animal drugs. 
What backlog exists in reviewing adverse event reports in both these 
areas now, and how will the systems proposed to be funded for fiscal 
year 2001 improve the review of these reports?
    Answer. In fiscal year 2001, FDA is requesting $2.5 million and 2 
FTE to begin the process of modernizing the Adverse Event Monitoring 
System for Dietary Supplements, including upgrading and automating 
record management and improving signal and report generation 
capabilities. Included in these efforts also are the clinical reviews 
and follow-up. We estimate that our current backlog would require 
approximately 6 FTE, over a significant period of time, to properly 
organize, paginate, redact each file and finally scan or rescan these 
files into the new system.
    Specific program goals have been identified and will focus on four 
strategic areas. The first of these strategic areas is Systems 
Enhancement. This will improve adverse event report monitoring system 
capability by enhancing the data systems and integrating them into the 
Agency-wide adverse event report monitoring system program. The second 
of these strategic areas is Timely Release of Reports. This will reduce 
CFSAN's response time to Freedom of Information Act inquiries. Another 
area is Clinical Evaluation and Follow-up. This will institute an 
efficient system for the monitoring, clinical evaluation, and timely 
regulatory follow-up of significant adverse event reports. The fourth 
area is Outreach, designed to educate consumers and health care 
professionals on how to use the adverse event reporting system. These 
changes will be implemented as resources allow.
    FDA is requesting $0.6 million and 3 FTE to provide contractor 
staff, and provide for maintenance and data entry and evaluation 
enhancements for Adverse Event Reports and Drug Experience Reports for 
drugs given to animals.
    We currently have a backlog of 6,000 adverse event reports on 
animal drugs. Currently, FDA only triages about 40 percent of the 
12,000 annual incoming animal drug adverse event reports. FDA triages 
these reports because there simply are not enough resources to 
thoroughly review all reports. Triage allows us to review those that 
pose the most serious potential of risk or harm. About 20 percent of 
the total 12,000 reports received are thoroughly reviewed and 
evaluated. The additional funds would be used to increase our triage 
level from 40 to 60 percent and our thorough review level from 20 to 30 
percent. This greater level of review would mean that more actual 
hazards would be identified, and corrective action taken. This would 
result in greater protection of human and animal risks, and increase 
public confidence.
    In the Center for Food Safety and Applied Nutrition--CFSAN, all 
initial reports are reviewed--about 50 to 60 per month. Additional 
information is requested on all serious adverse events, which account 
for 45 to 50 percent of reports received. There is a current backlog of 
about 50 initial adverse events that are awaiting follow-up 
information. Current resources do not permit us to perform certain 
routine clinical evaluation components on each adverse event, including 
preparing clinical summaries, coding and classification of adverse 
events. In addition, we are unable to perform more in depth analyses 
and risk assessments of adverse events grouped by particular product or 
type of ingredient.
    The preparation of dietary supplement adverse events information 
for CFSAN and Freedom of Information--FOI, process includes records 
management procedures, such as scanning and redacting, so that the 
records can be publicly released. The current backlog in this area 
consists of approximately 2,000 out of nearly 3,500 adverse events that 
FDA has received for dietary supplements. The FOI backlog for dietary 
supplement adverse events dates back to requests from 1998.
    Upgrades to the database system, elimination of the clinical review 
backlog and timely public release of adverse event information are 
important because they affect FDA's ability to take timely actions to 
protect the public health.
                              food safety
    Question. Commissioner Henney, you indicate that the additional 
funding requested for FDA food safety activities for fiscal year 2001 
will enable FDA to be able to inspect the high risk food firms at least 
once a year. What is a ``high risk'' food firm and how often is FDA 
conducting such inspections currently?
    Answer. High-risk establishments are those establishments that 
produce foods with the greatest risk for microbial contamination and 
those foods requiring specific components for a safe and nutritious 
product. One example is an establishment that produces infant formula. 
Another example is an establishment that produces ready-to-eat food. 
FDA defines ready-to-eat foods as products that will undergo no or 
minimal processing such as heating, freezing, washing that would 
eliminate a pathogenic organism on the food. These products include 
fresh fruits and vegetables, bakery goods, cheeses, and cooked pasta 
dishes. Yet another example of a high risk establishment is one that 
produces heat and serve products, that is, products which normally 
receive a heat treatment, such as microwave, prior to final consumption 
by the consumer. Such products are hazardous if the recommended heat 
treatment is insufficient to eliminate pathogenic organisms which may 
be in the product.
    Establishments that produce seafood products, particularly 
scrombotoxics, such as mahi mahi, pompano, tuna, salmon, swordfish, and 
those susceptible to cigueterra are also considered high risk 
establishments. Also included are establishments that produce molluscan 
shellfish, which are eaten uncooked. Seafood not considered high risk 
would be raw fish, not of the scromboid species, which require cooking 
before consumption, such as trout, catfish and shrimp.
    All low acid canned and acidified foods which if not properly 
processed may present a potential hazard to health in the form of 
botulism and are considered high risk. Examples of low acid canned food 
include not only foods in traditional tin and aluminum cans, but glass 
jars, and hermetically sealed pouches. Products which are usually low 
acid include canned vegetables, seafood such as tuna and sardines, and 
mushrooms. Acidified foods are low acid food products to which an acid, 
such as vinegar, is added for preservation. Examples of these products 
include barbecue sauces, salsas and pickles.
    We want to be certain that we are including all firms that would be 
appropriately considered to be high-risk. Therefore, FDA has convened a 
working group from both the Center and Field components of the Foods 
program to delineate the optimal operational definition of a high-risk 
food establishment. We expect their definition by early summer. We 
expect to inspect a total of 4,200 firms producing high-risk products 
in fiscal year 2000. We plan to inspect all 6,250 firms currently 
identified as high-risk firms in fiscal year 2001.
    Question. What improvements has FDA made in the past year to 
inspect imported food, particularly imported produce that contain 
microbiological pathogens?
    Answer. One of the improvements FDA has made in the last year to 
inspect imported food, particularly imported produce that contain 
microbiological pathogens, was to conduct a 1000-sample survey for 
imported produce in fiscal year 1999. The primary focus for this 
sampling survey was to ensure public health and the safety of the food 
supply. Through sample collection and analysis, we established the 
incidence and extent of bacterial pathogen contamination for selected 
fresh imported produce to assist in the development of additional 
policy for the Produce Safety Initiative. As of March 4, 2000, 689 
samples were collected and analyzed and 95 percent were found negative 
for the presence of E. coli O157:H7, Salmonella, or Shigella. The final 
data analysis in addition to other data sources will be used to help 
focus Agency efforts toward research and risk assessment needs; 
industry training needs; providing advice to industry on best practices 
that have been instrumental in minimizing microbial contamination; and 
emphasizing the importance of implementing and following good 
manufacturing and good agricultural practices.
    This 1000 sample imported produce survey focused on eight imported 
products: loose-leaf lettuce, cantaloupe, celery, strawberries, 
scallions or green onions, parsley, cilantro and broccoli. These 
commodities were analyzed for Salmonella, Shigella, and E.coli O157:H7. 
The criteria used for selection of these commodities were based on 
epidemiological outbreak data, such as involvement in outbreak; 
attributes of the product, or structure, such as leafy; growing 
conditions, such as grown near the ground; processing and consumption 
data, as in normally cooked or cleaned; and the volume of product 
imported.
    FDA is focusing greater efforts on preventing contamination by 
increasing education and outreach efforts to promote good agricultural 
practices--GAPs, and good manufacturing practices--GMPs.
    Furthermore, FDA developed with the United States Department of 
Agriculture--USDA, and in consultation with industry and other 
stakeholders, a guide ``Guidance for Industry: Guide to Minimize 
Microbial Food Safety Hazards for Fresh Fruits and Vegetables.'' This 
guide details a broad approach to minimize microbial contamination of 
produce through the control of water, manure, worker health and 
hygiene, field and facility sanitation and transportation of produce.
    In addition, FDA established criteria for assessing food safety 
systems of individual countries by evaluating data from FDA and USDA 
import information systems on fresh and frozen produce shipments by 
tonnage, FDA Import Alerts, and known foodborne illness outbreaks. 
Criteria for priority products are based on expected eating patterns, 
such as fresh or cooked; and whether the produce has a protective 
mechanism, such as skin or rind, that is normally not eaten. Based on 
these criteria, FDA separated produce into three tiers, in order of 
priority. The first tier includes all minimally processed produce eaten 
raw with no protective rind or skin. This tier includes most produce 
growing in or close to the soil. The second tier includes most tree-
grown fruit. And the third tier is produce that is normally cooked 
before ingestion and those with a protective skin. Based on these 
criteria, FDA generated a list of countries with a listing of key 
exports: Mexico, Canada, Chile, Guatemala, the Netherlands, New 
Zealand, Honduras, Costa Rica, Peru, Dominican Republic, Israel, Spain, 
and Nicaragua. For food safety evaluations, training and technical 
cooperation, FDA focused on those countries that have gaps in their 
food safety system and require training and technical assistance.
    Another improvement included increasing inspections of high risk 
imported products that are susceptible to pathogen contamination. These 
high risk imported products included ready-to-eat products such as 
fresh fruit and vegetables and cheeses; heat and serve products, 
seafood products such as mahi mahi, tuna, and swordfish); low acid 
canned and acidified food (canned vegetables, pet foods, sardines, 
barbeque sauces, and salsas) and infant formula.
    I would like to provide you with a table that lists the foreign 
foods inspections FDA accomplished in fiscal year 1999.
    [The information follows:]

             FDA FOREIGN FOODS INSPECTIONS, FISCAL YEAR 1999
------------------------------------------------------------------------
             Country                    Product              Date
------------------------------------------------------------------------
Mexico (6)......................  Cheese............  2/99 thru 8/99
France (5)......................  Cheese............  2/99 thru 8/99
Canada (1)......................  Cheese............  2/99 thru 8/99
Germany (1).....................  Cheese............  2/99 thru 8/99
El Salvador (1).................  Cheese............  2/99 thru 8/99
Singapore (1)...................  Cheese............  2/99 thru 8/99
Ecuador (11)....................  Seafood...........  6/99
Taiwan (9)......................  Seafood...........  7/99
Philippines (9).................  Seafood...........  5/99
Vietnam (9).....................  Seafood...........  4/99
Equador (5).....................  Low Acid Canned     4/99
                                   Food.
Brazil (6)......................  Low Acid Canned     6/99 thru 7/99
                                   Food.
Canada (9)......................  Low Acid Canned     8/99
                                   Food.
Malaysia (1)....................  Low Acid Canned     3/99 thru 7/99
                                   Food.
Philippines (1).................  Low Acid Canned     8/99
                                   Food.
Indonesia (1)...................  Low Acid Canned     5/99 thru 6/99
                                   Food.
India (1).......................  Low Acid Canned     6/99 thru 8/99
                                   Food.
Vietnam (1).....................  Low Acid Canned     4/99
                                   Food.
------------------------------------------------------------------------

    Question. Commissioner Henney, you mention in your prepared 
statement that FDA and the U.S. Customs Service have developed an 
Imported Foods Action Plan to further enhance border surveillance. 
Would you please tell us more about this surveillance effort?
    Answer. On October 27, 1999, FDA and the U.S. Customs Service 
submitted their joint report to the President that delineates action 
steps to target ``bad actor'' importers who violate regulations for 
importation of food into the United States, and work to subvert the 
system by moving unsafe food into the U.S. markets. There are several 
action areas for both FDA and U.S. Customs Service. The first of these 
is preventing distribution of imported unsafe food by requiring secured 
storage of products offered for entry by importers with a history of 
distribution prior to release, mis-declaration or substitution of 
product. The next is destroying imported food that poses a serious 
public health threat. This is followed by developing a regulation that 
would require the marking of shipping containers and/or papers of 
imported food that is refused admission for safety reasons. Another 
action item is proposing regulations to set standards for importers who 
use private laboratories for the collection and analysis of samples of 
imported food for the purpose of gaining entry into the United States. 
The next is increasing the amount of the bond posted by importers for 
imported foods when necessary to deter premature and illegal entry into 
the United States. And the last action item is enhancing enforcement 
against violations of U.S. laws related to the importation of foods, 
including the imposition of civil monetary penalties.
    We believe the full implementation of these action areas by both 
FDA and the U.S. Customs Service will provide greatly enhanced border 
surveillance of imported foods.
    Question. What level of funding and FTEs are included in FDA budget 
request for fiscal year 2001 for the Egg Safety Action Plan, as 
compared to fiscal year 2000?
    Answer. FDA's budget request for fiscal year 2000, included $30 
million for the Food Safety Initiative. FDA did not specifically 
identify the Egg Safety Action Plan within the amount requested for 
FSI. However, egg safety is a part of the FSI. In fiscal year 2000, we 
do have egg safety activities included in the Egg Safety Action Plan, 
which was issued in December 1999. In particular, FDA held two egg 
safety public meetings one in Columbus, Ohio on March 30 and the second 
in Sacramento, California on April 6, 2000. Additionally, FDA is in the 
process of developing the proposed nationwide consistent standards for 
egg safety. Expenditures for these activities have been minimal.
    The fiscal year 2001 FDA budget request includes $5 million and 17 
FTE to begin implementation of the Egg Safety Action Plan. The funding 
will allow FDA to initiate an accelerated research program; hire staff 
to manage the egg safety program and train and evaluate federal, state, 
and industry officials in implementation of the standards. 
Additionally, FDA intends to propose nationwide consistent egg safety 
standards in fiscal year 2000, finalize these standards in fiscal year 
2001, and implement the standards through state contracts in fiscal 
years 2002 through 2003. Adequate resources to fully implement this 
plan are crucial to the ability of FDA to meet the goal of reducing, by 
50 percent, the rate of Salmonella Enterditis illness associated with 
eggs, by 2005.
    Question. What success has PulseNet had in the past year in 
pinpointing the source of food borne illness outbreaks?
    Answer. PulseNet had a very successful year in rapidly identifying 
common source clusters. This faster identification of the problem 
permitted quicker interdiction and regulatory action, hence preventing 
a significant number of additional cases. I would like to tell you 
about some of the more noteworthy successes.
    Pulsed Field Gel Electrophoresis--PFGE, patterns linked the 
Salmonella Munchen isolates from orange juice and illnesses in multiple 
states in 1999. PFGE by Washington State Health Department confirmed 
the link after epidemiology detected the outbreak and the possible 
association. This finding added to the realization that unpasteurized 
juices pose a significant risk and spurred regulatory action in this 
area.
    Epidemiologic investigations linked several clusters of Salmonella 
Munchen to a common seed source used to produce sprouts. Thereafter 
PulseNet confirmed the epidemiology and helped to link other cases. 
This was part of the evidence used to foster the new regulations on 
testing sprouts
    Public Health Laboratory Information System--PHILIS, and Salmonella 
Outbreak Detection Algorithm--SODA, detected the 70 cases of Salmonella 
Newport illness in 10 states. PulseNet was used to confirm the link. 
This information and additional information obtained by CDC implicated 
imported Mangoes as the source of the infection.
    PulseNet supported the establishment of the connection between 
liver pate and cases of Listeriosis in a number of northeastern states 
while extricating other possible food items.
    In ongoing cases, PFGE technology is being used to determine the 
potential link between recalled product and human illness and death.
    Epidemiologists have used PulseNet to confirm links, and tie in 
other sporadic cases, that have been made with other standard 
epidemiology approaches. It has been useful in providing supporting 
evidence in identifying a common source of infection.
    PulseNet linked Salmonella from ill persons in the USA with those 
found in imported dog treats made from pig ears. This finding 
highlighted the role that certain non-food items can play in foodborne 
illness and provided direction for FDA's surveillance activities.
    The linkage established by PulseNet between lettuce and 
Escherichia. coli O157:H7 infections in elderly humans in two U.S. 
States helped identify the contaminated batches and hence prevent 
further illnesses.
    Question. PulseNet is a collaborative project between CDC, FDA and 
USDA. What portion of the total costs of PulseNet are borne by FDA? 
What additional investments are required in PulseNet and what is FDA's 
financial responsibility to this project? What amount of funding is 
included in the fiscal year 2001 FDA budget request for PulseNet? How 
does this compare with fiscal year 2000? How does this compare with the 
total fiscal year 2001 cost of PulseNet?
    Answer. Scientists from these agencies developed PulseNet 
technology and application to identify and correlate pathogenic strains 
using ``genetic fingerprints'' in food and clinical matrices which are 
used to identify the common source of foodborne illness outbreaks. 
Currently, CDC, FDA and USDA, working with 32 states, Los Angeles 
County and New York City, operate the network. In fiscal year 2000, we 
are expanding the network to 40 states. For the future, CDC is 
exploring improved technology to identify ``genetic fingerprints''.
    The PulseNet system and database is financed, managed and 
maintained by CDC. CDC reports Pulsenet operation costs to be about $7 
million. Of this $7 million, 70 percent is financed through federal 
funds. The balance is supplied by State and Local governments. Since 
its development in 1998, FDA's costs to support personnel, equipment 
and training have been approximately $400,000. There is no specific 
line item in FDA budget for PulseNet. However, we have included in the 
fiscal year 2001 request an increase of $800,000 and 1 FTE for PulseNet 
activities, under the Animal Drugs and Feeds portion of the Food Safety 
Initiative. The activities that the increase supports includes 
performing pulse field gel electrophoresis on animal isolates. The data 
on animal isolates is provided to CDC for entry into the PulseNet 
database to assist in the tracking of resistance in human and animal 
isolates. We estimate FDA's fiscal year 2001 PulseNet related costs 
approximately $300,000.
    Question. What level of funding will FDA commit for fiscal year 
2001 to complete the National Antimicrobial Resistance Monitoring 
System? What portion of the total cost of this system is being funded 
by FDA?
    Answer. In fiscal year 2001 FDA has requested an increase of $5.4 
million to complete the expansion of the National Antimicrobial 
Resistance Monitoring System--NARMS. FDA has funded approximately 90 
percent of the total cost of NARMS.
    Question: What funding is included in FDA fiscal year 2001 budget 
request for the Center for Food Safety and Technology? How does this 
compare with the funding provided for the Center in each of fiscal 
years 1998, 1999, and 2000?
    Answer. FDA is providing the National Center for Food Safety and 
Technology with an increase of $1 million in fiscal year 2000 in FSI 
funding to expand the collaborative research in food safety for a total 
of $3 million. This includes the previous fiscal year 1998 and fiscal 
year 1999 FSI base funding of $2 million. In fiscal year 2001 FDA 
expects to continue to fund NCSFT at $3 million.
    Question. What level of funding and full-time equivalent staff 
years is included in the fiscal year 2001 request for Codex 
Alimentarius? How does this compare with each of fiscal years 1999 and 
2000?
    Answer. The fiscal year 2001 budget request includes $1.8 million 
in support of Codex activities. This includes $1.7 million in salaries 
and support for almost 15 FTE, and $100,000 for travel.
    In fiscal year 2000, FDA plans to spend $1.6 million in support of 
Codex activities. This includes $1.5 million in salaries and support 
for almost 14 FTE and $100,000 for travel.
    The total amount spent by FDA in fiscal year 1999 in support of 
Codex activities was $1.4 million. This includes $1.3 million in 
salaries and support for 12 FTE and $100,000 for travel.
    Question. For fiscal year 2000, the Congress provided funding of 
$250,000 for a cooperative research program related to molluscan 
shellfish? What level of funding is included in the fiscal year 2001 
budget request for this research program? Please provide a description 
of the research being conducted through this program and achievements 
to date.
    Answer. The ISSC has conducted a number of projects, with funds 
provided by FDA, focusing on Vibrios. In 1997, the ISSC funded a two-
year project at Louisiana State University to study possible markers 
for virulent strains of Vibrio vulnificus. All of the capsule genes 
evaluated were eliminated as possible markers. Also in 1997, the ISSC 
funded a project at Texas A&M University to study the effects of rapid 
ice chilling on levels of Vibrio vulnificus and on oyster mortality. 
Rapid chilling of sacked shellstock was shown to significantly reduce 
vulnificus levels, with no increase in oyster mortality. In 1998, the 
ISSC funded a study conducted by the Pacific Coast Institute and the 
University of Washington to determine if temperature can be used to 
predict Vibrio parahaemolyticus levels in shellfish. A final report on 
this study is being prepared. Also in 1998, the ISSC funded a 
collaborative study with the ISSC, FDA, states, and NMFS, to gather 
data on levels of Vibrios in raw shellfish at retail outlets, and to 
create a regional and seasonal reference collection of Vibrio 
vulnificus strains. The report on the retail study is being finalized 
and the reference sample collection work is ongoing.
    In addition, the ISSC has funded two assessments. The first, 
conducted in 1997 and 1998, was to determine whether the time-to-
refrigeration controls adopted by the ISSC had been able to limit post-
harvest growth of Vibrio vulnificus. No significant impact on Vibrio 
levels was discernable. The second assessment, funded in 1999, was an 
analysis by Research Triangle Institute of the economic impact of 
mandating post-harvest treatment of oysters. A final report is in 
preparation.
    In fiscal year 2000, ISSC is using funds from FDA to conduct 
training for states in gene probe methodology used for monitoring 
shellfish growing areas for pathogenic Vibrio parahaemolyticus, and for 
collection by states of baseline data on total and pathogenic Vibrio 
parahaemolyticus levels in shellfish. These data are necessary to 
assist states in making decisions on growing area closures to prevent 
illnesses.
    In fiscal year 2001, FDA plans to continue funding cooperative 
research programs related to molluscan shellfish at the fiscal year 
2000 level of $250,000.
    Question. Please provide the Committee with an update on FDA's 
education program on the consumption of raw shellfish.
    Answer. In fiscal year 2000, FDA provided $200,000 to the 
interstate Shellfish Sanitation Conference--ISSC, to educate consumers 
on the risks to certain individuals associated with Vibrio vulnificus 
and the consumption of raw molluscan shellfish. In April 1999, the ISSC 
published a final report on their Vibrio vulnificus education campaign, 
which was targeted towards high-risk consumers through their health 
care providers. In partnership with five states, ISSC distributed over 
16,000 fact sheets and almost 29,000 patient education kits. The ISSC 
also surveyed the patients and health care providers who received the 
information. Both groups reported that the materials had increased 
their awareness of the risk of Vibrio vulnificus, and a majority of the 
high-risk patients who completed the survey said that they intended to 
stop eating raw shellfish.
    In addition, FDA's Food Safety Initiative is focusing on educating 
consumers about high-risk foods, including raw shellfish. In 1999 the 
theme for National Food Safety Education Month was ``Cook It Safely,'' 
and the FSI Education Staff added instructions on the safe preparation 
of seafood--including shellfish--to the 1999 National Food Safety 
Education Month Consumer Education Planning Guide, a 43-page compendium 
of ideas for food safety education activities, reproducible education 
materials, and sample media materials prepared by FDA and USDA and 
distributed to 35,000 health educators at the state and local levels. 
In October 1999, a representative of the FSI Education Staff 
participated in an ISSC Vibrio vulnificus Education Workshop concerning 
means of targeting education programs to persons at high risk. As a 
result, the FSI Education Staff has drafted a patient guide to food 
safety that stresses the importance of avoidance of raw shellfish by 
high-risk individuals. This patient guide, which is currently in 
review, is a part of the ongoing initiative of the agency in 
collaboration with American Medical Association, Centers for Disease 
Control and Prevention, and the Department of Agriculture to improve 
physician education on food safety, and will be distributed through 
physicians' offices.
    Question. In March of 1999, the FDA provided to the Subcommittee a 
detailed Food Safety Initiatives Activities Plan. Please update that 
plan to show the current fiscal year 2000 funding and FTE levels and 
those proposed for fiscal year 2001 by Food Safety activity.
    Answer. We are happy to provide a table that reflects total Food 
Safety Initiative--FSI, funding by major food safety activity, and 
another that reflects FSI funding by program. We are also providing by 
June 30, 2000, under separate cover, a detailed breakout that includes 
specific projects within each activity category. This will include 
resource data in the millions and associated FTE.
    [The information follows:]

                                TOTAL FOOD SAFETY INITIATIVE FUNDING BY CATEGORY
----------------------------------------------------------------------------------------------------------------
                                                        Fscal year 2000    Fiscal year 2001    Fiscal year 2001
                                                          current est          increase             request
                                                     -----------------------------------------------------------
                                                         In                  In                  In
                                                       dollars     FTE     dollars     FTE     dollars     FTE
----------------------------------------------------------------------------------------------------------------
Surveillance........................................     $11.0        51      $5.4         4     $16.3        55
Coordination........................................       7.9        76       0.0         0       7.9        76
Inspections.........................................     119.1     1,126      17.0       116     136.1     1,242
Education...........................................       8.6        67  ........  ........       8.6        67
Research & Risk Assessment..........................      40.6       278       7.6        11      48.2       289
                                                     -----------------------------------------------------------
      Total.........................................     187.2     1,598      30.0       131     217.2     1,729
----------------------------------------------------------------------------------------------------------------

    Question. In fiscal year 1997, FDA was spending $109.3 million for 
Food Safety initiatives. In the past year, FDA has received an 
additional $79 million for its Food Safety initiatives. How has food 
safety been improved as a result of the additional funding provided?
    Answer. On March 17, CDC reported a 20 percent reduction in overall 
foodborne illnesses associated with pathogens through their active 
surveillance network--Foodnet. The Centers for Disease Control--CDC, 
credited the federal, state and industry food safety partnership 
activities, such as Fight Bac!; HACCP and Good Agriculture Practices as 
major contributors to this public health improvement. CDC also 
reiterated the need to continue to make similar strides in prevention, 
improved food safety systems and outbreak response.
    Additionally, the overall picture of trends for food safety 
knowledge and practices that emerges from research is quite 
encouraging. Between 1993 and 1998, the public's food safety practices, 
both the consumption of risky foods and food handling behaviors in home 
kitchens, show dramatic improvement. For example, for the population as 
a whole, the incidence of eating pink hamburger is down 33 percent and 
the incidence of eating raw oysters or clams is down 39 percent. The 
safety of reported hand-washing and cutting board practices has also 
improved markedly. The improvement is particularly strong for handling 
meat or chicken, which improved 74 percent compared to a 27 percent 
improvement for fish. Knowledge levels about microbial food pathogens 
increased, along with rising perceptions of the possible risk of 
getting foodborne illness.
    That is not to say that there are no consumer education issues to 
be addressed. There are obvious gaps in consumer knowledge, attitudes 
and practices related to food safety. For example, although awareness 
of salmonella has increased most consumers still do not handle eggs 
very carefully and they are more likely to consume undercooked eggs or 
foods containing raw eggs than any other risky food. Most consumes have 
never heard of Listeria or Campylobacter, which are at least as 
prevalent in the food supply as the more well known pathogens, 
Salmonella or E. Coli.
    The Food Safety Initiative has provided necessary resources for FDA 
to undertake the enormous challenge of foodborne illness. Even more is 
expected of this Agency as its responsibility encompasses a broader 
array of regulated products and potential hazards in foods.
     Question. Commissioner Henney, you indicate in your prepared 
statement that the fiscal year 2001 budget proposed to accelerate the 
process of generic drug review. How specifically will the process be 
accelerated? Please give current review times as opposed to those that 
will be achieved with the additional resources proposed.
    Answer. With additional resources FDA expects to accelerate the 
processing time for generic drug applications by improving its IT 
infrastructure which will increase the number of electronic submissions 
and reviews. An increase in the generic drug science base will also 
improve our processing time. Funding is needed for research to support 
the development of scientifically rigorous bioequivalence testing 
methodologies for non-systemically absorbed drug products. The stronger 
scientific support of these approvals, the more likely it will be that 
we can successfully meet innovator challenges.
    Approval times reflect both time with the Agency reviewing 
applications as well as time with the sponsor or applicant responding 
to deficiencies noted by FDA reviewers. The time spent in FDA is 
measured by ``review cycles.'' A cycle starts when an application is 
filed by FDA and ends when the Agency issues an ''action'' letter. 
Generally, these letters communicate to the sponsor that their 
application is approved or not. The majority of actions on an original 
Abbreviated New Drug Application (ANDA) are disapprovals. If not 
approved, the sponsor or applicant is provided with the reasons why and 
has an opportunity to submit information needed to address all of these 
deficiencies. When this information is received, a new cycle begins; 
often, the next action is another disapproval, due to inadequate 
information in the submission. For fiscal year 1999, the average ANDA 
took 2.4 review cycles to reach approval, a decrease from previous 
years' number of cycles of 2.7 in fiscal year 1998 and 2.9 in fiscal 
year 1997. The time to reach approval has been decreasing as well, with 
the average time in fiscal year 1999 being 17.3 months, down from 18.7 
months in 1998 and 19.6 months in 1997.
    For fiscal year 1999, the Office of Generic Drugs does not expect 
to meet the original goal of reviewing 60 percent of the original, 
fileable applications in the statutory time frame. We expect to have 
acted upon 40 percent of the original applications in fiscal year 1999. 
Final performance data for the fiscal year 1999 cohort will not be 
available until April of 2000. The goal for fiscal year 2000 is 45 
percent. The additional funding request for fiscal year 2001 will help 
us meet 50 percent within statutory timeframes.
    For fiscal year 2000, the Committee approved the Administration's 
request to provide an additional $28 million and 141 FTE staffing for 
premarket application review. The Committee indicated in its report 
that it was approving the following increases requested in the budget: 
$11.4 million for foods (+51 FTEs); $2.4 million for human drugs (+13 
FTEs); $4 million for biologics (+16 FTEs); $1.6 million for animal 
drugs (+14 FTEs); $7 million for devices (+45 FTEs); and $1.6 million 
for NCTR (+2 FTEs). This was on top of the following base 
appropriations and staffing levels for premarket review, as follows: 
$16.310 million and 134 FTEs for foods; $162.813 million and 1,261 FTEs 
for human drugs; $57.263 million and 410 FTEs for biologics; $11.546 
million and 115 FTEs for animal drugs; $48.5 million and 477 FTEs for 
medical devices.
    Question. Are these premarket application review funding and 
staffing levels being achieved for fiscal year 2000? If not, please 
indicate what specific funding and staffing levels are being changed 
and explain why. Also, please provide the fiscal year 2001 comparable 
funding and staffing levels.
    Answer. FDA's total premarket review funding and staffing levels 
are being achieved for fiscal year 2000. The base resources referenced 
constitute those funds devoted solely to the review of an application. 
However, the application review process is entirely dependent on 
several activities that allow Agency to process and review an 
application. The areas historically included in the premarket review 
area include the review of an application, premarket research, 
premarket outreach and coordination, premarket inspections. These 
activities reinforce FDA's role of monitoring the industry and 
providing the consumer with the best assurances possible that the 
industry is meeting its responsibility. This strategy is designed to 
ensure that safety is built into the product rather than to check for 
safety after the product is on the market. Premarket review activities 
implement this strategy by ensuring that the premarket evaluations of 
drugs and medical devices are effective and timely, and the safety 
reviews of food and drug components are conducted to determine if they 
pose hazards in light of new scientific evidence and techniques. Agency 
staff actively work with manufacturers to identify critical control 
points and to develop good manufacturing practices. FDA is providing a 
table depicting total premarket review activity estimates through 
fiscal year 2001. The table provides data from fiscal year 1999 through 
fiscal year 2001 including the fiscal year 2000 mark, the effects of 
the recission, the PDUFA reallocation and the increases for fiscal year 
2001. Additionally, the agency is providing definitions of each of the 
pieces which make up premarket review.
    [The information follows]

                                                                                        PREMARKET REVIEW
                                                                                     [Dollars in thousands]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   Fiscal year 1999  Fiscal year 2000  Fiscal year 2000  Fiscal year 2000   Fiscal year 2000  Fiscal year 2001  Fiscal year 2001
                                                                        actuals            Inc.       ------------------     recission           PDUFA              Inc.           President's
                                                                  ------------------------------------                  ------------------    reallocation   ------------------      budget
                                                                                                        Amount     FTE                    -------------------                  -----------------
                                                                    Amount     FTE    Amouint    FTE                      Amount     FTE     Amount     FTE    Amount     FTE    Amount     FTE
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
FOODS............................................................   $25,196     207   $11,400      51   $36,596     258    ($840)  ......    $1,653   ......    $1,232       5   $38,641     263
HUMAN DRUGS......................................................   212,902   1,768    27,277      23   240,179   1,791     (136)  ......    (4,434)  ......     4,495       3   240,104   1,794
BIOLOGICS........................................................    96,187     716     5,869      15   102,056     731     (124)  ......     1,322   ......     8,778      30   112,032     761
ANIMAL DRUGS & FEEDS.............................................    18,522     178       500     115    19,022     293      (54)  ......       300   ......     3,936       9    23,204     302
DEVICES..........................................................    57,358     595      7,00     477    64,358   1,072     (164)  ......       212   ......     7,708      14    72,849   1,086
NATIONAL CENTER FOR TOXICOLOGICAL RESEARCH.......................    14,815      97      1,60  ......    16,415      97     (235)  ......  .........  ......       444       2    16,624      99
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                       PREMARKET REVIEW ACTIVITIES
------------------------------------------------------------------------
                Headings                       Definition, examples
------------------------------------------------------------------------
Premarket Review.......................  All resources involved in the
                                          premarket review process, i.e.
                                          application review, notices,
                                          petitions, sample collections,
                                          sample analysis and method
                                          validations, premarket
                                          regulation writing and policy
                                          decision making. Product
                                          approval activities, e.g.,
                                          ANDAs, colors, food additives.
Premarket Applied Research.............  Laboratory research to support
                                          premarket approval and
                                          activities. Includes Methods
                                          development for testing and
                                          non-testing purposes, and
                                          research to develop solutions
                                          for specific regulatory
                                          problems. Should include
                                          regulatory research, but
                                          exclude premarket methods
                                          development which should be
                                          included under premarket
                                          review. Excludes routine
                                          product testing, quality
                                          control, mapping, collection
                                          of general purpose statistics,
                                          experimental production, and
                                          training of scientific and
                                          technical personnel. Includes
                                          domestic and foreign standards
                                          development and recognition
                                          and international
                                          harmonization-related research
                                          activities.
Premarket Outreach/Coordination:         Includes all consumer
 Domestic.                                information, public affairs,
                                          legislative affairs, policy,
                                          meetings, conferences, media
                                          interviews, small business
                                          education and liaison
                                          activities. Premarket-related
                                          outreach activities includes
                                          manufacturers assistance and
                                          government, medical, and
                                          consumer liaison efforts.
Premarket Outreach/Coordination:         All foreign non-inspection
 Foreign.                                 trips such as ICH, MRA and
                                          conferences. International
                                          Harmonization activities.
                                          Premarket-related outreach
                                          activities includes
                                          manufacturers assistance and
                                          government, medical, and
                                          consumer liaison efforts. This
                                          category includes all foreign
                                          travel that does not result in
                                          a written inspection report.
Premarket Inspections: Domestic........  Physical inspection of
                                          regulated establishments,
                                          blood banks, manufacturers,
                                          etc. Investigations by field,
                                          non OCI personnel, trace
                                          backs, trace forwards.
                                          Includes domestic travel for
                                          inspection purposes. Includes
                                          sample collections.
Premarket Inspections: Foreign.........  Physical inspections of foreign
                                          establishments may include
                                          public health and trade
                                          issues. Includes foreign
                                          travel for inspection
                                          purposes. Should include all
                                          foreign trips for which an
                                          inspection report is written.
                                          Trips for GAP/GMP equivalence
                                          are contained in outreach.
------------------------------------------------------------------------

    Question. Included in the $11.4 million increases provided by the 
Congress for premarket application review for the foods program for 
fiscal year 1999 is an additional $5,400,000 for the direct additive 
process. Is this funding level being achieved? If not, why?
    Answer. Yes, the additional $5.4 million for the direct food 
additive petition review process has been targeted to that program in 
the Center for Food Safety and Applied Nutrition. Since passage of the 
fiscal year 2000 appropriations bill, the Center has begun the process 
of bringing on additional scientists as petition reviewers. To help 
improve productivity during the time it takes to hire and thoroughly 
train reviewers, we are also using some of the new resources to engage 
contractors to assist with some petition review tasks. Our performance 
in timeliness of petition review has been slowly improving in recent 
years; with the new resources, we expect to make significant further 
improvements in performance.
    Question. For fiscal year 2000, funding of $6 million was provided 
to FDA to fully implement the food contact substances program. Is this 
funding being provided? If not, why? How much is included in the fiscal 
year 2001 request for the food contact substances program, funding and 
FTE as compared to fiscal year 2000?
    Answer. Yes, the funding necessary to implement the food contact 
substance premarket notification program has been allocated to that 
program. Indeed, since the program became effective upon passage of the 
fiscal year 2000 appropriations bill, more than four dozen pending 
petitions for food contact substances have been converted to 
notifications, and more than a half dozen new notifications have been 
received. The first of these notifications became effective in early 
March, 120 days after receipt. FDA expects to continue to fund this 
program at the same level of $6 million in fiscal year 2001 as in 
fiscal year 2000.
    Question. For fiscal year 2000, the Committee indicated that at 
least $0.2 million and 2 new FTE positions were to be made available 
from the increase provided for animal drug premarket application review 
for the Center for Veterinary Medicine to review aquaculture drug 
submissions on a timely basis. What funding and staffing increase has 
been allocated to the Center for fiscal year 2000 for this purpose and 
what reductions will it yield in the amount of time required for the 
Center to review aquaculture drug submissions?
    Answer. In recent years, the Center for Veterinary Medicine--CVM, 
has had a heavy backlog of Aquaculture submissions waiting for review. 
Of the two positions specifically targeted for Aquaculture reviews in 
fiscal year 2000, one has been filled and the other will be filled 
shortly. The full effect of the new hires will not be felt until fiscal 
year 2001 when the reviewers are fully trained. This fiscal year CVM 
has made substantial progress in reducing the backlog of Aquaculture 
submissions, with only fourteen out of the sixty-two Aquaculture 
applications overdue at the current time. We intend to meet our goals 
in Aquaculture in fiscal year 2001, which are based on an Aquaculture 
Drug Team composed of four members, and submissions which fall within 
currently projected levels in subsequent years.
    Despite the challenges, definite progress is being made toward 
Aquaculture drug approvals. Coalitions from the public and private 
sectors are providing leveraging and are producing the needed 
investigational data for individual drugs. CVM is a willing participant 
in these partnerships and continues to look for new ways to support the 
continued growth of an Aquaculture industry that produces safe and 
healthy domestic and imported food products.
    Question. Provide the 2001 staffing (FTE) and funding levels for 
generic drug review, as compared with those in each of fiscal years 
1998, 1999, and 2000.
    Answer. I would be happy to provide information that reflects fully 
supported FTE for the Generic Drugs Program, including resources for 
both the Center for Drug Evaluation and Research and the Office of 
Regulatory Affairs. A fully supported FTE includes salaries, benefits, 
and other support costs such as training, office space, travel, 
equipment and supplies.
    [The information follows:]

                      GENERIC DRUG APPROVAL PROCESS
                         [Dollars in thousands]
------------------------------------------------------------------------
               Fiscal year                      FTE           Amount
------------------------------------------------------------------------
1995....................................             396         $42,643
1996....................................             327          33,634
1997....................................             351          34,183
1998....................................             345          34,898
1999....................................             362          36,049
2000 \1\................................             372          37,873
------------------------------------------------------------------------
\1\ Estimate. Fiscal year 2000 data is not yet available that will allow
  the Agency to project year end data, but the Agency expects to expend
  an additional $1.824 million for the Office of Generic Drugs--the $1.9
  million appropriation minus a $76,000 reduction taken as a result of
  the fiscal year 2000 Budget Recission.

    Question. Commissioner Henney, you indicate in your prepared 
statement that ``FDA will use new funding to develop a focused effort 
in the rapidly evolving field of food biotechnology''. What is planned 
and what level of ``new'' funding is requested for fiscal year 2001, as 
compared with fiscal year 2000, for this new effort?
    Answer. For fiscal year 2001, the Center for Food Safety and 
Applied Nutrition--CFSAN, is requesting an additional $1 million to 
enhance our research efforts and our scientific expertise in the area 
of food biotechnology, with a particular focus on areas that will 
directly support our regulatory programs. We are seeking both to 
increase our in-house research and testing capabilities in this area, 
as well as to leverage our resources with other institutions with 
relevant expertise, such as the Joint Institute for Food Safety and 
Applied Nutrition--JIFSAN. The major focus of our efforts will be on 
developing and improving techniques for assessing the safety of 
bioengineered foods and feeds, for example, methods for predicting 
allergenicity of proteins, and new alternatives to animal models for 
determining safety. There is also a pressing need for a better 
knowledge of factors that influence the perception of risks associated 
with genetically engineered foods and feeds, and thus we intend to work 
with other institutions with expertise in this area to develop methods 
for the effective communication of risks associated with these 
products. In fiscal year 2000, CFSAN expects to spend approximately 
$700,000 on in the area of food biotechnology.
    FDA's Center for Veterinary Medicine--CVM, in fiscal year 2000 
plans to spend approximately $120,000 in the area of food 
biotechnology. The activities include evaluating safety of biotech 
foods used in animal feeds and some outreach activities associated with 
biotech foods used in animal feeds. We are finding that the number of 
biotech related submissions is increasing.
    In fiscal year 2001, the Center for Veterinary Medicine is 
requesting an increase of $300,000 to be used for evaluating safety of 
biotech foods used in animal feeds.
    FDA's National Center for Toxicological Research has no funding in 
fiscal year 2000 for biotechnology research. In collaboration with 
CFSAN and CVM, in fiscal year 2001, NCTR is requesting $500,000 for 
research related to food derived from genetically modified organisms.
                     clinical pharmacology program
    Question. For each of fiscal years 1998, 1999, and 2000 please 
indicate the total funding level, by grantee, provided for the Clinical 
Pharmacology Program.
    Answer. I would be happy to provide the requested funding level by 
grantee of the Clinical Pharmacology Program for fiscal years 1998, 
1999 and 2000.
    [The information follows:]

                                          CLINICAL PHARMACOLOGY GRANTS
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                              Fiscal year  Fiscal year  Fiscal year
                           Grantee                                1998         1999         2000        Totals
                                                                actuals      actuals      estimate
----------------------------------------------------------------------------------------------------------------
Mayo Foundation.............................................           60  ...........  ...........           60
University of Illinois......................................          225          369  ...........          594
Meharry Medical College.....................................  ...........          131  ...........          131
Indiana University..........................................  ...........  ...........          460          460
                                                             ---------------------------------------------------
      Totals................................................          285          500          460  ...........
----------------------------------------------------------------------------------------------------------------

    Question. How much is included in the fiscal year 2001 budget 
request for the Clinical Pharmacology Program?
    Answer. FDA plans to expend $500,000 in fiscal year 2001 for 
clinical pharmacology grants awarded competitively.
    Question. Please provide a description of the Clinical Pharmacology 
Program.
    Answer. The Clinical Pharmacology Program provides financial 
assistance to investigators who conduct research as part of their 
clinical pharmacology training program. This program is funded through 
cooperative agreements. I will be happy to provide a more specific 
description of the Clinical Pharmacology Program for the record.
    [The information follows:]
    Specific goals important to the public health include: Advancing 
scientific knowledge of mechanisms of in vitro/in vivo metabolism/drug 
interactions; characterization of individual exposure-response to 
drugs; and, the effect of age, gender, and race on drug disposition and 
exposure response relationships.
    Projects that fulfill any one or a combination of the following 
specific objectives are considered for funding:
  --Mechanistic understanding of drug-drug, drug-food, and drug-non-
        prescription product interactions;
  --Research to develop and evaluate biomarkers, and noninvasive 
        imaging as a way to assess safety and efficacy;
  --Computer modeling and clinical trial simulations: evaluation of 
        clinical study designs to confirm drug safety and efficacy; 
        evaluation of techniques in gender, age, race, and liver/kidney 
        function-specific differences in drug response and drug 
        interactions;
  --Development of electronic databases to capture key metabolism/drug 
        interaction data and provide a linkage to an expert system to 
        assist the New Drug Application (NDA) review; and
  --Research to define the clinical pharmacology characteristics of 
        complex drug substances to assure proper use, define the 
        biopharmaceutic characteristics of the active ingredients, and 
        develop ways to establish equivalency of dosage forms to 
        establish standards.

                WASTE-MANAGEMENT AND RESEARCH CONSORTIUM

    Question. For fiscal year 2000, $100,000 was provided for the 
Waste-Management and Research Consortium, as proposed by the House. 
What level of funding is included in the fiscal year 2001 budget 
request for this consortium.
    Answer. FDA expects to provide approximately $100,000 for the 
Waste-Management and Research Consortium in fiscal year 2001.
    Question. What is the purpose of the Waste-Management and Research 
Consortium? What are its benefits to FDA and who are the participants 
in this program?
    Answer. The purpose of this program is to provide talented college 
students with a chance to work on real world environmental or health 
related problems. FDA presented a problem--``Find a way to detect 
contaminated fresh produce quickly''--that the consortium posted on its 
website. Five colleges responded to the challenge and are competing to 
solve the problem. In April 2000, 10-12 judges drawn from a pool of 
experts from FDA, the California State Department of Health, academia, 
and an expert from Waste-Management in Manure Research will evaluate 
the solutions presented. If a viable solution is found, FDA will begin 
implementing the solution to inspect imported fresh fruit for 
contaminants.

                     SEAFOOD EQUIVALENCY AGREEMENTS

    Last year, FDA indicated that it is working to improve the safety 
and sanitation of imported seafood by establishing equivalency 
agreements to ensure that exporting countries have seafood inspection 
systems equivalent to those of the U.S. Further, FDA indicated it was 
in the process of evaluating submissions for equivalency agreements 
from numerous countries and the European Union and had plans to visit 
six countries, including Australia, Canada, Chile, Iceland, New 
Zealand, and the European Union, before the end of the year.
    Question. What is the status of FDA's efforts with regard to 
seafood equivalency agreements?
    Answer. Thirty-four countries have made at least initial requests 
for equivalence determinations for seafood products. The determination 
process involves at least six significant steps. In the first step, FDA 
receives an initial inquiry from a country and, in response, provides a 
package of materials designed to help the country prepare a side-by-
side comparison of regulatory systems. Many countries realize at this 
point that they need to upgrade their systems and they essentially 
allow their request for an equivalence determination to become dormant. 
FDA regards the determination process for 26 of the 34 countries that 
made initial inquiries to be in a dormant stage. The second step 
involves a full ``paper'' comparison of all relevant aspects of a 
country's food safety system. This is a rigorous and time-consuming 
process involving major exchanges of material and lengthy analysis. The 
third step includes one or more site visits to verify the findings of 
the paper review.
    If FDA makes a preliminary determination of equivalence based on 
the paper review and on-site visits, the Agency will then progress to 
the fourth step, publishing preliminary determination for comment in 
the Federal Register. In the fifth step, a final determination is made 
after review of any comments received. The development of an 
equivalence agreement, if any, could then occur as the sixth and final 
step.
    The countries that have advanced the furthest in the process are 
Canada, New Zealand, Australia, Norway, and Japan. All have had at 
least first site visits and extensive, although not fully complete, 
paper reviews. A second site visit is scheduled for Canada later this 
year to review recent changes in the Canadian regulatory system. A 
preliminary determination may be possible for Canada this year, as well 
as preliminary determinations for some of the others, depending on 
outcomes of their reviews.
    Question. Did FDA complete the six country visits in 1999? If so, 
what has been the results of those visits? If not, why?
    Answer. In 1999, the Agency planned to visit Canada twice, Chile, 
Japan, Iceland, and Thailand. FDA visited Canada once, for an audit of 
Canadian regulatory laboratories, but delayed an inspection audit until 
this year at the request of the Canadians. The site visit to Japan was 
made, and may be sufficient to enable FDA to make a preliminary 
determination about Japan without need for further information or 
visits. The results are still being reviewed. The other site visits 
were not conducted due to a number of outstanding questions related to 
the paper review. FDA is waiting to receive answers to these questions 
before performing the site visits.
    Question. Has FDA established criteria for determining whether 
another country's food safety system is equivalent to the U.S. system? 
If not, why? Are these criteria specific to seafood?
    Answer. In June 1997, FDA published draft equivalence criteria for 
all foods regulated by FDA. The Agency obtained comment on the draft 
criteria from consumer advocacy organizations, industry trade 
associations, and foreign countries. FDA is in the process of 
developing final equivalence criteria that take into account the 
comments received. Completion of the equivalency criteria is a priority 
for CFSAN in fiscal year 2000.
    Question. Where will the FDA target overseas compliance visits this 
year?
    Answer. In fiscal year 1999, FDA inspected seafood processing 
plants for compliance with U.S. safety regulations in Ecuador, Taiwan, 
Vietnam, and the Philippines. A trip to Indonesia was canceled due to 
political unrest in that country. For fiscal year 2000, the Agency has 
planned compliance inspections in Costa Rica--which has already been 
completed, Thailand, China, Indonesia, Mexico, Panama, India, and South 
Africa. Non-seafood overseas compliance visits will be targeted toward 
manufacturers of low-acid canned foods, one of FDA's designated ``high 
risk'' areas.
    Question. What is the current level of resources for this effort? 
Are additional resources needed?
    Answer. FDA plans to spend approximately $4 million on all overseas 
compliance visits in fiscal year 2000. Our fiscal year 2000 plan for 
overseas compliance visits was drafted using available resource levels. 
Additional resources would allow FDA to increase the number of 
inspections.

            TRANSFER OF VOLUNTARY SEAFOOD INSPECTION PROGRAM

    Question. In a letter to me, the National Fisheries Institute has 
indicated its opposition to transferring the Department of Commerce 
Voluntary Seafood Inspection Program to the FDA. It feels it is 
inappropriate to combine the Department of Commerce voluntary marketing 
and quality assurance program with FDA's mandatory seafood HACCP 
program. It indicates that the National Academy of Sciences and the 
Department of Health and Human Services, in response to a 1992 General 
Accounting Office report, have warned against combining regulatory food 
safety programs with industry-funded marketing and promotional programs 
like Commerce's voluntary inspection service. Do you agree that 
combining these programs might undermine the objectivity and 
credibility of FDA's seafood HACCP program? If not, why?
    Answer. FDA believes that safeguards could be put in place to 
eliminate a potential conflict of interest that could undermine the 
objectivity and credibility of the current regulatory seafood HACCP 
program. Transferring the program as a Performance Based Organization--
PBO, would help. A PBO is a quasi-public organization that is located 
in a federal agency but operated like a business in that it is to be 
financially self sustaining. While FDA would oversee the policy 
direction of the PBO, no agency funds would be used to finance the 
organization. While the legislation would authorize PBO inspectors to 
perform regulatory inspections, FDA would adopt precautions to ensure 
the objectivity and credibility of the inspection. For instance, FDA 
could adopt a policy of utilizing PBO inspectors to perform regulatory 
inspections only for seafood firms that are not also paying customers 
of the PBO. In the end, FDA can always utilize its regulatory 
inspection force as a check against the PBO inspection force to ensure 
that the public health is protected.
    Question. What benefits does the FDA believe would be obtained by 
transferring the National Marine Fisheries Service voluntary seafood 
inspection program to the FDA?
    Answer. Transfer of the NMFS/SIP program to FDA will place all 
Federal seafood inspection authorities within one Federal agency, 
enabling increased efficiency and consistency of standards and 
implementation of FDA seafood requirements. It would establish FDA as 
the sole seafood agency with one HACCP standard, thereby promoting 
efficiency, effectiveness, and consistency of seafood regulation. This 
centralization will help both domestically and internationally. FDA 
would be able to train the voluntary inspectors in the regulatory HACCP 
standard along with the regulatory inspectors. Consequently, FDA may be 
able to contract with the voluntary inspectors to perform certain 
regulatory inspections or, in certain instances, to count a voluntary 
inspection as a regulatory inspection.
    Question. I understand the proposal would allow for voluntary 
inspectors to be ``cross-deputized'' as mandatory HACCP inspectors. Is 
this correct? Does the FDA need additional HACCP inspectors? If so, why 
doesn't the Administration's budget request simply reflect a need to 
hire additional HACCP inspectors?
    Answer. The legislative proposal does allow FDA to utilize the PBO 
inspectors to perform regulatory inspections under the Federal Food, 
Drug and Cosmetic Act. Such cross utilization could help to meet the 
agency=s goal of annual HACCP inspections for seafood establishments.

                              ORPHAN DRUGS

    Question. FDA policy already rewards an ``improved'' orphan drug by 
allowing it on the market immediately alongside the pioneer orphan 
drug, thus cutting short the pioneer's exclusivity. Is the grant of an 
additional reward on top of that, i.e., seven years of exclusivity for 
the improved drug, warranted? If so, why? What does it add to the 
incentive to develop improved versions of orphan drugs?
    Answer. Under the Orphan Drug Act, if a drug is designated for an 
orphan indication and is approved for that indication, it will receive 
seven years of exclusivity. During this seven-year period, the agency 
will not approve or license the same drug from another sponsor. 
However, the first sponsor's exclusivity is not a barrier to approval 
of a product that is not the same drug. If a subsequent sponsor 
demonstrates that its drug is for the same indication, and is not the 
same drug as the drug with exclusivity, either because it is chemically 
not the same, as defined in the orphan drug regulations or is 
clinically superior the term you use is ``improved'', the second 
product will be approved. If the second drug was designated for the 
orphan indication, it will also receive orphan exclusivity. Hence, the 
second drug is entitled to the full seven years of orphan exclusivity 
because it is not the same drug as the product that already received 
exclusivity. The statute does not limit the drug's eligible for 
exclusivity on the basis of indication, chemistry, or clinical 
behavior.
    The current approach, in which improved forms of human growth 
hormone for human growth hormone deficiency and interferon-beta for 
multiple sclerosis have been granted exclusivity, provides substantial 
incentive for research and investment.
    Question. In the case of an ``improved'' orphan, why does FDA 
insist on protecting the chemical entity itself for seven years instead 
of limiting protection to the improvement, e.g., a convenient long-
acting formulation, or oral version that replaced an injection? FDA 
seems to be making orphan drug exclusivity even broader than patent 
protection. Is that necessary?
    Answer. The Orphan Drug Act grants seven years of exclusivity to 
certain approved drugs for orphan indications. The analysis of whether 
approval of a new drug is blocked by orphan exclusivity turns on 
whether the two drugs are the same. Generally, an applicant wishing to 
establish that its product is not the same as one with orphan 
exclusivity must demonstrate that its drug is either chemically 
different, or clinically superior to the product with exclusivity. In 
that case, the first product's exclusivity is not a bar to the approval 
of the second product. If the subsequent product received an orphan 
designation, it will be entitled to its own seven year period of orphan 
exclusivity upon approval because it is not the same drug. That 
exclusivity will protect the second drug against competition from any 
drug that is chemically and clinically the same. The statute does not 
limit the scope of orphan exclusivity for some drugs only to certain 
characteristics of the drug.
    It is not clear how this protection is broader than patent 
protection. Patents run for a period of 20 years from date of 
application and, with respect to those applicable to drug products, can 
vary in coverage from very broad, such as those patents that cover a 
drug substance, to narrow, such as patents that cover a specific dosing 
regimen for a single indication or a single formulation.
    Please note that, in the rare case when there are at least three 
products that are chemically the same for the same orphan indication, 
different factors may be at issue. If the orphan exclusivity for the 
first of the products has expired, the new drug, if it is regulated 
under section 505 of the act, can also obtain approval despite the 
second product's exclusivity if it can demonstrate that it meets the 
criteria in 505(j) of the act as a duplicate to the product whose 
exclusivity has expired. The new drug would be approved because it is 
not the same drug as the drug that still has orphan exclusivity, but it 
would not receive its own exclusivity because the drug--albeit from a 
different sponsor--has already be granted exclusivity, which has 
expired.
    Question. What is the rationale for allowing only drugs that 
qualify for short cut approvals to enter into competition with an older 
version of an orphan drug? Why prevent biologic drugs from competing, 
as long as they do not attempt to copy the improvement that resulted in 
approval of the subsequent product?
    Answer. Any analysis of whether a drug can be approved in the face 
of existing orphan drug exclusivity turns upon whether the drug is the 
same chemically and clinically as the drug with exclusivity. When there 
are only two drugs at issue, the sponsor of the second drug must 
demonstrate that its product is chemically not the same as, or 
clinically superior to the product with exclusivity in order to obtain 
approval, and its own exclusivity. When there are two drugs that are 
chemically the same, but each has been granted orphan exclusivity 
because of a finding of clinical superiority for the more recently 
approved product, the issues for approval of a third product are 
somewhat different. Once the first product's exclusivity has expired, 
the inquiry is still whether a proposed drug is the same as the drug 
that still has orphan exclusivity. The new drug can show that it is 
clinically superior to the drug that still has exclusivity or, in the 
alternative, it can demonstrate that it is not the same as the drug 
that still has exclusivity by showing it is the same as the drug whose 
exclusivity has expired.
    The ``short cut'' approval process you refer to is the abbreviated 
new drug application program enacted by Congress in the Drug Price 
Competition and Patent Term Restoration Act of 1984 to provide a 
streamlined means for approving generic drugs that can be expected to 
be as safe and effective as the innovator product. FDA has determined 
that if the sponsor of a new product can establish that its product 
meets the approval criteria under section 505(j) of the Federal Food, 
Drug, and Cosmetic Act for a duplicate to the product whose exclusivity 
has expired, it will be approved because it is not the same as the drug 
that still has orphan exclusivity. There are scientific and technical 
barriers to demonstrating that two biological products from different 
manufacturers can be expected to have the same safety and effectiveness 
measures. There currently is no process for approving generic versions 
of biological products regulated under section 351 of the Public Health 
Service Act. The agency is reviewing its approach to orphan issues as 
they apply to biological products.
    Question. In enacting the Food and Drug Administration 
Modernization Act in 1997, Congress specifically included a section 
mandating greater harmonization between drug and biologic regulation 
(noting that the provision was not intended as a mandate for 
``generic'' biologics). How can FDA's orphan drug competition policy be 
reconciled with this mandate?
    Answer. Under FDAMA section 123(f), the agency continues to work to 
minimize differences in the review and approval of products required to 
have biologics licenses and products required to have approved new drug 
applications. The issues raised in certain orphan exclusivity 
situations relate to establishing whether two orphan products from 
different sponsors can be expected to have the same safety and 
effectiveness. The generic drug approval process at section 505(j) of 
the act is an appropriate means for making this determination for drugs 
approved under section 505 of the act. However, the composition and 
characteristics of biologic products regulated under 351 of the Public 
Health Service Act pose different scientific and technical challenges. 
The agency currently does not have a means for making a determination 
that two biological products from different sponsors can be expected to 
have the same safety and effectiveness.

              ASSESSING THE QUALITY OF DIETARY SUPPLEMENTS

    Question. Has a study been done to assess the overall quality of 
dietary supplements that are being sold in the United States?
    Answer. No, FDA has not conducted any systematic evaluation of the 
overall quality of dietary supplements in the marketplace
    Question. What kinds of scientific studies should be performed on 
dietary supplement products that are on the shelf in order to assess 
their quality?
    Answer. FDA believes that scientific studies, to assess quality of 
dietary supplements that are on the shelf, should verify that dietary 
supplement products offered for sale contain the ingredients that are 
stated on the label at the strength and purity claimed. Other quality 
factors appropriate for study include those that assure the 
dissolution, bioavailability, and shelf-life or stability of dietary 
supplement products.
    A ``market basket'' evaluation should be performed of one or more 
botanical dietary supplements that are used extensively by U.S. 
consumers. This evaluation would provide the information needed to 
conduct effective exposure evaluations for future risk assessments, to 
assess the distribution of formulations that are available 
commercially, and to identify the areas were FDA should be focusing its 
activities in botanicals in the future.

                          DIETARY SUPPLEMENTS

    Question. Are you concerned about microbiological contamination of 
dietary supplements?
    Answer. Although we are not aware of specific microbiological risks 
that are unique to dietary supplement ingredients or products, like 
conventional foods, many dietary supplement ingredients are natural 
products and we would expect that some natural products would be at 
risk for contamination with microorganisms that may affect the quality 
of the product or that may present disease risks.
    Question. Are pesticides, herbicides and fungicides a potential 
problem with dietary supplements?
    Answer. Yes, like any food ingredient, dietary supplements may 
become exposed to, and be contaminated with, various pesticides, 
herbicides, and fungicides used during their growth, harvest, 
production, or in the manufacturing facility. Additionally, cultivated 
and wild-crafted herbs or botanicals may unintentionally come in 
contact with pesticides, herbicides, and fungicides, via adjacent 
treated fields.
    Question. Is contamination with lead or other heavy metals from the 
soil a potential health problem?
    Answer. Yes, as with all plant-derived foods, plant-derived dietary 
supplements may accumulate heavy metals that are present in the 
environment. It is also possible for manufacturing equipment to 
unintentionally contaminate food and dietary supplements with heavy 
metals during processing. Whether a given heavy metal in a dietary 
supplement presents a health risk to consumers depends on many factors, 
including the amount present.
    Question. Can or should some of these studies be conducted by 
universities that have expertise and experience in that research area?
    Answer. Yes, partnering with universities and other academic 
institutions enables FDA to leverage both its financial and scientific 
resources to the benefit of U.S. consumers. In the areas of methods 
development and validation relative to issues of identity, 
bioavailability, dissolution and disintegration, potency, shelf-life 
stability, and quantification of contaminates, studies can be 
conducted, not only by FDA, but also by universities, research 
institutions, and other government agencies. To facilitate this 
process, FDA is talking with United States Pharmacopoeia--USP, academic 
institutions, and other interested parties to develop guidelines for 
the needed research, and a process to facilitate communication and 
coordination among research groups and users of these data.
    Question. Are you aware of the research on the quality of dietary 
supplements that is being done in the National Center for Natural 
Products Research at the University of Mississippi?
    Answer. During the past year, CFSAN has had increased interaction 
with the National Center for Natural Products Research--or NCNPR, at 
the University of Mississippi, including a site visit by several of our 
top scientists. This increased interaction is due in part to FDA's 
recognition of the NCNPR as center for excellence in the study of 
botanicals used as dietary supplements. We have identified dietary 
supplement research as a critical area for the future and are actively 
pursuing ways to work closely with the University of Mississippi to 
enhance the Agency's science-base. In the past, we have experienced 
great benefit from a government/academic/industry consortium at the 
National Center for Food Safety and Technology--or NCFST, at the 
Illinois Institute of Technology. FDA considers participation in such 
collaborative endeavors to be a vitally important resource in carrying 
out our mission to ensure that U.S. consumers have confidence in the 
safety of the drugs, foods, and dietary supplements that they purchase.
    Question. What scientific information is needed to help FDA 
determine if the dietary supplements on the market are safe?
    Answer. The Dietary Supplement Strategy--a comprehensive Ten Year 
Plan, outlines the scientific information that the agency believes is 
needed to help FDA determine if the dietary supplements on the market 
are safe. For safety purposes, FDA considers dietary supplements as 
foods. We believe that scientific studies of the same quality and 
scientific rigor as those required of novel food ingredients are 
appropriate to dietary supplements. Data is needed to form a basis to 
permit a science-based risk assessment of chronic and acute risks to 
general, high-risk, and vulnerable populations.
    A broad range of multidisciplinary research efforts is needed to 
evaluate the safety of marketed products, including dietary 
supplements. These efforts include the types of research needed to 
ensure the quality of marketed products; methods for improving the use 
of adverse event reports; basic toxicological profiles and dose 
response curves for ingredients and finished products; potential for 
adverse interactions among ingredients and identification of vulnerable 
populations; other clinical studies and evaluations that reflect actual 
use conditions; and consumer use patterns and interpretation of label 
information.
    Question. Does FDA fiscal year 2001 request include any funds for 
to improve the quality of dietary supplements? If not, what funding 
would be needed to initiate this research effort?
    Answer. Within the Foods Premarket initiative, our fiscal year 2001 
budget request includes an increase of $200,000 for FDA to develop 
sound scientific data and expertise to support standards and guidance 
in evaluating the safety of dietary supplements. Our goal is to respond 
to 90 percent of notifications for dietary supplements containing new 
ingredients within 75 days.
    Additionally, in fiscal year 2001, as part of the Foods Postmarket 
initiatives, FDA is requesting an increase of $2.5 million to enhance 
the adverse event reporting system, or AERS, for dietary supplements. 
With this increased funding, FDA would develop a system component to 
collect data on drug-dietary supplement interactions to provide a 
faster, more efficient way to evaluate adverse event reports, thus 
shortening the time needed for any responsible actions. The potential 
benefits for this enhancement are lives saved and improved public 
safety.
    We estimate that we would need approximately $1 million to $1.5 
million for FDA to approach a collaborative research project with a 
leading academic institution. This would allow FDA to initiate an 
analytical survey of currently marketed dietary supplement products to 
determine the level of health risk to the consumers of dietary 
supplements.
    Question. Has FDA conducted, or is it conducting, the studies 
described in the report that are necessary to evaluate the 
effectiveness of this technology?
    Answer. FDA has conducted an extensive review of the available 
information regarding the effectiveness of the technology. Based on 
this extensive review we have come to understand the infancy of the 
technology and how little is known about its potential for reducing 
illegal sales. Our investigation included a search of published and 
unpublished peer-reviewed scientific literature, searches of 
computerized data bases, and extensive discussions with experts in 
tobacco and alcohol control. We have interviewed all of the identified 
manufacturers of the devices, and requested any studies they had done 
prior to or after marketing their devices.
    Unfortunately, only one controlled study of the efficacy of the 
devices has been initiated and the results of that study will not be 
available until late summer of this year. Even when the study results 
are available, the applicability to sales of tobacco to minors will be 
limited. The study has as its end-points reduction in deaths from 
alcohol-related car crashes, a surrogate measure for alcohol use by 
minors.
    A definitive study of the utility of the devices to reduce sales of 
tobacco to youth would need to test not only the reliability of the 
machines, but how they are actually used in the retail setting. They 
can be easily circumvented by the clerk. On the other hand, the 
machines clearly can assist clerks in determining age eligibility once 
an ID card has been requested and inspected by the clerk. It is also 
possible that the mere presence of the machine within site of an under-
age customer might deter some youths from even attempting to purchase 
tobacco. A well-controlled study of these effects is certainly 
warranted before many merchants go to the considerable expense of 
installing the devices.

               REPORT ON AUTOMATED IDENTIFICATION SYSTEMS

    Dr. Henney, in its report on the Agriculture Appropriations, the 
Committee directed FDA to evaluate the feasibility of equipping tobacco 
retailers with technology to verify a tobacco purchaser's age through 
the use of an automated verification system capable of ``reading'' the 
magnetic strip or bar code on a driver's license in which the name and 
age of the licensee is encoded. Among other things, the report is 
intended to address the effects of reducing illegal tobacco sales to 
minors and the effect on compliance through the use of automated 
identification systems. The report accompanying the conference 
agreement on the bill indicates that FDA is to submit this report 
within 180 days of the date of the bill's enactment into law--that is, 
by late April of this year.
    Question. Does FDA plan to consult with states, such as New York, 
that have enacted legislation promoting the use of this technology, or 
with other states that are considering such legislation?
    Answer. FDA has monitored New York's experience with the 
legislation. The law in New York went into effect on September 1, 1999, 
and was intended primarily to protect merchants from minors attempting 
to buy liquor with falsified identification cards. The Agency has 
learned that to date no merchants have attempted to use the application 
of the machines as an affirmative defense. If the US Supreme Court 
affirm's FDA's jurisdiction to regulate tobacco products, FDA plans to 
continue to monitor the situation in New York, as well as consult with 
states such as Ohio, Florida, and Massachusetts that are considering 
the technology.
    Question. Does FDA agree, as a general matter, that the federal 
government should encourage the states to promote the use of technology 
that can ensure that the identification presented by tobacco purchasers 
has not been falsified, so as to help prevent underage purchases of 
tobacco?
    Answer. FDA has encouraged merchants to use the wide array of tools 
and business practices available to them to reduce illegal sales and 
has mentioned to interested retailers that scanners are one thing they 
may want to consider. Unfortunately, our research has shown that these 
devices possess a number of limitations. These limitations include 
cost; ease with which they can be bypassed; privacy issues; and lack of 
any credible, scientific evidence that the machines actually are 
effective in reducing illegal sales. As a result, FDA believes that it 
is important to not overstate the value that these products may provide 
in reducing illegal sales to minors.

                  FDA COUNTER-BIOTERRORISM ACTIVITIES

    Question. FDA performance plan indicates that in responding to 
chemical and biological threats of bioterrorism, FDA's roles include 
development of new vaccines and drugs, safeguards for the food supply, 
and research for diagnosis and treatment of disease outbreaks. Would 
you please give us an update on FDA's efforts in each of these areas, 
the level of resources currently (i.e., fiscal year 2000) being devoted 
to each, and how the additional funding requested for fiscal year 2001 
will strengthen each of these efforts.
    Answer. FDA participates on an interagency group formed by the 
Department's Office of Emergency Preparedness--OEP, with the Department 
of Defense, Veterans Administration, the Centers for Disease Control 
and Prevention--CDC, and the National Institutes of Health--NIH to plan 
for responses in the event of a bioterrorist attack. FDA's counter 
bioterrorism initiative focuses on the priorities for creating and 
maintaining a stockpile of pharmaceuticals and other materials, as well 
as furthering research on detection, diagnosis, antibiotics, 
therapeutics and vaccines. Under Emergency Support Function #8, FDA is 
the lead DHHS agency for ensuring the safety of regulated foods, drugs, 
biologics, and medical devices. This includes preventing and detecting 
the importation of contaminated FDA regulated products. Therefore, FDA 
has the responsibility for responding to any incident involving a FDA 
regulated product.
    In fiscal year 2000, the Center for Biologics Evaluation and 
Research, CBER, received $7.5 million one-time funding from the 
Department's Bioterrorism Vaccine Program Fund to begin the process of 
developing the necessary expertise and infrastructure to address 
regulatory activities related to the countering bioterrorism 
initiative. The one-time funding is being used to expedite the 
development and licensure process for improved vaccines for anthrax and 
smallpox, the associated immune globulin (VIG) products used to treat 
and prevent serious vaccinia infections brought on by the smallpox 
vaccine, and to continue on-going efforts to work with the interagency 
group on a variety of bioterrorism issues. The fiscal year 2001 request 
of $6.5 million for CBER is for the following proposed activities: 
developing necessary expertise regarding the agents identified in the 
President's Initiative; expanding efforts to test and produce DNA 
vaccines against the lethal factor and edema factor of anthrax and 
further develop an Ebola DNA vaccine; exploring the use of DNA vaccines 
for smallpox and the use of RNA vaccines against some of the 
encephalitis-causing alphaviruses; initiating or expanding programs on 
pathogenesis and mechanisms of immunity for a variety of pathogens; 
developing microarray technology to rapidly detect the presence of 
nucleic acids, oligonucleotides, and RNA fragments; improving 
monoclonal antibody therapies, new approaches in the use of 
biotherapeutics, animal and human derived immune globulins in the 
treatment of viral and bacterial diseases and in the area of emerging 
infectious diseases.
    The Center for Devices and Radiological Health has continued to 
conduct bioterrorism-related activities in fiscal year 2000. We 
estimate that the medical device program will expend approximately 
$800,000 out of its base resources for bioterrorism activities in 
fiscal year 2000. The Devices program will collaborate with the Center 
for Disease Control--CDC, and the military to address domestic 
preparedness and responsiveness to chemical and biological threat 
agents, including review of reagents currently available to detect 
toxic organisms and development of procedures that State and local 
public health laboratories and the military will employ to diagnose 
suspected exposures to these chemical and biological agents. FDA will 
also review plans and protocol for a new diagnostic product sponsored 
by the Armed Forces Institute of Pathology. In addition, FDA will 
investigate the validity of products that claim to detect exposure to 
biothreat agents. This is a new intended use for many in vitro 
diagnostics (IVDs) that raises unique scientific and regulatory 
questions. FDA needs to evaluate the effectiveness of these products 
before they are commercially marketed with these claims. Finally, FDA 
will establish an internal working group to develop a regulatory 
strategy, to support CDC's chemical-bioterrorism preparedness 
activities. This strategy is likely to require FDA to issue new 
guidances clarifying agency review of IVDs and may also require new 
rulemaking.
    For the past several years, scientists in CDRH, have been 
researching the development of DNA tools for diagnostic devices. This 
technology has the potential to be very useful for the early 
identification of biothreat agents, diagnosis of emerging infectious 
diseases, possibly in the form of miniaturized diagnostic devices. Part 
of the $800,000 requested for the device program bioterrorism 
initiative in fiscal year 2001 will be used to revive this research and 
take advantage of the scientific expertise CDRH has built in this area.
    The Center for Drug Evaluation and Research, CDER, is devoting 
$400,000 in fiscal year 2000 toward activities contributing to the 
development of a research agenda and the proposed rule to amend the new 
drug and biological product regulations to identify the kind of 
evidence needed to demonstrate efficacy of drug and biological products 
used to prevent or treat the toxicity of chemical, biological, or 
radiological substances. Activities also include working with academia 
to draft fact sheets that can be used by physicians and first 
responders so they can recognize the symptoms of bioterrorist agents 
and respond adequately to an attack. The fiscal year 2001 request of 
$1.2 million for CDER is for the following proposed activities: 
premarket review of drug products for the treatment and prevention of 
exposure to bioterrorism agents; review of the preclinical and clinical 
data supporting the recommendations for treatment of bioterrorism 
agents; evaluation of the need and availability of alternative agents 
for the treatment of exposure to bioterrorism agents; and collaboration 
with other agencies in the development of a research program to develop 
and test therapeutic agents.
    The Center for Veterinary Medicine, CVM, is devoting $100,000 in 
fiscal year 2000 to activities including the participation in meetings 
with representatives of government and non-government organizations to 
consider the risk to animal agriculture, including the safety of 
feedstuffs and food from food-producing animals and the development of 
effective lines of communication among anti-bioterrorism units of 
federal and State governments. The fiscal year 2001 request of $800,00 
for CVM is for the following proposed activities: exploring ways to 
prevent microorganism and toxic chemicals including pesticides from 
entering animal feeds and food-producing animals; training senior State 
personnel as first responders to an attack; developing effective lines 
of communications among anti-bioterrorism units; and facilitating 
timely reporting events, diagnoses, and identifying research needs.
    The Center for Food Safety and Nutrition, CFSAN, is devoting 
$300,000 in fiscal year 2000 toward a contract to develop the Food 
Safety Strategic Plan for Chemical/Biological Terrorism; coordinate the 
development of information on Chemical/Biological Terrorism from other 
Federal Agencies, particularly the Department of Defense, DOD, and the 
Department of Agriculture, USDA; develop research and Infrastructure 
needs for FDA and associated food safety partners, including State and 
local governments; facilitate leveraging of resources and technology 
transfer from DOD and other government organizations to meet these 
needs; and develop and implement the needs for contracts and grants for 
food safety chemical/biological terrorism programs. The fiscal year 
2001 request will help expand the agency's ability to safeguard the 
food supply from potentially harmful and lethal biological agents. The 
fiscal year 2001 request of $1.2 million for CFSAN is for the following 
proposed activities: conducting research to develop rapid methods of 
detection of biological agents, such as anthrax; working with other 
governmental agencies and private sector organizations to developing 
cooperative exchange information on surveillance activities and develop 
crisis management procedures.
    The proposed $1 million request for fiscal year 2001 activities for 
the National Center for Toxicological Research include expanding the 
mass spectrometry-based approaches to identify biomarkers of toxicity 
associated with biological warfare agents; and developing novel 
techniques to identify new bacteriological and chemical contaminants in 
the food supply.
    I will be happy to provide a table reflecting funding for the 
bioterrorism initiative.
    [The information follows:]

                          BIOTERRORISM FUNDING
                        [In thousands of dollars]
------------------------------------------------------------------------
                                                            Fiscal year
                 Program                    Fiscal year   2001 requested
                                           2000 estimate      increase
------------------------------------------------------------------------
Foods...................................           0.030           1.200
Human Drugs.............................           0.400           1.200
Biologics \1\...........................           7.500           6.500
Animal Drugs & Feed.....................           0.100           0.800
Devices & Radiological Health...........           0.800           0.800
NCTR....................................           0.000           1.000
                                         -------------------------------
      Total.............................           8.830          11.500
------------------------------------------------------------------------
\1\ Includes one-time funding from the DHHS Public Health and Social
  Services Emergency Fund in fiscal year 2000.

    Question. For fiscal year 2000, the Administration requested that 
funding for FDA's counter-bioterrorism activities be made available 
from the Department of Health and Human Services Public Health and 
Social Services Emergency Fund. Why are funds for these activities now 
being requested in FDA's budget? To what extent are FDA's activities in 
this area dependent on those of other federal agencies, and FDA's 
ability to use the funds it has requested dependent on funding being 
received by other agencies?
    Answer. The Administration requested $13.4 million in its fiscal 
year 2000 budget request to support FDA's counter bioterrorism 
activities. This request was made through the Public Health and Social 
Services Emergency Fund to the Appropriations Subcommittee on Labor, 
HHS, Education and Related Agencies as part of a consolidated request 
for the Department of Health and Human Services. FDA's fiscal year 2000 
counter bioterrorism request was not funded because FDA's appropriation 
falls under jurisdiction of the Appropriations Subcommittee on 
Agriculture. FDA's programs do not fall within the jurisdiction of this 
Subcommittee. In contrast, FDA's fiscal year 2001 request for 
activities related to the countering bioterrorism initiative is being 
made to the Appropriations Subcommittee on Agriculture, Rural 
Development and Related Agencies, which has jurisdiction over 
appropriations for FDA programs. FDA's efforts in countering 
bioterrorism are critical to success of the bioterrorism activities 
government-wide.
    In this, the third year of the Departmental anti-bioterrorism 
initiative, DHHS is continuing to build on its ongoing initiatives and 
also launch a number of new efforts that will further strengthen and 
enhance its capacity to anticipate and respond to bioterrorism. For 
fiscal year 2001, DHHS proposed an investment of $265 million for its 
anti-bioterrorism initiative. To date, FDA has been contributing to 
this initiative on a limited basis without receiving base 
appropriations earmarked in this area.
    FDA received $7.5 million one-time funding from the Department's 
Public Health and Social Services Emergency Fund for fiscal year 2000 
to begin the process of developing the necessary expertise and 
infrastructure to address regulatory activities related to the 
countering bioterrorism initiative. This one-time funding cannot be 
used by the Agency to develop staff experts or address the long list of 
agents identified as bioterrorism threats.
    FDA participates on an interagency group formed by the Department's 
Office of Emergency Preparedness--OEP, with the Department of Defense, 
Veterans Administration, the Centers for Disease Control and 
Prevention--CDC, and the National Institutes of Health--NIH to plan for 
responses in the event of a bioterrorist attack. All of the agencies 
are involved in the medical research and planning in the event of an 
attack.
    The Department of Health and Human Services' role is to meet the 
Nation's public health and medical needs associated with terrorist 
events. Preparing for the threat of bioterrorism requires government 
funding to train the health-care workers, improve laboratory testing, 
develop and produce vaccines and drugs, and expand hospitals' capacity 
to deal with a large influx of sick people. FDA's countering 
bioterrorism initiative focuses on the priorities for creating and 
maintaining a stockpile of pharmaceuticals and other materials, and 
furthering research on detection, diagnosis, antibiotics, therapeutics 
and vaccines.
    FDA has the responsibility of determining whether pharmaceutical 
products produce the benefits they are supposed to without causing side 
effects that would outweigh those benefits. This includes both 
laboratory and non-laboratory investigation that addresses questions 
either of immediate applicability to present-day regulatory problems, 
questions that can be expected to arise in the near-term, and 
fundamental studies in biomedical areas that can reasonably be expected 
to have long-term effects on FDA regulatory responsibilities. Unlike 
other DHHS agencies that are participants in the Department-wide anti-
bioterrorism initiative, FDA plays a critical but less visible role 
with respect to its programs. Whether the issue is the development and 
use of rapid diagnostics to quickly identify a suspected biological 
agent or the capability to make available and administer large 
quantities of a vaccine or drug to counter the effects of a bioweapon, 
FDA is the linchpin that makes it possible for DOD, CDC, OEP, and 
others to carry out such activities.
    Other than research, FDA has the responsibility to review and make 
approval decisions for drugs, therapeutics, vaccines, anti-toxins to be 
administered to humans and every diagnostic tool that is to be used 
clinically. In the event of bioterrorist attack, the public health goal 
is to have available pharmaceuticals, the rapid diagnostics and the 
vaccines that have already completed FDA review process for safety and 
efficacy. Since this regulatory process is lengthy, complex and fraught 
at times with the unforeseen, it is essential, in the interest of 
national security and public health, that FDA engages in the process as 
early as possible with sponsors and organizations that are developing 
the therapeutics, vaccines and rapid diagnostics. This means that FDA 
will assume a pro-active role and work with these organizations from 
the very outset, starting with outlining the individual steps that must 
be taken to obtain FDA approval, through pre-clinical toxicity testing, 
the development of protocols for conducting the clinical trials, to the 
review and analysis of the trial results, review of the proposed 
manufacturing procedures, inspection of the manufacturing process to 
assure compliance with Good Manufacturing Practices and post-marketing 
surveillance of adverse events.
    Question. Commissioner Henney, you indicate in your prepared 
statement that specialized equipment and facilities are necessary and 
needed in FDA to understand these agents and prevent, diagnose and 
treat outbreaks. How much of the $11.5 million requested is for 
specialized equipment and facilities?
    Answer. The Agency estimates that approximately $3 million of the 
requested $11.5 million request for the Countering Bioterrorism 
Initiative is for specialized equipment and facilities.
    Question. With respect to counter-bioterrorism, what is the total 
amount of funding required for FDA to complete its vaccine development 
and build an appropriate stockpile?
    Answer. FDA's role is to develop tools to determine the safety and 
effectiveess of vaccines that cannot be tested against live viruses. 
Vaccine development is a joint effort between DOD, CDC, FDA, and the 
private sector. The President's Countering Bioterrorism Initiative has 
identified numerous agents as bioterrorism threats, including, anthrax, 
smallpox, plague, botulinum, tularemia, brucellosis, Venezuelan equine 
encephalomyelitis, ebola, and Q-fever, as well as others. FDA has begun 
the process of developing the necessary expertise and infrastructure to 
address regulatory activities for the President's initiative. The 
fiscal year 2000 $7.5 million one-time funding is being used to 
expedite the development and licensure process for improved vaccines 
for anthrax and smallpox, and the associated immune globulin products 
(VIG) used to treat and prevent serious vaccinia infections brought on 
by the smallpox vaccine. These funds would be needed to develop, train 
and adequately equip staff experts that can deal with the range of 
agents that have been identified as part of the President's initiative. 
FDA's countering bioterrorism initiative includes other priorities as 
well for which funding is requested including safeguarding the food 
supply, development of pharmaceuticals and furthering research on 
agents with respect to detection, diagnosis, and treatment.
                      rent and related activities
    Question. Provide a detailed breakdown of the Commercial Rent and 
Related Services activities funded in each of fiscal years 1999 and 
2000, as compared with the fiscal year 2001 request.
    Answer. I am happy to provide the information detailing the 
specific expenses included in the Other Rent and Related Activities for 
fiscal year 1999 and fiscal year 2000 as compared to fiscal year 2001.
    [The information follows:]

                      OTHER RENT AND RELATED ACTIVITIES, FISCAL YEAR 1999-FISCAL YEAR 2001
                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                    Fiscal year     Fiscal year     Fscal year
                           Subaccount                               1999 actual    2000 estimate   2001 estimate
----------------------------------------------------------------------------------------------------------------
Commercial Leases:
    Dallas, TX..................................................             545             352  ..............
    Los Angeles, CA.............................................           1,561           1,606           1,648
    Bethesda, MD (NLRC).........................................           2,265           2,211           2,252
    Lenexa, KS..................................................             107             108             110
    San Clemente, CA............................................             250             250             250
    Jersey City, NJ.............................................             386             388             395
                                                                 -----------------------------------------------
      Total, Commercial Leases..................................           5,114           4,915           4,655
                                                                 ===============================================
FDA Owned:
    MOD I/BRF...................................................           3,637           3,720           3,830
    San Juan/WEAC...............................................             510             525             540
                                                                 -----------------------------------------------
      Total, FDA Owned..........................................           4,147           4,245           4,370
                                                                 ===============================================
GSA Rent-Related................................................          10,757          10,745          10,730
                                                                 ===============================================
GSA Buildings Delegated to FDA:
    Atlanta.....................................................             680             700             725
    FB-8........................................................           3,000           3,120           3,250
    MOD II......................................................           1,920           2,000           2,075
    Twinbrook Complex...........................................             236             130              50
                                                                 -----------------------------------------------
      Total, Building Delegation................................           5,836           5,950           6,100
                                                                 ===============================================
      Total, Other R&R..........................................          25,854          25,855          25,855
----------------------------------------------------------------------------------------------------------------

    Other Rent and Rent-Related Activities.--FDA costs for Other Rent 
and Rent-Related Activities are included in three subaccounts: 
Commercial Rent & Related Services, GSA Rent-Related Services and GSA 
Building Delegation Services.
    Commercial Rent & Related Services are expenses that FDA pays 
directly to non-Federal sources under the delegation of direct lease 
and service authority. Services include rental of space and all 
building operation services, i.e., utilities, janitorial, guard and 
grounds maintenance, and operation and maintenance of heating, 
ventilation and air conditioning (HVAC) systems. FDA also pays similar 
expenses for a small number of buildings owned by the agency.
    GSA Rent-Related Services are expenses that FDA pays to GSA that 
are over and above the standard level that GSA covers in its rent 
costs. Services include security systems, guard services and HVAC 
systems.
    Building Delegation expenses are expenses that FDA pays to either 
GSA or non-Federal sources to operate and maintain buildings delegated 
to FDA by GSA for management of day-to-day operations. Services include 
utilities, janitorial, guard and grounds maintenance and operation and 
maintenance of HVAC systems.
    Question. The fiscal year 2001 budget requests $13.5 million in 
additional funding to improve statutory inspection coverage for human 
drugs, biologics, animal drugs and medical devices. Please provide the 
level of inspection effort in terms of frequency of inspection, level 
of funding and FTEs, in each of these areas proposed to be achieved in 
fiscal year 2001, as compared with each of fiscal years 1999 and 2000.
    Answer. The Federal Food Drug and Cosmetic Act and FDAMA require 
FDA to conduct inspections at specified intervals. To meet the 
statutory requirement, FDA must inspect at least 50 percent of the 
statutory human drugs, biologics, animal drugs and feed, and medical 
device establishments annually. No food establishments are subject to 
the 2-year statutory inspection requirement. In fiscal year 1999, FDA 
inspected 26 percent of the domestic registered drug manufacturers, 
compounders, or processors; 64 percent of statutory biologics firms; 25 
percent of domestic registered animal drug and feed establishments; and 
30 percent of domestic registered class II and III medical device 
manufacturers, compounders or processors. In fiscal year 2000, we 
project that the agency will conduct biennial inspections in 22 percent 
of the statutory human drug establishments, 50 percent of the statutory 
biologics establishments, 27 percent of the statutory animal drugs and 
feed establishments, and 24 percent of the statutory medical device 
establishments. In fiscal year 2001, without a funding increase and 
given our need to absorb current services, we project FDA will be able 
to conduct biennial inspections in 18 percent of the statutory human 
drug establishments, 50 percent of the statutory biologics 
establishments, 25 percent of the statutory animal drugs and feed 
establishments, and 21 percent of the statutory medical device 
establishments.
    The current funding level for the field for domestic statutory 
inspections is $44.31 million and the staffing level is 525 FTE. FDA is 
seeking an increase for field inspectional activities of $13.5 million 
and 89 FTE. With the funds requested in fiscal year 2001, we expect to 
make modest improvements in statutory inspection coverage. The agency 
can increase the percentage of statutory inspections to 28 percent for 
the Human Drugs program, 28 percent for Medical Devices and 46 percent 
of Animal Drugs and Feeds. We expect to meet and possibly exceed the 
statutory inspection requirement in the Biologics program. In addition, 
$1.7 million dollars of the increase will support sample collection and 
sample laboratory testing in the Foods program for chemical 
contaminants and pesticides and dietary supplements.

                                       PERCENT OF FACILITIES INSPECTED \1\
----------------------------------------------------------------------------------------------------------------
                                                                                   Animal drugs       Medical
                                                    Human drugs      Biologics       and feeds        devices
----------------------------------------------------------------------------------------------------------------
Fiscal year 1999................................              26              64              25              30
Fiscal year 2000................................              22              50              27              24
Fiscal year 2001 (proposed targets without                    18              50              25              21
 enhancement)...................................
Fiscal year 2001 (proposed targets with                       28             +50              46              28
 enhancement)...................................
----------------------------------------------------------------------------------------------------------------
\1\ Includes only those with sstatutory inspection requirements.

    I am happy to provide a table that shows the funding level and 
staffing levels for the field statutory inspectional activities by 
program area for fiscal years 1999, 2000 and 2001. Since the fiscal 
year 2001 budget request includes a modest increase for inspectional 
activities in the Foods program, the table also displays base and 
fiscal year 2001 resources for the field inspectional activities 
associated with chemical contaminants and pesticides and dietary 
supplements for reference.
    [The information follows:]

                             FDA FIELD INSPECTION RESOURCES, FISCAL YEARS 1999-2001
                                             [Dollars in thousands]
----------------------------------------------------------------------------------------------------------------
                                             Fiscal year 1999        Fiscal year 2000        Fiscal year 2001
                                         -----------------------------------------------------------------------
                 Program                               Staffing                Staffing                Staffing
                                            Funding      level      Funding      level      Funding      level
                                             level       (FTE)       level       (FTE)       level       (FTE)
----------------------------------------------------------------------------------------------------------------
Human Drugs.............................     $16,890         208     $16,374         194     $20,161         213
Biologics...............................      11,368         140      11,141         132      13,141         136
Animal Drugs & Feeds....................       3,735          46       4,304          51       6,304          54
Medical Devices.........................      11,693         144      12,491         148      16,491         164
                                         -----------------------------------------------------------------------
      Statutory Inspections Subtotal....      43,686         538      44,310         525      56,097         567
                                         =======================================================================
Foods \1\ \2\...........................      15,753         194      16,374         194      18,096         209
                                         -----------------------------------------------------------------------
      Total FDA.........................      59,439         732      60,684         719      74,193         776
----------------------------------------------------------------------------------------------------------------
\1\ The Foods program has no biennial inspection requirement. The Foods resources are included for reference.
  The inspectional activities for the Foods program funded by the fiscal year 2001 increase are for sample
  collection and laboratory testing for chemical contaminants and dietary supplements. In addition, $17 million
  is being requested in fiscal year 2001 for inspection of high risk food establishments. These funds are
  included under our Food Safety Initiative request.
\2\ Base estimate represents the total field resources (for both domestic and imports) for the Pesticide and
  Chemical Contaminants program and resources for Dietary Supplements from the Food Composition Standards and
  Labeling Project.

    Question. Of the $13.5 million proposed, what amount of funding is 
to enhance laboratory testing for pesticides, chemical contaminants and 
dietary supplements?
    Answer. Of the $13.5 million increase in funding proposed for 
inspectional activities, $1.7 million are designated to enhance 
laboratory testing for pesticides and chemical contaminants and for 
dietary supplements. The increase requested includes resources needed 
for sample collection and laboratory testing.

                        BUILDINGS AND FACILITIES

    Question. The fiscal year 2001 budget requests $3 million for the 
next phase of the plan for the Arkansas Regional Laboratory. What is 
the ``next phase'' of this project and what work will be accomplished 
with the $3 million requested?
    Answer. The $3.0 million included in the fiscal year 2001 budget 
request continues work on Phase III of the Arkansas Regional Laboratory 
project. Phase III provides for the renovation of the existing Building 
50 in its entirety and completes the common ORA/NCTR administrative and 
support area. Specifically, the $3.0 million in the budget request will 
be utilized to fund the majority of the mechanical and plumbing systems 
infrastructure and related electrical system items necessary for the 
operation of the installed mechanical systems.
    Question. Please give us a status report on funding provided to 
date for the Arkansas Regional Laboratory, including the work funded 
and the status of that work.
    Answer. I would be happy to provide for the record the status of 
the Arkansas Regional Laboratory ARL.
    [The information follows:]
Arkansas Regional Laboratory
    The ARL facility project was initiated in fiscal year 1995 through 
a $2.5 million appropriation for architectural and engineering design. 
The firm Kling-Lindquist (KL), Philadelphia, PA, was selected. KL, in 
consultation with FDA, developed an overall campus design comprising 
both new and renovated space:
  --(1) joint NCTR and ORA animal quarantine facility--renovation of 
        Building 62;
  --(2) ORA's Arkansas Regional Laboratory--new facility;
  --(3) Building 50 renovation--3 floors of office space; and,
  --(4) common Office of Regulatory Affairs (ORA)/National Center for 
        Toxicological Research (NCTR) administration and support area.
    The fiscal year 1996 appropriation included $3.8 million for an 
animal quarantine facility and preparation of joint NCTR/ORA laboratory 
space.

Laboratory Building, Phases I & II, status

    The estimated construction cost of the laboratory portion of the 
project totals $37.95 million.
    The fiscal year 1997 appropriation included $13.0 million for Phase 
I construction of the ARL. Phase I began construction and provided the 
ARL building, foundation, substructure, superstructure, exterior 
enclosure, and roofing. Major building systems, such as fire 
protection, HVAC, electrical and some site work, is included.
    The construction of the ARL project was awarded on September 26, 
1997, to Charles N. White Construction Company (White) of Clarksdale, 
Mississippi. White was given notice to proceed on Phase I of the 
project on October 1, 1997.
    A ground breaking ceremony was held at NCTR on November 18, 1997.
    The fiscal year 1998 appropriation included $14.55 million for 
Phase II construction. Phase II continues the ARL project by completing 
the building systems and providing some office and laboratory fit-out 
in the ORA laboratory building.
    On December 24, 1997, White was given notice to proceed on a 
portion of the Phase II construction.
    FDA received reprogramming authority for up to $10.4 million of 
Buildings and Facilities funds for Phase II of the ARL project to 
complete the office and laboratory fit-out for the laboratory building.
    On February 27, 1998, White was given notice to proceed on the 
remaining portion of Phase II to complete the office and laboratory 
fit-out for the laboratory building.
    A building dedication ceremony for Phases I & II, the laboratory 
portion, was held on February 17, 2000.
Building 50 Renovation and Common Area, Phase III, status
    Phase III provides the renovation of the existing Building 50 in 
its entirety and completes the common ORA/NCTR administrative and 
support area.
    The fiscal year 1999 appropriation included $3.0 million to begin 
construction of a portion of Phase III. This first portion included the 
exterior demolition, exterior structural work, exterior masonry work, 
and some roofing repairs.
    On January 26, 1999, White was given notice to proceed on the first 
portion of Phase III.
    The fiscal year 2000 appropriation included another $3.0 million to 
continue the construction of a portion of Phase III. This portion of 
work includes exterior glass and glazing, roofing, an elevator, and 
some of the site work and utilities.
    On February 2, 2000, White was given notice to proceed on the next 
portion of Phase III.
    The total resources required to complete Phase III of the Arkansas 
Regional Laboratory project are currently $9.5 million. With the $3.0 
million requested in the fiscal year 2001 budget, the balance required 
is $6.5 million in today's dollars. Because the work remaining to 
complete Phase III is being divided into smaller increments, completed 
over a longer duration, and the construction market continues to be 
very active with increased competition for skilled labor, the costs of 
the construction continues to escalate. Therefore, a total of 
approximately $7.2 million in additional funding will be needed to 
complete Phase III. We will evaluate the decision to request the 
remaining amount as we determine our total requirements to meet our 
mission critical responsibilities.
    Question. What level of funding is required beyond the $3 million 
requested for fiscal year 2001 to complete the plan for the Arkansas 
Regional Laboratory?
    Answer. The total resources required to complete Phase III of the 
Arkansas Regional Laboratory project are currently $9.5 million. With 
the $3.0 million requested in this budget, the balance required is $6.5 
million in today's dollars. Because the work remaining to complete 
Phase III is being divided into smaller increments, completed over a 
longer duration, and the construction market continues to be very 
active with increased competition for skilled labor, the costs of the 
construction continues to escalate. Therefore, a total of approximately 
$7.2 million in additional funding will be needed in fiscal year 2002 
to complete Phase III. Prior to submitting our fiscal year 2002 budget 
submission to DHHS, we will re-evaluate the total cost requirements for 
this project and make the necessary adjustments to meet our mission 
critical responsibilities.
    Question. The budget requests $20 million to replace the Los 
Angeles laboratory facility. What is the total cost of construction of 
this project? Is there a lower-cost construction phase of this project?
    Answer. The budget request of $20 million is for the first phase of 
a two phase project that totals $43.0 million. It is conceivable that 
the construction documents could be modified to define a ``site-
foundation'' only project that would entail a first phase cost of $10.5 
million. However, this would delay the funding of a large portion of 
the construction work for another year, resulting in the prolongation 
of construction. As the construction market continuing to remain very 
active and with increased competition for skilled labor, the cost of 
construction may escalate.
    Question. If funding is not provided to construct the Los Angeles 
laboratory replacement facility, where will FDA perform the work now 
performed by this laboratory?
    Answer. Status quo is not an option, if funding is not provided the 
LA lab will close. The lease for the current laboratory facility at 
Pico Boulevard has been extended twice, and will expire at the end of 
March 2000. A short-term extension is being negotiated, which will 
allow adequate time for either new facility construction, or an orderly 
closing of the Los Angeles laboratory and reassignment of staff and 
workload. Closure will force the State of California, Department of 
Health Services to find a new facility for their laboratory operation 
that is co-located in the existing FDA lab. The closure of a large 
field laboratory, particularly a large lab such as Los Angeles, on 
relatively short notice, will cause significant disruption due to the 
personnel impacts. Workload may be transferred to other existing labs, 
but the requisite staff with the skills and experience would not be in 
place for years. The other two laboratories in the Pacific Region, 
located in Alameda, CA and Seattle, WA, are essentially at capacity for 
people and space. It would be difficult for those labs to take on the 
additional workload and staff, and would add to the time frames for 
sample analysis. While space exists in the Arkansas Regional Lab, we 
would anticipate a potentially lengthier delay in recruiting and 
training new analytical staff to handle the increased workload since we 
would expect only a small percentage of displaced analysts from Los 
Angeles to transfer to the Arkansas facility. Other labs in the 
Southwest Region, at Kansas City and Denver are also at capacity. 
Furthermore, it would require additional time for shipping and 
sequencing of additional samples from the LA Lab into other lab 
operations. Longer delays would occur if the added workload puts the 
receiving labs into a backlog situation. If FDA had to ship more 
samples to other labs we would incur significant additional expenses in 
addition to the time delays. Since a large number of samples are 
perishable, they need expedited and environmentally controlled 
shipments. For shipments of a relatively short distance, we are often 
able to use the freight shipping services of bus companies, etc. For 
longer distances, we would likely need to go to airfreight, which is 
more expensive. We have no recent studies that would specifically 
quantify projected cost increases for sample shipments. Of equal or 
greater importance would be the resulting additional delays in 
obtaining analytical results.

                         MEDICAL DEVICE REVIEW

    Question. As you know, this Committee has taken a significant 
interest in ensuring that medical device review times are improved and 
last year we earmarked an additional $7 million to that end. In the 
device portion of the budget justification, it indicates that $7.7 
million will be devoted to device reviews. Can you please provide a 
breakdown of how that money will be spent?
    Answer. FDA is requesting an appropriated enhancement of $7.7 
million and 14 FTE that will be spent in the medical device review 
areas of genetic testing, reuse applications, and premarket science. On 
genetic testing, $2.6 million, including 5 FTE, will build capacity and 
develop strategies to respond to scientific breakthroughs in this area 
and review genetic testing applications. For reuse applications, $2.8 
million, including 5 FTE, will increase review activities and develop 
standards for premarket review of devices that may pose significant 
risk if reused. In premarket science, $2.3 million, including 4 FTE 
will improve our scientific information base and evaluation methods to 
facilitate patient access to breakthrough technologies; intensify 
research and scientific collaborations that will enhance reviewer and 
user understanding of new technologies; and work with stakeholders to 
develop comprehensive test methods and performance requirements for 
critical devices.
    Question. I also note that the justification references a number of 
times, the Center's performance goals. The agency indicates its 
performance goals to be reviewing and completing 90 percent of PMA 
first actions and 95 percent of 510(k) first actions within statutory 
review times, 180 and 90 days respectively. Can you please tell me the 
resources which are needed, both in terms of dollars and staffing 
(FTEs), to accomplish these goals?
    Answer. In its fiscal year 2001 performance plans for the Medical 
Device program, FDA outlined a series of performance improvements that 
expand on fiscal year 2000 accomplishments. In fiscal year 2000, 
Congress appropriated an increase of $7 million to enhance medical 
device reviews. Expanding on these efforts, the fiscal year 2001 budget 
requests a total of $79.2 million and more than 640 FTE dedicated to 
improving and expediting premarket review work for medical devices. 
Without additional funding in fiscal year 2001, FDA will be severely 
limited in its ability to meet the heightened performance targets which 
are labor, as well as time intensive. These requested funds will allow 
FDA to improve fiscal year 2001 performance workload for the device 
program over fiscal year 2000 activity levels. For example, FDA would 
increase the percentage of PMA first actions completed within 180 days, 
and HDE first actions within 75 days, from a performance target of 85 
percent in fiscal year 2000 to 90 percent in fiscal year 2001. Also, we 
will increase the percentage of PMA supplement final actions within 180 
days from a performance target of 85 percent in fiscal year 2000 to 90 
percent in fiscal year 2001. In addition, we will increase the 
percentage of 510(k) final actions completed within 90 days from a 
performance target of 65 percent in fiscal year 2000 to 75 percent in 
fiscal year 2001. The performance plan also indicates that in fiscal 
year 1999 FDA completed over 99 percent of 510(k) first actions within 
90 days. FDA plans to build on this accomplishment with the more 
difficult task of increasing the percentage of 510(k) final actions 
completed within 90 days.
    Question. A first action on device applications within statutory 
review times is laudable but even more important is final action. The 
agency is only planning a final action on 90 percent of PMA supplements 
within statutory review times and 75 percent of 510(k)s within 
statutory review times. The performance goals don't even reference 
objectives for PMA's, the most innovative products. Can you please 
provide the Committee with a breakdown of the resources that are 
needed, (both dollars and FTE) to get the job done in each of these 
areas?
    Answer. Calculating the cost required to meet all of FDA's medical 
device review statutory obligations is a very difficult task given the 
rapid growth in the volume and complexity of emerging medical devices. 
In fiscal year 1999, FDA estimated that $26.7 million would be required 
to review all statutory obligations as stated in FDAMA for medical 
devices. Since that time, in fiscal year 2000, the Medical Device 
program received a $7 million increase, and the fiscal year 2001 
President's Budget requests an additional $5.4 million in appropriated 
funds, as well as a $5.8 million user fee increase. If these spending 
requests are approved, the medical device program still needs $8.5 
million to fully meet all the medical device review statutory 
requirements in FDAMA. Furthermore, FDA has subsequently identified 
additional costs to the $8.5 million that include: $3 million for PMAs 
and PMA supplements, $3 million for 510(k)s, and $2.5 million for 
meetings with sponsors required by FDAMA throughout the medical device 
review process, bringing the total revised cost to $17.0 million. This 
cost estimate may require future adjustments to reflect any changes in 
workload projections.
    FDA is committed to increasing medical device review performance 
and appreciates the support of the Congress in continuing to make 
progress. FDA sets performance goals for both first actions and final 
actions in the fiscal year 2001 Performance Plan. As I said earlier, 
the fiscal year 2001 performance plan includes device review 
performance goals, at the resource level requested in the President's 
budget, of 90 percent of PMA original first actions within 180 days, 
and HDE first actions within 75 days; 90 percent of PMA supplement 
final actions within 180 days; and 75percent of 510(k) final actions 
within 90 days.
    The fiscal year 2001 performance plan also commits to improved 
timeliness in meetings with sponsors, as required by FDAMA, throughout 
the medical device review process. FDA is also committed to high 
quality, interactive as well as timely device reviews. By statute and 
regulation, we are required to take action--final action if possible or 
interim action if necessary--on 510(k)s within 90 days; approve or 
disapprove IDEs within 30 days; and take action again, final action if 
possible or interim action if necessary--on PMAs and PMA supplements 
within 180 days and HDEs within 75 days.
    Question. Commissioner Henney you have made enhancing the Agency's 
science base a priority in your administration. This is a laudable goal 
and one that many of us would agree with given the increasing 
complexity of products the agency must review. Can you provide us with 
some sense of how that money will be used?
    The budget justification, for instances, speaks to ``improving the 
scientific information base'' and ``intensifying research and 
scientific collaboration in breakthrough technologies,'' ``increas[ing] 
scientific interactions with industry during review,'' and ``seeking 
outside expertise to ensure that its regulatory decisions are based on 
the latest scientific knowledge,'' etc. What do you mean? Are we 
talking about enhancing the training of existing reviewers? Hiring 
``bioengineers'' or others that are schooled in the latest 
technological developments to review products? Increasing the agency's 
bench science? Also, please explain what is meant by ``collaborative''.
    Answer. I am planning to improve the scientific information base 
via several avenues, a few of which you mentioned. We will work closely 
with the outside scientific community to focus our energies on 
breakthrough technologies and how best to regulate them. Consider the 
area of new medical devices. During the past two years, more than 800 
new high technology products have entered the market or are under 
development. FDA will consult with the scientific community in 
establishing appropriate standards for these new products. We will also 
collaborate with internationally recognized research Centers to help 
focus their efforts in emerging areas such as non-invasive surgical 
techniques and computerized technologies. In other instances we are 
strengthening our science base by building models that will predict 
risk individuals will face in clinical trials for new products. These 
models are constructed in partnership with scientists from other 
government agencies and industry. Our science base is also strengthened 
by maintaining close consultation with product sponsors in the early 
stages of product development. These early dialogues are invaluable to 
both FDA and industry, not only because they expedite the specific 
products under development by sponsors, but also because they expand 
the understanding of scientific breakthroughs that can be incorporated 
into guidance provided to other product sponsors.
    Our existing scientific reviewers need to continually update their 
knowledge of scientific advances in order to intelligently regulate new 
products. We need to strengthen the continuing active training programs 
that are already in place within the Agency. The `Staff College' 
concept has worked well at FDA, but should be augmented by external 
expertise. A critical requirement for strengthening FDA science is the 
recruitment of scientists with state-of-the-art skill sets. We must be 
able to access the appropriate professionals to address the 
breakthrough areas. For example, as a continually larger number of 
products are spawned by the biotechnology revolution, we will have to 
recruit more scientists in such disciplines as molecular biology.
    In answer to your question on the meaning of ``collaborative,'' we 
are defining that term as the creation of relationships and/or formal 
agreements with others outside FDA that will enhance FDA's ability to 
meet its public health mission. We intend to enter into collaborations 
where the end results are greater for all concerned than could have 
been realized if all parties were working independently. We have 
demonstrated that these collaborative efforts in the science arena can 
work very well. One illustration is the Product Quality Research 
Institute. This Institute was created in 1999. It is a partnership 
between FDA and several drug industry associations, designed to find 
joint solutions to key issues associated with drug product quality. The 
partnership works because it marshals the experience and energies of 
many private sector, academic and government specialists and focuses it 
on important drug quality issues. All parties gain in this 
relationship. The patients receive higher quality products, and both 
FDA and industry benefit by solving the tough problems, and thus 
reducing both costs and regulatory burden.
    Question. I understand that where more complex devices are eligible 
for 3rd party review, the industry is taking advantage of the 3rd party 
program. For instance, I understand the imaging sector of the device 
industry is using the program in much greater numbers, than other 
sectors. I also am aware that FDA has not yet met FDAMA's statutory 
triggers for the pilot program to begin. Can you advise me of the steps 
being taken to make this program work?
    Answer. In fiscal year 1999, we received 32 510(k)s with a third 
party review, the most in any fiscal year since the program began. But 
this is still a very small proportion, only 3 percent, of the 
approximately 1,200 submissions received that were eligible for third 
party review--including nearly 800 510(k)s for Class II moderate risk 
devices. The list of 154 devices currently eligible for third-party 
review includes a variety of diagnostic imaging devices, such as 
diagnostic ultrasound systems, magnetic resonance imagers, nuclear 
medicine tomography systems, and numerous types of x-ray systems and 
related products. The list of eligible devices is available on FDA's 
website at http://www.fda.gov/cdrh/dsma/3258.html. In fiscal year 1999, 
diagnostic ultrasound devices accounted for 15 of the 32, or 47 
percent, of the 510(k)s received by FDA with a third-party review, but 
only two third-party 510(k)s were received for all other types of 
diagnostic imaging devices. Thus, while one sector of the diagnostic 
imaging industry made significant use of the third party approach, most 
sectors did not. Even in the diagnostic ultrasound sector, 
approximately three-fourths of all 510(k)s processed by FDA in fiscal 
year 1999 did not have a third-party review.
    While you are correct that the third party program has not met the 
two FDAMA triggers per section 523(c) of the Federal Food, Drug, and 
Cosmetic Act, FFD&C Act it is important to note that the statutory 
triggers do not impact the starting date of the third party program. 
Instead, they are triggers for beginning the time period that would 
result in sunset of the Accredited Persons provisions. FDA has already 
begun FDAMA's third party program. On November 21, 1998, the agency 
began accepting reviews of premarket notifications--510(k)s--from 
qualified third party organizations under the Accredited Persons 
provisions. Before that date, the agency took numerous steps that were 
necessary for successful implementation of the program, including 
publishing the criteria for accreditation of third parties, as required 
by the FFD&C Act; issuing draft and final procedural guidance for the 
program; issuing a list of devices eligible for Accredited Person 
review; developing product-specific guidance and recognizing national 
or international consensus standards to assist third parties in 
conducting consistent and thorough 510(k) reviews; performing 
accreditation of prospective third parties; and conducting training of 
Accredited Persons.
    One of the statutory triggers--section 523(c)(2)--that would begin 
the time period leading to sunset of the Accredited Persons provisions 
occurs when the Agency notifies Congress that it has processed a third-
party review for at least 35 percent of the potentially eligible 
devices. Due to low industry use of the third-party approach, together 
with the large number of potentially eligible devices, it appears 
unlikely that this trigger will be met. The other trigger--section 
523(c)(1)--occurs when the agency notifies Congress that at least two 
third parties are accredited to review at least 60 percent of 510(k) 
submissions. Currently, 154 devices are eligible for third-party 
review--including many significant devices such as diagnostic 
ultrasound systems, magnetic resonance imagers, endoscopes, and cardiac 
monitors--and at least 2 of the 13 Accredited Personsare available to 
review each of the devices. In fiscal year 1999, the Agency received 
more than 1,200 510(k) submissions for the 154 devices, representing 
nearly 50 percent of all 510(k)s that are potentially eligible for 
third-party review based on the criteria in section 523(a)(3) of the 
FFD&C Act.
    FDA is working on a significant expansion of the third-party 
program. The agency intends to pilot test an expansion of the program 
that will allow all devices eligible under the terms of the statutory 
provision to be candidates for third party review. CDRH is planning to 
issue a draft guidance document in April that will explain the agency's 
expanded program and provide an opportunity for comment from all 
interested parties. We are hopeful that expansion of the eligible 
device list will stimulate greater industry interest in the third party 
approach, and many trade associations have informed us that they will 
encourage their members to take advantage of these third party 
opportunities. In addition, we are optimistic that the additive user 
fee proposal included in the Administration's fiscal year 2001 budget 
proposal, if implemented, will jump-start the third party program. The 
revenue from these fees would be used to provide information about the 
availability of third-party reviews and to subsidize the cost of these 
reviews.
    I understand that there may be a serious backlog as well as long 
review times for medical devices which get reviewed by the Center for 
Biologics Evaluation and Review.
    Question. What is the backlog for devices reviewed by the biologics 
center?
    Answer. Thank you for the opportunity to respond and provide 
information on the improvements made in device review performance by 
the Center for Biologics Evaluation and Research, CBER, since the 
enactment of the Food and Drug Administration Modernization Act of 
1997. There are currently 4 overdue PMAs or 510(k)s at CBER. Because we 
define overdue reviews as reviews that did not meet the statutory 
deadline for first review action, once FDA misses a statutory deadline 
for a submission, the submission will remain on the overdue list until 
it is either approved, cleared, withdrawn or denied. Subsequent review 
cycles will not have an effect on an application's overdue status until 
the product is approved, cleared, withdrawn, or denied. Thus far, 
during fiscal year 2000 there have been no additional overdue 
submissions. Significant improvements in review of all types of devices 
has occurred during the past 2 years. These improvements have come 
about as a result of a concerted effort by CBER known as the Device 
Action Plan. One example of the improvement is the review of 510(k)s at 
CBER. During the past two years on-time review of all device 
submissions has improved dramatically. For example, in fiscal year 
1998, only 22 percent of 510(k)s were reviewed on time, that is within 
90 days, for the first response either approving or denying substantial 
equivalence. On-time review improved to 64 percent in fiscal year 1999, 
and to 100 percent on time thus far in fiscal year 2000.
    CBER reviews devices that are used to ensure the safety of the 
blood supply, to prepare certain blood components, and tests that are 
used in the diagnosis of Human Immunodeficiency Virus (HIV). These 
devices involve complex issues and are critical to the public health. 
Devices reviewed by CBER include tests used to screen the blood supply 
for HIV, Hepatitis B virus, and Hepatitis C virus; diagnostic tests for 
HIV; blood-bank software; devices used to collect blood components; and 
other devices used to ensure blood safety. Approximately 12 million 
units of donated blood and 12 million units of donated plasma are 
collected each year. FDA considers the review of devices used to ensure 
blood safety one of its most important public health responsibilities.
    As mentioned above, CBER initiated the Device Action Plan in 1999. 
Because most of the devices reviewed by CBER are reviewed within the 
Office of Blood Research and Review, OBRR has reengineered the review 
process to improve the effectiveness and timeliness of reviews 
including the following: (1) implementation of the Regulatory Project 
Management concept to set the target dates for the review of an 
applications; (2) integration of the scientific and regulatory reviews 
within a division; (3) delegation of the resolution of the scientific 
issues down the management chain; (4) issuance of the Office Standard 
of Operation Policy (OSOP) to achieve the consistency and timeliness of 
the review; and, (5) implementation of the monitoring process to ensure 
the achievement of the Office Streamline Review Process.
    Question. What are the average review times for 510(k) and PMA 
devices reviewed by the biologics center?
    Answer. As noted above, review of all devices has greatly improved 
over the past 2 years. For fiscal year 1999, the average 510(k)s review 
times were 77 days per review cycle. This figure does not include time 
that the manufacturer may have taken to respond to deficiencies 
identified by FDA. If the submission was found to be not substantially 
equivalent, and the manufacturer needs to submit additional information 
for product approval then a second or even a third review cycle may be 
necessary. In fiscal year 1998, the average PMA review time was 132 
days per review cycle. Again, this does not include time a manufacturer 
may have needed to respond to FDA identified deficiencies. The average 
review time for PMAs for fiscal year 1999 are not yet available because 
submissions are still undergoing additional cycles of review before 
approval, denial or withdrawal.
    Question. What resources are needed to get the job done?
    Answer. The backlog of overdue medical device applications in CBER 
has been dramatically reduced. This accomplishment was achieved as the 
result of redirection of other mission-related, non-user-fee 
activities. In order to maintain the same level of response to device 
applications, as well as address other areas, the Office of Blood 
Research and Review, OBRR, requires additional resources. Specifically 
these needs are to meet predicted review workload; to address emerging 
infectious blood-borne diseases; and to deal with new technologies such 
as nucleic acid testing for infectious diseases, novel blood collection 
devices, and single-unit blood and plasma inactivation devices. Recent 
analyses of CBER workload predicts that there will be a continued 
upward trend in all types of device submissions to CBER, in particular 
to OBRR. The analyses were based on the trend in submissions over the 
past few years and on the degree of employee effort needed to review 
each type of submission. We have made significant progress on 
eliminating backlogged submissions and decreasing the review time on 
each application type. However, this progress will be difficult to 
maintain and has been accomplished at the cost of other components of 
our mission. Additional resources are needed to continue to provide the 
same speed and quality review in the blood program. The Office of Blood 
Research and Review estimates that 20 FTE and $2.5 million are needed 
to sustain the reduction of the blood medical device backlog, and 
perform their other regulatory responsibilities. This estimate does not 
include resources needed to permit scientific professional development 
and research.
    There are also additional needs related to special initiatives 
which include: expansion of reporting systems for transfusion-related 
errors, accidents and adverse reactions requiring approximately $1 
million including at least two FTE; completion of rulemaking, guidance, 
including monographs, and supply improvements under the Blood Action 
Plan at a cost of about $1 million per year for 3-5 years; and research 
to permit science-based revision of the donor questionnaire costing 
about $3 million.

                          HEALTHY PEOPLE 2010

    I have a few questions about the Department of Health and Human 
Services' target for reducing underage smokeless tobacco use and the 
method for measuring whether the target is met.
    For purposes of Healthy People 2000, the Department established a 
1988 baseline of 6.6 percent for past-month use of smokeless tobacco by 
12-17 year-old males and set a goal of reducing smokeless tobacco use 
among 12-17 year-old males to 4 percent by 2000. The Department used 
the National Household Survey on Drug Abuse to measure progress toward 
this goal. According to the National Household Survey, the 4 percent 
goal was not only reached but surpassed in 1993 and 1994.
    In 1996, the Department indicated that it had changed its survey 
methodology, and that one effect of the change was to estimate 12-17 
year-old male smokeless tobacco use at 5.1 percent in 1995--a much 
higher number than the 3.5 percent reported for 1994. Even with the new 
methodology and the higher 1995 estimate the department's 4 percent 
goal was reached and surpassed in 1996, 1997, and 1998. A past-month 
use rate of 2.1 percent was reported for 1998 for 12-17 year-old males.
    Healthy People 2010 establishes a new goal of reducing smokeless 
tobacco use among all 9th through 12th graders to 1 percent by 2010, 
but it will use yet another methodology--the Youth Risk Behavior 
Survey--to measure progress toward this goal.
    In the draft Healthy People 2010 Objectives issued for public 
comment however, the Department stated that ``continuity'' and 
``comparability'' were important and that, whenever possible, Healthy 
People 2010 should use the performance measures already used in Healthy 
People 2000.
    Question. Could you explain why the department has again revised 
its methodology for measuring underage smokeless tobacco use, for the 
second time in six years?
    Answer. Continuity and comparability in the source of information 
from one year to the next are important factors in monitoring trends in 
tobacco use in the population. The Department supports three surveys to 
determine how adolescents use tobacco products--the National Household 
Survey on Drug Abuse, NHSDA; Monitoring the Future, MTF; and the Youth 
Risk Behavior Survey, YRBS. Each of these surveys takes a somewhat 
different approach. Monitoring the Future surveys youth in schools, the 
YRBS also focuses on school youth; and the NHSDA interviews a large 
sample of persons over 12 years of age. Because these surveys are 
somewhat different in how the samples are drawn, how interviews are 
conducted, and the general structure of the questionnaires, they 
produce somewhat different results with respect to absolute levels of 
use. The different approaches contribute to resolving the problem of 
what the level of true use may be. What is important is that the three 
surveys historically describe essentially similar trends.
    Careful consideration was given to all available data sources for 
monitoring Healthy People 2000 and 2010 objectives. The tobacco working 
group, comprised of scientists and health professionals, suggested 
using YRBS because state data is available for both baseline and trend 
analysis, making it possible for states to accurately measure progress 
on the objectives.
    Question. How can the department accurately gauge the actual trend 
of smokeless tobacco use over time when it changes its measurement 
tools every few years?
    Answer. The Department does not change the tools it uses for 
measurement every few years. The YRBS, the NSDA, and the MTF have been 
used for more than a decade to measure changes in substance use and 
abuse. Each survey provides estimates of prevalence and trends over 
time. Each of the surveys can be used to provide a general picture of 
the trends in youth use of smokeless tobacco. Trend data are available 
in the current Healthy People 2010 data source, the Youth Risk Behavior 
Survey, which has collected information about smokeless tobacco use 
since 1993.
    Question. Will the Department again change its measurement tools if 
the Healthy People 2010 target is achieved ahead of schedule? Is there 
some concern that we'll stop making vigorous efforts to reduce underage 
smokeless tobacco use if estimated use levels are too low?
    Answer. The Department has maintained the NHSDA for almost 30 
years, the MTF for 25 years, and the YRBS for almost a decade. There is 
no intention to modify these surveys because of a specific change in 
the trend. Indeed, in order to describe trends the surveys need to be 
modified as little as possible. In addition, the department has no 
intention to change the Healthy People data source during the decade. 
As long as any youth are using tobacco, a cancer-causing substance, the 
department will maintain vigorous prevention, cessation, and research 
efforts in this area.
    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. The first strategic goal focuses on premarket activities 
and the second on postmarket activities. Both the fiscal year 2001 
budget request and performance plan are organized by these strategic 
goals. The fiscal year 2001 budget requests the resources necessary for 
FDA's core activities of premarket review and postmarket surveillance 
by program. The performance plan also organizes the agency's 
performance goals by these two strategic goals and links the 
performance goals to the agency's programs as presented in the budget 
request.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    What difficulties, if any, did you encounter, and what lessons did 
you learn?
    Answer. The process used to link performance goals to budget 
activities involved program managers, planners and budget 
representatives from each major program area, their field counterparts, 
and analysts in the Office of Planning and the Office of Financial 
Management in the Office of the Commissioner. It involved several 
steps, the most significant of which was the use of strategy teams 
composed of representatives of all agency programs and led by senior 
agency managers. These teams brought agency decision-makers together to 
look carefully at the difference between current Agency performance and 
specific performance targets established by statute, such as FDAMA. In 
this way we could focus on resources needed to close the gap between 
actual and intended performance and on the strategies needed such as 
leveraging and improving our science base to meet performance targets. 
Performance goals were developed to reflect the level of performance 
expected based on the budget request.
    We did not encounter many difficulties in linking performance goals 
to budget activities in terms of developing goals related to the budget 
activities. The difficulties encountered were in precisely linking 
specific resources to specific performance goals and in the 
presentation of the budget and related performance goals in the 
performance plan. We learned we would need more precise performance 
data and cost accounting data to establish specific linkages between 
resources and specific goals. This data, would be costly and difficult 
to collect especially if we had to collect performance related data 
from the public, industry, and the health care community. The 
presentation and integration of the budget and the performance plan are 
a continuing challenge and a continuing learning process. We will 
continue to look for meaningful ways to relate agency outcomes with 
resource allocation decisions.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Does each account have performance measures?
    Answer. Yes, the agency's performance plan links performance 
measures (goals) to its budget by its overall premarket and postmarket 
strategic goals and by program. The agency's budget has one major 
appropriation account which covers its programs. Each program within 
the account has corresponding performance goals in the performance 
plan.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Do you plan to propose any changes to your account structure for 
fiscal year 2001?
    Will you propose any changes to the program activities described 
under that account structure?
    Answer. The agency's performance planning structure is the same as 
the account and activity structure in its budget justification. The 
budget and the performance plan are both organized by the agency's two 
overall strategic goals for premarket and postmarket activities and by 
programs. We currently plan no changes to the agency's account 
structure nor to the program activities described under that account 
structure in fiscal year 2001.
    Question. How were performance measures chosen?
    How did the agency balance the cost of data collection and 
verification with the need for reliable and valid performance data?
    Does your plan include performance measures for which reliable data 
are not likely to be available in time for your first performance 
report in March 2000?
    Answer. Performance measures were selected by the agency leadership 
based on their direct support of the agency's long range, strategic 
goals, and also because they supported the strategies outlined during 
the planning phase of the fiscal year 2001 budget. Goals contained in 
the Performance Plan were determined to be the most critical indicators 
for successful achievement of strategic goals and strategies. The 
specific performance target levels for fiscal year 2001 were also 
influenced by several factors, including: the urgency of the health or 
safety risk addressed by the goal, the proposed level of funding, 
environmental factors such as size and complexity of workload, and 
actual performance results for fiscal year 1999.
    The agency balanced the cost versus the need for performance data 
based on the degree of health and safety risks involved and on the 
availability of existing data. The greater the potential risks, the 
greater is the need for performance data to tell us how we are 
addressing that risk. Where mature data systems are already in place, 
costs are well justified by the quality of performance data we receive. 
PDUFA is a good example of this type of program. In some new areas in 
which the agency is re-inventing its review processes to expedite the 
marketing of safe products, such as the premarket notification program 
for food additives, we are obliged to re-engineer our data systems, and 
collect data to support our regulatory activities. Improvements to the 
existing data collection systems that support our regulatory efforts 
require an initial front-end investment that will yield benefits 
relatively soon within one or two years. The benefits resulting from 
these investments in terms of the public health impact and ultimate 
savings to the industry will exceed the cost of the improvements. For 
some areas, such as medical errors, a large front-end investment is 
required. But we believe that investment in data collection is well 
worth the cost, even though benefits will only be fully realized after 
five or more years. This is because a comprehensive medical error 
surveillance, assessment and correction system is a primary means for 
improving health and safety outcome.
    Yes, FDA's fiscal year 2001 Performance Plan includes thirteen 1999 
performance goals and measures for which data were not available for 
inclusion in the fiscal year 1999 Performance Report. These goals 
account for 20 percent of the 65 performance goal commitments for 
fiscal year 1999.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    For each key annual goal, indicate whether you consider it to be an 
output measure (``how much'') or an outcome measure (``how well'').
    State the long-term (fiscal year 2003) general goal and objective 
from the agency Strategic Plan to which the annual goal is linked.
    Answer. I would be happy to provide that for the record.
    [The information follows:]

                                FISCAL YEAR 200 ANNUAL PERFORMANCE PLAN KEY GOALS
----------------------------------------------------------------------------------------------------------------
                                           Fiscal year 2000
               Program                     performance goal          Output/outcome           Strategic goal
----------------------------------------------------------------------------------------------------------------
Foods                                  Complete First Action    Output.................  Provide consumers
                                        on 40 percent of food                             quicker access to new
                                        and color additive                                food ingredients and
                                        petitions within 360                              dietary supplements,
                                        days of receipt.                                  while assuring safety
                                                                                          and effectiveness.
Foods................................  Achieve adoption of      Outcome................  Reduce the health risks
                                        Food Code by at least                             associated with food
                                        18 states.                                        and cosmetic products
                                                                                          by preventing human
                                                                                          exposure to hazards,
                                                                                          monitoring product
                                                                                          quality and correcting
                                                                                          problems that are
                                                                                          identified.
Foods................................  Inspect at least 90      Output.................  Reduce the health risks
                                        percent of high risk                              associated with food
                                        domestic food                                     and cosmetic products
                                        establishments.                                   by preventing human
                                                                                          exposure to hazards,
                                                                                          monitoring product
                                                                                          quality and correcting
                                                                                          problems that are
                                                                                          identified.
Foods................................  Conduct 60,600 import    Output.................  Reduce the health risks
                                        exams of high risk                                associated with food
                                        food products.                                    and cosmetic products
                                                                                          by preventing human
                                                                                          exposure to hazards,
                                                                                          monitoring product
                                                                                          quality and correcting
                                                                                          problems that are
                                                                                          identified.
Drugs................................  Review and act on 90     Output.................  Reduce human suffering
                                        percent of priority                               and enhance public
                                        NDAs within 6 months.                             health by providing
                                                                                          quicker access to
                                                                                          important, lifesaving
                                                                                          drugs, and assuring
                                                                                          availability of safe
                                                                                          and effective drugs.
Drugs................................  Review and act on 45     Output.................  Reduce human suffering
                                        percent fileable                                  and enhance public
                                        original generic drug                             health by providing
                                        application within 6                              quicker access to
                                        months after                                      important, lifesaving
                                        submission date.                                  drugs, and assuring
                                                                                          availability of safe
                                                                                          and effective drugs.
Drugs................................  Inspect 22 percent of    Output.................  Prevent unnecessary
                                        registered human                                  injury and death to
                                        manufacturers,                                    American public caused
                                        repackers, relabelers                             by adverse drug
                                        and medical gas                                   reactions, injuries,
                                        repackers.                                        medication errors and
                                                                                          product problems.
Biologics............................  Review and act on 90     Output.................  Ensure the expeditious
                                        percent of priority                               availability of safe
                                        original NDA/PLA/BLA                              and effective human
                                        submissions within 6                              drugs, including
                                        months of receipt.                                biologics, for
                                                                                          prevention, diagnosis,
                                                                                          and treatment of
                                                                                          disease.
Biologics............................  Meet the biennial        Output.................  Reduce the risk of
                                        inspection statutory                              biologics products on
                                        requirement by                                    the market through
                                        inspecting 50 percent                             assuring product
                                        of registered blood                               quality and correcting
                                        banks, source plasma                              problems associated
                                        operations and                                    with their production
                                        biologics                                         and use.
                                        manufacturing
                                        establishments.
Animal Drugs.........................  Increase the level of    Output.................  Increase the
                                        presubmission                                     availability and
                                        conferences with                                  diversity of safe and
                                        industry sponsors to                              effective animal drugs
                                        75 percent.                                       and feeds.
Animal Drugs.........................  Review and act on 65     Output.................  Increase the
                                        percent of NADAs/                                 availability and
                                        Abbreviated New Animal                            diversity of safe and
                                        Drug Applications                                 effective animal drugs
                                        (ANADAs) within 180                               and feeds.
                                        days of receipt.
Animal Drugs.........................  Improve biennial         Output.................  Reduce risks associated
                                        inspection coverage by                            with marketed animal
                                        inspecting 27 percent                             products.
                                        of registered animal
                                        drug and feed
                                        establishments.
Medical Devices......................  Increase the on-time     Output.................  Provide quicker access
                                        percentage of                                     to important, life-
                                        Premarket Approval                                saving and health-
                                        Application (PMA)                                 enhancing medical
                                        first actions (within                             devices, while
                                        180 days) and                                     assuring their safety
                                        Humanitarian Device                               and effectiveness.
                                        Exemption (HDE) first
                                        actions (within 75
                                        days) completed to 85
                                        percent.
Medical Devices......................  Review and complete 65   Output.................  Provide quicker access
                                        percent of 510(k)                                 to important, life-
                                        (Premarket                                        saving and health-
                                        Notification) final                               enhancing medical
                                        actions within 90 days.                           devices, while
                                                                                          assuring their safety
                                                                                          and effectiveness.
Medical Devices......................  Inspect 24 percent of    Output.................  Reduce the risk of
                                        Class II and Class III                            medical devices and
                                        domestic medical                                  radiation-emitting
                                        device manufacturers.                             products on the market
                                                                                          by assuring product
                                                                                          quality and correcting
                                                                                          problems associated
                                                                                          with their production
                                                                                          and use.
----------------------------------------------------------------------------------------------------------------

    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. FDA's Office of Planning, OPL, uses a long-established 
liaison system to work with each Center's staff that is responsible for 
its Center's portion of the Performance Plan. Each OPL liaison has 
received extensive training in the types of GPRA goals. OPL liaisons 
consulted closely with the Centers' staffs during the development of 
the goals. Once in draft form, OPL liaisons reviewed and provided 
comments on the Performance goals back to the Centers' staffs. In many 
cases, OPL liaisons offered suggestions so the goals would provide 
outcome measures. The OPL liaisons meet weekly together to exchange 
comments and suggestions to encourage Centers to develop outcome goals. 
Finally, the OPL Director provided another review level to point out 
possible improvements in goals.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. In addition to the liaison program mentioned in my previous 
answer, the Office of Planning OPL has provided extensive GPRA training 
to many parts of FDA. Between 1996 and 1997 a three-person OPL team 
trained over 500 FDA personnel throughout the country on GPRA 
requirements in three-day workshops. An integral part of this training 
were lectures and exercises to identify, distinguish and write outcome 
goals. OPL has followed up this initial training with workshops 
tailored to Centers' specific needs. For instance, these workshops 
often involve participants rewriting draft goals to become outcome 
oriented.
    While we believe that many managers understand the difference 
between output and outcome goals, by necessity we include output goals 
because many of our efforts provide information to an industry or the 
public. Even with this information in hand, there may be many external 
intervening factors that can affect the outcomes that we cannot 
control. Because change can be difficult, there can be economic, 
political, and cultural obstacles to altering people's behavior. For 
instance, providing the public information may require new spending 
patterns and challenging ingrained behavior.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. Some examples of external customer satisfaction measures 
are usefulness of information provided by FDA on food labels, 
usefulness of Consumer Alerts about food safety problems, and consumer 
awareness of FDA's mission. These measures were used as part of a 
government-wide Customer Satisfaction Survey sponsored by the 
President's Management Council. The particular group of FDA customers 
targeted by this survey were the principal grocery shoppers and food 
preparers in U.S. households. The agency has also committed to the 
National Performance Review goal which focuses on the availability, 
quality and usefulness of prescription drug information provided to 
individuals who receive new medicines.
    The agency applies a variety of performance measures to gauge 
service to internal customers, including measures of quality and 
timeliness of performance. Each of the agency's administrative support 
functions, including human resource management, procurement, 
facilities, information resource management and budgeting, are 
incorporating such measures into their continuous improvement efforts. 
Each week, executive officers from each of the agency's organizational 
components meet to address concerns in these areas of internal customer 
service. This meeting serves as an excellent forum for listening to 
feedback from customers and engaging in problem solving. In addition, 
the agency conducts periodic employee surveys to determine their degree 
of satisfaction at FDA. Their satisfaction is measured by such 
indicators as: job satisfaction, overall quality of the work being 
done, recognition for doing a good job and degree of flexibility in 
doing the work.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    If a proposed budget number is changed, up or down, by this 
committee, will you be able to indicate to us the likely impact the 
change would have on the level of program performance and the 
achievement of various goals?
    Answer. The agency's measurable fiscal year 2000 goals were 
important, but not the only, inputs used in developing the fiscal year 
2001 budget. We raised a series of questions during our planning and 
budgeting process. First, what was our long range goal? Second, what 
was our performance in fiscal year 1999? Third, how much closer did our 
fiscal year 2000 performance goal bring us toward closing the gap 
between actual and ideal? The gap between our fiscal year 2000 
performance goals and our long range goals told us how much further we 
had to go to reach our ideal. The selection of an fiscal year 2001 
performance goal represented a conscious decision concerning how much 
of the remaining gap we intended to close. The fiscal year 2001 budget 
increases are an estimate of the resources that would be required to 
achieve the fiscal year 2002 performance goals, as well as implement 
other key strategies.
    The area of drug inspections provides a good example of this 
process at work: We knew that one long range goal in the area of drug 
inspections was to meet our statutory biennial inspection requirement, 
which meant inspecting at least 50 percent of the drug establishments 
annually. Our fiscal year 1999 actual performance was 22 percent. We 
had established the same 22 percent goal for fiscal year 2000, and knew 
that ideally we would have to inspect an additional 28 percent of the 
firms annually to meet the statutory requirement. We made a conscious 
decision to set the fiscal year 2001 performance goal at 28 percent 
rather than the statutory goal of 50 percent. The more modest 
inspection goal in fiscal year 2001 was selected because FDA had to 
also address higher priority health and safety risks such as imports, 
needed to strengthen its science capability to address 21st Century 
technology, and also wanted to invest in bringing the states up to 
speed so that they could be more effective partners with FDA in the 
future. The fiscal year 2001 budget request for drugs in the post 
market arena reflects a balance in funding the above strategies.
    If a proposed budget number is changed by your Committee we would 
be able to estimate the likely impact of that change on our level of 
program performance for those areas where we have measurable 
performance goals. We would also be able to estimate the likely impact 
on less quantitative proposals, such as the strengthening of an adverse 
event reporting system; but the estimate would be made in qualitative 
terms.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    If so, who has access to the information--senior management only, 
or mid- and lower-level program managers, too?
    Are you able to gain access easily to various performance-related 
data located throughout your various information systems?
    Answer. We do have the capability to measure program performance in 
those instances where performance goals are stated in quantitative 
terms. We have the technological capability of reporting program 
performance throughout the year on a regular basis. All levels of 
management have access to that information, and our progress on key 
performance goals are becoming increasingly available both on FDA's 
intranet and on the internet as well. The agency is improving in its 
ability to access performance-related data throughout the various 
information systems. More of FDA's performance information is being 
shared through the web as time goes on. We are generally aiming for 
greater accessibility by all who have a need for this type of 
information.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in the budget.
    Many agencies have indicated that their present budget account 
structure makes it difficult to link dollars to results in a clear and 
meaningful way.
    Have you faced such difficulty?
    Answer. We have not been able to precisely link dollars to specific 
performance goals and results. However, our present budget account 
structure has not prevented us doing so. Rather, we do not have the 
necessary performance data or cost accounting systems to establish 
precise linkages between specific performance goals and results and 
resources. We have estimated resources for broad categories of goals 
based on our strategic goals and programs. For example, we estimate 
aggregate dollars for human drug premarket activities. We have also 
been able to estimate approximate changes to performance goal targets 
based on changes to related budget requests and final appropriations. 
However, it is not easy to estimate dollar amounts or FTE needed to 
meet specific statutory requirements or performance targets or to 
report on performance. Many factors affect performance. Using a risk 
based strategy the agency will emphasize higher priority risks over 
lower priority risks. Also, as we pursue more leveraging opportunities, 
we will have additional start up costs, set up time, and training 
requirements for our partners. Improving the agency's science capacity 
upon which decisions are based will also require resources and time. We 
need to expand our electronic submission and review capabilities, 
update our laboratories, and continuously train our staff in the 
scientific advancements that are creating the new products subject to 
FDA regulation. Allocating these investments which are intended to 
improve overall performance to specific performance results is very 
challenging.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. We do not believe that the linkages would be clearer if the 
budget account structure were modified. As described above, the 
difficulties in establishing linkages are not caused by the budget 
account structure.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. We do not propose modifying our budget account structure.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. We do not propose modifying our budget account structure.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions.
    Could you comment on your agency's cost accounting expertise and 
plans to link GPRA to the budget process?
    Answer. FDA has a good understanding of the resource requirements 
needed to achieve most of its performance goals. Inspectional coverage 
of food establishments, review time for new drug applications, and 
assessment of mammography facility quality are a few examples of areas 
in which good performance data are available or will be available soon. 
With that information, we can demonstrate how resources impact program 
performance. We have been able through analysis to discern the 
difference between available resources and the necessary resources to 
achieve the highest performance possible. This analysis also helped 
illustrate FDA's continuing need to set risk-based priorities.
    As we continue to gain experience in implementing GPRA, we improve 
our ability to evaluate the impact of changes in funding level on our 
programs and our ability to achieve the performance commitments 
outlined in the Annual Performance Plan. In some instances, changes in 
funding level may require an increase or decrease in program efforts 
and target level of performance. It may require development of new 
performance goals.
    Over the past few years, FDA has practiced several strategies for 
operating with reduced resources in spite of an increasing workload. 
These strategies have included reducing program efforts, refocusing 
program efforts to target the highest priority health risks, and re-
examining the role we play in protecting public health relative to 
other government agencies, third parties, and industry. Some of those 
strategic changes have caused us to change our activity measures. In 
some instances, for example, the number of inspections conducted is not 
as appropriate a measure as the percentage of products approved by 
third-party sources. However, changes in approach will not change the 
agency's desire to improve health outcomes.
    The performance goals in the annual performance plan link directly 
to the budget. Each individual performance goal supports a somewhat 
broader program strategic goal, which in turn supports a major FDA 
program. In the performance plan, budgeted amounts, both dollars and 
FTE, are aggregated at the program strategic goal level. So, for each 
major program area, the total budget request represents the total of 
the program strategic goal amounts.
    FDA implemented managerial cost accounting as a pilot program 
during fiscal year 1997, in order to meet the Chief Financial Officers 
Act requirement for a ``statement of net costs''. The pilot initiated 
efforts to design, document, and implement the process of measuring 
full cost of FDA programs. A series of Excel worksheets were created 
identifying the resources consumed. In fiscal year 1999, total costs 
were allocated to 7 programs. Using the Excel format, the resources (or 
cost elements) were subsequently assigned directly, or allocated 
indirectly to the FDA components that consumed them. Additionally, the 
worksheets were linked in a manner where the data for each cost element 
was summarized and uploaded into published report formats. We also have 
experience in cost accounting as required by the Prescription Drug User 
Fee Act.
    Integration of the budget and the annual performance plan is a 
continuous learning process. We continue to look for meaningful ways to 
relate Agency outcomes with resource allocation decisions. With no 
single answer on the horizon, we continue to emphasize agency results 
as a key driver for fiscal decisions.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial Cost Accounting.
    The clearly preferred methodology for such a system, as stated in 
that standard, is the one known as ``Activity-Based Costing,'' whereby 
the full cost is calculated for each of the activities of an agency.
    What is the status of your agency's implementation of the 
Managerial Cost Accounting requirement, and are you using Activity-
Based Costing?
    Will you be able in the future to show to this committee the full 
and accurate cost of each activity of each program, including in those 
calculations such items as administration, employee benefits, and 
depreciation?
    By doing so, would we then be able to see more precisely the 
relationship between the dollars spent on a program, the true costs of 
the activities conducted by the program, and the results of these 
activities?
    Will you be able to show us the per-unit cost of each activity and 
result?
    To what extent do the dollars associated with any particular 
performance goal reflect the full cost of all associated activities 
performed in support of that goal? For example, are overhead costs 
fully allocated to goals?
    Answer. FDA is evaluating the need to enhance our existing system 
in order to support cost accounting requirements of the new accounting 
standards recommended by the Federal Accounting Standards Advisory 
Board, and issued by OMB for the other major programs and sub-programs 
in FDA. These enhancements will improve FDA's ability to adequately 
gauge the performance measurement activity.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. Several significant reform measures have been implemented, 
many of them mandated by FDAMA. The agency's performance plan contains 
specific goals, strategies and reports on accomplishments which reflect 
the agency's commitment to successfully implementing these reforms. 
Some of the key reforms highlighted in the performance plan include: a 
new notification process for dietary supplements containing new 
ingredients; a pre-market notification process for food contact 
substances; an initiative requesting additional pediatric information 
on clinical trials for new drugs; redesigning the Animal Drug Approval 
process to make it more efficient for FDA and industry; and reinventing 
many of the medical device premarket review processes to use resources 
more effectively and efficiently. Through regulatory reform efforts 
such as these, the agency has been able to improve the transparency of 
its processes, and facilitate participation by outside stakeholders. 
These reforms also enable the agency to focus on specific risk 
priorities, as in the case of dietary supplements and obtaining 
additional information on the impact of new drugs on children in the 
clinical trial setting. The performance plan provides an operational 
document which is used to help manage the implementation of these 
important new steps for FDA.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    If so, what steps have you identified to prepare, anticipate and 
plan for such influences?
    What impact might external factors have on your resource estimates?
    Answer. Yes, FDA's fiscal year 2000 Performance Plan identifies 
external factors that could influence goal achievement in the goal-by-
goal presentation of performance of each FDA Program. Within the goal 
by goal presentation, external factors are discussed in the narrative 
description of each performance goal, the sections called ``Context of 
Goal'' and ``Performance''. External influences include changes in our 
workload and changes in the environment in which FDA operates, the 
increasing complexity and sophistication of the industries we regulate, 
and the ever-increasing development of new products that evolve from 
emerging technologies are also among external factors that may present 
obstacles to the achievement of our goals.
    In developing our program strategies, we have taken several steps 
to prepare, anticipate and plan for external influences. First, we make 
every effort to keep abreast of changes in our external environment 
through ongoing analysis of emerging issues, industry trends and 
existing and proposed policy and legislation. Occasionally, a 
particular public health issue may warrant special studies. Such 
studies allow us to gain insight on the various facets of the problem 
and to identify the most effective intervention strategies. Second, 
consultations with our stakeholders, contacts with trade associations 
and collaboration with partners provide valuable information and forums 
for exploring strategic alternatives and for identifying synergies and 
competing interests. This has become increasingly important now that 
FDA shares the responsibility for achieving national public health 
objectives, such as those of Health People 2010 and the Food Safety 
Initiative, with many government and non-governmental organizations. 
Third, the monitoring of FDA program performance and effectiveness 
provides valuable information about how the agency's efforts impact 
public health. Fourth, the agency engages in strategic and operational 
planning both at the program level and the agency level. In developing 
agency strategic approaches, program planners and budget officers focus 
on strategies that leverage FDA resources to achieve the maximum public 
health impact despite external influences that potentially impede our 
progress.
    FDA functions in a rapidly changing environment. Many factors that 
influence the achievement of our public health objectives are partially 
controlled by other organizations or are outside our direct influence 
and control. In addition, we acknowledge that despite our best efforts 
to anticipate and identify effective remedies to counteract the adverse 
effects of certain negative factors, unforeseen problems may arise. As 
a consequence, we may find that an unforseen change in our environment 
adversely affects our ability to attain some of FDA's performance 
targets and that the additional resources to address some external 
factors.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    If so, does the Performance Plan identify the overlap or 
duplication?
    Answer. Potential overlaps were identified during the agency's 
deliberations about fiscal year 2001 strategies, but as a result of 
those strategic discussions the overlaps were eliminated prior to the 
development of the performance plan. The performance plan reflects a 
clear division of responsibilities among the agency programs. Each 
program does address similar functional responsibilities--e.g., 
science-based pre-market review, and post-market surveillance, 
compliance and outreach. But the implementation of these 
responsibilities is tailored to the unique challenges addressed by each 
center.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Yes, agencies should and FDA does address management 
challenges, as well as potential duplication as part of their strategic 
and performance planning process. This is accomplished through the 
formation of `corporate' strategic teams that are composed of 
individuals representing all organizational components. Each team is 
assigned to a major strategic area that the Agency is pursuing. The 
teams identify management challenges for the future in their respective 
areas, and formulate strategies for addressing these strategies. As 
part of the strategy development process, teams coordinate with each 
other and identify potential overlaps. The performance plan is a 
reflection of the division of responsibility agreed to by the teams and 
also clearly allocates a division of responsibility among FDA's 
centers.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Will this use increase in the future and if so in what ways?
    Answer. GPRA principles are adhered to by FDA's leadership as they 
make strategic decisions about the agency's future directions, 
operational decisions about the specific performance goals that they 
are willing to commit to, and budget decisions which will adequately 
fund these commitments. As the agency gains further experience in 
implementing GPRA, we will improve our ability to evaluate the impact 
of changes in funding levels on our programs and our ability to achieve 
the performance commitments outlined in the Annual Performance Plan. 
FDA leaders will also be in a better position during the coming year to 
use information on actual performance to help make mid-course 
adjustments to plans. The ability to monitor performance, analyze 
variance and make decisions on adjustments will be further strengthened 
as the agency's information systems and web-based capabilities provide 
managers with greater access to performance information. Also, 
increasingly, GPRA-type of performance goals are being incorporated 
into the individual performance plans of senior executives. This 
enables their individual efforts to be directly linked to the agency's 
program commitments.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that:
    To what extent are your performance measures sufficiently mature to 
allow for these kinds of uses?
    Are there any factors, such as inexperience in making estimates for 
certain activities or lack of data, that might affect the accuracy of 
resource estimates?
    Answer. The maturity of our performance measures varies from 
program to program. In PDUFA-funded areas, for example, performance 
measures have remained relatively stable during the past several years. 
New measures have been added to implement PDUFA II, but the original 
measures are essentially the same. Because of this stability, the 
information and cost systems that support this endeavor have also 
matured and are able to provide reliable data. In the area of 
inspections, information systems do provide intelligence on actual 
performance, as well as costs associated with achieving target 
performance levels. In areas where significant reinvention has 
occurred, neither data bases nor base lines have yet been established 
which will allow the agency to report on historical progress. Thus, 
there would be no reference points from which goals could be 
established with a high level of confidence. FDAMA presented the agency 
with several regulatory reforms that required the creation of new 
review processes. Performance measures in these areas are not 
sufficiently mature to be used in a performance management setting.
    In several other areas, the agency is investing new efforts in 
leveraging its own limited assets with partners such as states, the 
health professionals, other agencies and the regulated industry. These 
leveraging initiatives should ultimately yield greater returns on 
investment to FDA in terms of stronger science-based regulatory 
decisions, faster review times and increased inspection coverage. 
Although review times and inspection coverage are the same kinds of 
performance measures that the agency currently uses, the estimates of 
funding required to achieve performance gains will be much less 
certain. This is because initial investments in leveraging will not 
yield immediate gains in performance. Time will be required to 
determine the cost profiles associated with a new way of doing 
business.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Specifically, are you requesting any relaxation of transfer or 
reprogramming controls in return for specific accountability 
commitments?
    Answer. No, we are not requesting a relation of transfer or 
reprogramming controls in return for specific accountability 
commitments.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. I believe that you are referring to the HHS Strategic 
Plan--not an FDA-specific strategic plan. The HHS Plan is in the 
process of being redrafted at this time. We suggested some 
modifications to FDA's contributions to the HHS Plan. Specifically, we 
placed additional emphasis on the fact that FDA would focus its future 
efforts on strengthening the science base of the agency. This is viewed 
as absolutely essential in order to keep pace with science and 
technology advancements so that FDA can pass judgements on the products 
and processes of these new advancements. We also suggested that FDA's 
future reliance on leveraging as a primary way of doing business be 
given greater emphasis in the HHS Strategic Plan.
                                 ______
                                 

           QUESTIONS SUBMITTED BY SENATOR CHRISTOPHER S. BOND

    I have some concerns about the possible effect on small businesses 
of FDA's final rule on the Prescription Drug Marketing Act, which was 
published on December 3, 1999. The FDA's small business analysis of the 
rule noted that 94 percent of pharmaceutical distribution firms, or 
about 4,000 companies, are small businesses. I have several questions 
about the rule and its small business impact:
    Question. It is my understanding that nearly all of these 4,000 
small businesses would have to provide their customers with a very 
detailed sales history for each product they wished to resell. If they 
cannot obtain the required information from whomever they buy the 
products from, is it correct that they would not be able to legally 
resell the prescription drug products?
    Answer. If the wholesalers who do not buy directly from the 
manufacturer cannot obtain the detailed prior sales history required by 
the final rule and they sell the product anyway, they would be 
violating the requirements of the rule.
    Question. Does the final rule require manufacturers or authorized 
distributors to provide this detailed information to firms who purchase 
from them?
    Answer. The final rule is consistent with the statute and the 
legislative history. Manufacturers or authorized distributors are not 
required to provide the sales history but unauthorized distributors are 
required to provide the sales history. The statute requires wholesale 
distributors who are not the manufacturer or an authorized distributor 
to provide a statement identifying each prior sale, purchase, or trade 
of such drug. There is no indication in the Prescription Drug Marketing 
Act, PDMA that Congress intended that the statement or pedigree include 
only those sales, purchases or trades since the drug was last handled 
by an authorized distributor. Moreover, the legislative history of PDMA 
indicates that the pedigree must include all previous sales of the 
product. Thus, an unauthorized distributor would be required to provide 
a full drug origin statement in accordance with PDMA and the final rule 
whether or not it has purchased a prescription drug from an authorized 
distributor of record. Although FDA has encouraged authorized 
distributors to provide a pedigree to unauthorized distributors, they 
are not required under PDMA to do so. Note, FDA has extended the 
effective date of this part of FDA's final rule and we are willing to 
consider the additional comments and information presently being 
provided to assist in developing a solution to this potential problem.
    Question. Is it possible that this rule will drive some of these 
small resellers out of business? If so, how many resellers do you think 
are at-risk? If many of these small distributors were to go out-of-
business, what would be the impact on prescription drug prices? Would 
we risk disruption in the supply of prescription drugs?
    Answer. FDA agrees there could be a negative impact if thousands of 
drug resellers were forced out of business. However, because the PDMA 
has been in effect since 1988, FDA does not believe that this will 
occur and does not believe that there will be a disruption in the 
supply of prescription drugs to retailers and consumers. Assurances to 
consumers that they are not receiving subpotent, adulterated, 
counterfeit or misbranded drugs will be strengthened by the procedural 
and recordkeeping requirements of the final rule. In any event, FDA is 
willing to work with Congress and others to resolve the concerns raised 
and allay any fears of supply disruption.
                                 ______
                                 

               QUESTION SUBMITTED BY SENATOR SLADE GORTON

    Question. As you know, Congress debated The Food and Drug 
Administration Modernization Act (FDAMA) for 3 years, from 1994 to 
1997, with the purpose of streamlining the FDA and its product approval 
process for drugs, medical devices, etc. One of the key provisions in 
the Act involves FDA having a quasi-private-public partnership, using 
independent 3rd party scientific review organizations to make product 
approval recommendations to the FDA. Companies would pay 3rd parties to 
review their products, and the FDA would accredit these 3rd parties, as 
well as sign off on their final recommendations. I understand that the 
3rd party system isn't working very well, because the list of products 
currently eligible for the program is very limited, to low-end 
products. Last year, this subcommittee allocated the largest increase 
for CDRH ever. In light of these new dollars, what is the FDA doing to 
expand the 3rd party program this year?
    Answer. Currently, 154 devices are eligible for third-party 
review--including many significant devices such as diagnostic 
ultrasound systems, magnetic resonance imagers, endoscopes, and cardiac 
monitors--and at least 2 of the 13 Accredited Persons are available to 
review each of the devices. In fiscal year 1999, the agency received 
more than 1,200 510(k) submissions for the 154 devices, representing 
nearly 50 percent of all 510(k)s that are potentially eligible for 
third-party review based on the criteria in section 523(a)(3) of the 
Federal Food, Drug and Cosmetic Act. An important milestone of the 
third-party review program occurs when the agency notifies Congress 
that at least two third-parties are accredited to review at least 60 
percent of 510(k) submissions. FDA expects to meet the 60 percent 
milestone with the next expansion of the eligible device list, which we 
plan to announce soon. In addition, the Administration's fiscal year 
2001 budget proposal includes a proposal for additive device user fees 
to help jump-start the third-party program. The revenue from these fees 
would be used to provide information about the availability of third-
party reviews and to subsidize the cost of these reviews.
                                 ______
                                 

             QUESTIONS SUBMITTED BY SENATOR MITCH MCCONNELL

    With respect to the FDA's regulations issued December 3, 1999 
implementing the Prescription Drug Marketing Act, I am concerned that 
wholesale distributors will not be able to comply with the requirement 
that they provide a statement identifying prior sales back to the 
manufacturer. This is because many of the distributors buy from full 
line authorized distributors who are not required by PDMA to provide 
such information. This aspect of the final rule is inconsistent with 
the contemporaneous interpretation that the industry has operated under 
for the past twelve years.
    Question. In its final rule, why did FDA change from its 1988 
guidance to its present rule requiring a statement identifying prior 
sales that go back to the manufacturer?
    Answer. FDA investigations have found that secondary wholesalers 
who are diverting prescription drugs will ship the drugs through an 
authorized distributor in order to erase, or wash, the record of all 
sales of the drugs prior to the authorized distributor. Since the 
Prescription Drug Marketing Act, PDMA, does not impose the drug 
pedigree--statement of origin-requirement on authorized distributors, 
the pedigree is--washed--with the drugs' passage through the authorized 
distributor, with the result that all sales of the drugs prior to the 
authorized distributor are erased. The secondary wholesaler can then 
claim that they purchased the drugs from an authorized distributor 
without divulging the true source or sources of the drugs. Traceability 
of the drugs through the wholesale distribution system is also, 
therefore, erased.
    Question. What evidence does FDA have that authorized distributors 
who are not required by PDMA to provide prior sales histories of the 
drugs they sell will do so voluntarily?
    Answer. Although FDA has encouraged authorized distributors to 
provide a pedigree to unauthorized distributors, they are not required 
under PDMA to do so. In any event, we have extended the effective date 
of that part of the final rule and are willing to consider the 
additional comments and information presently being provided to assist 
in developing a solution to this potential problem.
    Question. Has FDA determined the cost to authorized distributors of 
implementing the same system of providing prior sales information that 
is now required of distributors who are not authorized?
    Answer. As noted in the preamble to the final rule, most of the 
requirements in the proposed rule were already implemented by the 
industry in response to the enactment of the PDMA, FDA's guidance, and 
industry trade association recommendations. Therefore, the agency, in 
section IV, of the final rule determined that there would be one-time 
costs of $318,000 for developing forms, and total annual costs of 
approximately $82 million. Of these costs, approximately $39 million 
has already been incurred by industry since Congress enacted PDMA in 
1988.
                                 ______
                                 

                QUESTIONS SUBMITTED BY SENATOR HERB KOHL

    Question. Please provide information describing in detail the 
activities conducted by FDA using funds included as part of the Food 
Safety Initiative in fiscal year 2000 and proposed for fiscal year 
2001.
    Answer. I will be happy to provide this information for the record.
    [The information follows.]
                         food safety initiative
    For fiscal year 2000, FDA received a $30 million increase for the 
President's Food Safety Initiative and thanks the Committee for their 
continued support. The additional resources are being targeted to 
further developing a nationally integrated, seamless, and science-based 
food safety, enhancing public health surveillance and increasing the 
speed and efficiency of responses to outbreaks of foodborne illness, 
and placing greater emphasis on the control of foodborne hazards in the 
pre-harvest phase of the farm-to-table continuum. Specifically the 
funds will be used to:
  --Begin development of an electronic communication and data sharing 
        system for use in Federal-state monitoring and traceback 
        activities;
  --Expand and increase the overall capacity of the National 
        Antimicrobial Resistance and Monitoring System (NARMS) and the 
        number of States covered to assure a higher probability of 
        detecting emerging resistant pathogens capable of animal to 
        human transmission and to minimize the occurrence of foodborne 
        outbreaks including those from outside the United States;
  --Increase inspection coverage and frequency of coverage of domestic 
        firms, with top priority given to firms processing ``high-
        risk'';
  --Increase the number of inspections of foreign processors and 
        conduct evaluations of foreign food production systems;
  --Provide training to State and local food safety officials and 
        industry in the effective use of preventive control systems, 
        such as HACCP and to perform inspections of HACCP systems;
  --Develop methods for predicting the risk associated with foodborne 
        pathogens and partnerships with government, industry, and 
        academic scientists to conduct studies that demonstrate 
        comparability of disease across species;
  --Continue a program of research in quantitative risk assessment that 
        is targeted to address the limitations in risk assessment 
        methodologies;
  --Continue to build the activities of the interagency Risk Assessment 
        Consortium and to continue development, through the Joint 
        Institute of Food Safety and Applied Nutrition, of the Risk 
        Assessment Clearinghouse; and
  --Continue to develop and provide multi-lingual education programs 
        for food service workers and to implement a national education 
        and training program to ensure greater safety in retail food 
        preparation practices, including the use of HACCP principles in 
        retail establishments.
    The fiscal year 2001 request builds upon three years of intense 
work and cooperation among FDA, CDC, and USDA, as well as State and 
Local Health agencies. FDA's request would, among other things, ensure 
annual inspections of high-risk food establishments and enhance the 
supporting laboratory analyses; work with states to implement audit 
programs to ensure consistent application of regulations and develop 
consistent nationwide food safety standards; implement the Hazard 
Analysis Critical Control Point system for fruit and vegetable juices; 
develop and evaluate on-farm intervention strategies and/or 
technologies to improve testing methodologies for Salmonella 
Enteriditis (the Egg Safety Action Plan); and complete the National 
Antimicrobial Resistance Monitoring System by adding national and 
international data collection sites.
    Question. To what extent has FDA's role in the Food Safety 
Initiative reduced the health threat of imported foods?
    Answer. On March 17, CDC reported a 20 percent reduction in overall 
foodborne illnesses associated with pathogens through their active 
surveillance network--Foodnet. The Centers for Disease Control--CDC, 
credited the federal, state and industry food safety partnership 
activities, such as Fight Bac!; HACCP and Good Agriculture Practices as 
major contributors to this public health improvement. CDC also 
reiterated the need to continue to make similar strides in prevention, 
improved food safety systems and outbreak response.
    Additionally, the overall picture of trends for food safety 
knowledge and practices that emerges from research is quite 
encouraging. Between 1993 and 1998, the public's food safety practices, 
both the consumption of risky foods and food handling behaviors in home 
kitchens, show dramatic improvement. For example, for the population as 
a whole, the incidence of eating pink hamburger is down 33 percent and 
the incidence of eating raw oysters or clams is down 39 percent. The 
safety of reported hand-washing and cutting board practices has also 
improved markedly. The improvement is particularly strong for handling 
meat or chicken, which improved 74 percent compared to a 27 percent 
improvement for fish. Knowledge levels about microbial food pathogens 
increased, along with rising perceptions of the possible risk of 
getting foodborne illness.
    That is not to say that there are no consumer education issues to 
be addressed. There are obvious gaps in consumer knowledge, attitudes 
and practices related to food safety. For example, although awareness 
of salmonella appears to be on the rise, most consumers still do not 
handle eggs very carefully and they are more likely to consume 
undercooked eggs or foods containing raw eggs than any other risky 
food. Most consumes have never heard of Listeria or Campylobacter, 
which are at least as prevalent in the food supply as the more well 
known pathogens, Salmonella or E. Coli.
    The Food Safety Initiative has provided necessary resources for FDA 
to undertake the enormous challenge of foodborne illness. Even more is 
expected of this Agency as its responsibility encompasses a broader 
array of regulated products and potential hazards in foods.
    Question. Can FDA quantify the amount of unsafe food items that 
enter this country uninspected?
    Answer. No, however, we are able to quantify the total number of 
FDA regulated food products that are offered for entry into the United 
States. From January 1-December 31, 1999, 3.4 million food or food 
related products were offered for entry. Of these products, two percent 
were refused entry due to their failure to meet FDA's regulations or 
because they were determined to be unsafe for human use.

                          BOTTLED WATER STUDY

    The Safe Drinking Water Act Amendments of 1996 required a report 
related to bottled drinking water. Since that time, FDA has been 
charged with preparing a study on this subject for which the Senate 
Report for the Fiscal Year 2000 Appropriations Act directs completion 
by March 2000. The 1996 Amendments required a final report no later 
than February 1999. I now understand FDA has moved the completion date 
until later in the year.
    Question. Please explain why FDA is causing a further delay for a 
report that has been pending for nearly four years?
    Answer. In January 2000, FDA's Center for Food Safety and Applied 
Nutrition--CFSAN, published its workplan, titled ``2000 CFSAN Program 
Priorities,'' to inform its stakeholders about CFSAN's priorities for 
the fiscal year. The workplan includes A and B list goals. Items on the 
A-list are projects that will be completed this fiscal year. Items on 
the B-list are projects on which CFSAN intends to make progress this 
year, but will likely not complete.
    Among our A-list goals, pursuant to Senate Report 106-80, CFSAN 
will publish a ``Bottled Water Feasibility Study,'' examining the 
feasibility of appropriate methods of informing consumers about the 
contents of bottled water as mandated by the Safe Drinking Water Act 
Amendment of 1996. The draft ``Bottled Water Feasibility Study'' was 
published on February 22, 2000. We expect this study to be finalized by 
August 2000.
    Question. Will FDA be able to complete this report by a date more 
in line with the congressional directive?
    Answer. The draft bottled water feasibility study was published on 
February 22, 2000. The comment period for the draft study will close on 
April 24, 2000. The final feasibility study is on CFSAN's list of 
priorities for this fiscal year, and we have requested an extension of 
the due date until August 2000 to complete this report. We believe we 
can meet an August 2000 completion date, given the amount of time 
needed for the evaluation of comments and development of the final 
report.

                    SEAFOOD INSPECTION FROM COMMERCE

    Question. The President's budget proposes to transfer the voluntary 
seafood inspection program from the Department of Commerce to the FDA. 
Some have expressed concern that this action may undermine the public 
confidence provided by Seafood HAACP. Please respond to that concern.
    Answer. Rather than undermine public confidence, such a transfer 
could strengthen it. Transferring the National Marine Fisheries 
Service--NMFS, voluntary program to FDA would establish FDA as the sole 
seafood agency with one HACCP standard. FDA would be able to train the 
voluntary inspectors in the regulatory HACCP standard along with the 
regulatory inspectors. Consequently, FDA may be able to contract with 
the voluntary inspectors to perform certain regulatory HACCP 
inspections or, in certain instances, to count a voluntary inspection 
as a regulatory inspection. The result is that the transfer would 
provide a skilled cadre of inspectors to implement FDA's regulatory 
HACCP program. Industry will benefit by eliminating redundant 
inspections at the federal level. Consumers will benefit by improved 
food safety resulting from inspections based on a single HACCP standard 
established by FDA.
    FDA believes that safeguards could be put in place to eliminate a 
potential conflict of interest that could undermine public confidence 
in the current seafood HACCP program. While the legislation would 
authorize PBO inspectors to perform regulatory HACCP inspections, FDA 
would adopt precautions to ensure the objectivity and credibility of 
the inspection. For instance, FDA could adopt a policy of utilizing PBO 
inspectors to perform regulatory inspections only for seafood firms 
that are not also paying customers of the PBO. In the end, FDA can 
always utilize its regulatory inspection force as a check against the 
PBO inspection force to ensure that the public health is protected.

                         FOOD CONTACT SUBSTANCE

    The Fiscal Year 2000 Appropriation Act provided an increase for 
premarket application reviews of food contact substances.
    Question. How much of FDA's fiscal year 2000 budget was directed 
for this purpose?
    Answer. For fiscal year 2000, funding of $6 million was provided to 
FDA to fully implement the food contact substance notification program 
established by FDA Modernization Act.
    Question. Does FDA require any additional resources to fully meet 
the needs of this premarket review process?
    Answer. Our current estimate is that $6 million would adequately 
fund this program in fiscal year 2001. FDA notes that this program has 
only recently begun to operate. As we gain experience with the 
notification program, and obtain better information about the number 
and complexity of notifications we can expect to receive, we may need 
to refine our cost estimates for future years.

                                GINSENG

    The Senate Report to accompany the Fiscal Year 2000 Appropriations 
Act includes language that calls FDA's attention to potential problems 
of adulterated ginseng imports.
    Question. What specific actions has FDA taken in response to this 
language?
    Answer. FDA received information suggesting that a significant 
amount of imported ginseng may be treated with pesticides that are not 
approved for use in ginseng in the United States. In response to this 
information, FDA decided to determine the scope of the problem in 
September 1998. Accordingly, FDA collected samples of imports between 
October 1998 and May 1999. A total of 56 samples were collected and 
analyzed for organochlorine and organophosphate pesticide residues. Of 
the 56 ginseng samples analyzed, 33, or 58.9 percent were found to be 
violative for pesticide residues and appropriate regulatory action was 
taken.
    I would like to provide a chart for the record that shows the 
countries in which the violative samples originated.
    [The information follows:]

                            IMPORTED GINSENG
------------------------------------------------------------------------
                                                           Number of
             Country               Number of samples  regulatory actions
                                       collected             taken
------------------------------------------------------------------------
China/Hong Kong.................                  38                  18
Korea...........................                  13                  10
Canada..........................                   5                   5
------------------------------------------------------------------------

    A total of 28 different manufacturers or shippers were involved in 
shipping violative ginseng samples from the countries listed above and 
were named on an Import Alert.
    An Import Alert identifies and disseminates import information 
about problem commodities and/or shippers and provides guidance to FDA 
personnel on import coverage.

                               EGG SAFETY

    Last year, the FDA proposed a warning label for eggs. I have heard 
from egg producers who feel it is overly alarmist and would prefer a 
different label; they do not oppose the concept of labeling, only the 
specific label the agency proposed.
    Question. Can you give us some insight into your thinking on this 
label, and whether you are considering any changes to what you proposed 
last year?
    Answer. From the results of previous focus group research on label 
statements used to alert consumers to potential hazards in foods--
namely, iron supplements and fresh or unprocessed fruit and vegetable 
juice warning statements, FDA determined that certain types of 
information was required to adequately inform consumers about the 
potential risks associated with the food. In particular, our focus 
group research indicated that for consumers to understand and modify 
their behavior with regard to a particular food there needed to be an 
information statement explaining why there was a risk associated with 
the food. This information statement was especially important if the 
information was considered new information. In crafting the proposed 
safe handling instructions for eggs, FDA considered that consumers 
needed to be given information on why the product presented a risk. 
Accordingly, FDA proposed to include a sentence in the statement that 
informed the consumer that the eggs may contain harmful bacteria known 
to cause serious illness in children, the elderly, and persons with 
weakened immune systems. FDA included these groups because they are 
generally at higher risk of serious illness from food borne pathogens 
than the rest of the population.
    FDA received several comments objecting to the introductory 
sentence in the proposed safe handling instructions. We also received 
comments offering alternative wording for the safe handling 
instructions, as well as those asserting that the presence of 
Salmonella in eggs was not new information.

                          CONSUMER INFORMATION

    Question. To what extent does the ``Take Time to Care Initiative'' 
duplicate the ``MedGuide'' program?
    Answer. The programs were created to complement each other, not 
duplicate each other. As part of its mission, FDA makes approval 
decisions for new products based on a balancing the risks and benefits 
of a given product. Yet, that is just one small part of the process--
all along the way, from the manufacturer who makes a drug, to the 
prescriber who writes a prescription, the pharmacist who fills the 
prescription, to the patients and consumers who make decisions about 
product use for themselves and their families, we all have a role to 
play in minimizing product risks.
    Because women are the primary users of medicines and typically 
administer medicines to their families--they are ultimately the risk 
managers for their families--The Take Time to Care Initiative focuses 
on them. Women need to take charge of their own health and learn about 
proper use of medicines for themselves and in their role as family 
caregivers. Through this program, we have emphasized that there are 
very easy ways to do this, including: reading labels, keeping track of 
their medications, avoiding sharing or skipping of medications, keeping 
track of the basic side effects, and, simply--but importantly--asking 
questions. These very easy steps can ultimately have a very large 
impact on reduction in adverse events from medical products.
    In this effort, FDA's Office of Women's Health partnered with more 
than 70 organizations in the ``Take Time to Care'' campaign, which 
distributed the My Medicines brochure to help women safely use 
medications. The brochure is available at the FDA website: www.fda.gov/
womens/tttc or by calling toll free 1-888-8-PUEBLO.
    In addition, FDA's Medication Guide program would provide 
additional information to patients and consumers regarding the 
prescription drugs that they receive for themselves and their families. 
Medication Guides contain specific information about each drug--
information about dosage, warnings, contraindications, and other 
critical information to help individuals take their medications 
accurately and effectively. This program provides the specific 
information about each drug, ensuring that it is conveyed to the 
patient or consumer in a manner that is clear and intelligible. In 
contrast, the Take Time to Care Initiative is focused more broadly, 
underscoring the importance of reading and following such information.

                          INTERNET DRUG SALES

    Question. Please provide information regarding identified problems 
related to current internet drug sales practices and the specific 
manner in which your proposal would solve these problems?
    Answer. The Internet has provided a new marketplace for sales of 
unapproved new drugs including counterfeit drugs, prescription drugs 
sold without a prescription, drugs imported or re-imported illegally, 
and products marketed with fraudulent claims. Patients who buy 
prescription drugs from websites that engage in such illegal activities 
are at risk for adverse effects from inappropriately prescribed 
medications, dangerous drug interactions, and contaminated drugs. As 
you know, long before the Internet was created, Congress and the State 
legislatures enacted a comprehensive system of premarket approval, 
prescription drug designations, practioner evaluation and pharmacy 
dispensing to protect patients from injuries resulting from unsafe or 
counterfeit drugs and from the illicit practice of medicine and 
pharmacy This system has worked well over the years.
    Because the current laws were not enacted with the Internet in 
mind, however, they do not provide regulatory and law enforcement 
agencies with fully effective tools to protect consumers from operators 
of online pharmacies that engage in illegal activities. For example, 
both consumers and law enforcement officials may have difficulty 
identifying the name, location, and State licensure of physicians, 
pharmacists, and online pharmacy operators. Even if the parties can be 
identified, because the Internet is largely unconstrained by State and 
national boundaries, States--traditionally the primary regulators of 
the practice of pharmacy and the practice of medicine are undercut in 
their efforts to regulate online pharmacies. Finally, both State and 
Federal agencies are limited in the causes of action that may be 
brought against illegal online sellers of prescription drugs.
    The Administration's proposal is designed to provide sufficient 
safeguards to protect the public health effectively without hindering 
the enormous potential benefit of the Internet. In addition, the 
proposal is designed to enhance the effectiveness of the Federal-State 
partnership in the regulation of prescription drugs and recognize the 
importance of the States' traditional role in regulating the practice 
of medicine and pharmacy. Accordingly, the proposal would support and 
strengthen the States' authority too enforce applicable law within 
their borders, while providing enhanced Federal authority to monitor 
the multistate and interstate aspects of Internet prescription drug 
sales. By filling gaps in Federal and State authority, the bill seeks 
to curb illegal sales of prescription drugs and to ensure that 
consumers are receiving safe and effective drugs prescribed by health 
care professionals, and dispensed by pharmacies that properly licensed. 
The proposal will allow legitimate online pharmacies to be much more 
easily distinguished from illegal online pharmacies, which will enhance 
consumer safety and confidence, and level the playing field for 
legitimate online pharmacies by reducing their illegal competition.
    Question. To what extent do you believe further regulation of 
internet drug sales will impair or reduce the availability of drugs 
through this medium?
    Answer. New legislation regarding Internet drug sales will not 
reduce the availability of legally prescribed and dispensed medications 
through this medium, however, it will reduce the availability of 
illegal medications distributed through this medium. By increasing 
consumer confidence in the Internet as a medium for prescription drug 
sales, new regulations will advance the interests of legitimate online 
pharmacies.
    Question. If you think further regulation of internet drug sales 
will have no effect on the availability of prescription drugs, please 
explain.
    Answer. The legislation only targets illegal sellers of 
prescription drugs and would have little effect on those entities who 
are properly licensed by states and abiding by state and federal law.

                       ORPHAN DRUGS/EVERGREENING

    Under current law, companies which bring certain orphan drug 
products to the market are granted a 7 year exclusivity period in which 
they are allowed to help recoup their development costs for that 
product. However, under a so-called ``Evergreen'' provision, any 
company which develops a further improvement of that product is granted 
a further 7 year exclusivity period for the entire product, not just 
for the ``improved'' component. This combination of factors can 
potentially lead to a product's exclusivity period running indefinitely 
and, thereby, cutting off competition and related cost savings to the 
consumer.
    Question. Please explain why the exclusivity of a product 
improvement attaches to the entire product?
    Answer. Under the Orphan Drug Act, if a drug is designated for an 
orphan indication and is approved for that indication, it will receive 
seven years of exclusivity. During this seven-year period, the agency 
will not approve or license the same drug from another sponsor. 
However, the first sponsor's exclusivity it not a barrier to approval 
of a product that is not the same drug. If a subsequent sponsor 
demonstrates that its drug for the same indication is not the same 
drug, either because it is chemically not the same, as defined in the 
orphan drug regulation, or clinically superior, the second product will 
be approved. If the second drug was designated for the orphan 
indication, it will also receive orphan exclusivity. The statute does 
not limit the drugs eligible for orphan exclusivity, or the scope of 
that exclusivity, on the basis of indication, chemistry, or clinical 
behavior.
    Question. To what extent would consumers benefit from cost savings 
if the exclusivity attached only to the improvement?
    Answer. It is well established generally that the entry onto the 
market of the first generic version of a drug begins what may 
ultimately be a sharp decline in the price. This is described in How 
Increased Competition from Generic Drugs Has Affected Prices and 
Returns in the Pharmaceutical Industry, July 1998, Congressional Budget 
Office. However, generic drugs are duplicates of innovator products and 
thus may be promoted by the sponsors only in the same manner as the 
innovator product. In contrast, an orphan drug exclusivity program that 
permitted the agency to approve any new orphan drug that did not copy a 
particular protected improvement could result in the introduction of 
new ``innovator'' products that would attempt to distinguish themselves 
from the other marketed products, and not result in any cost savings to 
consumers. It is useful to note that the availability of multiple 
``innovator'' human growth hormone and erythropoetin products on the 
market for orphan indications has not resulted in a meaningful decrease 
in the cost of these drugs to consumers. In addition, because the 
expressed goal of the Orphan Drug Act is to encourage investment in 
drugs for rare diseases and conditions, it is important to keep in mind 
the need for adequate financial incentives for continuing development 
and improvement of these treatments. Although the availability of 
generic drugs is a continuing priority for the agency, any discussion 
of generic drugs for orphan diseases would be fruitless if innovator 
companies do not first develop needed orphan products.
    Question. Please compare this feature of orphan drug products to 
other drug or device products which enjoy periods of marketing 
exclusivity.
    Answer. Every exclusivity under the Federal Food, Drug, and 
Cosmetic Act, FFD&C Act, that gives drugs some form of market 
protection has different characteristics. For example, there are 
substantial differences in what aspect of a drug is protected by each 
form of exclusivity. ``New chemical entity'' exclusivity under section 
505(c)(3)(D)(ii) and 505(j)(5)(D)(ii) of the Act protects the active 
moiety of the drug from competition from other products containing the 
same moiety, regardless of whether the subsequent drug is for the same 
indication, has the same formulation, the same dosage form. In 
contrast, orphan drug exclusivity protects only the particular drug for 
the designated orphan indication; a subsequent applicant can obtain 
approval of the same drug for a different indication, even in the face 
of orphan exclusivity. In addition to differences in what aspect of a 
drug is protected, forms of exclusivity differ in what competition is 
prohibited. ``New chemical entity'' exclusivity and ``clinical 
studies'' exclusivity under section 505(c)(3)(D)(ii)-(iv) and 
505(j)(5)(D)(ii)-(iv) of the Act grant protection to innovative drugs 
against competition from certain generic drugs and other drugs for 
which the sponsor did not do the supporting studies. However, these two 
forms of exclusivity do not protect against competition from a drug 
whose sponsor has conducted all the studies necessary to gain approval 
of its product, even though this product may be directly competitive to 
the product with exclusivity. Orphan drug exclusivity, on the other 
hand, protects the drug with the exclusivity from competition from the 
same drug for the same indication produced by another sponsor, 
regardless of whether the other sponsor may have conducted all the 
studies necessary to obtain approval of the drug. The pediatric 
exclusivity provisions passed as Section 111 of the FDA Modernization 
Act of 1997 include an express limitation upon the number of times a 
drug can benefit from the six month exclusivity period, but that 
exclusivity can attach to multiple other exclusivity and patent 
protections covering many drug products. There is no exclusivity 
protection in the Federal Food, Drug, and Cosmetic Act for devices.

                             GENERIC DRUGS

    Over the next five years, brand drugs with approximately $21.6 
million in annual sales will come off patent, providing opportunities 
for substantial health care cost savings through the alternate use of 
generic drugs. However, it is reported that the median approval time 
for generic drugs in fiscal year 1999 was 17.3 months.
    Question. What levels of savings in the costs of prescription drugs 
would be realized if approval times were shortened from the 17.3 month 
time frame to the statutory requirement of six months?
    Answer. There would be some cost savings, but generic applications 
for most large selling drugs are submitted to FDA well before the date 
of patent expiration for the innovator drugs. As a result, in recent 
years FDA review time has not significantly delayed the availability of 
most generic products.
    Question. How much of FDA's fiscal year 2000 budget will be 
directed to the Office of Generic Drugs?
    Answer. Approximately $13.6 million of fiscal year 2000 budget 
proposed for the Center for Drug Evaluation and Research will be 
allocated to the Office of Generic Drugs. These dollar and FTE figures 
do not include overhead expenses such as legal, facilities and 
telecommunications, personnel, budget development and execution, 
executive communications, labor/management, EEO, and general management 
oversight.
    Question. How much of the fiscal year 2001 budget is proposed 
specifically for the Office of Generic Drugs?
    Answer. It is estimated that approximately $13.8 million of the 
proposed budget for the Center for Drug Evaluation and Research will be 
allocated to the Office of Generic Drugs in fiscal year 2001.

                         ANTIMICROBIAL PRODUCTS

    I note that the National Antimicrobial Resistance Monitoring System 
(NARMS) expanded its activities from funds derived from the Food Safety 
Initiative during fiscal year 1999.
    Question. Please provide information regarding specific activities 
of NARMS.
    Answer. The National Antimicrobial Resistance Monitoring System--
NARMS, monitors the emergence and spread of resistance in enteric 
bacteria and helps to ensure the continued safety and effectiveness of 
veterinary antimicrobials. Under NARMS thousands of bacterial isolates 
are tested for resistance to antimicrobials. NARMS will provide an 
early warning to identifying resistance trends among bacteria. All data 
from NARMS are made public for review by scientists or the public. With 
the additional funds requested for NARMS in fiscal year 2001 we will 
expand the geographical scope and capacity of NARMS by increasing the 
number and sources of isolates of Campylobacter, Salmonella, and E. 
coli from both human and animal sources. Additional veterinary sentinel 
sites are also planned. Increasing the number and sources of these 
foodborne pathogens will increase the likelihood of detection of 
emerging resistance. Detecting the resistance early allows the 
implementation of strategies to contain or mitigate the resistance 
before it reaches public health concerns. These resources will also aid 
in the Center for Veterinary Medicine's ability to establish and 
implement monitoring thresholds for resistance development in food 
animals to guide post-marketing regulatory activity.
    In addition, new pathogens will be monitored by NARMS from both 
animal and human isolates. Anticipated pathogens to be monitored 
include Enterococcus and Shigella species. Also, we plan to enhance and 
expand FDA support of current international efforts to develop a global 
resistance database. The incidence of multi-country foodborne outbreaks 
are increasing and the severity of foodborne disease originating in 
foreign countries is increased by resistant foodborne pathogens.
    Question. What specific health risks have been identified resulting 
from the use of antimicrobial drugs in animals produced for human 
consumption?
    Answer. The specific human health risks identified with using 
antimicrobial drugs in food animals is loss of efficacy of the drugs in 
treating human disease. The FDA recently contracted with a quantitative 
risk assessment expert to develop a model relating the prevalence of 
fluoroquinolone resistant Campylobacter infections in humans associated 
with the consumption of chicken to the prevalence of fluoroquinolone 
resistant Campylobacter in chickens. The risk assessment showed that 
fluoroquinolone use in chickens accounted for almost all of the 
fluoroquinolone-resistant Campylobacter in those persons who had not 
traveled outside the United States or had taken a fluoroquinolone drug 
prior to submission of a culture. This risk assessment estimated that 
out of 122,078 people seeking care for a campylobacter enteric 
infection from chickens, 58,450 persons would be treated with 
antibiotic and of those, 4,682 would be resistant to fluoroquinolone 
therapy.
    Other human health risks due to antimicrobial use in food-animals 
are the potential development of resistant organisms in the gut of 
persons consuming an antimicrobial residue and an allergic reaction to 
the residue. Unlike the fluoroquinolones, for which the major hazard 
associated with their use in animals is the selection of resistant 
foodborne pathogens, the major hazard associated with the use of 
virginiamycin in food animals is the selection of resistant 
enterococci. The presence of virginiamycin resistant enterococci is of 
concern because a related antimicrobial, Synercid, was recently 
approved for use in human medicine. Synercid will be used in humans to 
treat enteroccal infections for which there are no other antimicrobial 
therapies available. To assess the risk associated with the continued 
use of virginiamycin in animal agriculture, a quantitative risk 
assessment framework is needed. This risk assessment framework will 
quantify the probability, uncertainty and variability associated with 
several factors. The agency will also be considering whether additional 
risk assessments should be conducted on other antimicrobial and 
foodborne pathogen combinations.

                       SINGLE USE MEDICAL DEVICES

    Concerns have been expressed about the safety of reprocessed single 
use medical devices.
    Question. Please provide your analysis on the safety of these 
devices including findings of any investigations you may have pursued 
relating to injuries caused by such devices.
    Answer. In the past three years, FDA has received approximately 245 
adverse event reports from manufacturers that involved the reuse of 
devices labeled for single use including 7 deaths; 72 injuries; 147 
malfunctions, and 19 other. During that same time period, FDA received 
approximately 300,000 device adverse event reports, summary reports, 
and supplements. The 245 reports spanned approximately 70 different 
types of devices. An analysis of the events did not reveal any patterns 
of failures with the reuse of single-use devices--SUDs--that were 
different from patterns noted with the initial use of SUDs.
    It is important to note that the Medical Device Reports--MDRs--are 
unlikely to represent an accurate assessment of failure rates for any 
medical device, regardless of whether they are single-use or non-
disposable products, because of incomplete reports and under-reporting. 
The SUDs, however, pose a greater challenge because there may be 
increased under-reporting of these events when end-users recognize that 
the failed device involved a reused device labeled for single use. In 
addition, infections that may have resulted from an improperly 
reprocessed SUD may be difficult to trace to a reused device.
    Question. Please compare the current regulatory requirements 
related to marketing of reprocessed single use medical devices with 
similar requirements for ``new'' devices.
    Answer. To date, FDA has enforced existing premarket submission 
requirements against original manufacturers, but not third party 
reprocessors or hospitals that reprocess single use devices. FDA has 
enforced other requirements of the Act, such as good manufacturing 
practice and adverse event reporting requirements, against third party 
reprocessors. FDA has not enforced Federal Food, Drug, and Cosmetic Act 
requirements against hospitals that reprocess single use devices. We 
FDA recently issued draft guidance entitled Enforcement Priorities for 
Single-Use Devices Reprocessed by Third Parties and Hospitals, 
proposing to enforce the premarket submission requirements and all of 
the other requirements of the act against third party reprocessors and 
hospitals.
    Question. What, if any, additional regulatory requirements 
regarding reprocessed single use medical devices would you recommend?
    Answer. Under the proposed strategy outlined in FDA's enforcement 
guidance, the agency would enforce the same regulatory requirements 
that are applicable to a new device to reprocessed devices labeled for 
single use, regardless of whether the reprocessor was a third-party or 
a hospital. Additional regulatory requirements would not be required; 
however, FDA's proposed strategy would phase in enforcement of existing 
requirements over a period of 18 months.
    Question. What effect would additional regulation of reprocessed 
single use medical devices have on health care costs?
    Answer. As I said earlier, FDA is not proposing to promulgate new 
regulatory requirements regarding reprocessed single use medical 
devices. The agency's strategy is to phase in uniform enforcement of 
all current requirements for third-party reprocessors and hospitals, 
including premarket requirements. At this time, FDA cannot determine 
the economic effect of its proposed enforcement policy on the cost of 
health care. However, any evaluation would need to consider the 
expected reduction in the number and severity of adverse events as well 
as any costs associated with FDA's phased in enforcement strategy.

                           DETROIT LABORATORY

    Language was provided in the fiscal year 2000 Appropriations Act 
regarding the Detroit, Michigan, lab and field office.
    Question. Please provide an update on activities at these 
locations.
    Answer. I am happy to describe our efforts to relocate both the 
Detroit District Office and Detroit Laboratory. As you may recall, the 
current facility which houses both our laboratory and district office 
is scheduled to be acquired and demolished by the City of Detroit as 
part of a major downtown renovation project. We are proceeding in 
accordance with congressional guidance, which in short prohibited any 
geographical reassignment of the lab staff or reorganization of the 
district. We are actively engaged in dialogue with several Michigan 
State authorities and federal agencies in the area in an effort to 
develop mutually beneficial arrangements to house the remaining Detroit 
laboratory staff. Of particular interest to FDA at the moment, is the 
strong possibility of entering into a partnership arrangement with 
Wayne State University to co-locate our laboratory operations. Wayne 
State is a part of the university system of Michigan, and currently has 
state of the art facilities and equipment that would enhance our 
current level of operation, and the potential exchange of expertise 
between university scientists and FDA scientists would serve both 
parties well. We are continuing to explore other possibilities with 
other components within the State system, as well as with the Veterans 
Administration. We are committed to identifying and securing suitable 
accommodations in the immediate area to continue our inspectional 
operations and to maintain viable laboratory support.

                         LOS ANGELES LABORATORY

    The budget request includes $20 million for construction of the Los 
Angeles Lab. I understand that if improvements are not made at that 
location, FDA will be forced to transfer personnel to other FDA field 
locations.
    Question. What would be the costs of such transfers and how soon 
would they occur?
    Answer. The current lease for this facility has been extended twice 
and will expire at the end of March 2000. A short term extension has 
been negotiated which will allow for continued occupancy during 
construction of a new facility, or an orderly closing of the existing 
lab within three years.
    Our experience with other field labs that have closed has been that 
most laboratory staff have not willingly accepted directed 
reassignments to gaining laboratories. Those staff not wanting to 
relocate to a targeted laboratory may apply for laboratory analyst jobs 
at other, more personally desirable locations; apply for other jobs 
within the district to which they are currently assigned; resign 
Federal service and accept positions in the private sector; retire if 
they met eligibility requirements; or, be separated, with severance 
pay, if they cannot retire and refuse a directed reassignment to a 
laboratory in another part of the country.
    As is FDA policy for all closing field laboratories, all impacted 
laboratory staff in Los Angeles would be given a directed reassignment 
to an equal position at another FDA field laboratory, with full rights 
to relocation benefits for reimbursable expenses. The average cost for 
an employee move is $35,000. Total staffing at the Los Angeles 
Laboratory at Pico Boulevard is 76. If the facility were to be closed 
with an estimated effective date of the end of fiscal year 2002, the 
agency could expect approximately 20 employee transfers to other sites, 
resulting in moving costs of approximately $700,000 over the next three 
fiscal years.
    If the Los Angeles Laboratory were to close, the greater cost to 
FDA would be the loss of productivity and expertise that would 
certainly occur over the next several years. We would expect a 
significant number of experienced analysts to retire or accept other 
positions in the Los Angeles area, either in the district or within the 
private sector. Inexperienced replacement staff would need to be hired 
and trained in other locations, causing delays in product analysis. Los 
Angeles is one of the agency's largest field laboratories, analyzing 25 
percent of FDA import sample workload nationally. Workload in this area 
is increasing, and faster turnaround times for import sample analysis 
is a stated priority of both Congress and the import community.
    Question. Can an amount be provided in fiscal year 2001 less than 
$20 million that would allow construction at the lab to proceed?
    Answer. The budget request of $20 million is for the first phase of 
a two phase project that totals $43.0 million. It is conceivable that 
the construction documents could be modified to define a ``site-
foundation'' only project that would entail a first phase cost of $10.5 
million. However, since this would delay the funding of a large portion 
of the construction work for another year, partial funding would result 
in the construction being completed over a longer duration. With the 
construction marketing continuing to be very active and with increased 
competition for skilled labor, the cost of construction may escalate.

                      ARKANSAS REGIONAL LABORATORY

    Question. Please provide an update on construction activities of 
the Arkansas Regional Lab.
    Answer. I would be happy to provide that information for the 
record.
    [The information follows:]
Status of the Arkansas Regional Lab
    The ARL facility project was initiated in fiscal year 1995 through 
a $2.5 million appropriation for architectural and engineering design. 
The firm Kling-Lindquist (KL), Philadelphia, PA, was selected. KL, in 
consultation with FDA, developed an overall campus design comprising 
both new and renovated space: (1) joint NCTR and ORA animal quarantine 
facility--renovation of Building 62; (2) ORA's Arkansas Regional 
Laboratory--new facility (Phases I & II); (3) Building 50 renovation--3 
floors of office space (Phase III); and, (4) common ORA/NCTR 
administration and support area (Phase III).
    The fiscal year 1996 appropriation included $3.8 million for an 
animal quarantine facility and preparation of joint NCTR/ORA laboratory 
space. This project has been completed. The fiscal year 1997 
appropriation included $13.0 million for Phase I construction of the 
ARL. Phase I began construction and provided the ARL building, 
foundation, substructure, superstructure, exterior enclosure, and 
roofing. Major building systems, such as fire protection, HVAC, 
electrical and some site work, is included.
  --The construction of the ARL project was awarded on September 26, 
        1997, to Charles N. White Construction Company (White) of 
        Clarksdale, Mississippi. White was given notice to proceed on 
        Phase I of the project on October 1, 1997.
    The fiscal year 1998 appropriation included $14.55 million for 
Phase II construction. Phase II continued the ARL project by completing 
the building systems and providing some office and laboratory fit-out 
in the ORA laboratory building.
  --On December 24, 1997, White was given notice to proceed on a 
        portion of the Phase II construction.
    FDA received reprogramming authority for up to $10.4 million for 
Phase II of the ARL project to complete the office and laboratory fit-
out for the laboratory building.
  --On February 27, 1998, White was given notice to proceed on the 
        remaining portion of Phase II to complete the office and 
        laboratory fit-out for the laboratory building.
    A building dedication ceremony for Phases I & II, the laboratory 
portion, was held on February 17, 2000.
    Building 50 Renovation and Common Area, Phase III, status:
  --The fiscal year 1999 appropriation included $3.0 million to begin 
        construction of a portion of Phase III. This first portion 
        included the exterior demolition, exterior structural work, 
        exterior masonry work, and some roofing repairs.
  --On January 26, 1999, White was given notice to proceed on the first 
        portion of Phase II. This work has been completed.
  --The fiscal year 2000 appropriation included another $3.0 million to 
        continue the construction of a portion of Phase III. This 
        portion of work includes exterior glass and glazing, roofing, 
        an elevator, and some of the site work and utilities.
  --On February 2, 2000, White was given notice to proceed on the this 
        portion of Phase III.
  --In fiscal year 2001, FDA requested $3.0 million to continue work on 
        Phase III. Therefore, approximately $7.2 million in additional 
        funding will be needed to complete Phase III. The $3.0 million 
        in the fiscal year 2001 budget request will be utilized to fund 
        an additional portion of the Phase III construction. This 
        portion will include work such as the majority of the HVAC and 
        plumbing infrastructure and related electrical system items 
        necessary for the operation of the installed HVAC systems.
    Question. Please provide information regarding FDA field structure 
consolidation as it relates to completion of the Arkansas Regional Lab 
and please identify savings to be achieved by this action.
    Answer. I would be happy to provide that information for the 
record.
    [The information follows:]
    The original field lab consolidation plan called for six field 
laboratories to be ultimately consolidated into the Arkansas Regional 
Laboratory. They are as follows, including dates of closure:

Chicago...........................................................  1997
Minneapolis.......................................................  2000
Detroit...........................................................  2000
Dallas............................................................  2000
Denver............................................................  2010
Kansas City.......................................................  2014

    As leases have or will expire for these facilities, the agency will 
negotiate new leases for office space only, as opposed to full 
replacement space to include new laboratories. FDA will thus realize 
considerable savings on an annual basis in the form of ``avoided rent'' 
for replacement of expensive, state-of-the-art lab space in the above 
locations.
    The current estimated differences in annual rent for office only 
versus office and lab space for each of these locations is presented 
below, and does not include Denver or Kansas City due to the lengthy 
time before planned closing of those facilities. Savings to FDA will 
increase again starting in 2010 with the additional closures of Denver, 
and then Kansas City in 2014.

                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                    Est savings
                                                                    Annual cost     Annual cost        with
                           Facility                                   for lab         for lab      consolidation
                                                                   consolidation    replacement       at ARL
----------------------------------------------------------------------------------------------------------------
CHICAGO (Lab only)..............................................  ..............             574             574
MINNEAPOLIS.....................................................             664           2,500           1,836
DETROIT.........................................................             783           1,900           1,117
DALLAS..........................................................             132           1,700           1,568
ARKANSAS REG LAB \1\............................................           3,650  ..............          -3,650
                                                                 -----------------------------------------------
      TOTAL.....................................................           5,229           6,674           1,445
----------------------------------------------------------------------------------------------------------------
\1\ The annual cost for ARL was calculated based on a 20 year amortization of constructions costs plus $1
  million per year in operating costs.

                               USER FEES

    Question.  Section 735 of Public Law 106-78, the Agriculture, Rural 
Development, Food and Drug Administration, and Related Agencies 
Appropriations Act, 2000, requires the budget proposal for fiscal year 
2001 to include information identifying savings in the event proposed 
user fees are not authorized prior to the convening of a committee on 
conference for the fiscal year 2001 appropriations act. The fiscal year 
2001 budget request assumes revenues from the enactment of unauthorized 
FDA user fees.
    Accordingly, which FDA activities proposed for fiscal year 2001 do 
you recommend for reduction in the event these user fees are not 
authorized this year?
    Answer. In the fiscal year 2001 budget, FDA has requested user fees 
in the amount of $8.4 million for Direct Food Additive Petition review, 
and $5.8 million for the premarket review in the Medical Device 
program. These two proposed user fees are additive in nature, allowing 
for increased performance on the part of FDA, once enacted. Were these 
user fees not to be approved, the activities highlighted as being 
accomplished with the user fee funds would not be accomplished. For 
example, FDA would not be able to provide enhanced training to support 
scientific expertise of reviewers that need to keep pace with 
increasingly complex products; nor would there be time for the agency 
to be ready to engage in pre-filing consultations with petitioners. 
Medical device manufacturers would continue to face a significant 
financial disincentive to use the third party review option created by 
the Food and Drug Administration Modernization Act, or FDAMA.
    FDA also requested $5.3 million in new user fees for the food 
export certification program. Collection of user fees for export 
certificates for human drugs, animal drugs and devices is authorized by 
the Federal Food, Drug, and Cosmetic Act. This does not cover 
collection of user fees for export certificates for foods. FDA must 
divert significant resources from food safety work to address what in 
essence is an economic trade matter for these certificates. Were this 
user fee not authorized this year, FDA would continue to expend 
resources for the food export certificates, with no means to recoup the 
costs incurred as a result of inspections, laboratory analyses and 
administrative costs associated with issuance of food export 
certificates.
    Question. Can you give us some insight into your thinking on this 
label, and whether you are considering any changes to what you proposed 
last year?
    Answer. From the results of previous focus group research on label 
statements used to alert consumers to potential hazards in foods--
namely, iron supplements and fresh and unprocessed fruit and vegetable 
juice warning statements, FDA determined that certain types of 
information was required to adequately inform consumers about the 
potential risks associated with the food. In particular, our focus 
group research indicated that for consumers to understand and modify 
their behavior with regard to a particular food there needed to be an 
information statement explaining why there was a risk associated with 
the food. This information statement was especially important if the 
information was considered new information. In crafting the proposed 
safe handling instructions for eggs, FDA considered that consumers 
needed to be given information on why the product presented a risk. 
Accordingly, FDA proposed to include a sentence in the statement that 
informed the consumer that the eggs may contain harmful bacteria known 
to cause serious illness in children, the elderly, and persons with 
weakened immune systems. FDA included these groups because they are 
generally at higher risk of serious illness from food borne pathogens 
than the rest of the population.
    FDA received several comments objecting to the introductory 
sentence in the proposed safe handling instructions. We also received 
comments offering alternative wording for the safe handling 
instructions, as well as those asserting that the presence of 
Salmonella in eggs was not new information. We have fully considered 
all of the comments. We have been persuaded by those comments to 
reconsider the wording of the informational component of the safe 
handling instruction and will likely revise the safe handling 
instructions in a way that addresses both the concerns raised by 
industry and the need to adequately inform consumers about the risk 
associated with eggs.
                                 ______
                                 

               QUESTIONS SUBMITTED BY SENATOR TOM HARKIN

    Question. Commissioner Henney, I was disturbed to read a recent 
report that DES had been found in a shipment of meat to Europe. 
Incidences such as this certainly don't help resolve our trade 
difficulties with the EU. Can you tell me what role FDA has in 
resolving incidences such as the DES incident, and what you have been 
doing to help address issues related to residues in meat?
    Answer. In July 1999, Switzerland reported to the United States 
that it had found trace levels of diethylstilbestrol--DES--in two 
samples of U.S. beef. On July 13, the Swiss government published a 
press release that announced its DES findings in U.S. beef. The press 
release stated that the amounts detected were at low levels and did not 
pose an acute health threat.
    FDA takes misuse of compounds of public health significance like 
DES, very seriously. The agency's Center for Veterinary Medicine--CVM--
which has the responsibility to investigate the misuse of drugs in food 
animals, has carried out an intensive investigation during the past 
eight months. FDA inspectors have conducted on-farm investigations of 
animal producers and feedlots delivering animals to the establishment 
in question. They have investigated bulk drug re-packers, compounding 
pharmacies, and other points at which illegal diversions of drugs might 
be uncovered. FDA has thus far found absolutely no evidence of the 
diversion of DES for use in food animals.
    In the meantime, we have learned that the Swiss government sent the 
two positive samples to a European Union--EU--reference laboratory for 
re-confirmation. The October 14, 1999 report from the EU reference 
laboratory states that the conclusion of the analyses does not confirm 
the presence of DES in the samples submitted for analysis. FDA 
scientists conclude that some type of laboratory contamination may have 
led to false positive samples.
    In response to your question regarding FDA's role in resolving 
incidences such as the DES case, the FDA establishes tolerances for 
residues of animal drugs in edible tissues. Food-producing animals, 
even though not in their final, edible form, have been held to be food 
under a variety of statutes. Thus, live animals raised for food are 
``food'' under the Federal Food, Drug, and Cosmetic Act.
    CVM has implemented a compliance program to address consumer 
exposure to drug residues in the edible tissues of food animals. The 
Center assigns more Field resources to this program than to any other 
that it oversees. The immediate goal of this program is to prevent 
future residue violations through on-farm educational efforts, and/or 
enforcement activity as warranted. To this end FDA has developed 
cooperative agreements with 32 states to conduct educational follow-ups 
of first-time violators. State participation is an integral element of 
the U.S. residue reduction effort. The compliance program instructs the 
FDA District Offices to conduct onsite investigations whenever the Food 
Safety and Inspection Service--FSIS--reports finding a residue of a 
drug prohibited from food-animal use such as DES. FDA investigations 
are also required for all high-level residues which may pose a 
toxicological concern, as well residues from drugs not approved for 
food animal use. FDA also conducts investigations of any residue from 
drugs prohibited from extra-label use under the Animal Medicinal Drug 
Use Clarification Act of 1995. Additionally, FDA Districts are 
instructed to follow up on all repeat violators. A repeat violator is 
defined as an individual who sells a slaughter animal whose carcass is 
found to contain a violative concentration of a drug, pesticide, or 
environmental contaminant within a 12-month period after receiving the 
FSIS Violation Notification Letter. Complete instructions for these 
investigations are included in Compliance Program 7371.006. Last year 
FDA conducted approximately 485 investigations of illegal residues and 
the States an additional 1,000 on-farm visits in response to FSIS-
reported tissue residue violations.
    Question. FDA announced early in 1999 its intention to give 
``priority'' to reviews of food additive petitions with food safety 
benefits. Several food irradiation petitions are pending at FDA, 
including one that would allow the use of irradiation on hot dogs or 
luncheon meats, and could be used to reduce the incidence of Listeria. 
The Conference Report accompanying the Fiscal Year 2000 Agriculture 
Appropriations bill directed FDA to propose and finalize a rule on this 
petition by August 2000. Do you intend to meet this deadline? How 
quickly does FDA intend to act on other pending irradiation petitions? 
How can we be assured they won't meet the same fate as red meat 
irradiation that FDA and USDA more than five years to complete? When 
will we see faster reviews resulting from the more than $5 million in 
additional funds the Congress provided FDA in fiscal year 2000?
    Answer. First, FDA does not intend to propose a rule because under 
the food additive petition process, a proposal is not required. Rather, 
the filing notice, which was published in the Federal Register on 
January 5, 2000, meets the legal requirement of giving notice that a 
rule under consideration.
    In the priorities established for food safety in fiscal year 2000, 
FDA has established a goal of completing the safety evaluation for 80 
to 90 percent of expedited review petitions within one year of filing. 
FDA filed the petition that includes hot dogs and luncheon meats on 
October 27, 1999. This is the actual filing that preceded the notice in 
the Federal Register. Although we cannot comment on issuing a rule 
until we complete the safety evaluation and verify whether data in the 
petition will support a final rule, we are committed to completing that 
evaluation within a year of filing. FDA expects to complete evaluations 
of all other pending irradiation petitions within the same time frame.
    With regard to the petition for red meat irradiation that FDA 
approved in December 1997, FDA received this petition at a time when 
there was a backlog of several petitions and before a priority was 
being placed on petitions intended to significantly reduce pathogens. 
Additionally, USDA regulations for meat irradiation now incorporate FDA 
regulations for the use of radiation which means that USDA will not be 
required to issue its own regulation to allow irradiation of meat after 
FDA issues such a regulation.
    The time to complete reviews on food and color additives has been 
improving in recent years. FDA is committed to making further 
significant improvements as we hire and train additional scientists for 
review. We have already begun the process of bringing more reviewers on 
board and improving the training for current staff. In the interim as 
this process is ongoing, FDA is also using some of the newly 
appropriated resources to arrange for review help through the use of 
contractors. The most immediate results will be seen in the petitions 
that qualify for expedited review due to pathogen reduction described.
    Question. FDA visits foreign countries to audit the safety of food 
produced in these countries for export to the United States. Please 
indicate for fiscal year 1998 and fiscal year 1999: (a) each foreign 
country for which such an audit was conducted, (b) the particular food 
product that was the subject of the audit, and (c) the approximate 
dates of each such audit. Are there written reports prepared on the 
results of each such foreign audit? If so, are these reports available 
to the public? If they are not available to the public, why not? Was 
the FDA ever denied access to a foreign country in which it wanted to 
conduct an audit in fiscal year 1998 or fiscal year 1999? If so, please 
briefly describe the circumstances.
    Answer. An Establishment Inspection Report is prepared for each 
inspection of a firm. Reports are also prepared from audits conducted 
in response to foodborne outbreaks in other countries. These reports 
can be obtained through the Freedom of Information Act. When an 
inspection results in a regulatory action such as issuance of a Warning 
Letter or the firm placed on Detention with Physical Examination and 
added to an Import Alert, these documents are available on the agency's 
internet Website, at www.fda.gov.
    Although in the past Mexico has a very positive record of 
cooperation with FDA, FDA was denied access to Mexico once in 1999 in 
follow-up to a foodborne outbreak associated with the consumption of 
unpasteurized orange juice in the United States. The Mexican Ministry 
of Health would not allow FDA investigators to visit the processor or 
orchards implicated in the outbreak. The Ministry of Health did its own 
evaluation and provided FDA with information. We would like to note 
that Mexico participates in a number of cooperative efforts with the 
U.S. and collaborative exchanges are underway in the areas of research 
and outbreaks. Additionally, in September 1999, Mexico hosted a food 
safety practices symposium for more than 4,000 government officials in 
Mexico and Central America.
    I would be happy to provide two tables that reflects the import 
information you are requesting, for the record.
    [The information follows.]

------------------------------------------------------------------------
   Country (number of firms)          Product               Date
------------------------------------------------------------------------
 Fiscal Year 1998 Foreign Foods
       Inspections/Audits
 
Thailand (13)..................  Low Acid Canned    1/98 thru 8/98
                                  Food.
Spain (5)......................  Low Acid Canned    1/98 thru 2/98
                                  Food.
Germany (3)....................  Low Acid Canned    2/98 thru 4/98
                                  Food.
China (14).....................  Low Acid Canned    3/98 thru 4/98
                                  Food.
Philippines (1)................  Low Acid Canned    2/98
                                  Food.
Indonesia (1)..................  Low Acid Canned    2/98
                                  Food.
Mexico.........................  Parsley..........  10/98
Guatemala......................  Fresh Raspberries  3/98, 6/98, 11/98
Honduras.......................  Country            8/98
                                  Evaluation.
 
    Fiscal Year 1999 Foreign
       Inspections/Audits
 
Mexico (6).....................  Cheese...........  2/99 thru 8/99
France (5).....................  Cheese...........  2/99 thru 8/99
Canada (1).....................  Cheese...........  2/99 thru 8/99
 Germany (1)...................  Cheese...........  2/99 thru 8/99
El Salvador (1)................  Cheese...........  2/99 thru 8/99
Singapore (1)..................  Seafood..........  6/99
Ecuador (11)...................  Seafood..........  7/99
Taiwan (9).....................  Seafood..........  5/99
Philippines (9)................  Seafood..........  4/99
Vietnam (9)....................  Low Acid Canned    4/99
                                  Food.
Equador (5)....................  Low Acid Canned    6/99 thru 7/99
                                  Food.
Brazil (6).....................  Low Acid Canned    8/99
                                  Food.
Canada (9).....................  Low Acid Canned    3/99 thru 7/99
                                  Food.
Malaysia.......................  Low Acid Canned    8/99
                                  Food.
Philippines....................  Low Acid Canned    5/99 thru 6/99
                                  Food.
India..........................  Low Acid Canned    6/99 thru 8/99
                                  Food.
Vietnam........................  Low Acid Canned    4/99
                                  Food.
Mexico.........................  Basil............  12/99
                                 Green onions.....  3/99
                                 Parsley..........  2/99
                                 Celery/Lettuce...  7/99
Costa Rica.....................  Cilantro.........  7/99
                                 Country            7/99
                                  Evaluation.
Guatemala......................  Raspberries......  3/99
                                 Mamey............  4/99
                                 Post-Hurricane     7/99
                                  Mitch Food
                                  Safety
                                  Assessment.
Honduras.......................  Post-Hurricane     7/99
                                  Mitch Food
                                  Safety
                                  Assessment.
Trinidad and Tobago............  Country
                                  Evaluation
El Salvador....................  Post-Hurricane     7/99
                                  Mitch Food
                                  Safety
                                  Assessment.
Nicaragua......................  Post-Hurricane     7/99
                                  Mitch Food
                                  Safety
                                  Assessment.
------------------------------------------------------------------------

                                 ______
                                 

             QUESTIONS SUBMITTED BY SENATOR BYRON L. DORGAN

    I know that we all recognize the enormous public health 
contributions that vaccines have made in preventing a wide range of 
adult and childhood diseases. It is my understanding that the pace of 
development of new vaccines and vaccine combinations is quite dramatic. 
I am concerned that FDA may not have sufficient resources to give 
appropriate priority to the review of new vaccines that have a 
demonstrable public health benefit.
    Can you provide me and the Subcommittee with data from your Office 
of Vaccine Research and Review (OVRR) in response to the following 
questions:
    Question. For each of the past five years, what has been the 
funding and staffing at the OVRR?
    Answer. We are happy to provide a table showing the OVRR funding 
and staffing for each of the past five years.
    [The information follows:]

       OFFICE OF VACCINE RESEARCH AND REVIEW FUNDING AND STAFFING
                        [In millions of dollars]
------------------------------------------------------------------------
                                                  Fiscal years
               Resource               ----------------------------------
                                        1995   1996   1997   1998   1999
------------------------------------------------------------------------
OVRR funding.........................   18.6   18.5   18.7   18.4   19.3
FTE..................................    171    185    179    166    177
------------------------------------------------------------------------

    Question. What is your proposed fiscal year 2001 request for 
funding and staffing at the OVRR?
    Answer. The proposed fiscal year 2001 funding level for OVRR is 
$24.2 million based upon the President's budget request.
    Question. For each of the past five years, please break down the 
resources of the OVRR between new vaccine application review activities 
and other activities. Please describe those other activities.
    Answer. We are happy to provide a table showing the break down of 
OVRR resources between new vaccine application review activities and 
other activities for each of the past five years. New vaccine 
application review activities include: IND and license application 
review; lot-release processing and testing; and assay validation. Other 
activities include: mission-related product research; post-approval 
surveillance and enforcement activities; and miscellaneous other 
activities including training/professional development; processing 
information requests, and international harmonization activities.
    As shown below, while we have been able to increase our resources 
related to application review, much of which is funded through user-
fees, it has been at the expense of critical non-review activities, 
funded entirely through appropriations, that assure the expeditious 
review of future vaccines and the continued safety and effectiveness of 
vaccines already on the market.
    [The information follows:]

         OFFICE OF VACCINE RESEARCH AND REVIEW FTE DISTRIBUTION
------------------------------------------------------------------------
                                               Fiscal years
            Activity             ---------------------------------------
                                   1995    1996    1997    1998    1999
------------------------------------------------------------------------
Application Review..............    75.6    83.9    85.9    90.3    98.2
Other...........................    95.4   100.8    93.5    75.3    78.3
                                 ---------------------------------------
      Total.....................   171.0   184.7   179.4   165.6   176.5
------------------------------------------------------------------------

    Question. For each of the past five years, please provide the 
number of Biological License Applications (BLA) and Investigation New 
Drug Exemptions (IND) received for new vaccines.
    Answer. We are happy to provide a table showing the number of OVRR 
application receipts for each of the past five years.
    [The information follows:]

   OFFICE OF VACCINE RESEARCH AND REVIEW VACCINE APPLICATION RECEIPTS
------------------------------------------------------------------------
                                                  Fiscal years
             Application              ----------------------------------
                                        1995   1996   1997   1998   1999
------------------------------------------------------------------------
INDs \1\.............................     70     63     65     52     49
BLAs \1\.............................      6      4      4      3      4
BLA Supplements......................     62     30     60     77   116
------------------------------------------------------------------------
\1\ Note: INDs include commercial and non-commercial INDs. BLAs include:
  product license applications (PLAs), establishment license
  applications (ELAs), and biological license applications (BLAs).

    Question. For each of the past five years, please provide the 
average review times for BLAs and INDs for vaccines.
    Answer. INDs become effective automatically after 30 days unless 
the FDA imposes a clinical hold on the clinical trials. We are happy to 
provide a table showing the average BLA review times for each of the 
past five years. License application review time is the time to review 
completion for applications during the respective fiscal year. License 
applications may undergo several review cycles, in which an FDA action 
is taken and the sponsor responds, before approval.
    [The information follows:]

OFFICE OF VACCINE RESEARCH AND REVIEW MEDIAN VACCINE LICENSE APPLICATION
                               REVIEW TIME
------------------------------------------------------------------------
                                               Fiscal years
                                 ---------------------------------------
                                   1995    1996    1997    1998    1999
------------------------------------------------------------------------
Median BLA Review Time (months).   26.84    8.83   16.29   34.00   15.19
------------------------------------------------------------------------

    Question. What information does FDA have about future vaccine 
development and the number of INDs and BLAs for new vaccine products 
this year and in the future?
    Answer. A 1998 survey by the Pharmaceutical Research and 
Manufacturers of America (PhRMA) found 350 new biotechnology medicines 
in development and 140 pharmaceutical and biotechnology companies 
testing biotechnology products. Among the 350 new biotechnology 
medicines in development , 77 are vaccines. They include vaccines 
either to prevent or treat HIV infection, AIDS, colorectal, pancreatic, 
breast, lung, colon and prostate cancers, multiple sclerosis, and 
stroke. Senator Richard J. Durbin
                                 ______
                                 

            QUESTIONS SUBMITTED BY SENATOR RICHARD J. DURBIN

                                 CODEX

    Question. The Codex Alimentarius Commission (``Codex'') is an 
international organization that seeks to set food safety standards that 
are then used by the World Trade Organization to determine whether a 
national food safety standard is a ``trade barrier.'' Please indicate 
the amount spent by FDA in fiscal year 1999 in direct support of Codex, 
showing separately how much of the fiscal year 1999 amount is for 
travel.
    Answer. The total amount spent by FDA in fiscal year 1999 in 
support of Codex activities was $1.4 million. This includes $1.3 
million in salaries and support for approximately 12 FTE, and $100,000 
for travel.
    Question. FDA is part of the Codex Policy Committee, which is 
chaired by the Under Secretary for Food Safety of USDA and contains 
senior policy members from HHS, State, Commerce, USTR, and other parts 
of USDA. In June 1999, the U.S. acquiesced in four final decisions by 
Codex that provide less protection to U.S. consumers than current U.S. 
requirements: (a) international residue levels for methyl parathion and 
other pesticides even though in August 1999 the EPA banned methyl 
parathion for fruits and vegetables because of its potential adverse 
effects on children; (b) an international standard for natural mineral 
waters that permits higher levels of lead and other contaminants than 
the FDA now allows; (c) an international standard that does not require 
pasteurization of dairy products, as is now generally required by the 
FDA; and (d) an international standard for the labeling of a composite 
ingredient in prepackaged foods that permits it to be listed by a 
standardized name without declaring all its component ingredients if it 
is less than 5 percent of the food, even though the FDA now requires 
these components to always be listed in order to protect consumers who 
suffer from hypersensitivities. Please explain why the U.S. did not 
formally object last year to the approval of each of these four Codex 
standards?
    Answer. Codex is the reference international organization for food 
safety standards under the World Trade Organization--or WTO, Agreement 
on Sanitary and Phytosanitary Measures--the SPS Agreement. While the 
SPS Agreement requires countries to base their food safety measures on 
Codex standards and guidelines unless they can scientifically justify a 
more stringent standard, there is no requirement under the WTO Trade 
Agreements for countries to adopt Codex standards. Codex standards 
remain voluntary. Additionally, under the SPS Agreement, counties are 
free to select their own level of public health protection.
    While Codex maintains a provision for voting on standards--with 
each country, including the United States, having one vote--Codex 
operates on the basis of consensus. The United States works extensively 
within the Codex System to help assure that the U.S. position is well 
known, well supported and is the option selected by Codex. However, 
there is no assurance, under either the voting or consensus process, 
that the United States position on any given Codex standard or 
guideline will become the final Codex decision.
    I would be happy to provide for the record details of certain CODEX 
standards.
    [The information follows:]

                        SELECTED CODEX STANDARDS

    International levels for methyl parathion.--At the time the Codex 
Alimentarius Commission adopted the standard for this compound in June 
of 1999, the Environmental Protection Agency had made no decision on 
canceling this compound--the voluntary cancellation notification was 
published in October, 1999. Therefore, there was no reason for the U.S. 
to object to the adoption of the Codex standard at the June 1999 
Commission meeting.
    International standard for natural mineral waters.--The United 
States was very much aware that the standard permitted higher levels of 
lead and other contaminants than FDA currently allows. During the 
consideration of this standard in the Committee on Natural Mineral 
Waters and in the Commission, the U.S. and other countries made strong 
objection. This standard was the result of a vote in the Commission; 
the United States position was not upheld.
    International standard for milk products not requiring 
pasteurization.--At no time did the United States adopt a position or 
strategy that would lower U.S. public health levels for milk or dairy 
products. For several years, the U.S. worked strenuously to ensure that 
language in Codex food hygiene codes and dairy product standards codes 
did not result in default language that would make it difficult for the 
United States to prevent the importation of raw milk or dairy products 
containing raw milk. This effort was a top priority of the United 
States. The U.S. was instrumental in helping to craft language for 
Codex dairy product standards that permitted maintenance of the high 
U.S. public health standards for milk and milk products while at the 
same time allowing Codex to move forward with the adoption of Codex 
dairy product standards. This language involved the insertion of a 
specific provision into Codex dairy product standards, that states: 
``From raw material production to the point of consumption, the 
products covered by this standard should be subject to a combination of 
control measures, which may include, for example, pasteurization, and 
these should be shown to achieve the appropriate level of public health 
protection.'' This language permits countries--including the U.S. to 
allow entry of dairy products only if they meet the country's level of 
public health protection, while at the same time not hindering a 
country's ability to produce dairy products in any manner they see fit. 
This is a classic example of how U.S. public health officials worked 
within an international forum to arrive at a solution that allowed the 
U.S. to maintain its high public health standards while also achieving 
updated dairy product standards that greatly assist the U.S. dairy 
industry in their international trade effort.
    International labeling standard for composite food ingredients.--
While the 5 percent cut off level for listing composite ingredients is 
less restrictive than current U.S. regulations that require full 
disclosure of most ingredients, the value is substantially better than 
the previous figure of 25 percent, that the 5 percent figure replaced. 
The 5 percent figure is also coupled with a requirement that 
ingredients that are food allergens be fully disclosed. This new Codex 
labeling requirement is far more stringent than its predecessor. While 
the U.S. would have preferred a more stringent standard, and worked 
towards that end, the U.S. position was not supported by many other 
countries within the Codex commission. The compromise solution obtained 
was a distinct improvement over the earlier standard and, coupled with 
the food allergen mandatory disclosure, was the best solution that 
could be expected in a forum in which the U.S. held the minority view.

                             IMPORTED FOOD

    Question. FDA visits foreign countries to audit the safety of food 
produced in these countries for export in the U.S. Please indicate for 
fiscal year 1998 and fiscal year 1999 each foreign country for which 
such an audit was conducted, the particular food that was the subject 
of the audit, and the approximate dates of each such audit?
    Answer. I would be happy to provide that information for the 
record.
    [The information follows:]

 FDA'S FISCAL YEAR 1998 AND FISCAL YEAR 1999 FOREIGN INSPECTIONS/AUDITS
------------------------------------------------------------------------
   Country (number of firms)          Product               Date
------------------------------------------------------------------------
China (14).....................  Low Acid Canned    3/98 thru 4/98
                                  Food.
Thailand (13)..................  Low Acid Canned    1/98 thru 8/98
                                  Food.
Spain (5)......................  Low Acid Canned    1/98 thru 2/98
                                  Food.
Germany ( 3)...................  Low Acid Canned    2/98 thru 4/98
                                  Food.
Philippines (1)................  Low Acid Canned    2/98
                                  Food.
Indonesia (1)..................  Low Acid Canned    2/98
                                  Food.
Mexico.........................  Parsley..........  10/98
Guatemala......................  Fresh Raspberries  3/98, 6/98, 11/98
Honduras.......................  Country            8/98
                                  Evaluation.
Ecuador (11)...................  Seafood..........  7/99
Canada (9).....................  Low Acid Canned    3/99 thru 7/99
                                  Food.
Philippines (9)................  Seafood..........  4/99
Taiwan (9).....................  Seafood..........  5/99
Vietnam (9)....................  Low Acid Canned    4/99
                                  Food.
Brazil (6).....................  Low Acid Canned    8/99
                                  Food.
Mexico (6).....................  Cheese...........  2/99 thru 8/99
Equador (5)....................  Low Acid Canned    6/99 thru 7/99
                                  Food.
France (5).....................  Cheese...........  2/99 thru 8/99
Canada (1).....................  Cheese...........  2/99 thru 8/99
El Salvador (1)................  Cheese...........  2/99 thru 8/99
Germany (1)....................  Cheese...........  2/99 thru 8/99
Singapore (1)..................  Seafood..........  6/99
Costa Rica.....................  Cilantro.........  7/99
                                  Country            7/99
                                  Evaluation.
El Salvador....................  Post-Hurricane     7/99
                                  Mitch Food
                                  Safety
                                  Assessment.
Guatemala......................  Raspberries......  3/99
                                 Mamey............   4/99
                                 Post-Hurricane     7/99
                                  Mitch Food
                                  Safety
                                  Assessment.
Honduras.......................  Post-Hurricane     7/99
                                  Mitch Food
                                  Safety
                                  Assessment.
India..........................  Low Acid Canned    6/99 thru 8/99
                                  Food.
Malaysia.......................  Low Acid Canned    8/99
                                  Food.
Mexico.........................  Basil............  12/99
                                 Green onions.....  3/99
                                 Parsley..........  2/99
                                 Celery/Lettuce...  7/99
Nicaragua......................  Post-Hurricane     7/99
                                  Mitch Food
                                  Safety
                                  Assessment.
Philippines....................  Low Acid Canned    5/99 thru 6/99
                                  Food.
Trinidad and Tobago............  Country
                                  Evaluation
Vietnam                          Low Acid Canned    4/99
                                  Food.
------------------------------------------------------------------------

                             IMPORTED FOOD

    Question. Was the FDA ever denied access to a foreign country in 
which it wanted to conduct an audit in fiscal year 1998 or fiscal year 
1999? If so, please briefly describe the circumstances.
    Answer. Although in the past Mexico has a very positive record of 
cooperation with FDA, FDA was denied access to Mexico once in 1999 in 
follow-up to a foodborne outbreak associated with the consumption of 
unpasteurized orange juice in the United States. The Mexican Ministry 
of Health would not allow FDA investigators to visit the processor or 
orchards implicated in the outbreak. The Ministry of Health did its own 
evaluation and provided FDA with information.
    We would like to note that Mexico participates in a number of 
cooperative efforts with the U.S. and collaborative exchanges are 
underway in the areas of research and outbreaks. Additionally, in 
September 1999, Mexico hosted a food safety practices symposium for 
more than 4,000 government officials in Mexico and Central America.
    Question. FDA inspects for safety a sample of imported food at the 
U.S. border. Please indicate for fiscal year 1999 the rejection rate by 
each major food product for each foreign country?
    Answer. We will be happy to provide this information for the 
record. In the table we provide, the data will represent the total 
number of imported foods refused for entry into the United States by 
major food product category. We use the terms ``rejection'' and 
``refusal'' interchangeably.
    [The information follows:]

    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    

                          SEAFOOD EQUIVALENCY

    Question. Seafood has been subject to mandatory process control 
systems, called HACCP, since December 1998. What percent of the 
domestic seafood industry is currently in compliance with the HACCP 
regulations? What percent of the imported seafood industry is currently 
in compliance with the HACCP regulation? How is FDA using the $8 
million that this committee appropriated for fiscal year 1998 to 
improve inspection of the seafood industry?
    Answer. I will be happy to provide this information for the record.
    [The information follows:]
    Domestic compliance.--As background, FDA's traditional regulatory 
database captures data on the classification of inspections, for 
purposes of regulatory follow-up. In this database, inspections are 
categorized as:
  --NAI--no action indicated, where there are essentially no 
        significant inspectional findings and no regulatory response 
        needed;
  --VAI--voluntary action indicated, where there are some significant 
        inspectional findings, but they are not sufficient to warrant a 
        regulatory response; or
  --OAI--official action indicated, where inspection findings warrant a 
        regulatory response (e.g., warning letter, seizure, injunction, 
        prosecution). For regulatory purposes, FDA has traditionally 
        considered firms that are classified as NAI or VAI as being in 
        compliance.
    Approximately 5 percent of the 3,334 seafood HACCP inspections 
conducted in 1999 were classified OAI for HACCP purposes, and these 
firms were sent Warning Letters by FDA. These inspections constitute 
those firms that exhibited significant violations and did not exhibit a 
willingness to make prompt and appropriate corrections.
    For the seafood HACCP program, FDA has created a separate database, 
which is used for program evaluation and management purposes. The 
database includes data on a wide range of very specific features of 
processors' HACCP plans and implementation. A deficiency in any of 
these areas counts as noncompliance under this grading system, even 
though the firm may be doing well in all other aspects of its HACCP 
system. ``Compliance,'' as defined by this database, is a rigorous 
standard. In 1999, 55 percent of inspected firms were ``in compliance'' 
by this standard. This exceeded FDA's GPRA goal by 5 percent.
    It should be noted that a significant percentage of firms that were 
not in compliance by the latter standard did not receive warning 
letters. As noted above, warning letters were reserved for firms that 
were not showing good faith progress toward full compliance. The 
overwhelming majority of firms are now either in full compliance or 
demonstrating good progress towards it. For that reason, we expect to 
see significant improvement this year.
    Foreign compliance.--Over half of all seafood consumed in the 
United States is imported from a total of about 135 countries. A number 
of these countries have advanced regulatory systems for seafood while 
others do not. There are literally tens of thousands of foreign 
processors that export to the U.S. Their products are therefore subject 
to U.S. requirements. FDA's traditional strategy for examining imports 
has been physical examination of a small percentage of products at 
ports-of-entry. The examination is primarily directed toward 
determining whether the product at the port contains substances that 
would cause it to be adulterated under U.S. law. This examination would 
not directly reveal whether the products were produced under HACCP 
controls in the country of origin.
    Consequently, FDA has developed three new strategies to augment the 
port-of-entry examination process. These strategies should eventually 
enable us to determine an overall compliance rate for foreign HACCP. 
The first strategy is a new requirement on U.S. importers that they 
take ``affirmative steps'' to ensure that seafood products they are 
importing have been processed in accordance with U.S. requirements. 
Affirmative steps may be basic, threshold indicators of compliance, 
such as obtaining copies of the foreign processors' HACCP plans and 
records. Importers are not expected to be surrogate regulatory 
agencies. Nonetheless, the ``affirmative steps'' requirement is novel 
and, as anticipated, will take some time to be fully understood and 
implemented by the entire importing community.
    The second strategy involves a significant increase in foreign 
regulatory inspections by FDA inspectors, primarily directed toward 
developing countries that are major exporters of seafood. The findings 
from those inspections generally parallel those for domestic 
inspections. Most processors are implementing HACCP but have not 
perfected it yet. For that reason, education--both for the industry and 
the local regulatory agencies--is a major component of these inspection 
visits.
    The third strategy involves equivalence determinations. The nature 
of equivalence is such that it is expected ultimately to involve 
countries with advanced regulatory systems.
    Improving inspections.--To provide you with a response in the 
shortest possible time, we are submitting the following materials that 
FDA has used to brief congressional staff on the seafood HACCP program. 
Last year, 85 percent of establishments in FDA's domestic inventory 
were inspected, targeted toward firms with problems reported during the 
previous inspection.
    Question. The U.S. and Canada are now discussing an equivalency 
agreement on seafood imports. Are the approved levels for food and 
color additives permitted in seafood identical for Canada and the U.S.? 
If not, please list the approved levels for Canada and the U.S. for 
those food and color additives in seafood where the levels are not 
identical?
    Answer. There are literally thousands of additives permitted in 
food in each country. One aspect of an equivalence determination is to 
review additives for major differences in approved uses and to assess 
the significance of those differences. One feature of this evaluation 
is to screen the additives for those that actually are approved for, 
and used in, seafood products being traded between the two countries.
    FDA and the Canadian Food Inspection Agency are in the process of 
conducting such a screen. Where significant differences in approved 
uses are found to exist in additives that are germane to seafood 
products being traded between the two countries, those additives will 
be publicly listed and assessed pursuant to U.S. obligations under the 
Uruguay Round Agreements Act. FDA's preliminary assessment in this 
process is that there are few differences.
    Question. In the seafood equivalency negotiations with Canada, has 
the Canadian government asserted that there are differences between the 
low-acid canned seafood containers approved by the FDA and by the 
Canadian government? If so, please summarize what these differences are 
and indicate whether the FDA believes the Canadian requirements provide 
more safety to consumers that the FDA's requirements.
    Answer. With regard to low acid canned food containers, FDA and the 
Canadian Food Inspection Agency are reviewing differences in the way 
the agencies interpret the significance of certain types of can 
defects. FDA's preliminary view is that the US and Canadian 
interpretations yield the same level of protection for consumers. 
Neither FDA or the Canadian Food Inspection Agency have come to any 
conclusions about whether the issue affects equivalence. The issue 
remains the subject of technical discussion between the two 
governments.

                  USE OF HUMAN ANTIBIOTICS IN ANIMALS

    Question. Last year, the Committee directed the Secretary of Health 
and Human Services to implement the GAO's recommendation on the use of 
human antibiotics in animals. What is the status of this 
implementation?
    Answer. FDA has taken several steps to determine the nature of the 
problem associated with antibiotic resistance and will develop 
appropriate regulatory responses as the information permits. FDA issued 
Guidance for Industry Number 78, which addresses how the agency intends 
to consider the potential human health impact of the microbial effects 
associated with all uses of all classes of antimicrobial new animal 
drugs intended for use in food-producing animals when approving such 
drugs. FDA developed A Proposed Framework for Evaluating and Assuring 
the Human Safety of the Microbial Effects of Antimicrobial New Animal 
Drugs Intended for Use in Food-Producing Animals to attempt to promote 
animal health while protecting the public health. It describes a 
proposed regulatory approach, for antimicrobial products used in food 
producing animals. The agency has conducted a model risk assessment, 
plans for a second assessment, and initiates research to fill data 
gaps. It also describes the policy direction the agency will take in 
developing the new regulations.
    The Center for Veterinary Medicine, CVM, is aggressively developing 
risk assessment strategies to assist in evaluating the human health 
effects from antimicrobial use in animals. The Center contracted with a 
quantitative risk assessment expert to develop a quantitative risk 
assessment model. The risk assessment intends to determine the 
feasibility of estimating risk to human health from resistant foodborne 
pathogens associated with the use of antimicrobial products in food-
producing animals. In early December the draft risk assessment model 
was discussed at a public meeting. Scientific experts provided the 
agency with their comments on the strengths, limitations, and data gaps 
associated with the model. The agency will consider these comments, as 
well as comments submitted to the public docket, in finalizing the 
draft risk assessment.
    The agency has also initiated planning for a second risk assessment 
to look at the indirect transfer of resistance from animals to humans. 
The use of antimicrobial products in food animals not only leads to the 
development of resistance in foodborne pathogens, but also in all 
bacterial associated with the animal. This risk assessment will 
quantify the probability, uncertainty, and variability associated with 
several factors. The agency initiated a feasibility study for this 
specific assessment in the first quarter of 2000. After the feasibility 
study is complete, the agency should be able to report on the timeframe 
to complete a risk assessment on this issue, or, if sufficient data are 
not currently available, identify the additional data that need to be 
generated to support the risk assessment.
    The National Antimicrobial Resistance Monitoring System--NARMS, 
which is a collaborative effort among the Food and Drug Administration, 
the United States Department of Agriculture, and the Centers for 
Disease Control and Prevention, is a post-marketing activity to monitor 
the emergence and spread of resistance in enteric bacteria and to help 
ensure the continued safety and effectiveness of veterinary 
antimicrobials. In order to determine risks to the public health from 
the agricultural use of existing antimicrobials, CVM established and 
continues to expand NARMS. In addition, the system may form the basis 
for a regulatory tool to monitor the safety of new antimicrobial 
products afer approval.
    The Center has initiated its own intramural, extramural, and 
collaborative research efforts to investigate factors associated with 
development, dissemination, and persistence of bacterial antibiotic 
resistance in both the animal production environment and food supply. 
In late February, the agency sought input from experts via a public 
workshop. The appropriate design for pre-approval studies to evaluate 
the microbial effects of antimicrobial drugs intended for use in food-
producing animals was discussed. The agency is considering the need to 
hold additional scientific workshops on risk management issues relating 
to the regulation of antimicrobials use in food-producing animals. 
Because the agency intends to solicit expert advice from the animal 
health industry, the animal production industry, and consumer groups, 
we are not able to develop a specific time frame for all activities 
associated with the antibiotic resistance issue. However, FDA does not 
intend to wait for all the answers before taking certain actions. As 
opportunities develop to implement changes, we will take the necessary 
steps.

             NATIONAL CENTER FOR FOOD SAFETY AND TECHNOLOGY

    Question. For fiscal year 2000, the National Center for Food Safety 
and Technology (NCFST) received a $3 million appropriation. This $3 
million will continue the NCFST's progress in keeping our dinner tables 
safe. Will the Administration continue to support food safety efforts 
by supporting another $3 million appropriation for the National Center 
for Food Safety and Technology in fiscal year 2001?
    Answer. FDA is providing the National Center for Food Safety and 
Technology with an increase of $1 million in fiscal year 2000 in FSI 
funds to expand the collaborative research in food safety for a total 
of $3 million. This includes the previous FSI base funding of $2 
million.
    In fiscal year 2001 FDA expects to continue to fund NCSFT at $3 
million. FDA is not requesting new money in its fiscal year 2001 budget 
for this purpose.

                      PRESIDENT'S EGG SAFETY PLAN

    Question. CDC first identified internally contaminated eggs as a 
source of Salmonella enteritidis infection in the late 1980's. Why has 
it taken so long for FDA and USDA to develop an action plan to address 
this public health problem? What steps could be taken to reduce the 
government's reaction time to food safety problem in the future?
    Answer. FDA and USDA have a history of cooperation on food safety 
issues. FDA and USDA have supported the development of egg quality 
assurance programs at the state level since the early 1990s. FDA has 
responsibility for foodborne, including eggs, illness outbreak 
tracebacks, whereby the agency identifies and limits the number of 
contaminated eggs that reach the consumer. In addition, FDA and USDA 
identified the proper handling, storage and cooking of eggs in FDA's 
retail Food Code to reduce the potential hazard of Salmonella 
Enteritidis, or SE, contamination. Although these interventions have 
helped to reduce the problem of SE in eggs, they have not been as 
effective as the agencies had hoped in addressing the problem.
    While SE was recognized as a problem in internally contaminated 
eggs several years ago, more recent scientific data have facilitated 
FDA's ability to pursue other farm-to-table interventions to prevent or 
reduce internal SE contamination of eggs. In June 1998, USDA and FDA 
completed its SE in eggs risk assessment. The risk assessment modeled 
the various pathways that eggs can become contaminated with SE and 
analyzed the effectiveness of interventions at each potential pathway. 
Using data generated in the risk assessment, both agencies have 
developed proposed regulations requiring refrigeration and labeling of 
eggs throughout distribution and storage. The risk assessment also 
serves as the basis for the scope of the Egg Safety Action Plan, which 
comprehensively addresses egg safety from farm to table. The Egg Safety 
Action Plan includes plans for additional research to fill existing 
data gaps in our understanding of SE in the environment and develop new 
technologies and interventions to further reduce the hazard.
    Although the development of the risk assessment on SE in eggs has 
been beneficial in guiding the recent egg safety efforts of the 
agencies, both FDA and USDA over the past ten years have made attempts 
at addressing SE in eggs but have had legislation and or appropriations 
transferred or removed from their respective programs. For example, FDA 
drafted a proposal requiring refrigeration of eggs in the early 1990s 
when authority for refrigeration during transport and storage was 
legislatively given to USDA in the 1991 Egg Products Inspection Act 
amendments. Special funding for a successful USDA-sponsored on-farm SE 
risk reduction pilot project was established by Congress in 1992 but 
then was eliminated from appropriations in 1995. Likewise, federal 
authority in responding to foodborne illness through food tracebacks of 
egg-related illnesses was transferred from USDA to FDA in October 1995. 
The changes of authorities and lack of funding have contributed to 
delay in providing a comprehensive program to improve public health .
    With regard to future government response to new food safety 
problems, the Food Safety Initiative funding received by FDA over the 
past three years has provided a solid foundation in surveillance, 
research , risk assessment, science-based inspection models, and 
education that should significantly shorten the time needed for 
effective government response. This will continue to improve as FDA's 
scientific knowledge advances and our regulatory programs develop solid 
track records. The recent data published by CDC through FoodNet 
underscore the significant progress being made by our science-based 
regulatory programs.
    Question. While I believe the President's Plan on Egg Safety is a 
very ambitious first step to eliminate disease due to SE-contaminated 
eggs, I am puzzled as to why FDA and FSIS have divided up 
responsibility for egg safety. Please explain why it is better to have 
two agencies responsible--FDA for the producers and FSIS for the shell 
egg packers and egg products processors--rather than for one agency to 
have responsibility for egg safety from the farm to the retail level?
    Answer. The President's Council on Food Safety identified one 
responsible agency for each stage of the farm-to-table continuum to 
consolidate oversight responsibilities, based on existing statutory 
authority and to provide clear authority at each stage of the 
continuum. The Council further recognized and identified 
responsibilities based on the expertise and technical strengths of each 
agency.
    Question. The President's Plan on Egg Safety gives responsibility 
for egg safety to several agencies: FDA develops standards for the 
producer; FSIS develops standards for both shell egg packers and egg 
products processors; and FDA and CDC conduct surveillance and 
monitoring. What kinds of resources need to be in place in order to 
ensure that monitoring from the farm to the retail level are being 
equally enforced? Does FDA feel they can meet the goals of the 
Presidents Plan on Egg Safety?
    Answer. The fiscal year 2001 FDA budget request includes $5.0 
million to begin implementation of the Egg Safety Action Plan. The 
funding will provide FDA funding to initiate an accelerated research 
program; development of the nationwide, consistent egg safety standards 
and programs; hire staff to manage the egg safety program; hire staff 
to train and evaluate federal, state, and industry officials in 
implementation of the standards. FDA intends to propose nationwide 
consistent standards in fiscal year 2000, finalize these standards in 
fiscal year 2001, and implement the standards through state contracts 
in fiscal years 2002 and 2003. FDA anticipates that its fiscal year 
2001 request for Egg Safety will provide sufficient resources to 
conduct monitoring of egg safety at both the farm and retail level. 
Fiscal year 2001 to 2003 funding and staffing will be critical to FDA's 
ability meet the 50 percent reduction goal for Salmonella Enterditis 
illness associated with eggs by 2005 and to meet the goals of the 
President's Plan on Egg Safety.

                       SARA LEE LISTERIA OUTBREAK

    Question. USDA has been criticized recently in the Washington Post 
Magazine for taking too long to issue a recall notice in the Sara Lee 
outbreak, an outbreak where 100 people became ill and 21 died from a 
hazardous bacteria, Listeria, in ready-to-eat meat products. Consumer 
groups have criticized USDA for failing to publicize the recall and 
require the industry to test ready-to-eat meat products and plants for 
Listeria. FDA foods, like soft cheeses and smoked fish, can also 
contain deadly Listeria. What steps are you planning to take to control 
this hazard in FDA-regulated foods? Does it make sense to have two 
separate agencies regulating the same hazard in different foods?
    Answer. FDA, with cooperation from USDA, is conducting a Risk 
Assessment for Listeria monocytogenes in ready-to-eat foods. We are 
assessing risk management options in light of the outcome of the risk 
assessment. Certain foods may need to be monitored more closely than 
others. We are also developing appropriate risk communication messages 
for the consumer, medical professional, and industry.
    FDA and USDA each regulate different commodities and frequently the 
same hazard may occur in different commodities. Each of the commodities 
has intrinsic factors that may affect the types of hazards that may be 
found. Also, the same hazard may behave differently in different 
commodities. We do not see the organizational structure to be a barrier 
in this regard.

                          DIETARY SUPPLEMENTS

    Question. As you know, the Dietary Supplement Health and Education 
Act (DSHEA) which passed in 1994 has significantly reduced FDA's 
ability to ensure the safety of these products. Over half the U.S. 
population now uses some type of dietary supplement ($12 billion per 
year in spending). Dietary supplements are not subject to premarket 
safety review or approval by FDA. These products do not currently have 
good manufacturing standards or any uniformity in content of the 
``active ingredient''. FDA can only intervene after ``serious adverse 
events'' including death.
    Answer. Yes, it is correct that, as a general matter, dietary 
supplements are not subject to premarket safety review or approval by 
FDA. FDA is currently developing good manufacturing practices 
regulations to address the issue of uniform composition of dietary 
supplement products.
    Question. Does FDA believe that ``production standards'' or ``good 
manufacturing standards'' for dietary supplements should be instituted? 
If so does this require a legislative change or does FDA believe that 
they have current authority to require such standards?
    Answer. FDA believes that production standards or good 
manufacturing standards for dietary supplements should be instituted. 
The purpose of these standards would be to establish the minimum 
current good manufacturing practices--CGMPs, that must be used in 
activities associated with the manufacture of a dietary supplement, 
including packaging, labeling, testing, quality control, releasing for 
distribution, and holding. CGMPs are intended to ensure that 
manufacturing practices will not result in an adulterated dietary 
supplement, and thereby protects consumers from unsafe products. CGMPs 
are intended to assist manufacturers in producing unadulterated dietary 
supplements. CGMPs would allow consumers to have confidence that the 
dietary supplements they purchase have the identity, strength, purity, 
quality, or composition that they are represented to possess.
    The Dietary Supplement Health and Education Act, also referred to 
as DSHEA, is Public Law 103-417, and was signed into law on October 25, 
1994. DSHEA, among other things, amended the Federal Food, Drug, and 
Cosmetic Act by adding a section, to provide, in part, that the 
Secretary may by regulation prescribe good manufacturing practices for 
dietary supplements. DSHEA provides the Secretary the authority to 
issue regulations on dietary supplement CGMPs. FDA plans to issue a 
proposed regulation this year.

                              ORPHAN DRUGS

    The FDA budget justification book states that the agency 
anticipates a significant increase in overall interest in the Orphan 
Product Research Grants program in fiscal year 2000 and fiscal year 
2001.
    Question. Has the agency, therefore, increased the level of funding 
for this vital program in their budget request?
    Answer. The agency plans to maintain the level of funding for the 
Orphan Product Grants program at $11.5 million in fiscal year 2001. In 
addition to the grant funds, the agency spends over $2.3 million to 
administer the Orphan Products program. The agency makes a considerable 
effort to maintain spending in this area and must consider a proper 
balance amongst all competing priorities within the Human Drugs 
program, especially those programs with congressional mandates.
    The Orphan Drug Act allows for the awarding of market exclusivity 
for a given orphan indication for a pioneer orphan drug. If an 
improvement in that orphan drug can be demonstrated, then a new orphan 
status with its concomitant market exclusivity may be issued for the 
improved orphan product. Under such a rationale, FDA judges the second 
``improved'' drug to be dissimilar enough from the first version so as 
to grant new exclusivity to the ``improved drug.'' Such was the case 
for a product that helps multiple sclerosis patients. Betaseron was 
first granted market exclusivity in 1993 and so its exclusivity will 
expire in 2000. FDA judged a modified version of this drug known as 
Avonex to be superior i.e. different from, Betaseron and granted Avonex 
exclusivity which will run until 2003. Under such a model, if a generic 
drug was developed that was identical to Betaseron, then it should be 
able to go to market in 2000 rather than 2003. Such a drug Rabif, which 
I believe is identical to Betaseron is seeking to come on the market in 
2000. However, I understand that FDA has been considering a 
modification of this process which may not be in line with 
congressional intent with respect to the Orphan Drug exclusivity 
provisions of the Orphan Drug Act. This modification would deny 
multiple sclerosis patients access to a cheaper generic version of 
Betaseron until the exclusivity not of Betaseron but of the improved 
Avonex product expires in 2003.
    Question. Would FDA agree that is in the interest of patients to 
have access to generic drugs in a timely fashion?
    Answer. We fully agree that the availability of generic drugs in a 
timely fashion would be beneficial to patients.
    Question. Would the FDA agree that if a drug is identical to the 
unimproved orphan product that it should be treated as such and should 
not be barred from the market until the improved product's exclusivity 
expires ?
    Answer. FDA agrees that if a sponsor can establish that its drug is 
the same as a drug whose orphan exclusivity has expired, it may obtain 
approval notwithstanding orphan exclusivity that still protects a drug 
that is chemically the same, but clinically superior to the drug with 
expired exclusivity. The only mechanism currently available for 
establishing that two drugs from different sponsors can be expected to 
have the same safety and effectiveness is the generic drug approval 
process established under section 505(j) of the act for drugs approved 
under section 505 of the act. There are scientific and technical 
barriers to demonstrating that two biological products from different 
manufacturers can be expected to have the same safety and 
effectiveness. Moreover, there currently is no process for approving 
generic versions of biological products regulated under section 351 of 
the Public Health Service Act.
    Question. Does the FDA believe that the original ``unimproved'' 
orphan product should in effect gain additional near exclusivity merely 
because a second ``improved'' product gains exclusivity later than the 
original product?
    Answer. A product's period of orphan exclusivity is limited by 
statute to seven years. When there are two orphan products that are 
chemically the same, but are not the same drug because they have 
different clinical profiles, a third product will be able to enter the 
market upon the expiration of the first applicant's exclusivity, if it 
establishes it is not the same as the drug that still has exclusivity. 
The third product may show that it is clinically superior to the 
product that still has exclusivity, or it may establish that it is the 
same as the drug whose orphan exclusivity has expired and thus is 
different from the product that still has exclusivity. By using the 
clinically superior criteria, the orphan drug program protects the drug 
development incentive, while permitting the introduction of better 
products to treat serious diseases. Drugs regulated under Section 505 
of the Federal Food, Drug, and Cosmetic Act may be shown to be the same 
as the drug whose exclusivity has expired by meeting the standard for 
approval of a generic drug under Section 505(j).

                  REUSE OF SINGLE-USE MEDICAL DEVICES

    Question. Last year, FDA officials promised my staff, that they 
would revise either the MEDWATCH form or the guidance document used by 
health processionals in reporting injuries, so that information on 
whether a device was reused and the identity of a reprocessor might be 
collected. This has not happened to date.
    Question. When will the FDA be revising the MEDWATCH voluntary 
reporting form so that appropriate tracking of injuries from reused 
devices may take place ?
    Answer. Two years ago, FDA modified its MedWatch voluntary report 
form so that health professionals could indicate whether a device in an 
adverse event was labeled for single use and whether it was being used 
for the first time or reused. The instructions on FDA's web site for 
FDA Form 3500--voluntary report form--address the reuse of single use 
devices or SUDs. In block B5 of the form, the health care professional 
is requested to report the facts and perceived contributions of reuse 
to the adverse event. FDA has received about 1,399 adverse event 
reports from MedWatch forms involving the reuse of single use devices. 
Almost half of these reports involved dialyzer equipment. In response, 
FDA has worked with the medical device community to issue safety alerts 
and developed guidances on how to do reuse properly.
    The instructions for FDA Form 3500A--mandatory report form--which 
were written in 1995, do not explicitly mention reuse. The MedWatch 
staff has revised the instructions to address the reuse issue. The new 
instruction requests information about reuse in blocks F10, H6, and H8. 
Also, a new device problem code has been added specifically for reuse. 
The revised instructions are currently undergoing internal agency 
review prior to OMB clearance.
    FDA believes that implementing Phase II of the MeDSuN system, as 
proposed in the fiscal year 2001 President's budget, would be the best 
way to improve reporting of reused devices. MeDSuN will recruit a 
statistical sample of hospitals and train them to report both adverse 
events and routine procedures. This will enable FDA and the health care 
community to put the reuse problems in context. At present, there are 
no plans to further revise the MedWatch voluntary report form because 
FDA believes that the voluntary form, with its recent changes, and the 
proposed revised instructions for the mandatory form, when approved, 
will address reporting reuse problems.
    Question. When is FDA going to come out with final rules that 
require high risk, highly-invasive devices be shown to be both SAFE and 
EFFECTIVE for their intended use, not just when they are used for the 
first time but for every use ?
    Answer. FDA has sufficient authority to address the issue of reuse 
of single use devices. New regulations are not necessary. On February 
8, 2000, FDA posted two draft guidance documents on FDA web site. One 
is titled Reprocessing and Reuse of Single-Use Devices: Review 
Prioritization Scheme. The second is Enforcement Priorities for Single-
Use Devices Reprocessed by Third Parties and Hospitals. The 
availability of these guidances was also announced in the Federal 
Register on February 11, 2000 in 65 FR 7027.
    The review prioritization scheme guidance document sets forth 
factors FDA would consider in categorizing a reprocessed SUD as high, 
moderate, or low risk. The enforcement priority guidance document sets 
forth the agency's priorities for various requirements based on the 
risk categorization of a device.
    The end of the 60-day public comment period for both guidances is 
April 11, 2000. The agency plans to review and consider all comments by 
May 11, 2000 and expects the guidances to be finalized in July 2000.
    Upon implementation of the final guidances, anticipated to be 
January 2001, FDA would enforce premarket requirements for reprocessors 
of single use devices deemed high-risk. The agency believes that the 
requirement to submit premarket data will ensure the continued safety 
of these devices. Moreover, the agency has the authority to take 
immediate action at any time that a device poses an immediate and 
significant risk to public health.
    Question. If FDA believes or has research data that shows that some 
of these devices can not be reprocessed safely, shouldn't they move to 
prohibit the reprocessing of such devices?
    Answer. To date, our research indicates that some single use 
devices are more difficult to clean than others. FDA does not have 
sufficient data associated with any particular models or brands of 
single use devices, or SUDs, to support removing those products from 
market. However, FDA has notified all stakeholders that reused SUDs are 
subject to all statutory controls, including premarket notification, 
and that FDA intends to phase in enforcement of all these controls for 
third party reprocessors and hospitals that reuse devices labeled for 
single use.
    Question. When is the FDA going to start enforcing safety 
requirements for high-risk, highly invasive reprocessed medical 
devices?
    Answer. FDA has proposed to start enforcing premarket requirements 
against third party and hospital reprocessors of devices categorized as 
High Risk--in FDA's draft guidance document A Reprocessing and Reuse of 
Single-Use Devices: Review Prioritization Scheme--within 6 months of 
issuance of the final enforcement guidance.
    Question. How much money does the FDA need to do such enforcement?
    Answer. To do such enforcement, FDA estimates that approximately $1 
million will be needed in fiscal year 2001 and $2 million in fiscal 
year 2002. These estimates assume that hospitals will reprocess single 
use devices at a low or modest level.
    Question. Of the $7.7 million in the Administration's budget for 
new premarket device initiatives, how much is for the development of 
safety standards for high risk reused devices?
    Answer. I would be happy to provide that information for the 
record:
    [The information follows:]
    FDA's fiscal year 2001 Budget request includes an increase of $2.8 
million for medical device reuse. FDA believes the requested funds are 
sufficient to carry out its regulatory responsibilities of this 
initiative. The requested funds will ensure the safety and efficacy of 
reprocessed devices by:
  --increasing product review activities; and
  --developing standards for high-risk reuse applications to ensure 
        that if a single-use device is going to be reused, it is done 
        safely and remains safe and effective for its intended use.
    These activities will be accomplished through:
    Hospital outreach.--FDA plans to conduct a variety of outreach 
activities like mailings, speaking at conferences, posting notices on 
the Web to aid hospitals in coming into compliance with the Federal 
Food, Drug, and Cosmetic Act.
    Hospital compliance with reprocessing guidelines.--FDA is 
considering pilot testing a program where some third party or 
professional standards organization could include questions about reuse 
in surveys of hospital standards and possibly in audits of hospital 
practice.
    Question. Is this sufficient?
    Answer. Based on the expected volume of premarket submissions, this 
amount will be sufficient for reprocessing single use devices.
    Question. Will the new rules apply to all reprocessors, or just 
third-party reprocessors?
    Answer. There are no new rules, but FDA intends to explore existing 
requirements for third party reprocessors and hospitals.
    Question. Would the FDA not agree that where a device is 
reprocessed is irrelevant to the consumer and therefore, the same 
standards and safeguards should apply whether the device is reprocessed 
by a third-party or a hospital?
    Answer. FDA agrees that appropriate safeguards need to be in place 
for reprocessing operations. FDA's proposed guidance documents define 
the agency's intent to ensure that such safeguards are in place in both 
third-party reprocessing firms and in hospitals.
    Question. What is FDA doing to make sure that hospitals fully 
understand the risks of reprocessing and learn about the research going 
on at FDA.
    Answer. FDA has undertaken various efforts to make sure that 
hospitals fully understand the risks of reprocessing and to make them 
aware of the research going on at FDA. We have launched a major 
outreach program to help both hospitals and consumers become aware of 
the agency's proposed strategy to address the issue of reuse of single 
use devices--SUDs--and to solicit their input. Some examples outreach 
efforts included an FDA sponsored satellite teleconference on November 
10, 1999 that was broadcasted nationally to explain the agency's 
proposed reuse strategy and an FDA hosted public meeting that was held 
on December 14, 1999, to solicit public comment on the agency's 
proposed strategy. FDA scientists have held meetings as well to discuss 
their research. In addition, the agency created a web site to 
disseminate FDA information on reuse of SUDs and established an 
electronic mailbox whereby consumers and interested parties may submit 
questions to FDA concerning reuse of SUDs. FDA has also held several 
conference calls with the Joint Commission on Accreditation of 
Healthcare Organizations--JCAHO--to discuss the development of a joint 
program to audit hospital reprocessors to ensure compliance to FDA 
regulations and to educate these facilities about our policies and 
relevant research.
    Question. What is FDA doing to make sure that hospitals fully 
understand that these reprocessed devices are not FDA approved and have 
not been demonstrated to be ``safe and effective'' as FDA defines such 
terms ?
    Answer. FDA has launched a major outreach program to help hospitals 
and consumers become aware of the agency's requirements and proposed 
strategy to address the issue of reuse of SUDs and to solicit their 
input. In addition, FDA has held several conference calls with the 
Joint Commission on Accreditation of Healthcare Organizations--JCAHO to 
discuss the development of a joint program to audit hospital 
reprocessors to ensure compliance to FDA regulations and to educate 
these facilities about our policies and relevant research.
    FDA has contacted the American Hospital Association (AHA) to seek 
their assistance in disseminating FDA information. We also have 
requested that they serve as an intermediary between FDA and hospitals 
on a FDA-assisted educational program geared specifically to hospitals. 
We envision that the educational program will provide hospitals with 
information that may help them decide as to whether they should 
continue to reprocess SUDs in-house or to contract this service with 
commercial third party reprocessors.
    AHA surveyed its associated member organizations including the 
Association for Healthcare Resources and Materials Management and the 
American Society of Health Risk Management, as to what type of 
information they desired from the agency. The results of the survey 
indicated that articles, summaries of studies, and up-to-date web site 
information would be helpful and that the information be sent via 
electronic mail.
    I would be happy to provide for the record some examples of our 
outreach efforts:
    [The information follows:]
  --Sponsored a satellite teleconference on November 10, 1999 that was 
        broadcasted nationally to explain FDA's proposed reuse 
        strategy;
  --Convened a public meeting on December 14, 1999, to solicit public 
        comment on the agency's proposed strategy;
  --Created a web site to disseminate FDA information on reuse of SUDs;
  --Created an electronic mailbox whereby consumers and interested 
        parties may submit questions concerning reuse of SUDs to FDA;
  --Published a detailed article on the subject of reuse of SUDs in the 
        User Facility Reporting Bulletin; and
  --Compiled an electronic mailing list of the participants that 
        attended the public meeting for the purpose of following up on 
        inquiries or for notifying them of the availability of the risk 
        prioritization scheme and enforcement priorities draft 
        guidances.
  --Conducted meetings where FDA device scientists discussed their 
        research.

                              GENE THERAPY

    The area of gene therapy clinical trials has come under close 
scrutiny lately. Problems have been found both with research protocols, 
lack of reporting and the public's ability to know when research 
protocols result in adverse patient outcomes. In 1994, I inserted 
report language in the Agriculture Appropriations bill that directed 
FDA to create a tracking data bank for patients involved in clinical 
trials. The language stated: ``The Food and Drug Administration is one 
of the lead agencies involved in gene therapy biomedical technologies. 
Many gene therapy protocols are being approved by various government 
and institutional committees, yet there is no mechanism to track gene 
therapy patients throughout their lives to assess long-term effects. 
Currently, there are only a few hundred individuals that are under 
protocols for gene therapy. Now is the time to establish a tracking 
program. Accordingly, within the funds available, the Food and Drug 
Administration should create a gene therapy registry of patients.''
    According to inquires by my office to FDA, I am told that in 
response to this Congressional mandate the agency launched the 
development a prototype for such a system, the Gene Therapy Information 
Network (GTIN). However, FDA did not follow the 1994 report language 
because in stead of tracking patients, FDA set up a pilot system to 
track research protocols. FDA limited the tracking to the life of the 
clinical trials under FDA supervision prior to product approval. So the 
long-term effects on individual patients were not studied and in fact 
no tracking of individual patients took place. The computer software 
generated for this initiative was eventually used for another purpose.
    Question. Why did FDA not comply with the provision to set up a 
patient tracking data base?
    Answer. FDA supports the gene therapy patient tracking system 
concept. FDA has begun to formulate a request for proposal (RFP) for 
the gene therapy patient tracking system that will incorporate 
automated methods to receive, track, and oversee adverse event 
information. Between December 1994 and 1996 FDA developed a pilot gene 
therapy patient tracking system, known as Gene Therapy Information 
Network (GTIN). The pilot was a project under FDA's Submission 
Management and Review Tracking (SMART) initiative. The GTIN was 
strictly a patient tracking system, did not contain or tie into adverse 
event reporting and was not expanded beyond the pilot phase. Some of 
the GTIN concepts were used in developing the National 
Xenotransplantation Database (NXD). FDA believes to effectively enhance 
patient protection, the gene therapy patient tracking system will need 
to tie into FDA's current adverse event reporting system and the short 
term and long-term effects for the patient population.
    Some of the components needed for a gene therapy patient tracking 
system are in various stages of analysis. FDA is looking at the many 
factors which will affect the cost of such a system. Among those 
factors are: the development time frame; the size of the system; the 
tracking requirements and the staffing needs. While this analysis is 
not complete and the development cost and time has not yet been 
determined, we are certain there will be significant costs for 
development, startup, and maintenance phases of the project. Much of 
the system costs will be in creating and maintaining an infrastructure 
to assure proper maintenance of the database code and structure, 
resources to staff the function of the database including data entry 
personnel, medical and scientific reviewers to properly evaluate 
adverse events, support for coordination with the NIH OBA staff and 
RAC, and other infrastructure issues.
    Question. Does FDA agree that in light of recent developments, this 
data base now actually seems like a pretty good idea and would have 
detected problems much earlier than happened without such a tracking 
mechanism?
    Answer. FDA manages adverse event data in many product fields 
without a special product-specific database. The desire for such a 
database for gene therapy arose largely from the interest in lifelong 
monitoring of patients including monitoring of their off-spring for 
potential effects of the gene therapy. Such monitoring, while 
potentially appropriate given theoretical concerns regarding gene 
therapy, is not easily conducted under normal clinical trial paradigms. 
The recent University of Pennsylvania incident involved short term 
toxicities more typical of drug development.
    For a class of treatments which is novel and rapidly expanding, a 
database potentially could facilitate rapid communication and 
integration of information. However, of note, gene therapy is very 
diverse, involving many essentially unrelated classes of treatment. 
There have only been a very limited number of protocols which have used 
adenoviral vectors into a blood vessel such as was done at the 
University of Pennsylvania. The limited amount of data could be well 
communicated within FDA through normal channels such as our Adenovirus 
gene therapy working group. Furthermore, there was not evidence that 
clinically significant disseminated intravascular coagulation or acute 
respiratory distress syndrome had occurred prior to the death at the 
University of Pennsylvania. Thus, the existence of the gene therapy 
information network would not have been expected to provide information 
which would have impacted the case.
    Question. Given that FDA is the agency that oversees all clinical 
trials rather than just federally sponsored clinical trials, would the 
FDA agree that such a tracking mechanism is best housed at FDA?
    Answer. We agree that FDA is the appropriate Agency to develop and 
maintain a gene therapy tracking registry. Cell and gene therapy 
products constitute a new and emerging scientific area that challenges 
existing regulatory systems. FDA would support, given adequate 
resources, the establishment of a functional gene therapy tracking 
registry.
    Question. How much money would the FDA need to comply with the 1994 
report language?
    Answer. FDA will continue to work with the Committee to develop the 
costs of a gene tracking system as described.
    Question. Under current FDA requirements for research protocols, 
how would a patient get information on risks associated with a research 
study independent of the researchers actually telling the patient the 
full risks ?
    Answer. Under FDA's regulations pertaining to Institutional Review 
Boards (21 CFR Part 56), the IRB is responsible for requiring that 
information given to subjects as part of informed consent is in 
accordance with section 50.25 (21 CFR 56.109(b)). Further, the IRB has 
the authority to observe or have a third party observe the consent 
process and the research (21 CFR 56.109(e)). Thus, the information on 
risks would be available to the patient through the consent process and 
document, from the individual identified in the consent form as the 
individual to contact for answers to questions, and from the 
responsible IRB. FDA's informed consent regulations (21 CFR Part 50) 
describe the specific information that is to be provided to subjects in 
obtaining the subject's informed consent and how consent is to be 
documented. These regulation require ``A description of any reasonably 
foreseeable risks or discomforts to the subject'' (21 CFR 50.25(a)(2)). 
They also require, when appropriate, ``A statement that significant new 
findings developed during the course of the research which may relate 
to the subject's willingness to continue participation will be provided 
to the subject'' (21 CFR 50.25(b)(5)). Further, they are required to 
contain ``An explanation of whom to contact for answers to pertinent 
questions about the research . . .'' (21 CFR 50.25(a)(7)).
    Question. How would a patient know of the financial interests of a 
researcher?
    Answer. FDA's informed consent regulations which specify the 
minimum information that is required to be provided to research 
subjects, do not require that the patient be apprised regarding the 
investigator's financial interests. In accordance with 21 CFR 
56.109(b), the IRB may require that information, in addition to that 
specifically mentioned in section 50.25, be given to the subjects when 
in the IRB's judgment the information would meaningfully add to the 
protection of the rights and welfare of subjects. Thus, when an IRB 
determines that such information would be meaningful in protecting the 
rights and welfare of subjects, the IRB has the authority to require 
that the subjects be made known of financial interests of a researcher.
    Question. Does the FDA believe that full disclosure of financial 
interest should be required for researchers?
    Answer. From the juxtaposition of this question with the previous 
question, FDA assumes that the question is referring to full disclosure 
to the subject, not to FDA (which is covered, in part by 21 CFR Part 
54). The agency believes that this is a complex question for which a 
consensus has not yet emerged. Certainly, it is critical for a research 
subject to understand that the motivation of a researcher is different 
from the motivation of the individual's treating physician, 
particularly when these individuals are the same. FDA also recognizes 
that there are interests, beyond those that are financial, that may 
impact on a researcher's judgment and actions. Therefore, FDA is 
collaborating with NIH and the Office of the Secretary in planning a 
public consultation this summer with a view to developing better and 
more specific guidance for investigators, sponsors, IRBs and research 
subjects regarding the disclosure of financial interests.
    Question. What is FDA doing to promote better public disclosure of 
adverse events and research risks to those enrolled in clinical trials?
    Answer. FDA has formed a working group to determine its role in 
reviewing the adequacy of informed consent documents. Currently, the 
agency relies, in large part, on the work of the IRB. Sometimes, the 
agency reviews model consent documents provided to it as part of an 
application; in other instances, either the model consent form is not 
submitted or it is not reviewed. The agency is evaluating its review 
process in this regard.
                                 ______
                                 

             Questions Submitted by Senator Robert C. Byrd

                             GENERIC DRUGS

    Generic drug application median approval times have improved from 
twenty-seven months in 1995 to 17.3 months in 1999. However, generic 
drug applications are statutorily required to be completed within six 
months.
    Question. What efforts are being made at the Food and Drug 
Administration to decrease processing time for generic drug 
applications?
    Answer. FDA is required to take final action on generic drug 
applications within 180 days. The agency is making every attempt to 
complete all final action within 180 days. Either an approval or 
disapproval is considered by the agency to be a final action. The 
Federal Food, Drug and Cosmetic Act states in Section 505(b)(4)(A), 
``Within one hundred and eighty days of the initial receipt of an 
application under (2) . . . the Secretary shall approve or disapprove 
the application''. The agency makes every attempt to meet this 
requirement; however, for a number of reasons it is not always possible 
to do so. After receiving a disapproval action, manufacturers 
frequently resubmit applications that address the deficiencies 
indicated in the disapproval action. Approval times are substantially 
longer than review times because many reflect multiple review cycles.
    The review time for generic drug applications can be decreased by 
improving our information technology infrastructure to enable us to 
increase the number of electronic submissions and reviews. We also 
believe that increasing the generic drug science base will improve our 
processing time. Funding is needed for research to support the 
development of scientifically rigorous bioequivalence testing 
methodologies for nonsystemically absorbed drug products. The stronger 
scientific support of these approvals, the more likely it will be that 
we can successfully meet innovator challenges.
    Question. What benefits do generic drugs provide to consumers?
    Answer. Approved generic drug products provide a safe, effective, 
low cost alternative to the American public.
    Question. What are the downsides to generic drugs?
    Answer. We do not believe there are any downsides to generic drugs. 
A generic drug product is comparable to an innovator drug product in 
dosage form, strength, route of administration, quality, performance 
characteristics and intended use.

                            NEUTRACEUTICALS

    In recent years, the marketplace has seen a sharp increase in the 
number of herbals and other natural products that are purported to have 
a beneficial impact on health and nutrition, giving rise to an entire 
industry known as ``neutraceuticals.'' Over 60 million U.S. adults, or 
approximately 1 in 2, take some form of dietary supplement.
    Question. With the number of Americans using neutraceuticals 
rising, what action is the Food and Drug Administration taking to 
evaluate potency and chemical composition of neutraceutical products?
    Answer. Substances referred to as ``neutraceuticals'' are not 
specifically recognized in statutes or in regulations. All products 
regulated as foods must meet applicable safety and labeling 
requirements. In many cases, these products may be marketed without 
premarket review or approval by FDA. As such, it is the manufacturer's 
responsibility to ensure that marketed products are safe for their 
intended use and are labeled in a truthful and not misleading manner. 
Consistent with all foods, and as warranted by public health concerns 
and enforcement priorities, FDA will evaluate the potency and/or 
chemical composition of specific products on a case-by-case basis.
    Question. What technologies are being employed by the Food and Drug 
Administration to evaluate the composition of neutraceuticals?
    Answer. Evaluation of the composition of all food products, 
including what some call neutraceuticals, is dependent on identifying 
and validating methods that are appropriate for the particular 
substance of interest, for the matrix in which the substance is found, 
and for the nature of the question being asked. Thus, the type of 
technology used is decided on a case-by-case basis. For example there 
are a variety of chromatography techniques and mass spectrometry that 
might be helpful.
    Question. What new technologies are being developed to evaluate the 
safety of neutraceuticals?
    Answer. The types of new technologies needed to evaluate the safety 
of foods that may be referred to as ``neutraceuticals'' are similar to 
the types of new technologies needed for many food ingredients and 
products. In evaluating foods, it is more a matter of adapting existing 
techniques and technologies to the specific types of products under 
evaluation, as would be the case with electron spin analysis.

                          SUBCOMMITTEE RECESS

    Senator Cochran. The subcommittee will stand in recess.
    [Whereupon, at 12:01 p.m., Tuesday, March 7, the 
subcommittee was recessed, to reconvene subject to the call of 
the Chair.]


AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2001

                              ----------                              

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

    MATERIAL SUBMITTED BY AGENCIES NOT APPEARING FOR FORMAL HEARINGS

    [Clerk's note.--The following agencies of the Department of 
Agriculture did not appear before the subcommittee this year. 
Chairman Cochran requested these agencies to submit testimony 
in support of their fiscal year 2001 budget request. Those 
statements follow:]
                       DEPARTMENT OF AGRICULTURE

                     AGRICULTURAL MARKETING SERVICE

        PREPARED STATEMENT OF KATHLEEN MERRIGAN, ADMINISTRATORE

    Mr. Chairman and Members of the Committee, I am pleased to have 
this opportunity to represent the Agricultural Marketing service in 
presenting our fiscal year 2001 budget proposals.

                                MISSION

    AMS' mission is to facilitate the marketing of agricultural 
products in the domestic and international marketplace, ensure fair 
trading practices, and promote a competitive and efficient marketplace 
so that producers, traders, and consumers all benefit. We accomplish 
this mission through a variety of activities funded from appropriations 
and from fees charged for services. Since most of our user-funded 
services are voluntary, we must be responsive to customer needs while 
remaining conscious of the cost. Through our services such as market 
reporting and grading, we maintain close contact with our customers, 
who help to keep us informed about their concerns. We also recognize 
and support USDA-wide efforts to assist the agricultural industry.

                   CHANGES IN AGRICULTURAL MARKETING

    American agriculture is confronting rapid changes in industry 
structure, decreasing government price supports, new trade agreements 
and market outlets, evolving consumer expectations, and new production 
methods. Industry concentration in certain agricultural industries 
threatens to inhibit competition. While global trade agreements open 
new markets, they often set new market requirements and restrictions 
such as the hormone testing of beef required by the European Union, and 
new questions on the labeling of genetically engineered food. 
Furthermore, since price supports are no longer available for producers 
to ``fall-back'' on, agricultural producers, particularly smaller 
producers, must increasingly depend on marketing to maintain their 
profitability. Small and medium-sized farmers have the fewest resources 
to compete in this evolving marketplace. USDA policy recognizes the 
importance of small farms to the nation's economy, resources, and 
social fabric. In fact, small farms lead the development of organic 
production systems in the U.S. We propose to make available the 
information, tools, and expertise all agricultural producers need to 
market their products. Furthermore, AMS' international marketing 
efforts assist all sectors of the agricultural industry to maintain 
their foreign sales, which are critical to our nation's farm economy. 
Our budget proposals reflect, in priority order, AMS' response to the 
current needs of our customers.

                         MANDATORY MARKET NEWS

    Concern over the potential harmful effects of industry 
concentration on competition resulted in the Livestock Mandatory Price 
Reporting Act of 1999. Consolidation in the red meat industry has 
resulted in the growth of private marketing agreements and declining 
participation in public markets. Since voluntary price reports do not 
reflect transactions from marketing agreements, it is difficult for 
producers to determine prevailing market prices or to evaluate contract 
offers from packers. The lack of price information also makes it 
difficult to administer programs that address economic stress in the 
livestock industries. Mandatory price reporting will increase the 
transparency of market price signals for producers and others in the 
marketing chain. These mandatory reports will include 90 percent of the 
beef, 96 percent of the hogs, 84 percent of the lambs slaughtered and 
80 percent of the lambs imported. Congress authorized the Secretary to 
initiate mandatory reporting by the industry in the fiscal year 2000 
thousand budget and provided start-up funding of $4.7 million from CCC 
funds allotted to AMS in fiscal year 2000. Since these funds will not 
be available to AMS in fiscal year 2001, we are requesting an increase 
of $5.9 million to finance the annual cost of the mandatory reporting 
program. As we implement mandatory reporting, Market News reporters 
will expand their contacts throughout the industry--with producers, 
processors, wholesalers, retailers, importers, and exporters of 
livestock, meat, and related products. At the same time, the agency has 
been encouraged to continue all of its voluntary reporting that falls 
outside the coverage of the mandated program. Because of the mandatory 
nature of the new program, an extensive monitoring and review system 
will ensure that the information is accurate and timely. During fiscal 
year 2000, AMS must hire additional reporters and support staff to 
analyze and edit the dramatically expanded volume of data to be 
collected, and compliance personnel to audit packer records to ensure 
that packers are accurately reporting the required information. We will 
also begin development of a computer system to manage the data, and 
establish outreach programs to educate producers about the new 
information. The fiscal year 2001 request reflects a full year of 
program activity at fully staffed levels, and continuing development 
and maintenance of the computer system. We expect to publish the 
proposed rule for mandatory reporting in the near future, and hope to 
have the program implemented before the end of this summer.

                         ORGANIC CERTIFICATION

    A segment of the agricultural industry that is continuing to grow 
is organic products. American consumers are embracing organic foods at 
a rate of 20 percent a year. Congress determined that there should be a 
nationwide minimum standard and a system to certify that products meet 
that standard. AMS' organic certification program, now in the final 
stages of development, will assist producers by facilitating interstate 
commerce of organically produced food, and assure consumers that 
organically produced products meet a consistent standard.
    AMS is proposing budget increases that are designed to better serve 
consumers and our customers in the organic industry. These increases 
are for organic certification, market news, and marketing agreements 
and orders.
    We are requesting a net increase of $703 thousand for the organic 
certification program, of which $639 thousand is needed only for one 
year. These funds will allow us to ``jump-start'' the certification 
program and provide outreach to new customers. As we begin implementing 
the program, we will educate producers, consumers, processors, 
certifiers and traders about the program while accrediting at least 49 
certifying agents and monitoring their activities. We will monitor 
State programs' compliance with national regulations and develop a 
system to prevent fraudulent labeling. In addition, we will implement 
an international program component to develop standards and accredit 
international certifying agents, and will participate in the 
development of international agreements for organic products and 
production. The additional funding requested will enable us to begin 
full operation of the certification program.

                          ORGANIC MARKET NEWS

    AMS is requesting $614 thousand to expand market reporting on 
organically-grown fruits and vegetables so that producers can find the 
best markets for their products and maximize their returns. Producers 
of organically-grown fruits and vegetables need timely, reliable, 
consistent, and unbiased marketing information on factors such as 
prices, supply, demand, and trends. Such information is scarce, 
especially for smaller producers with fewer resources, which places the 
larger participants in the market at an advantage. Efficient markets 
can help consumers by keeping prices reasonable.

                MARKETING ORDERS AND ORGANIC PRODUCTION

    The growing market for organic products is becoming an issue facing 
industry fruit and vegetable marketing agreements and orders 
committees. Virtually all of the 36 active fruit and vegetable 
marketing agreement and order programs could soon include some 
organically produced commodities. We are requesting $1 million of 
Section 32 Administrative funding to develop our expertise and provide 
research on the economic impact of marketing order programs on the 
organic sector. Marketing agreements and orders are designed to help 
stabilize market conditions for fruit and vegetable products for the 
benefit of producers and consumers. Marketing order programs assist 
farmers by allowing them to collectively work to solve marketing 
problems. AMS oversees the activities of the industry committees. AMS 
and the marketing order committees need additional data on organic 
production, marketing and distribution channels, as well as a 
projection of future organic fruit and vegetable production in order to 
resolve the issues raised. Without supporting data, it is difficult for 
AMS to make informed decisions on the interrelationship between organic 
and conventionally grown commodities.

                        SMALL FARMERS AND FSMIP

    To assist small farmers on a local scale, AMS is requesting an 
additional $300 thousand in ``Payments to States'' matching grants 
funding. These funds will be made available to the States for local and 
regional product development and marketing initiatives that will assist 
small farmers to identify and develop marketing opportunities. The new 
projects would focus on: marketing opportunities emphasizing local or 
direct marketing; export-oriented market research and technical 
assistance targeting small, limited resource producers and marketing 
organizations; and encouraging sustainable agricultural production and 
marketing. By providing matching funds, we are able to compound the 
benefits received by small farmers. In conjunction with these new 
grants funds, we are requesting $31 thousand in appropriated funds to 
administer the additional grants and conduct outreach efforts. We will 
assist cooperators to develop their submissions, monitor the projects 
in progress, and ensure that the results are made widely available to 
potential beneficiaries.

                          FOREIGN MARKET NEWS

    Our request for $453 thousand to expand agricultural market 
reporting on foreign markets will assist all agricultural producers and 
traders interested in international trading, but particularly the small 
and medium-sized farmer with limited resources who is interested in 
export markets. Rapid changes in international markets are largely due 
to shifts in global partnerships and trade agreements, production 
methods, and customer preferences. The U.S. agriculture industry must 
maintain its market share and expand sales in international markets in 
order to maintain its profitability. Expanded market data will help 
U.S. commercial interests gain access to foreign markets by supplying a 
greater quantity of data on more foreign markets. Farming and ranching 
operations of all sizes are increasingly dependent on market expansion 
and exports for their growth in income. Overproduction of many 
commodities makes it particularly necessary to increase exports to 
maintain farm revenues. Trade agreements can provide improved access to 
foreign markets; however, traders need information to determine the 
most favorable markets. AMS is the only publicly available source for 
centralized, consistent, and timely information on international prices 
and trade volume. The dairy, meat, poultry, and fruit and vegetable 
industries have asked AMS to expand its international market coverage 
so that they can take advantage of business opportunities available 
around the world. Foreign market information is especially important to 
small and medium sized producers who would otherwise have no access to 
the data.

                       PDP--WATER TESTING PROGRAM

    Foreign buyers and U.S. consumers are concerned about pesticide 
residue levels in food. We are asking for $1.1 million to plan and 
implement a new water testing program within the Pesticide Data 
Program, or PDP. AMS, under the provisions of the Food Quality 
Protection Act, or FQPA, samples, tests, and compiles pesticide residue 
levels on fresh and processed foods. EPA uses AMS pesticide data 
findings to develop consumption risk data and to determine whether 
pesticides should be re-registered for continued use. The FQPA requires 
EPA to consider all routes of pesticide residue exposure, including 
drinking water. EPA's current reliance on models may significantly 
overstate the residue levels in drinking water and threatens the 
continued availability of several agricultural pesticides. EPA 
continues to require the type of data being collected on food 
commodities under the current program. Due to the complexity of testing 
water, AMS cannot redirect current PDP funds to begin a water testing 
program without seriously compromising the statistical reliability of 
the program's findings on other commodities. Pesticide residue analysis 
provides the data needed by EPA for informed decisions on the safety of 
agricultural pesticides, and reassures foreign and domestic buyers that 
the pesticide residues on U.S. foods meet safety standards.

                       MICROBIOLOGY DATA PROGRAM

    In the area of food safety, we are requesting $6.2 million to 
initiate a microbiological data program as part of the President's Food 
Safety Initiative. This program responds to concerns generated by the 
sporadic cases of microbiological contamination resulting from food-
borne disease outbreaks in recent years. The requested funds will allow 
AMS to build on the framework of the Pesticide Data Program to design a 
scientifically-sound program to collect data related to microbiological 
contamination that causes food-borne outbreaks. The program will 
collect data pertaining food-borne pathogens and spoilage microflora on 
domestic and imported fruits and vegetables that can be used to 
identify and avoid potentially dangerous situations that can cause loss 
of life. Under this program, AMS will perform almost 30 thousand 
analyses a year on a maximum of 11 commodities in 10 participating 
states that represent approximately 50 percent of the population. 
Samples will be collected at terminal markets and chain store 
distribution centers, from commodities selected based on per capita 
consumption from those that are usually eaten raw. There is no other 
statistically valid Federal or State program that can give a complete 
microbiological picture of fruits and vegetables nationwide. By using 
the existing Pesticide Data Program infrastructure for sampling, 
participating State laboratories, and data reporting, AMS is able to 
minimize costs for this program.

                      COMMODITY PURCHASE SERVICES

    Our two final budget increases will allow AMS to improve service to 
our customers and enhance the overall efficiency of the Commodity 
Purchase Services program. We are requesting $795 thousand of Section 
32 Administrative funding to customize our Economic Database 
Information Network, or EDIN, for use in purchase decisions, and $225 
thousand to develop a Management Information System for the Food 
Quality Assurance Program and initiate an outreach effort toward new 
customers.
    Increased funding will allow us to expand the EDIN database so that 
it can be used to administer surplus commodity and Federal feeding 
program food purchases. The database was begun in fiscal year 2000 to 
house information on fruits and vegetables for decision-making by 
industry marketing order committees and for government regulatory 
impact analyses. Commodity purchase decisions also depend on access to 
comprehensive, readily accessible information. For many of the 
commodities involved, information must be drawn from a variety of 
sources and constantly updated. The database will provide an 
interactive repository of commodity data that supports several hundred 
million dollars of annual government purchases for federal feeding 
program outlets. We will add meat and fish, poultry, and specialty 
commodities, current and historical data sets on commodity prices, 
shipments, production, inventories, and other information that will 
support decision-making. The database will streamline purchase 
activities by eliminating duplication and improving the scope and 
timeliness of data for more comprehensive analyses on commodity 
purchases. AMS will make the database information available via a Web 
page and CD-ROMs, to the public--including farmers, processors, 
wholesalers, brokers, retailers, and researchers--and to other 
government agencies.
    Additional funding will also be used to develop a publicly-
accessible information system for the Food Quality Assurance Program 
and support a heightened outreach effort for current and potential 
users of this information. The Food Quality Assurance Program develops 
government-wide food purchase specifications, including Commercial Item 
Descriptions, or CIDs, Institutional Meat Purchase Specifications, and 
other product descriptions. These purchase specifications allow for 
product standardization and increased competition within the market, 
and ultimately, a more uniform product and lower price for the buyer. 
Purchase specifications find widespread use by many private sector 
institutional buyers. Public sector purchasers such as schools are also 
finding these specifications to be of tremendous value. Current and 
potential customers have requested that AMS expand the product variety 
and customer base for CIDs. To better facilitate their use by all 
interested parties, we will develop a centralized database that will 
contain information on all CIDs and other product specifications, 
quality assurance results, and inspection plant surveys to verify 
quality and safety. The database will allow AMS to expand the range of 
CIDs on products not covered by U.S. grade standards and provide 
electronic access to the various product specifications maintained and 
developed by the Food Quality Assurance Program. This increase will 
allow us to better serve our current customers such as Federal and 
State food purchasers, and expand the program to include school 
districts that buy food for their child feeding programs. Through 
substantial outreach, we will assist other potential public sector 
users, including local schools and state governments, in the 
application of these specifications to their purchases of food 
products.

                         BUDGET REQUEST SUMMARY

    That concludes our list of budget increases proposed for fiscal 
year 2001. By fund, our increase requests total $15 million for 
``Marketing Services,'' $300 thousand for FSMIP grants under ``Payments 
to States,'' and $2 million in ``Section 32 Administrative funds.''
    I hope you agree with me that these requests will allow AMS to move 
forward in assisting the agricultural industry by facilitating domestic 
and international marketing, particularly for the small and medium-
sized farmer.
    Thank you for this opportunity to present our budget proposals.
                                 ______
                                 

                     AGRICULTURAL RESEARCH SERVICE

         PREPARED STATEMENT OF DR. FLOYD P. HORN, ADMINISTRATOR
 
   Mr. Chairman and Members of the Subcommittee, I appreciate this 
opportunity to present the Agricultural Research Service's budget 
recommendations for fiscal year 2001. Before I begin to outline the 
Agency's program and financing recommendations, I would like to take a 
moment to reflect on the truly amazing transformation that has taken 
place in American agriculture.
    A hundred years ago, nearly 40 percent of employed people worked on 
farms. Today, less than 2 percent work on farms. In the span of a 
century, the number of farms has fallen by two-thirds, while the 
average farm size has more than tripled. This reflects increased off-
farm employment opportunities and growing productivity in agriculture.
    Farm production has become more concentrated. In 1900, 17 percent 
of U.S. farms produced 50 percent of farm sales. In 1997, only 2 
percent of farms produced half of all agricultural sales.
    There has also been a dramatic increase in crop yields over the 
past 100 years. From 1900 to 1999, wheat yields have multiplied from 
12.2 bushels per acre to 42.7 bushels per acre; corn, from 28.1 bushels 
per acre to 134.5 bushels per acre; soybeans, from 10.9 bushels per 
acre to 36.7 bushels per acre; cotton, from 203 pounds per acre to 592 
pounds per acre; peanuts, 661 pounds per acre to 2,660 pounds per acre; 
and potatoes, from 52 hundred weight per acre to 348 hundred weight per 
acre.
    Similarly, with higher crop productivity, animal production has 
jumped substantially. Chicken production has expanded more than 10-
fold. Hog production has increased 3-fold. With significantly higher 
output per cow, milk production has also risen sharply.
    Without question, many of the advances we have seen which have 
literally transformed American agriculture are the direct result of new 
technologies and practices which have been developed through 
agricultural research. It is agricultural research that has made 
possible the huge increases in agricultural productivity that we have 
seen.
    Agricultural research is constantly adjusting to address new 
challenges of a dynamic world. At the beginning of the twentieth 
century, the emphasis of agricultural research was primarily on the 
production of crops and animals and their protection from diseases and 
pests. The role of research has expanded beyond agricultural production 
efficiencies to include food safety, human nutrition, emerging diseases 
and exotic pests, new products and agricultural uses, sustainable 
agricultural practices, and natural resources conservation. Today, 
agricultural research embraces a variety of new approaches and 
technologies, from integrated pest management to remote sensing 
technologies and biotechnologies, and tools, from precision agriculture 
to bioinformatic tools and genetic sequencing. The new technologies and 
tools are being used to improve the nutritional value and safety of the 
food supply, convert agricultural materials to biofuels, manipulate the 
properties of plant and animal genes, etc.

                       MAJOR ARS ACCOMPLISHMENTS

    During the past 10 years, ARS accomplishments have significantly 
benefitted American agriculture. Examples (organized under four broad 
goals) include:
An agricultural system that is highly competitive in the global economy
  --Pioneering the concept of using gene markers to assist in selecting 
        plants and animals for improving yield, imparting disease 
        resistance, enhancing nutritional value, and making food 
        products safer for the consumer.
  --Publishing the first genetic linkage maps in the world for swine 
        and cattle which were key contributors in the first genetic map 
        for poultry.
  --Organizing a multi-State areawide integrated pest management 
        project to control the codling moth, the key pest affecting 
        commercial apple and pear production in the Pacific Northwest. 
        This initiative was so successful that pesticide usage was 
        reduced 75 percent and products from the area were able to be 
        exported to nations where they had been previously restricted. 
        This strategy is now being followed for other important crop 
        pests.
  --Discovering and patenting a new method to immunize poultry from a 
        number of diseases by injecting vaccines into the egg. Today, 
        this technology protects 85 percent of North American broilers.
  --Developing and releasing a new cotton variety with high fiber 
        strength, which has enabled the industry to introduce new 
        processes for wrinkle-resistant cotton slacks, and open a 
        multi-billion dollar market.
A safe and secure food and fiber system
  --Cloning a plant gene conferring resistance to disease causing 
        viruses. The ability to breed agriculturally important plants 
        that are resistant to virus borne diseases is critical to 
        preserving a secure food production system.
  --Developing the first practical live animal test for scrapie in 
        sheep, a disease similar to ``Mad Cow'' disease that has 
        plagued Europe. This technology will allow producers to develop 
        disease free flocks. APHIS is using the third eyelid test in 
        their planning for a scrapie eradication program in sheep.
  --Developing a five minute test to identify bacterial contamination 
        on meat. A second rapid detection test for E. coli is being 
        used by commercial laboratories that screen ground meat for 
        fast food restaurants and other retail food outlets.
  --Developing a product called Preempt (TM) that can be sprayed over 
        newly hatched chicks to reduce the potential for salmonella 
        contamination. This technology, known as ``competitive 
        exclusion,'' will significantly decrease the potential for 
        human illness from salmonella.
A healthy and well nourished population
  --Demonstrating that the nutritional status of a host can influence 
        the pathogenesis of a known human viral pathogen.
  --Producing the only reliable human studies on the effects of 
        transfatty acids in the diet and their adverse impact on the 
        risk factors for heart disease.
  --Demonstrating how supplementing the diets of postmenopausal women 
        with additional calcium and vitamin D lowers the rate of bone 
        loss, slowing the development of osteoarthritis.
  --Identifying how the brain function of children with certain 
        nutritional deficits differs from those with good nutritional 
        status.
  --Maintaining the Nutrient Database which is the primary source of 
        data on nutrients in food used in managing Federal nutrition 
        programs and widely used throughout the food industry.
  --Developing a series of high fiber, low calorie products (OATRIM, Z-
        TRIM and NU-TRIM) that can be used as fat substitutes in 
        prepared foods.
An agricultural system that protects natural resources and the 
        environment
  --Developing conservation tillage systems and crop residue management 
        practices that have increased profitability and improved soil 
        quality on hundreds of thousands of acres in the United States.
  --Developing methods to remediate toxic element contaminated sites 
        using specially designed biosolids compost. This approach has 
        greatly reduced the remediation cost at some toxic metal 
        contaminated ``Superfund'' sites.
  --Developing an indexing tool for mapping the vulnerability of 
        landscapes and locating areas with the greatest potential for 
        contributing to water contamination by phosphorus. This index 
        provides Federal and State agencies with the tools to manage 
        watersheds to reduce water pollution.
  --Developing the Riparian Ecosystem Management Model to provide 
        landowners and environmental agencies with guidelines to design 
        and manage forest buffers.
  --Altering the nutritional or other end-use quality of certain grains 
        to reduce their phytic acid, phosphorus, and mineral content. 
        This research is focused on animal feeds and is designed to 
        increase the absorption rates of nutrients by the animal while 
        reducing the amount of phosphorus entering the environment.
  --Screening thousands of American Elm trees to identify resistance to 
        Dutch Elm disease. As a result, two new resistant varieties 
        were developed and released to wholesale nurseries for 
        propagation and sale to the public.

                        FISCAL YEAR 2001 BUDGET

    ARS' fiscal year 2001 budget recommends a funding level of 
$894,258,000 which represents an increase of $63,874,000 above the 
Agency's fiscal year 2000 level. This budget includes $97,815,000 in 
national high priority research initiatives, and $8,500,000 to finance 
pay costs. To help fund these high priority initiatives, the proposed 
budget also includes a reduction of $42,441,000 of both lower priority 
ongoing research and earmarked research projects added to the Agency's 
fiscal year 2000 appropriation.

                 NEW AND EXPANDED RESEARCH INITIATIVES

    ARS' fiscal year 2001 research initiatives are directed at 
maximizing productivity and product quality while preserving natural 
resources and environmental quality. The initiatives are also directed 
to the concerns of every American--for a safe, healthy, nutritious food 
supply. The specific research initiatives are detailed below.
An agricultural system that is highly competitive in the global economy
    One of ARS' principal goals is to conduct research which results in 
strengthening U.S. agriculture at home and abroad. This is accomplished 
by developing new techniques and strategies to prevent or control 
insects and diseases which reduce economic losses and increase product 
longevity and market quality. Research is conducted which demonstrates 
new postharvest technologies that add value, improve quality, and 
overcome technical barriers to trade. ARS also carries out research 
which results in the development of new products and new uses for 
agricultural products. Under this goal, ARS is recommending in its 
fiscal year 2001 budget new and expanded research initiatives in 
biobased products and new uses.

            Biobased products and new uses (to expand markets, improve 
                    farm income, and reduce dependence on nonrenewable 
                    fossil fuels)

    Biobased feedstocks and products are commercial and industrial 
products, other than food and feed, that utilize biological products or 
renewable domestic agricultural (plant, animal, and marine) or forestry 
materials in their production and manufacture. On August 12, 1999 the 
President signed an Executive Order 13101 to accelerate the development 
and commercialization of biofuels and biobased products. Legislation to 
enhance this program area was also introduced by the Congress. Biobased 
products research is a high priority for several reasons. First, there 
is a need for new products and uses to expand markets for farm and 
forest products and improve farm income. Second, there is an increasing 
concern regarding the long term adverse environmental impacts from the 
continuing use of nonrenewable fossil resources. Third, our Nation is 
growing increasingly dependent on imported sources of energy and 
industrial feedstocks.
    ARS is requesting an increase of $14,000,000 to develop biobased 
materials from agricultural commodities and byproducts; improve 
conversion of agricultural materials to biofuels; expand development of 
novel crops for value added products; improve biomass for energy; and 
increase our knowledge of fundamental biomaterials science. The 
proposed research will bring to commercialization an increased number 
of biobased feedstocks and products that can successfully compete in 
the marketplace with fossil fuel-based feedstocks and products. Success 
will increase the use of environmentally preferable feedstocks and 
products while reducing the use of those that add global warming gases 
to the atmosphere. Success will add new profit potential to old crops 
and create profitable new crops. Moreover, adoption of biobased 
feedstocks and new products will bring growth in processing and 
manufacturing businesses near to where the crops are grown, providing 
new off-farm jobs and income growth for rural America.
A safe and secure food and fiber system
    One of the Agency's principal goals is to perform research which 
will ensure that U.S. farmers and food processors have the technologies 
and resources necessary to produce a safe and secure food system. Under 
this goal, ARS is recommending in its fiscal year 2001 budget new and 
expanded research initiatives in emerging and exotic diseases, invasive 
species, agricultural genome and genetics, and food safety.

            Emerging and Exotic Diseases, and Pests (to reduce 
                    agricultural losses, protect the Nation from 
                    bioterrorism, and help ensure food safety)

    Emerging and reemerging infectious diseases and pests during the 
past several years have become and remain a major public and animal 
health concern. The globalization of trade, increased international 
travel, climate change, intensive agriculture, and changing 
agricultural demographics have created new opportunities for 
reemergence and spread of infectious diseases and pests. Exotic (non-
native) pathogens or pests once introduced into the U.S. can explode 
into an epidemic due to the absence of natural control agents and the 
lack of resistance of host animals. For emerging diseases to be 
detected and effectively controlled, the biology of the pathogens, 
pests, and parasites must be researched and strategies developed to 
limit their establishment and spread.
    ARS is requesting a total increase of $4,358,000, which includes an 
increase of $3,750,000 for preventing and controlling emerging exotic 
and domestic infectious diseases of livestock and aquaculture, 
controlling livestock pests, and developing vaccines for brucellosis in 
wildlife, and an increase of $608,000 to prevent and control emerging 
and exotic plant diseases. The proposed animal and plant disease 
research will lead to better diagnostic tests and improved control 
technologies and practices resulting in reduced production losses. It 
will also help ensure that the U.S. food supply remains the safest, 
healthiest, and least costly in the world.
    United States agriculture is also extremely vulnerable to a 
deliberate introduction of highly infectious diseases and pests, 
particularly foreign diseases not endemic to the U.S. A recent GAO 
report cites that certain countries are engaged in developing 
biological warfare agents directed at animal and plant agriculture. 
Disease pathogens that could be used include highly infectious viruses, 
bacteria, nematodes, fungi, and insects that attack major commodities, 
such as cattle, swine, poultry, cereals, vegetables, and fruits. The 
malicious introduction of these pathogens would affect consumer 
confidence in the safety of their food and could have profound impacts 
on the U.S. economy. The potential impact of an outbreak of foot and 
mouth disease in cattle and swine in the U.S. was vividly demonstrated 
in 1997 in Taiwan where eight million pigs had to be destroyed causing 
$5 billion in economic losses, environmental consequences, and a total 
shutdown of their swine exports.
    To protect U.S. agriculture from its vulnerability to acts of 
bioterrorism, ARS is requesting an increase of $10,000,000. Terrorist 
acts against U.S. agriculture have the potential to cost tens of 
billions of dollars and many lives. It is therefore necessary to take 
preventive action now. Research will focus on developing a forensic 
capability to rapidly identify highly infectious pathogens that have 
been turned into biological weapons. Also, new tools will be developed 
which will facilitate the epidemiological mapping of disease outbreaks 
and tracking of disease agents to their geographic origin. This new 
generation of technology will also substantially augment our 
traditional mission and capacity to deal with animal diseases that 
naturally or accidentally enter the U.S. and threaten the livestock 
industry.

            Invasive Species (to detect and eradicate new invading weed 
                    and pest species)

    Invasive weeds and other pest species cost the Nation over $122 
billion a year. At last count, there were more than 30,000 invasive 
species in the U.S.--they impact production agriculture, organic 
farming, the environment, and other plant and animal species. For 
example, weeds such as purple loosestrife, leafy spurge, salt cedar, 
Brazilian Pepper, yellow starthistle, water hyacinth, downy brome, and 
melaleuca infest at least 100 million acres in the U.S. Arthropod 
pests, such as the silverleaf whitefly, Asian longhorned beetle, and 
Russian aphid destroy 13 percent of crop production each year. About 
one half of the endangered plants in the Nation are at risk because of 
invasive species. In 1999, the President signed an Executive Order on 
Invasive Species directing agencies to increase their efforts to detect 
and eradicate incipient populations and prevent invasive species from 
entering the U.S. Many Members of this Subcommittee are aware of these 
problems in your own States and districts.
    In addressing the growing invasive species problem, ARS is 
requesting an increase of $4,300,000. Research will be directed toward 
developing pathogens for biological control of invasive weeds and 
insects. In addition, integrated management systems will be developed 
for weeds such as purple loosestrife. Also, new biological information, 
and the systematics of key groups of invasive weeds and insects will be 
developed. The proposed research will aid APHIS and other regulatory 
agencies, and State land managers in managing established invasive 
species, and detecting and eradicating new invading species.

            Agricultural Genome (to enhance the quality and safety of 
                    the food supply, and strengthen U.S. agricultural 
                    competitiveness in world markets)

    The U.S. agricultural system faces formidable challenges, from new 
pests and diseases, water and soil pollution and degradation, climate 
events, and less land available for farming. These challenges can only 
be met by harnessing the inherent potential of genetic resources. More 
rapid and efficient methods are necessary to identify and manipulate 
the useful properties of genes and genomes. New methods termed 
``genomics,'' rely on more detailed, accurate, and comprehensive 
knowledge of genetic organization and function. This will enable 
scientists to examine the genetic potential of plants, animals, and 
beneficial organisms.
    ARS is proposing an increase of $5,350,000 to develop bioinformatic 
tools, biological databases, and information management technology for 
plants. The research includes manipulating the function of important 
genes in crops, and developing new genomic approaches for improving 
economically important traits in livestock and poultry. In addition, 
marker genes of pathogenic microorganisms will be characterized to 
develop disease prevention in plants and animals. The proposed research 
will provide the means for maintaining and enhancing the quality and 
safety of the U.S. food supply. It will also strengthen the Nation's 
agricultural competitiveness in world markets by ensuring continued 
improvement of plants and animals.

            Agricultural Genetic Resources (to protect the Nation's 
                    agriculture from genetic vulnerability, and 
                    strengthen U.S. agricultural competitiveness)

    The United States needs a comprehensive program to maintain: crop 
germplasm; genetic diversity within animal species which provide 
abundant high quality food and fiber; and microbial germplasm, 
including pathogens and microorganisms, which may be useful in 
bioconversion, bioremediation, or biocontrol. Genetic diversity is 
critical for further improvement of production efficiency and for the 
protection of valuable germplasm from catastrophic events including 
climate change and disease epidemics.
    ARS is requesting an increase of $6,600,000 to provide a program 
which will secure and maintain critical plant, animal, and microbial 
germplasm. Specifically, ARS will identify threatened germplasm and 
incorporate it into USDA/ARS gene banks. The germplasm will be 
preserved, documented, characterized, evaluated, and enhanced. The 
proposed germplasm program will protect U.S. agriculture from genetic 
vulnerability, and strengthen U.S. competitiveness in agricultural, 
pharmaceutical, and industrial markets by ensuring continued genetic 
improvement through an optimal pool of genetic resources.

            Food Safety (to control pathogens and reduce food-related 
                    illnesses/deaths)

    Food safety is a National Presidential priority. The Department is 
committed to providing consumers with the safest, highest quality food 
possible. It recognizes that food safety problems must be addressed and 
solved from the ``farm-to-the-table.'' ARS' research begins at the 
preharvest stage of crop and animal production. It is there, during the 
production and transportation of animals to slaughter, that exposure 
and infection to pathogens takes place. This is a major source of 
contamination in meat-based foods. During production pathogens also 
contaminate harvested fruits and vegetables. Similarly, toxic metals 
from soils and allergens contaminate various commodities.
    ARS is requesting a total increase of $5,720,000. Within that total 
is a proposed increase of $2,860,000 for preharvest food safety 
research to develop methods for controlling pathogens during 
preslaughter and transportation, and develop technologies to extend the 
useful life of antibiotics. Toxins, heavy metals, and allergens which 
contaminate food products will also be researched. In addition, 
management and animal health practices will be developed to reduce 
Salmonella enteritidis on and in shell eggs.
    Postharvest operations--slaughter and processing--are also key 
links in the food safety chain. Postharvest operations can provide an 
opportunity for removing or inactivating pathogens previously acquired 
during production. Pathogens can rapidly develop resistance to 
antimicrobials and traditional control measures.
    ARS is also requesting an increase of $2,860,000 for postharvest 
food safety research. The proposed research will develop methods to: 
control pathogens in meat, poultry, and fruits and vegetables; detect 
pathogens and residues during processing and storage; and improve egg 
sanitation technologies and storage conditions to reduce contamination. 
Also, an Internet-based food safety research information system will be 
developed as part of the Food Safety Research Information Office 
established at the National Agricultural Library. The proposed pre- and 
postharvest food safety research will result in fewer pathogens in the 
production and processing environment thereby reducing consumer food-
related illnesses and deaths.

            Food Quality Protection Act (to reduce the use of 
                    pesticides which are harmful to humans)

    The Food Quality Protection Act (FQPA) requires a change in the 
standard for evaluating pesticides from an acceptable risk/benefit to a 
reasonable expectation of no harm. This change in the evaluation 
standard is likely to affect the permissible uses in agriculture of 
many pesticides that can have toxic effects on humans.
    USDA policy already places high priority on the funding, 
development, and testing of replacement technology for currently used 
pesticides at risk of being taken off the market due to the new FQPA 
tolerance standards. The Department is committed to implementation of 
IPM practices on at least 75 percent of the Nation's crop acreage. In 
addition, USDA supports efforts to develop areawide pest management 
programs using biointensive IPM approaches, IR-4 minor use pesticide 
programs, biological control agents, methyl bromide alternatives, and 
other IPM component technology.
    In implementing FQPA, ARS is requesting an increase of $4,537,000. 
Research would be directed at expanding areawide IPM programs 
demonstrating alternatives to at-risk pesticides. IPM systems will be 
developed for fruits and vegetables treated with organophosphates and 
carbamates, and for pests under large scale control/eradication 
programs. In addition, methyl bromide alternatives will be developed 
and registered. The proposed research will develop new technologies and 
practices as substitutes for ``hard'' pesticides (e.g., organophosphate 
and carbamate pesticides) and provide new, target specific biointensive 
approaches to control crop and other agricultural pests. The research 
will also contribute to fulfilling the Department's commitment to 
implement IPM practices or methods on 75 percent of the Nation's crop 
acreage. Within the amount requested, ARS is also requesting an 
increase of $1,500,000 to increase its support of the Department's 
Office of Pest Management Policy. Established in 1997, this office 
provides a coordinated and rapid response to FQPA data analysis needs, 
interacts with grower groups, and coordinates USDA programs with EPA.
A healthy and well nourished population
    A healthy diet is critical to an individual's growth and 
development, susceptibility to diseases, and their quality of life. 
Poor nutrition underlies many chronic conditions, such as obesity, 
cardiovascular disease, cancer, osteoporosis, and diabetes. Research is 
only now beginning to reveal how nutrients and genes interact to cause 
various diseases. Under this goal, ARS is recommending in its fiscal 
year 2001 budget the largest increase for any one program area to 
support the President's Human Nutrition Research Initiative.

            Human Nutrition (to reduce nutritionally-related diseases, 
                    and produce a more healthy, productive population)

    The goal of the President's Human Nutrition Research Initiative is 
to improve the overall health of the American people by reducing health 
care costs and enhancing the quality of life by further defining the 
relationship between diet and health; improving the scientific basis of 
more effective food assistance programs; generating a more nutritious 
food supply; improving resistance to infection and immune disorders; 
promoting changes in diet by understanding the factors that affect food 
choices; and extending dietary guidance to nutritionally vulnerable 
groups by determining how food consumption at points in the life cycle 
affects risk of disease. In the first phase of the initiative, emphasis 
was placed on the dietary requirements of children. In the second 
phase, cutting edge research approaches such as molecular biology were 
applied to human nutrition to identify the role of nutrients in 
promoting health.
    In this phase of the Initiative, ARS is requesting an increase of 
$17,250,000. Emphasis will be on the identification and measurement of 
the active components of a healthy diet; determination of the factors 
that maintain healthy body weight; role of nutrition in bone growth and 
maintenance; importance of diet in maintaining optimal neurological 
function throughout life; effects of diet on the immune function; role 
of nutrition throughout the life cycle; and development of nutritional 
biomarkers. In addition, the National Nutrient Databank (the database 
of foods consumed in the U.S. and the foundation for food composition 
tables) will be updated. The proposed research will lead to a reduction 
in the number of nutritionally-related diseases, and to a more healthy 
and productive population. This in turn will lead to a decrease in the 
staggering costs (estimated in excess of $200 billion per year) 
associated with the treatment of nutritionally-related diseases.

An agricultural system that protects natural resources and the 
        environment

    Agricultural growth and enhanced productivity must be balanced with 
maintaining and preserving the Nation's natural resources. One of ARS' 
goals is to provide a better understanding of the complex interactions 
between agricultural production and the soil, water, and air. Under 
this goal, ARS is recommending in its fiscal year 2001 budget new and 
expanded research initiatives in global climate change, climate change 
technology, air quality, and integrated science for ecological 
challenges.

            Global Climate Change (to reduce the harmful effects of 
                    global climate change on U.S. agriculture)

    Agriculture is vulnerable to changes in climate. Rising 
temperatures and changing amounts and patterns of precipitation can 
reduce crop yields. A changing climate can also alter the competitive 
relationships between weeds and crops, and the frequency of insect 
infestations and the severity of weed infestations which challenges our 
ability to control pests. Strategies and technologies need to be 
developed so that we better understand the effects of climate change 
thereby mitigating their impacts on agriculture.
    ARS is requesting an increase of $7,900,000 for research on the 
effects of climate change on food availability; the impacts of 
atmospheric and climate change on the Alaskan agro-ecosystem; and the 
carbon cycle research initiative. In the carbon cycle initiative, ARS 
will collaborate with other Federal agencies in determining how farmers 
and ranchers can store carbon in agricultural soils to improve air 
quality. Rates of emissions of greenhouse gases associated with crop, 
livestock, and forage production systems will also be documented, and 
technologies to reduce them will be developed.
    ARS will also conduct U.S. global change research program national 
assessment activities. Assessments assemble and synthesize scientific 
results, help increase interaction among scientists and the public, and 
aid in identifying gaps in knowledge. The national assessments and the 
other proposed global climate change initiatives will help mitigate the 
effects of global climate change. Accurate measurements of greenhouse 
gas emissions or rates of storage in agricultural soils will reduce 
climate change and assist in the prediction of future greenhouse gas 
concentrations.

            Climate Change Technology (to expand biomass for energy, 
                    and predict/adapt to global change impacts)

    By making changes in production and land use practices, agriculture 
can reduce greenhouse gas emissions. Practices such as, biomass 
conversion to fuels, improved animal management and waste utilization, 
conservation tillage, and other management practices (e.g., cover 
crops, buffers, etc.) will enhance long-term storage of carbon in 
soils. These practices will also increase energy efficiency, and 
improve soil tilth, fertility, and water holding capacity.
    ARS is requesting an increase of $7,000,000 to develop new 
technologies both for predicting and adapting to global change impacts, 
and for improving and expanding biomass for energy. The proposed 
research will provide farmers and ranchers with the means to adapt 
agricultural production methods in response to climate change. 
Expanding biomass for energy will contribute to sustainability, 
environmental quality, and efficiency of crop and livestock production, 
and forestall potential climate change.

            Air Quality (to improve air quality)

    With the adoption of the EPA's National Ambient Air Quality 
Standards, the role of agriculture in polluting air came under greater 
scrutiny. Concerns about the regulation of agricultural air quality 
prompted the establishment of the Agricultural Air Quality Task Force. 
The Task Force has identified the emission of particulates (which 
penetrate human lungs and cause various aliments) as its number one 
priority.
    ARS is requesting an increase of $2,000,000 to develop new 
knowledge on particulate matter and precursors. New knowledge will also 
be developed on the emission and control of animal manure odors. In 
addition, research will be conducted on protecting agricultural crops 
from the effects of tropospheric ozone. The proposed research will make 
it possible to develop technologies to control or mitigate dust and 
odor emissions. Also, practices will be established to protect crops 
from ozone damage.

            Integrated Science for Ecological Challenges (to protect 
                    the Nation's soil and water resources)

    Changes in land and resource use, the introduction of invasive 
species, the input of pollutants and excessive nutrients, extreme 
natural events, and changes in atmospheric and climate conditions--
these stresses and their cumulative effect on the Nation's ecological 
systems is poorly understood and raises numerous questions. The Federal 
agencies in the National Science and Technology Council, Committee on 
Environment and Natural Resources propose to begin addressing these 
major ecological questions under a broad coordinated effort entitled, 
``Integrated Sciences for Ecological Challenges.''
    ARS is requesting an increase of $6,800,000 under this initiative 
to protect the Nation's natural resources, by improving livestock 
manure management systems to protect evironmental quality; controlling 
eutrophication, harmful algal blooms, and hypoxia in waterways; 
restoring riparian zones and coastal habitats; developing practices for 
managing agricultural production while protecting soil and water 
resources; and conducting integrated ecosystem risk assessments. The 
overall goal of the proposed research is to protect the Nation's 
natural resources.

Enhancing information systems

    The National Agricultural Library (NAL) is the largest agricultural 
library in the world. Its print and electronic collections support the 
information needs of farmers, agricultural producers, researchers, 
policymakers, educators, and others. Under this goal, ARS is 
recommending in its fiscal year 2001 budget enhanced support of its 
research and information programs.

            Enhanced Support of Research and Information Programs (to 
                    preserve and increase access to agricultural 
                    research information)

    The number and variety of electronic information resources in 
agriculture continues to increase. At the same time, NAL must improve 
access to printed agricultural literature currently maintained in its 
collection. NAL also must initiate a digital archiving program to 
ensure that the Department's digital publications are accessible in the 
future.
    ARS is requesting an increase of $2,000,000 for increasing access 
to research information; updating and improving NAL's information 
delivery system; and preserving USDA digital publications. The proposed 
funding increase will ensure that NAL will be able to meet the growing 
needs of the agricultural community for rapid delivery of print and 
electronic information.

                               PAY COSTS

    The Agency is requesting $8,500,000 to cover part of the 
anticipated fiscal year 2001 pay raise. These funds are essential to 
the ongoing research effort of the Agency. The absorption of these 
costs over the last several years has eroded resources which has 
hindered the Agency's ability to hire new scientists, and procure 
equipment, materials, etc., which are critically needed to carry out 
ARS' research programs.

                          PROJECT TERMINATIONS

    ARS is recommending no new funding for earmarked projects funded in 
fiscal year 2000, as well as lower priority projects. Resources that 
would have gone to these activities would be able to be allocated to 
high priority initiatives of national importance. None of the 
reductions in lower priority projects will be taken from the 
Administration's priority initiative areas.

                        BUILDINGS AND FACILITIES

    Many of ARS' laboratories are inefficient and outdated. Major 
systems (i.e., water, heating, air-conditioning, electrical) in many of 
the laboratories have long passed their useful life expectancy and fail 
to meet building code requirements. The modernization or replacement of 
these laboratories which began several years ago remains a high 
priority.
    In fiscal year 2001, the Agency recommends under its Buildings and 
Facilities account $39,300,000 for the following modernization 
projects:

National Animal Disease Center, Ames, Iowa

    The Center serves as USDA's primary animal health research 
facility. Its research is widely recognized as preventing and 
controlling animal diseases, and protecting the food supply. Scientists 
at the Center have developed vaccines for porcine parvovirus, bovine 
viral diarrhea virus, and brucellosis, and have developed diagnostic 
tools for hog cholera, bovine tuberculosis, and scrapie.
    In fiscal year 2001, $9,000,000 is requested to plan and modernize 
facilities for ARS and APHIS. Specifically, ARS is requesting 
$8,000,000 to complete planning and design for new Biosafety Level 2 
and 3 Animal Isolation Facilities, and $1,000,000 for utility 
distribution system improvements to support the new facilities. These 
facilities will be located on the NADC grounds and will be used by both 
ARS and APHIS scientists.

Beltsville Agricultural Research Center, Beltsville, Maryland

    The largest agricultural center in the world, it is renowned for 
its prominent scientists, quality of research, and contributions to 
agriculture. Its research programs encompass natural resources and 
environmental sciences, plant sciences, livestock and poultry sciences, 
and human nutrition. In fiscal year 2000, ARS received an appropriation 
of $13,000,000, primarily for modernization of the Beltsville Human 
Nutrition Research Center. In fiscal year 2001, the Agency is 
requesting an increase of $13,300,000 to complete construction of the 
Beltsville Human Nutrition Research Center and for the modernization of 
the Building 307.

Western Regional Research Center, Albany, California

    The Center conducts research principally on food safety and new 
agricultural uses. Research, however, is hampered by facilities which 
were built before World War II. In fiscal year 2000, ARS received 
$2,600,000 for the design of a new Research and Development Facility. 
In fiscal year 2001, the Agency is requesting $4,900,000 for the first 
phase of construction of the Research and Development Facility.

Plum Island Animal Disease Center, Greenport, New York

    The Center conducts state-of-the-art research and diagnostic work 
on foreign diseases that are an ongoing threat to U.S. livestock. 
Located on an island off Long Island, the Center is the only site 
authorized by Congress to carry out such research. In fiscal year 2001, 
ARS is requesting $7,000,000 for continuation of the modernization of 
existing facilities at the Center. No new construction is being 
proposed.

National Agricultural Library, Beltsville, Maryland

    NAL is the largest agricultural library in the world and serves as 
a national resource for access to information on agriculture and 
related sciences. Built in 1968, many of the systems in the building 
are unreliable and require replacement. A 1991 facility condition study 
identified numerous mechanical, electrical, and architectural 
deficiencies. In fiscal year 2001, ARS is requesting $1,770,000 to 
continue modernization projects currently underway.

U.S. National Arboretum, Washington, D.C.

    The Arboretum was created by an Act of Congress in 1927 as a center 
for research and education on plant sciences. Since 1959, the Arboretum 
has been open to the public. Each year, thousands of residents and 
tourists who visit Washington, D.C. visit the Arboretum. A 1990 
facility condition study of the Administration Building (which includes 
offices, laboratories, an auditorium, and an herbarium) found numerous 
building and system deficiencies. In fiscal year 2001, ARS is 
requesting $530,000 in design funds for the modernization of the 
Administration Building, and $2,800,000 for replacement of the 
irrigation distribution system leading into the collections and 
research plots, and for installation of an automated control system.

                                SUMMARY

    In the span of a century, the face of American agriculture has 
changed dramatically--horses and mules have given way to power farm 
machinery, precision agriculture, remote sensing technologies, and 
bioinformatics. What has been achieved through agricultural research is 
truly remarkable.
    As we begin a new century, we look ahead to the new opportunities 
and challenges that lie ahead. For the discoveries and advances that 
have not been made, ARS is hard at work. ARS is committed to solving 
the agricultural problems that affect both producers and consumers, and 
to improving the life of each and every American.
    I will be pleased to respond to any questions that you may have 
regarding ARS' budget request.
                                 ______
                                 
                       ECONOMIC RESEARCH SERVICE

          PREPARED STATEMENT OF SUSAN E. OFFUTT, ADMINISTRATOR

    Mr. Chairman and members of the Committee, I am pleased to have the 
opportunity to present the proposed fiscal year 2001 budget for the 
Economic Research Service (ERS).

                                MISSION

    The Economic Research Service provides economic and other social 
science research and analysis on efficiency, efficacy, and equity 
issues related to agriculture, food, natural resources, and rural 
development to improve public and private decision making.

                                 BUDGET

    The agency's request for 2001 is $55.4 million, a net decrease of 
$10 million from the 2000 appropriation. The net decrease consists of 
four parts: a $1 million increase for an initiative on structural 
changes and concentration in food and agriculture; a $.5 million 
increase to support a global research and outreach initiative; a $.7 
million increase for a study on carbon sequestration; and a $12.2 
million decrease for evaluations of food stamp, child nutrition, and 
WIC programs. Funding for these evaluation studies in 2001 is included 
in the Food and Nutrition Service (FNS) budget.

                ERS CONTRIBUTIONS TO MISSION AREA GOALS

    ERS shares five general goals with its fellow agencies in the 
Research, Education, and Economics (REE) mission area: (1) a highly 
competitive agricultural production system, (2) a safe and secure food 
supply, (3) a healthy and well nourished population, (4) harmony 
between agriculture and the environment, and (5) enhanced economic 
opportunity and quality of life for all Americans. These goals are 
fully consistent with the U.S. Department of Agriculture mission.

Goal I: The agricultural production system is highly competitive in the 
        global economy

    ERS helps the U.S. food and agriculture sector effectively adapt to 
changing market structure and post-WTO and post-NAFTA trade conditions 
by analyzing the linkage between domestic and global food and commodity 
markets and the implications of alternative domestic and international 
policies on competitiveness. ERS economists analyze factors that drive 
change in the structure and performance of domestic and global food and 
agriculture markets; provide economic assessments of structural change 
and competition in the food industry; analyze how global environmental 
change, international environmental treaties and agreements, and 
foreign trade restrictions affect U.S. agricultural production, 
exports, and imports; and provide economic analyses that determine how 
fundamental commodity market relationships are adjusting to changing 
trade, domestic policy, and structural conditions.
    ERS will continue to work closely with the World Agricultural 
Outlook Board and other USDA agencies to provide short- and long-term 
projections of U.S. and world agricultural production, consumption, and 
trade. Cooperative efforts will seek to understand how commodity price 
and farm income variability affect market performance and interact with 
Federal policies and programs. ERS has sustained the frequency of 
reporting on commodities' outlooks, while strengthening the analysis 
that leads to a better understanding of reported observations and 
reporting needs in a sector that is witnessing profound structural 
change. In addition, ERS will continue to work closely with the Foreign 
Agricultural Service and the Office of the U.S. Trade Representative to 
assure that agricultural negotiations under the auspices of the World 
Trade Organization are successful and advantageous for U.S. 
agriculture. Research will target issues that prevented the 
Administration from fully meeting its goals for the Seattle-round of 
WTO trade negotiations--namely, the interrelationships involved among 
biotechnology, intellectual property rights, environmental concerns, 
and agricultural trade. ERS' December 1998 publication of Agriculture 
in the WTO demonstrated the Agency's ability to provide critical 
information on the benefits of earlier trade rounds and the potential 
gains from further liberalization of key markets. ERS experts will 
provide critical technical expertise in taking a more in-depth look at 
China's evolving role in world agricultural markets, including its 
potential membership in the WTO. ERS will conduct research designed to 
significantly improve the understanding among decision makers of the 
changing structure of the food marketing chain (for example, the 
implications for producers of the increasing replacement of open 
markets by contractual arrangements and vertical integration). ERS will 
also continue to analyze the use and effectiveness of alternative 
marketing strategies and risk management tools in mitigating farm 
income risk. ERS' 1999 publication of Managing Risk in Farming: 
Concepts, Research, and Analysis demonstrates the broad and deep 
knowledge that ERS brings to addressing the risk concerns of the 
sector.
    ERS analyses can help guide and evaluate resource allocation and 
management of public sector agricultural research--a key to maintaining 
increases in productivity that underlie a strong competitive position 
for U.S. farmers. ERS economists track and seek to understand the 
determinants of public and private spending on agricultural R&D 
evaluate the returns from those expenditures; and consider the most 
effective roles for public and private sector research entities.

Structural change, coordination and concentration in food and 
        agriculture

    The request for an increase of $1,056,000 in fiscal year 2001 is 
intended to greatly enhance research and the dissemination of 
information related to structural changes within the food and fiber 
system. These changes within the market structure can have far reaching 
impacts on farmers, consumers, rural communities, and U.S. 
competitiveness in international agricultural markets. Through this 
initiative, ERS will shed light on the appropriate role of agricultural 
policy in this new structural environment while looking at new ways to 
examine markets and conduct aggressive data collection programs. ERS 
will also examine opportunities for small farmers and rural communities 
to remain viable in the changing market structure.

Global Research and Outreach Initiative

    The request for an increase of $500,000 is part of an REE mission 
area interagency initiative to focus research and outreach programs on 
international issues of vital interest to the U.S. food and agriculture 
sector and on alleviation of the causes of global food insecurity. ERS 
will develop programs which are designed to strengthen research and 
outreach capacity in developing countries. Through collaborative 
activities with institutions in selected developing and former Soviet 
Block countries, ERS will be able to access information needed to 
support substantive research on challenges to developing a better 
understanding of the global agricultural market within which the U.S. 
food and agriculture sector functions. In the process, institutional 
and professional relationships will develop that facilitate long term 
exchanges and continued access to needed information and data.

Goal 2: The food production system is safe and secure

    ERS focuses on improving the efficiency and effectiveness of public 
policies and programs designed to protect consumers from unsafe food by 
analyzing the benefits of safer food and the costs of food safety 
policies; efficient and cost-effective approaches to promote food 
safety; and how agricultural production and processing practices affect 
food safety, resource quality, and farm workers' safety. This research 
helps government officials design more efficient and cost-effective 
approaches to promote food safety. For example, ERS works closely with 
various USDA agencies and the Centers for Disease Control and 
Prevention (CDC) on pathogen reduction efforts, including Hazard 
Analysis and Critical Control Points (HACCP). The ERS research program 
provides detailed and up-to-date appraisals of the benefits of safer 
food, such as reducing medical costs and costs associated with 
productivity losses from foodborne illnesses caused by microbial 
pathogens. Specifically, in 1999 ERS used data provided by the CDC's 
``FoodNet'' active surveillance system to update estimates of the costs 
of foodborne disease caused by four major microbial pathogens 
(estimated at $9.2 to $10.2 billion annually), and collaborated with 
CDC staff to refine and update the methodology for measuring the cost 
of foodborne disease. In fiscal year 1999, ERS established a new 
extramural research program to measure the benefits of safer food. ERS 
established a competitive selection process to award funding for 
cooperative agreements in food safety research. ERS awarded grants to 
Harvard University and the University of Wyoming to begin a multi-year 
effort to apply state of the art economic analysis to develop national 
estimates of the benefits of improving the safety of the Nation's food 
supply. In addition, ERS has undertaken new research on the costs of 
coming into compliance with various food safety policies, including 
assessment of the distribution of costs across the food industry and 
across different consumer demographic groups.
    Understanding how food prices are determined is increasingly 
important in responding to domestic and international market events and 
opportunities that promote the security of the U.S. food supply. As the 
farm share of the food dollar declines, accurate retail price forecasts 
depend more heavily on understanding the marketing system beyond the 
farmgate. ERS systematically examines the factors that help set retail 
prices, including an assessment of the roles of the transportation, 
processing, manufacturing, wholesaling and retailing sectors, the 
impact of imports and exports, and linkages to the total economy.

Goal 3: The nation's population is healthy and well-nourished

    ERS helps identify efficient and effective public policies that 
promote consumers' access to a wide variety of high-quality foods at 
affordable prices. ERS economists analyze factors affecting dietary 
changes as well as trends in America's eating habits; assess impacts of 
nutrition education and the implications for the individual, society 
and agriculture; and provide economic evaluations of food nutrition and 
assistance programs, such as factors determining changes in Food Stamp 
program participation. In addition, ERS studies the implications for 
producers and consumers of movement towards adoption of the dietary 
guidelines, evolution of trade in food products, and the determinants 
of food prices.
    Analysis of nutrition education efforts considers what kinds of 
information motivate changes in consumer behavior, the food cost of 
healthy diets, the influence of food assistance programs on nutrition, 
and the implications of healthy diets for the structure of the food 
system. In 1999, ERS released the study, America's Eating Habits: 
Changes and Consequences, which poses questions and answers on several 
issues including: what are the economic costs associated with unhealthy 
eating habits; how much do people know about nutrition; how do national 
income and prices and demographic trends affect nutrient intake; and 
how do Government programs and regulations influence food expenditures 
and consumption. Since trade in high valued agricultural products now 
exceeds the value of bulk commodity flows, ERS will spend more time to 
disaggregate the components of these trade flows, understand their 
relationships to international investment and strategic behavior of 
U.S. food firms, and investigate the implications for U.S. consumers of 
a globalized food marketplace.

Goal 4: Agriculture and the environment are in harmony

    In this area, ERS research and analytical efforts in cooperation 
with the Natural Resource Conservation Service (NRCS) support 
development of Federal farm, natural resource, and rural policies and 
programs. Such efforts promote long-term sustainability goals, improved 
agricultural competitiveness, and economic growth. This effort requires 
analyses of the profitability and environmental impacts of alternative 
production management systems in addition to the cost-effectiveness and 
equity of public sector conservation policies and programs. ERS 
analysts focus on evaluating the benefits and costs of agricultural and 
environmental policies and programs in order to assess the relationship 
between improvements in environmental quality and increases in 
agricultural competitiveness. For example, in its 1999 publication 
Economic Valuation of Environmental Benefits and the Targeting of 
Conservation Programs: The Case of the CRP, ERS demonstrated that 
targeting of land for inclusion in the Conservation Reserve Program 
with the use of a new environmental benefits index approximately 
doubled the benefits of outdoor activities affected by the CRP--
particularly freshwater-based recreation and wildlife viewing. The ERS 
research report, Economics of Water Quality Protection from Nonpoint 
Sources (released in November 1999), compares and contrasts five 
different approaches to the prevention or resolution of the type of 
water quality problems most frequently associated with agriculture. 
This serves as a guide to agriculturally-related program development 
under the Clean Water Act. ERS is working with NRCS to provide a 
combination of economic, farm structural, and geographic information to 
inform ongoing decision making about the regulation of animal waste.
    ERS is putting increasing emphasis on understanding and analyzing 
trends in adoption of genetically modified crops and the emergence of 
markets for both genetically modified and non-genetically modified 
commodities--becoming a leader in the public sector in releasing new 
and timely information on this topic. For example, ERS was the first 
government agency to provide and interpret survey data on the extent of 
adoption of genetically engineered soybeans, cotton, and corn. This 
included information on impacts on pesticide use, crop yields, and net 
returns.

Carbon sequestration initiative

    This initiative will focus on the economic potential for domestic 
carbon sequestration and control of greenhouse gases (GHG) in 
agriculture, the use of economic incentives to encourage carbon 
sequestration on agricultural lands, and the potential to target USDA 
conservation programs to promote GHG mitigation activities in the farm 
sector. A request of $700,000 for this initiative would allow ERS to 
analyze the economic potential of alternative practices that increase 
soil carbon levels and identify the most efficient policies to 
facilitate adoption of soil carbon building practices. It would also 
enable ERS to collaborate with researchers around the world to 
incorporate estimates of carbon sequestration in global economic 
models, as well as to consider the potential for other GHG mitigation 
efforts on agriculture. This would build on modeling work to estimate 
the impacts of climate change on agriculture which links to the broader 
issue of threats to global agricultural sustainability such as water 
quantity and quality and land constraints and soil degradation.

Goal 5: Enhanced economic opportunity and quality of life for rural 
        Americans

    The ERS contribution to this goal is based on analysis that 
identifies how investment, employment opportunities and job training, 
and demographic trends affect rural America's capacity to prosper in 
the global marketplace. ERS economists analyze rural financial markets 
and how the availability of credit (particularly Federal credit) and 
public spending, taxes, and regulations influence rural economic 
development. ERS analyzes the changing size and characteristics of 
rural and farm populations and the implications of these changes on the 
performance of rural economies. In addition, ERS studies the economic 
structure and performance of non-farm economic activities in rural 
areas, including the rebound in population growth in non-metropolitan 
counties.
    ERS will also monitor rural earnings and labor market trends with 
emphasis on regional and other disaggregations in order to provide 
insight into the determinants of variation in trends among rural 
counties. Such work should yield a better understanding of the factors 
that promote rural vitality and the opportunities for effective public 
sector intervention.
    Because the effects of changes in welfare programs may vary between 
rural and urban residents, ERS social scientists will track 
implementation of recent program changes to understand impacts unique 
to rural residents. In particular, ERS analysis can help anticipate 
changes in participation across assistance programs for rural housing 
and for food security. For example, ERS has conducted the first 
nationally representative sample survey of participants in USDA's 
Section 502 rural housing program. Responses indicated that without the 
Section 502 program, 90 percent of borrowers thought it would have 
taken longer than 2 years, if ever, for them to be able to buy a 
comparable home. Another opportunity for understanding whether rural 
America faces unique circumstances will come with analysis of a 
recently-completed survey designed to determine characteristics of the 
rural manufacturing sector.
    ERS continues to monitor the financial situation of the farm sector 
through establishing farm business organization and performance 
benchmarks. This task includes study of the financial position of 
farmers who employ technological advances and innovative risk 
management strategies in their businesses, compared with the financial 
position of farmers who use more traditional approaches. ERS has 
developed and widely disseminated a new farm typology that goes beyond 
the traditional classification of farms by sales class alone to a 
grouping that is much more reflective of operators' expectations from 
farming, stage in their life cycle, and dependence on agriculture. The 
development of the typology brings new understanding about the 
diversity of the U.S. farm community and the factors that can enhance 
success among small and minority-owned farms.

                 CUSTOMERS, PARTNERS, AND STAKEHOLDERS

    The ultimate beneficiaries of ERS's program are the American people 
whose well-being is improved by informed public and private 
decisionmaking leading to more effective resource allocation. ERS 
shapes its program and products principally to serve key decision 
makers who routinely make or influence public policy and program 
decisions. This clientele includes White House and USDA policy 
officials and program administrators/managers; the U.S. Congress; other 
Federal agencies and State and local government officials; and domestic 
and international environmental, consumer, and other public 
organizations, including farm and industry groups interested in public 
policy issues.
    ERS depends heavily on working relationships with other 
organizations and individuals to accomplish its mission. Key partners 
include: the National Agricultural Statistics Service for primary data 
collection; universities for research collaboration; the media as 
disseminators of ERS analyses; and other government agencies and 
departments for data information and services.

                            CLOSING REMARKS

    I appreciate the support that this Committee has given ERS in the 
past and look forward to continue working with you and your staff to 
ensure that ERS makes the most effective and appropriate use of the 
public resources. Thank you.
                                 ______
                                 
      COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE

      PREPARED STATEMENT OF DR. CHARLES W. LAUGHLIN, ADMINISTRATOR

    Mr. Chairman and Members of the Committee, I appreciate the 
opportunity to present the proposed fiscal year 2001 budget for the 
Cooperative State Research, Education, and Extension Service (CSREES), 
one of four agencies in the Research, Education, and Economics (REE) 
mission area of the United States Department of Agriculture (USDA). I 
am especially honored as this is my first opportunity to submit 
testimony to this Committee.
    I have been the Administrator of CSREES for a little over eight 
months, having come to CSREES from the land-grant university system. 
Through the years I spent in that great system, first as a student and 
then as an educator, I gained an appreciation for the strong 
partnership the agency has forged with the land-grant system, other 
colleges and universities, and public and private research and 
education organizations.
    Over the years, I have witnessed how funding from the broad 
portfolio of CSREES programs has taken scientific discovery from 
conception to application. Formula funds have leveraged dollars from 
other sources, provided the start-up funds needed for an investigator 
to establish a research program and obtain the results needed to 
compete successfully in a competitive program, and allowed for a rapid 
response to an emerging problem. Competitively funded research from the 
National Research Initiative has supported individual investigators 
undertaking basic research aimed at generating new knowledge. Finally, 
research results were applied to real life problems through the 
Cooperative Extension System's outreach efforts. All of these efforts 
were undertaken in an environment which prepared students to meet the 
ongoing needs of agriculture, the environment, individuals and 
communities.
    The broad portfolio of CSREES programs, whether formula based or 
competitively awarded, ensure that research leads to the transfer and 
implementation of practical outcomes. With this broad portfolio as a 
base, the strong Federal, state, and university partnership has 
supported great successes that have far reaching impacts on the food we 
eat, the environment in which we live, and the quality of life of our 
citizens. For example: In an Animal Health Program in the School of 
Veterinary Medicine at the University of Minnesota, three investigators 
teamed up to study three important pathogens, Pasteurella multocida (a 
multispecies animal pathogen of major national importance), 
Cryptosporidium (primarily a disease of cattle causing morbidity in 
calves, but also an opportunistic cause of disease in humans), and 
Avian pneumovirus (a new and emerging disease of turkeys). University 
and National Institutes of Health (NIH) funds supported the 
establishment of a gene sequencing facility. The research on 
Pasteurella and the Pneumovirus was extended by a grant from private 
industry, while CSREES formula funds were used to support the initial 
gene sequencing. These preliminary studies, in turn, led to successful 
grant applications to the National Research Initiative (NRI) and NIH. 
The NRI grant funds provided the sequencing of the entire Pasteurella 
genome, one of the first non-viral animal pathogens to have its entire 
genetic blueprint deciphered. The practical outcomes of this work have 
been enormous. First, for all three organisms, there has been the 
development of practical diagnostic kits and experimental vaccines 
based on knowledge gained from gene sequences. In the case of Avian 
pneumovirus, experiment station support allowed an accurate and 
sensitive diagnostic kit to be available within three months of 
obtaining the genome sequence. Two vaccines were developed within 12 
months.
    As a result of the development of the diagnostic kits and vaccines, 
extension professionals were able to work with producers to confine the 
spread of the disease and prevent a national epidemic. This example 
indicates how a variety of funding mechanisms may be necessary to take 
discovery research from conception to application. In particular, it 
demonstrates how formula funds provided to research directors can 
underwrite a new study such that it quickly becomes competitive. It 
shows how funds from one source can be used to leverage funds from 
another, and how both research and extension formula monies can be used 
to respond quickly to an emerging and potentially devastating disease 
that began at the local level but showed every likelihood of becoming a 
national catastrophe.
    The questions before us involve not only important issues requiring 
the application of hard data and science, as in the scenario described 
above, but problems involving human behavior and motivation, complex 
social systems, and personal values. These questions require an agency 
that is engaged, and an engaged agency must be organized to step up to 
today's and tomorrow's needs. The challenge to CSREES is to move from a 
knowledge-dissemination model to an engagement model, developing and 
sustaining mutually beneficial partnerships with a wide array of 
constituents. The fiscal year 2001 budget strongly moves us in that 
direction.
    The fiscal year 2001 budget proposes an increase of approximately 
2.3 percent in discretionary funds. CSREES is committed to seven 
overarching themes in its fiscal year 2001 budget:
  --Increases for competitively awarded grant programs such as the 
        $30.7 million increase for the NRI;
  --Funding for targeted areas, including Biobased Products, Invasive 
        Species, and Pest Related issues;
  --Integrated research, extension, and education activities, as 
        evidenced by an increase of $36.6 million increase in the 
        Integrated Activities Account;
  --A balanced program portfolio, as evidenced by sustained support at 
        the fiscal year 2000 level for all formula programs;
  --Expanded partnerships to reach diverse audiences through increases 
        in funding for the 1890 and 1994 land-grant institutions, as 
        well as for Hispanic-Serving Institutions; and through 
        increases in programs that support the USDA Civil Rights 
        Implementation Team Recommendations;
  --Development of human capacity to address the need for a highly 
        trained cadre of quality scientists, engineers, managers, and 
        technical specialists in the food and fiber systems through 
        increased funding for the Higher Education Programs and 
        International Science and Education Grants; and
  --Streamlined management and improved accountability of CSREES 
        programs through increases for the Research, Education, and 
        Economics Information System (REEIS), and through the 
        integration of research, extension, and education under certain 
        programs as intended in the Agricultural Research, Extension, 
        and Education Reform Act of 1998 (AREERA).

                   FISCAL YEAR 2001 BUDGET HIGHLIGHTS

    The fiscal year 2001 budget request is a conscious effort to 
address concerns raised about the distribution of funding between 
formula grant programs and competitive grant programs in the 
Administration's fiscal year 2000 Budget. In order to reduce the 
disparity in funding between formula and competitive grant programs, 
the fiscal year 2000 budget proposed $200 million for the National 
Research Initiative and $489 million for the six major formula programs 
(a reduction from the fiscal year 1999 enacted level of $540 million). 
In response to the concerns raised about this reduction, the fiscal 
year 2001 budget has proposed to fund major formula programs at the 
fiscal year 2000 enacted level of $542 million, and to request a more 
modest funding level of $150 million for the NRI. We hope that the 
Committee will recognize and respond to this action, and provide this 
more modest increase for the NRI.
    One of the most crucial variables in the food and fiber system is 
scientific and professional human capital. The research and education 
agenda of the future depends on a highly trained cadre of qualified 
scientists, engineers, managers, and technical specialists. However, 
the higher education institutions that produce this essential human 
capital are confronted with two increasingly serious issues: expertise 
development and institutional development. Increases are provided in 
the fiscal year 2001 budget for several of the CSREES Higher Education 
Programs. An increase of $2 million is provided for the Food and 
Agricultural Sciences National Needs Graduate Fellowships Grants 
Program to expand support for the recruitment and training of 
outstanding graduate students in the food and agricultural sciences. An 
increase of $1.65 million is provided for the Higher Education 
Challenge Grants Program to enhance programs and capabilities for 
educating baccalaureate students in priority food and agricultural 
science areas, including food safety. An increase of $1 million is 
provided for the Multicultural Scholars Program which will support 
efforts to increase the multicultural diversity of the food and 
agricultural scientific and professional workforce .
    The CSREES budget request reflects USDA Civil Rights Action Team 
recommendations to address disparities in funding and enhance the 
Department's cooperative efforts with institutions of higher education 
that are primarily devoted to the needs of minority students. An 
increase of $650 thousand is provided for the Hispanic Serving 
Institutions Education Grants program and an increase of $300 thousand 
is provided for the 1890 Institutions Teaching and Research Capacity 
Building Grants Program. CSREES is proposing an increase of $2.5 
million for the Native American Institutions Endowment Fund to increase 
the endowment which will increase the interest earned on the endowment 
for use by the 1994 Institutions. CSREES also is proposing that the 
1994 Institutions be authorized to use endowment income for facility 
renovation and construction and will encourage the 1994 Institutions to 
use the increased funding for that purpose. An increase of $0.5 million 
is provided for the second year of the 1994 Institutions competitive 
research program; an increase of $0.4 million is provided for the 
Extension Services at 1994 Institutions program; and an increase of 
$3.3 million is proposed for the Extension Indian Reservations Program 
to enhance the ability of extension agents to provide educational 
programs to isolated and under-served audiences on the reservations. 
Additionally, eligibility under the Section 406 Integrated Authority, 
first used in 2000 and for which a total of $76 million in 12 programs 
is requested in 2001, is open to colleges and universities, including 
the 1890 institutions.
    Achieving sustained long-term improvement in the competitive 
position of United States agriculture relies critically on the Federal 
government's assurance that producers and marketers have access to the 
basic tools for success. Studies have shown that successful producers 
(farmers, ranchers, and foresters) are better educated, more apt to 
adopt new technology, have lower costs of production, and take better 
advantage of or have more opportunities for spreading production and 
marketing risk across alternative enterprises and mechanisms, than 
their less successful counterparts. The fiscal year 2001 CSREES budget 
proposes a new $9.6 million Biobased Products Program that will 
generate information and tools for farmers to grow, harvest, and handle 
alternative crops, and for manufacturers to convert renewable, raw 
materials to useful products for industry and/or consumers. The $4 
million proposed for a new Small Farms Initiative will develop 
research, education, and extension programs in appropriate marketing 
strategies for small farms, business skills for small farmers, and help 
beginning farmers establish viable farm operations and enterprises. A 
proposed increase of almost $3.7 million will be focused on organic 
farming under the research and extension components of the Sustainable 
Agriculture Research and Education Program. An additional $1 million is 
requested for a new program to develop and implement biologically based 
pest management practices that mitigate the ecological, agronomical and 
economic risks associated with the transition from conventional to 
organic production systems.
    Increases are proposed to support the development and application 
of new technology and management practices to replace the traditional 
pest controls that are at risk of being restricted or prohibited due to 
the Food Quality Protection Act of 1996 (FQPA). The budget proposes a 
$6 million increase to support long-term development and implementation 
of innovative pest management for major acreage crops, fruits, and 
vegetables through an integrated research, education, and extension 
competitive grants program. A $2 million increase is proposed for the 
development of intermediate-term alternative pest controls for fruit 
and vegetable crops to replace pesticides at risk of not meeting the 
new FQPA requirements.
    An additional $3 million is proposed for development of practical 
management alternatives and technologies for commodities affected by 
the methyl bromide phase-out now scheduled for 2005 under recent 
amendments to the Clear Air Act. The budget includes an increase of 
$1.5 million for a Regional Crop Information and Policy Centers program 
that will address high priority pest management needs of Federal and 
State regulators, extension personnel, and the public through a 
coordinated effort at the regional level. These programs, in 
conjunction with increased funding for the Critical Issues, Pest 
Management Alternatives, Minor Crop Pest Management, Expert IPM 
Decision Support System, Integrated Pest Management extension, and 
Pesticide Applicator Training programs, as well as sustained funding 
for the Integrated Pest Management research program, will ensure a more 
safe and secure food and fiber system.
    Establishing the scientific basis for optimal health, developing 
knowledge of the eating habits of Americans, and modifying food intake 
behavior are critical components to having a well-nourished population. 
An increasingly important component to having a well-nourished 
population is empowering our communities to build their capacities to 
meet a greater share of their food needs. The fiscal year 2001 budget 
proposes a new $5.25 million Anti-Hunger and Food Security Grants 
Program to provide support to non-profit entities for projects that 
reduce hunger, improve nutrition, bolster community food security, and 
help families move from poverty to self-sufficiency. An increase of 
$2.3 million above the 2000 appropriated level also is proposed for the 
Expanded Food and Nutrition Education Program (EFNEP) to support 
nutrition education programs aimed at meeting the needs of 
undernourished segments of the population, especially children.
    As a Nation, we increasingly value the environment--clean air and 
water, unique ecosystems, and pristine land. We recognize that, given 
the vast amounts of land being used in agricultural or forestry 
production, we must ensure that our production practices, as well as 
our public policies and programs affecting these practices, are 
consistent with the dual objectives of promoting competitiveness while 
preserving natural resources and environmental quality. To achieve 
these goals, a better understanding of the complex interactions between 
agricultural production and the environment is needed. An increase of 
$1.5 million is proposed for a new Invasive Species Program in fiscal 
year 2001 to target invasive species issues on an ecoregional basis. 
Water Quality also is a serious national concern as reflected in the 
President's Clean Water Action Plan. We propose an increase of $3.2 
million for the integrated research and extension water quality program 
that will support projects to investigate such issues as the linkage 
between agricultural practices and outbreaks of harmful algal blooms, 
which can lead to conditions that cause massive fish-kills, human 
health problems, and significant economic losses to the seafood 
industry.
    Americans recognize that their quality of life depends largely on 
economic, physical, and institutional factors affecting their families, 
businesses, and communities. The fast pace of changes in these factors, 
and their increasingly complex interactions, present a growing 
challenge. CSREES, in partnership with the land-grant university 
system, enhances the capabilities of individuals, families, and 
communities to improve their quality of life. An increase of $5 million 
is proposed for a new Youth Farm Safety Education and Certification 
Program for support to States to provide formal safety training and 
certification programs targeted to youth who are 16 to 17 years of age 
and working in agriculture to help mitigate farm-related injuries and 
deaths. The fiscal year 2001 budget proposes an increase of $1 million 
for the Children, Youth, and Families at Risk program to enhance child 
care programs for those segments of the population in greatest need, 
including limited resource families, isolated farm and rural families, 
and families needing child care during non-traditional hours, such as 
families of migrant farm laborers.
    CSREES strategies to ensure responsive and effective management of 
USDA's extramural research, extension, and education programs include: 
strengthening the Federal/State partnership; integrating research, 
extension, and education activities as appropriate; improving 
information management systems which are accessed by both internal and 
external users; and participating in efforts to improve financial 
management within USDA. The fiscal year 2001 budget proposes an 
increase of $250 thousand for REEIS. Increased funding will help 
further the implementation of the system to enable CSREES and the REE 
mission area to meet the reporting requirements of the Government 
Performance and Results Act and help facilitate implementation of 
various reporting requirements and accountability provisions of AREERA.
    The fiscal year 2001 Budget also includes mandatory funding of $120 
million for the Initiative for Future Agriculture and Food Systems 
under Section 401 of AREERA for competitive research, education, and 
extension grants to address critical and emerging agriculture issues. 
Mandatory funding also is available under the Fund for Rural America, 
where a minimum of $20 million is expected to be provided for a wide 
range of research, extension, and education activities. The budget also 
supports funding for the Community Food Projects grants program at $2.5 
million (supported with mandatory funds provided by the Food and 
Nutrition Service Food Stamp Program).
    An increasing portion of Federal funds will be distributed 
competitively to address the most critical needs of the agricultural 
community and fund the most highly meritorious projects. The increases 
proposed for competitive programs are partially offset by decreases in 
non-competitive projects slated for reductions due to constrained 
budget resources. The additional flexibility provided in AREERA, where 
a portion of the formula funds can be used to support either research 
or extension projects, allows states more authority to use Federal 
funds in addressing their highest priority needs.

                                SUMMARY

    The CSREES fiscal year 2001 budget represents a critical investment 
in research, extension, education, and integrated programs that focus 
on the development and delivery of tools to help agriculture compete in 
the long-term, enhancement of the environment, improvement of human 
health, and development of human capacity.
                                 ______
                                 
                       FOOD AND NUTRITION SERVICE

       PREPARED STATEMENT OF SAMUEL CHAMBERS, JR., ADMINISTRATOR

    Thank you, Mr. Chairman and members of this Subcommittee: I am 
Samuel Chambers, Jr., the Administrator of the Food and Nutrition 
Service (FNS). This is my second appearance before the Subcommittee 
having come to FNS eighteen months ago from the Michigan Family 
Independence Agency for Wayne County where I served as the Director. In 
my previous position, I gained a substantial familiarity with the U.S. 
Department of Agriculture's nutrition assistance programs, particularly 
how these programs operate at the State and local level. I wish to 
thank you and the other Subcommittee members for the opportunity to 
again appear before this Subcommittee to discuss the fiscal year 2001 
budget request for FNS.

                          2001 BUDGET REQUEST

    The FNS requests $36.3 billion in new budget authority for fiscal 
year 2001, a level that will maintain and augment the long-standing 
contribution of the Nation's nutrition assistance safety net in 
fighting hunger and improving nutrition for children and low-income 
people. The request meets the priorities described in FNS's Strategic 
Plan, which was recently revised to better reflect the agency's 
unifying mission and purposes. The new Strategic Plan, and the fiscal 
year 2001 Annual Performance Plan which was derived from it, chart a 
clear course toward the food security and nutrition outcomes that these 
vital programs are intended to achieve, and to meeting the stewardship 
responsibilities that are critical to continued public confidence in 
Federal nutrition assistance. Both plans provide a strengthened 
foundation for both internal management improvements, and better 
coordination with our State and local nutrition assistance partners. I 
look forward to working with you as we meet the challenges of 
implementing these plans.
    The fiscal year 2001 request includes funds to fully support all 
Federal nutrition programs and to make targeted improvements to these 
programs in a number of areas, some of which include the following.
  --We propose to restore Food Stamp benefits to certain legal 
        immigrants who lost their eligibility as a result of Welfare 
        Reform;
  --We are proposing simplification of certain food stamp rules related 
        to the ownership of vehicles, which would encourage work by 
        eliminating barriers to participation that result from owning a 
        reliable vehicle;
  --We propose an array of management changes designed to improve 
        oversight in the Child and Adult Care Food Program (CACFP);
  --The request includes the second increment of resources necessary to 
        carry out the School Breakfast Program Pilot which we initiated 
        in fiscal year 2000; and
  --The request for the Women, Infants and Children's (WIC) Program is 
        sufficient to provide benefits for all those eligible who wish 
        to participate.

                           FOOD STAMP PROGRAM

    The Food Stamp Program continues to serve the Nation as the primary 
source of nutrition assistance for low-income Americans. The program's 
mission is to ensure that low-income Americans have access to a 
nutritious, healthful diet through nutrition assistance and education. 
The resulting improvements in the nutritional status of low-income 
Americans protects their health and strengthens the food and 
agricultural economy. We are requesting $22.2 billion for the Food 
Stamp Programs in the context of continuing strong economic conditions. 
This estimate includes a benefit reserve of $1 billion, a $900 million 
increase over fiscal year 2000 level. This benefit reserve will ensure 
that funds can be made available quickly in the event of some 
unforeseen circumstance, thereby ensuring the program's ability to get 
food quickly to people who need it. Based on current economic forecasts 
from the Office of Management and Budget (OMB) for fiscal year 2001:
  --The average unemployment rate is projected to be 4.4 percent;
  --Food Stamp Program participation is projected to average 18.8 
        million persons monthly under current law; and
  --The average monthly benefit is projected to be $76.40 per person.
    The cost of the Thrifty Food Plan for a family of four is projected 
to rise about 2.9 percent from fiscal year 2000 to fiscal year 2001. 
Participation is projected to rise by approximately 750,000, reflecting 
a slight increase in the population eligible for benefits. In addition, 
the request reflects our legislative proposal to restore benefits to 
legal immigrants made ineligible for benefits under welfare reform. 
Benefits would be restored: (1) to legal immigrants who resided in the 
U.S. on August 22, 1996 and who subsequently reach age 65 benefiting 
10,000 people by fiscal year 2005 ; and (2) to legal immigrant adults 
who resided in the U.S. on August 22, 1996 and live with eligible 
children, effective April 1, 2001, benefiting 155,000 people by fiscal 
year 2005. Another proposal will allow States the option of conforming 
food stamp rules on the treatment of vehicles to a more generous 
Temporary Assistance to Needy Families Program (TANF) policy. This 
change would help participants to access food stamp benefits and also 
own a reliable vehicle so they may have the needed transportation to 
obtain and keep a job. A final proposal in our request would allow 
States to use the same rules for defining income in the Food Stamp 
Program as in the Medicaid Program. Also included under the Food Stamp 
account is $100 million authorized for the purchase of commodities for 
The Emergency Food Assistance Program and $1.3 billion to fund the 
Nutrition Assistance Program for Puerto Rico. Our request also includes 
$76.5 million for the Food Distribution Program on Indian Reservations 
(FDPIR), a slight increase from fiscal year 2000 reflecting the 
increased costs to the Indian Tribal Organizations (ITO) for 
administration of the program. The FDPIR provides benefits to eligible 
needy persons living on or near Indian reservations and was authorized 
by the Food Stamp Act in response to the need for an alternate program 
for those who do not have access to the regular Food Stamp Program. The 
estimates for participation in the program during fiscal year 2001 
average 133,300 persons monthly, the same level projected for fiscal 
year 2000.

                        CHILD NUTRITION PROGRAMS

    The purpose of the Child Nutrition Programs is to assist State and 
local governments in providing healthful, nutritious meals to children 
in public and nonprofit private schools, child care institutions, 
including family day care homes and summer recreation programs. FNS is 
requesting $9.5 billion which is slightly less than the level enacted 
for fiscal year 2000. We estimate that in fiscal year 2001, the 
requested funds, plus about $416 million in projected carryover funds 
available from fiscal year 2000, will support:
  --4.6 billion meals in the School Lunch Program;
  --1.3 billion meals in the School Breakfast Program;
  --1.8 billion meals in Child Care Centers and Day Care Homes;
  --155 million meals in the Summer Food Program; and
  --130 million half pints of milk in the Special Milk Program.
    For fiscal year 2001, expected average daily participation in both 
the National School Lunch Program (SLP) and the School Breakfast 
Program (SBP) are projected to be somewhat higher than in fiscal year 
2000--the SLP is up by 1.6 percent while the SBP is up by about 3.2 
percent.
    Included in our request for fiscal year 2001 is $6 million to fund 
the final phase of the School Breakfast Program Pilot which was 
initiated by FNS during fiscal year 2000. During the three year 
project, FNS will carefully evaluate the effect of eating a free school 
breakfast on children's behavior and educational performance. The final 
increment of resources requested is sufficient to fully fund the 
collection and analysis of data as well as food costs necessary to 
complete the evaluation.
    In the Child and Adult Care Food Program we project a 4.5 percent 
increase (77 million) in meals served over fiscal year 2000. In an 
effort to improve program integrity of the CACFP program, we are 
proposing legislation that would net the agency estimated savings of 
about $800 thousand in fiscal year 2001 and $115.2 million over a five 
year period. The proposal will include measures to strengthen oversight 
by sponsors, including prohibiting participation by sponsors that have 
a track record of mismanagement in other government programs and 
limiting and funds that may be retained by sponsors of child care 
centers for administration. The proposal also includes measures to 
strengthen State oversight, such as allowing States to retain a portion 
of program funds recovered through audits and reviews. In addition, the 
proposal would enhance Federal oversight and fund an evaluation of the 
program's administrative reimbursement structure. This proposal 
effectively addresses a number of issues raised in Federal audits which 
can only be addressed through legislation. These resources would be a 
complement to and reinforced by the additional funds for Child 
Nutrition Program integrity enforcement which we are requesting in the 
Food Program Administration (FPA) account.
    Included as part of our child nutrition request is $2 million for 
the Nutrition, Education and Training (NET) Program. I urge your 
support for this modest amount which will help to fund the State 
infrastructure that provides training for school food service personnel 
in food service management, for instructing teachers in nutrition 
education, and for teaching children about the relationship of 
nutrition and health in order to help them make better food choices.

               SCHOOL MEALS INITIATIVE AND TEAM NUTRITION

    The School Meals Initiative for Healthy Children regulation updated 
the nutrition standards for school meals and recognized the importance 
of training and technical assistance for school food service 
professionals and nutrition education for students. To implement this 
regulation, the Food and Nutrition Service established the Team 
Nutrition Initiative, a comprehensive, structured plan for improving 
the nutritional standards of school meals as well as creating an 
environment in the school dining area, in the classroom and in the 
community that fosters good dietary practices among children and their 
families. This initiative involves schools, parents and the community 
in efforts to continuously improve school meals, and to promote the 
health and education of 50 million school children in more than 96,000 
schools Nationwide. Through training and technical assistance for 
school food service professionals; fun, interactive nutrition education 
for children and their parents; and support for school and community 
leaders, Team Nutrition works to change current behaviors to be more 
supportive of healthy eating and physical activity. These strategies 
are accomplished through direct Federal operations as well as grants to 
State agencies. In fiscal year 2001, we are requesting a total of $10 
million for Team Nutrition, the same level appropriated for fiscal year 
2000.

SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN 
                                 (WIC)

    The purpose of the WIC Program is to improve the health of 
nutritionally at-risk, low-income, pregnant, breastfeeding and 
postpartum women, infants and children up to their fifth birthday. WIC 
participants receive three primary benefits: nutritious food packages 
designed to supplement their diets; nutrition education intended to 
improve their nutrition practices; and referrals to other critical 
health and social services.
    We are requesting $4.1 billion in fiscal year 2001 to provide 
nutrition education and food benefits to a monthly average of almost 
7.5 million needy women, infants and children. This funding level is 
sufficient to provide benefits for all those eligible who wish to 
participate in the program.

                 WIC ELECTRONIC BENEFIT TRANSFER (EBT)

    FNS is engaging in activities complementary to the Food Stamp 
Program to advance EBT systems to improve program benefit delivery and 
client services for the WIC Program. Our WIC Program request for fiscal 
year 2001 includes $6 million which will be dedicated to EBT 
development. Our goal is to implement EBT in States that have embarked 
on planning and eventually expand EBT development to additional States. 
Our current progress includes:
  --A successful WIC/Food Stamp EBT pilot in Wyoming which resulted in 
        the State's decision to proceed with implementing the EBT 
        system Statewide;
  --Nevada has completed WIC EBT system design development and is 
        scheduled for a March 2000 launch of a pilot in the Reno area 
        involving 7,200 WIC recipients and 30 retailers;
  --Ohio has finalized their contract with Citibank for WIC EBT system 
        design, development and implementation and expects to launch 
        their pilot during the summer of 2000 in Montgomery County. The 
        Ohio WIC EBT pilot will include up to 11,000 WIC recipients and 
        80 retailers;
  --Michigan has finalized their contract with Citibank for WIC EBT 
        system design, development and implementation and is in the 
        process of negotiating the timeline and details of the WIC 
        pilot, which is expected to begin by the end of calendar year 
        2000;
  --Texas and New Mexico expect to launch WIC EBT pilots in fiscal year 
        2001;
  --The PARTNERS project, a consortium of 6 WIC State agencies (CT, MA, 
        ME, NH, RI, VT), plans to release a joint Request For Proposal 
        (RFP) for WIC EBT pilots in fiscal year 2001, and is continuing 
        extensive planning for the development and implementation of 
        WIC EBT systems; and
  --New Jersey plans to release an RFP for a WIC EBT pilot in fiscal 
        year 2001.

                   FARMERS' MARKET NUTRITION PROGRAM

    The Farmers Market Nutrition Program provides WIC participants 
access to fresh fruits and vegetables while also expanding the 
awareness and use of farmers' markets by consumers. We firmly believe 
this program is a strong complement to the WIC Program and should not 
be competing with WIC for needed funds. Accordingly, we are requesting 
funding for the Farmers' Market Nutrition Program separate from the WIC 
Program, that is, as part of the Commodity Assistance Programs. The 
requested level of $20 million for fiscal year 2001 is an increase of 
$5 million above the fiscal year 2000 level. This level of funding 
would allow the program to continue to grow to new counties in States 
currently participating and to expand beyond the current 39 State 
agencies participating in the program to other States which have 
expressed interest in having this program.

                     COMMODITY ASSISTANCE PROGRAMS

    The Commodity Assistance Programs include funding for the Commodity 
Supplemental Food Program (CSFP), administrative funding for The 
Emergency Food Assistance Program (TEFAP) and funds for the Farmers' 
Market Nutrition Program. Our budget request for fiscal year 2001 
includes:
  --$93.3 million in support of the women, infants, and children and 
        elderly caseload in CSFP;
  --$45 million for TEFAP administrative expenses in addition to the 
        $100 million for commodity purchases available in the Food 
        Stamp account providing for a cumulative total program of $145 
        million; and
  --$20 million for the Farmers' Market Nutrition Program.
    The CSFP level requested will support an average monthly 
participation of 102,800 women, infants and children as well as an 
average monthly participation of 320,100 elderly. The request of $93.3 
million, in conjunction with use of $7 million in inventory, will allow 
for a total program of about $100 million in fiscal year 2001. The 
request of $93.3 million (which is a $5 million increase from fiscal 
year 2000) is required in order to continue the program at the level of 
participation expected to be attained by the end of fiscal year 2000 
which will include participants from five new States. These States 
include Ohio, Mississippi, Texas, Montana and Vermont.

                   NUTRITION PROGRAM FOR THE ELDERLY

    Our request for the Nutrition Program for the Elderly is $150 
million, an increase of $10 million above the fiscal year 2000 level. 
The request will allow FNS to support an increase in the number of 
meals served by about 7.7 percent.

                      FOOD PROGRAM ADMINISTRATION

    Our request for fiscal year 2001 is $128.6 million--an increase of 
$14.0 million over fiscal year 2000. We are requesting a total of $8 
million (a $5 million increase) to be used for program integrity 
initiatives in both the Food Stamp Program and the Child Nutrition 
Programs. This investment in program integrity, although significant in 
absolute terms, is small when compared to the more than $36 billion 
spent annually for program benefits, State administration and other 
supporting activities. The requested increase of $5 million would be 
divided between the Food Stamp and Child Nutrition Programs. Efforts in 
the Food Stamp Program would be directed to improving the accuracy of 
the quality control systems, working with States to reduce error rates 
and avoid error rate increases while ensuring benefits for eligible 
households; and efforts to ensure that States are efficiently using 
procedures designed to help eligible families retain food stamp 
benefits when they move from welfare to work. Efforts in the Child 
Nutrition Programs would be used in part to study sources of errors in 
school meals applications and evaluate alternative methods for 
determining and verifying children's eligibility for free and reduced 
price benefits in the School Lunch Program. Also, some of the resources 
would be devoted to enhanced Federal monitoring of the CACFP State 
agencies, sponsors and child care facilities.
    The overall importance of nutrition to health is being increasingly 
recognized with diet-related medical and lost productivity costs 
soaring over an estimated $71 billion annually. To reduce these costs, 
we are asking for $2 million to develop an integrated nutrition 
education campaign to aggressively promote both the Dietary Guidelines 
for Americans and the Food Guide Pyramid to targeted segments of the 
general population (including the Spanish language community). This 
increase also provides for development of consumer materials that will 
help income individuals apply the Dietary Guidelines and Food Guide 
Pyramid concepts within a limited budget.
    We also are asking for $5 million to support an intergovernmental 
partnership led by FNS to address the nutrition, health, and employment 
needs of impoverished citizens in border areas known as ``Colonias.'' 
These resources will allow FNS to expand efforts to a larger proportion 
of the 1,500 Colonias located near the Mexican border in Arizona, 
California, New Mexico and Texas.

                         STUDIES AND EVALUATION

    For fiscal year 2001, we are requesting funds for practical, 
focused analysis in support of the agency's nutrition assistance 
programs. In the Food Stamp account, our request is for $10.7 million; 
in the Child Nutrition account, our request is $3 million; and in the 
WIC account, we are requesting $3.5 million. The continued absence of 
study, demonstration and evaluation funds over the last three fiscal 
years has severely limited the depth of FNS support to Congressional 
staff, decreased our ability to respond to States, and restricted us 
from providing practical, research-based guidance to the managers of 
our programs. FNS has a critical need to target program specific 
studies and evaluations, rather than general research. FNS has designed 
its studies and evaluations to be useful in formulating its nutrition 
policy, measuring program impacts and integrity, and advising both 
Administration officials and the Congress of the potential costs and 
effects of legislative proposals under consideration.

                 GOVERNMENT PERFORMANCE AND RESULTS ACT

    The FNS Annual Performance Plan (APP) has been submitted as part of 
the fiscal year 2001 budget request. As previously indicated, the 
fiscal year 2001 APP has been structured to support the revised FNS 
Strategic Plan which has been extensively modified to better support 
the FNS mission. The goals outlined in the APP are directly related to 
the achievement of the agency's strategic goals and objectives.

                               CONCLUSION

    The mission of FNS is to increase food security and reduce hunger 
in partnership with cooperating organizations by providing children and 
low-income people access to food, a healthful diet, and nutrition 
education in a manner that supports American agriculture and inspires 
public confidence. This fiscal year 2001 budget request reflects our 
commitment to the achievement of this mission. We also believe that our 
request for $36.3 billion is crucial to continued efficient program 
operations. Mr. Chairman, this summarizes the FNS fiscal year 2001 
budget request. I will be happy to answer questions that you or other 
members of the Subcommittee may have.
                                 ______
                                 
                 FOOD, NUTRITION AND CONSUMER SERVICES

       PREPARED STATEMENT OF SHIRLEY R. WATKINS, UNDER SECRETARY

    Mr. Chairman and Members of the Subcommittee. Thank you for the 
opportunity to present the fiscal year 2001 budget request for the 
Food, Nutrition, and Consumer Services (FNCS). I am accompanied today 
by Samuel Chambers Jr., the Administrator for the Food and Nutrition 
Service (FNS), Dr. Rajen Anand, the Executive Director for the Center 
for Nutrition Policy and Promotion and Stephen Dewhurst, the 
Department's Budget Officer. As Under Secretary for FNCS, I am 
responsible for nutrition assistance programs administered by the Food 
and Nutrition Service, including the three core programs: Food Stamp; 
Child Nutrition; and the Special Supplemental Nutrition Program for 
Women, Infants and Children (WIC). I am also responsible for the Center 
for Nutrition Policy and Promotion which is the lead Federal agency in 
the research and promotion of human nutrition issues.
    The mission of FNS is to increase food security and reduce hunger 
in partnership with cooperating organizations by providing children and 
low-income people access to food, a healthful diet, and nutrition 
education in a manner that supports American agriculture and inspires 
public confidence. The importance of the nutrition assistance programs 
administered by FNS is clear. Despite the strongest economy in a 
generation, hunger in America remains a problem, and about one in five 
individuals participates in one or more of these programs. In 1998 over 
9 million people, more than one-third of them children, lived in 
households that experienced hunger.
    A nutritious diet and access to sufficient food are critical to 
lifelong health and well being, and a poor diet has been proven to be a 
significant factor in 4 out of the 10 leading causes of death in the 
United States. We know that obesity, in children and in adults, is a 
major factor in the incidence of such conditions as diabetes, 
hypertension and stroke, osteoporosis, heart disease, and some types of 
cancer. These diseases account for 1.4 million deaths annually, and 
they cost society an estimated $71 billion in medical costs, lost 
productivity and premature deaths. Diet plays a central role in the 
prevention of virtually all of these appalling statistics. Our programs 
can play an effective role in education and prevention.
    By fighting hunger and promoting good nutrition, these programs 
help to promote the well-being of millions of families and children in 
this country, and they play a crucial role in supporting those who are 
making the difficult move from welfare to work and self-sufficiency. 
Today we celebrate an extraordinarily strong economy and good times for 
the majority of our people. But even now, National economic success has 
not led to personal prosperity for everyone. Many continue to face 
difficulty and hardship, and our nutrition assistance programs exist to 
help. Even now--especially now--we must not lose sight of the ongoing 
contribution that Federal nutrition assistance programs make in 
ensuring that, in good times and bad, no one in this land of 
unparalleled agricultural abundance should have to go without adequate 
and nutritious food.

                           PROGRAM HIGHLIGHTS

    Before discussing some of the particulars of our budget request, I 
would like to share with you some of our efforts to maintain and 
improve the effectiveness of the Federal nutrition assistance programs.

The Food Stamp Program

    Food Stamp Program (FSP) participants represent a broad cross-
section of the Nation's needy families and children. The Food Stamp 
Program provides a critical nutrition safety net for low-income working 
families, children, the disabled, some of our legal aliens, and the 
elderly. We are working to ensure that the program reaches all those 
who need it and to serve them efficiently and with dignity.
    As a result of welfare reform legislation, some groups of 
individuals have become ineligible for our programs. Many immigrants 
and unemployed adults without dependents are no longer entitled to 
receive food stamps. The Agricultural, Research Extension and Education 
Reform Act of 1998 (the 1998 Act) restored food stamp benefits to some 
of our legal aliens, but we continue to be concerned for those who 
remain ineligible for benefits. In our fiscal year 2001 request, we are 
asking that eligibility be restored (1) to certain legal aliens who 
become elderly and (2) to certain legal aliens living with eligible 
children. Additionally, we are requesting simplification of certain 
food stamp rules which relate (1) to the ownership of vehicles and (2) 
to the definition of income. I will have more to say about these 
specific policy initiatives.
    The agency is leading the way in new benefit delivery technologies. 
At the end of fiscal year 1999, about two-thirds of all food stamp 
benefits were issued using Electronic Benefit Transfer (EBT). Thirty-
two States and the District of Columbia had fully implemented EBT for 
issuing food stamp benefits. FNS continues efforts to provide needed 
technical assistance associated with State EBT implementation and to 
provide ground breaking technology in the development of a multi-
program delivery system which includes both WIC and food stamp 
benefits.
    Participation in the Food Stamp Program averaged 18.2 million 
people in fiscal year 1999, and has since fallen even further, reaching 
a 20 year low. Part of this decline can be attributed to the strength 
of the economy and the success of welfare reform in moving many 
families from welfare to work. Part of the decline is also due to new 
restrictions on the participation of legal aliens and unemployed able-
bodied adults without dependents. However, between 1995 and 1997, food 
stamp participation fell five times faster than the poverty rate, a 
sign that the nutritional needs of some low-income people may be going 
unmet. The number of people in poverty fell by .8 million over this 
period while the number of food stamp participants fell by 3.8 million, 
suggesting that many poor families have left the program despite their 
continuing eligibility. Some families who leave welfare for work may 
not be aware that they are still eligible for food stamps and, in other 
instances, State or local agencies may have discouraged or even 
prevented those eligible for benefits from applying. In any case, 
families and children are suffering needlessly.
    In July, 1999, the President responded by taking action to help 
these needy families. The efforts included (1) issuing guidance to make 
it easier for families to own reliable vehicles without losing their 
benefits, (2) providing States with options to simplify income 
reporting rules and (3) announcing a public education campaign for the 
Food Stamp Program. The goals of the education campaign are to reach 
and inform potential applicants about the Program and its requirements 
and to help those who may be eligible. The campaign is targeting four 
groups: the general public, the elderly, working poor, and immigrants. 
Using models developed by FNS, a variety of materials have been 
produced in both English and Spanish, and have been distributed by 
State and local agencies, community organizations, and advocacy groups.
    FNS continues its efforts to support State welfare reform efforts 
while providing technical assistance as State policies evolve. In early 
fiscal year 1999, Food Stamp Program eligibility was restored to about 
225,000 legal aliens who were made ineligible by the welfare reform 
legislation of 1996. FNS developed guidance for States on 
implementation and bilingual materials for immigrants, and also worked 
with the Social Security Administration (SSA) on a notice to Social 
Security Income (SSI) recipients advising them that they may again be 
eligible for food stamp benefits.
    FNS continues to be a leader among Federal agencies in the 
implementation of the Treasury Offset Program (TOP) to collect 
delinquent food stamp recipient debt. Through TOP, Treasury is able to 
match Federal payments to a delinquent debtor database. Under certain 
circumstances, when a match occurs, the payment is intercepted to 
satisfy the debt, either in whole or part. Claims collections for 
overissued food stamps increased to $206 million in fiscal year 1999. 
In fiscal year 1999, over $88 million in food stamp recipient debt was 
collected through TOP. FNS is currently working with State agencies to 
improve the process of submitting debts to TOP by (1) allowing State 
agencies to move from an annual submission process to a quarterly 
process and (2) providing direct online access to TOP for States for 
more timely updates and submissions.
    In the Food Distribution Program on Indian Reservations (FDPIR) we 
have been working through a unique partnership between the Tribal 
Governments and USDA to make some important program changes. First, we 
have improved the FDPIR food package based on a comprehensive review 
conducted in fiscal year 1997. The nutritional content of the food 
package has been improved by decreasing the percent of calories from 
fat and making it conform more closely to the USDA's Food Guide 
Pyramid. Second, the successful and popular FDPIR Fresh Produce 
Initiative continues to expand to new sites across the country, 
providing enhanced nutritional benefits to nearly 78,000 people each 
month. This initiative is the result of a successful partnership with 
the Department of Defense, and has now expanded to 64 sites. Third, 
Indian Tribal Organizations (ITO's) that receive shipments through 
Federal warehouses are now enjoying significantly better service. By 
altering the basis on which orders are placed, the ITO's now only need 
place their requests two months in advance of delivery instead of the 
five months previously required.
    In early fiscal year 1999, FNS published a rule which reinstated 
the agency's authority to grant waiver requests from ITO's in Oklahoma 
to allow Indian households living in urban areas to participate in the 
Food Distribution Program for Indian Households in Oklahoma (FDPIHO). 
This rule provides households living in urban areas with the choice of 
receiving either food stamps or commodities each month. To date, two 
Indian tribes in Oklahoma (the Choctaw Nation and the Chickasaw Nation) 
have requested waivers to expand FDPIHO services to urban areas. Both 
waivers were approved.

Child Nutrition

    The Child Nutrition Programs, which include the National School 
Lunch and School Breakfast and After School Snack Programs, the Child 
and Adult Care Food Program, Summer Food Service Program and the 
Special Milk Program serve meals to millions of children in schools and 
other sites each day. For example, on an average school day during 
fiscal year 1999, more than 50 percent of all children enrolled in 
school ate a Federally supported school lunch. These programs are 
important because providing nutritious meals and nutrition education to 
these children helps them to be more productive and more likely to 
succeed in school and in life. Well-educated and healthy children 
mature into productive and healthy adults.
    We are currently working to evaluate the potential impact of 
changes in the School Breakfast Program on student behavior and 
performance in school. The William F. Goodling Child Nutrition 
Reauthorization Act of 1998 (the Goodling Act) authorized FNS to pilot 
test the serving of breakfast in elementary schools in six districts. 
This pilot will test the impact of providing free breakfasts to all 
elementary school children without consideration to family income. I am 
pleased to report the agency has done a considerable amount of work in 
preparation for the planned beginning of the pilot in school year 2000-
2001. Our fiscal year 2001 budget request includes $6 million for the 
second and final installment of funding necessary to complete the 
pilot. These funds will support the provision of meals and a rigorous 
evaluation of the impact of providing free breakfasts regardless of 
income on student nutrition and educational achievement.
    In the Child and Adult Care Food Program (CACFP) the Agency 
continues to aggressively expand program integrity activities. We are 
taking advantage of the Goodling Act which authorizes $1 million each 
year targeted toward improved management and oversight of the CACFP. 
The preponderance of these resources are being used to fund additional 
staff years and associated travel costs to provide additional 
management support to State agencies. Additionally, we have reconvened 
the CACFP Management Improvement Task Force and significantly expanded 
its efforts. To date, the Task Force has developed training modules 
based on the previously issued management improvement guidance. As a 
part of our comprehensive integrity improvement strategy, we expect to 
publish a proposed and final child care initiative rule during the 
current fiscal year (2000). In addition to ongoing program oversight 
activities in fiscal year 2000, the agency will conduct an enhanced 
management evaluation of CACFP administration in one State in each of 
our seven regions. Finally, we are submitting, as part of the fiscal 
year 2001 budget, a proposal which includes an array of management 
changes designed to further address the issues of integrity and 
oversight in the CACFP.
WIC
    The Special Supplemental Nutrition Program for Women, Infants, and 
Children (WIC) is widely regarded as one of the Nation's most 
successful, cost-effective public programs, and it continues to be one 
of our top priorities. This Administration has consistently 
demonstrated its commitment to ensuring that every eligible mother, 
infant and child is provided the opportunity to receive WIC benefits. 
In fiscal year 1999, average monthly participation was slightly above 
7.3 million persons. We are working hard to make the program an even 
greater success. I would like to mention some noteworthy examples:
  --In mid-December 1999 Vice President Gore's National Partnership for 
        Reinventing Government announced that the WIC Program scored 
        second highest among 30 high impact government programs in 
        customer satisfaction. Only the Head Start Program scored 
        higher. The rating was 83 out of a possible 100, and was about 
        10 points higher than the National average for the programs 
        evaluated. These high customer satisfaction ratings are a 
        testament to the close and productive partnership among USDA, 
        the National Association of WIC Directors (NAWD), and the staff 
        at the State and local levels who work with WIC participants 
        every day. Together we vow to continue to provide the best 
        quality service to WIC customers to help ensure the health of 
        America's children.
  --The agency has also continued its efforts to improve WIC program 
        integrity. We recently issued a regulation to strengthen the 
        determination of income eligibility during the certification 
        process. All WIC State agencies have implemented a standard set 
        of criteria to be used for nutritional risk determinations, and 
        work continues to improve the consistency of determinations 
        based on dietary risk. In the area of vendor management, we 
        issued a proposed rule in June 1999 that would implement the 
        provisions in the Goodling Act pertaining to vendor selection, 
        monitoring, and the detection of high-risk vendors. This rule 
        further proposed other comprehensive management provisions 
        designed to strengthen vendor integrity. We plan to issue this 
        final rule before the end of fiscal year 2000. In addition, in 
        March 1999 we published a final rule to curb vendor-related 
        fraud in the WIC Program by mandating uniform sanctions across 
        WIC State agencies for the most serious program violations. 
        These violations include trafficking, overcharging, and 
        exchanging food vouchers for alcohol or tobacco products. The 
        rule also requires the disqualification of any WIC vendor who 
        has been disqualified from the Food Stamp Program. This rule is 
        intended to promote WIC and Food Stamp Program coordination in 
        the disqualification of vendors and retailers who violate 
        program rules.
  --FNS is engaged in activities to advance EBT systems that would 
        improve benefit delivery and client services for the WIC 
        Program. The agency is working with individual State 
        initiatives to research, plan, fund, and implement WIC EBT 
        systems. Several States continue to pursue hybrid benefit 
        delivery systems at point-of-sale locations which would combine 
        on-line food stamp benefit redemption with off-line WIC benefit 
        authorization. FNS has earmarked $2.6 million in grants for WIC 
        EBT in fiscal year 2000. Our fiscal year 2001 request includes 
        $6 million dedicated to EBT development in States that have 
        already begun EBT planning, with an ultimate goal of 
        implementing EBT in additional States.
  --The Farmers' Market Nutrition Program (FMNP) now operates in 39 
        State agencies, providing fresh fruits and vegetables to WIC 
        participants. During 1999, the FMNP was expanded to add one new 
        State (Alabama), one new Territory (Guam) and two Indian Tribal 
        Organizations (Rosebud and Osage Tribal Councils). The 
        President's budget transfers the program from WIC to the 
        Commodity Assistance Program (CAP) and proposes to increase 
        funding to allow for growth in those States currently 
        participating as well as expansion into other States not 
        currently in the program.
  --FNS and the Center for Disease Control (CDC) continue to work with 
        non-federal partners to increase access to immunization 
        services through the WIC Program. Currently, about three 
        quarters of all local WIC agencies assess client status and 
        make appropriate referrals to immunization services for 
        children. The CDC reports that about 81 percent of pre-school 
        children are being assessed for immunization status and receive 
        the needed services thanks to the intervention of the WIC 
        Program.
  --Over the past 10 years, WIC per person food costs have either 
        declined or have reflected only a modest increase due to the 
        diligent cost containment efforts of State and FNS 
        partnerships. The most successful part of this strategy has 
        been competitively bid rebate contracts between State agencies 
        and infant formula manufacturers. These successes have been 
        instrumental in supporting more participation than would 
        otherwise have been possible.
  --The WIC Program promotes breastfeeding as the best form of 
        nutrition for infants through the provision of support and 
        encouragement to new mothers and through nutrition education 
        during pregnancy. In fiscal year 1998, State agencies spent 
        nearly $57 million on this effort. FNS continues to sponsor 
        semi-annual meetings of the Breastfeeding Promotion 
        Consortium--a group of health professionals representing 
        government, advocacy and public health interests. In 1997, FNS 
        implemented a National Breastfeeding Promotion Campaign, in 
        cooperation with State agencies. The goal of the Loving Support 
        Campaign is to raise awareness of the benefits of breastfeeding 
        among WIC-eligible women, fathers, and family health care 
        providers to help create a community environment that accepts 
        and supports a woman's decision to breastfeed. Currently, 54 
        WIC State agencies are participating in the campaign and a 
        recent evaluation indicates that the campaign is a tremendous 
        success. Along with the Department of Health and Human Services 
        (DHHS), USDA participated in the development of a Health Care 
        Physicians' and Providers' Breastfeeding Support Kit by Best 
        Start. The kits were developed for health care professionals to 
        complement the Loving Support Campaign materials which focus on 
        consumer education. Finally, the authorization in the Goodling 
        Act to allow program funds to be used for the purchase or 
        rental of breast pumps was a giant step forward.
    WIC is, without a doubt, one of the best nutrition assistance 
programs ever created. It provides mothers access to nutrition 
education, health care referrals, and supplemental foods rich in the 
necessary dietary elements they could not otherwise afford. WIC babies 
do get a healthier start in life, and we intend to continue our hard 
work so that all who need the program will be able to participate.

Commodity Supplemental Food Program

    In our Commodity Supplemental Food Program (CSFP), we have improved 
the flexibility of State and local agencies to serve needy populations. 
In short, agencies operating CSFP can now serve women, infants, 
children and the elderly as needed. We are seeing a distinct increase 
in elderly participation, and we want to make sure that the program is 
responsive to their needs.
    Program services have been improved through a redesign of inventory 
systems. Federal inventory is now replenished based on historical data, 
rather than on a requirement for organizations to place orders five 
months prior to delivery. This change significantly reduces the need 
for organizations to adjust orders and helps to ensure that they will 
have the foods they need on hand.

The Emergency Food Assistance Program

    During fiscal year 1999, the States once more had the prerogative 
of using administrative funds for the purchase of food. This was a 
significant improvement and allowed administrative funds to be more 
efficiently used to increase the total flow of food from all sources 
through The Emergency Food Assistance Program (TEFAP). As a result, we 
have been able to purchase a greater variety of healthful foods. In 
fiscal year 1999, bonus commodities donated to States were valued at a 
total of $108 million.

Food Program Administration

    FNCS has a fundamental responsibility to ensure both the program 
and financial integrity of each nutrition assistance program including 
the timely delivery of benefits to all qualified recipients. It is a 
responsibility that the Administrator and I take very seriously. The 
FNS Food Program Administration (FPA) account, which supports most of 
the Federal administrative activity for our nutrition assistance 
programs, is an important part of such assurance. The FNS staff 
continues to be committed to finding new and innovative approaches to 
improving program integrity and services. I will have more to say 
concerning those new initiatives in this account.
    In addition to its nutrition assistance programs, FNCS operates the 
Center for Nutrition Policy and Promotion. The Center is the focal 
point for the advancement and coordination of nutrition promotion and 
education policy. It provides important research and analysis and 
actively collaborates with public, private and non-profit organizations 
to expand the body of critical nutrition information and research.
Nutrition Education
    FNCS nutrition education programs offer one of the Nation's best 
opportunities to improve dietary practices in our target populations in 
ways that promote health and well-being. These programs offer an 
extraordinary opportunity to reach participants, particularly children 
who participate during their formative years, with nutrition and 
healthy lifestyle messages. Research confirms that well-designed, 
behavior-focused interventions can effectively improve diets and 
nutrition-related behaviors. FNCS is working toward a comprehensive 
nutrition education approach that is fully integrated into all FNCS 
programs, and provides consistent, reinforcing nutrition messages 
across programs. Members of the target groups are encouraged to make 
healthy food and nutrition-related choices throughout their life cycle. 
The FNCS nutrition education objective is to reach all those we serve 
with state-of-the-art nutrition education that can effectively change 
behavior and promote long-term health. Last year, in response to a 
request included in the conference report accompanying the Fiscal Year 
2000 Agriculture, Rural Development, Food and Drug Administration, and 
Related Agencies Appropriations Act, FNS prepared and submitted a 
report to Congress, ``Promoting Healthy Eating: An Investment in the 
Future.'' That report presents a range of recommendations in support of 
a comprehensive, integrated nutrition education approach that reaches 
across programs. I commend the report to your attention, and I look 
forward to working with Congress to implement its recommendations.

                        FISCAL YEAR 2001 REQUEST

    FNS has recently revised its Strategic Plan to better reflect the 
agency's unified mission and purposes. The new Strategic Plan (and the 
associated fiscal year 2001 Annual Performance Plan) charts a clear 
course toward the nutrition security outcomes that each of our vital 
programs are intended to achieve and fully meets our stewardship 
responsibilities which are so critical to maintaining public 
confidence. Our request of $36.3 billion in new budget authority for 
fiscal year 2001 fully supports the goals and objectives set forth in 
the Strategic Plan and will maintain and augment the long-standing 
contribution of the Nation's nutrition assistance programs. I will 
focus the remainder of my remarks on key aspects of the budget request, 
including a number of policy changes we have proposed. The testimony of 
the Administrator, Samuel Chambers, is being submitted for the record 
and presents many of the technical aspects of our request.

                           FOOD STAMP PROGRAM

    We are requesting $22.2 billion for the Food Stamp Program, a 
slight increase from fiscal year 2000, resulting principally from an 
increase in projected participation and food costs. The request would 
also fund a number of important policy changes that the Administration 
is proposing. Two of our policy initiatives deal with the issue of 
eligibility for certain legal aliens. As I have indicated on previous 
occasions, the Administration believes that some provisions of welfare 
reform went too far, making some changes that had nothing to do with 
the stated goal of moving people from welfare to work. The 1998 Act 
restored food stamp eligibility to several of the most vulnerable 
groups of legal aliens, including those who were age 65 or older and 
legally residing in the U.S. when welfare reform legislation passed in 
1996. It is now time to take the next steps. We propose to restore food 
stamp eligibility to aliens who legally resided in the U.S. on August 
22, 1996, and who subsequently reach age 65, correcting the inequity of 
treating some elderly legal aliens differently from others solely on 
the basis of a birth date.
    Another proposal included in our request for fiscal year 2001 will 
restore food stamp eligibility to aliens adults who legally resided in 
the U.S. on August 22, 1996, and who live with eligible children--
effective April 1, 2001. Families with children of immigrant parents, 
even the children born into citizenship in this country, receive fewer 
benefits than families with children of native born parents facing the 
same circumstances. This proposal will eliminate this inequity and 
improve the well-being of children by increasing food stamp benefits to 
their low-income households.
    We are also pursuing changes to better serve the working poor. As 
more families move from welfare into the job market, there is a growing 
recognition of the importance of owning a reliable vehicle to find and 
keep a job. Under today's Food Stamp Program rules, people leaving 
welfare to go to work may not qualify for food stamps because of the 
value of their vehicle(s). These rules are complicated and may be 
inconsistent with the regulations States use in the Temporary 
Assistance to Needy Families (TANF) Program. The stringent limit 
currently in place is a barrier to participation by low-income people, 
many of whom are faced too often with the choice between buying food 
and reliable transportation. To mitigate this situation, we have 
included in our request a legislative proposal to allow States the 
option of making Food Stamp Program vehicle rules conform to TANF 
Program rules, simplifying administration and improving access for the 
working poor.
    Finally, we have included a legislative proposal to allow States to 
conform the mandatory income exclusions in the Food Stamp Program to 
those used in the Medicaid Program. Current food stamp law excludes 
certain categories of income from benefit calculations, exclusions 
which are somewhat different from Medicaid. These differences introduce 
unnecessary complexity in State administration. This proposal, which 
allows for the alignment of Food Stamp and Medicaid income definitions, 
will help eliminate this complexity.
    This estimate includes a benefit reserve of $1 billion--a $900 
million increase from fiscal year 1999. The Food Stamp Program is the 
primary source of nutrition assistance for low-income families with a 
mission to ensure that all households have access to healthful diets 
and receive sound nutrition education and guidance. As part of the Food 
Stamp Program operations, States conduct an Employment and Training 
(E&T) Program to assist program participants in gaining the skills, 
instruction or experience that will increase their ability to move from 
welfare to regular employment. In fiscal year 2001, we are requesting 
$381 million to support the E&T Program. In addition, during fiscal 
year 2000, States will be allowed to use any carryover fiscal year 1999 
E&T funds.
    Also included in our request for the Food Stamp Program is $10 
million to support a nutrition education initiative and a campaign 
designed to reach potentially eligible families and individuals with 
information about (1) the nutritional benefits of the Food Stamp 
Program and (2) application procedures. The effort will target the 
following groups: the general public; the elderly; working poor; the 
disabled; and households containing legal aliens. Educational materials 
will be produced in both English and Spanish.

                        CHILD NUTRITION PROGRAMS

    In the Child Nutrition Programs, we are requesting funding of $9.5 
billion--a very slight decrease from fiscal year 2000. The decrease is 
the result of a $416 million projected carryover from fiscal year 2000, 
reducing the need for new budget authority. We do project modest 
increases in participation in both the National School Lunch and School 
Breakfast Programs. These increases are attributable to higher school 
enrollments and the resulting rise in the numbers of children 
participating in the programs.
    We have included a modest request of $2 million for Nutrition 
Education and Training (NET) Program activities for which I strongly 
urge your support. NET provides training for school food service 
personnel in food service management and for teachers in providing 
nutrition education and information for children. It is a critical tool 
for building capacity at the State level to support and deliver 
nutrition education to our young people--education that helps them 
develop healthy eating habits that can last a lifetime. We are also 
requesting $6 million for meals and to fund a rigorous evaluation of 
the School Breakfast Program Pilot which was authorized by the Goodling 
Act. The evaluation will be designed to ensure that the results of the 
pilots are measured and analyzed so they will be reliably valid and 
useful in making future policy decisions. Finally, our request for 
resources to support the crucial Team Nutrition Program remains at the 
fiscal year 2000 level of $10 million.
    I have been most concerned about the cases of mismanagement and 
fraud that both FNS and Federal auditors have identified in the Child 
and Adult Care Food Program (CACFP). In an effort to improve CACFP 
program management, we are proposing legislation that would net the 
agency savings of about $800 thousand in fiscal year 2001 and $115.2 
million over a five year period. This legislative proposal includes an 
array of management changes designed to improve integrity and oversight 
in CACFP. The proposal will include measures to strengthen oversight by 
sponsors, including prohibiting participation by sponsors that have a 
track record of mismanagement in other government programs and limiting 
the funds that may be retained by sponsors of child care centers for 
administration. The proposal also includes measures to strengthen State 
oversight, such as allowing States to retain a portion of program funds 
recovered through audits and reviews. In addition, the proposal would 
enhance Federal oversight and fund an evaluation of the program's 
administrative reimbursement structure. This proposal effectively 
addresses a number of issues raised in Federal audits which can only be 
addressed through legislation. These resources would complement and 
reinforce the additional funds for Child Nutrition integrity 
enforcement which we are requesting in the Food Program Administration 
(FPA) account.

SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS AND CHILDREN 
                                 (WIC)

    For the WIC Program, our request is $4.1 billion--a $116 million 
increase from the level enacted for fiscal year 2000. This level of 
funding will support an average monthly participation of nearly 7.5 
million at-risk women, infants and children who receive the nutrition 
education and food benefits of this crucial assistance program. This 
requested amount is sufficient to ensure that all who are eligible will 
be able to participate.

                     COMMODITY ASSISTANCE PROGRAMS

    In our Commodity Assistance Programs (CAP), we request a funding 
level of $158.3 million--a net increase of only $5 million from the 
fiscal year 2000 level. The Farmers Market Nutrition Program (FMNP) is 
included at $20 million--an increase of $5 million over the fiscal year 
2000 level which is funded in the WIC appropriation. The $20 million 
request will sustain or expand the current program level in the 39 
State agencies now participating and allow for new States that have 
expressed an interest in joining the program. To give you a sense of 
the magnitude of the program, in fiscal year 1998, coupons were given 
to 1.3 million WIC participants. The participants redeemed their 
coupons at 1,529 authorized farmers' markets providing revenue for 
almost 9,600 small family farmers--contributing to the commitment to 
support American agriculture which is reflected in the FNS mission 
statement.
    As you know, the CAP also supports the Commodity Supplemental Food 
Program for women, infants and children as well as the elderly. Our 
request of $93.3 million, in conjunction with the use of about $7 
million from inventory, will serve a combined caseload estimated at 
about 423,000--an increase of almost 9,000 from fiscal year 2000. The 
nominal $100 million which we will spend in fiscal year 2001 will 
include participants from five new States which are being brought into 
the program in fiscal year 2000. Those new States are Ohio, 
Mississippi, Texas, Montana and Vermont. Our request for The Emergency 
Food Assistance Program (TEFAP) administrative expenses is $45 
million--the same level as for fiscal year 2000.

                        FOOD DONATIONS PROGRAMS

    We are requesting $150 million for the Nutrition Program The $10 
million increase will provide for an approximate 7.7 percent increase 
in the number of meals served. Our two smaller programs remain at the 
same level as fiscal year 2000.

                      FOOD PROGRAM ADMINISTRATION

    In the Food Program Administration account, our request is $128.6 
million--about $14 million above the fiscal year 2000 level. Included 
in our request level are several noteworthy initiatives. First, we are 
requesting $5 million to support a new intergovernmental partnership to 
be led by FNS. The objective is to address the nutrition, health, 
housing and employment of the very impoverished Southwest border areas 
known as Colonias. FNS would help these communities maximize the 
current assistance programs offered by Federal, State, local and non-
profit partners. FNS began work in fiscal year 1999 in 10 Colonias in 
Texas, providing partnership support and program benefits to 
participants. The fiscal year 2001 level of $5 million will allow FNS 
to expand its efforts to a larger proportion of the 1,500 Colonias near 
the Mexican border in Arizona, California, New Mexico and Texas.
    Second, we are requesting $2 million for use in developing an 
integrated nutrition education program which will aggressively promote 
the 5th edition of the Dietary Guidelines for Americans and the Food 
Guide Pyramid, including the recently-released Food Guide Pyramid for 
Young Children. Nutrition promotion efforts will be targeted to 
individuals with particular needs, such as low-income children and 
women, and pregnant and post-partum women, particularly teenagers. The 
increase for CNPP also provides for development of consumer materials 
that will help low-income individuals apply Guidelines and Pyramid 
concepts within a limited budget. With diet-related medical and lost 
productivity cost in the U.S. now reaching an estimated $71 billion 
annually, we must move decisively to promote both the Guidelines and 
the Pyramid if we are to effectively help Americans improve and 
maintain their health. This is a very modest investment which can 
result in a large payback in terms of a healthier America.
    Third, we are requesting a total of $8 million to supplement other 
ongoing program integrity activities within FNS. The $8 million will be 
distributed to the Food Stamp and Child Nutrition Program integrity 
activities. Efforts in the Food Stamp Program would be directed at: (1) 
improving the accuracy of the quality control systems, (2) working with 
States to reduce payment error rates and avoid error rate increases, 
while ensuring access to Food Stamps for all eligible households; and 
(3) efforts to ensure that States are effectively implementing 
procedures set forth in regulations which are designed to guarantee 
that eligible households moving from welfare-to-work continue to 
receive nutrition assistance. Efforts in the Child Nutrition Programs 
would be used, in part, to study sources of errors in school meals 
applications and evaluate pilots of alternative methods for determining 
and verifying eligibility for free and reduced price benefits in the 
National School Lunch Program. Also, some of the resources would be 
devoted to enhanced Federal monitoring of the CACFP State agencies, 
sponsors and child care facilities.
    Federal administrative resources to support our nutrition 
assistance programs have declined very significantly over the years to 
the point where they represent less than one-half percent of the total 
FNS funding. For example, resources available to oversee States and 
implement improvements such as WIC EBT are extremely limited. 
Therefore, it is most important to us that our FPA request be fully 
funded.

                        STUDIES AND EVALUATIONS

    The Administration is once again requesting that funding for 
studies and evaluations be provided to FNS. Our request is for $10.7 
million in the Food Stamp account, $3 million in the Child Nutrition 
account and $3.5 million in the WIC account. The continued absence of 
study, demonstration and evaluation funding over the last three fiscal 
years has severely limited the depth of FNS support to Congressional 
staff, decreased our ability to respond to requests from the States, 
and restricted us from providing practical research-based guidance to 
the managers of our programs. FNS has a strong record of studies and 
evaluations used to formulate its nutrition policy, measure program 
impact and integrity and advise both Administration officials and the 
Congress of the potential costs and effects of legislative proposals 
under consideration. The proximity of research staff to FNS' program 
and policy staff is critical to ensure a research agenda that is 
practical and relevant to program operations and policy development. 
With enhanced research funding FNS can more effectively address problem 
areas on a short term basis. It is appropriate that study funds be 
located in FNS because of the strong need to target those funds for 
action-oriented and program-specific studies and evaluations, rather 
than for general research purposes.

                               CONCLUSION

    As I conclude today, I wish to personally thank you for your 
support and for the support of the Subcommittee in helping to make our 
programs the enormous success stories that they have become. Thanks to 
you, they continue to make a significant and positive impact on 
millions of families and children across this country. This concludes 
my statement. I will be happy to answer any questions you may have.
                                 ______
                                 
        Grain Inspection, Packers and Stockyards Administration
          Perepared Statement of James R. Baker, Administrator
    Mr. Chairman and members of the Committee, I am pleased to submit 
the fiscal year 2001 budget proposal for the Grain Inspection, Packers 
and Stockyards Administration (GIPSA).
    GIPSA is part of USDA's Marketing and Regulatory Programs, which 
works to ensure a productive and competitive global marketplace for 
U.S. agricultural products. GIPSA's mission is to facilitate the 
marketing of livestock, poultry, meat, cereals, oilseeds, and related 
agricultural products, and to promote fair and competitive trading 
practices for the overall benefit of consumers and American 
agriculture.
    GIPSA has both regulatory and service roles. GIPSA's Packers and 
Stockyards Programs (P&S) ensure fair business practices for livestock, 
meat, and poultry while providing financial protection to livestock 
producers. The Agency's Federal Grain Inspection Service (FGIS) 
provides the U.S. grain market with Federal quality standards and a 
uniform system for applying them. It also provides impartial, accurate 
measurements of grain quality to create an environment that promotes 
fairness and efficiency in the U.S. grain marketing system. GIPSA, an 
unbiased, third-party entity in the marketplace, helps ensure fair and 
competitive marketing systems for all involved in the merchandising of 
livestock, meat, and poultry, and grain and related products.

                              ORGANIZATION

    During fiscal year 1999, GIPSA completed its consolidation of 
headquarters activities and established three field offices for the 
Packers and Stockyards (P&S) Programs to replace the previous 11 
offices. Each office is responsible for the major issues in a 
particular commodity--beef, pork, or poultry--and has investigative 
units to focus on the core activities of competition, trade practices, 
and financial responsibility. Funding to complete the reorganization 
was provided for in fiscal year 1999, which allowed GIPSA to step up 
staffing efforts in the regional offices and to fill resident agent 
positions that provide routine services to areas not proximate to the 
three main offices. The reorganization has significantly improved P&S 
Programs' ability to focus program resources on providing financial 
protection and promoting fair business practices and a competitive 
marketing environment for livestock, meat, and poultry. The new 
structure and the addition of economic, statistical and legal expertise 
to the investigation staff of the field offices significantly 
strengthens GIPSA's ability to investigate anticompetitive practices, 
and provides greater flexibility and efficiency in enforcing the trade 
practices and payment protection provisions of the P&S Act. This, in 
turn, enables GIPSA to rapidly respond to high priority investigations 
that require fast action.
    Federal grain personnel work with over 2,000 State and private 
inspectors to provide high-quality inspection and weighing services on 
a user-fee basis. Federal inspectors service 37 export elevators 
located in Georgia, Illinois, Indiana, Louisiana, Maryland, New York, 
Ohio, Oregon, and Texas. Under a cooperative agreement with GIPSA, the 
Canadian Grain Commission provides official services, with GIPSA 
oversight, at 6 locations in Canada for U.S. grain transshipped through 
Canadian ports. Eight delegated States provide service at an additional 
19 export elevators located in Alabama, California, Minnesota, 
Mississippi, South Carolina, Virginia, Washington, and Wisconsin. 
Fifty-nine (59) designated agencies service the domestic market under 
GIPSA supervision. In 1999, this unique mix of Federal, State, and 
private inspection agencies provided nearly 2 million inspections on 
over 228 million metric tons of grains and oilseeds; weighed over 106.5 
million metric tons of grain; and issued over 90,000 official weight 
certificates.

             GIPSA'S PACKERS AND STOCKYARDS PROGRAMS (P&S)

    GIPSA's P&S Programs provides financial protection and promotes 
fair business practices and a competitive marketing environment for 
livestock, meat, and poultry. Our programs foster fair competition, and 
guard against deceptive and fraudulent practices affecting the movement 
and price of meat animals and their products. The production and 
marketing of livestock, meat, and poultry are important to American 
agriculture and significantly impact the Nation's economy. The Commerce 
Department estimates the annual wholesale value of livestock, meat, and 
poultry products produced in fiscal year 1999 by firms subject to the 
P&S Act to be $109 billion. At the close of fiscal year 1999, there 
were 1,287 stockyards; 6,434 market agencies/dealers; 2,000 packer 
buyers registered with GIPSA to engage in the livestock marketing 
business. In addition, there are 377 slaughtering packers who purchased 
over $500,000 of livestock annually that are required to be bonded, 205 
poultry firms, and a significant number of meat distributors, brokers, 
and dealers subject to the P&S Act.
    P&S Programs conducted over 1,200 investigations during the 1999 
fiscal year. Most violations were corrected on a voluntary basis with 
several resulting in livestock and poultry producers receiving 
additional funds for the sale of their product. During fiscal year 
1999, 12 administrative or justice complaints were issued to bring 
subject firms into compliance with the provisions of the P&S Act. In 
addition, 18 decisions and orders were issued by USDA against 22 
individuals or firms for violating the P&S Act.
    GIPSA closely monitors anticompetitive practices which may impede 
the free trade of livestock, meat, and poultry. A high priority is 
placed on investigating all complaints and further developing 
information received concerning the failure of firms and individuals in 
the livestock, meat, and poultry industries to operate in a fair and 
competitive manner. Appropriate corrective action is initiated when 
evidence of anticompetitive practices is discovered.
    USDA has committed to conducting peer reviews of major 
investigations to ensure that the investigators asked the right 
questions, collected the right data, and conducted appropriate 
analyses. Peer reviews by objective, qualified reviewers may contribute 
to GIPSA's plans to strengthen enforcement of anticompetitive behavior 
in the livestock, meat, and poultry industries. GIPSA initiated the 
peer review process for the current Texas fed-cattle investigation. A 
panel of seven outside peer reviewers was assembled in January 1999; 
the group reported their findings to GIPSA in May 1999. Their comments 
were used by the analysts who conducted econometric analyses as part of 
the Texas investigation as they prepared their final report.
    GIPSA has received information that some livestock transactions are 
conditioned on an agreement that the transaction price not be reported 
to public or private reporting services. GIPSA is concerned that the 
non-reporting of price as a condition of the purchase or sale of 
livestock may result in inaccurate and incomplete price information, 
thereby adversely affecting the price discovery process. On September 
10, 1998, GIPSA published in the Federal Register an Advance Notice of 
Proposed Rulemaking (ANPRM) concerning the practice of non-reporting of 
price as a condition of purchase or sale of livestock. The comment 
period for the ANPRM closed on December 9, 1998. Eighteen comments were 
received and have been analyzed by GIPSA.
    USDA's fiscal year 2000 appropriation mandates, subject to funding, 
creation of a swine marketing-agreement library and monthly reporting 
of types of contracts in use, provisions providing for expansion in the 
number of swine to be delivered in 6 months and 12 months, estimated 
number of swine committed for delivery to packers in 6 months and 12 
months, and the estimated maximum number of swine that could be 
delivered to packers in 6 months and 12 months. GIPSA is preparing a 
regulation to implement the provisions.
    As part of its responsibility to strengthen investigations and 
assess competitive implications of structural changes in the livestock, 
meatpacking, and poultry industries, GIPSA entered into five 
cooperative research agreements. Two of the projects will examine 
competitive conditions in beef markets. Two projects will examine 
competitiveness issues and compensation methods used in broiler 
production. The final project will examine bidding behavior in a 
laboratory auction setting in order to gain insights into expected 
behavior in actual markets. GIPSA obtains special procurement 
information for the Nation's top 15 steer and heifer slaughter firms 
annually. This information is related to livestock purchased through 
contracts, packer feeding arrangements, or marketing agreement/formula-
priced transactions. Much more work must be done to determine the 
effects of these captive supplies in both the beef and pork industries. 
Additional resources are critical to provide for data collection, and 
economic and statistical analyses in this very important and sensitive 
area.
    GIPSA's P&S Programs continues to provide payment protection to 
livestock and poultry producers. Financial investigations, during 
fiscal year 1999, resulted in $2.7 million being restored to custodial 
accounts established and maintained for the benefit of livestock 
sellers. Since the 1976 amendments to the P&S Act, livestock sellers 
have been paid $53.8 million under the statutory trust provisions. In 
1999, no poultry trust complaints were received by GIPSA. During Fiscal 
year 1999, 169 insolvent dealers and market agencies corrected or 
reduced their insolvencies by $4.5 million. Insolvent packers corrected 
or reduced their insolvencies by $4.6 million.
    GIPSA continues to receive complaints from contract growers that 
integrators use their dominant positions to impose unfair or unjustly 
discriminatory terms or conditions on contract growers. GIPSA published 
an Advance Notice of Proposed Rulemaking in the Federal Register to 
solicit input on the need for regulations to protect growers. 
Subsequently, GIPSA proposed amending regulations pertaining to scales 
and weighing in regard to feed weights. These amendments to the 
regulations are in the clearance process. Specifically, GIPSA is 
proposing to include requirements regarding the weighing of feed 
whenever the weight of feed is a factor in determining payment or 
settlement to a livestock grower or poultry grower when that livestock 
or poultry is produced under a contract growing arrangement.
    Concentration in the poultry processing industry and its effects on 
contract growers is an area that needs attention to determine whether 
the processors are using their dominant positions to impose unfair or 
unjustly discriminatory terms or conditions on contract growers. Grower 
complaints continue to highlight the need to address concerns about 
their relative bargaining position. If GIPSA is to effectively address 
this issue, it must obtain the resources needed to fully staff both the 
Trade Practices and Competition Units in its Atlanta office, which are 
responsible for major issues in the poultry industry across the Nation.

                GIPSA'S FEDERAL GRAIN INSPECTION SERVICE

    GIPSA's grain inspection program plays a critically important role 
in facilitating the marketing of U.S. grain and related commodities for 
the benefit of American agriculture. We provide the U.S. grain market 
with Federal quality standards and a uniform system to apply these 
standards. Through this program, GIPSA provides descriptions (grades) 
and testing methodologies for measuring the quality and quantity of 
grain, rice, edible beans, and related commodities, and, provides an 
array of inspection and weighing services, on a fee basis, through a 
unique partnership of Federal, State, and private laboratories.
    By serving as an impartial third party, GIPSA ensures that the 
standards are applied and the weights recorded in a fair and accurate 
manner. Our presence in the market advances the orderly and efficient 
marketing and effective distribution of U.S. grain and other assigned 
commodities from the Nation's farms to domestic and international 
buyers.
    Our guidance in carrying out these important tasks is provided by 
the U.S. Grain Standards Act (USGSA) and the Agricultural Marketing Act 
of 1946 (AMA) as it relates to the inspection of rice, pulses, lentils, 
and processed grain products. Through voluntary and mandatory programs, 
GIPSA promotes the efficient and effective marketing of U.S. grain and 
other commodities from farmers to end users.
    For an average cost of 22 cents (adjusted for inflation to 1992 
dollars) per metric ton of grain in fiscal year 1999, exporters 
received USDA export certificates from GIPSA on which they relied to 
facilitate the marketing of over $20 billion worth of cereals and 
oilseeds. Likewise, here at home, buyers and handlers requested over 
1.9 million domestic inspections that facilitated the trading of 127 
million metric tons of cereals and oilseeds destined for domestic use.
    While current services are effective and efficient, GIPSA 
recognizes that to remain relevant in today's marketplace, continuous 
efficiency enhancements and service improvement are essential. To that 
end, GIPSA is focusing on improving our efficiency and service delivery 
through the introduction of new technology; preparing to enter the 
world of e-commerce; and responding to new market needs being driven by 
technology and global market demands. The grain program has made a 
number of enhancements to its operations and structure to improve the 
efficiency and productivity, not only of the inspection and weighing 
process and GIPSA's service delivery, but, more importantly, to the 
actual handling and marketing of grain.
    Structurally, GIPSA has, over the years, continuously realigned to 
optimize its staffing levels and organization. Since 1994, the grain 
program reduced staffing levels by 8 percent and streamlined its field 
structure from 31 to 21 offices, thereby allowing for more flexible 
staff utilization and more consistent policy implementation. Our 
Commodity Testing Laboratory, formerly in Beltsville, Maryland, was 
merged into our Technical Center in Kansas City, MO. The Technical 
Center is now a model of how streamlining and cross-functional teams 
can result in cost efficiencies and a sharpened customer service focus.
    We also are reengineering to provide more efficient and effective 
programs and services. We reengineered our quality assurance program, 
already known worldwide for ensuring consistent and accurate inspection 
and weighing results. By automating to a PC-driven system and 
decentralizing the process to the local level, our reengineered quality 
assurance program provides for proactive problem solving and immediate 
quality control feedback. Automation is also the key to improving our 
inspection services. To integrate our export inspection process with 
the export industry's technological advances, GIPSA is automating the 
export inspection statistical shiploading plan, also known as Cu-Sum 
Plan. Automating Cu-Sum allows for direct data sharing with our export 
grain customers, thereby eliminating manual data entry and reducing 
administrative costs both for GIPSA and our customers. We are working 
closely with export elevators to automate their scales and material 
systems to official requirements. This automation reduces official 
oversight personnel, which produces a considerable cost savings for our 
customers, and provides for superior supervision and greatly improved 
efficiency for GIPSA. To date, five export elevators are operating 
approved systems; 6 more are in the process of automating. To improve 
the efficiency and productivity of U.S. grain handling, GIPSA 
established a public/private partnership to automate inspection 
processes. This effort reduced the agency's operating costs and 
improved the speed, productivity, and efficiency of export operations--
essential factors in today's competitive global market. A prototype 
system currently is being installed at an export elevator in Destrehan, 
Louisiana. These are only some of the ways that GIPSA is seeking to 
enhance the efficiency of our operations. Future technological advances 
and customer needs will drive even further improvements.
    Our efforts are paying off for our customers, both in terms of 
their bottom lines and in greater customer satisfaction. GIPSA's 
service delivery costs decreased from $0.27 per metric ton in fiscal 
year 1994 to $0.22 per metric ton in fiscal year 1999, saving American 
agriculture over $5 million in fiscal year 1999 alone.
    These savings in inspection service costs pale in comparison to the 
savings achieved by the industry thorough improved productivity. GIPSA 
is proud to be a partner with the industry in realizing that 
productivity enhancement. Last year, at a single facility in Iowa, 
GIPSA fostered a unique and unprecedented cooperative partnership to 
provide service and made rules more flexible in order to implement a 
new, on-site rapid inspection program that saved one the customer more 
than $250,000 per year.
    Applying technology to our inspection and weighing services is only 
one part of our continuous improvement process. We also are 
implementing new services to keep pace with an increasingly 
sophisticated market that requires end-use quality information. In 
fiscal year 1999, GIPSA approved two new deoxynivalenol (DON) test kits 
for use in the official grain inspection and weighing system. These 
test kits expand the availability and choice of test kits for the 
official system. In fiscal year 1999, GIPSA also approved a new 
instrument for use in conjunction with an approved mycotoxin test kit--
this flourometer provides the official system alternative equipment at 
approximately half the cost of the original equipment.
    In fiscal year 1999, GIPSA also developed a reference method for 
fumonisins in grain. This method reduces direct costs and improves 
efficiency through use of robotics technology. In the spring of 2000, 
the Food and Drug Administration is expected to establish advisory 
levels which will specifically address fumonsins levels in grains 
destined for human, cattle, swine or poultry consumption. The reference 
method will be used to evaluate the performance of rapid fumonisin 
tests submitted to GIPSA to for approval and use in the official 
system. GIPSA plans to evaluate and approve fumonisin rapid tests for 
the official inspection system prior to the fall corn harvest.
    Our efforts to harness technology, improve service delivery, and 
meet new market needs are diverging most clearly in our work to address 
American agriculture's needs in the area of biotechnology.
    Biotechnology has accelerated the rate of change in agriculture 
with new varieties meeting both the agronomic needs of the farmer and 
the specific quality attributes of the end user. It also has created 
new market challenges as a result of increased consumer demand for non-
biotech foods.
    The entire infrastructure of agriculture including production, 
transportation, storage, handling, processing, distribution, and 
marketing is being influenced.
    When markets around the world reject or limit imports of biotech 
crops, it has enormous implications for all of America's farmers. In 
1999, one third of the U.S. corn crop and over half of the soybean crop 
were biotech varieties. U.S. corn growers lost approximately $400 
million in potential export sales since 1998, and face similar losses 
this year.
    As local markets around the world began to demand a distinction 
between conventional and biotech crops, GIPSA provided a letterhead 
statement indicating that for certain crops, the United States was not 
producing any biotech varieties. Specific statements to facilitate 
trade involved dry edible beans, sorghum, wheat, and barley.
    GIPSA also initiated action to establish a biotech reference 
facility. Our laboratory will meet the market's need for reliable and 
accurate analytical techniques that differentiate non-biotech from 
biotech grains and oilseeds by evaluating and verifying the validity of 
analytical procedures used to detect and quantify genetically enhanced 
traits in grains and oilseeds. It also will be used to establish 
sampling procedures for use in testing genetically enhanced grains and 
oilseeds. These standardized sampling and testing methods will be 
implemented through GIPSA's inspection program. The laboratory will 
meet a market need to ensure reliability of biotech crop detection 
methods and to facilitate information exchange, which, in turn, will 
decrease transaction costs and increase overall market efficiency. 
GIPSA's fiscal year 2001 budget request includes funding that will 
enable GIPSA to complete establishment of the laboratory.
    GIPSA has developed and will continue to develop the standardized 
testing methods needed by the market to measure the true value of the 
new enhanced quality attributes being introduced through biotechnology. 
This is a formidable challenge as more and more traits are introduced. 
New soybean traits alone include high content levels of oleic and 
stearate fatty acids, low linolenic acid content, and high sucrose 
content.
    GIPSA has traditionally taken this role in the marketplace. We 
facilitate the marketing of grain by providing accurate and cost-
effective measures of grain quality. We have been viewed as an 
independent, third party in providing grades and standards, 
establishing procedures, and in the actual provision of inspection and 
weighing services.
    We are an integral part of America's grain handling 
infrastructure--a superior infrastructure of storage facilities, rail 
lines, and waterways that makes American agriculture preeminently 
successful in the global marketplace. We recognize our role and will 
continue to provide all members of the U.S. grain handling system with 
the innovative, high-quality official inspection services they need to 
efficiently and effectively meet the challenges of a changing marketing 
environment.
    Our commitment to reaching our customers does not end at our 
borders. Exporters, importers, and end users of U.S. grains and 
oilseeds, as well as other USDA agencies, USDA cooperator 
organizations, and other governments, frequently ask for GIPSA 
personnel to travel overseas. These activities include representing the 
Agency at grain marketing and grain grading seminars, meeting with 
foreign governments and grain industry representatives to resolve grain 
quality and weight discrepancies, helping other countries develop 
domestic grain and commodity standards and marketing infrastructures, 
assisting importers with quality specifications, and training local 
inspectors in U.S. inspection methods and procedures. In fiscal year 
1999, GIPSA saw a dramatic increase in the number of requests for 
technical assistance overseas. During the fiscal year, GIPSA helped 
other USDA agencies and USDA cooperators conduct destination sampling, 
provide technical assistance, give grain inspection seminars overseas, 
lead a U.S. delegation to review several receiver's grain scale 
operations, and investigate quality discrepancies, on a cost recovery 
basis.
    At home, GIPSA regularly holds seminars and meetings to educate our 
worldwide customers about the quality and value of U.S. grain exports. 
In fiscal year 1999, GIPSA representatives met in the United States 
with 89 teams from 50 countries to provide information, technical 
guidance, and educational seminars. These international outreach 
efforts help promote greater harmony between U.S. and international 
standards, and foster a better understanding of the U.S. grain 
marketing system, the official U.S. grain standards, the national 
inspection system. This, in turn, reduces the risk of new barriers in 
today's open and freer global marketplace, enhances purchasers' 
confidence in U.S. grain, and facilitates the export of U.S. 
agricultural products.
    The grain program will continue to work to ensure our relevance and 
value to American agriculture. We are reaffirming our commitment to 
facilitating the marketing of U.S. grain by responding to our 
customers' needs and providing the highest quality grain inspection and 
weighing services to all whom we serve--from farmer to domestic and 
international end users, and all those in between.
    Our efforts in fiscal year 2001 will focus on working with our 
customers to identify how we can apply automation to reengineer our 
administrative and inspection processes to achieve greater efficiency 
and productivity, and on helping American agriculture maximize the 
opportunities presented by biotechnology by providing the information 
the market needs to effectively and equitably market value-added 
products. In fiscal year 2001, our commitment to improved efficiency 
and effectiveness will continue to serve American agriculture well, as 
U.S. agricultural exports are expected to total $49 billion.
    GIPSA accomplished a great deal in fiscal year 1999 and much is 
planned for fiscal year 2000. Our efforts to continuously improve our 
programs and services were further guided by the Agency's Strategic 
Plan, developed under the provisions of the Government Performance and 
Results Act.

                              CIVIL RIGHTS

    In addition to improving our services and programs in fiscal year 
1999, GIPSA also accomplished a great deal in the area of civil rights. 
In accordance with USDA's efforts to change and improve the way we do 
business; and to ensure that every employee and customer is treated 
fairly, equitably, and with dignity and respect, GIPSA is working to 
improve all areas of Civil Rights. Accordingly, we have taken a number 
of actions.
    In fiscal year 1999, GIPSA implemented a strengthened Alternative 
Dispute Resolution (ADR) Program that reflects GIPSA's commitment to 
operate more efficiently and effectively, and to encourage, where 
possible, consensual resolution of disputes. Under this program, GIPSA 
is promoting greater use of mediation, arbitration, early neutral 
evaluation, agency ombuds, and other alternative dispute resolution 
(ADR) techniques.
    GIPSA continued to seek early resolution of employee complaints. 
The Agency targeted several formal cases for resolution and worked 
closely with the USDA's Employee Complaints and Adjudication Division 
to reduce the Agency's caseload by 25 percent by the end of fiscal year 
1999.
    In addition, GIPSA strengthened its support for educational 
initiatives, Land Grant and other minority institutions, the USDA 
summer intern program, and the college recruitment initiative Ag-HOPE, 
Agriculture Helps Our People Earn, at Alcorn State University, Lorman, 
Mississippi. The Agency also strengthened its relationships with small 
and disadvantaged businesses by entering into agreements with these 
contractors where possible.
    These are only some of the steps GIPSA has taken in the EEO/CR 
area. The Department of Agriculture has made Civil Rights a major 
priority and GIPSA is completely committed to supporting the 
Department's efforts.

                    FISCAL YEAR 2001 BUDGET REQUEST

    To fund these important initiatives and to enable GIPSA to remain a 
valuable part of American agriculture, GIPSA's budget request for 
fiscal year 2001 is $33.5 million under current law for salaries and 
expenses and $42.6 million for our Inspection and Weighing Services. 
GIPSA also is submitting legislation to collect $23.1 million in new 
user and license fees in fiscal year 2001.
    The President's fiscal year 2001 budget proposes a current law 
request for grain inspection of $14.2 million. There are proposed 
increases of $150,000 to support GIPSA's increased role in 
international trade services and trade activities, and $1,980,000 for 
methods development activities. Proposed legislation to authorize the 
collection of $3.7 million in new user fees to cover the costs of grain 
standardization activities also is being submitted.
    The budget proposes a current law request of $19.3 million for the 
Agency's P&S Programs.
    There are proposed increases of $1,200,000 to develop sophisticated 
models to help identify anti-competitive behavior and examine causes 
and competitive implications of contract livestock production; $800,000 
to examine the competitive structure of the poultry industry; 
$1,300,000 for rapid response teams within GIPSA; and $400,000 to 
establish a swine contract library. Additionally, proposed legislation 
is being submitted to authorize the collection of $19.3 million in new 
license fees to cover the cost of the P&S Programs.
    There are additional increases in the budget of $100,000 for Civil 
Rights activities and $350,000 for an Information Staff that will 
benefit both the grain inspection program and the P&S program.
    The $150,000 increase to support GIPSA's increased role in 
international trade services and trade activities would allow GIPSA to 
increase international travel. GIPSA has become increasingly involved 
in addressing international grain trade issues, including emerging 
sanitary and phytosanitary (SPS) issues and other technical barriers to 
trade, as well as trade issues with the World Trade Organization (WTO) 
and the North American Free Trade Agreement (NAFTA). For example, 
compelled to adhere to the requirements of WTO and NAFTA, some grain 
and oilseed importing countries have created other barriers to limit or 
restrict unencumbered trade.
    GIPSA works cooperatively with associated agencies to resolve 
critical issues that limit or restrict trade; assist individual 
governments and organizations in developing and/or enhancing their 
grain inspection and weighing capabilities; and enhance the 
international market's understanding of the U.S. inspection and 
weighing system.
    The increase of $1,980,000 for methods development activities will 
enable the Agency to begin the process of addressing the changes 
occurring due to biotechnology. As the commercialization of 
bioengineered crops has expanded, consumers worldwide have expressed an 
interest in having access to better and more reliable information about 
foods that do not contain biotech ingredients. In addition, U.S. 
producers and industry representatives are seeking to ensure that 
claims by competitors as to the biotech-free nature of their products 
are not false and misleading. As American agriculture works to address 
these complex and difficult issues involving the production and 
marketing of bioengineered crops, it is vital that USDA establish the 
framework to ensure the reliability of biotech crop detection methods. 
Measuring the traits of newly engineered grains is of critical 
importance in keeping grain markets open and fair. Of greater 
importance is the United States government's ability to provide 
leadership in establishing consistency in test methods to measure 
bioengineered grain and oilseeds. Producers, grain handlers, processing 
facilities, life science companies, and foreign buyers have all 
expressed their full support of USDA-GIPSA providing this leadership.
    The $1,200,000 increase to develop sophisticated models to help 
identify anti-competitive behavior, and to examine the causes and 
competitive implications of contract livestock production will allow 
the Agency to look closely at potential anti-competitive behavior and 
its effects. The increase will be used to (1) develop econometric 
models to help identify collusion, predatory behavior, price 
leadership, market allocation, failure to compete, price and non-price 
discrimination, and other restraints in the procurement of cattle, 
hogs, and lambs by meatpackers; and (2) examine economic variables 
associated with production and marketing contracts for livestock, and 
the effects of contracting on the structure of livestock production and 
slaughter, and on competition in meatpacking and processing. This 
initiative addresses complex issues that are important in examining the 
competitiveness of firms and markets in the meatpacking industry. An 
ongoing effort will be needed to develop methodology, databases, and 
analyses to effectively monitor competitive behavior and the 
competitive effects of structural changes in the meatpacking industry.
    The increase of $800,000 to examine the competitive structure of 
the poultry industry will assess the characteristics of markets for 
poultry grower services and develop basic information about the 
structure and competitive conditions associated with the market for 
grower services. It will examine geographic distributions of growers 
around integrators' facilities; production and transportation costs; 
entry and exit conditions; contract terms; general grower-integrator 
relationships; and how contract terms are implemented; such as which 
chicks are assigned to which growers, feed weighing arrangements, and 
measurement of factors used in settlements.
    This project will provide fundamental information about the 
relevant markets for grower services and address questions such as 
whether treatment of growers varies among integrators and among growers 
of a particular integrator. We have long focused our attention on 
contract disputes. This project will begin to examine underlying 
competitive conditions in the market for grower services.
    The $1,300,000 increase will allow the Agency to designate a 
special investigation rapid response team for each of the three 
regional offices to handle the complex, high priority investigations. 
These investigations are time sensitive that require expeditious 
examination and analysis to protect constituent interests, and to 
prevent or minimize major competitive or financial harm caused by 
ongoing violations of the P&S Act. These teams will be comprise of an 
economist/marketing specialist, legal specialist, auditor, and computer 
specialist, all of whom are experts in their area and experienced in 
P&S investigations. Full utilization of the team is anticipated within 
in the respective region, however, multi-teams will be used for 
investigations, when required.
    The increase of $400,000 to establish a swine contract library will 
allow the Agency to comply with Section 222 of the fiscal year 2000 
Agriculture Appropriation Bill that mandates that GIPSA implement a 
``library or catalog of each type of contract offered by packers to 
swine producers.'' GIPSA is required to collect, compile, and publish a 
monthly report on the estimated number of swine expected to be 
delivered within the 6-month or 12-month periods following the date of 
the report. This mandate is ``subject to the availability of 
appropriations to carry out this section''; GIPSA was not provided 
funding for this project.
    Additional staff will be required to collect swine contracts on an 
ongoing basis from all packers slaughtering over 100,000 head of swine 
yearly. Contracts must be reviewed; all proprietary information 
redacted from the contracts; and then assembled and cataloged. We 
anticipate that the library or catalog to be accessible by the general 
public through the Internet.
    Conclusion
    Mr. Chairman, this concludes my statement. I appreciate the 
opportunity to testify on behalf of the Grain Inspection, Packers and 
Stockyards Administration (GIPSA). I will be happy to answer any 
questions the Committee may have.
                                 ______
                                 
                NATIONAL AGRICULTURAL STATISTICS SERVICE

        PREPARED STATEMENT OF R. RONALD BOSECKER, ADMINISTRATOR

    Mr. Chairman and members of the Committee, I appreciate the 
opportunity to submit a statement for this Committee's consideration in 
support of the fiscal year 2001 budget request for the National 
Agricultural Statistics Service (NASS). This Agency now conducts the 
census of agriculture which was begun in 1840, and the agricultural 
statistics program created in 1842. The basic mission of both programs 
is to provide factual information for and about the Nation's food and 
agricultural industry.
    As American farms and ranches have progressed to making greater use 
of agricultural science and technology, the need for more detailed 
information has increased. The periodic surveys and censuses conducted 
by NASS contribute significantly to the overall information base for 
agricultural producers, handlers, processors, wholesalers, retailers, 
and ultimately, consumers. Voids in relevant, timely, accurate data 
contribute to wasteful inefficiencies throughout the entire production 
and marketing system.
    The most critical complaints received by NASS occur when there is 
an absence or shortage of official data available for a commodity, and 
therefore that segment of agriculture is forced to operate with 
insufficient information. Recent environmental concerns have meant that 
entirely new surveys are needed to accurately measure the chemicals 
used by the food and fiber industry. The globalization of agricultural 
commodity markets also increases the demand for relevant, accurate, 
timely, and impartial statistical information to assist those who sell 
U.S. agricultural commodities worldwide. For example, information 
concerning genetically engineered crops and crop varieties will enable 
the United States to better compete in the world market.
    The crop, livestock, and other related statistics are provided 
throughout the year, in cooperation with each State Department of 
Agriculture. This program, which began in 1917, has served the 
agricultural industry well and is often cited by others as an excellent 
model of successful State-Federal cooperation. The addition of the 
census of agriculture, which provides a wealth of detailed information 
at the State and county level, has strengthened NASS's partnership with 
its State cooperators. This joint State-Federal program helps meet 
State and national data needs while minimizing overall costs by 
consolidating both staff and resources, eliminating duplication of 
effort, and reducing the reporting burden on the Nation's farm and 
ranch operators. The success of this partnership was demonstrated this 
past year as NASS, through its State-Federal cooperation, was able to 
complete the census in almost half the time of previous censuses, 
increase the total response, and, through the use of a toll-free 
number, better respond to questions from farmers and ranchers 
completing the census questionnaires. NASS's 45 field offices, which 
cover all 50 States (New England States are combined), support the six 
goals and outcomes in the Research, Education, and Economics (REE) 
mission area strategic plan by providing statistical information that 
serves national, State, and local data needs.
    NASS statistics contribute to providing fair markets where buyers 
and sellers alike have access to the same official statistics. This 
prevents markets from being unduly influenced by ``inside'' information 
which might unfairly affect market prices for the gain of an individual 
market participant.
    With the enactment of the Federal Agriculture Improvement and 
Reform Act of 1996, the demand for agricultural statistics has 
increased as producers make production decisions based solely on market 
information. Empirical evidence indicates that an increase in 
information improves the efficiency of commodity markets. Information 
on the competitiveness of our Nation's agricultural industry will 
become increasingly important as producers rely more on the world 
market for their income.
    NASS's agricultural statistics are used throughout the agricultural 
sector to evaluate supplies and determine competitive prices for world 
marketing of U.S. commodities, which directly supports Goal 1 of the 
REE Strategic Plan: Through research and education, empower the 
agricultural system with knowledge that will improve domestic 
production, processing, and marketing to successfully compete in the 
global market.
    Through new technology, the products produced in the United States 
are changing rapidly. This also means that the agricultural statistics 
program must be dynamic and able to respond to the demand for coverage 
of newly emerging products. For example, genetic engineering technology 
will be producing new commodity varieties, such as BT corn and cotton, 
and Roundup Ready soybeans. Data users are already requesting 
information on genetically modified crops in order to help assess the 
magnitude and impact of these new varieties.
    Not only are NASS statistical reports important to assess the 
current supply and demand of agricultural commodities, but they are 
also extremely valuable to farm organizations, commodity groups, and 
public officials who analyze agricultural policy, foreign trade, 
construction, and environmental programs, research, rural development, 
and many other activities. NASS numbers are scrutinized very closely by 
producers, agribusinesses, industry analysts, economists, investors, as 
well as government policy makers. As a result of their analysis, major 
decisions are made that affect the Nation's agricultural economy.
    All reports issued by NASS's Agricultural Statistics Board are made 
available to the public at previously announced release times to ensure 
that everyone is given equal access to the information. NASS has been a 
leader among Federal agencies in providing electronic access to 
information. All of NASS's national statistical reports and data 
products, including graphics, are available on the Internet, as well as 
in printed form. Customers are able to electronically subscribe to NASS 
reports by clicking on the appropriate release. A summary of NASS and 
other USDA statistical data are produced annually in USDA's 
Agricultural Statistics, available on the Internet through the NASS 
Home Page, on CD-ROM disc, or in hard copy. Each of NASS's 45 field 
offices have Home Pages on the Internet, which provide access to 
special State statistical reports and information on current local 
commodity conditions and production.
    Beginning in fiscal year 1997, NASS received funding for the census 
of agriculture which is conducted every 5 years. The transfer of the 
responsibility for the census of agriculture to USDA streamlines 
Federal agricultural data collection activities and has improved the 
efficiency, timeliness, and quality of the census data. The release of 
the 1997 Census of Agriculture on February 1, 1999, came exactly one 
year from the date the questionnaires were due to be returned by the 
Nation's farmers and ranchers.
    Statistical research is conducted to improve methods and techniques 
used in collecting and processing agricultural data. This research is 
directed toward providing higher quality census and survey data with 
less burden to respondents, producing more accurate and timely 
statistics to data users, and increasing the efficiency of the entire 
process. For example, NASS has been a leader in the research and 
development of satellite imagery to improve agricultural statistics. 
The NASS statistical research program strives to improve methods and 
techniques for obtaining agricultural statistics with an acceptable 
level of accuracy. The growing diversity and specialization of the 
Nation's farm operations have greatly complicated procedures for 
producing accurate agricultural statistics. Development of new sampling 
and survey methodology, along with intensive use of telephone and face-
to-face contacts and computer technology enable NASS to keep pace with 
an increasingly complex agricultural industry. Considerable new 
research will be directed at improving the 2002 Census of Agriculture 
to be conducted in 2003.
    NASS performs a number of statistical services for other Federal, 
State, and producer organizations on a cost-reimbursable basis. In 
addition, NASS has an expanding international program to provide 
technical assistance to a number of countries on a cost-reimbursable 
basis.

MAJOR ACTIVITIES OF THE NATIONAL AGRICULTURAL STATISTICS SERVICE (NASS)

    The primary activities of NASS are to conduct periodic surveys and 
the census of agriculture every 5 years to meet the current data needs 
of the agricultural industry. The periodic surveys include the 
collection, summarization, analysis, and publication of reliable 
agricultural forecasts and estimates. Farmers, ranchers, and 
agribusinesses voluntarily respond to a series of nationwide surveys 
about crops, livestock, prices, chemical use and other agricultural 
activities each year. Periodic surveys are conducted during the growing 
season to measure the impact weather, pests, and other factors have on 
crop production. Frequent surveys are also needed for food products 
that are perishable. Many crop surveys are supplemented by actual field 
observations in which various plant counts and measurements are made. 
Administrative data from other State and USDA agencies, as well as data 
on imports and exports, are thoroughly analyzed and utilized as 
appropriate. NASS prepares estimates for over 120 crops and 45 
livestock items which are published annually in almost 400 separate 
reports.
    Agricultural reports issued by NASS include: number of farms and 
land in farms; acreage, yield, and production of grains, hay, oilseeds, 
cotton, tobacco, major fruits and vegetables, floriculture, and 
selected specialty crops; stocks of grains; inventories and production 
of hogs, cattle, sheep and wool, goats, catfish, trout, poultry, eggs, 
and dairy products; prices received by farmers for products; farm real 
estate values and land rental rates; prices paid by farmers for inputs 
and services; cold storage supplies; agricultural labor and wage rates; 
agricultural chemical usage; crop production cultural practices; and 
other data related to the agricultural economy.
    The census of agriculture provides national, State, and county data 
for the United States on the agricultural economy every 5 years, 
including: number of farms, land use, production expenses, farm product 
values, value of land and buildings, farm size and characteristics of 
farm operators, market value of agricultural production sold, acreage 
of major crops, inventory of livestock and poultry, and farm irrigation 
practices. The census of agriculture is the only source for this 
information on a local level which is extremely important to the 
agricultural community. Detailed information at the county level helps 
agricultural organizations, suppliers, handlers, processors, and 
wholesalers and retailers better plan their operations. Important 
demographic information supplied by the census of agriculture also 
provides a very valuable data base for developing public policy for 
rural areas. The local detailed data provided by the census of 
agriculture which facilitates locality-based policy and business 
decisions supports Goal 5 of the REE mission area Strategic Plan: 
Empower people and communities, through research-based information and 
education, to address the economic and social problems facing our 
youth, families, and communities.
    Nearly two-thirds of NASS's staff are located in the 45 field 
offices; 24 of these offices are collocated with State Departments of 
Agriculture or land-grant universities. NASS's State Statistical 
Offices issue approximately 9,000 different reports each year and 
maintain Internet Home Pages to electronically provide their State 
information to the public.
    NASS has developed a broad environmental statistics program under 
the Department's water quality and food safety programs. Until 1991, 
there was a complete void in the availability of reliable pesticide 
usage data which became evident during the Alar situation with apples. 
Therefore, in 1991 NASS cooperated with other USDA agencies, the 
Environmental Protection Agency (EPA), and the Food and Drug 
Administration, to implement comprehensive chemical usage surveys that 
collect data on certain crops in selected States. Beginning in fiscal 
year 1997, NASS also began survey programs to acquire more information 
on Integrated Pest Management (IPM), additional farm pesticide uses, 
and post-harvest application of pesticides and other chemicals applied 
to commodities after leaving the farm. These programs have resulted in 
significant new chemical use data, which are important additions to the 
data base. These surveys, conducted in cooperation with the Economic 
Research Service, also collect detailed economic and farming practice 
information for the purpose of determining the use of IPM practices as 
well as to analyze the productivity and the profitability of different 
levels of chemical use. American farms and ranches manage half the land 
mass in the United States, underscoring the value of complete and 
accurate statistics on chemical use and farming practices to 
effectively address public concerns about the environmental effects of 
agricultural production. NASS's chemical use survey programs supports 
both Goals 2 and 4 of the REE Strategic Plan which relate to ensuring 
an adequate food and fiber supply and the promotion of food safety, and 
enhancing the quality of the environment.
    NASS conducts a number of special surveys as well as provides 
consulting services for many USDA agencies and other Federal, State, 
and private agencies or organizations on a cost-reimbursable basis. 
Consulting services include assistance with survey methodology, 
questionnaire and sample design, information resource management, and 
statistical analysis. NASS has been very active in assisting USDA 
agencies in programs that monitor nutrition, food safety, environmental 
quality, and customer satisfaction. In cooperation with State 
Departments of Agriculture, land-grant universities, and industry 
groups, NASS conducted 122 special surveys in fiscal year 1999 covering 
a wide range of issues such as farm injury, nursery and horticulture, 
farm finance, fruits and nuts, vegetables, and cropping practices.
    NASS provides technical assistance and training to improve 
agricultural survey programs in other countries in cooperation with 
other Government agencies on a cost-reimbursable basis. NASS's 
international programs focus on developing countries, such as those in 
Asia, Africa, and Central and South America, as well as emerging 
markets countries in Eastern Europe. Accurate information is essential 
in these countries for the orderly marketing of farm products. NASS 
works directly with countries undergoing the transition from centrally-
planned to market economies by assisting them in applying modern 
statistical methodology, including sample survey techniques. This past 
year, NASS provided assistance to Chile, China, Ecuador, Ethiopia, 
Ghana, Guinea, Kazakhstan, Mexico, Nicaragua, Russia, South Africa, and 
Ukraine and received approximately $.9 million in reimbursements for 
these services.
    NASS annually seeks input on improvements and priorities from the 
public through: displays at major commodity meetings, data user 
meetings with representatives from agribusinesses and commodity groups, 
special briefings for agricultural leaders during the release of major 
reports, and through numerous individual contacts, especially those 
made at the grass roots level through NASS's 45 field offices. As a 
result of these activities, the Agency has made many adjustments to its 
agricultural statistics program, published reports, and electronic 
access capabilities to better meet the statistical needs of customers 
and stakeholders.

                         FISCAL YEAR 2001 PLANS

    The fiscal year 2001 budget request is for $100,615,000. This is a 
net increase of $1,282,000 from the fiscal year 2000 current estimate.
    The fiscal year 2001 request includes changes in activities 
associated with the census of agriculture, implementation of a monthly 
hog survey to improve market information, expansion of the agricultural 
chemical use surveys, and improvements to computer security to assure 
the integrity of market sensitive data prior to official release.
    A net decrease of $1,490,000 and 12 staff-years for the census of 
agriculture.
    The 2001 census of agriculture budget request is for $15,000,000. 
This includes an increase of $410,000 and 5 staff-years for increased 
activities associated with preparations for the 2002 Census of 
Agriculture. It also reflects a decrease of $1,900,000 and 17 staff-
years for the Agricultural Economics and Land Ownership Survey. The 
survey will be completed in 2000 and is being removed from the budget 
since it is to be conducted only once every 10 years following 
alternate censuses of agriculture.
    A net increase of $572,000 and 4 staff-years consisting of 
$1,272,000 for the monthly hog survey and a decrease of $700,000 for 
the quarterly hog survey.
    Title IX--Livestock Mandatory Reporting, Subtitle C-Related Swine 
Reporting Provisions, Section 931. Improvement of Hogs and Pigs 
Inventory Report, which passed as part of the fiscal year 2000 
Agriculture Appropriations Bill in October 1999, states that the 
Secretary of Agriculture will publish on a monthly basis the Hogs and 
Pigs Inventory Report, and that for a period of 8 quarters after the 
implementation of the monthly report, the Secretary shall continue to 
maintain and publish on a quarterly basis the Hogs and Pigs Inventory 
Report. The purpose of a monthly survey is to provide more timely 
information on market supplies of pigs than the present quarterly 
surveys provide.
    The current NASS quarterly Hogs and Pigs report provides detailed 
information, by State, for the 17 largest hog producing States, 
accounting for 93 percent of the total U.S. hog inventory, together 
with all ``other States'' combined in order to provide U.S. totals. The 
proposed funding increase of $572,000 would provide, on a monthly 
basis, total breeding herd inventory, number of sows farrowed, pigs 
born, and number of sows bred. An offset of $700,000 will limit 
comparable quarterly and monthly State-level data to nine States 
covering approximately 77 percent of the total U.S. breeding herd 
inventory plus the U.S. total. Full funding at $1.272 million is 
necessary for NASS to implement a monthly breeding herd program which 
mirrors the existing quarterly program but provides important breeding 
herd data on a monthly basis. The goal is to provide more timely 
information on both the location and supplies of pigs to facilitate 
more orderly marketing of hogs.
    An increase of $800,000 and 4 staff-years is requested for 
expansion of pesticide use surveys.
    In order to accurately analyze the impact of chemical use as 
directed by the Food Quality Protection Act, EPA and USDA, together 
with other agencies and industry officials, have requested an expansion 
of NASS's current pesticide data collection program to include coverage 
of additional crops, sectors, and States. This additional funding would 
enable NASS to expand the number of field crops covered in the current 
pesticide use survey program in order to address existing data gaps. 
Pesticide usage survey information collected by NASS provides accurate 
data which are critically needed by the agricultural industry, EPA, and 
others with an interest in the evaluation of pesticides, setting of 
pesticide residue standards, and the determination of exposure risks. 
In the absence of actual data, default assumptions or worst case 
scenarios are often used in chemical risk assessment analysis.
    An increase of $1,400,000 is requested for development of NASS 
Computer Security Architecture.
    There is a growing need for cyber-security given the increased 
incidences and threats of the loss, misuse, unauthorized access to, or 
modification of information on computer systems. The level of 
sophistication displayed by hackers and others also supports the need 
for security reforms, such as the need for early warning systems for 
attacks, intrusions, and viruses. Cyber-security has replaced Year 2000 
as the top priority in the information technology community. 
Information security is of vital importance to maintain NASS's 
credibility given the market sensitivity of the reports released as 
well as the confidential nature of the data collected by NASS from the 
Nation's farmers, ranchers, and agribusinesses.
    This concludes my statement, Mr. Chairman. Thank you for the 
opportunity to submit this for the record.
                                 ______
                                 
                       NATIONAL APPEALS DIVISION

            PREPARED STATEMENT OF NORMAN G. COOPER, DIRECTOR

    Mr. Chairman and members of the Subcommittee, I am pleased to 
appear before you to discuss the fiscal year 2001 budget request for 
the National Appeals Division.

                              INTRODUCTION

    The National Appeals Division--NAD--was established by the 
Secretary of Agriculture pursuant to the Reorganization Act of 1994. 
The Act consolidated the appellate functions and staffs of several USDA 
agencies to provide for appeal hearings of adverse agency decisions, 
and review of appeal determinations by the NAD Director. NAD appeals 
currently involve program decisions of the Farm Service Agency, Risk 
Management Agency, Natural Resources Conservation Service, Rural 
Business-Cooperative Service, Rural Housing Service, and Rural 
Utilities Service. NAD is headquartered in Alexandria, Virginia, and 
has regional offices located in Indianapolis, Indiana; Memphis, 
Tennessee; and Lakewood, Colorado. NAD's staff of 133 includes 75 
hearing officers Nationwide.

                                MISSION

    Our mission is to conduct evidentiary administrative appeal 
hearings and reviews arising out of program decisions of specific USDA 
agencies. Our strategic goal is to conduct timely hearings and issue 
timely and well-reasoned determinations that correctly interpret 
applicable regulations. NAD's mission is statutorily specific, but the 
administration of such is dynamic and challenging, given the 
complexities of changing laws, regulations and policies.

                    FISCAL YEAR 2001 BUDGET REQUEST

    NAD is requesting $12,610,000 in direct appropriations for fiscal 
year 2001. This request represents an increase of $903,000 over the 
fiscal year 2000 current estimate. The increase is comprised of 
$589,000 for training costs, and $314,000 for pay costs.
    NAD employees must possess a broad, in-depth knowledge of many 
areas, including adjudication procedures as well as the laws and 
regulations of subject agencies. The hearing and review officers must 
stay abreast of changes in the law, regulations and agency policies, in 
order to issue determinations that withstand challenge in the Federal 
courts. Continuous training and development is essential to providing 
the public a competent and fair administrative appeal system that 
recognizes the rights of program participants and promotes the lawful 
operations of agency programs. NAD's budget request for training will 
be used to sustain high-quality skills development that is critical to 
accomplishing our goal.
    We are also requesting $314,000 for pay costs in order to maintain 
current staffing levels. In the last five years, our funding level has 
gone from $11,846,000 to a level of $11,707,000. During this time, NAD 
has absorbed approximately $1,454,000 in pay costs. This trend 
adversely impacts NAD's ability to execute its mission. To help offset 
these costs, NAD offered four buyouts in fiscal year 1997, and has 
reduced costs through attrition and other cost reduction initiatives. 
Additional pay cost absorption will negatively affect our ability to 
provide an effective administrative appeals system.

                               CONCLUSION

    NAD's administrative appeals process is a cost-effective means for 
USDA program participants to have adverse agency decisions fairly and 
impartially adjudicated in a timely manner consistent with the intent 
of Congress. The initiatives in the fiscal year 2001 budget will help 
ensure that we accomplish our mission in a more efficient and effective 
manner--making correct determinations and continuing to assure the 
rights of all participants in appeals. The initiatives provide the 
groundwork for accomplishing the goals and objectives outlined in NAD's 
Strategic Plan and Annual Performance Plan. More importantly, these 
initiatives assure farmers, ranchers, cooperatives, agencies, and 
others an avenue to a fair and equitable adjudicative process.
    That concludes my statement, and I look forward to working with the 
Committee on the fiscal year 2001 National Appeals Division budget.
                                 ______
                                 
                 NATURAL RESOURCES CONSERVATION SERVICE

              PREPARED STATEMENT OF PEARLIE S. REED, CHIEF

    Mr. Chairman and members of the Committee I am providing a copy of 
the statement that I used before the House of Representatives for your 
consideration and use.
    Thank you Mr. Chairman and members of the Committee for the 
opportunity to appear before you today. Conservation is important to 
me. I've spent most of my life and my professional career devoted to 
addressing environmental problems and getting sound conservation on the 
ground.
    I want to thank the Committee for their support during the fiscal 
year 2000 appropriations process. I promise you that I will do my best 
to make sure NRCS effectively and efficiently delivers the conservation 
programs and projects we have been directed to oversee.
    I will continue our efforts to develop web-based tools that 
increase employee productivity in service centers and give many farmers 
and ranchers electronic access to automation that can assist them in 
making conservation decisions. As Chairman of the National Food and 
Agriculture Council, I am also working closely with the other field 
based agency heads to ensure that automation tools in service centers 
are user friendly for both our customers and employees and that 
databases are seamless between the agencies and our partners.
    I am hopeful that we will be able to work with the Committee to 
continue your funding support for conservation in fiscal year 2001 and 
address the top conservation issues facing private landowners and 
operators, farmers and ranchers, and local communities.
    In recent years, public concern for the environment and demand for 
NRCS technical assistance has increased dramatically. Public concern 
has grown about pollutants from animal feeding operations, improper 
application of pesticides and fertilizers, over-application of 
nutrients, continued excessive soil erosion, and poor land use 
decisions at the individual and community level. Invasive plant species 
on agricultural land, pfiesteria and other harmful algal blooms along 
our coasts, hypoxia in coastal waters, and declines in salmon and other 
fish and wildlife are leading the public to demand that agricultural 
producers act to address these natural resource issues.
    However, few farmers and ranchers are able to respond to these 
demands on their own, let alone coordinate efforts at the watershed and 
regional scales. They frequently call upon the NRCS at the local level 
to provide them with technical assistance to address these emerging 
concerns and financial assistance from USDA conservation programs to 
help share the cost of implementing mitigating conservation measures. 
In addition, these concerns have required that we increase our 
investment in new, cost-effective, science-based practices that 
producers can install, operate, and maintain. I have accelerated our 
work on identifying appropriate technologies with the Agriculture 
Research Service and with other research entities. I have made an 
initial investment to improve the technology transfer and technical 
training of NRCS' field employees to meet the demands for new and 
innovative solutions.
    Mr. Chairman, as you know, the NRCS conducts a National Resources 
Inventory (NRI) every five years. Recently, the results of the 1997 
study were published. Significant NRI results include:
  --Loss of prime and important farmland. From 1992 to 1997, nearly 16 
        million acres of agricultural and forestland were developed. We 
        are now losing 3 million acres per year, double what was lost 
        each year from 1982 to 1992.
  --Soil erosion. Nearly 2 billion tons of soil erosion is occurring 
        annually on the Nation's non-Federal lands. Despite gains in 
        erosion control during the past 15 years, there have been no 
        substantial improvements since 1995.
  --Wetland losses. The U.S. still has not reached the goal of ``no net 
        loss''. But wetland preservation efforts, like the Wetlands 
        Reserve Program are helping us move towards that goal.
  --Grazing lands losses. The nation's grazing lands total 583 million 
        acres and include pastureland, rangeland, and grazed 
        forestland. Since 1982, total pastureland and rangeland have 
        declined by nearly 26 million acres.
    The fiscal year 2001 budget proposals seek to address many of these 
significant NRI trends.

                         DISCRETIONARY FUNDING

    Overall, the fiscal year 2001 President's budget proposes a net 
decrease of $6.2 million from fiscal year 2000 Appropriations level for 
NRCS' discretionary accounts, including supplemental funding provided 
in November 1999 for natural disasters. These budget proposals for 
discretionary funding reflect difficult choices for addressing the most 
significant environmental and conservation concerns.

Conservation operations

    Mr. Chairman, the fiscal year 2001 budget request proposes an 
increase of $86.4 million for Conservation Operations from the fiscal 
year 2000 appropriations level of $660.8 million. This increase is 
essential for NRCS to fund the necessary technical assistance 
components so vital to getting sound conservation on the ground.
    Specifically, the budget includes a $28 million increase for 
providing basic technical assistance for private landowners who are not 
typically participants in CCC cost-share conservation programs. 
Assistance to these landowners and local entities has eroded in recent 
years. In addition, because of increasing budget constraints, we have 
had to indefinitely postpone essential training, eliminate key field 
positions, minimize partnerships, compromise administrative support, 
and postpone replacement of aging equipment. While we have taken 
internal steps through automation to improve our processes and increase 
the time available to provide direct customer assistance, we would like 
to improve our service even more by providing additional trained 
personnel in the local communities. However, we cannot do this without 
additional funding assistance.
    The budget also proposes a $20 million increase to provide 
additional staff needed to perform the increased workload associated 
with developing nutrient management plans for Animal Feeding Operations 
(AFO). This is an integral part of the President's Clean Water Action 
Plan (CWAP). During the past 24 months, some form of state or local 
regulation on AFOs has been debated in 34 states. It is clear that 
solving the nation's nonpoint source pollution is critical to making 
drinking water safe and lakes, streams and rivers clean. NRCS provides 
leadership and technical assistance to local communities in addressing 
the environmental concerns associated with AFOs. Specifically, NRCS 
helps set the nutrient management technical standards, develops 
comprehensive nutrient management plans with producers, including the 
development and design of manure management systems, and helps 
producers implement components of the plans.
    The AFO related workload is tremendous. Based on our latest 
workload analysis, there are approximately 300,000 AFOs that will need 
some form of nutrient management planning in order to address the 
concerns of the Clean Water Act. With the proposed budget, we 
anticipate that we can complete the second year of a ten-year work plan 
to address this AFO workload. In fiscal year 2000, Congress provided an 
additional $8 million for this increased workload, bringing the total 
funding for AFO technical assistance to $56 million. The fiscal year 
2001 budget proposes a total AFO workload effort of approximately $87 
million under the Conservation Operations account, which includes a 
redirection of $11 million from within the technical assistance from 
other activities that are currently being provided within the account.
    In other CWAP-related activities, the budget also proposes an 
increase of $13 million to provide $10 million in grants on a 
competitive basis to local organizations to coordinate watershed 
restoration activities among our Federal, State, and local partners 
allowing resources to be more effectively targeted and $3 million to 
enable additional environmental monitoring and research work that would 
be used to implement water quality assessment actions and set local and 
national priorities.
    Fifteen million dollars is needed to support the Administration's 
Global Climate Change Initiative by expanding soil carbon studies and 
conducting pilot projects to better understand the impacts of climate 
change on soil carbon status. NRCS global change related activities 
have focussed on delivering technical assistance to help American 
farmers and ranchers cope with either human-caused climate change or 
natural climate variability that influences so many of their land 
management and farming decisions. NRCS efforts have emphasized the 
sequestration of atmospheric carbon in the soil, which increases the 
organic matter of the soil, and leads to improved rainfall 
infiltration, larger water and nutrient holding capacity, and reduced 
erosion. The increased funding would enable us to expand our 
understanding of soil carbon exchanges and develop new technologies and 
methods for improving carbon sequestration that will aid both producers 
and the wider American public.
    Five million dollars is proposed to help farmers plan, develop, and 
implement conservation based biomass production systems, and an 
additional $5 million is requested again this year for the Community 
Federal Information Partnership. This will support the Administration's 
Livability Initiative through the development of consistent and 
compatible geospatial data systems.
    Proposed funding remains stable for soil surveys, snow survey and 
water forecasting, and plant material centers. These functions play a 
vital role in the delivery of conservation services to private 
landowners. Soil surveys help us understand soils, snow surveys provide 
information on future water supplies important to water conservation, 
and the plant material centers provide native conservation plants 
unavailable from other sources that help solve natural resource 
problems. Additional funds are not requested for mandatory pay 
increases or inflationary costs.
    Grazing Lands.--In fiscal year 2000, Congress provided $17 million 
for the Grazing Land Conservation Initiative, a $2 million increase in 
funding from past years. The fiscal year 2001 budget proposes to 
continue funding at that level. At the $17 million level, NRCS is able 
to maintain staff needed to provide technical assistance to private 
grazing landowners and managers.
    In fiscal year 1999, approximately 700 NRCS employees allocated a 
majority of their time to providing technical assistance to over 28,000 
individuals for grazing related issues. The total impact of NRCS 
assistance affected more than 20 million acres of grazing land. In 
addition, NRCS staff provided assistance with 790 grazing land 
demonstration projects nationwide that demonstrated grazing land 
technologies and management, and conducted over 1,800 education and 
awareness activities (workshops, field days, tours, etc.) involving 
more than 100,000 individuals. With the increase in fiscal year 2000 
funding for Grazing Lands Conservation, NRCS expects to build upon the 
fiscal year 1999 effort and impact on more than 22 million acres of 
grazing land.

Resource Conservation and Development (RC&D)

    Through the RC&D program, NRCS works in partnership with local 
volunteers organized as Resource Conservation and Development Councils 
representing multi-county areas. Council members include local civic 
and elected officials who set an agenda to care for and protect their 
natural resources while improving local economies and quality of life. 
RC&D Councils, established as non-profit entities, undertake projects 
in the areas of natural resource improvement, recreation and tourism, 
and economic development. These Councils operate on the premise that 
local people know the most about the local natural resource and 
development needs. Currently, 315 USDA designated RC&Ds serve 2,304 
counties in all 50 states, the Caribbean, and the Pacific Basin.
    Information gathered from our new RC&D management database 
indicates that councils and their partners are very active in the 
development and expansion of rural business. In fiscal year 1999, 248 
new businesses were created with RC&D assistance. RC&Ds helped expand 
284 businesses, and financially assisted 678 businesses with non-RC&D 
funds. An estimated 3,000 jobs have been created through Area projects. 
The councils also are very effective in obtaining grant funds to 
implement their projects. Those Areas reporting in our database brought 
in over $312.8 million to rural America. Efforts to improve natural 
resources have resulted in improvement of 500,000 acres of wildlife 
habitat, improvement of 510,000 acres of lakes, and 1,500 miles of 
streams. Educational projects have helped 556,000 people develop new 
skills. RC&D projects have helped 446,500 economic or socially 
disadvantaged people.
    Mr. Chairman, this program plays a vital role in rural communities. 
The President's budget proposes an increase of $1 million to support 
mandatory pay increases that cannot be absorbed without seriously 
degrading the program's success and benefits.
Watershed and Flood Prevention Operations
    In fiscal year 2000, the Watershed and Flood Prevention Operations 
account was reduced by $7.8 million in financial assistance from the 
appropriated level of $99.443 million as a result of the rescission 
associated with Public Law 106-113.
    For fiscal year 2001, the budget proposes a decrease of $88.2 
million from the fiscal year 2000 appropriations level of $171.6 
million. This includes a reduction of $80 million in Emergency 
Watershed Protection (EWP) supplemental funding provided in fiscal year 
2000 and an $8.2 million reduction in financial and technical 
assistance provided under the account reflecting a redirection of 
administration priorities. The requested level of $83.4 million for the 
Watershed and Flood Prevention Operations account reflects the minimum 
needed to address high priority sub-watershed projects under the Public 
Law 78-534 and 83-566 program authorities.
    Also included in the budget proposal is a new loan program for 
helping communities rehabilitate aging Public Law 78-534 and 83-566 
watershed structures that were built 30 to 50 years ago. A recent 
survey has revealed rehabilitation needs for more than 2,200 of these 
structures in 22 states for an estimated cost of $540 million. The 
budget proposes a $4.2 million subsidy budget authority that would be 
used to support a $60 million program loan level to provide loans to 
state and local governments to help them begin to address this problem. 
Under the proposal, Rural Development offices would service the new 
loans and NRCS would provide technical assistance to communities 
receiving the loans on a reimbursable basis.
    The budget also includes a proposal to use $3 million in funding to 
provide financial and technical assistance to communities to implement 
disaster mitigation plans.
    Emergency Watershed Protection.--Of the $80 million in supplemental 
funding appropriated in fiscal year 2000 to repair damages to waterways 
and watersheds resulting from natural disasters, NRCS has committed 
funds to 28 states. Currently, we have 173 EWP ongoing projects in 46 
states. EWP provides vital assistance to local communities when 
disasters occur. For Hurricane Floyd, for example, NRCS provided 
assistance to 98 producers in 20 counties with the disposal of 
approximately 2 million dead animals. By having funding available, the 
agency was able to quickly provide the much needed financial and 
technical assistance. In fiscal year 2000, Congress provided $8 million 
for pilot rehabilitation projects in New Mexico, Ohio, Mississippi and 
Wisconsin. The State Conservationists in each state have been working 
with local watershed project sponsors and state dam safety officials to 
select high priority projects. We have set aside $2 million for each 
state and expect that construction will begin by this fall and will 
continue through fiscal year 2001. While we are in the planning process 
for these projects, local sponsors must obtain land rights, easements, 
permits and other project administrative needs, as well as finding 
financing for 35 percent of the total estimated cost of rehabilitation.

Watershed surveys and planning

    Funding has been requested for fiscal year 2001 at the same level 
as the fiscal year 2000 appropriation, $10.368 million.

Forestry Incentives Program

    In fiscal year 2000 the Forestry Incentives Program was reduced by 
$948 thousand in financial assistance from the appropriated level of 
$6.325 million as a result of the rescission associated with Public Law 
106-113. The President's budget does not propose funding for fiscal 
year 2001.

       COMMODITY CREDIT CORPORATION FUNDED CONSERVATION PROGRAMS

Conservation Security Program

    Under Secretary Lyons has highlighted the budget proposal in his 
testimony, I would like to provide an overview of how NRCS would 
deliver the program if it were authorized and funded.
    First, we would issue program regulations in an expedited manner. 
We would base our program delivery on past successes and complement 
other conservation programs. In the field, we would quickly train our 
existing staff and use conservation district employees to help us roll 
out the program.
    The program will be designed to reward those who are currently 
maintaining sound stewardship on their private lands. It will ideally 
also provide an incentive for those who wish to increase their level of 
conservation treatment. Under the program, farmers and ranchers would 
receive an annual payment based on the level of conservation treatment 
covered by the program agreement. One option could have payments 
covering conservation measures by land use. Examples could be crop 
residue management for cropland, proper grazing use for range and 
pastureland, integrated pest management, hayland management, and 
irrigation water management for irrigated land.
    Our goal is to gain conservation benefits. The Secretary has asked 
us to provide the opportunity for those not covered by current 
commodity programs such as owners and operators of grazing land, 
orchards, vineyards, as well as those covered by the current farm 
programs. Both of these groups are the NRCS traditional customers. 
Essentially, the program would be used to help keep past investments 
in-tact and reward good stewards of our natural resources.

Environmental Quality Incentives Program

    This program, which began in late 1996, has provided producers and 
landowners with incentives to implement long term, comprehensive 
conservation farm plans. We've had some growing pains. We've listened 
to public and Congressional concerns, and we are taking action to 
reduce program processing problems and overall make the program more 
responsive.
    The fiscal year 2001 funding request reflects the full $200 million 
authorized level under current law and, an additional $125 million for 
a total program level of $325 million. Demand for EQIP has historically 
exceeded available funding. For example, approximately 52,000 program 
applications were received in fiscal year 1999 with only 36 percent, or 
approximately 19,000 applications, approved. Cost-share assistance 
programs like EQIP provide a significant incentive to installing 
voluntary conservation practices based on local and national 
conservation issues. Components of the $325 million EQIP budget 
include: $178.5 million for AFO related activities, $16 million for 
priority environmental issues on American Indian and Alaskan Native 
lands, $10.5 million for Pacific salmon habitat recovery and $3.6 
million to fund demonstration or pilot projects concerning methane gas 
recovery and utilization projects. The remaining $116.4 million would 
be available for local priority conservation concerns.

Wetlands Reserve Program

    Re-authorized under the 1996 Federal Agriculture Improvement and 
Reform Act (1996 Act), the program is authorized to enroll a total of 
975,000 acres in permanent easements, 30-year easements, and wetland 
restoration cost-share agreements.
    Through the end of fiscal year 2000, the agency will have enrolled 
approximately 935,000 acres toward the total authorized for the 
program. The fiscal year 2001 budget proposes to enroll the remaining 
40,000 acres and under proposed legislation, to enroll an additional 
210,000 acres for a total acreage enrollment of 250,000 acres. The 
proposed legislation would also increase the total annual enrollment to 
250,000 acres through 2010. This requested program level is needed in 
order for us to achieve a no-net loss of acres per year and begin to 
achieve our national goal of an increase in wetlands annually.

Farmland Protection Program

    According to the Census of Agriculture, nearly 85 percent of 
domestic fruit and vegetable production and 80 percent of our dairy 
products come from urban influenced areas. Rapid development and urban 
sprawl have significantly threatened this valuable and productive 
farmland.
    As part of the Farm Safety Net proposal, the budget proposes 
legislation to fund the Farmland Protection Program at $65 million 
level annually. The initial funding level of $35 million authorized by 
the 1996 Act was exhausted at the end of fiscal year 1998. The FPP 
provides assistance to communities interested in protecting unique or 
prime agricultural lands from conversion to non-agricultural uses. The 
FPP provides matching funds to states, tribes or local government 
entities to acquire conservation easements or other interests in land. 
It helps protect strategic farmland from urbanization and ensures that 
valuable farmlands are preserved for future generations.
    If the requested $65 million is provided in fiscal year 2001, NRCS 
would be able to reduce the significant loss of prime agricultural 
lands and protect approximately 130,000 farmland acres from conversion.

Wildlife Habitat Incentives Program

    First authorized by the 1996 FAIR Act, the program provides 
incentives to farmers, ranchers, and other landowners to install 
conservation practices that improve wildlife habitats. These practices 
include native grass restoration, riparian area restoration, and 
aquatic habitat establishment. The budget proposes, under new 
legislation, an annual funding level of $50 million since all available 
funds from the original authorization have been used.

Conservation Reserve Program

    NRCS provides technical assistance to CCC in the delivery of this 
conservation program. Under proposed legislation, the acreage 
enrollment caps would be increased from 36.4 million acres to 40 
million acres in fiscal year 2001. The acreage increase, coupled with 
bonus payments proposed for continuous signup, would help address the 
significant problem of soil erosion and improve the quality of our 
nation's waterways.
    The Department has concern regarding technical assistance funding 
to implement the WRP and CRP. These two programs fall under a 
legislative cap in the Commodity Credit Corporation fund transfers, 
known as Section 11. Although $35 million in emergency supplemental 
appropriations was enacted in May, 1999 for the fiscal year 2000 
program to make up for shortfalls under this cap, our most recent 
estimates raise the possibility that amounts available may not be 
sufficient. This matter is under review within the Administration.

                   CONSERVATION THROUGH PARTNERSHIPS

    Mr. Chairman, as you know, NRCS has operated since its creation 
through voluntary cooperative partnerships with individuals, state and 
local governments, and other Federal agencies and officials. That 
partnership is as important today as it ever was. In fact, it may be 
even more important, if we are to meet the challenging conservation 
problems facing our Nation's farmers and ranchers.
    NRCS has worked with 4.7 million farmers, ranchers, producers, 
operators, private landowners and local communities to help them 
conserve their natural resources by gaining knowledge about new 
conservation problems and solutions, by providing guidance and advice, 
and by developing and helping implement conservation plans. NRCS does 
this by working with 3,000 local conservation districts that have been 
established by state law and with American Indian Tribes and Alaska 
Native Governments.
    State and local governments contribute substantially, with both 
people and funding to complement NRCS technical and financial 
assistance. Approximately 7,750 FTE of assistance is provided annually 
by NRCS partners and volunteers. In addition, state and local 
governments match Federal funding by $1.60 for every one Federal dollar 
provided for conservation. And Americans have generously given their 
time to volunteer with NRCS as part of the Earth Team Volunteers 
effort. In fiscal year 1999, over 29,000 people volunteered their time 
locally, working approximately 350 FTE. The Points of Light Foundation 
calculated the value of this volunteer service at $10.4 million.
    And we work closely with other Federal agencies such as our sister 
agencies in the Department of Agriculture, the Forest Service, Farm 
Service Agency, and Rural Development, as well as Agricultural Research 
Service, Cooperative State Research, Education and Extension Service 
and other Departments, including the Environmental Protection Agency.
    Good conservation doesn't just happen. It takes all of us, 
including Congress, working together to make it happen. This concludes 
my statement, Mr. Chairman. I will be glad to answer any questions.
                                 ______
                                 
                 OFFICE OF THE CHIEF FINANCIAL OFFICER

     PREPARED STATEMENT OF SALLY THOMPSON, CHIEF FINANCIAL OFFICER

    Mr. Chairman and members of the Subcommittee, I am pleased to 
present the fiscal year 2001 budget request for the Office of the Chief 
Financial Officer--OCFO--and the Department's Working Capital Fund--
WCF.
    I would like to thank you, your colleagues, and your respective 
staff members for taking this time to focus on the multiple financial 
management challenges facing USDA and how we are working to address 
these concerns. Secretary Glickman has made resolving these issues a 
major priority, and I thank him for his strong leadership. I also want 
to recognize this committee's staff for your efforts on behalf of 
improving financial management. We are moving forward, and this budget 
request highlights the next steps that we must take to fully achieve 
USDA's financial management objectives.
    During fiscal year 1999, USDA made significant progress towards 
improving its financial credibility and accountability. The following 
examples give you a glimpse of our progress:
    Financial Statements.--USDA submitted its consolidated financial 
statements to the Office of Management and Budget--OMB--by the March 1 
deadline. The previous year's submission arrived at OMB five months 
past the deadline. USDA has six stand-alone audits, three of which---
the Food and Nutrition Service, the Rural Telephone Bank, and the 
Federal Crop Insurance Corporation--received unqualified--clean--audit 
opinions. An unqualified audit opinion assures policy makers, the 
Congress, program recipients, and taxpayers that these financial 
statements reflect credible, reliable information that complies with 
laws, regulations, and accepted authoritative requirements. These clean 
opinions on three stand-alone audits are a major step toward USDA 
achieving an unqualified audit opinion on its consolidated financial 
statements in fiscal year 2001.
    Debt Collection.--USDA collected $136.2 million in delinquent debt 
through Treasury's Administrative Offset Program and other debt-
collection tools during fiscal year 1999. This figure represents a 45 
percent increase over the $93.9 million collected in fiscal year 1998 
and a 90-percent increase over the $71.5 million collected in fiscal 
year 1997. In addition, USDA lowered the amount of delinquent debt in 
its overall loan portfolio from $7.5 billion in delinquencies in fiscal 
year 1997 to $6.4 billion in fiscal year 1999, a drop of nearly 15 
percent.
    Integrated Financial Management System.--USDA made significant 
progress in implementing the Foundation Financial Information System--
FFIS. Along with senior-level staff from the Office of the Secretary 
and other top USDA officials, I made significant changes to the 
implementation's project management. Under this new management 
structure, the Forest Service and the Food Safety and Inspection 
Service, which together represent 46 percent of USDA's workforce, 
implemented the system on October 1, 1999. The Risk Management Agency 
implemented this administrative system on October 1, 1998. This success 
led the Secretary to accelerate the system's implementation in the 
current fiscal year to include four major agencies--Animal and Plant 
Health Inspection Service--APHIS, Rural Development--RD, Farm Service 
Agency--FSA, Natural Resource Conservation Service--NRCS. These 
agencies are expected to have the system in place by October 1, 2000.
    National Finance Center.--OCFO's National Finance Center--NFC--in 
New Orleans processes the payroll for 40 percent of the Federal 
civilian workforce and administers the $90 billion Thrift Savings Plan, 
a 401(k) type plan for 2.5 million Federal employees. NFC has added 
three new payroll clients: The Peace Corps--900 employees, The Federal 
Elections Commission--350 employees, and the county-based employees 
from the Farm Service Agency within USDA--1,200 employees in addition 
to the 16,300 in fiscal year 1999. NFC has added 21,400 individuals to 
the list of employees receiving payroll services in the last two years. 
Adding customers to the NFC payroll service helps to reduce the cost 
per transaction for all users of the service.
    These examples represent progress that will continue only if we 
receive the necessary resources to establish the framework in which we 
will lead, direct, and coordinate USDA's financial management 
priorities to satisfy congressional mandates and provide the Secretary, 
the Congress, and program managers with credible financial information 
on which they can base decisions.

                    FISCAL YEAR 2001 BUDGET REQUEST

    Mr. Chairman, OCFO is requesting an increase of $1,505,000 over our 
fiscal year 2000 appropriation. The $500,000 increase that we received 
in fiscal year 2000 marked the first time in several years that OCFO, 
or its predecessor agency, received an increase in its appropriated 
budget. We thank you for recognizing financial management's 
increasingly important role in ensuring that sound business practices 
are in place. We will use the increase in fiscal year 2001 to devote 
the necessary staff and resources to continue working on the following 
goals:
    Lead Corporate Systems Strategy.--The Secretary has directed me to 
lead a executive group, including the Chief Information Officer and the 
Assistant Secretary for Administration, to develop a corporate strategy 
for Department-wide administrative/financial systems, including 
accounting/budget execution and formulation functions, procurement, 
property, human resources, travel, and the associated 
telecommunications and security. These financial management systems 
require OCFO to review all current business practices in the affected 
agencies to ensure that these systems will produce accurate, timely and 
reliable data. Currently, program managers, policy officials, members 
of Congress, and other stakeholders do not always have the reliable and 
timely information needed to support essential program and financial 
management decisions, as well as develop, monitor, and report on 
performance plans and their goals and objectives, as required by GPRA. 
The added resources for this corporate systems strategy will help OCFO 
accomplish these specific objectives: (1) adequately implement 
Congressionally mandated debt collection provisions, (2) implement a 
financial information architecture that fully complies with Federal 
requirements, (3) maintain guidelines for cost distribution processes 
to include guidelines for the establishment of fees, (4) ensure 
compliance with the Single Audit Act and non-procurement debarment and 
suspension/drug-free workplace requirements, and (5) participate as a 
key player in Government-wide efforts to continually define and refine 
financial information requirements.
    Implement Information Infrastructure.--Consistent with the 
corporate systems strategy, OCFO will work with four agencies--Rural 
Development, FSA, NRCS and APHIS--to implement FFIS, the integrated 
administrative accounting system that 46 percent of the Department's 
workforce now relies on for its accounting services.
    Resolve Credit and Debt Management Issues.--In fiscal year 1999, 
OCFO initiated a pilot with the Department's two major credit 
agencies--Rural Development and FSA--to jointly address credit reform 
issues in partnership with OCFO, the Office of Inspector General, and 
the Office of the General Counsel. The pilot was funded through 
reimbursable agreements among OCFO, FSA, and Rural Development. The 
Federal Government's quest for a clean audit opinion on the Government-
wide Financial Statements is in jeopardy if the Department does not 
resolve these credit-related issues.
    Fully implement GPRA.--OCFO must (1) conduct oversight and provide 
expert guidance within the Department to ensure that the strategic 
planning function meets legislative requirements; (2) publish the 
Department's Strategic Plans and the annual performance reports; and 
(3) ensure that a demonstrated linkage exists between annual 
performance plans and the strategic plan and that cost data are aligned 
with performance goals and correlate with budget requests. The 
resources OCFO needs to manage financial and administrative systems 
reforms will be used to link program managers with the essential 
information they need to examine performance measures and cost data.
    Direct Cost Accounting Reforms.--OCFO leads the USDA Cost 
Accounting Task Force efforts and will use the additional resources to 
ensure that the systems modernization efforts comply with these 
standards and produce the appropriate cost-accounting information that 
program officials need.
    Produce An Accountability Report.--Without additional resources, 
OCFO would have to divert resources from other high profile financial 
management initiatives, new systems implementation, and/or audit 
resolution to issue an accountability report. An accounting report 
would streamline financial and performance reporting and provide 
internal and external stakeholders with a single source of 
comprehensive information on the Department's performance on program 
and financial management issues. With this funding, an accountability 
report could be produced by March 31, 2001.
    Provide oversight, guidance, and coordination for audit monitoring, 
tracking, and resolution.--The added resources would ensure that 
Federal funds are utilized for the purposes for which they are 
intended, and that instances of program abuse and/or fraud do not go 
undetected, but are addressed by Government managers in a timely 
fashion. In the last year, OCFO developed an Automated Tracking 
System--ATS--to produce better, more efficient management information. 
Since the OCFO has been designated as the central point to receive and 
track USDA audits these funds are needed to carry out that function.

                          WORKING CAPITAL FUND

    Finally, Mr. Chairman, I will conclude my remarks by providing you 
with a brief update on our WCF. As you know, the WCF serves as the 
Department's primary financing mechanism for centrally managed 
financial, administrative, and information technology services. As 
such, it supports more than 20 distinct activity centers. Much of what 
I have already discussed, with respect to implementing FFIS and our new 
corporate systems, will be financed by our WCF and result in some 
short-term cost increases.
    I cannot tell you, Mr. Chairman, how many USDA officials have come 
to me over the last twenty-three months and raised concerns on the WCF 
and the perceived lack of controls over its costs. I share these 
concerns and last fall initiated a study to evaluate those WCF costs at 
the National Finance Center. I recently expanded the study to look at 
all services performed at the Center, with the exception of those 
performed on behalf of the Thrift Investment Board. When the study is 
concluded, my goal will be to determine what it costs the Center to 
provide its accounting services.
    USDA's leadership wants to control costs, not only for the WCF but 
for the individual agencies. The agencies' support for establishing a 
corporate strategy is indicative of this awareness. Furthermore, we are 
seeing a much greater collaboration between the activity centers that 
provide the WCF services and the agencies to ensure we are not 
duplicating each others work. For example, Mr. Chairman, last year the 
Department's Executive Information Technology Investment Review Board--
EITRB--reviewed the major administrative, financial, and program 
systems. This Board is comprised of the Department's senior policy 
officials chaired by the Deputy Secretary. In this manner, we are 
better able to reduce the duplication of systems development and to 
coordinate the Secretary's administrative and financial priorities. In 
the long run, I also see this process as a means to maintain and 
improve the WCF's integrity.
    As you know, the WCF is a revolving fund and totally dependent on 
transfers and income it receives from its customers for the services we 
provide. We are here today requesting no funding from the Committee, 
only to justify them. Much of the increase includes a number of items 
related to the modernization investments, re-engineering efforts, and 
enhanced accounting services I have spoken of already, along with 
associated increases related to the Thrift Savings Plan, or TSP. These 
increases are essential to modernize our operations, so we can maintain 
and improve upon the high quality of service delivery all of our 
customers demand. Only a small portion of the increases are related to 
inflation or other cost increases. With respect to TSP, we are 
requesting an increase in operating funds to provide for an expansion 
of services. The Thrift Investment Board has requested these increases 
so they can meet the expected legislative requirements allowing 
military personnel to participate in the TSP; make certain other 
changes relating to changes in employees' eligibility; and 
significantly expand the plans capabilities. These increased costs will 
be fully reimbursed by the Board as the customer. I am pleased to 
report that we, along with the Board and a private contractor, are in 
the final stages of implementing a new system in October 2000 that will 
provide two new investment options for TSP participants and allow them 
the capability to conduct on-line investing within their own accounts. 
These changes will bring TSP up to the standards on-line traders 
currently enjoy on the Web.
    We have learned that modernizing our financial and administrative 
systems is an expensive and continuing process, and we are currently 
paying for years of inadequate investments that prevented NFC from 
keeping up with current technology standards. That's why we are having 
to bear high costs for modernizing NFC and for re-engineering a wide 
variety of administrative, information technology, and financial 
processes.
    As I mentioned, we are evaluating innovative methods to provide 
financing for our major initiatives, including the performance-based 
contracting. With this in mind, the President's Budget includes new 
language to be included in the Department's General Provisions that 
would grant authority to the Secretary to transfer certain funds to the 
WCF for plant and equipment investments in administrative, financial, 
and information technology services. In a rapidly changing 
technological environment, we are always going to be faced with the 
need to make improvements, redesign systems, re-engineer processes, and 
generally manage our operations in a virtual environment. Our customers 
will no longer accept less than what they can get in the market place 
or from our competitors. Therefore, we must have access to investment 
capital that is both sustainable and flexible. We need to be able to 
bring needed resources to bear quickly and efficiently. There is no 
clearer example of our emerging need than our efforts to re-engineer 
our corporate systems, as I noted before. When completed, we will be 
able to provide to all of our customers real-time information in an 
interactive environment. Again, our customers will accept no less.
    Mr. Chairman, we have a shared responsibility to ensure that we can 
meet the needs of our agencies as they address the needs of the 
American farmer and agricultural community. I am eager to work with you 
and the members of this Committee to ensure that those needs are met. 
The resource estimates that I am presenting to you is our commitment to 
fulfilling our responsibilities. Thank you, Mr. Chairman. I welcome any 
questions the Committee might have.
                                 ______
                                 

                      OFFICE OF INSPECTOR GENERAL

       PREPARED STATEMENT OF ROGER C. VIADERO, INSPECTOR GENERAL

                       INTRODUCTION AND OVERVIEW

    Good morning, Mr. Chairman and members of the Committee. I am 
pleased to have this opportunity to visit with you today to discuss the 
activities of the Office of Inspector General (OIG) and to provide you 
with information on our audits and investigations of some of the major 
programs and operations of the U.S. Department of Agriculture (USDA).
    Before I begin, I would like to introduce the members of my staff 
who are here with me today: Jim Ebbitt, Assistant Inspector General for 
Audit; Greg Seybold, Assistant Inspector General for Investigations; 
and Del Thornsbury, Director of our Resources Management Division. I 
want to thank the Committee for its support during the 5\1/2\ years 
since my appointment as Inspector General. We have tried to work 
closely with you, and I hope we have been able to address some of your 
concerns. We have a diverse staff of auditors, criminal investigators, 
and other personnel in our offices throughout the Nation to carry out 
the agency's audit and investigative mission.
    I am proud to say that in fiscal year 1999, we continued to more 
than pay our own way. In the audit arena, we issued 146 audit reports 
and obtained management's agreement on 348 recommendations. Our audits 
resulted in questioned costs of over $262 million. Also, as a result of 
our audit work, management agreed to recover more than $55 million and 
put another $114 million to better use. Equally as important, 
implementation of our recommendations by USDA managers will result in 
more effective operations of USDA programs. In addition, our 
investigative staff completed 515 investigations and obtained 502 
indictments, 559 convictions, and 2,780 arrests. OIG investigations 
also resulted in $68 million in fines, restitutions, other recoveries, 
and penalties during the year.
    We continued to work closely with USDA agency officials during 
fiscal year 1999 to address key issues and expand our cooperation with 
other Federal, State, and local law enforcement and audit agencies to 
broaden the impact of our work. Working together, our staffs identified 
program weaknesses and program violators. Capitalizing on the staffs' 
respective expertise, we created solutions for positive action.
    In fiscal year 2000, our primary concerns continue to be in the 
areas of food safety, public health, and consumer protection. In the 
food safety arena, we continue to identify contaminated food, 
misbranded products, uninspected meat or other products, or items 
smuggled into the United States containing unwanted and unsafe pests. 
With the Nation's food supply being highly susceptible to tampering, 
diseases, or infestation with unwanted plant pests, OIG's resources, 
especially our investigative resources, continue to be drastically 
overextended in these highly critical areas.
    We are also focusing our audit efforts on the Department's 
financial information systems, which process billions of dollars in 
payments and an extraordinary amount of sensitive data. And, of course 
as conditions change, we adapt quickly to address critical, time-
sensitive situations. For example, when Congress passed supplemental 
appropriations to help farmers suffering from natural disasters and low 
commodity prices last year, our audit staff immediately teamed up with 
Department officials to make sure controls were in place to quickly get 
the right payments to farmers. Another area we are addressing is 
employee integrity. We are concerned by the occurrences of corruption 
within the Department's ranks. For instance, during fiscal year 1999, 
we issued 40 investigative reports and obtained 22 convictions of 
current or former USDA employees.
    Before I continue with our accomplishments during the past year, I 
want to take a few minutes to address an issue that has me deeply 
troubled. I have been candid with the committee on whatever issues came 
before me and reported the facts as I have known them. This is as it 
should be. But now, I want to speak of the special agents and auditors 
of my own agency. These dedicated individuals have accomplished so very 
much, only a small portion of which I have ever had the time to share 
with you. Their work literally saved the lives of large numbers of our 
citizens, particularly children, and elderly. They have saved our 
precious tax dollars, worked with USDA agencies to restore integrity to 
our programs, and protected American agriculture. I am immensely proud 
of them and hope you are too.
    While I have reported to you some of their accomplishments, I have 
not told how they have been stretched beyond the breaking point. The 
numbers of special agents and auditors, and the resources available to 
them, were severely limited when I arrived 5\1/2\ years ago, and while 
our responsibilities have increased since my arrival, our staff and 
resources have continually diminished. In January 1993, we had 875 
employees on board. Now we have only 665 210 less, a 24 percent loss. 
Yet, the decrease to 665 people means little until one considers that 
the Department's budget, including loan authority, currently is $177 
billion; with a personnel staff of approximately 110,000 for fiscal 
year 2000. Not included in this dollar amount are the operations and 
actions of millions of companies, plants, and individuals regulated by 
USDA. As you know, investigating criminal activity by any of them is 
the responsibility of OIG agents. Ensuring the integrity of all of 
these programs is the responsibility of OIG auditors.
    To put it in perspective, when we compare OIG staffing to the 
Department's programs and personnel, we find that each auditor must 
ensure the integrity of approximately $635 million in program activity. 
Each special agent is responsible for investigating all crimes 
involving nearly $840 million of USDA funds, and any crimes committed 
by the Department's approximately 110,000 employees, such as 
embezzlements, thefts, bribes, or extortions. This lone agent is also 
responsible for investigating criminal activity committed by immense 
numbers of companies, plants, and individuals whose actions are 
regulated by the Department through its animal and plant, meat, 
poultry, grain, fruit, and vegetable inspection and grading programs. 
Then, there are USDA's forests. It's like having one police officer and 
one auditor to handle all crime and corruption in New York City.

[GRAPHIC] [TIFF OMITTED] T01ROGER.001

    As our funding shortages have grown more severe, we have been 
forced to change our standards for determining which criminal 
activities we investigate. For years we have declined to investigate 
large numbers of prosecutable cases, focusing instead on those with 
higher dollar amounts or those that would have a significant impact on 
a USDA program. In recent years, as our resources have diminished, we 
have had to elevate the standard further, leaving thousands of 
prosecutable criminal cases in the files. The types of criminal 
activity which we do not have resources to investigate continue to vary 
widely, and range from corruption in USDA's grading programs, to 
smuggling of agricultural products, to large frauds in the Department's 
benefit programs. Proactive investigations have been, by necessity, 
severely curtailed.
    Of course, our people continue to do their best, continue to lock 
up some of those who steal from the taxpayers, poison our citizens, and 
endanger American agriculture, but you must know that there are now 
huge gaps in that ``thin blue line'' that is OIG.
    Our auditors and investigators can continue to recover and save 
money for the taxpayers only if they have the tools needed to perform 
their duties. The changing world of automation has added to the tools 
needed, and these tools come at a heavy price. For example, audits of 
computer security require specialized and costly training, hardware, 
and software. Without these tools, we stand little chance of staying 
abreast with the ``hacker community,'' and the Department's exposure to 
system penetrations remains high, with potentially devastating effects. 
The highly publicized breakins over the past 2 weeks via the Internet 
of such major cyberspace vendors as Yahoo, Amazon.com, and eBay only 
highlight the urgency of protecting the Department's data bases and 
vulnerable computer systems.
    Compounding our dilemma, for several years we have been required to 
absorb increases in personnel costs. This has forced us to limit our 
replacement hiring and has extensively curtailed the funding we have 
available for other necessary items, such as travel and specialized law 
enforcement equipment. At the same time, programs and activities 
administered by USDA to protect consumers have undergone substantial 
increases due to liberalized world trade and travel, and purchases of 
commodities for use in the National School Lunch and related programs. 
In addition to fewer staff, we received no additional resources for 
such mandated activities as auditing the Department's financial 
statements, yet this activity consumes about 20 percent of our audit 
resources. Under these conditions something has to give, and it is 
reduced coverage of the Department's increasing activities and 
expenditures. To illustrate this, in fiscal years 1997 through 2000, we 
determined that on average a little over 100,000 workdays were needed 
in each of those fiscal years to provide audit coverage. Yet with 
available audit resources, we could staff only an average of 67,000 
workdays, a shortage of 33,000 workdays. In fact, in fiscal year 2000 
only 61,400 workdays are available. By way of example, because of these 
shortages, we have not been able to provide in-depth audit coverage to 
issues such as the Department's efforts to increase collection of debts 
owed to it, and the Department's new computer system for tracking the 
Rural Housing Loan Program. Overall, more needs to be done with 
information technology information since, with the advancing state of 
automation, more data involving payment systems, health and safety, 
economic matters, and research becomes at risk because of unauthorized 
access and possible irreparable damage.
    At our current staffing level, we are simply not able to deal with 
crisis issues needing immediate audit and investigative attention 
without neglecting important work elsewhere. OIG is often required to 
pull its special agents from assigned investigations of large frauds in 
USDA's benefits and loan programs to investigate criminal activity that 
threatens the health and safety of the public. We currently have 34 
open investigations on those who intentionally sold meat products that 
could have sickened or killed consumers, including school children and 
military personnel. While most cases involved those who processed the 
meat products, we also investigated those who endangered the public in 
other ways. For example, just this month we immediately responded to an 
incident where individuals had stolen tractor-trailer loads of meat and 
poultry from several locations in Georgia. Our immediate concern was 
that the thieves were repackaging and relabeling the stolen product and 
not properly maintaining it, making it hazardous to consumers. A 
portion of one tractor-trailer load transported to Texas had spoiled 
because the refrigeration unit on the trailer was not properly working. 
Other stolen meat product was found in Mississippi and in Tennessee, 
where it had been sold to prisons.
    Another area that significantly affects our resources being 
available for criminal investigative operations is our need to provide 
protective security for the Secretary of Agriculture. OIG special 
agents continue to protect the Secretary during his official duties in 
Washington, D.C., and during his extensive official travel domestically 
and abroad. In the past 5 years, the number of threats to the Secretary 
has increased by 250 percent. In January 2000, the OIG security detail 
provided protection to the Secretary while he attended the World Trade 
Organization (WTO) meeting in Seattle, Washington. The WTO conference 
was ground to a halt by thousands of protestors who blocked entrances 
to meeting halls and hotels, virtually shutting down the city for 3 
days. In 1999, 20 individuals either wrote threatening letters to the 
Secretary or protested the Secretary's agricultural policies and 
programs. One individual repeatedly wrote letters to the Secretary 
threatening deadly force against him or any other Government employee 
who attempted to foreclose on his farm. This individual was arrested by 
OIG special agents on January 28, 1999, and has been confined to a 
medical facility for psychiatric evaluation. At the time of his arrest, 
the individual was carrying a semiautomatic pistol and a shotgun in his 
vehicle. An OIG search of his home found five shotguns, three 22-
caliber rifles, ammunition, and a gas mask. The weapons were placed at 
various doors and windows throughout the house, and ammunition was 
placed beside the weapons. The criminal complaint filed in Federal 
court against this individual is still proceeding.
    Adequate funding and staffing for our office makes good sense 
because we help create a Government that works better and produces 
positive results. While I recognize that funding is limited, I believe 
OIG cannot continue to provide sufficient service and assistance to 
you, the Congress, and to USDA agencies without being provided adequate 
resources, and I request that our proposed funding level be approved. I 
believe that resources allocated to OIG are very cost-effective in view 
of the money we save the taxpayers.
    Also, to keep the Committee informed, I have attached a summary to 
my testimony of the forfeiture funds we have received to date as a 
fully participating member of the Department of Justice's Asset 
Forfeiture Fund and how these have been used. These monies have been 
very helpful to the agency and have also enabled us to provide support 
to the State and local law enforcement agencies we work with in such 
joint efforts as Operation Talon. For example, we have been able to 
provide these law enforcement agencies nearly $100,000 during the last 
year and a half to assist in this particular operation as a result of 
our forfeiture authority.
    Mr. Chairman, at this time, I would like to highlight some of our 
audit and investigative activities.

                  AUDIT AND INVESTIGATIONS ACTIVITIES
                              FOOD SAFETY

Animal and Plant Health Inspection Service (APHIS)

    Last year, OIG began an antismuggling campaign to interdict foreign 
agricultural products that are being illegally brought into the 
country. Such products can contain pests and diseases that could be 
catastrophic to U.S. plant and animal populations. Ongoing criminal 
investigations are targeting smuggled fruits, vegetables, plants, 
animals, and other commodities that bring high dollars in underground 
``black market'' commerce. This initiative requires significant agent 
resources dedicated to intelligence collection, undercover operations, 
and foreign law enforcement liaison, as well as a need for high-tech 
surveillance equipment.
    OIG is currently conducting 26 investigations into the smuggling of 
agricultural products that are entering the United States through 
Canada, Mexico, and U.S. ports in Florida and California. We are 
working closely with foreign customs and agricultural inspection 
officials, the U.S. Customs Service, the Animal and Plant Health 
Inspection Service, and State and local agricultural inspection 
personnel to locate the illegal products and identify the manner in 
which they are being brought into and moved around the country. These 
ongoing investigations have uncovered sophisticated smuggling 
conspiracies that are bringing in large quantities of agricultural 
products. These individuals fly products into areas of the country with 
little agricultural inspection, but then move them into other States 
where they pose a danger. They devise paper trails that hide the source 
of the products, and conceal the products when moving them. All of the 
products could harbor pests and diseases that could devastate the 
agricultural sector. Many of our investigations are being conducted on 
individuals who are bringing products into California, where outbreaks 
of plant pests have been common and costly. There is heightened concern 
in California because of the fruit fly quarantine imposed as a result 
of these pests being introduced. OIG must do proactive work to ensure 
these destructive pests are not being brought into the country on 
smuggled plants and commodities to infest our plants and crops. We must 
shift staff from current work to address these immediate issues to 
prevent loss of crops and dire economic consequences to the local 
economies.
    Antismuggling operations also include our long-term joint Special 
Field Enforcement Program with APHIS, the U.S. Customs Service, and 
State and local law enforcement agencies in Florida. This Special Field 
Enforcement Program will target organized transportation and 
distribution networks responsible for the smuggling of foreign fruit 
contaminated with fruit flies and other pests into the United States 
via Florida. This program will eventually expand to other States with 
pest smuggling problems.
    In another OIG criminal investigation that demonstrates our work in 
this area, we worked with APHIS to convict two owners and their company 
operating a horse export/import business in Virginia and Germany. The 
owners pled guilty to smuggling and providing falsified information 
concerning the age of horses being exported from Germany. The German 
veterinarians unknowingly issued inaccurate health certificates that 
allowed the horses to be exported to the United States. The 
certificates were presented to APHIS officials so that the horses could 
avoid the 50 days of quarantine in the United States paid for by the 
owner which is a requirement for all horses over the age of 731 days in 
order to prevent the spread of Contagious Equine Metritis, a sexually 
transmitted disease. Consequently, at least 10 mature horses were 
imported into the United States without being placed in quarantine. One 
owner was sentenced to 4 months in prison while the second owner and 
corporation were given probation. Collectively, the three were fined 
$45,000. Because of OIG criminal enforcement actions, the Government 
seized the owners' horse farm in Virginia, valued at $1.2 million, 
which the owners forfeited to pay damages in this case.
    In another case, a husband and wife, both Canadian citizens, were 
indicted in Washington State for smuggling prohibited Asian fruit into 
the United States. The Asian fruit is prohibited entry into the United 
States because it is known to carry pests and diseases not found here 
that could devastate local crop economies. Four hundred pounds of fruit 
were discovered hidden in the cargo area of the subjects' station wagon 
as well as inside the walls of the cargo area. This was the third time 
these individuals had been caught smuggling fruit into the United 
States. The husband subsequently pled guilty while the charges against 
the wife were dropped. Both the Federal prosecutor and the defense 
counsel had initially recommended probation with no jail time. The 
judge, noting the potential harmful impact of the fruit, which tested 
positive for insect infestation, could have had on domestic crops and 
local economies, declared her intent to ``send a message'' to the 
subject. She sentenced him to 2 days in jail and 3 years' supervised 
release.

Food Safety and Inspection Service (FSIS)
    At last year's budget hearings, I reiterated our continuing 
commitment to placing a high priority on food safety and consumer 
protection issues. Threats to the health and safety of the public are 
the most important matters investigated by OIG. Recent criminal 
investigations addressed the processing and sale of adulterated meat 
and poultry and tampering with food products consumed by the public.
    During the last few months, criminal investigations have 
necessitated the immediate deployment of special agents to several 
cities in the United States to protect the health and safety of 
consumers. These cases, some of which are still ongoing, have involved 
real or threatened adulteration of meat with E.coli and Listeria from 
unsanitary production methods intentionally neglected by the processor, 
sewing needles placed in commercial meat product packages at a 
supermarket to injure and possibly kill unsuspecting consumers, and 
substances added by the processor for economic gain.
    To address these serious threats and illegal acts against the 
public's well being, we are pursuing joint activities with other 
Federal, State, and local agencies to share intelligence and conduct 
undercover operations. Doing so will help us better target criminal 
enterprise in general and the threat to the food supply in packing 
plants and other facilities in particular.
    The increasing threat to the wholesomeness and safety of domestic 
and exported food requires not only vigilance but also advanced 
preparedness and preemptive undercover operations. Profit-motivated 
criminal activity that threatens the food industry can cause economic 
disruption while victimizing innocent members of the industry. 
Likewise, threats from outside the food industry of criminal 
adulteration and biological contamination of food products for 
extortion or ideological motives victimize and disrupt the food 
production or distribution systems until these threats are resolved 
through a law enforcement and health and safety response.
    Immediate response to emergency situations impacting USDA programs 
and operations and regulated industries requires the specific, unique 
law enforcement expertise of USDA OIG. OIG's rapid response and 
deployment of considerable staff resources has helped to protect the 
health and safety of consumers this past year, and we will continue to 
do so in the future. However, the cost to respond rapidly is great and 
growing. To do so, we require specialized equipment and protective 
clothing and supplies to ensure the health and safety of our personnel 
responding to these crises. To date, we have very limited funding for 
these critical necessities.
    A prime example of our work in this area was one of our high-
profile cases, which was conducted with the technical assistance of the 
FSIS Compliance staff. Together, OIG and FSIS identified approximately 
30 million pounds of potentially tainted hot dogs and sandwich meat 
deemed unfit for human consumption and ordered destroyed by FSIS. 
During December 1998, FSIS suspended the operations of the Arkansas 
meat processing plant responsible for the unsanitary production process 
that resulted in Listeria Monocytogenes bacteria infecting the hot dogs 
and sandwich meat. This processing plant produced approximately 600,000 
pounds of hot dogs and cold cuts per week and sold these items to large 
food stores and the U.S. military. Our criminal investigation 
continues. An incident at an Iowa grocery store is another significant 
example of the multitude of food safety issues we deal with on a 
regular basis. In this case, 18 OIG criminal investigators, in 
cooperation with the local police department, worked round-the-clock 
for 4 weeks to identify the individual responsible for placing sewing 
needles in ground beef packages, fruit, and bakery items to be sold to 
the public. Due to the immediate response of OIG special agents and 
their subsequent investigative actions, one individual was indicted on 
a Federal criminal charge of tampering with food products. Fortunately, 
no injuries are known to have resulted from these criminal acts. An 
April 2000 trial date has been set.
    As a result of another joint criminal investigation by OIG and the 
Internal Revenue Service, two owners, the vice president, plant 
manager, and four salesmen for a large meat company in Philadelphia, 
Pennsylvania, were indicted for skimming $2.7 million from the company 
cash register and concealing this income on their tax returns. The 
owners and plant manager were also indicted for misbranding cheaper 
cuts of beef and pork and selling this meat as expensive cuts. The two 
owners pled guilty to all 52 counts brought against them. The plant 
manager pled guilty to selling misbranded meat and filing false income 
tax returns. At sentencing, the two owners were ordered to pay a total 
of $1.5 million in restitution and fined $724,000. In addition, one 
owner was sentenced to serve 60 days' imprisonment, the other was 
sentenced to 1 year of home confinement, and each received 5 years' 
probation.

            ONGOING FOOD SAFETY REVIEW

    Another area that is critical to increasing food safety and 
ensuring that consumers receive safe and wholesome meat and poultry 
products is successful implementation of the Hazard Analysis and 
Critical Control Point (HACCP) and pathogen reduction programs. We 
developed a ``Food Safety Initiative'' to review FSIS' food safety 
mission across a broad spectrum of meat and poultry inspection 
operations. This initiative, which is now underway, includes a review 
of meat and poultry establishments' sanitation and HACCP 
implementation, including efforts to test for pathogens and reduce 
their presence. Because a key to pathogen reduction is FSIS' laboratory 
operations, our review is assessing FSIS' quality control system over 
those laboratory operations, product sample integrity, and laboratory 
testing operations.
    Our review also focuses on the import of meat and poultry products 
into the United States from foreign countries. In order for a country 
to ship meat or poultry products into the United States, the country 
must demonstrate that its inspection system is equivalent to the U.S. 
system. When the review of the FSIS equivalency determination is 
completed, our efforts will focus on FSIS' responsibility to inspect 
the imported product on entry to the United States, and if need be, 
conduct visits to selected foreign countries to assess their inspection 
systems. Lastly, our initiative is focusing on FSIS' Compliance Program 
to determine its effectiveness in preventing and detecting violations 
of the meat and poultry inspection laws. This includes activities 
related to businesses engaged in transporting, storing, and 
distributing products after they leave federally inspected 
establishments. We are in the process of finalizing our work in this 
area.
            FSIS OVERSIGHT OF STATE-OPERATED MEAT AND POULTRY 

                    INSPECTION PROGRAMS NEED FURTHER IMPROVEMENTS

    Under the State-Federal Cooperative Inspection Program, individual 
States are authorized to inspect meat and poultry products sold solely 
within their boundaries, provided that their food safety requirements 
are at least equal to those of the Federal Government. FSIS retains an 
oversight role in this effort. Twenty-six States have FSIS-approved 
inspection programs, covering about 2,700 slaughtering and processing 
plants. About 7 percent of all meat and poultry production in the 
United States is inspected at these plants.
    FSIS took significant steps to correct problems identified in a 
previous OIG audit, but additional improvements are still needed. Our 
most recent audit, released in May 1999, included reviews in two States 
that represented about 24 percent of the State-inspected establishments 
nationwide. This audit found that FSIS needs to ensure acceptable 
ratings are not given to State programs with identified sanitary 
deficiencies or to States that do not take adequate corrective actions 
to address serious sanitation problems. FSIS agreed to implement our 
recommendations.

                           EMPLOYEE INTEGRITY

    The investigation of criminal acts associated with employee 
integrity violations by USDA employees is another high priority for 
OIG. During fiscal year 1999, we issued 40 reports of investigation 
concerning allegations of criminal conduct by USDA employees. Our 
investigations resulted in 22 convictions of current and former 
employees and resulted in 68 personnel actions, including removals, 
suspensions, resignations, reprimands, and alternative discipline.
    Our current investigation in New York City epitomizes the agency's 
work in the employee integrity area. Thus far, in this ongoing 
investigation, 9 Agricultural Marketing Service (AMS) graders have pled 
guilty to charges of accepting bribes for downgrading the quality of 
fruit and vegetables at the Hunts Point Terminal Market in the Bronx. 
In addition, 3 owners or employees of produce wholesalers have pled 
guilty to charges of paying bribes to these graders. All 12 owners and 
employees of other produce wholesalers have also been indicted and are 
waiting trial. All had been arrested by OIG special agents. During the 
2\1/2\ year investigation, we uncovered a scheme by which the AMS 
graders accepted bribes from produce wholesalers to downgrade lots of 
produce. The wholesalers then used the lower grades to negotiate the 
price they paid the grower for the produce downward, which resulted in 
the growers being cheated out of the true value of their produce.
    In another investigation, in West Virginia, nine individuals, 
including two employees of the Farm Service Agency's (FSA) Agricultural 
Credit Team, were convicted for defrauding the Government of 
approximately $2 million in FSA direct and guaranteed farm operating 
loan funds. The loans were obligated by FSA based on false information 
submitted by the applicants. The two employees of the Agricultural 
Credit Team assisted the loan applicants by forging signatures or 
manipulating figures on official FSA documents for the purpose of 
making the applicants qualify for loans. Eight of the nine individuals 
have been sentenced. All seven loan recipients were ordered to make 
full restitution. The two FSA employees resigned from Government 
service following their convictions.
    In an investigation in Louisiana, five individuals pled guilty and 
were sentenced in Federal court for their involvement in a kickback 
scheme in which an FSA credit manager in Louisiana falsified loan 
documents, resulting in $1.8 million in false FSA farm-operating loans. 
The credit manager, who resigned, and two other FSA borrowers were 
indicted and are fugitives. In addition, a local bank vice president 
was placed on pretrial diversion for conspiring with the former credit 
manager to provide false information to the Government, which resulted 
in the issuance of an FSA guaranteed loan that should not have been 
made. The bank vice president obtained the loan for the construction of 
an airplane hangar. To date, the sentences have ranged from probation 
to 2 years 3 months of incarceration. In addition, the court has, thus 
far, ordered a total of over $670,000 in restitution be paid to USDA.

                           WORKPLACE VIOLENCE

    Another extremely important area for OIG is the investigation of 
threats of violence against USDA employees. We have responded to 
numerous situations involving the use or threatened use of force 
against the Department's employees. For example, in Oklahoma, we 
investigated a shooting incident involving a farmer, a USDA Natural 
Resources Conservation Service employee, and a second farmer who was 
assisting the USDA employee. The USDA employee was present in an 
official capacity when the shooting occurred. The farmers involved in 
the situation began arguing about the destruction of several fences, 
and one farmer shot and killed the other. The USDA employee was held at 
gunpoint for 30 minutes until he was allowed to leave the scene to 
obtain help for the farmer who had been shot. The farmer who killed the 
individual was indicted by a Federal grand jury for murder. He recently 
appeared in District Court for a detention hearing. He was denied bond 
and ordered to remain in jail until his trial date which is scheduled 
for March 6, 2000.
    In another investigation, in North Dakota, a dog kennel owner pled 
guilty to a felony count of threatening to assault an APHIS Animal Care 
inspector in an attempt to prevent the inspector from performing the 
required inspections at the kennel. During the OIG criminal 
investigation of this matter, the subject admitted that he had 
threatened to kill the inspector, and then proceeded to make a similar 
threat if the APHIS inspector attempted to perform his inspection 
duties in the future. The kennel owner was sentenced to 12 months' 
probation.

                    INFORMATION RESOURCES MANAGEMENT

Computer security

    We have also conducted numerous reviews of the vulnerability of 
agencies' computer systems to unauthorized access. Using advanced 
techniques known to the hacker community our audits disclosed over 600 
security vulnerabilities. For example, sensitive data such as passwords 
could be identified which would enable hackers to penetrate the 
Department's systems. With the continued expansion of Internet use and 
public access to departmental systems, security risks will continue to 
increase. The potential harm of improper entry to the Department's 
computer systems is extraordinary given the degree of sensitive data 
processed and the extent of program payments made through these 
systems. Alteration of data on quantity and price compiled by the 
National Agricultural Statistics Service could drastically impact world 
commodity markets. Penetration of Rural Development's $56 billion loan 
portfolio could significantly reduce the safeguarding of those assets. 
Finally, data that FSIS depends upon to ensure a safe and healthy meat 
and poultry supply could be compromised. Although we have been 
successful in our audit efforts in this area, much work remains, and 
our ability to address it has been limited due to staffing and resource 
constraints.

The Department achieves ``year 2000'' compliance

    Year 2000 testing was essential to provide reasonable assurance 
that new or modified systems processed dates correctly and would not 
jeopardize an agency's ability to perform core business operations 
after the millennium change. Throughout fiscal year 1999, we continued 
to review and report on the Department's Year 2000 compliance or 
necessary remedies. Our reviews were essential to provide the public 
with assurance that the Department would continue to operate and 
provide needed benefits to program participants.
    The Department overcame the Y2K threat without significant 
interruption. OIG played a major role in this achievement.

                 FARM AND FOREIGN AGRICULTURAL SERVICES

Farm Service Agency (FSA)

            Monitoring the Implementation of the Crop Loss Disaster 
                    Assistance Program (CLDAP)

    In 1998, Congress appropriated $2.4 billion for distribution to 
eligible farmers under the 1999 CLDAP. This program provided emergency 
assistance to over 270,000 farmers, many of whom suffered multiyear 
losses from drought or floods. The value of lost production totaled 
around $2 billion. When the bill passed, we began working with FSA and 
the Risk Management Agency (RMA) as they began to implement this 
massive farm program, to ensure that all eligible farmers received this 
Federal farm assistance timely. We provided input on program controls 
to FSA and RMA as they drafted program regulations, and, in doing so, 
were able to proactively review and provide comments on the agencies' 
implementing regulations. This cooperative effort helped to preclude 
many of the problems we had noted in prior ad hoc disaster programs. We 
had staff at the FSA field offices shortly after CLDAP was implemented, 
checking on the effectiveness of FSA's and RMA's outreach program to 
ensure all eligible farmers were notified of this program and to 
determine if there were any backlogs or other problems in the timely 
processing of applications from all eligible farmers. We worked with 
the agencies to alert them to potential problems in getting this 
massive assistance to all farmers. We were also alert to potential 
abuses in the program through ineligible program overpayments submitted 
by individuals. As a result of our work with FSA and RMA, they were 
able to revise the program procedures and on a timely basis, which 
helped to preclude improper CLDAP payments.
    On the investigative side, historically, one of our primary 
responsibilities has been the investigation of criminal violations of 
the various farm support programs administered by USDA. For example, as 
a result of a criminal investigation in Georgia, three Mitchell County 
farmers have each pled guilty to one count of conspiracy to launder 
money. These 3 individuals were believed to be the masterminds in a 
disaster fraud scheme that netted them and 12 of their relatives and 
friends approximately $1.6 million in unentitled disaster payments. The 
defendants filed fraudulent claims to receive FSA disaster payments for 
themselves and the others and submitted fictitious seed invoices to 
support the fraudulent claims. Each farmer was sentenced to serve 1 
year in Federal prison for involvement in this scheme.
    In another investigative case in this area, two Idaho warehouse 
operators, a husband and wife, were ordered to pay restitution of 
$166,000 to the Commodity Credit Corporation and local farmers after 
they pled guilty to Federal charges related to the theft of grain that 
was being stored at their State-licensed grain warehouse. Producers in 
Idaho and Oregon lost more than $1.5 million as a result of the theft. 
The wife was sentenced to serve 6 months in Federal prison to be 
followed by 4 months of home detention and 3 years of supervised 
release. Her husband was placed on probation for 4 years. As part of 
their plea agreement, they also agreed not to contest debarment action 
by USDA. This investigation was a cooperative effort with the warehouse 
examiners from the FSA Kansas City Commodity Office; the Oregon State 
Police; the Canyon County, Idaho, Sheriff's Department; the FBI; and 
the IRS's Criminal Investigation Division.

Risk Management Agency (RMA)

            Reinsured companies were not properly servicing 
                    catastrophic (CAT) risk protection policies

    The CAT Program is part of the safety net for farmers. It provides 
basic coverage to all producers at a minimal cost and to limited-
resource farmers at no cost. In 1996-1997, a decision was made to 
transfer the delivery of CAT policies from FSA to the reinsured 
companies. We evaluated the transfer and found a number of servicing 
problems, such as farmers not receiving adequate local agent servicing. 
Frequently, these producers were not contacted by insurance agents, and 
the needs of the limited-resource farmers were not being addressed.
    In our recent followup review, we evaluated how effectively the 
delivery of this safety net program had been implemented by the 
reinsured companies. We found that the number of limited-resource 
farmers with CAT policies declined by about 78 percent between 1997 and 
1998, during the time the reinsured companies assumed sole delivery of 
the program. RMA acknowledged there is a problem in the CAT Program as 
currently authorized. However, RMA believes that the significant 
decline in participation by limited-resource farmers stems from the 
elimination of the legal requirement that farmers purchase crop 
insurance in order to receive other Federal farm assistance and from 
the farmers' perception as documented in RMA's reviews--that the CAT 
Program, as currently devised, does not provide an adequate safety net. 
Without improvements in the CAT Program, we believe that producer 
participation will likely continue to decline and that the 
effectiveness of the program as part of the safety net against 
catastrophic losses for farmers, especially small and socially 
disadvantaged farmers, will diminish further.

Foreign Agricultural Service (FAS)

            Monitoring of FAS' Food Aid Assistance Agreements With the 
                    Russian Government

    For the past several years, OIG has evaluated various aspects of 
the Department's food aid assistance to the Independent States of the 
Former Soviet Union. In response to our recommendations, the Department 
took actions to strengthen future programs' controls over 
accountability for the commodities and monetary proceeds and oversight 
of cooperating sponsors. We believe these actions have improved the 
Department's current food aid assistance.
    In December 1998, the Governments of the United States and Russia 
signed two food aid agreements that would provide over 3 million metric 
tons of wheat and various other commodities to the Russian Government. 
Shortly thereafter, we began to monitor FAS' efforts to implement 
procedures to minimize potential misuse and improper losses of 
commodities. The estimated total costs for all the agreements, 
including transportation costs, are about $1 billion. The commodities 
alone are estimated to have cost $746 million, and their monetary 
proceeds in Russia are estimated at over $403 million.
    In February 1999, we recommended specific actions to strengthen 
FAS' monitoring plan, including the need to increase the size and 
effectiveness of its monitoring staff detailed to Russia, and to verify 
the financial integrity of any Russian financial institutions involved 
with monetary proceeds. In May 1999, we participated on a U.S. 
Government Interagency Team to Russia to observe the implementation of 
the agreements. We documented our observations in a memorandum to FAS 
in August 1999, suggesting that it needed to quickly finalize the 
financial guarantees for payment of the commodities and to increase 
coordination and communication among all parties. In that memorandum 
and in our testimony before the U.S. House of Representatives, 
Committee on Agriculture, in October 1999, we stated that even though 
we could not provide complete assurance that the controls are fully in 
place and working, we believed that FAS had made significant efforts to 
establish controls and strengthen monitoring efforts.

                 FOOD, NUTRITION, AND CONSUMER SERVICES

Food and Nutrition Service (FNS)

            Operation Talon

    Previously, I informed you we had initiated a new law enforcement 
initiative, code named ``Operation Talon.'' This initiative provides 
for the exchange of information between law enforcement and State 
social services agencies. Specifically, law enforcement fugitive 
records are matched with social service agencies' food stamp recipient 
records, and the information is used by OIG and State and local law 
enforcement officers to locate and apprehend dangerous and violent 
fugitive felons who may also be illegally receiving food stamp 
benefits.
    Overall, Operation Talon has been the most successful investigative 
initiative we have yet undertaken. To date, this initiative has 
resulted in the arrest of approximately 5,600 fugitive felons. This has 
included 33 wanted for murder or attempted murder; 24 for child 
molestation; 14 for rape or attempted rape; 9 for kidnapping; and 1,695 
for assault, robbery, and drug offenses. Also, a number of States are 
removing arrested fugitives from their food stamp rolls, which will 
result in savings to the Food Stamp Program and allow food stamp 
benefits to continue to go to the needy who are the intended recipients 
and entitled to this benefit.
    Operation Talon is an ongoing initiative, and we are planning 
future arrest operations in many parts of the country. During the next 
phase of Operation Talon, we will initiate data matches between State 
social service agencies' records and Federal fugitive information 
provided by the U.S. Marshals Service. Following these matches, our 
agents and the U.S. Marshals Service will conduct fugitive apprehension 
operations. These Federal arrest operations will take place concurrent 
with OIG, State, and local law enforcement agency operations targeting 
non-Federal fugitive felons.

            Food Stamp Program (FSP)--Electronic Benefits Transfer 
                    (EBT)

    In fiscal year 1999, just over $19 billion in FSP benefits was 
issued with about 70 percent issued via EBT. This now involves 34 
statewide systems and the District of Columbia. It is critical that we 
provide audit coverage to ensure not only that the systems operate as 
designed, but also that only eligible persons receive benefits in the 
proper amounts. We will need to provide periodic assurances that EBT is 
working and that interState operability is functioning as it is 
expanded.
    In fiscal year 1999, we completed EBT system work in seven States. 
The EBT systems were successfully implemented in all seven States; 
however, controls need to be strengthened in some areas. Six States 
need to improve controls over access to their EBT systems. Two States 
need to establish procedures to reconcile program authorizations to 
those received by the EBT processor and the system operated by the 
Federal Reserve. In another State, controls were not in place to 
correct an erroneous benefit file that had been transmitted to the 
contractor. This resulted in a system error, causing an estimated 
$730,000 in erroneous FSP benefits to be issued to about 10,000 
individuals. Even with these problems, however, we believe EBT has been 
successful it gets stamps off the street, thereby reducing the 
opportunities for food stamp trafficking. Our reviews of EBT systems 
will continue as States endeavor to implement EBT to meet the deadline 
of October 2002 mandated by the Welfare Reform Act.
    We also continue to devote significant investigative resources to 
combating fraud in FSP. Ever since this important program began 
distributing food stamps to needy Americans, unscrupulous people have 
been willing to devise methods to unlawfully benefit from it. As the 
result of three OIG criminal investigations in Cleveland, Ohio, that 
initially seemed unrelated, a local grocer pled guilty to laundering 
$8.6 million in connection with food stamp trafficking. The 
investigation showed that, from June 1993 through March 1998, the 
grocer organized the illegal redemption of food stamps for himself and 
other Cleveland area grocers. The grocer was sentenced in Federal court 
to 12 years' imprisonment. This individual also had two prior 
convictions for food stamp trafficking as a result of OIG 
investigations conducted in 1989 and 1994. The other two store owners 
involved in the conspiracy, who cooperated with the prosecution, were 
sentenced to 2\1/2\ years and 18 months, respectively. All involved 
grocers were permanently disqualified from FSP. This investigation was 
conducted by the Cleveland Food Stamp Task Force, which is composed of 
OIG, the Secret Service, the FBI, the IRS Criminal Investigation 
Division, the U.S. Customs Service, the Cleveland Police Department, 
and the Ohio Department of Public Safety.
    In another 2-year criminal investigation by OIG, the Texas 
Department of Human Services' OIG, the IRS, and the Secret Service, six 
family members in Houston, Texas, were convicted for food stamp fraud, 
money laundering, and conspiracy, and criminal forfeiture actions were 
imposed. The subjects illegally accepted and redeemed in excess of $2 
million in food stamp benefits via the EBT system. The six subjects 
received sentences that ranged from 27 months' imprisonment to 97 
months' imprisonment, and $2 million was ordered in restitution.

            Child and Adult Care Food Program (CACFP)

    Last year I testified that we would continue with Operation 
``Kiddie Care'' our Presidential Initiative reviewing CACFP as long as 
we find evidence of abuses in the program. In fiscal year 2000, 
estimated outlays for this program are $1.8 billion; a program we judge 
to be at risk because its current control structure is flawed and 
places the primary controls in the hands of sponsors. Unless the 
program delivery system is overhauled, the kinds of abuses we have 
identified will continue, with the result being food literally being 
taken out of the mouths of hungry children to the benefit of greedy 
sponsoring organizations. We have continued our ``sweeps'' to identify, 
remove, and prosecute unscrupulous program sponsors and recover 
ineligible payments.
    Since last year, the cases of serious deficiencies and criminal 
activities have continued to mount. Currently, we have 38 open CACFP 
investigations, which are part of our ongoing efforts to detect fraud 
committed by CACFP sponsors nationwide.
    Our efforts have been very successful. For example, in Michigan, a 
former City of Detroit School Board member who owned and operated 16 
day care centers, as well as an assistant, were indicted by a Federal 
grand jury for defrauding USDA of an estimated $16 million. Our 
investigation showed that these individuals inflated the number of 
meals fed to children and falsified supporting documentation. A food 
vendor admitted supplying false invoices to inflate the food costs of 
the day care centers to substantiate the false meals reported to USDA. 
A Federal District Court jury found the owner of the day care centers 
guilty of conspiracy to commit mail fraud and Government program fraud, 
obtaining funds of the Department of Agriculture by fraud, mail fraud, 
embezzlement of public funds, conspiracy to launder money, and money 
laundering. This individual was sentenced to 108 months in prison, 
followed by 3 years' supervised release, and was ordered to pay over 
$13 million in restitution and a $10 million fine. Her assistant 
recently pled guilty to conspiracy to commit mail fraud and Government 
program fraud. Sentencing is pending.
    Our audit reviews of CACFP, as of December 1999, have identified 40 
sponsors whose program deficiencies are so serious that they should be 
terminated from program participation unless the shortcomings are 
promptly addressed. These sponsors have been receiving about $78.6 
million in CACFP funds annually. Twenty-two sponsors terminated from 
the program were receiving $45.4 million annually. Fifty-seven 
individuals have been charged with crimes, and 38 have pled guilty or 
been convicted thus far.
    The focus of our Operation is now on improving program delivery and 
oversight. After an interim report on Operation ``Kiddie Care'' in 
April 1998, we issued our audit report in August 1999, urging needed 
regulatory and legislative changes to CACFP.
    We believe our findings demonstrate a need for dramatic changes in 
CACFP. We made 23 recommendations to eliminate the structural program 
flaws, strengthen internal controls, and clarify CACFP requirements. We 
also recommended that FNS study alternative methods of delivering a 
meal program to children and adults in day care, specifically one that 
addresses the problems with private, nonprofit sponsoring 
organizations. FNS is in the process of preparing new regulations and 
requesting comments from stakeholders on basic structural changes in 
how payments are made to sponsors. Until changes are implemented, 
program abuses assuredly will continue. Returning integrity to this 
important feeding program and protecting the resources of the American 
taxpayer are high priorities for OIG, as well as FNS.

            Special Supplemental Food Program for Women, Infants, and 
                    Children (WIC)

    One of the primary purposes of WIC is to provide funds to families 
with small children to allow them to purchase certain nutritious food 
items. In an effort to curb fraud in WIC, we are continuing our 
investigative activities. For example, in a joint criminal 
investigation by OIG and the Georgia Department of Human Resources', 
Office of Fraud and Abuse, a Georgia Department of Health clerk 
responsible for administering WIC pled guilty to creating $47,945 in 
fraudulent WIC vouchers and converting them for her own use. The 
investigation disclosed that the clerk created 77 fictitious infants, 
including 21 sets of twins, in a scheme to defraud WIC from October 
1994 to August 1996. The clerk issued 1,073 fraudulent WIC vouchers and 
redeemed them for infant formula, which she resold to small retail 
grocery stores in the Atlanta area. While the investigation was in 
progress, the clerk resigned from her position. She pled guilty and was 
sentenced to 1 year of incarceration, followed by 3 years of supervised 
release, and ordered to pay $47,945 in restitution.

                           RURAL DEVELOPMENT

Rural Housing Service (RHS)

            Multifamily Housing Enforcement Program

    RHS programs are intended to help finance new or improved housing 
for more than 70,000 moderate or low-income families. When program 
funds are diverted, tenants (including many elderly and disabled 
people) do not receive decent, safe, and sanitary housing as intended 
by the program. OIG and RHS recently combined forces to develop a team 
approach for review of borrowers and management agents at high risk of 
defrauding or abusing the multifamily rural housing program. Our 
report, issued in March 1999, described a high-risk profile which we 
used to identify over $4.2 million in misused funds, as well as health 
and safety hazards posing an immediate danger to the tenants.
    Historically, OIG has responded vigorously when indications of 
fraud and abuse are identified. However, as our resources are 
stretched, almost to the breaking point, we are frequently unable to 
respond to requests for audit assistance. As a result, some who abuse 
the RRH program can continue to do so with impunity at least until 
additional staffing and resources become available.
    We have worked closely with RHS to develop proposed legislation to 
improve the integrity of the multifamily housing program. The draft 
bill would authorize a broad range of criminal and civil authorities 
which could be brought to bear against persons or entities who misuse 
RHS housing programs. Specifically, the proposed legislation would (1) 
establish civil sanctions for equity skimming, (2) establish civil 
monetary penalties for persons or entities who violate agreements and 
contracts, (3) authorize the Secretary to withhold the renewal or 
extension of loan or assistance agreements and request judicial 
intervention to enforce compliance with an administrative decision, (4) 
provide sanctions for money laundering and provide civil fines for 
obstruction of Federal audits and, (5) authorize the Secretary to 
impose civil penalties when project accounting records are found to be 
in unsuitable condition for audit. These provisions will strengthen our 
ability to audit and prosecute cases of program fraud and abuse, 
significantly improve program controls, and facilitate the effective 
administration of rural housing programs.

Rural Utilities Service (RUS)

            Telephone Loan Program Policies and Procedures

    RUS continues to make and service loans to financially strong 
borrowers who likely could obtain financing from other sources. Of $4.8 
billion in loans to 815 direct and guaranteed RUS telephone borrowers, 
we determined that 434, or 53 percent of the borrowers, with loans 
totaling $1.87 billion had sufficient financial strength to repay their 
loans or could obtain or be graduated to nongovernmental lending 
sources. This totaled 39 percent of the loans for the 17-year period, 
1981 through 1997, which we reviewed.
    By law, RUS is required to assist borrowers to achieve financial 
strength to enable them to satisfy their credit needs without its 
assistance. However, RUS' loan eligibility criteria are based on 
meeting minimum financial standards, with no consideration given to 
whether the borrower has a financial need. Also, RUS' annual budget is 
based on anticipated loan requests from all applicants regardless of 
financial condition. As a result, RUS makes loans to financially 
healthy telephone companies. Also, we reported that RUS has not 
established procedures and requirements for financially strong 
borrowers to seek credit from other sources, nor has it established a 
loan graduation program for borrowers who no longer need Government 
assistance.
    We recommended that RUS work with the Congress to clarify its 
policy for the telephone loan program regarding loan graduation and 
require financially strong borrowers to obtain credit from 
nongovernmental sources. If Congress determines that RUS should require 
financially strong borrowers to use other sources of credit, we 
recommend that RUS establish a graduation program for assisting the 53 
percent of its telephone borrowers who are financially strong. We point 
out, though, that RUS officials disagree that a graduation program is 
needed. Instead, RUS believes that it is carrying out its mission. We 
raise the question as to whether or not it makes sense to loan 
Government funds, limited in the first place, to borrowers who have the 
wherewithal to obtain credit in the private sector.

                   NATURAL RESOURCES AND ENVIRONMENT

Forest Service (FS)

    While FS' operations are not funded through this Committee, they 
are a major program operation within USDA. As a result, OIG invests a 
significant amount of audit and investigative resources in the agency's 
activities.
    We recently evaluated FS' administrative controls over the 
preparation of environmental documents and the implementation of 
environmental safeguards for timber sale activities. Our review 
disclosed that improvements were needed in all aspects of this program. 
We found that the lack of adequate administrative controls hurt not 
only the environment, but also the Timber Sale Program and timber 
purchasers. During our evaluation, FS took immediate action on several 
key recommendations that will improve the overall effectiveness of the 
Timber Sale Program. These actions included halting several timber 
sales in the Southern Region after we advised the region that surveys 
for threatened, endangered, and sensitive species had not been 
performed. Also, another region's FS personnel revised the boundaries 
of a timber harvest after we identified a heritage resource site that 
was not adequately protected.
    We have also looked at a number of FS land exchanges. For example, 
in the Thunderbird Lodge land exchange, in Lake Tahoe, Nevada, FS 
obtained a $50 million, 140-acre lakefront estate. During our review, 
we identified a number of issues that could have resulted in 
significant liabilities to FS if not resolved before completion of the 
transaction. For instance, we found that provisions for maintaining the 
historically significant structures were not adequate. As a result, FS 
could have been liable for up to $3 million in maintenance costs for 
the estate over the duration of the agreement. Prompted by our 
discussion with FS officials, the terms and conditions of the 
transaction were changed to ensure FS would not be liable for future 
maintenance of the structure. While we were able to obtain prompt 
action in this instance, we are aware of other land exchanges where 
similar questions could be raised that go unaudited due to the lack of 
resources.

                  ACCOUNTING AND FINANCIAL MANAGEMENT

Financial Statement Audits

    As required by law, we performed audits of the Department's fiscal 
year 1998 financial statements. These audits provide Congress and the 
public with information and insight regarding management's stewardship 
over Federal assets and its overall fiscal performance. We issued 
unqualified, or ``clean,'' opinions on the financial statements of the 
Federal Crop Insurance Corporation and FNS. The Rural Development 
mission area, including the Rural Telephone Bank, received a qualified 
opinion because we were unable to assess the reasonableness of its 
credit program receivables or its estimated losses on loan guarantees.
    We issued a disclaimer of opinion on FS and the USDA consolidated 
statements. A disclaimer of opinion means that the books and records of 
the entity were so poorly maintained we could not complete the required 
audit analyses. FS received a disclaimer due to significant financial 
system weaknesses, which include the lack of an integrated general 
ledger and supporting subsidiary records. Furthermore, FS could not 
account for its vast property, plant, and equipment holdings. The USDA 
consolidated statements received a disclaimer of opinion because the 
Department could not provide assurance that its financial systems 
provide information that is relevant, timely, consistently reported, 
and in conformance with accounting principles. In addition to financial 
system problems, numerous internal control weaknesses materially 
degrade the Department's ability to report accurate and reliable 
financial information.

Implementation of the Foundation Financial Information System (FFIS) 
        Needs Improvement

    Many of the Department's financial accounting problems stem from 
extraordinary weaknesses associated with the Central Accounting System 
(CAS) used by the National Finance Center (NFC). These weaknesses have 
significantly affected the ability of Department officials to prepare 
accurate financial statements and cost data necessary to manage 
departmental programs. To correct these problems, the Department is 
implementing FFIS to replace CAS at NFC. Our monitoring and review of 
these implementation efforts continue to find substantial weaknesses, 
however, and unless corrective actions are taken, the full and 
effective implementation of FFIS will not be achieved.

USDA Investments at Risk Due to Corporation's Mismanagement

    The Alternative Agricultural Research and Commercialization 
Corporation (AARCC) was established to find innovative uses for 
agricultural products. We performed an audit to assess the agency's 
management of its mission program. The audit concluded that AARCC had 
only minimal assurance that taxpayers' monies had been properly 
expended and that its $27 million investment portfolio had been 
adequately protected from loss.
    The audit found that the process used by AARCC to select firms for 
investment was not adequate because the applicants had not displayed 
any reasonable basis for prospective success. AARCC's monitoring of the 
investees' operations to ensure compliance with its agreements was 
virtually nonexistent. Of particular concern were various 
transgressions by companies that AARCC took no action to preclude or 
rectify. In one case, AARCC invested $450,000 in a firm for the 
development, manufacture, and marketing of headbands made from starch 
absorbents. In return, AARCC was to receive royalties on the sales of 
the product and an equity interest in the firm. After receiving the 
funding and procuring the specialized equipment to manufacture the 
headbands, the firm realized that no market existed for the product. 
However, the firm discovered there was substantial demand about $80,000 
a month for incontinence pads which could be made with the same 
equipment. The firm asserted AARCC had no claim to the revenues from 
the manufacture of the pads because the product had changed. The 
agreement, however, prohibited the use of the equipment for alternative 
production. AARCC subsequently became aware of the impropriety and 
unsuccessfully attempted to renegotiate the terms. Congress did not 
provide any funding for AARCC for fiscal year 2000. However, AARCC's 
Board of Directors needs to decide how it will manage and protect its 
existing $27 million portfolio to ensure that the Government's 
interests are protected.

                               CONCLUSION

    This concludes my statement, Mr. Chairman. As you can see, the work 
of OIG is far-reaching and expansive. I appreciate the opportunity to 
appear before you today and share with you some of the work we do. I 
hope my comments have been helpful to you and the Committee. I will be 
pleased to respond to any questions you may have at this time.

                          DEPARTMENT OF JUSTICE PARTICIPATING AGENCY FORFEITURE FUNDING
----------------------------------------------------------------------------------------------------------------
                                                                                     Fiscal year--
                  Categories                               Description           --------------------    Total
                                                                                    1998      1999
----------------------------------------------------------------------------------------------------------------
Total expenditures:
    Third Party Interests.....................  Payment of valid liens and          $5,877  ........      $5,877
                                                 secured mortgages.
    ADP Equipment.............................  Automated data processing            4,734   $13,278      18,012
                                                 equipment.
    Case Related Expenses.....................  Travel and subsistence expenses,    40,635    92,078     132,714
                                                 translation services, storage.
    Special Contract Services.................  Contract personnel (Data               646   131,555     132,200
                                                 Analyst, Law Clerk).
    Training and Printing.....................  Training, travel, and printing      37,726   224,111     261,838
                                                 expenses.
    Contracts to Identify As-  sets...........  Information services for tracing  ........     5,393       5,393
                                                 forfeitable as-  sets.
    Joint Law Enforcement Task Forces.........  Overtime and other operational       7,367   239,692     247,059
                                                 costs for state and local
                                                 agencies (including $75,000 for
                                                 Operation Talon).
    Awards for Information....................  Payment for specific information  ........    19,802      19,802
                                                 on criminal activity.
    Purchase of Evidence......................  Purchase of evidence for money    ........       848         848
                                                 laundering and other forfeiture
                                                 related violations.
    Equipping of Conveyances..................  Equipping agency owned or leased   185,380     3,586     188,966
                                                 vehicles.
                                                                                 -------------------------------
       Totals...................................................................   282,365   730,344  1,012,709
----------------------------------------------------------------------------------------------------------------
Fiscal year 2000: OIG has received an allocation of $940,000 for fiscal year 2000 current year use.

                                 ______
                                 
                   RURAL BUSINESS-COOPERATIVE SERVICE

         PREPARED STATEMENT OF DAYTON J. WATKINS, ADMINISTRATOR


    Mr. Chairman and members of the Subcommittee, I am pleased to 
appear before you today to present the Administration's fiscal year 
2001 Budget for the Rural Business-Cooperative Service (RBS).
    Mr. Chairman, the key to improving the economic conditions of rural 
areas, and particularly those areas experiencing decades of poverty and 
stagnant economies, is the creation of more business opportunities and 
more jobs, and specifically jobs that pay wages that are sufficient to 
lift families out of poverty. Presently, service sector jobs are the 
leading employer in many rural areas, and as important as those jobs 
are to the local economy, they still do not pay a wage sufficient to 
support a family of four.
    The creation of jobs is best accomplished by the private sector, 
but as we all know, there are a number of rural areas in which private 
sector capital is not readily available. The programs of the Rural 
Business-Cooperative Service help close the gap in opportunity for 
these areas, bringing them closer to sharing in the benefits of the 
Nation's economic growth. The $1.5 billion requested for the programs 
in this budget will assist in creating or saving about 105,000 jobs and 
provide financial assistance to more than 4,200 businesses.

       BUSINESS AND INDUSTRY GUARANTEED AND DIRECT LOAN PROGRAMS

    For the Business and Industry Program (B&I), the fiscal year 2001 
budget includes $13 million in budget authority to support $1.25 
billion in Guaranteed Loans and $50 million in Direct Loans. Since the 
streamlined Business and Industry Guaranteed Loan Program regulations 
were published in December 1996, demand for the program has increased 
300 percent. With this level of funding, we estimate that these two 
programs will create or save about 40,000 jobs. But equally as 
important, under the guaranteed loan program, we are able to help the 
local lender provide financing and thus help build community stability.
    Of the $1.25 billion requested for the guaranteed program we are 
again proposing to make available $250 million for financing for 
cooperative businesses with a particular emphasis on new value-added 
cooperatives as a policy objective. Priority will be given to projects 
involving farmer owned value-added cooperatives. In addition, this 
financing is available for guarantees of individual farmer's purchase 
of cooperatives stock in a start-up cooperative established for value-
added processing of an agricultural commodity raised by the individual 
farmer stockholders. We expect this program to be a key tool in capital 
investment in rural areas and as a means of helping farmers keep more 
of the income generated by their product. In fiscal year 1999, $44.4 
million of B&I Guaranteed funding was obligated to support cooperative 
business. In fiscal year 2000, $32 million of B&I Guaranteed funding 
has been obligated to date. In fiscal year 2001 priority will continue 
to be given to cooperatives businesses.

                     INTERMEDIARY RELENDING PROGRAM

    The fiscal year 2001 budget also includes $32.8 million in budget 
authority to support $64.5 million in loans under the Intermediary 
Relending Program (IRP). The initial investment of this level of 
funding will create or save an estimated 14,500 jobs, but because these 
funds are re-loaned 3 or 4 times by the intermediary, we estimate that 
over 49,300 jobs will result eventually. In an effort to be of more 
assistance through this program, we revised the regulation in 1998 to 
expand the $2 million cap on loans to intermediaries to a $15 million 
cap to any one intermediary in annual increments of $1 million. The 
Presidents budget also provides that $4 million of the request for IRP 
shall be for Native Americans. The Administration is directing Federal 
lending entities to work more closely with Tribal governments and 
lenders to resolve some of the concerns private lenders have with trust 
lands and sovereignty issues.
    The IRP regulation is now more user-friendly, and authorizes the 
Rural Development State Offices to process applications at the State 
level, rather than submitting applications to the National Office for 
processing. This change has speeded up the application process and 
allows State Offices to provide immediate feedback to borrowers 
concerning their applications. Pursuant to Rural Development's mission 
of prioritizing the most under served communities, we are prioritizing 
the neediest communities, such as those in low-income or under served 
areas, those with declining populations, or communities faced with 
economic restructuring or economic disasters. In addition, the eligible 
purposes for loans to businesses have been expanded. The demand for 
this program continues to be strong. To illustrate the benefits the IRP 
provides to rural America, the Southern Kentucky Economic Development 
Corporation (SKEDC) has loaned in excess of $1.5 million to more than 
ten ultimate recipients, leveraging approximately $11 million in new 
private investments. As a direct result of the IRP and leveraged funds, 
more than 200 new jobs have been created.
    One ultimate recipient organization that directly benefited from 
the IRP funds was in Laurel, Kentucky. The Grocery Company needed to 
expand its transportation fleet and construct a modern new warehouse 
including the installation of a state-of-the-art computer tracking 
system for inventory control and uniform pricing. The warehouse was 
expanded by 37,000 square feet for a total of 237,000 square feet under 
one roof. Thirty new jobs were created, bringing the company's total 
employment to 290 persons. The total project value was $1,361,000, 
which included a $150,000 ultimate recipient loan from the SKEDC. The 
Grocery Company now serves 600 retail stores in Indiana, Ohio, West 
Virginia, Tennessee, and Kentucky.

                    RURAL BUSINESS ENTERPRISE GRANTS

    For the Rural Business Enterprise Grants Program, the fiscal year 
2001 budget includes almost $40.7 million. We anticipate that this 
level of funding will create or save over 12,700 jobs. The purpose of 
this program is to assist small and emerging businesses and the small 
amount of funds we typically invest in a project, on a dollar-for-
dollar basis generates another $2.40 in private capital.

               RURAL ECONOMIC DEVELOPMENT LOANS AND GRANTS

    The fiscal year 2001 budget requests $15 million in Economic 
Development Loans and $4 million in grants. These programs represent a 
unique partnership since they directly involve the Rural Electric and 
Telecommunication borrowers in community and economic development 
projects. These borrowers are the intermediaries through which the 
funds are invested locally. Each dollar invested through these programs 
attracts an additional $3 in other capital. The loan program provides a 
zero interest loan to the cooperative, which guarantees repayment of 
the loan to the government. Loans are used primarily for economic 
development activities, while the grant funds can be used for 
establishing revolving loan funds and for community development 
projects. To support the Vice President's Reinvention of Government 
Plain Language Initiative, we have recently published plain language 
regulations as a proposed rule. When implemented, these plain language 
regulations will provide a more efficient and customer friendly 
procedure for accessibility to the programs.

                   RURAL BUSINESS OPPORTUNITY GRANTS

    The fiscal year 2001 budget includes $8 million for Rural Business 
Opportunity Grants to provide much needed technical assistance and 
capacity building in rural areas. We have determined, through the 
Empowerment Zone/Enterprise Community Rural process, that the most 
significant non-capital need in most rural areas is the capacity to 
develop the economic and community development strategies necessary to 
attract private investment capital and Federal and state assistance. 
The vast majority of rural communities are served by part-time 
officials who do not have the time or the necessary training to compete 
with large communities for funding that may be available to them. The 
funds requested under this program will aid in providing that 
invaluable assistance that allows communities to take the first step in 
assisting themselves.

                  RURAL COOPERATIVE DEVELOPMENT GRANTS

    For the Rural Cooperative Development Grants (RCDG), the fiscal 
year 2001 budget requests $6 million. This program complements our 
internal National and State Office technical assistance efforts by 
encouraging the establishment of centers for cooperative development. 
Demand for technical assistance through RCDG has exceeded available 
funding by approximately five or six times over the past few years. Ten 
centers were funded in fiscal year 1999 and 13 in fiscal year 1998. 
They provide a focus of development expertise that devotes extensive 
time to conducting feasibility analysis and outreach for newly 
developing cooperatives. RBS has demonstrated how we are able to 
harness a variety of resources to enhance cooperative development 
efforts. In 1999, the National Pork Producers Council (NPPC) asked for 
technical assistance to explore cooperative solutions to the 
concentration issues facing the pork industry and its producers. RBS 
aggressively worked with a NPPC Task Force to explore formation of a 
nationwide cooperative business structure of independent pork 
producers. The result of these efforts has been the incorporation of 
the Pork America Cooperative in January 2000. RBS will continue its 
technical assistance in cooperative development as the newly formed 
organization develops its business plan, membership base and 
operations.

            APPROPRIATE TECHNOLOGY TRANSFER FOR RURAL AREAS

    The Appropriate Technology Transfer for Rural Areas (ATTRA) program 
provides technical information to producers and their advisors on best 
sustainable production practices. A funding increase to $2 million is 
requested to enhance delivery of this effective program. Direct 
responses to over 15,000 inquires were made in 1999, in addition to 
information provided through the ATTRA web site. Requests from 
agricultural producers, extension personnel, and others focus primarily 
on sustainable practices that reduce dependence on chemicals and is 
more environmentally friendly.

                    COOPERATIVE RESEARCH AGREEMENTS

    The fiscal year 2001 budget requests $2 million in funding for 
cooperative research agreements. These agreements help assure our 
nation's farmers and their cooperatives have a sound basis on which to 
make critical economic decisions. In a time of considerable stress and 
structural change in U.S. Agriculture, it is essential that group 
action marketing endeavors be on the most solid ground possible.

                           BIO-BASED PRODUCTS

    The President's fiscal year 2001 budget requests $1.5 million to 
support cooperatives involved with processing and marketing bio-based 
products. Of that amount, $1 million is for a pilot program for Rural 
Utilities Service electric borrowers to demonstrate the efficiency of 
bio-mass fuel generation.

               NATIONAL SHEEP INDUSTRY IMPROVEMENT CENTER

    The fiscal year 2001 budget requests $5 million in funding for the 
National Sheep Industry Improvement Center. The Center, while having 
significant delays in implementing their program, has now made a major 
grant to an intermediary revolving fund that is loaning money to the 
sheep and goat industry. In addition, $5 million of the National Sheep 
Industry Improvement Center's permanent funding has been used to assist 
the industry in market promotion in light of the unfair trade practices 
found in the International Trade Commission case against Australia and 
New Zealand.

                    COOPERATIVE CAPITALIZATION FUND

    The President's fiscal year 2001 budget requests $130 million to 
cooperative capitalization fund that would be used to provide equity 
capital for new livestock and other cooperatives and help finance 
construction of cooperative-owned processing facilities.

       RURAL EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES GRANTS

    For the Rural Empowerment Zones and Enterprise Communities, the 
President's fiscal year 2001 budget requests $15 million to provide 
grants to designated rural areas including 5 Rural Empowerment Zones 
and 20 Rural Enterprise Communities. The purpose of this program is to 
target Federal, State, and local resources to low-income rural areas to 
demonstrate that innovative, comprehensive, and strategic alliances 
between private, public and nonprofit entities can work in concert to 
improve the economic strength of rural communities.

                         SALARIES AND EXPENSES

    Before closing, I would like to urge the Committee to provide the 
requested funding for Rural Development Salaries and Expenses. We 
cannot manage the $4.3 billion portfolio without qualified staff. We 
cannot maintain qualified staff without adequate funding. In addition, 
our computer systems cannot keep up with the growing portfolio.

                               CONCLUSION

    Over the past several years, RBS has been provided with increased 
program resources to use in meeting rural business and economic 
development needs. We have streamlined our programs, improved consumer 
focus, and developed strategic relationships to benefit all of rural 
America. Each year we have used all of our resources in this new 
business environment, but still, the need exists for additional 
resources to accommodate the needs of those communities not yet 
experiencing the positive impact of America's economic prosperity. Mr. 
Chairman, this concludes my formal statement on the fiscal year 2001 
Budget. I would be happy to respond to any questions the Subcommittee 
may have regarding the Rural Business-Cooperative Service programs of 
the Rural Development Mission Area.
                                 ______
                                 
                           RURAL DEVELOPMENT

  PREPARED STATEMENT OF JILL LONG THOMPSON, UNDER SECRETARY FOR RURAL 
                              DEVELOPMENT

    Mr. Chairman, Members of the Committee, it is a pleasure to present 
to you the President's fiscal year 2001 Budget Request for the Rural 
Development Mission Area of USDA. With your permission I will summarize 
my statement and request that the full text of the statement be 
presented in the hearing record.
    Before discussing the budget request for 2001, I am pleased to 
share with you some of the results of the funding the Committee 
provided Rural Development for fiscal year 1999. I am very proud of the 
results, and I think the Committee will be as well. With the $1.7 
billion appropriated for Rural Development programs in fiscal year 
1999, investments totaling $9.9 billion were made in rural people, 
communities and businesses. A conservative estimate of the economic 
impact of that investment is $18 billion. The following is a sample of 
the successes.
  --The investment in rural businesses, housing and community 
        infrastructure created or saved about 200,000 jobs.
  --Almost 66,000 rural families that could not otherwise qualify for 
        mortgage credit were able to buy or improve their homes; over 
        5,000 affordable rental units were added to the rural housing 
        stock; and 42,357 low-income households were able to obtain 
        decent housing at an affordable rent.
  --Almost 500 community facilities projects, such as health clinics, 
        child care facilities, schools, libraries, police stations and 
        fire stations serving over 8 million residents were built.
  --Almost 2 million rural residents were provided new or improved 
        public water supply or waste disposal systems; 2.8 million 
        rural residents received improved electrical service; 287 rural 
        schools and 131 rural health care providers benefitted from the 
        distance learning/telemedicine facilities.
  --Over 200 marketing networks and cooperative partnerships were 
        established or increasing their business outlets.
    While the aggregate statistics are impressive, they do not tell the 
human side of the story which is substantial, but is difficult to 
report statistically. Actual successes are described below.
  --The local job market in a small, rural community in Kentucky was 
        improved with the reopening of a local textile plant which had 
        been closed by a large national company. With assistance from 
        Rural Development, the plant was refurbished with modern 
        equipment and now employs 125 residents.
  --A single mother in rural Maine, suffering from memory impairment 
        due to an automobile accident, now has a home for herself and 
        her 6-year-old daughter. After the accident they had been 
        required to move several times and for a while lived in a 
        motel.
  --The 1,200 residents of a small town in Georgia will, for the first 
        time, have local health care and child care facilities. The 
        clinic will provide health care 7 days a week and the child 
        care facility will be open 24 hours a day to accommodate 
        children whose parents work at night.
  --A county-wide volunteer fire department in Texas replaced their 30-
        year-old radio equipment with new communications technology 
        which will allow direct communications with the county police 
        and emergency medical services.
  --Approximately 9,100 residents in the very isolated Bering Straits 
        region of Alaska will have improved health care. Diagnosis-
        quality images will be transmitted to medical specialists in 
        Anchorage from 15 villages, a clinic in tribal headquarters and 
        two health care providers in Nome. The residents are scattered 
        over 25,000 square miles with some having no road access.
    Mr. Chairman, as you and the Committee review the fiscal year 2001 
Budget request for Rural Development, please keep in mind that the 
reason each of these programs was authorized, in some cases decades 
ago, was concern that rural America was being left behind economically. 
Although there has been significant progress during the past three 
decades in addressing these needs, the poverty rate in many rural 
communities is still unacceptable. After showing some improvement in 
the 1970's, many rural areas are once again significantly lagging 
behind the improvement in the national economy. And more recently there 
has been increased concern about the future economic opportunities of 
rural communities due to the concentration of agricultural production 
and processing.
    We all know that, as farming operations increase in size and 
processing operations vertically integrate, ties to the rural community 
are weakened. Larger farms can purchase their inputs, including 
capital, from larger and more distant sources. Larger farms also find 
it easier to negotiate directly with processors rather than local 
buyers. This often results in less income being retained in local 
communities and less capital available for other business needs and for 
diversifying the local economy to counter the effects of concentration. 
This situation is exacerbated by consolidation in the banking, 
retailing, and in health care. Consequently, there are fewer rural 
economic hubs than once existed. And evidence shows that the greater 
the distance from an economic hub, the lower the economic growth rate.
    Mr. Chairman, although there have been significant successes in 
rural areas generated by the programs we administer, the Federal 
government is not, nor should it be, a substitute for the wealth 
generating capacity of the private sector. That is why we, in Rural 
Development, continue to stress that cooperatives are a good solution 
to some of the development needs in rural areas. Agricultural producers 
have the opportunity to maximize their position in negotiating prices 
for their commodities through marketing cooperatives. They can also 
increase their profits by utilizing cooperatives to process and add 
value to their commodities. An example is a new cooperative soybean 
processing plant whose farmer-owners will realize an additional forty 
cents per bushel. Most of the additional earnings remain in the local 
community. We would like to see more cooperative business operations 
such as this one and others that we have financed in recent years. 
Through market forces, member-owned cooperatives help grow local 
economies and rural communities.
    We believe it is our responsibility to assist the private sector 
make these opportunities a reality. This has been the focus and the 
message of the President's `` New Markets'' initiative to encourage the 
private sector to view poverty stricken rural and urban areas as 
potential market opportunities. Last fall I had the pleasure of 
accompanying the President to Hermitage, Arkansas, to demonstrate the 
success of a very small cooperative venture that includes 17 member 
producers. Three years ago before the cooperative was formed, these 
producers sold 3,400, 20 pounds cases of tomatoes worth $60,000, and 
fifteen of the producers were on the verge of bankruptcy. Last year the 
sales had increased to 570,000 cases worth $4 million. During peak 
season, the cooperative employs 120 people in a town with a population 
of less than 700.
    Other examples include a very small cooperative in northern Florida 
that is selling its fresh vegetables and fruits to local school 
districts. Some of the producers have seen their incomes triple as they 
provide very competitively priced, nutritious and fresh produce to 
school children. Rural Development was a partner in this cooperative; 
much of the work was done by the Natural Resources Conservation 
Service, the Farm Service Agency, and, of course, the farmers. Another 
success story is a wheat farmer's cooperative in Colorado who purchased 
a bakery that was closing. They now process their own wheat into bakery 
products that are sold to a national sandwich chain and local 
supermarkets in the Denver area. They have already exceeded their 
capacity and are looking at options for expanding their operations.
    In addition to the economic successes enjoyed by these operations, 
Mr. Chairman, is the satisfaction one sees on the faces of the 
producers when they realize they can be just as entrepreneurial as some 
of the ``dot com'' companies. Success breeds success. Seeing people 
realize they can be in charge of determining their future is one of the 
most rewarding parts of this job. A few years ago I told you of the joy 
I saw in people's faces after they had completed building their own 
homes through our mutual and self help housing programs--believe me, 
that joy is equaled when I see agricultural producers realize they can 
take greater control and generate greater profits in the food chain. 
They no longer feel captive of the markets.
    I urge each Member of the Committee to visit some of these 
operations and enjoy that experience for themselves. You have 
appropriated the funds that made it possible.

                             BUDGET REQUEST

    Mr. Chairman, the President's commitment to improving the economies 
of rural America continues and that is reflected in the budget request 
for fiscal year 2001. The Rural Development budget request for programs 
is $12.4 billion, $1.3 billion higher than the level enacted for fiscal 
year 2000. This level requires only about $300 million in additional 
budget authority, not counting what is requested in the Farm Safety Net 
proposals, which I will discuss later. But, Mr. Chairman, if the Rural 
Development Mission is to deliver programs of this amount and carry out 
our fiduciary responsibilities of protecting the $80 billion loan 
portfolio, we must have sufficient administrative expenses.

                        ADMINISTRATIVE EXPENSES

    The request for administrative expenses for fiscal year 2001 is 
$581 million, $48 million higher than appropriated for fiscal year 2000 
and includes $20 million increase in administrative expenses to support 
a new guaranteed loan accounting system and other system improvements. 
I realize the burden this places on the Committee, but the potential 
risk that may occur without the appropriate level of oversight far 
overshadows this cost. For example, between housing loans of the Rural 
Housing Service and the farm credit operations of the Farm Service 
Administration, we are obligating about $8 billion in guaranteed loans 
annually, and we do not have an automated accounting system that 
provides the capacity to manage these funds. This is irresponsible and 
is not a legacy that I want to leave.
    Yet, because we cannot afford to reduce staffing any further than 
we have, I have made the decision to reduce other administrative 
expenses, including investments in accounting systems, to maintain the 
staffing level needed to deliver the programs and do the best we can in 
managing the assets with which we have been entrusted. These were not 
good decisions, and are decisions I would prefer not to make. For 
example, when I became Under Secretary, the training budget for Rural 
Development was about $11 million. Over the past years we have reduced 
that budget to about $2 million in training that we classify as 
mandatory, i.e, training that is the minimum needed for our staff to 
perform at acceptable levels. The loan programs we administer are much 
more complex than anything found in the private sector, and we have a 
significant number of new employees that are coming on board. We are 
not providing them adequate training. We have also reduced travel from 
over $21 million to just over $11 million at a time when we need to 
travel more to adequately supervise and monitor our loan portfolio. We 
have made these decisions because we had to, but I have concerns about 
our ability to maintain our fiduciary responsibilities. Mr. Chairman, 
the $48 million increase requested for salaries and expenses is about 
40 percent of the pay cost increases that we have had to absorb during 
the time that I have served in this job. Absorbing these costs is the 
same as a reduction as a reduction in funding..
    An important part of the efforts to modernize field operations for 
the Natural Resources Conservation Service, the Farm Service Agency and 
the Rural Development agencies is the effective consolidation of three 
separate and largely redundant administrative systems inot one under 
the proposed Support Services Bureau. This is a glaring inefficiency 
that needs to be eliminated. Consolidated support would be provided for 
information technology, financial management, travel, procurement, 
civil rights and human resource management. These services would be 
provided under the direction of an Executive Director who would report 
to a board of directors comprised of the heads of the agencies to be 
serviced. Unfortunately, language in the fiscal year 2000 
Appropriations Act prevented us from implementing our plans for the 
Support Services Bureau. I would ask you to take a look at that 
language and work with us to move our operations into the modern world. 
By poling resources in the administrative arena, each agency will be in 
a better position to provide greater program support.
    Mr. Chairman, before I leave the area of administrative expenses, I 
would also like to advise the Committee that the Office of General 
Counsel is critical to our success in protecting the interest of the 
taxpayers . We consider the Office of General Counsel to be an integral 
part of our team, and they are particularly helpful to us in resolving 
the problems we encounter in our more complex lending programs, such as 
like the multi-family housing and the electric loan programs. They have 
my support and I believe they deserve the support of the Committee.
    Mr. Chairman, I would also like to take just a moment to discuss 
consolidation of some of the administrative systems that serve the 
Natural Resources Conservation Service, the Farm Service Agency, and 
Rural Development. We should not get bogged down in terms such as 
``Support Services Bureau'' that, in my opinion, may have confused the 
objective. Mr. Chairman, Members of the Committee, the Natural 
Resources Conservation Service, Farm Service Agency and Rural 
Development are, for the most part, located in the same offices, and we 
are going to share one information system. Does it not, therefore, make 
good sense that we have one personnel system, one travel administration 
system, and. one procurement system that serves all three?
    I would ask you to take another look at the language included in 
the fiscal year 2000 Appropriations Act that prevents us from 
implementing the plans for administrative consolidation; work with us 
to improve our administrative operations and place us in a better 
position to enhance delivery of the programs and services that each of 
us are entrusted, by Congress, to provide to the residents of rural 
areas.

                         PROGRAM BUDGET REQUEST

    Mr. Chairman, I shall now discuss the requests for the various 
programs administered by Rural Development.

                         RURAL HOUSING SERVICE

    I was honored to attend the 50th anniversary of the single family 
housing loan program in December of last year in Georgia at the home 
built with the first loan issued under this program. The wife of the 
family with the first loan and the widower of the Farmers Home 
Administration employee making the first loan were also in attendance. 
While the ownership has changed, the home is still in immaculate 
condition. The story of how much this home, and hundreds of thousands 
like it, have meant to rural families, and rural communities, is 
something that should be told again and again. This country can be very 
proud of this home ownership program.
    The budget request for the programs administered by the Rural 
Housing Service totals $6.7 billion, almost $900 million more than the 
level appropriated for fiscal year 2000, requiring almost $200 million 
more in budget authority. This increase reflects the Administration's 
commitment to improving housing conditions in rural areas and, in 
particular, improving homeownership opportunities, a key ingredient in 
building stable communities and economies. The request for single 
family housing, direct and guaranteed loans totals $5.0 billion and 
will support about 64,000 housing units and, in the process, provide 
nearly 44,000 jobs, primarily in the construction trades.
    We are proposing a modest increase in the multi-family housing 
program which provides housing for some of our most vulnerable 
citizens. A significant portion of these units are occupied by female 
heads of household, generally elderly females or single mothers, with 
annual incomes of about $7,300. The budget request will provide for the 
construction of 1,400 units and the rehabilitation of over 4,000 
existing units. Mr. Chairman, while there is a significant need for new 
multi-family housing throughout rural areas, we also have a significant 
problem in meeting the need for rehabilitation of an aging portfolio, 
and in maintaining the availability of these units for very low income 
tenants. The request for the multi-family housing guaranteed loan 
program will provide for the construction of about 6,400 units. The 
request for rental assistance is $680 million, $40 million higher than 
the level available for 2000. Most of the request is needed to renew 
contracts for 42,800 units. Without rental assistance, it would be 
impossible to provide affordable rental housing for very low income 
families, most of whom have no other housing alternative.
    As I have told the Committee on many occasions, one of the great 
joys of this job is to see the satisfaction and absolute joy on the 
faces of families and their children when they have completed building 
their own homes with the help of new neighbors. The mutual and self 
help program is community building at the most basic level, neighbor 
helping neighbor in the construction of new homes. The Administration 
is requesting a significant increase in this grant program, $12 million 
which is used to provide the technical expertise and supervision during 
construction. Families participating in the program receive loans 
through the single family direct loan program.
    We are also requesting modest increases in the farm labor housing 
loans and grants and we are proposing $5 million be appropriated for 
emergency assistance for migrant and seasonal farm workers. This 
program, although authorized in the 1990 Farm Bill, was not funded 
until last year's emergency supplemental appropriations act. The 
contribution of migrant and seasonal farmworkers to feeding our nation 
is often overlooked. The $20 million made available for the first time 
last year is equally important and a very small cost to pay, compared 
to the value these families contribute to this economy. The assistance 
was used to pay back rent and utilities, school fees, and a number of 
other obligations that could not be met, due to natural disasters 
destroying the crops these individuals and families would have 
harvested.
    Mr. Chairman, I would also like to thank the Committee for having 
the foresight to provide $6 million in fiscal year 2000 for the Rural 
Community Development Initiative. These funds will be used by a wide 
variety of organizations to assist us in developing the capacity of 
rural communities to become more self-reliant. It is through these 
efforts that we endeavor to teach community leaders that dependence on 
the Federal government is not the answer to long-term economic 
problems. The communities, themselves, must develop the capacity to 
build local economies. It is also through efforts like this that we 
engage other organizations with resources to work with us in building 
homes for low income families. We are very proud of the number of 
funding partnerships we have established in the past couple of years. 
Through these efforts we are stretching the capacity of the tax dollars 
with which we are entrusted.
    Mr. Chairman, we are also requesting a significant increase in the 
low income housing repair loan and grant program, This program provides 
the very basic improvements in owner occupied single family homes to 
make the house safe and livable. However, the most important 
contribution of the program may be that it allows elderly men and women 
to live the remainder of their lives in their own homes with a degree 
of dignity. It is also one of the most utilized programs we have in 
most disaster situations. It was used extensively in North Carolina 
following Hurricane Floyd.
    The request for community facilities totals $484 million, $24 
million of which is for grants, including $6 million to continue the 
Rural Community Development Initiative which is being implemented this 
year, and $5 million for the hazardous weather early warning alert 
system, the need for which has been recently demonstrated again in 
rural Georgia. Increasing the community facilities grant program is one 
of our highest needs. We can accomplish more with this program than 
almost any program in our portfolio. As Members of the Committee 
realize, this program finances rural health facilities, child care 
facilities, fire and safety facilities, jails, education facilities, 
and almost any other type of essential community needed in rural 
America. However, it is very difficult to reach many of the more 
impoverished communities that are unable to repay loans. Additional 
grant funds are needed to offset the cost of these loans.

                  RURAL BUSINESS-COOPERATIVE SERVICES

    Mr. Chairman, the key to creating economic opportunity in rural 
areas is the development of new businesses and employment 
opportunities. This is primarily the role of the private sector. 
However, due to concentration and integration of the agriculture 
industry, and more recently the consolidation of the banking industry, 
local lending institutions frequently do not have the capacity or the 
capital needed to sustain local businesses and generate new growth. 
Further, something that should not be overlooked is that frequently, 
the Rural Business Service is only a partner, and sometimes a minor 
partner, in the loans made through these programs. We expend a lot of 
effort in every program, including housing and utilities, to leverage 
other monies into the projects we finance.
    The programs, particularly the Business and Industry loan guarantee 
program, were enacted to supplement the efforts of local lending 
institutions in providing that capital. The program requested for the 
Rural Business-Cooperative Service is $1.5 billion with the majority of 
the request for the Business and Industry Loan Guarantee program, $1.2 
billion, compared to $869 million in fiscal year 2000. We will also 
again establish a policy objective of $200 million of the total for the 
development or expansion of cooperative businesses. As you know, we 
have established similar priorities in other years, and while we have 
not yet achieved our objectives, the level used by cooperatives is 
increasing each year. For example, through the first quarter of fiscal 
year 2000, we almost matched the level used by cooperatives in fiscal 
year 1999.
    I am particularly pleased that this budget request includes funding 
for a Cooperative Equity Capital Fund which will be used to assist 
producer's of livestock and other cooperatives to counter the effects 
of market concentration. This request is included in the Farm Safety 
Net proposal as a mandatory expenditure of the Commodity Credit 
Corporation. I have mentioned that the lack of capital is a major 
problem that rural areas face in economic growth. While not everyone 
agrees on the degree to which capital is lacking in rural areas, there 
is agreement on the lack of equity capital, and this need is greatest 
when crop and livestock prices are depressed. More and more producers 
are beginning to realize that the only means of gaining a greater share 
of the food dollar is to own the processing or manufacturing 
facilities. We intend to use this program to meet some of that demand 
and we will be submitting legislation for the consideration of Congress 
outlining how we intend to use the program.
    Complementing this request is an increase in cooperative 
development grants which will be used to assist in the development of 
new cooperatives. These grants are made to cooperative development 
centers which augment our internal staff resources in providing 
technical, financial, and management assistance in the creation and 
maturation of new cooperative ventures. As provided in last year's 
Appropriations Act, a portion of these funds will be devoted to 
assistance to small and minority producers. It is these producers that 
more frequently, and more quickly, feel the effects of reductions in 
prices. The same producers can benefit more through the use of 
cooperatives to market or process their commodities. The Administration 
will also again be submitting legislation to authorize assistance to 
non-agriculturally related cooperatives. I believe such authority is 
important to the economic success of rural areas.
    We are proposing that the Intermediary Relending Program be 
increased by almost 70 percent. The demand for this program is 
increasing significantly, and with part of the increase we wish to 
improve our ability to assist tribal governments establish revolving 
loan funds. We plan to do this in conjunction with the Small Business 
Administration and the Department of Treasury's Office of Community 
Development Financial Institutions. This would be a joint effort to aid 
tribal governments establish lending capacity, but also to aid private 
sector lenders in dealing with some of the obstacles they have 
encountered in lending to tribal organizations. The importance of these 
small revolving loan funds to rural communities is demonstrated not 
only in the successes of this program, but also in the fact that a 
significant portion of other grant programs are used to establish 
similar loan funds.
    We are also proposing an $8 million level for the Rural Business 
Opportunity Grant program, a 100 percent increase over the level 
provided for fiscal year 2000. This program was authorized in the 1996 
Farm Bill and funded for the first time for the current fiscal year. 
These funds can be used by a variety of organizations, such as the 
Empowerment Zones/Enterprise Communities, Rural Conservation and 
Development districts and others to develop economic development 
strategies.
    The budget request also includes $3.5 million in budget authority 
for bio-mass demonstration projects. Specifically, $2 million will be 
available for firms that will use the Business and Industry loan 
guarantee program to develop, process, or market bio-based products; $1 
million will be available for electric borrowers to demonstrate the 
value of generating electricity using bio-based products as the fuel, 
and $500,000 will be available for cooperative development grants for 
cooperatives that process or market bio-based products.
    The National Sheep Industry Improvement Center has recently entered 
into an agreement with the Livestock Production Association to 
establish a revolving loan fund which will be used to improve the 
infrastructure of the sheep and goat industry. We are requesting $5 
million of the remaining $30 million authorized for this program to 
augment that effort.
    We are also requesting $15 million for the third year of the 
Empowerment Zones/Enterprise Communities designated in the 2nd round of 
this program.

                        RURAL UTILITIES SERVICE

    The Rural Utilities Service provides financing for electric, 
telecommunications, and water and waste disposal services that are the 
backbone of economic development. Last fall we celebrated the 50th 
anniversary of the telecommunications program, and this year we will 
celebrate the 60th and 65th year of the water and waste disposal and 
electric programs, respectively. The successes of these programs and 
the benefits they have provided to rural America are unparalleled. Over 
$70 billion has been invested in rural America through these programs, 
and the economic growth they have generated has repaid the cost 100 
fold. And even more remarkable is that less than one percent of the 
amount loaned has been lost through defaults. The capital investment 
generated by the program levels requested in the budget will generate 
about 100,000 jobs, but more important is the opportunities generated, 
particularly through the telecommunications programs. It has long been 
the policy of RUS that fiber optic cable be used for telecommunication 
rather than the copper wire that is found in most urban areas. However, 
much of the rural traffic still must be routed through other exchanges 
with less capacity. The ``digital divide'' is composed of issues such 
as this.
    Mr. Chairman, when President Clinton announced the Digital 
Initiative in early February, he was criticized for constructing a 
political deal, and he responded that, ``this is not a political deal. 
If I had waited for the market to solve universal telephone access, 
there would still be places in Arkansas where people wouldn't have a 
phone.'' Paraphrasing another comment in that regard, the bottom line 
of the President's proposal is a better bottom line for firms in the 
technology industry. The President knows how important these programs 
have been to rural America over the decades and he sees the 
opportunities they can bring in the future.
    The level requested for the programs administered by the Rural 
Utilities Service is $4.3 billion, the same as is available for fiscal 
year 2000. For electric loans we are requesting $1.5 billion, requiring 
$26 million in budget authority. Again this year, we respectfully 
request that the budget authority be provided in a single amount, 
rather than by individual program. This additional flexibility permits 
us to more effectively manage demand for the four different programs.
    Our request also includes $670 million for telecommunication loans, 
including those made by the Rural Telephone Bank, and an additional 
$325 million for the distance learning/telemedicine programs, which 
includes a significant increase for grant funds. One of the concerns 
that I have with the lack of opportunity in many rural areas is that 
unless we are able to reach the children in poverty stricken families 
and provide them the opportunity to expand their education, they will 
soon be left behind by the technology-driven economy and the rapidity 
with which knowledge is changing. Distance learning/telemedicine 
program is one of the best tools we have for ensuring that they are not 
left behind. We also request $102 million to finance a broadband 
internet access loan and grant pilot program.
    The request for water and waste disposal programs is $1.6 billion 
which will require less budget authority than was available in fiscal 
year 1999, but a significant increase over fiscal year 2000. With this 
funding we estimate that we will build, improve, or expand 1,155 water 
and waste disposal systems serving 2.4 million people and create 42,000 
jobs in the construction related fields. In addition, we will improve 
our leveraging of funds with State Revolving funds that are also used 
to finance water and waste disposal systems to ensure that each dollar 
provided by the taxpayers is used to its maximum. Our primary target is 
still those residents without safe, dependable water in their homes, 
especially those with the most serious quality or quantity problems--
the systems classified as Water 2000 systems.
    When we were challenged early in this Administration to provide 
every resident in rural America with safe, dependable water in their 
homes, we knew that we could not meet the ultimate objective. However, 
the challenge has led to the reduction in the number of rural residents 
without this basic necessity from 1.1 million in 1990 to under 700,000 
now, and this is something we all should be proud of. We will continue 
to pursue that objective in fiscal year 2001, although we must be frank 
and tell you that the ultimate objective may not be reachable due to 
sparsity of population making affordable systems improbable or terrain 
that increases cost to the point that systems are not affordable.
    Mr. Chairman, before I close, I must return to the issue of 
administrative expenses. These programs that all of us are so very 
proud of and that contribute so much to the economies and the quality 
of life in rural America cannot continue to be delivered without 
adequate support of the dedicated employees and the automated systems 
that are needed to ensure proper accounting of the taxpayers dollars. 
To continue down the path that we have been on in the past few years 
may be penny wise, but it is dollar foolish. I am very proud of our 
accomplishments in reducing expenses. But, being economical and 
reducing expenses where one can is different than not providing the 
resources needed for our staff to operate successfully. Since I have 
held this position, the Rural Development Mission Area has met every 
streamlining target we have been given, but we have also been asked to 
absorb $80 million in pay raises and other inflationary items that also 
should be considered as reductions, but never are. Rural Development 
and other USDA entities have reached the breaking point and without 
some relief, all of us may face the embarrassment of a major failure. I 
do not want this on my record, and I, as a former Member of Congress, 
am sure that none of you want to be responsible for such a failure 
either.
    The Congress and the Administration, as well as the taxpayer, have 
every right to be proud of the fact that we have eliminated the word 
``deficit'' from policy discussions. Let us acknowledge the fact and 
move on to ensuring that every individual in this country has the 
opportunity to participate in a dynamic, growing economy, but do so 
with the recognition that delivering these programs wisely costs money. 
The economic growth we create with these investments in rural America 
more than pay for the cost of the programs and the associated 
administrative cost. It is time we started counting both sides of the 
ledger.
    Mr. Chairman, Members of the Committee, this concludes my formal 
statement. The Administrators and I would be glad to answer any 
questions you may have. Thank you for the opportunity to appear before 
you to discuss the Rural Development budget request with you.
                                 ______
                                 
                     ADDITIONAL SUBMITTED QUESTIONS

              Questions Submitted by Senator Thad Cochran

                       DEPARTMENT OF AGRICULTURE

                     AGRICULTURAL MARKETING SERVICE

              FEDERAL-STATE MARKETING IMPROVEMENT PROGRAM

    Question. Please provide the budget baseline for the Federal-State 
Marketing Improvement Program. Please include a listing of fiscal year 
2000 and 2001 grants and an estimate of the backlog of applications for 
this program for fiscal year 2001.
    Answer. The fiscal year 2000 appropriation for the Federal State 
Marketing Improvement Program, or FSMIP, is $1.2 million. For fiscal 
year 2001, the Agricultural Marketing Service is requesting an 
additional $300,000. FSMIP grants for fiscal year 2000 will be awarded 
on the basis of two rounds of competition among proposals submitted by 
eligible State Agencies. Fund allocations for the first round will be 
announced in late April, 2000, and those for the second round will be 
announced in August, 2000. Applications for grants typically exceed 
available funds by a ratio of approximately three to one. While AMS 
does not maintain a backlog list, proposals that are not funded during 
a particular round of competition may be reconsidered during subsequent 
rounds at the request of the applying State agency.

                        NATIONAL ORGANIC PROGRAM

    Question. Please explain why the $639,000 requested for consumer 
outreach in the National Organic Program cannot be offset from reduced 
costs in the program resulting in finalization of the rules to 
implement this program.
    Answer. AMS is not proposing to finance the initial accreditation 
costs from current funding because there will be no reduction in 
organic program activities or expenditures after the rule is finalized. 
The program staff, whose efforts were previously focused on developing 
and issuing the final rule, must now change its focus to various 
related activities including:
  --research on, and the possible development of, organic standards for 
        aquatic animals, wildlife, honey production, hydroponic 
        production and greenhouse production;
  --conducting regulation review and amendment;
  --reviewing substances petitioned to the National Organic Standards 
        Board for addition to the National List;
  --conducting day-to-day administration of the National Organic 
        Standards Board;
  --developing training materials and conducting training activities 
        for producers, handlers and certifying agents on how to comply 
        with the Act and regulations;
  --reviewing documents and participating in the negotiation of organic 
        program equivalency agreements between the United States and 
        foreign governments;
  --reviewing and recognizing foreign government organic accreditation 
        programs for equivalency determinations;
  --conducting program communication and education outreach to organic 
        producers, organic handlers, and consumers of organic products;
  --conducting program outreach to minority and limited resource 
        farmers; and
  --conducting continuing performance reviews of certifying agents and 
        general enforcement of the Act and regulations after the 
        initial accreditations (expected to begin 12 months after the 
        final rule is published). Funding for these activities was not 
        available during the development of the organic rule.
    AMS is requesting $639,000 to fund the cost of initially 
accrediting, without charge, as many as 59 certifying agents over an 
18-month period. As recommended by Congress in fiscal year 2000 
appropriations, AMS constructed a national organic program that takes 
into consideration the needs of small farmers, handlers, and 
certification agents. The proposed rule includes a provision that the 
initial costs of accreditation services will be provided without charge 
so that small farmers, handlers, and certification agents are not 
excessively burdened by additional costs. If this funding is not 
provided, the proposed rule will require substantial changes and 
consequently, further delays in implementation.
    Specifically, AMS anticipates that accreditation costs for fiscal 
year 2001 will amount to $450,680 and that accreditation costs for 6 
months of fiscal year 2002 will amount to $188,320. In addition to 
accreditation services, these funds will allow the program to develop 
and issue a program manual, and develop and distribute some of the 
educational materials needed for consumers, producers, handlers, 
certifying agents, and trading partners. AMS is requesting that 
$639,000 be transferred to the Expenses and Refunds, Inspection and 
Grading of Farm Products fund account for the cost of the National 
Organic Program and that such funds remain available until expended. 
AMS does not anticipate requesting additional start-up funds beyond the 
existing request, which covers the anticipated 18-month implementation 
period.
    Accreditation requires that AMS staff review certifier quality 
manuals for accuracy and completeness and perform at least one on-site 
audit evaluation. During an on-site audit, certifiers will be assessed 
for business capacity and competency in accordance with International 
Organization for Standardization Guide 65, as well as their ability to 
attest to the technical standards for organic production and handling.

                       ORGANIC SEAFOOD STANDARDS

    Question. Please provide an update on activities regarding the 
organic seafood regulations.
    Answer. The fiscal year 2000 appropriations Act included $75,000 to 
begin development of organic standards with respect to seafood. To 
initiate this process, AMS will hold two public meetings to discuss 
issues related to the organic production and handling of aquatic 
animals to be labeled as organic: on April 10, 2000, in Mobile, 
Alabama; and on April 12, 2000, in Anchorage, Alaska. AMS will hold a 
third public meeting on May 3, 2000, in Providence, Rhode Island. We 
will also participate in the April 10, 2000, Workshop on Organic 
Certification of Wild Aquatic Animals in Seattle, Washington, sponsored 
by Senator Ted Stevens from Alaska and Governor Tony Knowles from 
Alaska. AMS will be participating in the June 23-24, 2000, aquaculture 
production standards workshop at the University of Minnesota, St. Paul, 
Minnesota.
                                 ______
                                 

               ANIMAL AND PLANT HEALTH INSPECTION SERVICE

                           LINE ITEM FUNDING

    Question. In your budget justification notes, there is no line item 
for the following items. Please provide the fiscal year 2001 budget 
request for the following: Foot-and-mouth-disease; Tropical bont tick; 
Golden nematode; and Witchweed.
    Answer. These items were not included on the Summary of Increases 
and Decreases because no change in funding was requested. The funding 
levels are included on the table on page 14-18. The fiscal year 2001 
funding levels are:

                        [In thousands of dollars]

                                                        Fiscal year 2001
        Line item                                                request

Foot-and-mouth disease............................................ $3803
Tropical bont tick................................................   407
Golden nematode...................................................   580
Witchweed......................................................... 1,506

                       GRASSHOPPER/MORMON CRICKET

    Question. Does the fiscal year 2001 budget request provide funding 
for the control of the grasshoppers/Mormon crickets?
    Answer. The Animal and Plant Health Inspection Service (APHIS) is 
currently conducting spring predictive surveys to determine the needs 
for crop protection programs. Our effort is funded through contingency 
funds. In fiscal year 1999, we used $850,000 and in fiscal year 2000 we 
plan to use $404,000 for these activities. At this time, there is no 
clear indication of the funding level required for the crop protection 
programs in fiscal year 2000, but the need could be $1.3 million or 
higher.
    The fiscal year 2001 funding needs for grasshopper and Mormon 
cricket control will depend on this year's weather conditions--lack of 
a cool, damp spring will promote the development of high grasshopper/
Mormon cricket populations in areas where they previously existed. Dry 
weather conditions in the spring exacerbate higher grasshopper/Mormon 
cricket populations because there will be increased numbers of 
grasshopper/Mormon cricket eggs laid and less forage, increasing the 
competition between livestock and the pests for survival. While we can 
not predict at this time what our funding needs will be and did not 
request funding for fiscal year 2001, we do know that we will need to 
continue survey work to determine where grasshopper/Mormon cricket 
problems will potentially exist and how to address them.

                      EMERGENCY MANAGEMENT SYSTEM

    Question. Please provide the amount of funding for each activity 
that will be funded from the fiscal year 2001 budget request increase 
of $5,241,000 for the emergency management systems program.
    Answer. APHIS proposes to spend the $5.2 million increase on the 
following activities: $260,000 for an educational campaign aimed at 
providing information to Federal, State, and local governments, 
industry, stakeholders, and the public; $657,000 for specialized 
training for State and Federal emergency managers and private 
practitioners; $2 million for animal health emergency managers in the 
field to assist states with establishing animal health emergency 
management standards and to support the states during actual responses; 
$230,000 for a genetic fingerprinting library; $300,000 for the EpiInfo 
2000 system, a geographical information system, and hand held units to 
record geographical data; $300,000 for preparing and updating 6 disease 
plans and conducting 1 National and 2 regional test exercises; and 
$1,494,000 for equipping the Emergency Management Operations Center.

                                 KUDZU

    Question. Does the fiscal year 2001 budget request for noxious 
weeds include funding the for Kudzu projects?
    Answer. In fiscal year 2000, APHIS will continue to fund 
approximately $45,000 in a cooperative agreement with Mississippi State 
University for demonstration of Kudzu control techniques. Mississippi 
State University reported preliminary results from the Kudzu 
demonstration project at the 2000 Southern Weed Science Society 
meeting. Researchers are demonstrating and evaluating various control 
techniques. The project will continue in fiscal year 2000 at a new 
site. In fiscal year 2001, APHIS will reevaluate the Kudzu project to 
determine if the demonstration project control techniques can be 
effective in widespread eradication and if so, will continue to fund 
Kudzu activities in fiscal year 2001.

                             PINK BOLLWORM

    Question. How much funding is needed to continue the pink bollworm 
eradication program in Arizona and to begin the program in New Mexico, 
Texas, and Mexico in fiscal year 2001? The fiscal year 2001 budget 
request proposes a decrease of $242,000 for this program. Which 
activities are continued and which are discontinued for fiscal year 
2001?
    Answer. Before a pink bollworm eradication program can begin in New 
Mexico, Texas, and Mexico, funding for larval cut out racks (where pink 
bollworm eggs feed on an artificial diet until they hatch into larvae), 
pupal maturation racks (where the larvae spin into cocoons and begin 
maturing into moths), and upgrades to the existing electrical utilities 
is still necessary. Our current estimate for these costs is $350,000.
    With the fiscal year 2001 requested funds, we will continue to 
produce sterile insects for release in the San Joaquin Valley, 
California; however, we will not be in a position to move the 
eradication program to New Mexico, Texas and Mexico.

                          EMERGING PLANT PESTS

    Question. The fiscal year 2001 budget request proposes an increase 
of $25,079,000 for the emerging plant pests program. In the past, APHIS 
has been able to use emergency funds for citrus canker and the Asian 
longhorned beetle eradication. Why has the Administration chosen to 
request appropriations for this work instead of using emergency funds?
    Answer. The Secretary's emergency transfer authority is a vital 
tool in enabling APHIS to respond quickly and effectively to incursions 
of exotic pests and diseases. The difficult issue is trying to 
determine the best funding mechanism when a given pest or disease 
incursion requires a multi-year eradication effort. Because it became 
apparent that the citrus canker, Asian longhorned beetle, and 
Mediterranean fruit fly programs would take more than 2 years to 
complete, we did not feel it was appropriate to continue to rely on CCC 
emergency funding, and instead decided to request funds for these 
programs through the regular budget process where it can receive the 
benefit of Congressional scrutiny.

                                SCRAPIE

    Question. Why has the Administration decided to put an emphasis on 
eradicating scrapie from the U.S. in the fiscal year 2001 proposed 
budget?
    Answer. Scrapie is a fatal disease of sheep and goats that is one 
of a group of diseases called transmissible spongiform encephalopathies 
(TSEs), which also includes bovine spongiform encephalopathy (BSE). 
This disease could impact the American food supply and the public 
health. The sheep industry has asked APHIS to accelerate efforts to 
eradicate scrapie because the disease costs the U.S. sheep industry an 
estimated $20 million per year in direct losses and millions of dollars 
more in lost potential markets and flock productivity.
    Currently, producers in scrapie-free countries have a significant 
competitive advantage over U.S. sheep producers for several reasons. 
First, as a result of scrapie, U.S. sheep producers are subject to 
higher production costs and lower revenues. Second, importing countries 
are demanding that imported sheep come from scrapie-free countries or 
regions, and U.S. producers are unable to make this certification. As a 
result, U.S. producers are locked out of the international market--a 
situation that is taking a financial toll on American sheep producers.
    In addition, the presence of scrapie in the United States may 
jeopardize our ability to market a variety of ruminant products such as 
meat and bone meal internationally--due to elevated concerns about all 
TSEs resulting from the occurrence of BSE in Europe. APHIS has 
determined that it is necessary to accelerate efforts to eradicate 
scrapie from the United States to help the U.S. sheep industry become 
competitive again in the global market place and to protect existing 
U.S. markets for all ruminant products.

                      WILDLIFE SERVICES OPERATIONS

    Question. The program fiscal year 2001 budget proposes a decrease 
of $2,711,000 for Wildlife Services Operations program. Which ongoing 
activities will be affected by this proposed decrease?
    Answer. APHIS proposes that cooperators of Wildlife Services 
programs assume a greater share of the operations costs in fiscal year 
2001. Producers, States, and local governments are responsible for a 
large portion of the costs of running programs where they are the 
beneficiaries. We will work with program cooperators to determine how 
to best make the program reductions if the cooperators are unable to 
assume a larger share of the costs in light of the proposed reduction 
in fiscal year 2001.
    We have not placed into priority order how we would implement 
program reductions if necessary.
    Question. How does APHIS propose to enforce that cooperating 
agencies and individuals take on a larger share of the costs for 
projects currently underway? Does the fiscal year 2001 budget assume 
receipts from these agencies? If so, how much?
    Answer. The fiscal year 2001 budget reduction for Wildlife Services 
Operations assumes that cooperating agencies and individuals will 
contribute a greater share of the costs for the projects underway. 
Cooperators are already contributing more than 50 percent of program 
costs. It is the cooperators' discretion to take on a greater share of 
the costs for the programs, assuming that they will prioritize funding 
for those projects which benefit them directly. If they choose not to 
raise their level of contributions, APHIS will be forced to reduce 
program activities.

                   NATIONAL POULTRY IMPROVEMENT PLAN

    Question. How much funding does the fiscal year 2001 budget request 
propose for the National Poultry Improvement Plan?
    Answer. APHIS has included approximately $616,000 in the fiscal 
year 2001 budget request to support the National Poultry Improvement 
Plan (NPIP). Of this amount, APHIS will use $236,000 for program 
coordination; $368,000 for diagnostic testing related to the NPIP; and 
$12,000 for the Advisory Committee on the NPIP. The Advisory Committee 
serves as a liaison between the poultry industry and the U.S. 
Department of Agriculture on matters pertaining to U.S. poultry health.

                   SUMMARY OF INCREASES AND DECREASES

    Question. On page 14-17 of the Explanatory Notes, what is contained 
in the line item for ``All Other'' ? Does the Contingency Fund stay at 
the fiscal year 2000 level for fiscal year 2001?
    Answer. The entry for ``All Other'' comprises all APHIS line items 
for which we are not proposing any program changes for fiscal year 
2001. This encompasses the following line items: FMD/Emerging Foreign 
Animal Diseases; Tropical bont tick; Golden nematode, Witchweed, and 
the Contingency Fund.
                                 ______
                                 

      COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE

       ADVANCED SPATIAL TECH, MISSISSIPPI (PRECISION AGRICULTURE)

    Question. Please provide a description of the research that has 
been funded under the Advanced Spatial Technology, Mississippi grant.
    Answer. This research will evaluate the use of site-specific 
technology and assess the economics of its application. Cultural 
practices will be studied and integrated into management system using-
site specific technology to monitor yield and variable rate 
application. This project will expand on work conducted under the 
Special Technology Special Research Grant funded at $350,000 in fiscal 
year 1997 and $600,000 in 1998.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The need for this research is to provide farmers with 
unbiased information on the application and economics of site specific 
technologies for cotton production in the mid-south.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to evaluate site 
specific technologies and develop recommendations for management 
decisions related to fertilization, pest control, and other cultural 
practices.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1997 
and the appropriation for fiscal year 1997 was $350,000, for fiscal 
year 1998 it was $600,000, for 1999 it was $1,000,000 and for fiscal 
year 2000 $1,000,000 for a total of $2,950,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds provided for this grant are $620,300 
in 1998, and $942,000 in 1999. These funds are State appropriations 
that support the salaries of scientists and their support staff.
    Question. Where is this work being carried out?
    Answer. The research is being conducted on various Mississippi 
Agricultural Experiment Station branch locations around the State.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The principal investigators anticipated the completion date 
for the original objective to be in fiscal year 2004.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project was subject to an initial evaluation at its 
start in fiscal year 1998. The last evaluation was in July of 1999. 
Progress so far has resulted in useful information already being 
applied at the farm level.

                      AFLATOXIN RESEARCH, ILLINOIS

    Question. Please provide a description of the research that has 
been conducted under the Aflatoxin Research, Illinois grant.
    Answer. This research is focused on development of strains of corn 
which will be highly resistant to infection with Aspergillus flavus and 
the production of aflatoxin under field conditions. Transfer of genetic 
material from resistant strains to other, usable, inbred strains of 
corn is underway and these new strains are being field tested to 
determine level of resistance to fungal infection.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for the 
research?
    Answer. There is much national concern about the role of aflatoxins 
as carcinogens in the human population. The aflatoxin material is also 
toxic to animals and humans. The presence of the fungus in corn results 
in a lower value for the crop and the possible rejection of the corn by 
the grain elevator owners. Aflatoxin contamination continues to be a 
serious problem in the southern and southeastern United States, with 
additional outbreaks also occurring during severe drought conditions in 
the upper mid-west and other areas during the past few years.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of the research was the reduction of 
infestation of corn with Aspergillus flavus and the consequent 
reduction of aflatoxin in the corn produced. The researchers have 
produced strains with resistance genes for both prevention of infection 
with A. flavus as well as the production of the aflatoxin itself. Field 
trials have been in progress to determine effectiveness of these 
resistance factors under normal growing conditions when exposed to the 
fungus. The work has now progressed to the stage where it seems likely 
that more than one gene will have to be transferred to produce strong 
resistance to the Aspergillus infection and production of aflatoxin.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1990, $87,000; fiscal year 1991, $131,000; fiscal 
years 1992-1993, $134,000 per year; fiscal year 1994, $126,000; fiscal 
years 1995 through 2000, $113,000 per year. A total of $1,290,000 has 
been appropriated.
    Question. What is the source and amount of non-Federal funds by 
fiscal year?
    Answer. The non-Federal funds have been from State appropriated 
dollars in the form of principal investigator and technical salaries, 
equipment usage, and experimental plot expenses. These have been at the 
level of $130,000 for fiscal years 1997 and 1998, and $24,747 for 
fiscal year 1999.
    Question. Where is this work being performed?
    Answer. The research is being performed in the Department of Crop 
Sciences at the University of Illinois.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
was 1995, but the project was revised last year to continue to fiscal 
year 2002. The primary reason for the extension of the work is that 
there appear to be multiple resistance genes which are necessary to 
prevent both the infection with the fungus and the synthesis of the 
aflatoxin compound. The investigators are very optimistic about the 
future success of this approach. This work was discussed at a meeting 
of Multi-State Research Project NC-129 on January 25-26, 1999 in New 
Orleans and the Principal Investigators are members of the Technical 
Committee of this project.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project was evaluated on March 10, 2000. The 
investigators have made good progress on this project. They presently 
have identified that the key issue is to insert genes coding for two 
enzymes, chitinase and B glucanase, which will attack the fungus cell 
wall. They have many options on how to enhance the resistance level in 
the corn and several genetic transformations that can be tested. The 
resistance of plants to Aspergillus flavus does not carry over to 
resistance to Fusarium monoiliforme. A major impediment now is the 
ability to do field trials of sufficient scale to test the new 
varieties and the variation in environmental conditions which often 
results in a growing season with a low incidence of aflatoxin 
production even in susceptible plants. The research team indicated that 
additional funds would be required in order to accelerate their current 
rate of progress.

         AGRICULTURAL DIVERSIFICATION AND SPECIALTY CROPS GRANT

    Question. Please provide a description of the research that has 
been funded under the Agricultural Diversification and Specialty Crops 
grant.
    Answer. There are numerous outcomes from this grant over the past 
year:
  --A book on plants for Hawaiian lei material is in the publications 
        office for final work-up.
  --Video conferences in June 1998 and September 1998 were held to 
        discuss issues relating to food safety on the farm, and 
        included USDA and FDA personnel in Washington and over 90 
        participants at each session. A food safety website was 
        developed (http://www.hawaiiag.org/foodsafe/foodsaf.htm) and an 
        article was written for the Hawaii Farm Bureau Federation 
        newsletter covering on-farm food safety issues.
  --In 1999 the project co-chaired a Hawaii transportation industry 
        education task force and developed and wrote with 18 co-authors 
        the ``Preflight Checklist for Shipping Your Quality Hawaii 
        Agricultural Product.''
  --The project worked with 32 co-authors to produce the handbook 
        ``Hawaiian Islands Air Cargo Resource Book 1999-2000,'' which 
        lists information on 130 service providers and valuable 
        information on how to ship a product in the most efficient 
        ways.
  --A talk was given at the 2nd Annual Hawaii Air Cargo Symposium in 
        September 1999 on the progress of the transportation education 
        task force.
  --The project developed a fact sheet called, ``Estimating the per-
        pound cost of a dried or condensed food based on process yield 
        and farm-gate price,'' that helps entrepreneurs calculate 
        processing loss and potential profits from food dehydration.
  --Three tools for entrepreneurs will be completed in the first 
        quarter of 2000: An extensive fact sheet on the ``Costs and 
        Considerations for Establishing an Entrepreneurial Community or 
        Shared Use or Test Kitchen Incubator,'' a poster to help food 
        product entrepreneurs quickly calculate their cost of 
        production; and a fact sheet on the cost of establishing 
        incubator kitchens for food processing entrepreneurs, including 
        an emphasis on safe food processing.
  --The project is advising the Hawaiian Commercial and Sugar Company 
        on the possibility of starting a large-scale white taro 
        production and processing operation in high pressure minimal 
        processing for pineapple and other tropical fruits, the cause 
        of premature fading of pineapple slices has been determined and 
        the temperature, pressure and time relationship has been 
        identified to achieve sterility.
  --The project is collecting data and information on cultural 
        practices for kava, a nutraceutical. Projects with other 
        funding sources have been facilitated on the major disease of 
        kava in Hawaii (cucumber mosaic virus dieback) and on the 
        biosynthesis of kava lactones in a bioreactor. Cooperation with 
        the private sector is being facilitated on the production and 
        processing of stevia, a natural sweetener.
    Question. According to the research proposal, or the principal 
investigator, what is the national, regional, or local need for this 
research?
    Answer. Hawaii's economy continues to lag behind national averages 
where growth is concerned. The various projects under the umbrella of 
the Diversified Agriculture and Specialty Crop grant rely on 
information research to build decision-making tools. These tools help 
entrepreneurs make more informed decisions. When entrepreneurs make 
better decisions they have a higher chance of making a profit in 
business. The decision-making tools are being used in the Hawaii, the 
Pacific, and on the mainland.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the original proposal was to screen potential 
food and non-food crops for commercial development in Hawaii and then 
make earnest attempts to work with willing and able entrepreneurs to 
move the results of research to the private sector. The lei manual, in 
final preparation, will provide entrepreneurs with information on how 
to grow plants that they never had information about, and they will 
also be armed with a cost of production framework that is specific to 
nursery production. While the University of Hawaii continues to screen 
crops to help entrepreneurs pick the best ones for production and the 
market place, there are few decision making tools that can help 
entrepreneurs take their products more successfully to market. Thus, 
there is an emphasis on information tools such as a transportation 
handbook and a cost of production poster. To help farmers prepare for 
increased food safety scrutiny, the University of Hawaii is working 
with Hawaii State agencies and other non-profits to reach out to 
farmers with critical information.
    Question. How long has this work been underway and how much has 
been appropriated, by fiscal year, through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows, fiscal years 1988-1989, $156,000 per year; fiscal years 1990-
1993, $154,000 per year; fiscal year 1994, $145,000; and fiscal years 
1995-1999, $131,000 per year; and fiscal year 2000, $131,000. A total 
of $1,859,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The University of Hawaii provides in-kind support in the 
form of laboratory and office facilities, equipment and equipment 
maintenance, and administrative support services: $68,503 in fiscal 
year 1992; $75,165 in fiscal year 1993; and approximately $75,000/year 
in fiscal years 1994-96, approximately $20,000/year in fiscal years 
1997-2000. Funds are also being leveraged from other private sector, 
State and Federal sources for the development of nutraceuticals.
    Nearly $50,000 of in-kind support has come from private sector and 
State partners, including $8,000 from the Office of Hawaiian Affairs 
and $30,000 from the private sector on the high pressure minimal 
processing project. The value of community time on all the publications 
written in the past year or so is also well over $75,000.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at the University of Hawaii's 
College of Tropical Agriculture and Human Resources on the island of 
Oahu, and other Hawaiian islands as necessary.
    Question. What is the anticipated completion date for the original 
objectives of this project? Have those objectives been met? What is the 
anticipated completion date for additional or related objectives?
    Answer. All taro work is completed. Lei plant manual will be out in 
the first quarter of 2000. Work is just starting on transportation and 
food safety issues and will continue through 2002. Work on business 
related information tools will continue through 2002. Work continues on 
high pressure processing of tropical fruits and will continue through 
2002. Work on nutraceuticals, particularly cultural practices and 
disease management of kava and stevia, is continuing through 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Project PI's are in regular contact with project manager at 
USDA-CSREES. The USDA manager has seen outcomes on a regular basis and 
visits the project at least once per year to evaluate progress and help 
plan subsequent or related project objectives.

              AGRICULTURAL DIVERSITY/RED RIVER, MN AND ND

    Question. Please provide a description of the research that has 
been funded under the Agricultural Diversity Grant.
    Answer. This multi-year, multi-phase project will have six specific 
components. They are: (1) vegetable growing research--especially field 
and glasshouse related research, (2) vegetable collection and storage 
research and/or related storage or distribution business development, 
(3) development of processing industries for the fresh market or 
research related to the fresh products for market, (4) development of 
marketing and/or supply associations among vegetable producers, (5) 
development of processing industries for the ready-to-eat salad market 
or research related to ready-to-eat products, and (6) development of 
processing industries for the frozen vegetable products market or 
research related to frozen products. This first phase of this multi-
phase project will concentrate its industry development and research 
activities in three areas: vegetable growing research--especially field 
and glasshouse related research, development of marketing and/or supply 
associations among vegetable producers, and development of processing 
industries for the ready-to-eat salad market or research related to 
ready-to-eat products. The second phase of this multi-phase project 
will concentrate its activities in four areas: continued research on 
vegetable production, including commercial greenhouse production, field 
production using Missouri River water for irrigation; development of 
markets for fresh product; preparation of a business plan for a ready-
to-eat delicatessen salad processing facility in the region; and 
analysis of the potential for adding higher value complementary crops 
to the rotation mix in vegetable producing areas.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. Initially the growing of vegetables in the region was 
driven by an opportunity to meet increasing consumer demand for fresh 
vegetables and concerns over both the cost of water and the 
environmental impacts of the use of chemicals in the traditional 
vegetable producing regions of the southern United States. This 
industry currently raises three crops of vegetables a year. This 
requires extensive irrigation in the hot summer months. Population 
growth and increased domestic and industrial demands for water have 
created significant pressures to shift water usage away from 
agriculture and toward other domestic and industrial needs. 
Additionally, use of chemicals to fight soil bacteria has raised 
environmental concerns in these States. These issues created a need to 
identify other regions to produce vegetables, especially in the summer 
months. The northern plains States of Minnesota, North Dakota and South 
Dakota have been identified as one area that could meet this need. In 
addition, the opportunity to add a high-value crop to the rotation 
cycle for northern Great Plains farmers can help to decrease their 
dependence upon program crops. The shift in cropping patterns can have 
a positive effect on farm income and lessen the need for outside or 
Federal financial assistance. Interest in the potential for adding 
higher value crop to the rotation cycle, including vegetables, has 
increased significantly in the past year due to the poor farm economy. 
Research on the potential for adding new crops to the region's 
production base could help stabilize the farm economy in the region and 
lessen the need for outside financial assistance to farmers.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The project objectives include: (1) Conduct three 
replicated field trials on growing of carrots; (2) Continue study of 
vegetable growing techniques in Europe and continue negotiations with 
vegetable growing research facilities/laboratories in Europe to 
transfer growing knowledge to the region; (3) Review current and future 
market opportunities for further development of the industry and 
identify strategies and partners for pursuing these opportunities and 
take appropriate organizing steps; (4) Develop and maintain a web page 
for this vegetable industry project; (5) Conduct market research for 
establishment of a ready-to-eat delicatessen salad processing facility 
in the region; (6) Conduct market research for establishment of a 
ready-to-eat fresh-bagged salad processing facility in the region; (7) 
Continue business development planning for establishment of a ready-to-
eat delicatessen salad processing facility in the region; and, (8) 
Continue business development planning for establishment of a ready-to-
eat fresh-bagged salad processing facility in the region. Funding for 
this project was received July 1, 1998 at which time work on the 
project began. The Red River Trade Council Vegetable Industry Task 
Force has a number of specific activities currently underway to help 
develop regional vegetable processing markets for vegetable production.
    In the area of Deli-salad production the Vegetable Task Force 
continues to work on transferring state-of-the-art deli-salad and 
upstream processing technology that produces long-shelf-life, 
preservative-free wet salads to the region. Over the past several 
years, researchers have conducted market opportunity studies, taste-
test evaluation, and are in the process of business planning and 
coordinating additional partners to capitalize construction of a new 
processing facilities in the region. The work conducted in this process 
has identified specific technology that is used by up-stream suppliers 
of a deli-salad company. This technology produces the highest quality 
pre-processed vegetables that can be stored at room temperature for up 
to 90 days. This technology allows several different vegetables to be 
processed using the same equipment and requires little time to switch 
to different vegetables. A facility like this in the region that is 
capable of processing several different vegetables is critical to allow 
production and market diversification.
    Significant research has been conducted to understand the market 
opportunities available in premium dehydrated products, especially 
dehydrated vegetables. This research has identified several different 
vegetables that provide opportunities depending on the processing yield 
that our products would provide. Initial vegetable production trials 
were conducted in the summer of 1999. Results from these trials were 
positive and additional research will be conducted to evaluate 
additional varieties and production and storage practices in the summer 
of 2000.
    Greenhouse Production issues are being examined by the Red River 
Trade Council which is developing a greenhouse task force to evaluate 
the potential for controlled environment production in the region. The 
Red River Trade Council has worked with extension and industry in the 
Netherlands to understand issues facing the development of this 
industry in the region. The Greenhouse Task Force is working to 
identify markets and feasibility for controlled environment production 
to provide year-round supply of high-quality vegetables to supply 
processed and fresh markets.
    Market research conducted on high value products from alfalfa 
indicated that there is a potential for development of an alfalfa 
processing facility in our region. Additional work to coordinate 
research, identify potential industrial partners, and further evaluate 
the market feasibility is continuing.
    Significant effort is being conducted to develop cooperative 
marketing systems that allow production to be focused on specific-
quality traits. The Red River Trade Council is working to facilitate 
development of farmer alliances or next generation cooperatives to 
supply specific-quality products to the marketplace.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1998 
with appropriations for fiscal year 1998, 1999 and 2000 of $250,000 
each year for a total of $750,000 appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Efforts have been made to secure non-Federal funding from 
individual States and commodity groups. To date the States of North 
Dakota and Minnesota have been a source of approximately $65,000.
    Question. Where is the work being carried out?
    Answer. The work is being carried out in Minnesota, North Dakota 
and South Dakota.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Progress is being made on the original objectives. It is 
expected that this will be a multi-year, multi-phase project. Work is 
expected to continue until June 30, 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project was evaluated by review of the proposal and is 
subject to annual project reports. An on-site review is scheduled for 
June of 2000.

         AG-BASED INDUSTRIAL LUBRICANTS RESEARCH PROGRAM, IOWA

    Question. Please provide a description of the research that has 
been funded under the agricultural-based industrial lubricants research 
program grant.
    Answer. This project is a continuation of nine years of activity 
conducted to target specific applications, establish baseline 
performance data, develop formulations of additives and chemical 
modifications, administer laboratory and field tests, characterize, and 
build relationships for commercialization of industrial lubricants 
derived from U.S. grown vegetable-based oils. Baseline performance data 
will be compiled to establish fatty acid compositions, will serve as 
guide to develop strategies for genetic modifications, additive 
development, establish standards relative to toxicity and 
biodegradability, and characterize compatibility with specific metallic 
and non-metallic components. The grant has been peer reviewed 
internally at the University of Northern Iowa.
    Question. According to the research proposal, or the principal 
research, what is the national, regional, or local need for this 
research?
    Answer. Primary local and regional need is related to expanding 
value-added applications of agricultural commodities in order to 
stimulate increased demand and raise crop prices paid to farmers. On a 
national level, the need is to provide renewable, safer, more 
environmentally sound alternatives to petroleum based industrial 
lubricants. The principal investigator believes this research to be of 
local, regional and national importance. Furthermore, there is a belief 
that there are international possibilities for the use of genetically 
modified soybean-based lubricants. Premium quality lubricants made of 
genetically modified domestic crops present a potential for use in a 
no-food area, i.e. industrial lubricants.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of the program was sponsored by non-
Federal funding to develop a soybean based hydraulic oil which was 
introduced to market in July of 1997, marketed by AGRI Industries of 
West Des Moines, Iowa as BioSOY hydraulic fluid. As of January 1999, 
and with the consensus of Agri Industries, the original license was 
transferred to West Central Cooperative of Ralston, Iowa, which is in a 
better position to market the product. Field testing of two grease 
formulations and a dielectric transformer coolant has begun, as well as 
development of a two-cycle engine lubricant, and bar and chain oil. A 
large volume of technical data has been compiled specific to crop based 
oil and lubricants. This program has identified and has begun servicing 
a broad array of market development requirements, including 
demonstrating specific performance features, expanding awareness, and 
supporting government purchase initiatives. In September 1999, two new 
soybean-based lubricants were licensed to West Central Coop and are now 
commercial products. Those were a chain saw bar oil called SoyLINK and 
a fifth wheel grease call SoyTRUK.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Federal funding for this project began with a 1998 
appropriation of $200,000. Fiscal years 1999 and 2000 appropriations 
are $250,000 each year for a total of $700,000 appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Since 1992, this research program has received cash grants 
from the Iowa Soybean Promotion Board, Carver Scientific Research 
Initiatives, in addition to several in-kind donations from industry to 
develop and coordinate commercialization of what has since become 
BioSOY hydraulic oil. Beginning in 1995, the State of Iowa began to 
support the program through its Wallace Technology Transfer Foundation. 
Beginning in 1996, State funding was provided by legislative 
appropriation through the Iowa Department of Economic Development. 
Additional funding has been provided by the Iowa Department of 
Agriculture and Land Stewardship. In fiscal year 1998 $150,000 was 
appropriated through the Iowa Department of Economic Development, 
$50,000 from the Iowa Soybean Promotion Board, $25,000 from Iowa 
Department of Agriculture and Land Stewardship, $32,500 from John 
Deere, and other awards and service revenues totaling approximately 
$60,000. State funding for fiscal year 2000 in amount of $400,000 has 
been requested through direct appropriation to the university.
    Question. Where is the work being carried out?
    Answer. Laboratory and literature studies are being carried out 
primarily at the Ag-based Industrial Lubricants Research Program 
facility in Waverly, Iowa, with minor portions of activity being 
conducted on the campus of the University of Northern Iowa in Cedar 
Falls, Iowa and the laboratories of various industrial affiliates 
located throughout the State and country. Field tests are being 
conducted at Sandia National Laboratories, U.S. Department of Army test 
sites, some municipalities, and in industrial equipment located 
throughout the nation. A short line Iowa-based railroad and a class I 
railroad have been testing soybean-based rail/flange grease with 
success and a new lubricant for railroad use is expected to be 
commercialized this year.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objectives have been met, in part, with the 
optimization, demonstration, and commercialization of the soy-based 
hydraulic fluid. Data collection, additive and modification research, 
characterization, and supplier development objectives of the first year 
are ongoing. The development of the dielectric transformer coolant is 
an added objective and has been expedited through to field testing. 
Activities to expand public awareness and support government purchase 
initiatives have been added to the original objectives. Field testing 
of some products is expected to be completed within a year and 
additional lubricant applications are anticipated to be targeted for 
development and field testing within two years.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The cognizant staff scientist reviews quarterly reports and 
has determined that this research is technically sound and directly 
addresses the goal of the agency to expand markets for agricultural 
materials.

                   AGRICULTURE TELECOMMUNICATIONS, NY

    Question. Please provide a description of the research that has 
been funded under this grant.
    Answer. This program encourages the development and utilization of 
an agricultural communications network to facilitate and strengthen 
agricultural extension, resident education, and research, and domestic 
and international marketing of United States commodities and products 
through a partnership between eligible institutions and the Department 
of Agriculture.
    Question. According to the research proposal or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The following needs will be addressed by this program:
  --Make optimal use of available resources for agricultural extension, 
        resident education, and research by sharing resources between 
        participating institutions;
  --Improve the competitive position of United States agriculture in 
        international markets by disseminating information to 
        producers, processors, and researchers;
  --Train students for careers in agriculture, natural resource 
        management, environmental science, human sciences, and the food 
        industries;
  --Facilitate interaction among leading agricultural scientists;
  --Enhance the ability of United States agriculture to respond to 
        environmental and food safety concerns; and
  --Identify new uses for farm commodities and increase the demand for 
        United States agricultural products in both domestic and 
        foreign markets.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this program is to encourage the development 
and utilization of an agricultural communications network to facilitate 
and strengthen agricultural extension, resident education, and 
research, and domestic and international marketing of United States 
commodities and products through a partnership between eligible 
institutions and the Department of Agriculture. Various educational, 
extension, and technology transfer projects have been funded through 
the program in fulfillment of this goal.
    Question. How long has this work been underway and how much has 
been appropriated, by fiscal year, through fiscal year 2000?
    Answer. The project began in fiscal year 2000, and is funded for 
$425,000.
    Question. What is the source and amount of non-Federal funds 
provided, by fiscal year?
    Answer. Prior to fiscal year 2000 it was a one hundred percent 
match of funds from non-Federal sources. However, beginning in fiscal 
year 2000, it became a special research grant and does not require a 
match of funds from non-Federal sources.
    Question. Where is this work being carried out?
    Answer. Cornell University will award grants competitively 
throughout the United States.
    Question. When do the principal researchers carrying out this work 
anticipate that the work will be completed?
    Answer. Projects funded through this grant are two-year projects.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Due to the changing nature of technology and the continuing 
need for information in the agricultural community, the objectives of 
this project cannot be considered of a terminal nature. Individual 
projects being funded address ongoing needs for information 
dissemination and technology transfer. As each project is completed the 
results are evaluated to determine the success of meeting the program's 
objectives.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted?
    Answer. The agency evaluates this project each year via a report 
from institutions funded. In summary, the following highlight the 
programs funded:
  --Dollars provided by the Agricultural Telecommunications Program 
        resulted in the Tri-State Agricultural Distance Delivery 
        Alliance (TADDA), which includes Washington State University, 
        Oregon State University, and the University of Idaho. Six 
        courses reach learners at any location, and nearly fifty more 
        are in the development stage.
  --Texas A&M University collaborated with Utah State University and 
        the University of Kentucky to develop a nationally recognized 
        program in international agribusiness marketing. It reaches 
        food marketing firms, food processors, and other extension 
        audiences.
  --New Mexico State University successfully implemented a multimedia 
        program called ``Marketing from a Rural Environment,'' which 
        focuses on place-bound minority learners.
  --The University of Arizona developed a comprehensive and dynamic 
        Internet-based resource on rangeland management.
  --Mississippi State University extended the reach of the Web to all 
        State and county offices.
  --Ohio State University developed an internationally recognized 
        system for quickly targeting and accessing appropriate 
        horticulture information.

                    AGRICULTURE WATER USAGE, GEORGIA

    Question. Please provide a description of the research that has 
been funded under the Agriculture Water Usage, Georgia grant.
    Answer. The project will determine agricultural water use in 
Georgia using a 2 percent statistical sample of water sources. 
Equipment has been purchased and personnel hired to conduct the 
project.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. Water has become a major issue in the southeast. The tri-
state water ``issue'' between Florida, Georgia, and Alabama is seeking 
to allocate interstate waters in the primary river basins which begin 
in the Atlanta area. These allocation formulas are completed and ready 
for use. The salt water intrusion problem associated with coastal 
Georgia and South Carolina is also a major issue. Both these problems 
suffer from the lack of data on agricultural water use across the 
State. This program seeks to develop a monitoring and modeling strategy 
to determine how much water is used by agricultural irrigation. The 
program is designed to begin with Georgia and then allow expansion into 
neighboring States for a better estimate of agricultural water use.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The project has begun by hiring of strategic personnel for 
the monitoring program, and development of the equipment and the data 
base to be used for obtaining volunteers for the monitoring phase. This 
integrated project will involve the development of computer based 
models to take a monitoring sample and extrapolate that information for 
the entire State.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1999. 
The appropriation for fiscal year 1999 and 2000 is $300,000 giving a 
total of $600,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The State of Georgia through the Georgia Department of 
Natural Resources, Environmental Protection Division has appropriated 
$289,000 for fiscal year 1998-1999 and is expected to appropriate 
$250,000 per year for an additional 4 years to help support this 
project.
    Question. Where is the work being carried out?
    Answer. Research will be conducted from the University of Georgia, 
College of Agricultural and Environmental Sciences. The primary 
coordination of the program will be centered in the Biological and 
Agricultural Engineering Unit at Tifton, Georgia, but the program will 
involve input from personnel in Griffin and Athens, and researchers 
outside the University of Georgia.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. This project, within the overall agricultural water use 
program, is anticipated to be completed within the original 5-year time 
frame. Since this project is new, objectives have not been completed to 
date.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project is new and has not been through an agency 
evaluation; however, the investigators prepare quarterly reports for 
the State. The procedures used to conduct the project have been peer 
reviewed and all publications developed by the project will be peer 
reviewed. One product has been produced, ``Irrigation Conservation 
Practices for the Southeast U.S.'', a 60-page report.

                  ALLIANCE FOR FOOD PROTECTION, NE, GA

    Question. Please provide a description of the research that has 
been funded under the Alliance for Food Protection grant.
    Answer. The fiscal year 2000 appropriation supports the 
continuation of a collaborative alliance between the University of 
Georgia Center for Food Safety and Quality Enhancement and the 
University of Nebraska Department of Food Science and Technology. 
Fiscal year 1999 funds supported research at the University of Nebraska 
on the detection, identification and characterization of food 
allergens, the effects of processing on peanut allergens, and 
investigation of the efficacy of using various types of thermal 
processes to reduce or destroy the toxicity and mutagenicity of certain 
Fusarium metabolites in corn and corn products. Research at the 
University of Georgia is directed toward determining the foodborne 
significance of Helicobacter pylori, developing a competitive exclusion 
bacterial culture to reduce carriage of Camplylobacter jejuni in 
poultry, developing methods to differentiate Shiga toxin-producing 
E.coli that are pathogenic for humans from nonpathogenic strains, and 
developing methods to detect parasites in produce.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes the proposed research 
addresses emerging issues in food safety which have national, regional 
and local significance. Specifically, research will address bacterial 
pathogens that can cause ulcers, cancer and diarrheal illness, toxic 
fungal metabolites in corn products, and allergens in foods that cause 
serious reactions, including death, in sensitive people. These emerging 
issues affect consumers, the food industry, and food producers at all 
levels, national, State, and local.
    Question. What was the original goal of the research and what has 
been accomplished to date?
    Answer. The original goal of this research was to: (1) facilitate 
the development and modification of food processing and preservation 
technologies to enhance the microbiological and chemical safety of 
products as they reach the consumer and (2) develop new rapid and 
sensitive techniques for detecting pathogens and their toxins as well 
as toxic chemicals and allergens in foods. The University of Nebraska 
developed assays for detection of peanut, milk, egg, and almond 
residues in processed foods, produced high-quality antibodies for these 
assays, identified a soybean allergen and two sunflower seed allergens, 
discovered clues as to the reason why Brazil nuts cause severe allergic 
reactions, discovered that certain types of Fusarium fungi do not 
produce mutagenic substances, developed a simple liquid chromatographic 
procedure for determination of moniliformin toxin, found that the corn 
flake manufacturing process can reduce levels of fungal toxins such as 
aflatoxin and fumonisins, and also found that low levels of 
carcinogenic aflatoxins in corn grits might be reduced to less than 
regulatory actions levels by the corn flake manufacturing process. The 
University of Georgia developed methods to culture Helicobacter pylori 
and to detect the pathogen in water by advanced genetic-based 
techniques. It was found that Arcobacter is easily killed by heat 
treatment, exposure of E.coli 0157:H7 to acid increases the bacterium's 
tolerance to heat and that the pathogen could survive for many weeks in 
refrigerated dry foods, and it was determined that extrusion cooking 
can greatly reduce allergens in peanuts.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1996, 
and $300,000 was appropriated in each fiscal year 1996 through 2000, 
for a total appropriation of $1,500,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year 2000?
    Answer. The non-Federal funds and sources provided for this grant 
were $117,000 State funds and $250,000 industry and miscellaneous in 
fiscal year 1996 and were estimated to be a minimum of $111,000 State 
funds and $305,000 industry and miscellaneous in fiscal year 1997. In 
fiscal year 1998, $70,000 came from State funds and $295,000 from the 
food processing industry and miscellaneous funds. The amount of State 
funds provided in fiscal year 1999 was $30,000 and $100,000 were 
provided by the industry. A minimum of $25,000 State funds and $25,000 
industry funds will be provided in fiscal year 2000.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at the University of Georgia 
Center for Food Safety and Quality Enhancement in Griffin, Georgia and 
at the University of Nebraska Department of Food Science and Technology 
in Lincoln, Nebraska.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. The original objectives have not yet been met. The 
researchers anticipate that work will be completed on the original 
objectives in 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. An agency science specialist conducts a merit review of the 
proposals submitted in support of the project on an annual basis. A 
review of the proposal from the University of Nebraska was conducted on 
March 29, 1999, and good progress was demonstrated on the objectives 
undertaken in 1998. For example, research performed at Nebraska has 
shown that extrusion cooking reduces allergenicity of peanut flour. At 
the University of Georgia a review was conducted on April 14, 1999, and 
good progress was demonstrated on the objectives undertaken in 1998. 
Researchers there have developed a medium to enhance the growth of 
gastric ulcer-causing bacteria.

                    ALTERNATIVE CROPS, NORTH DAKOTA

    Question. Please provide a description of the research that has 
been funded under the Alternative Crops, North Dakota program.
    Answer. The alternative crops project has two main thrusts, 
development and utilization of alternative or novel crops and 
utilization of traditional crops. The goals of the project are to 
diversify income at the farm gate, reduce reliance on monoculture to 
help alleviate pest problems, while providing new agricultural and 
industrial products to society. Some of the new areas under 
investigation include feeding of co-products to livestock; development 
of white wheat as an alternative crop, production of certified dried 
bean seed, and borage. Previous work continues with oilseed crops such 
as crambe, rapeseed and safflower as a renewable supply of industrial 
oil, products from food crops for novel new uses in paints, coatings, 
food ingredients, and the development of new biochemical and enzymatic 
processes to refine oils for industrial uses. The projects funded in 
this appropriation are evaluated by a peer-panel chosen by the 
Associate Dean of Research at North Dakota State University. The 
internal peer review was conducted on the following criteria: (1) 
probability and extent of generating value-added agricultural products, 
(2) technical and financial feasibility, (3) scientific merit, (4) 
innovation, (5) probability of rapid commercialization and (6) 
interdisciplinary research efforts.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. Regionally, the temperate areas of the Midwest have the 
potential to grow a great number of different crops but are in need of 
publicly-sponsored research efforts to reveal the most practical, 
efficient, and economical crops and products to pursue. Growers in 
surrounding States are currently utilizing the information generated by 
research conducted through this grant. The principal researcher 
believes that nationally, developing new crops and new markets for 
agricultural products is critical for both environmental and economic 
reasons. Enhanced biodiversity that comes from the successful 
commercialization of new crops aids farmers in dealing with pests and 
reducing the dependency upon pesticides. New markets are needed to 
provide more economic stability for agricultural products, especially 
as Federal price supports are gradually withdrawn.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was and still is to 
introduce, evaluate and test new crops which will broaden the economic 
diversity of crops grown in North Dakota. The primary emphasis is to 
find new crops, new uses and create value added products, such as 
crambe, lupin, canola, safflower, cool-season grain legumes, buckwheat, 
amaranth, field pea production and utilization, transgenic sugar beets 
to produce levan, utilization and processing lupin flower, 
confectionery sunflower production, growing and marketing of carrots, 
crop-derived red food dye and high quality pectin as food ingredients, 
innovative biochemical means of splitting crop oils, and other new uses 
of oilseed crops, development of markets for new crops as livestock and 
fish feeds. These efforts have forged a strong link with the private 
sector, and successfully spawned several crops and products into 
profitable private sector businesses
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Appropriations by fiscal year are as follows: 1990, 
$494,000; 1991, $497,000; 1992 and 1993, $700,000 per year; 1994, 
$658,000; 1995, $592,000; and in 1996 through 2000, $550,000 per year. 
A total of $6,391,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. In fiscal year 1991, $10,170 was provided by State 
appropriations. In fiscal year 1992, $29,158, was also provided by 
State appropriations and self-generated funds. In fiscal year 
1993,$30,084, was provided by State appropriations. In fiscal year 
1994, $161,628 was provided by State funds, $3,189 provided by industry 
and $9,020 provided by other sources, totaling $173,837. In fiscal year 
1995, $370,618 was provided by State appropriations, $1,496 provided by 
self-generated funds, $1,581 provided by industry and $5,970 was 
provided in other non-Federal funds, totaling $379,665 for fiscal year 
95. In fiscal year 1996 $285,042 was provided by State appropriation, 
$4742 provided by industry, $14,247 provided from other non-Federal 
funds totaling $304,031 for 1996. In fiscal year 1997, $462,012 was 
provided by State appropriations, $8,080 was provided by self-generated 
funds, $8,217 was provided by industry and $103,063 was provided from 
other non-Federal funds totaling $581,372 for fiscal year 1997. In 
fiscal year 1999, $984,251 was provided through State appropriations, 
$40,198 provided through self-generated funds, $13,010 provided by 
industry and $87,942 from other non-Federal sources.
    Question. Where is this work being carried out?
    Answer. The work is conducted on the campus of North Dakota State 
University and at six different research extension centers in North 
Dakota. Work is also done in eastern Montana.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Fiscal year 2000 is the eleventh year of activity under 
this grant. The primary emphasis has been to find new crops with non-
food uses and create value added products. The original objectives have 
been met, and continue to expand.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The cognizant staff scientist annually reviews the project 
and has determined that the research is conducted in accordance with 
the mission of this agency to expand agricultural markets.

                ALTERNATIVE CROPS FOR ARID LANDS, TEXAS

    Question. Please provide a description of the research that has 
been funded under the Alternative Crops for Arid Lands, Texas grant.
    Answer. This grant is to develop the two most abundant plants in 
southwestern United States, i.e. mesquite and cactus, into commercial 
crops through a combination of applied research and market development. 
In Texas, New Mexico, Arizona and California these plants occupy 72 
million acres. This grant is peer reviewed internally and external 
reviewers include a private sector cactus breeder, the Texas 
Agricultural Extension Service and a specialist in wood products 
marketing.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this goal?
    Answer. The semi-arid regions of the United States that border with 
Mexico in Texas, New Mexico, Arizona, and California have some of the 
highest unemployment rates, lowest economic returns per acre, and 
lowest incomes in the United States. The two most abundant plant 
species in this region are prickly pear cactus and mesquite. By working 
with Mexican researchers, this grant will help to stabilize the 
economic situation of rural poor in Mexico and the United States. There 
are few crops capable of being grown sustainably in these regions. Due 
to the nitrogen fixing capability, and thus soil improving properties, 
of mesquite and high water use efficiency of cactus, these plants 
contribute to sustainable agriculture, and will diversify southwestern 
agriculture. This research group is the only center in the United 
States developing these plants as crops.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal is to dramatically improve the economic returns, 
and year-to-year economic stability in the southwestern United States 
from arid and semi-arid lands. For cactus, the goal has been to provide 
improved varieties that can be harvested and processed into food and 
forage. A collection of more than 130 varieties of cacti serves as a 
resource for full scale breeding program. Chromosome analysis began in 
fiscal year 1999 to improve breeding success. One hundred additional 
hybridizations are being tested. Especially significant is the start of 
a production trial for the top eight fruit and top two nopalito 
selections. The size of the production trial will be large enough to 
provide planting stock in quantities suitable to many growers. For 
mesquite, the goal is to increase its value as a result of better tree 
form. A genetic screening trial has been initiated to evaluate the 
growth and form of 20 native Texas mesquite seed sources. This research 
seeks to identify superior genetic material for further breeding and to 
maintain some of these trees as seed producers for further 
silvicultural research. Mesquite accomplishments include demonstrations 
of mesquite products at the World Trade Fair in Chicago, presentations 
to architects in all major cities in Texas, and providing research 
information that helped a new manufacturing plant license their 
mesquite products. Further economic development depends on good 
relations and cooperation of landowners willing to sell mesquite trees 
from their property. In return, landowners need relevant information to 
formulate plans for a sustainable harvest that can incorporate 
considerations for grazing, wildlife, and soil improvement.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1994 
and the appropriation for fiscal year 1994 was $94,000. For fiscal 
years 1995 through 1997 the appropriation was $85,000 per year and for 
fiscal years 1999 and 2000 is $100,000 per year. A total of $549,000 
has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. In fiscal year 1994, $43,215 was provided by the Texas 
legislature.
    Question. Where is the work being carried out?
    Answer. The work is being conducted by Texas A&M University, 
Kingsville, Texas.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. For cactus, the original objective of the project was to 
provide improved varieties of cactus for fruit and napolitos marketing. 
The fiscal year 1999 production trial represents a partial completion 
of the original objective by examining the yield and financial benefits 
of larger scale cactus cultivation. Researchers anticipate that 
improved varieties should be available in two to four years. Currently, 
a small Texas and California cactus industry exists and more economic 
growth can be achieved with the introduction of new varieties. For 
mesquite, the objective to improve the economic return largely has been 
met, since markets for mesquite lumber, flooring, furniture, and 
barbecue work products continue to improve. However, other related 
objectives such as growth and form, genetic screening and breeding will 
take longer to complete. Initial data collection for growth and form 
will begin in two years.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Evaluation of this project is conducted annually based on 
the annual progress report and discussions with the principal 
investigator, as appropriate. The review is conducted by the cognizant 
staff scientist who has determined that this research is in accordance 
with the mission of the agency.

              ALTERNATIVE SALMON PRODUCTS PROGRAM, ALASKA

    Question. Please provide a description of the research that has 
been funded under the Alternative Salmon Products grant.
    Answer. The initial project funded under this program is the 
Pinbone Removal Machine Project. This project was aimed at developing a 
high capacity commercial pin-bone removal machine to take pinbones out 
of salmon fillets. The machine promises to lower production costs for 
making boneless salmon fillets and provide new products like frozen 
skinless boneless salmon fillet portions that will open new markets for 
salmon fillet in shatter packs. Subsequent to initial funds provided in 
fiscal year 1998, additional appropriations to the Alternative Salmon 
Product Program have allowed other projects to be supported. These 
include the Marketing Competition Project and the Salmon Quality 
Project.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The Alaska salmon industry has lost considerable market 
share worldwide to farmed salmon production. In 1994, the farmed salmon 
market share surpassed Alaska's market share of the world's salmon 
supply and has continued to climb every year since. In 1997, Norwegian 
farmed salmon production exceeded Alaska wild stock harvests. Also in 
1997, Chilean coho salmon exports to Japan exceeded North American 
sockeye salmon exports to Japan. Japan has traditionally been Alaska's 
strongest and most lucrative export market. The current situation is an 
example of foreign competition undermining a traditional American 
industry. Though the product is harvested in Alaska, the benefits of 
this research are shared with fishermen residents in Washington State, 
Oregon, California and throughout the nation. There is still room for 
optimism in that worldwide salmon consumption is up and new markets for 
high quality affordable salmon exist.
    Question. What was the original goal of the research and what has 
been accomplished to date?
    Answer. The broad research goal of the Alternative Salmon Product 
Program is the development of market-desired salmon products using 
wild-caught salmon. In 1998 and continuing, researchers involved in the 
Pinbone Removal Machine Project are addressing the problem of deboning 
wild-caught fish in appropriate volumes, so that they can be marketed 
as frozen skinless boneless fillet portions rather than simply as H&G 
frozen fish or canned salmon. New products such as this would allow 
Alaskan wild caught salmon to compete more effectively with pen-reared 
salmon. The researchers have designed, built and tested 4 prototype 
pinbone removal machines, making sequential improvements in design as 
new problems surfaced. Their latest iteration will be tested in 
processing plants during the 2000 salmon season.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The initial funding of the Alternative Salmon Product 
Program was $400,000 in fiscal years 1998 and 1999, and in fiscal year 
2000 it is $552,500. A total of $1,352,500 has been appropriated.
    The fiscal year 1999 appropriations have gone to two other 
projects, both under the Alternative Salmon Product Program. These are 
the Marketing Competition Project and the Salmon Quality Project.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year 2000?
    Answer. Industry will contribute approximately $50,000, based on an 
estimated cost of $50,000 per plant, for commercial testing of the beta 
prototypes.
    Question. Where is this work being carried out?
    Answer. The work on the Pinbone removal Machine Project has been 
and will continue to be conducted at both the University of Alaska 
Fairbanks--Fishery Industrial Technology Center in Kodiak, Alaska and 
at the Geophysical Institute of the University of Alaska Fairbanks, in 
Fairbanks, Alaska.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. The Pinbone Machine Project under the Alternative Salmon 
Product Program, including original and related objectives, will be 
completed with fiscal year 2000 funding. Other projects, like the 
Alternative Salmon Management Program will take about five years to 
complete their goals.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The proposal received in support of the fiscal year 1999 
appropriation was reviewed for merit on August 18, 1999. At that time, 
the agency science specialist determined that the projects addressed 
needs and interests of the Alaskan salmon industry.

                 ANIMAL SCIENCE FOOD SAFETY CONSORTIUM

    Question. Please provide a description of the research that has 
been funded under the animal science food safety consortium program.
    Answer. The Food Safety Consortium is focused on accomplishing six 
objectives: (1) to develop techniques for rapid detection of infectious 
agents and toxins in meat and poultry; (2) to develop a statistical 
approach for evaluating potential health risks; (3) to identify 
effective intervention points to control microbiological or chemical 
hazards; (4) to develop monitoring methodologies to detect these 
hazards in the distribution chain; (5) to develop technologies to 
complement the development of Hazard Analysis and Critical Control 
Point programs by USDA; and (6) to estimate costs and benefits 
associated with intervention alternatives.
    Question. According to the research proposal, or the principal 
researchers, what is the national, regional, or local need for this 
research?
    Answer. The Consortium's participation in technology transfer to 
health departments and trade associations are helping on a regional and 
local level to educate consumers and food handlers on safe handling 
procedures. Scientific-based testing that is being developed will help 
provide food that will be more readily accepted in international 
markets and increase exports and sustainable rural economies at home. 
On a regional and local level, each of the institutions are involved in 
Hazard Analysis Critical Control Point program training for industry 
and are holding seminars for industry to discuss food safety research 
findings. In addition, the University of Arkansas is teaching food safe 
programs to children in State elementary schools.
    Question. What was the original goal of this research, and what has 
been accomplished to date?
    Answer. The original goal was to bring together research and 
expertise of institutions in three States in order to best address the 
areas of poultry, beef, and pork meat production from the farm to the 
consumer's table. In coordination with each other, they seek to develop 
detection, monitoring, and prevention techniques to control or prevent 
the presence of infectious agents and chemical toxins in the food 
supply. Each year advisory and technical committees provide guidance 
and expertise in research planning.
    In 1999, research at the University of Arkansas emphasized 
detection and control of pathogens from pre- through post-harvest raw 
and thermal processing, molecular surveillance of pathogens, predictive 
microbial modeling and risk assessment, a variety of rapid detection 
methods and education and outreach programs for children in grades K-12 
and for food processors. At Iowa State University, research 
concentrated on swine production, irradiation, methodology and risk 
assessment. Work performed at Kansas State University emphasized 
intervention strategies, methods development, risk assessment and 
technology/information transfer.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1989, $1,400,000; fiscal year 1990, $1,678,000; 
fiscal year 1991, $1,845,000; fiscal years 1992-11993, $1,942,000; 
fiscal year 1994, $1,825,000; fiscal years 1995-1996, $1,743,000 each 
year; fiscal year 1997, $1,690,000; fiscal years 1998-1999, $1,521,000 
each year; and fiscal year 2000, $1,521,000. A total of $20,371,000 has 
been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year 2000?
    Answer. The non-Federal funds are provided primarily by State and 
private organizations. These funds provided for this grant are as 
follows: $1,611,947 in 1991; $1,639,050 in 1992; $1,726,153 in 1993; 
$2,304,223 in 1994; $2,075,145 in 1995; $2,796,097 in 1996; $2,600,545 
in 1997; $1,850,899 in 1998; $3,421,866 in 1999. Thus, from 1991 
through 1999 a total of $20,025,934 in non-Federal funds was provided.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at Iowa State University, 
Kansas State University, and University of Arkansas at Fayetteville, 
University of Arkansas for Medical Sciences at Little Rock, and 
Arkansas Children's Hospital.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. The research projects from the Consortium continue to 
evolve and build on the original objectives first set out in 1989. 
Additional objectives are revised on an annual basis to enhance the 
original six objectives. Recently, the Consortium has participated in 
research projects that have made significant contributions to the 
establishment of scientific parameters used in Hazard Analysis and 
Critical Control Point programs. The principal investigators have 
developed patented tests that have significantly reduced the time 
necessary to detect pathogens in the processing plants.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. There has never been a formal evaluation of the Food Safety 
Consortium but instead, an annual conference is organized at which a 
designated representative from CSREES attends. Along with other invited 
agency representatives such as FSIS, ARS, and ERS, CSREES participates 
in a steering committee meeting which critiques projects and discusses 
research priorities. CSREES representatives were considered part of the 
Technical Advisory Committee as well as members of the Food Safety 
Consortium Steering Committee and fully participated in meetings and 
conference calls. Peer reviews are conducted by expert scientists who 
are not members of the Consortium and determine those projects selected 
for funding.

                APPLE FIRE BLIGHT, MICHIGAN AND NEW YORK

    Question. Please provide a description of the research that has 
been funded under the Michigan and New York, Apple Fire Blight grant.
    Answer. This project studies fire blight in apple trees, which is a 
bacterial disease that can kill spurs, branches, and whole trees. The 
management of this disease is difficult because only one antibiotic 
treatment is available. The objectives of this research are to develop 
fire blight resistance varieties, evaluate biological and chemical 
control methodologies for disease management, and develop an education 
and extension component for disease management.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. Fire blight is a destructive disease of apple trees that 
can kill the trees. This disease is caused by bacteria and affects 
apple trees in all apple growing areas of the nation. In the northeast, 
the disease is more prevalent because of humid weather conditions. 
Because there are significant needs for research in high priority 
national interest topics such as improved pest management systems, 
funds are not proposed in fiscal year 2001 to continue this Special 
Research Grant. At the discretion of the State, Hatch Act or other 
funding could be use to support this research.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goals of this research are to develop transgenic apple 
trees through various molecular technologies, to develop new approaches 
to antibiotic treatments of disease, to develop an early screening 
technique for tree sensitivity to the disease, to evaluate biological 
and cultural controls and to develop and improve education and 
extension components of disease management. The last objective involves 
using disease prediction models.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Fiscal year 1977 was the first year funds were appropriated 
for this grant at $325,000. For fiscal year 1998-2000, $500,000 was 
appropriated per year. A total of $1,825,000 has been appropriated.
    Question. What are the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds provided for 1997 were $40,127 for 
Michigan and $104,166 for New York State. In 1998 the State of Michigan 
appropriated $25,071 and the Michigan Apple Research Committee provided 
$15,000 for a total of $40,071 from Michigan. New York provided State 
appropriated funds of $104,166 for 1998. The State appropriated funds 
provided for 1999 were $49,771 for Michigan and $106,689 for New York. 
The State appropriated funds provided for 2000 are $46,178 for Michigan 
and $43,200 for New York.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at Michigan State University 
and Cornell University, New York Experiment Station.
    Question. What is the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated date of completion for the original 
objectives was 2000. The objectives have not been met. It is estimated 
by the researchers that three to five years is needed to complete this 
project.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The last merit review of this project was in January, 1999. 
A site visit was made to Michigan State University in March 1999 and to 
Cornell University, Geneva and Ithaca, New York in April 1999. Both 
principal investigators were visited as well as the field sites. In 
summary, in surveys of established apple orchard and new planting in 
New York there were losses of up to 255 of trees filled by fire blight 
infections of rootstocks. Several new materials for control of fire 
blight on susceptible varieties gave promising results in field trails. 
Improved techniques to transfer genes into apple and to obtain 
flowering on the trasgenci trees have been developed so that transgenic 
fruits can be examined within two years. In research in Michigan a 
total of 50 phage isolated from fire blight were characterized with the 
potential of using these to control the disease. A new plant growth 
regulator that controls vegetative growth in apple appeared to make 
trees less susceptible to fire blight. A detailed study of the role of 
the hrpA gene in fire blight virulence has been completed with a better 
understanding of its involvement in virulence in the disease.

                         AQUACULTURE, LOUISIANA

    Question. Please provide a description of the research that has 
been funded under the Aquaculture, Louisiana grant.
    Answer. The agency requested that the university submit a grant 
proposal for fiscal year 2000 that has not been received to date. 
Research under this program has addressed critical problems in the 
commercial aquaculture industry including crawfish, catfish, and other 
emerging species. The university has completed studies in the area of 
fish nutrition, fish health, fish genetics, production management 
strategies, alternative species, seafood processing, product quality, 
and broodstock development.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal investigator indicates that information 
generated from the funded research will have broad application for 
local, regional, and national aquaculture industries. Specific projects 
have addressed priorities identified in the crawfish industry including 
water quality management, harvesting strategies, and nutrition for the 
production of large crawfish and development of value-added crawfish 
products. Problems addressed in the channel catfish industry include 
off-flavor, viral and bacterial diseases, gene mapping, nutrition, and 
an improved production system technology. Additionally, genetic studies 
on both hybrid-striped bass and tilapia are currently underway.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of the research was to provide science-
based information through a basic and applied research base that 
specifically addressed the needs of the aquaculture industry in 
Louisiana and the southern region. The overall goals of the research 
are to improve production efficiency of important aquaculture species 
through enhancement of nutrient utilization, improvements in genetics, 
and development of new and alternative production management systems; 
to develop new technologies for preventing and treating prevalent 
diseases of important aquacultural species; and to develop new food 
products and new techniques and processes that improve aquacultural-
food product quality. Research has led to improved channel catfish and 
hybrid striped bass feed formulations, production of new channel 
catfish vaccines, improved extraction and detection methods for off-
flavor compounds, production of genetically-improved channel catfish, 
procedures for the production of gene maps for channel catfish, 
improved harvesting and production strategies for crawfish, and 
improved processing technologies for crawfish and other aquaculture 
products. Research continues to be directed at important opportunities 
to enhance production efficiency and commercial viability of 
sustainable aquaculture systems in Louisiana and the southern region.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. Research to be conducted under this program continue as 
initiated under the Aquaculture General program in fiscal years 1988 
through 1991. The work supported by this program began in fiscal year 
1992 and the appropriation for fiscal years 1992-1993 was $390,000 per 
year, $367,000 in fiscal year 1994, and $330,000 each year in fiscal 
years 1995-2000, for a total of $3,127,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The university estimates that non-Federal funding for this 
program is as follows: in fiscal year 1991, $310,051; in fiscal year 
1992, $266,857; in fiscal year 1993, $249,320; in fiscal year 1994, 
$188,816; in fiscal year 1995, $159,810; in fiscal year 1996, $150,104; 
in fiscal year 1997, $158,808; and in fiscal years 1998 and 1999, 
$110,101. The primary source of this funding was from State sources and 
self-generated funds with minor contributions from industry and other 
non-Federal sources.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at Louisiana State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original specific objectives were to be completed in 
1990. These specific research objectives have been met, however, 
research required for long-term growth of the aquaculture industry in 
Louisiana and the southern region continues to be addressed. The 
specific research outlined in the current proposal will be completed in 
fiscal year 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Grants are awarded to scientists within the university on a 
competitive peer-review basis. The entire proposal is reviewed by 
agency Program Managers on an annual basis. The university is required 
to provide an accomplishment report each year when the new grant 
proposal is submitted to the agency for funding. In addition, the 
Program Manager conducted site visits in 1996 and 1997 to meet with the 
scientists involved in the project and review the progress of the 
research. The 1999 review concluded that the proposed research is 
addressing important research needs of the aquaculture industry 
throughout the southern region, that the facilities are excellent, that 
the principal investigators are well-qualified, that the experimental 
design is sound, that the proposed research builds upon research 
previously funded through this program, and that the progress on 
previous research funded under this program is well documented. 
Research results from this program have had a significant impact on the 
aquaculture industry in Louisiana and the region.

             AQUACULTURE RESEARCH, STONEVILLE, MISSISSIPPI

    Question. Please provide a description of the research funded under 
the Aquaculture Research Stoneville, Mississippi grant.
    Answer. The agency has requested that the university submit a grant 
proposal that has yet to be received. Past projects funded by this 
grant have addressed critical problems in the farm-raised channel 
catfish industry including practical feeding and nutrition strategies 
and acoustical in-pond monitoring technologies.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal investigator indicates that results from this 
project will continue to have a significant impact on the 
competitiveness of a significant segment of the domestic aquaculture 
industry, namely channel catfish. The farmed-raised channel catfish 
industry accounts for over 70 percent of total domestic aquaculture 
production. Research funded by this program is directed towards 
improving feeds and feeding strategies and acoustical monitoring and 
inventory of catfish in pond production systems. These findings will 
have long-term impacts on the competitiveness of the farm-raised 
channel catfish industries in several southern States.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to address the 
research needs of the farm-raised channel catfish industry in the areas 
of water quality and nutrition. Results from this research has led to 
improved water quality management practices in commercial catfish ponds 
and improved diet formulation and feeding strategies that have been 
widely adopted by the industry. Research findings from this program 
have had a direct impact on reducing the cost of catfish feed without 
reducing performance and productivity. Additionally, sonar hardware and 
software technologies are being developed and evaluated for use in 
stock assessment of channel catfish ponds.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal years 1980-81, $150,000 per year; fiscal year 1982, 
$240,000; fiscal year 1983-84, $270,000 per year; fiscal year 1985, 
$420,000; fiscal years 1986-87, $400,000 per year; fiscal year 1988, 
$500,000; fiscal year 1989, $588,000; fiscal year 1990, $581,000; 
fiscal year 1991, $600,000; fiscal years 1992-1993, $700,000 per year; 
fiscal year 1994, $658,000; fiscal years 1995-1997, $592,000 each year, 
$642,000 in fiscal year 1998, and $592,000 per year in fiscal years 
1999 and 2000. A total of $10,229,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The university estimates a total of $2,101,508 in non-
Federal funding to support this research for fiscal years 1991-1994; 
$1,128,451 in fiscal year 1995; $601,473 in fiscal year 1996; $463,990 
in fiscal year 1997, $464,266 in year 1998, and approximately $740,000 
in fiscal year 1999. Non-Federal funding is primarily provided by State 
funds. Additional funding is also provided from product sales, industry 
contributions, and other miscellaneous sources.
    Question. Where is this work being carried out?
    Answer. The grants have been awarded to the Mississippi State 
University Agricultural and Forestry Experiment Station. All nutrition 
research is conducted at the Delta Branch Experiment Station, 
Stoneville, Mississippi. The acoustical research is conducted in 
cooperation with the National Center for Physical Acoustics at the 
University of Mississippi.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the specific original 
research objectives was 1984. The original objectives have been met, 
however, projects funded by subsequent grants continue to address the 
research needs of the domestic channel catfish industry as problems 
arise. The specific research outlined in the current proposal will be 
completed in 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency's Program Managers and Program Specialist 
evaluate the progress of this project on an annual basis. The 
university is required to provide an accomplishment report when the new 
proposal is submitted to the agency for funding. Proposed new projects 
undergo internal review by the Mississippi State University 
Agricultural and Forestry Experiment Station and are reviewed 
externally by agency personnel consistent with United States Department 
of Agriculture guidelines. The Program Manager conducted a site visit 
in 1999. The 1998 review indicated that the research addresses key 
problems faced by the farm-raised channel catfish industry. Significant 
progress has been reported on past research and the experimental and 
scientific design of the new project are sound. Scientists involved in 
the project are leading authorities in this area of research and 
linkages between the researchers and the catfish industry has lead to 
accelerated adoption of research findings. Adoption of improved feeds 
and feeding strategies developed through this program by the catfish 
industry has led to improved production efficiency in commercial 
catfish operations. The agency is planning a site visit in fiscal year 
2000.

                      AQUACULTURE, NORTH CAROLINA

    Question. Please provide a description of the research that has 
been funded under the Aquaculture, North Carolina grant.
    Answer. The agency has requested that the university submit a grant 
proposal that has yet to be received. The researchers indicate that the 
research will focus on improving husbandry methodologies for striped 
bass and rainbow trout.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal investigator indicates that the project will 
address specific research needs of the domestic trout and hybrid 
striped bass industries. Studies addressing vaccine administration and 
disease resistance, broodstock maintenance, and feeding strategies will 
result in improved culture technologies for these species in the United 
States.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of the project was targeted at resolving 
specific, industry-recognized impediments to aquaculture efficiency, 
profitability, and growth. The specific objectives include: improved 
vaccine administration methods for rainbow trout; improved broodstock 
maintenance methodologies for striped bass; and reduction of 
environmental impacts by improving system technologies and feeding 
strategies in hybrid striped bass production ponds.
    Question. How long has the work been underway and how much has been 
appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1997 
and the appropriation for fiscal year 1997 was $150,000. The project 
was not funded in fiscal years 1998 and 1999. The current fiscal year 
2000 appropriation is $255,000. The total amount appropriated is 
$405,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The university reports a total of $94,000 of non-Federal 
funding to support research carried under this program for fiscal year 
1997. The primary source of the non-Federal funding was from State 
sources.
    Question. Where is the work being carried out?
    Answer. Research is being conducted at North Carolina State 
University and their aquaculture research field station.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. This project was initiated in fiscal year 1997 and was 
funded for one year. Funding was not appropriated in fiscal years 1998 
and 1999.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency will conduct the initial review of this proposal 
when it is submitted to the agency for funding. The proposal will be 
externally peer reviewed as part of the agency's evaluation.

                         AQUACULTURE, VIRGINIA

    Question. Please provide a description of the research that has 
been funded under the Aquaculture, Virginia grant.
    Answer. The agency requested that the university submit a grant 
proposal that has yet to be received. The proposed research will 
document and develop fish production culture methodologies and analyze 
economic management and marketing strategies for a recirculating 
aquaculture system-based industry.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The investigators indicate that there is a need to develop 
a highly competitive, sustainable aquaculture industry predicated upon 
land-based recirculating-water system technologies in order to meet 
consumer demand for cultivated aquatic foods that are of high quality, 
safe, competitively priced, nutritious, and are produced in an 
environmentally responsible manner. Research refining culture system 
technologies have the potential of significantly enhancing domestic 
aquaculture production.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research is to identify 
commercially-viable aquaculture species utilizing recirculating 
aquaculture system technology, verifying production and culture 
management protocols utilizing this technology, analyze production 
budgets providing information upon which to build business plans, 
investigate marketing development strategies, and prepare scientific, 
technical, and popular publications to disseminate the results of this 
research. Research was initiated in fiscal year 1999. Initial 
production trials are underway, but have not yet been completed.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. This was a new research initiative in fiscal year 1999. 
$100,000 per year was appropriated for fiscal years 1999 and 2000. The 
total appropriation for this grant is $200,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The university estimates a minimum of $90,000 of non-
Federal funding in fiscal year 1999 and $34,853 in fiscal year 2000 
coming primarily from State sources.
    Question. Where is this work being carried out?
    Answer. The research will be conducted through the Virginia 
Agricultural Experiment Station, Virginia Polytechnic Institute and 
State University, Blacksburg, Virginia and in collaboration with 
private aquaculture firms in Virginia.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. This proposal seeks funding for year two of a proposed 
three year project. The anticipated completion date for the fiscal year 
2000 component of the project is July 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency evaluates the progress of this project on an 
annual basis. The university is required to submit an accomplishment 
report each year when the new proposal is submitted to the agency for 
funding. The objectives described in the proposal are relevant to 
State, regional, and national goals and address an important 
opportunity within the regional aquaculture industry. The specific 
objectives, methodology, and experimental design are clearly presented 
and experimentally sound. Personnel and facilities are appropriate for 
the stated objectives and objectives should be attained within 
budgetary and time constraints. Appropriate literature review and 
justifications for research were provided.

          AQUACULTURE PRODUCT AND MARKETING DEVELOPMENT, W.V.

    Question. Please provide a description of the research that has 
been funded under the Aquaculture Product and Marketing Development, 
West Virginia.
    Answer. The agency requested that the university submit a grant 
proposal that has yet to be received. The research program is aimed at 
developing a viable and competitive aquaculture industry in West 
Virginia and the Appalachian region. The specific objectives of the 
project address State and regional needs by improving the short-term 
viability and long-term sustainability of aquaculture production and 
processing firms in West Virginia and similar areas of Appalachia. 
Specific research strategies include the development of marketing 
strategies for trout producers and processors, increasing the economic 
efficiency and profitability of trout-based enterprises, improving the 
consistency and quality of fresh trout fillets and value-added smoked 
trout products, and to implement a technology transfer component to 
disseminate information generated by this project to the aquaculture 
industry in Appalachia.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The researchers indicate that there is a regional and 
national need to evaluate marketing and product development for small 
scale aquaculture systems in rural communities. In addition, there is a 
need to improve the efficiency and sustainability of these systems.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The research proposes to develop sound marketing strategies 
for aquaculture products, improve the economic efficiency of 
aquaculture production systems, and improve the quality and variety of 
aquaculture products in West Virginia and the Appalachian region.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. A grant has been awarded from funds appropriated as 
follows: fiscal year 1998, $600,000 and $750,000 for each of fiscal 
years 1999 and 2000. A total of $2,100,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The university indicated that there were no non-Federal 
funds provided in fiscal years 1998 and 1999 for this project.
    Question. Where is this work being carried out?
    Answer. The research is being conducted at the University of West 
Virginia in Morgantown and at off campus sites with a variety of 
potential cooperators.
    Question. What was the anticipated completion date for the original 
objective of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The project was initiated in fiscal year 1998. Research 
addressing the original objectives is currently underway and the 
anticipated completion date for these objectives is fiscal year 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency conducted an external and internal peer review 
of the original proposal. The proposal was peer reviewed by 10 external 
reviewers and the agency's National Program Leaders for Aquaculture, 
and the Aquaculture Program Specialist. Although the proposal was aimed 
at important issues facing the aquaculture industry in the region, a 
number of significant concerns were expressed by both external and 
agency reviewers. These concerns with recommendations were presented to 
the university and a revised fiscal year 1998 proposal was submitted 
and approved. The Agricultural Experiment Station requested that a 
planning review be held to provide recommendations to the University to 
assist in developing and refining the direction and focus of the 
aquaculture program at West Virginia University. An external planning 
review was held in August, 1999, facilitated by the National Program 
Leaders and Program Specialist. The agency and West Virginia University 
agreed that additional time would be needed to develop a complete, 
detailed proposal for the fiscal year 1999 funding. West Virginia 
University requested, in their fiscal year 1999 proposal submission, 
that the funds be obligated but restricted until a detailed proposal 
was submitted and approved by the agency. The agency is currently 
awaiting receipt of the revised fiscal year 1999 proposal.

   BABCOCK INSTITUTE FOR INTERNATIONAL DAIRY RESEARCH AND DEVELOPMENT

    Question. Please provide a description of the research that has 
been funded under the Babcock Institute grant.
    Answer. The Babcock Institute for International Dairy Research and 
Development was established with participation of the University of 
Wisconsin-Madison College of Agriculture and Life Sciences, School of 
Veterinary Medicine and the Cooperative Extension Division. The 
objective of the Babcock Institute is to link the U.S. dairy industry 
with the dairy industry in the rest of the world through degree 
training, continuing education, technology transfer, adaptive research, 
scientific collaboration and market analysis.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes the need is to strengthen 
dairy industries around the world, to enhance international commercial 
and scientific collaborative opportunities for the U.S. dairy industry, 
and to draw upon global perspectives to build insight into the 
strategic planning of the U.S. dairy industry.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the Institute remains the linkage of the U.S. 
dairy industry with the rest of the world through training, continuing 
education and outreach, technology transfer, adaptive research, 
scientific collaboration and market analysis. Initial efforts were 
focused on planning and staffing. An initial activity was, and 
continues to be, the development of multi language extension materials 
about basic management techniques essential to optimize performance of 
U.S. dairy cattle overseas. This activity has grown to include manuals 
on Breeding and Genetics, Lactation and Milking, and Basic Dairy Farm 
Financial Management published in English, Spanish, French, Russian, 
and Chinese. Research on potential implications of NAFTA and GATT on 
the U.S. dairy industry was completed. A technical workshop on dairy 
grazing in New Zealand and the Midwest was organized and held in 
Madison during the fall of 1993. A technical workshop on Nutrient 
Management, Manure and the Dairy Industry: European Perspectives and 
Wisconsin's Challenges was held in Madison, Wisconsin during September 
1994. A round table was held in January 1995 addressing ``World Dairy 
Markets in the Post-GATT Era.'' Sponsored the Great Lakes Dairy Sheep 
Symposium in 1995 and 1996. Created a World Wide Web site in 1996 for 
distribution of Babcock Institute technical dairy fact sheets in four 
languages. The first International Dairy Short Course for a group of 
producers and technicians from Argentina has been organized on the 
University of Wisconsin Campus. Scientists' are being supported in 
collaborative research with New Zealand primarily to gain a better 
understanding of grazing systems as related to dairy management. An 
analysis of the impact of changes in European dairy policies has been 
completed. The Institute sponsored a Minnesota-Wisconsin Dairy Policy 
Conference to provide insights into current agricultural programs and 
policy issues in the dairy sector of the U.S. economy.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal years' 1992 and 1993, $75,000 per year; fiscal year 
1994, $250,000; and fiscal years' 1995-1998, $312,000 per year; fiscal 
year 1999, $400,000; and fiscal year 2000, $510,000. A total of 
$2,648,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. During fiscal year 1992, $13,145 of State funds were used 
to support this program and $19,745 of State funds in fiscal year 1993 
for a total of $32,890 during the first two years of this research. 
Information is not available for fiscal years 1994-1999.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at the University of Wisconsin-
Madison College of Agriculture and Life Sciences.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The Babcock Institute's overarching mission has been to 
link the U.S. dairy industry and its trade potential with overseas 
dairy industries and markets. The original objectives of this project 
have remained consistent over the years. However, each year specific 
objectives were proposed to further the mission of the Institute and to 
build on previous accomplishments. The Institute has accomplished 
specific objectives each year in a timely manner. The Babcock Institute 
has remained true to its original objective of linking Wisconsin and 
the U.S. to dairy industries around the world. This objective remains 
increasingly important with continued development of international 
markets for dairy products and technologies. The University researchers 
anticipate that work currently in progress will be completed by 
September 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The Babcock Institute undergoes two independent review 
processes each year. The first is done by a committee of university and 
industry representatives who review the annual research proposal and 
amend it prior to submission to the agency. The annual proposal is 
reviewed by agency technical staff prior to approval for fund release. 
In addition, the institute was included in a comprehensive review of 
the programs of the Department of Dairy Science at the University of 
Wisconsin in May 1995. The agency project officer has conducted two on 
site reviews of the institute since its formation in 1992. The most 
recent review has found that the approach proposed by the researchers 
is appropriate and that the researchers are well qualified to perform 
the objectives as stated. The objectives of the proposal are within the 
mission of the United States Department of Agriculture and the 
Cooperative State Research, Education, and Extension Service.

                      BIODIESEL RESEARCH, MISSOURI

    Question. Please provide a description of the research that has 
been funded under the biodiesel research grant.
    Answer. Research on biodiesel involves examining the feasibility of 
producing biodiesel and other higher value products from oilseed crops 
including soybeans, canola, sunflower and industrial rapeseed. The 
project is also evaluating local processing plants whereby farmers 
could produce crops, process the crops locally and use the fuel and 
high protein feed coproducts on their farms or locally. This project 
undergoes merit review at the College of Agriculture.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The initial work is being conducted in Missouri. The 
results may provide the agricultural community with alternative crops 
and more diverse markets, additional marketable products and a locally 
grown source of fuel. This will result in increased investment in local 
communities, additional jobs, and increased value added in the farm and 
rural community sectors.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The ultimate goal of this project was to conduct research 
and development in an effort to help commercialize biodiesel as an 
important alternative fuel that could be used in fleets throughout the 
country. This would help to attain the objectives of the comprehensive 
Energy Policy Act of 1992, also known as EPACT. Success would increase 
the use of agricultural products as well as diversifying product 
markets, both of which would be beneficial to American farmers. This is 
especially important during periods of large commodity surpluses and 
extremely depressed prices such as we are currently experiencing. An 
important part of the on-going research has been to identify potential 
markets where biodiesel can compete on an economic basis with other 
alternative fuels. An important part of the research this past year is 
to compare the cost of using a biodiesel blend, 20 percent biodiesel/80 
percent petroleum diesel, as an alternative fuel in the St. Louis 
Metropolitan Fleet with other alternative fuels. Results indicate that 
the incremental cost of biodiesel over conventional diesel fuel is 
$1,013 per EPACT credit. The incremental cost of the other options 
investigated was $4,000 for compressed natural gas and $3,281 for E-85 
per credit. Thus, from an incremental cost perspective, biodiesel is 
the least cost option for helping the City of St. Louis meet the clean 
air requirements of Energy Policy Act.
    Question. How long has this work been underway, and how much has 
been appropriated, by fiscal year, through fiscal year 2000?
    Answer. The work for this program began in fiscal 1993, and the 
appropriation for that year was $50,000. The appropriation for fiscal 
year 1994 was $141,000; and for fiscal years 1995-2000, $152,000 
annually. A total of $1,103,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The source of non-Federal funds is State appropriated 
funds. The level in 1994 was $7,310. The funding level for 1995 was 
$74,854. Cost sharing by the University of Missouri each year for 
fiscal year 96 and fiscal year 97 was $80,000 and $86,000 respectively. 
Total cost sharing for the project by the University of Missouri has 
been $242,224. Matching funding for fiscal years 1998 and 1999 was 
$77,431 and $79,730. Total matching for the entire period has been 
$399,385. Additionally, some work funded by this grant has been 
conducted in cooperation with the National Biodiesel Board, plus the 
Missouri Soybean Merchandising Council.
    Question. Where is this work being carried out?
    Answer. The work is being carried out at the University of 
Missouri-Columbia.
    Question. What was the anticipated completion date for the original 
objectives of the project Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The principal investigator believes that the work will be 
completed at the end of fiscal year 2000. Research and development 
completed by the end of that period will provide private industry with 
the information needed to successfully commercialize biodiesel.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The evaluation of using biodiesel as a complete fuel and in 
a blend has been met. This project is evaluated on an annual basis 
based on the annual progress report, discussions with the principal 
investigator as appropriate, and agency participation in collaborative 
activities related to this project. The review is conducted by the 
cognizant staff scientist and it has been determined that the research 
is performed in accordance with the mission of this agency.

           BLOCKING ANHYDROUS METHAMPHETAMINE PRODUCTION IOWA

    Question. Please provide a description of the research that has 
been done under the Blocking Anhydrous Methamphetamine Production 
Grant, Iowa.
    Answer. The Agency has requested Iowa State University to submit a 
grant proposal that has not yet been received. This is a new special 
grant for which there have been no previous awards.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher has indicated that anhydrous 
ammonia, a commonly used agricultural fertilizer, can be used as an 
ingredient for making methamphetamine, an illegal and highly addictive 
drug which has posed a drug enforcement problem for Iowa and other 
Midwestern States in recent years. At the discretion of the State, 
Hatch Act or other formula funding could be used to support this 
research. The National Research Initiative is another possible funding 
source for this project.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the research is to discover a chemical 
procedure that will render anhydrous ammonia ineffective in producing 
methamphetamine while keeping the anhydrous ammonia cost-efficient and 
effective as a fertilizer. Preliminary results suggest that certain 
metal salts in catalytic amounts can be effective at inactivating the 
drug-producing reaction.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000 ?
    Answer. Preliminary work funded by the State has been underway for 
approximately five months. This is a new special grant and $212,500 has 
been appropriated for fiscal year 2000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. State funds in an amount less than $5,000 were used to get 
the project started in fiscal year 1999. The State plans to cost-share 
the salaries of the principal investigator and a faculty collaborator 
in the amounts of $20,000 and $25,000 per year, respectively.
    Question. Where is this work being carried out?
    Answer. The research is being conducted in the Chemistry Department 
at Iowa State University, Ames, Iowa.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The principal investigator anticipates completing the 
original objectives of the project in two or three years. Additional or 
related objectives have not been specifically identified at this time.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. As a new special grant for which a proposal has not yet 
been received, this project has not yet been evaluated. A merit review 
panel will be convened to evaluate the project upon receipt of a 
proposal for fiscal year 2000.

                     BOVINE TUBERCULOSIS, MICHIGAN

    Question. Please provide a description of the research that has 
been conducted under the Bovine Tuberculosis, Michigan grant.
    Answer. The agency has requested the university to submit a grant 
proposal that has not yet been received.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for the 
research?
    Answer. The need for this research relates to the critical problem 
of bovine tuberculosis which has now been discovered to have spread 
into the white-tailed deer population in the State of Michigan. If 
information on the scope of this disease in deer and methodologies to 
monitor and reduce this problem is not available rather soon, this 
could cause significant problems for the plans to eradicate 
tuberculosis from cattle in the United States.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of the research is to develop information 
about the spread of the bovine tuberculosis organism, Mycobacterium 
bovis, within the deer population of Michigan. Appropriate control 
programs can not be devised until the epidemiologic information is 
available.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and the appropriation for fiscal year 2000 is $170,000.
    Question. What is the source and amount of non-Federal funds by 
fiscal year?
    Answer. Because this project is just being initiated in this fiscal 
year, 2000, there is no information available about other funding for 
the project.
    Question. Where is this work being performed?
    Answer. The research is being performed in the College of 
Veterinary Medicine, Michigan State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
is 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Because this project is just being started in fiscal year 
2000, no evaluation has been done at this time.

                      BRUCELLOSIS VACCINE, MONTANA

    Question. Please provide a description of the research that has 
been conducted under the Brucellosis Vaccine, Montana grant.
    Answer. This project will study the immune response of bison to 
Brucella abortus antigen which has been incorporated into an organism 
that can be given orally to the animals. The objective is to produce an 
oral vaccine that can be easily administered to the bison without 
subjecting them to intensive handling procedures.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for the 
research?
    Answer. The research project is intended to develop a strategy for 
vaccinating or immunizing cattle against brucellosis by incorporation 
of Brucella abortus genes into an orally administered system.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of the project was to accomplish 
incorporation of Brucella genes which code for specific antigens into 
Salmonella species of bacteria and test the efficacy of oral 
administration of this material in developing systemic immunity in 
bison.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work was started in fiscal year 1999. The appropriation 
for fiscal year 1999 was $150,000, and for fiscal year 2000 was 
$425,000 for a total of $575,000.
    Question. What is the source and amount of non-Federal funds by 
fiscal year?
    Answer. The source and amount of non-Federal funds for fiscal year 
1999 was $67,401 from State sources.
    Question. Where is this work being performed?
    Answer. The work is being performed at Montana State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
was May, 2002 or three years from the initiation of the project.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. As the project was started in the summer of 1999, there has 
not yet been an agency evaluation.

        CENTER FOR ANIMAL HEALTH AND PRODUCTIVITY, PENNSYLVANIA

    Question. Please provide a description of the research that has 
been funded under the Center for Animal Health and Productivity grant.
    Answer. This research is designed to reduce nutrient transfer to 
the environment surrounding dairy farms in the Chesapeake Bay 
watershed. Progress to date includes the development of an individual 
dairy cow model which will predict absorbed amino acids and the loss of 
nitrogen in manure. This model has been developed into a user friendly 
software so that trained farm advisors can evaluate herd nutrient 
management status while on a farm site. A whole farm model has been 
developed which integrates feeding and agronomic practices to predict 
utilization of nitrogen and farm surpluses. Using these tools, a survey 
of dairy farms in the region has been done to assess nitrogen status on 
dairy farms and potential management practices to reduce nitrogen 
excesses on dairy farms. Refinement of the model tools and research to 
refine estimates of the environmental fate of excess nitrogen from 
dairy farms is in progress. During the last year, researchers have 
discovered that significant nitrogen is lost from the animal housing 
facility in the form of ammonia volatilization to the atmosphere. 
Preliminary estimates indicate that as much as 50 percent of the 
nitrogen consumed by dairy cows is lost as ammonia to the atmosphere 
and never reaches the manure storage and management system. Two on-site 
reviews of the program have been conducted by the CSREES Project 
Officer and a third is planned during 2000. The animal and farm models 
have been published in a peer reviewed scientific journals.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes that reducing non-point 
pollution of ground and surface water by nitrogen from intensive 
livestock production units are of concern nationally, and especially in 
sensitive ecosystems like the Chesapeake Bay. This research is designed 
to find alternative feeding, cropping and management systems which will 
reduce net nutrient flux on Pennsylvania dairy farms to near zero. The 
principal researcher believes this research to be of national, 
regional, and local need. Members of the research team have applied for 
funding through both the National Research Initiative and the Fund for 
Rural America. The Initiative for Future Agriculture and Food Systems 
should provide additional opportunity for funding of this research.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goals of this research remains the development 
of whole farm management systems which will reduce nutrient losses to 
the external environment to near zero. To date the researchers have 
developed their own models to more accurately formulate rations for 
individual dairy cows which permit the comparison of alternative 
feeding programs based upon both maximal animal performance and minimal 
nutrient losses in animal waste. This model is being tested on select 
commercial dairy farms to evaluate the extent to which total nitrogen 
losses in manure can be reduced without impacting economic performance 
of the farm. At the same time, whole farm nutrient models have been 
developed to evaluate alternative cropping systems which will make 
maximum use of nutrients from animal waste and minimize nutrient flux 
from the total farm system. These tools are currently being used to 
survey the current status of nutrient balance on farms in the area and 
efforts to fine tune the tools are in progress. The recent discovery of 
the quantitative significance of nitrogen loss as ammonia to the 
atmosphere and potential transport from the farm and redeposition to 
the earth's surface raises a whole new aspect of nutrient management.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. A grant has been awarded from funds appropriated in fiscal 
year 1993 for $134,000 and in fiscal year 1994 for $126,000. In fiscal 
years 1995-2000, $113,000 has been appropriated each year. A total of 
$938,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. This information is not available at the present time.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at the University of 
Pennsylvania, College of Veterinary Medicine at New Bolton Center, 
Pennsylvania.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The University researchers anticipate that work currently 
underway will be completed by September 2000. This will complete the 
original objectives of the research. The principal researcher indicates 
that consideration has been given to the broadening of objectives to 
include additional nutrients in the model system, but this has been 
dropped because technical expertise required is currently not readily 
available.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The Center for Animal Health and Productivity Project was 
last reviewed in June 1997. An on site review by agency technical staff 
was conducted in June 1995. It was concluded that project objectives 
are within the goals of the program, are within the mission of both the 
USDA and CSREES, and the institution is well equipped and qualified to 
carry out the research project. The institution has made excellent 
progress toward the completion of the original goals of the project, 
but still must evaluate the effectiveness of the use of the new tools 
developed in reducing nutrient runoff from commercial dairy farms in 
the watershed of the Chesapeake Bay.

                   CENTER FOR RURAL STUDIES, VERMONT

    Question. Please provide a description of the program that has been 
funded under the Center for Rural Studies Project in Vermont.
    Answer. The Center for Rural Studies Project involves applied 
research focused on developing and refining social and economic 
indicators used to evaluate the impact of economic development 
programming and activities. They are perfecting a delivery format for 
technical assistance for community and small business development. A 
major component of current research relates to utilization of the world 
wide web as a delivery vehicle. Project proposal undergoes a merit 
review within the agency.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. This is an on-going pilot to demonstrate the effective 
development and implementation of applied research, training, 
education, and technical assistance related to rural development. The 
grant has addressed methodology and strategies for assessing rural 
development program impacts.
    Question. What was the original goal of this research and what has 
been accomplished?
    Answer. The original goal was to create a database and analytical 
capability for rural development programming in Vermont. Examples of 
past accomplishments include maps presented to target child hunger 
programs, targeted areas for other types of rural development program 
intervention, analytical reports to guide the development of retail 
shopping areas, an ``Economic Handbook for Vermont Counties'', and 
strategies for using the world wide web to disseminate information.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The grant was initiated in fiscal year 1992. Appropriated 
amounts are: fiscal years 1992-93, $37,000 per year; fiscal year 1994, 
$35,000; fiscal years 1995-98, $32,000 per year; fiscal year 1999-2000, 
$200,000 for total appropriations of $637,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Fiscal year 1991 included $91,130 in State matching funds. 
Fiscal years 1993, $143,124; 1994-96, $3,547 State matching funds. 
Fiscal years 1997-98 State dollars were $2,931 plus researcher's 
salary. No non-Federal dollars were provided for fiscal year 1999-2000.
    Question. Where is this work being carried out?
    Answer. Applied research and outreach is being carried out through 
the University of Vermont.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original completion date was September 30, 1993. The 
original objectives of this research have been met. The additional 
objectives being presented for the current year will be completed by 
September 30, 2002. Proposal for current year has not been received to 
date.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency evaluates the merit of research proposals as 
they are submitted. No formal evaluation of this project has been 
conducted. The principal investigators and project managers submit 
annual reports to the agency to document impact of the project. Agency 
evaluation of the project includes peer review of accomplishments and 
proposal objectives and targeted outcomes.

                     CHESAPEAKE BAY AGROECOLOGY, MD

    Question. Please provide a description of the research that has 
been funded under the Chesapeake Bay Agroecology, MD special grant.
    Answer. The Chesapeake Bay Agroecology grant focuses on increasing 
our understanding of nutrient cycling, retention and utilization by 
vital agricultural industries located within vulnerable Chesapeake Bay 
watershed ecosystems that have been impacted by outbreaks of the toxic 
microorganisms Pfiesteria. There is a specific focus on Maryland's 
Eastern Shore.
    This research focus has been identified as a priority by the State 
of Maryland's Blue Ribbon Pfiesteria Action Commission Report (1997), 
and by a Research, Education, and Economics (REE) strategic plan 
emphasis, Greater Harmony Between Agriculture and the Environment, that 
calls for a better understanding of the linkages between agricultural 
production, water and soil quality, range and forest land health, and 
habitat protection.
    Since the projects were initiated last year, investigators spent 
the first year designing and implementing their research. While some 
preliminary results are available, quantitative conclusions will 
require more time.
    Requested funds in fiscal year 2000 will support interdisciplinary 
projects that bring together the expertise of numerous scientists 
located at institutions throughout the University System of Maryland. 
These scientists continue to generate technical and scientific advances 
that guide Federal, State and local policy responses to Pfiesteria 
outbreaks.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research.
    Answer. The continued viability of Maryland's important coastal 
agricultural economy, and the protection of Chesapeake Bay and Atlantic 
Coastal aquatic and agricultural resources from future Pfiesteria 
outbreaks, depends upon our ability to prevent future toxic algal 
blooms by stemming the flow of nitrogen, phosphorus, and other 
agricultural nutrients into estuarine waterways.
    Maryland is an acknowledged leader in implementing agricultural 
nutrient management, soil conservation, conservation reserve, 
Chesapeake Bay tributary team and other cooperative planning 
strategies. However, non-point sources of nutrients remain a major 
source of pollution into Atlantic Coastal waterways, and farmland 
remains the largest controllable source of non-point nutrient loading 
into Chesapeake Bay. Thus, it is essential that we continue to increase 
our efforts to stem nutrient losses into waterways while preserving and 
enhancing important agricultural industries.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this research is to increase our understanding 
of nutrient (nitrogen and phosphorus) cycling, retention and 
utilization by vital agricultural industries located in coastal regions 
of Chesapeake Bay, and to develop new technologies and strategies that 
limit nutrient losses while enhancing vital agricultural industries. 
This project was initiated in fiscal year 1999.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. This project was initiated in fiscal year 1999, and has 
received $150,000 in fiscal years 1999 and 2000. A total of $300,000 
has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The project is in its first year. The State of Maryland has 
pledged to match 100 percent of the Federal funds provided in fiscal 
year 2000 and in future years for the Chesapeake Bay Agroecology 
Project.
    Question. Where is the work being carried out?
    Answer. This research will be conducted at University System of 
Maryland institutions and field research stations located throughout 
the State, with an emphasis on the Eastern Shore of Maryland which 
experienced significant Pfiesteria outbreaks.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Major progress has been made towards meeting specific 
projects as well as regional objectives. However, the issues being 
addressed are complex and solutions will require a long-term approach.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project has not yet been reviewed by the agency. 
However, the projects supported by this special grant are peer reviewed 
by an independent, external scientific panel and before competitive 
awards are made to qualified scientists located throughout the 
University System of Maryland.

                  CHESAPEAKE BAY AQUACULTURE, MARYLAND

    Question. Please provide a description of the research funded under 
the Chesapeake Bay Aquaculture grant.
    Answer. The agency requested that the university submit a grant 
proposal that has yet to be received. The objective of the Chesapeake 
Bay Aquaculture project is to improve the culture of striped bass and 
its hybrids through genetic improvement, reproductive biology, 
nutrition, health management, waste management, and product quality. 
The research is aimed at enhancing production efficiency, product 
safety, and provides a good balance between basic and applied research.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal investigator indicates that the Mid-Atlantic 
region of the country continues to play a significant role in the 
overall expansion of the domestic aquaculture industry. Research 
supported through this program will assist in enhancing the culture of 
striped bass and its hybrids in the United States.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original research goal was to generate new knowledge 
that can be utilized to address serious problems limiting the expansion 
of the aquaculture industry in Maryland and the Mid-Atlantic region. 
The program concentrates on closing the life cycle, enhancing 
production efficiency, decreasing effluents, and improving product 
quality under aquaculture conditions of striped bass and its hybrids. 
Research is conducted in the areas of growth, reproduction and 
development, nutrition, aquacultural systems, product quality, and 
aquatic animal health. Progress has been made in developing controlled 
artificial spawning techniques, cryopreservation of sperm, and refining 
the nutritional requirements.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported under this grant began in fiscal year 
1990 and the appropriation for fiscal year 1990 was $370,000. The 
fiscal years 1991-1993 was $437,000 per year; fiscal year 1994, 
$411,000; fiscal years 1995-1998, $370,000 each year, and for each of 
fiscal years 1999 and 2000, $385,000. A total of $4,342,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The university reports the amount of non-Federal funding 
for this program is as follows: in fiscal years 1991 and 1992, 
$200,000; in fiscal years 1993 and 1994, $175,000; in fiscal year 1995 
$400,000; in fiscal year 1996 $536,000; in fiscal year 1997 
approximately $400,000; in fiscal year 1998, $360,000; and in fiscal 
year 1999, approximately $360,000. These funds are from direct State 
appropriations and other non-Federal funding sources.
    Question. Where is the work being carried out?
    Answer. Research is being conducted at the University of Maryland.
    Question. What was the anticipated completion date for the original 
objective of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original specific research objectives were to be 
completed in 1993. The original specific research objectives have been 
met, however, research funded through this grant continues to address 
problems faced by the hybrid-striped bass industry in Maryland and 
throughout the country. The specific research outlined in the current 
proposal will be completed in fiscal year 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency's Program Managers and Program Specialist 
evaluate the progress of this project on an annual basis. The 
researchers are asked to the develop a research proposal consistent 
with the National Science and Technology Council's Strategic Plan for 
Aquaculture Research and Development. The university awards grants 
consistent with United States Department of Agriculture guidelines 
based upon internal competitive peer review. The 1999 review concluded 
that the proposal was well written with objectives clearly stated; that 
excellent progress is reported on previous work; that scientific and 
technical expertise is excellent; and that the proposal addresses high-
priority research needs. The proposal does address high priority 
research needs for the aquaculture industry at the State, regional, and 
national level and is consistent with the National Science and 
Technology Council's Joint Subcommittee on Aquaculture Strategic Plan 
for Aquaculture Research and Development.

                            CITRUS TRISTEZA

    Question. Please provide a description of the research that has 
been funded under the citrus tristeza research program grant.
    Answer. Nine projects were selected for funding through a CSREES 
competitive grants program. Some of the research included survey 
information on distribution of the brown citrus aphid and Citrus 
Tristeza Virus in Louisiana and Arizona, the develop of resistant 
citrus varieties to the virus, better understanding of virus strains 
and the disease complex and biological control efforts on the brown 
citrus aphid in Florida.
    Question. According to this research proposal, or the principal 
investigator, what is the national, regional, or local need for this 
research?
    Answer. Citrus Tristeza virus is a problem in all citrus growing 
areas of the United States and Puerto Rico. The recent introduction of 
a new vector, the brown citrus aphid, into Florida has allowed for 
another pathotype of the virus to be introduced. This is a more 
destructive pathotype of the virus that causes more damage than those 
pathotypes already established in the citrus producing areas.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this research is to reduce losses in citrus 
through research the characterization and detection of citrus tristeza 
virus strains, biology and control of the brown citrus aphid; host 
plant resistance; epidemiology and crop loss assessment; development of 
cross-protecting citrus tristeza virus strains, and research to enhance 
virus free budwood programs.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1999 
at the appropriation level of $500,000 and for fiscal year 2000, the 
appropriation is $595,000. A total of $1,095,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. There are no non-Federal funds provided for this grant.
    Question. Where is this work being carried out?
    Answer. Research is being carried out at land grant universities 
and research centers in the Florida, Louisiana, California, and 
Arizona.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. This is the second year of this funding. An anticipated 
completion has not been determined as the original objectives have not 
been met at this time.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. All projects underwent a peer review at the University 
level, a scientific peer review and an agency merit review in August, 
1999.

                         COASTAL CULTIVARS, GA

    Question. Please provide a description of the research that has 
been funded under the Coastal Cultivars grant.
    Answer. The Cooperative State Research, Education, and Extension 
Service has requested the university to submit a grant proposal that 
has not yet been received. The research will address new plant crops 
and sustainable production systems.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The research need to which this grant is directed is to 
potential new crop plants for the South Eastern United States Coastal 
zone and develop sustainable production systems. The results will have 
application throughout the region. Farmers currently have few options.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research is to improve rural 
income by identifying new crop cultivars for production in this area 
that now has few options.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1997 
and the appropriations for fiscal year 1997 was $200,000, for fiscal 
year 1998, $250,000 for fiscal year 1999 was--0. The appropriations for 
fiscal year 2000 is $170,000. The total is $411,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were estimated to be $97,400 in 1997 and $146,200 in 1998.
    Question. Where is this work being carried out?
    Answer. The work is being carried out at the University of Georgia 
Coastal Garden research facility.
    Question. When was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
is fiscal year 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Project proposals for this program were reviewed and 
evaluated in fiscal years 1997 and 1998.
          competitiveness of agriculture products, washington
    Question. Please provide a description of the research that has 
been done under the Competitiveness of Agriculture Products research 
grant?
    Answer. This research identifies international marketing 
opportunities for Northwest firms in the forest products and food 
products sectors.
    Question. According to the research proposal, or the principal 
researchers, what is the national, regional, or local need for this 
research?
    Answer. Most food processing firms are small. Their export sales 
are made in many widely scattered markets with different languages, 
customs, institutions, and market structures. These markets have also 
been subjected to wrenching changes. University researchers provide a 
central and stable core of knowledgeable experts who can guide small 
export businesses in navigating these markets successfully.
    Forest products from the Pacific Northwest can be shipped to Asian 
markets for less than shipping them to the eastern population centers 
in the United States. Research has opened Asian markets to U.S. light 
frame construction building technology, providing good opportunities to 
export higher valued secondary manufactured products to Japan and 
China. Research has also been focused on forest management alternatives 
that can better satisfy environmental goals with less negative impacts 
on timber-dependent communities. The Northwest agricultural economy is 
highly dependent upon being able to export given that food production 
in the region greatly exceeds food consumption.
    Northwest wood products companies that could export are generally 
small and are not able to provide their own research. Construction 
technologies used in Asian markets are inferior to U.S. technology, yet 
there is a long history of use and cultural appreciation of traditional 
methods. Deregulation and change in these markets has required 
extensive research on comparability of alternative product and building 
standards, quality and service needs, training in the U.S. technology, 
and customization to foreign consumer values. The Pacific Northwest can 
grow more wood with higher quality using more advanced technologies 
while reducing the impact on timber-dependent communities from harvest 
constraints to protect certain species.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal is to provide the information on markets and 
product technologies that can open higher-valued international markets 
to U.S. exporters. Foreign purchasers need information on the 
advantages of U.S. products, and U.S. exporters need information on the 
substantially different quality and service requirements for serving 
foreign markets. If the United States can remain competitive and retain 
its presence in these markets in the face of a stronger dollar, exports 
should return to a high growth path once Asian economies recover. 
Evidence to date suggests that this is indeed happening.
    The food production research has focused on finding new market 
opportunities for Pacific Northwest producers, solving technical 
impediments to exports and developing new products and new processes 
that will enhance exports. It has pinpointed emerging market 
opportunities in Southeast Asia, China, Mexico, and Latin America. It 
has improved the export quality of diverse products, such as asparagus, 
apples, grass-seed, and wheat. It has helped commercialize high-value 
products, such as Wagyu beef, azuki beans, wasabi radish and burdock, 
and pioneered new food processing technologies that produce fresh-like, 
shelf-stable products and that save energy and reduce waste.
    Question. How long has the work been underway and how much has been 
appropriated by fiscal year through fiscal year 2000?
    Answer. The work began in fiscal year 1992. The appropriation for 
fiscal years 1992-1993 was $800,000 each year; fiscal year 1994, 
$752,000; fiscal years 1995-1998, $677,000 each year; and $680,000 in 
fiscal years 1999 and 2000. A total of $4,420,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
are as follows: $716,986 State appropriations, $209,622 product sales, 
$114,000 industry, and $661,119 miscellaneous, for a total of 
$1,701,727 in 1991; $727,345 State appropriations, $114,81 product 
sales, $299,000 industry, and $347,425 miscellaneous for a total of 
$1,488,351 in 1992; $1,259,437 State appropriations, $55,089 product 
sales, $131,000 industry, and $3,000 miscellaneous, for a total of 
$1,448,526 in 1993; $801,000 State appropriations, $1,055,000 product 
sales, $1,040,000 industry, and $244,000 miscellaneous, for a total of 
$3,140,000 in 1994; $810,000 State appropriations, $42,970 product 
sales, $785,000 industry, and $2,000,000 gift of a ranch due to the 
International Marketing Program for Agricultural commodities and Trade 
Center's research on Wagyu cattle, for a total of $3,637,970 in 1995; 
$844,000 State appropriations, $45,000 product sales $900,000 industry, 
and $45,000 miscellaneous, for a total of $1,834,000 in 1996; $876,000 
State appropriations, $1,606,000 industry, for a total of $2,482,000 in 
1997, $1,180,000 State appropriations, $604,000 industry, for a total 
of $1,784,000 in 1998, and $1,551,000 State appropriations, $1,006,400 
industry, $62,000 product sales, and $30,096 miscellaneous, for a total 
of $2,649,496 in 1999.
    Question. Where is the work being carried out?
    Answer. The food research is being carried out by the International 
Marketing Program for Agricultural Commodities and Trade (IMPACT) at 
Washington State University, Pullman, and the forest products research 
is carried out at the Center for International Trade in Forest Products 
(CINTRAFOR) at the University of Washington, Seattle.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The project was projected for 3 years duration to be 
completed following fiscal year 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Two evaluations of the Washington State University 
component of the project were conducted in 1992 by the U.S. Department 
of Agriculture. The State of Washington Legislative Budget Committee 
gave the Washington State Center exemplary marks for meeting its 
objectives. On-site reviews are conducted annually of the University of 
Washington component of the project through annual meetings of the 
project's executive board attended by the agency's staff. Both 
components are reviewed annually by the agency. The project is meeting 
the key objective of trade expansion through innovative research. The 
University of Washington project was formally reviewed by the agency in 
1991. State reviews were completed in 1992 and 1994. A formal review by 
the University was completed in 1997. A broad survey of constituents 
impacted by the research was completed, resulting in a very favorable 
review of the Center's activities and a recommendation to continue this 
research. In 1998, State of Washington legislation eliminated the 
requirement for State reviews of the center, including one scheduled 
for 1999, based on hearings that focused on the other favorable reviews 
and the continuous oversight by the Executive Board.

                      COOL SEASON LEGUME RESEARCH

    Question. Please provide a description of the research that has 
been funded under the Cool Season Legume Research grant.
    Answer. The Cool Season Legume Research Program involves projects 
to improve efficiency and sustainability of pea, lentil, chickpea, and 
fava bean cropping systems collaborative research. Scientists from 
seven States where these crops are grown have developed cooperative 
research projects directed toward crop improvement, crop protection, 
crop management, and human nutrition/product development.
    Question. According to the research proposal, or principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The multi-state region covered by this program represents 
most of the nation's production of cool season food legumes. These 
minor crops are very important economically to the region, are the 
primary source of these important food items, and contribute 
significantly to U.S. agricultural exports. The growers face a number 
of production problems that need research if this industry is to 
compete with international competition. In addition, use of these crops 
in rotation with wheat is critical to the production of wheat, the 
major cash crop for the region. National research in the area of crop 
genetics could potentially be supported by competitive grants awarded 
under the National Research Initiative and the Initiative for Future 
Food and Agricultural Systems.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The principal researcher believes the original goal of this 
project was to improve efficiency and sustainability of cool season 
food legumes through an integrated collaborative research program and 
genetic resistance to important virus diseases in peas and lentils. 
Evaluation studies of biocontrol agents for root disease organisms on 
peas are underway. Other studies are evaluating integration of genetic 
resistance and chemical control. Considerable progress has been made 
using biotechnology to facilitate gene identification and transfer. 
Management system studies have addressed tillage and weed control 
issues.
    Question. How long has the work been underway and how much has been 
appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1991 
with appropriations for fiscal year 1991 of $375,000; fiscal year 1992 
and 1993 $387,000 per year; fiscal year 1994, $364,000; fiscal year 
1995, $103,000; fiscal years 1996 and 1999, $329,000, fiscal year 2000 
$329,000. A total of $3,261,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds provided for this grant were as 
follows: 1991, $304,761 State appropriations, $14,000 industry, and 
$18,071 other non-Federal; 1992, $364,851 State appropriations, $15,000 
industry, and $14,000 other non-Federal; 1993, $400,191 State 
appropriations, $19,725 industry, and $10,063, other non-Federal; and 
1994, $147,607 non-Federal support. Non-Federal support for 1995 was 
$150,607; for 1996 it was $386,887; for 1998, $392,000 and for 1999 
$557,000.
    Question. Where is this work being carried out?
    Answer. Research has been conducted at agricultural experiment 
stations in Idaho, Oregon, Washington, Wisconsin, Minnesota, New York 
and New Hampshire. The funds have been awarded competitively among 
participating States and not all States receive funds each year.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The projected duration of the initial project was five 
years. Revised objectives are expected to be completed in 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation?
    Answer. The project is evaluated annually by a university/industry 
advisory panel. Proposals are peer reviewed at the universities and by 
the agency National Program Leaders. This research has provided vital 
information which is already being used to improve production 
management. However, a number of critical issues related to insect and 
disease control as well as crop quality remain to be addressed. 
Breeding for insect and disease resistance is given the highest 
priority, while crop management alternatives to help reduce disease and 
insect pest problems will continue to be studied.

                 CRANBERRY AND BLUEBERRY, MASSACHUSETTS

    Question. Please provide a description of the research that has 
been funded under the cranberry/blueberry research program grant.
    Answer. CSREES has requested the university to submit a grant 
proposal that has not yet been received.
    Question. According to this research proposal, or the principal 
investigator, what is the national, regional, or local need for this 
research?
    Answer. The research is a new approach to managing pests associated 
with cranberries and blueberries in Massachusetts. The program is 
focusing on the use of molecular genetics to reduce pesticide 
dependency in cranberry production. The research will be applicable to 
all cranberry research in States where cranberries are produced.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goals of this research are to determine whether early 
emerging and late emerging dodder populations can be differentiated 
using molecular markers; to determine the relationships among several 
isolates of a fungus which might be used in biological control; to 
screen various plant pathogen fungi isolates for infectivity and 
virulence and determine the presence of genes in these isolates; and 
develop an in vitro assay system for root rot and induce resistance in 
cranberry plants caused by different isotypes of the fungus.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1999 
and the appropriation for fiscal year 1999 and 2000 was $150,000. A 
total of $300,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. There were no non-Federal funds provided for this grant in 
1999 or 2000.
    Question. Where is this work being carried out?
    Answer. Research is being carried out at the University of 
Massachusetts Cranberry Experiment Station.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Since this began in fiscal year 1999, the original 
objectives have not yet been met.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project underwent a merit review at the agency level in 
January, 1999. Due to delayed funding of this project until July of 
1999, research is just now starting on these objectives.

          CRANBERRY-BLUEBERRY DISEASE AND BREEDING, NEW JERSEY

    Question. Please provide a description of the research that has 
been funded under the Cranberry-Blueberry Disease and Breeding, New 
Jersey grant.
    Answer. The work has focused on identification and monitoring of 
insect pests on blueberries and cranberries, the identification, 
breeding, and incorporation of superior germplasm into horticulturally-
desirable genotypes, identification and determination of several fungal 
fruit-rotting species, and identification of root-rot resistant 
cranberry genotypes. Overall, research has focused on the attainment of 
cultural management methods that are environmentally compatible, while 
reducing blueberry and cranberry crop losses.
    Question. According to the research proposal, or the principal 
investigator, what is the national, regional, or local need for this 
research?
    Answer. This project involves diseases having major impacts on New 
Jersey's cranberry and blueberry industries, but the findings here are 
being shared with experts in Wisconsin, Michigan, and New England.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal was the development of cranberry and 
blueberry cultivars compatible with new disease and production 
management strategies. Over 75 blueberry selections with wild blueberry 
accessions resistant to secondary mummy berry infections have been 
moved into advanced testing identified. The biology and seasonal life 
history of spotted fireworm on cranberries has been determined. A 
pheromone trap-based monitoring system for cranberry fruitworm was 
developed and further refined for commercialization. Blueberry fruit 
volatiles attractive to blueberry maggots were identified and tested in 
the field. Researchers have planted over 4500 cranberry progeny for 
evaluation. Seven major fruit-rotting fungal species were identified, 
and their incidence in 10 major cultivars of blueberry and cranberry 
were determined. It is likely that resistance to fruit rot is specific 
to fungal species.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1985, $100,000; fiscal year 1986-1987, $95,000 per 
year; fiscal year 1988-1989, $260,000 per year; fiscal year 1990, 
$275,000; fiscal years 1991-1993, $260,000 per year; fiscal year 1994, 
$244,000; and fiscal years 1995-1999, $220,000 each year. A total of 
$3,209,000 has been appropriated
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. State and non-Federal sources are providing funds in the 
amount of 250,000 each year.
    Question. Where is this work being carried out?
    Answer. This research is being conducted at the New Jersey 
Agricultural Experiment Station.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The completion date for the original objectives was 1995. 
Those objectives have not been met. To complete the breeding, disease 
and insect management and provision of new management guidelines for 
extension and crop consultants, it estimated that an additional five to 
nine years will be required.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted?
    Answer. The last agency evaluation of this project occurred in 
January, 1999. In summary, the evaluation stated that the effort has 
continued to be highly productive, with various improved management 
strategies, plant materials and environmentally-balanced pesticides 
being areas of major impact. Some specific accomplishments included 
continued evaluation of blueberry and cranberry germplasm for yield, 
color, fruit rot, and flavor; and development of an efficient plant 
regeneration system for cranberry for genetic transformation. Other 
research includes trap and lure development for monitoring the 
cranberry fruitworm and evaluation of several aphicides in blueberries. 
The discovery of an antisporulant in a registered fungicide provide for 
a novel use patent for blueberry anthracnose control.

                            CRITICAL ISSUES

    Question. Please provide a description of the research that has 
been funded under the grant.
    Answer. These funds support research on critical issues related to 
new or emerging pests and diseases of animals and plants. The program 
is expected to initiate research in a short time period until other 
resources can be secured to address the issue. The program began in 
fiscal year 1996 when potato late blight and vesicular stomatitis in 
animals were the two targeted emerging problems chosen for funding. 
Funding for these two projects was continued with fiscal year 1997 
funds to permit orderly conclusion of work leading to integrated pest 
management efforts for the potato late blight and for further surveys 
on wildlife reservoirs of the vesicular stomatitis virus. During fiscal 
year 1998 these funds were used for support of a project on a newly 
emerging corona virus strain that is a probable cause of severe 
outbreaks of shipping fever or pneumonia in transported beef cattle. 
For plant diseases, fiscal year 1998 funds were used to support two 
major research projects on a new disease of sorghum, Sorghum Ergot. The 
two projects were Epidemiology and Life History of Ergot and 
Development of Integrated Control of Sorghum Ergot. In fiscal year 
1999, Johne's Disease of cattle was identified by both veterinary 
researchers and APHIS animal disease control staff as a major issue. 
For plants in fiscal year 1999, research was supported on the insect 
vectored disease, Tomato Yellow Leaf Curl virus.
    Question. What is the national, regional or local need for this 
research?
    Answer. Vesicular stomatitis was of national impact due to its 
similarity to foot and mouth disease and the negative effect on 
movement of horses, cattle and swine during an outbreak. Since 1992 
new, highly virulent strains of the potato late blight fungus 
Phytophthora infestans caused severe losses in potato and tomato 
production throughout the United States, resulting in what some experts 
term a national crisis. From 1993 to 1995, a series of meetings 
involving growers, consultants, industry, academia and government 
assessed the growing problem and participants concluded that 
extraordinary steps were needed to mobilize research efforts that would 
help address the problem in the near term. Bovine shipping fever causes 
heavy economic losses to the beef industry in cattle being shipped to 
feedlots and vaccines for currently recognized viruses seem to be 
ineffective in certain settings in preventing outbreaks. The isolation 
of a probable new virus, bovine respiratory corona virus represents an 
opportunity to contribute to the reduction of this disease complex in 
cattle. Sorghum Ergot is a serious disease of sorghum which was first 
detected in Texas in March, 1997. It rapidly spread to almost all 
sorghum growing regions of the U.S. by September 1997. Johne's Disease 
has been identified by several commodity and animal health 
organizations as the leading problem for dairy cattle owners and also a 
serious issue for beef producers. Decisions on specific research needs 
and focus of research projects is decided after consultation with a 
variety of commodity stakeholders, other USDA agencies, especially the 
Animal and Plant Health Inspection Service, scientists in the land 
grant system, and other public input. Tomato Yellow Leaf Curl virus is 
a newly introduced disease into Florida that has caused considerable 
crop loss. The disease moved rapidly over the entire State and now has 
moved into Georgia. This disease is vectored by the silver leaf 
whitefly and affects tomatoes, beans, and other vegetables. The disease 
symptoms are severe stunting, distortion, and high rates of flower 
loss.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the research supported by this program is to 
focus on specific questions or issues which are considered to be most 
important in developing control or prevention programs for the disease 
agent under investigation, whether in plants or animals. Thus, for the 
animal studies, the focus has been on identifying natural reservoirs of 
the vesicular stomatitis virus and insects which are capable of 
transmitting the disease among animals; determining the precise 
significance of the apparent new corona virus in shipping fever 
pneumonia of beef cattle; and developing a sub-unit vaccine for Johne's 
Disease in cattle and determining the significance of a linkage between 
Johne's Disease and Crohn's disease of humans. In spite of a very large 
research effort, the natural reservoir for vesicular stomatitis virus 
is still unknown. The bovine respiratory disease work on the apparently 
new respiratory corona virus is expected to validate the role of this 
virus in outbreaks of pneumonia in cattle vaccinated for other known 
causes of shipping fever. Confirmation of such a fact will provide a 
basis for development of control measures including vaccine 
development. Research was initiated to provide growers with the 
knowledge and technologies they need to reduce economic losses 
resulting from potato late blight with less reliance on pesticides. 
Research initiated with fiscal year 1996 funds is making progress in 
developing modeling tools and management approaches that are an 
important step towards reducing the devastating effects of late blight. 
The National Late Blight Fungicide Trial provided important information 
on the efficacy of an array of fungicide programs. A World Wide Web 
site was established to provide growers, researchers and industry with 
the latest information on management of potato late blight. The 
research projects on Sorghum Ergot were intended to develop information 
about the history and epidemiology of the disease which would lead to 
studies on development of integrated control programs for this fungus. 
Research on Tomato Yellow Leaf Curl Virus has aided in the 
understanding of which field crops other than tomato serve as a source 
of virus infection. Weed reservoirs were also studied as potential 
whitefly infection sites. These results will help in the development of 
field management strategies for this virus. Another research project 
tested transformed tomatoes that had been selected for resistance to 
Tomato Yellow Leaf Curl virus. This approach was successful in 
developing resistant tomatoes to another similar virus and is expected 
to produce highly resistant tomato varieties to Tomato Yellow Leaf Curl 
virus.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. $200,000 were appropriated in fiscal years 1996-2000 for a 
total appropriation of $1,000,000 to date. The fiscal year 2001 budget 
proposes an increase of $267,000 for a total of $467,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. This information should be available within 30 days.
    Question. Where is this work being carried out?
    Answer. From 1996 to 1997, the vesicular stomatitis work was 
conducted at the University of Arizona and Colorado State University. 
The potato late blight work has been conducted at Washington State 
University, Oregon State University, University of Idaho, University of 
Wisconsin, and Pennsylvania State University, and North Carolina State 
University. In 1998 the bovine respiratory disease work was performed 
at Louisiana State University. The Sorghum Ergot work is being done at 
the University of Nebraska and Texas A&M University. In 1999 the 
research on Johne's Disease has been performed at Iowa State University 
and the University of Iowa. The research on Tomato Yellow Leaf Curl 
Virus was carried out at the Gulf Coast Research and Education Center, 
University of Florida, Bradenton, FL and the Tropical Research and 
Education Center, University of Florida, Homestead, FL.
    Question. What was the anticipated date for the original objectives 
of the project? Have those objectives been met? What is the anticipated 
completion date of additional or related objectives?
    Answer. The Critical Issues funds are intended to support the 
initiation of research on issues requiring immediate attention until 
other, longer-term resources are available. The objectives of the 
projects are short-term and are expected to be completed within a 1-2 
year period. This has been true for the vesicular stomatitis and potato 
late blight work. These projects have been reviewed to ensure 
compliance with the original goals during fiscal year 1997.
    The subsequent project grants for potato blight in 1997 and for 
Sorghum Ergot and bovine respiratory disease in 1998 had short term 
goals and are expected to be completed by the end of their project 
years which will occur in late spring 1999. Similarly, the objectives 
of the research funded with fiscal year 1999 funds are expected to be 
completed by the summer of 2000. For the Johne's Disease work, the 
emphasis is on determining the likelihood of a link between this 
disease of cattle and Crohn's Disease in the human and also developing 
a vaccine to prevent further spread within the cattle population. For 
Tomato Yellow Leaf Curl Virus, the emphasis is on field management of 
the disease and the development of virus resistant varieties of tomato.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. All projects were reviewed for scientific merit before 
funding decisions were made. Also, scientists being supported with 
these funds are in close contact with CSREES' National Program Leaders 
in these areas so that the agency is kept abreast of developments as 
they occur. Each investigator is required to submit a detailed report 
at the end of the funding period to document their accomplishments with 
these funds. In addition, site visits are arranged when convenient to 
include as part of other official travel to that State. The vesicular 
stomatitis research had a site visit review in early 1998 and was 
reviewed as a completed project in March, 1999 during a program review 
at the University of Arizona. The final results of the bovine 
respiratory work were submitted to CSREES for review in early fall, 
1999. The plant related projects have received similar reviews as the 
projects have moved forward, and the results are being reported at 
regional and national meetings.

         DAIRY AND MEAT GOAT RESEARCH, PRAIRIE VIEW A&M, TEXAS

    Question. Please provide a description of the research that has 
been funded under the dairy goat research grant?
    Answer. The program has addressed a range of issues associated with 
goat production. Research by scientists at the International Dairy Goat 
Center, Prairie View A&M University focuses on problems affecting goat 
production in the United States. Issues included are the study of 
nutritional requirements of goats, disease problems, methods to improve 
reproductive efficiency in the doe, the use of gene transfer to improve 
caprine genetics and the evaluation of breeding schemes to improve meat 
and milk production. Currently, research is in progress to assess the 
economics of alternative breeding and rearing systems for goats in the 
southeastern region of the U.S., to study the incidence and impact of 
intestinal parasites, and to develop least-cost health management 
strategies for parasite control.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes that nationally, most of 
the farm enterprises that include goats are diverse and maintain a 
relatively small number of animals. Responding to disease, nutrition, 
breeding and management problems will improve efficiency of production 
and economic returns to the enterprise.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to conduct research 
that will lead to improvement in goat production among the many small 
producers in the United States. Research has been conducted to develop 
and improve nutritional standards, improve genetic lines for meat and 
milk production and to define mechanisms that impede reproductive 
efficiency in goats. Current efforts focus on the development of 
enterprise budget management tools for goat producers in the Texas gulf 
coast region.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded through appropriated funds as 
follows: $100,000 per year for fiscal years 1983-85; $95,000 per year 
for fiscal years 1986-88; no funds were appropriated in fiscal year 
1989; $74,000 for fiscal year 1990; $75,000 per year for fiscal years 
1991-1993; $70,000 for fiscal year 1994; and $63,000 per year for 
fiscal years 1995-2000. A total of $1,332,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The University reports no non-Federal funds expended on 
this program.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at Prairie View A&M University 
in Texas.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The overall objective of this research is to support the 
needs of small farms engaged in the production of meat and milk from 
goats along the Texas Gulf Coast. The University researchers continue 
to address those needs on an annual basis and anticipate that work 
currently in progress will be completed by the end of fiscal year 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The Dairy/Meat Goat Research grant was reviewed last in 
June 1997. The project objectives are within the goals of the program, 
are within the mission of both USDA and CSREES, and the institution is 
well equipped and qualified to carry out the research project.

                DELTA RURAL REVITALIZATION, MISSISSIPPI

    Question. Please provide a description of the program that has been 
funded under the Delta Rural Revitalization, Mississippi Project?
     Answer: The Delta Rural Revitalization, Mississippi Project 
involves applied research and outreach focused on creating new and 
expanded economic development opportunities for the Mississippi Delta 
region. The project has gone through several phases in the delineation 
of a strategy for long range development within the region. Phase I was 
completed with the delivery of a baseline assessment of the economic, 
social, and political factors that enhance or impede the advancement of 
the region. Phase II of the project evaluated the potential for 
entrepreneurship and small business creation as mechanisms to improve 
economic conditions. Phase III is now focusing on technical assistance 
to Delta region manufacturing firms to strengthen their ability to 
provide employment and incomes and includes the development and 
refinement of data bases and development statistics. The proposals are 
submitted for internal review and evaluation within the agency. 
Recommendations are presented to enhance impact on regional and 
national agendas and provide greater impact on targeted region.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. This is an on-going pilot to demonstrate the effective 
development and implementation of applied research, training, 
education, and technical assistance related to job and business 
development as a development strategy. The principal researcher 
believes that the databases, technical assistance, and analytical 
capability will increase the effectiveness of economic development and 
entrepreneurial activity in the region.
    Question. What was the original goal of this research and what has 
been accomplished?
    Answer. The applied research and outreach project was designed to 
increase the ability to guide economic development strategically 
through target industry attraction. They developed an analytical 
baseline for the Delta region to benchmark economic development 
progress and to profile potential arenas of opportunity. An 
entrepreneurial forum was established to help new business ventures 
with start-up advice and assistance. A venture capital association was 
formed to help both inventors and businessmen find capital resources to 
carry out development initiatives. The emphasis of the project is now 
shifted to technical assistance for existing industries.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded from appropriated funds in the 
following amounts per year: fiscal year 1989, $175,000; fiscal year 
1990, $173,000; fiscal years 1991-93, $175,000 per year; fiscal year 
1994, $164,000; fiscal years 1995-2000, $148,000 per year. A total of 
$1,925,000 has been appropriated and awarded.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
     Answer. Total non-Federal funds from the State of Mississippi 
directed to this project, as reported by Mississippi State University, 
are: fiscal year 1991, $117,866; fiscal year 1992, $84,402; fiscal year 
1993, $68,961; fiscal year 1998, $57,404. Reports for other years 
indicate no non-Federal funds.
    Question. Where is this work being carried out?
    Answer. Applied research and outreach is being carried out through 
Mississippi State University and sub-contractors.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original completion date was September 30, 1990. The 
original objectives of this research have been met. The additional 
objectives being presented for the current year should be completed by 
September 30, 2000. The current year proposal has not been submitted to 
date.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency evaluates the merit of research proposals as 
they are submitted. No formal evaluation of this project has been 
conducted. The principal investigators and project managers submit 
periodic reports to the agency to document the impact of the project. 
Significant suggestions have been offered to improve the relevance and 
impact of this project. Time lines tend to lag on targeted 
accomplishments. An assessment of the project was conducted by the 
Social Science Research Center at Mississippi State University and a 
report compiled in November, 1996. A site review was conducted in 
April, 1999, to assess the merits of research efforts underway. A 
review and evaluation by an outside consultant is currently underway.

                   DESIGNING FOODS FOR HEALTH, TEXAS

    Question. Please provide a description of the research that has 
been funded under the Designing Foods for Health, Texas grant.
    Answer. Designing fruits and vegetables for improved health and 
nutrition is the overall goal. Health scientists have documented that 
naturally occurring compounds such as flavonoids, carotenoids, and 
antioxidants, have health benefits to prevent heart disease, stroke, 
and some forms of cancer. The research objective is to develop fruits 
and vegetables that have uniform, high levels of these compounds so all 
consumers can prevent chronic diseases through their diet. The fiscal 
year 1999 grant supports research through June 2000. CSREES requested 
the university submit a grant proposal for fiscal year 2000 that has 
not yet been received.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The need for this research is to improve the quality and 
health-related benefits of fruits and vegetables. Health scientists 
have documented that fruits and vegetables have naturally occurring 
compounds that promote health and prevent disease. The medical 
community advocates that preventing disease is more advantageous than 
trying to cure it. For example, a large effort of Texas health science 
centers is to develop improved diets that can aid in prevention of 
colon, esophagus, and prostate cancers. Improved fruits and vegetables 
for health will provide an enormous benefit for consumers worldwide.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research is to design fruits and 
vegetables that assist in preventing diseases through diet. The most 
exciting accomplishment has been the development of the new carrot, 
BetaSweet. It was designed to be attractive, crisp in texture, have 
excellent sweet carrot flavor, and to contain a higher content of beta-
carotene than most orange carrots in the marketplace. Beta-carotene is 
a major source of Vitamin A and is thought to play additional roles in 
preventing certain forms of cancer, especially oral cancer. This carrot 
also contains high levels of anthocyanins that are normally found in 
fruits. They are known to be excellent antioxidants that prevent blood 
clotting, aid in the prevention of some cancers, heart disease, and 
strokes. The researchers are also improving health promoting aspects of 
the BetaSweet carrot by adding lycopene, which is found in tomatoes. 
All these improvements are being done using conventional breeding.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1999, 
and the appropriation for fiscal year 1999 was $250,000 and fiscal year 
2000 was $318,750. A total of $568,750 has been appropriated.
    Question. What are the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were $206,500 from university funds and $165,000 from an endowment fund 
in 1999.
    Question. Where is this work being carried out?
    Answer. Research will be conducted at the Vegetable and Fruit 
Improvement Center and other locations within the Texas A&M University 
System.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original overall objective of developing fruits and 
vegetables that contain high levels of naturally occurring compounds 
that have health benefits continues to be addressed. The specific 
objective of improving the carrot by increasing the carotenoid and 
anthocyanin content while maintaining superior flavor and textural 
properties will be completed in 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project director conducted a review by peer scientists 
at Texas A&M prior to submitting the proposal for fiscal year 1999. The 
Vegetable and Fruit Improvement Center has a very active advisory board 
which reviews the Center's research programs annually.

                     DIAPREPES/ROOTWEEVIL, FLORIDA

    Question. Please provide a description of the research that has 
been funded under the Diaprepes/Rootweevil grant.
    Answer. The funds are requested to address objectives established 
by an interagency/industry task force, as follows:
  --Assessment of the plant injury and economic damage caused by the 
        root weevil on horticultural, agronomic and ornamental plants 
        in the affected area, and the potential for the pest to spread 
        beyond its current range;
  --Development and use of monitoring tools to evaluate population 
        levels, regions infested, and to predict where economic damage 
        is likely to occur. Since the pest's most damaging stages, the 
        larvae, feed on roots, damage is not evident, and thus 
        monitoring for the presence of the weevil and assessing 
        population levels is most difficult;
  --Development, field evaluation and implementation of management 
        tools that individually will assist in reducing populations or 
        the impact of their presence, and collectively, will serve as 
        the basis for inclusion of weevil management into existing pest 
        management programs in citrus and other affected crops. These 
        tools also are being suggested as strategies important to 
        management of containerized plant material, ornamentals and 
        fruit trees, so that the weevil is not moved beyond its current 
        area of infestation into other States and regions. Included in 
        the tools to be developed are chemical, biological, cultural 
        and mechanical methods.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. Diaprepes abbreviatus is a pest introduced into Florida 
from its native Caribbean Islands in the late 1960's, but remained very 
localized in few citrus groves until the late 1980's when for unknown 
reasons, the pest began to spread, helped by movement of potted plant 
material and other mechanical spread methods. Known as a serious pest 
of a wide range of plants, from grasses, including Bermuda grass, to 
legumes, fruit trees and a large number of ornamental plants, this pest 
has the potential to not only affect traditional agricultural 
environments, but also native plants and can cause enormous economic 
losses in the home landscape, a multi-billion dollar industry in 
Florida and the Southeast. Further movement could expand the impact of 
this pest to other areas of the United States, and could invoke 
regulatory concerns between trading partners and commerce. Currently, 
there is no known tool or collection of tools that effectively limits 
population growth of the pest, and thus, there is no remedy for this 
pest at present. Development and evaluation of methods to locate and 
reduce larval populations must rely on a combination of treatments that 
are effective, safe, and economical. At present, those infested with 
the pest must stand by and watch the trees decline.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research is to develop and 
deliver strategies to eliminate further spread and maintain viable 
plant health in the presence of the pest. Since it was first funded in 
1999 progress towards attainment of the goal is still being assessed.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Fiscal year 2000 is the first year of the grant and 
$297,500 has been appropriated for fiscal year 2000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Numerous investments will continue to be made in this 
research. University of Florida has several programs who have focused 
their efforts on Diaprepes research, including the entomologists, 
pathologists and plant improvement teams. Internal funds as well as 
effort have been redirected to address this problem. Likewise, United 
States Department of Agriculture, Agricultural Research Service 
scientists at several locations in the Southeast have been assigned to 
this research and internal funding is being utilized to address this 
problem. The citrus growers of Florida have dedicated considerable 
grant dollars from a self-tax for research, and more recently, other 
commodity groups are contributing to fund research. In-kind support 
through cooperation, shared equipment and other means are being offered 
to address the issue. However, the speed with which the pest has spread 
and the increasing economic impact has outpaced the current allocation 
of resources, and the economic losses are rising.
    Question. Where is the work being carried out?
    Answer. The work is being carried out at the University of Florida 
at Gainesville.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The plan for the work will be submitted with the research 
proposal.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This is a new project for which an evaluation has not been 
conducted

                      DROUGHT MITIGATION, NEBRASKA

    Question. Please provide a description of the research that has 
been funded under the Drought Mitigation grant.
    Answer. The National Drought Mitigation Center in the School of 
Natural Resource Sciences at the University of Nebraska has a 
comprehensive program aimed at lessening societal vulnerability to 
drought. Activities of the Center include promoting and conducting 
research on drought mitigation and preparedness technologies, improving 
coordination of drought-related activities and actions within and 
between levels of government, and assisting in the development, 
dissemination, and implementation of appropriate mitigation and 
preparedness technologies in the public and private sectors. Emphasis 
is directed toward research, outreach projects and mitigation/
management strategies that stress risk minimization.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The Federal Emergency Management Agency has recently 
estimated that annual losses attributable to drought in the United 
States are between $6-8 billion. Drought impacts are escalating in 
response to increasing demands for water and other natural resources, 
increasing and shifting population, new technologies, and social 
behavior. These impacts are diverse and affect the economic, 
environmental, and social sectors of society. This fact was reinforced 
dramatically in 1996 in the Southwestern United States. Impacts in 
Texas alone were estimated to be more than $5 billion.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to create a National 
Drought Mitigation Center and develop a comprehensive program aimed at 
lessening societal water shortages and vulnerability to drought. The 
Center has created an information clearinghouse and is delivering 
information to a diverse audience of users through its home page. Over 
50,000 users now access the Center's home page each month. The Center's 
award winning home page was used extensively by State and Federal 
agencies during the 1999 drought to assist in the evaluation and 
response process. This home page networks users of drought-related 
information in the United States and elsewhere with information that 
would otherwise be unavailable or inaccessible to users.
    The National Drought Mitigation Center played an important role in 
the response of Federal and State Government to the 1996 severe drought 
in the Southwest and southern Great Plains States. In addition to 
providing timely and relevant information on drought severity and 
alternative response, mitigation, and planning measures, the Center 
participated in the Multi-state Drought Task Force workshop organized 
at the request of President Clinton and helped formulate long-term 
recommendations to improve the way this Nation prepares for and 
responds to drought. The Center is also a member of the Western 
Governors' Association
    Drought Task Force. This Task Force made recommendations to Reduce 
the risks associated with drought in the western United States.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant received an appropriation 
of $200,000 in fiscal years 1995 through 2000, for a total 
appropriation of $1,200,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The University of Nebraska contributed $75,737 of non-
Federal funds in support of this research in fiscal year 1995, $58,977 
in fiscal year 1996, and $61,545 in fiscal year 1997. The University of 
Nebraska contributed $67,819 in fiscal year 1998, and $74,887 in fiscal 
year 1999.
    Question. Where is this work being carried out?
    Answer. The research is being conducted at the University of 
Nebraska-Lincoln.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The research conducted under this project is being 
undertaken within a series of nine tasks. Significant progress on each 
of these tasks has been made, but these activities are ongoing. The 
information clearinghouse has been created, but new information and 
documents are continuously added to the home page in response to users' 
needs and requests. In addition, the drought watch section is updated 
monthly to assist users in evaluating current climate and water supply 
conditions. Research on new climatic indices to monitor drought and 
water supply conditions are being tested and mitigation technologies 
and existing State drought plans are continuously evaluated. New 
activities are also being initiated in response to the growing interest 
and awareness in drought mitigation in the United States and elsewhere. 
The activities of the Western Drought Coordination Council provides the 
Center with a broadening range of research needs on an annual basis.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project was peer-reviewed at the time the proposal was 
prepared in 1998. Each year when the new proposal is prepared, the 
proposal is reviewed on the campus and again at CSREES. The project is 
evaluated for progress toward completion of objectives, new activities 
proposed and accomplishments.

                          ECOSYSTEMS, ALABAMA

    Question. Please provide a description of the research that has 
been funded under the Ecosystems, Alabama, grant.
    Answer. In 1998, CSREES approved a proposal from Auburn University 
to support projects at two Community Colleges in Alabama-Faulkner State 
Community College and Alabama Southern Community College. The Faulkner 
State Community College's project is intended to: (1) fund the 
development of distance education classrooms for estuarine- and marine-
related education, and (2) to establish an aquaculture-related 
veterinary technician education program. The Alabama Southern Community 
College project will purchase and install laboratory equipment to 
further the education capacity of the Center for Excellence in 
Forestry, Paper, and Chemical technology.
    Question. According to the research proposal, or the principal 
researcher, what is the local, regional, or national need for this 
project?
    Answer. Faulkner State Community College asserts that their 
veterinary technician program will be the only such program in the 
country, providing the first two years of the degree program leading to 
an A.A. degree at Faulkner State, and the second two years leading to a 
bachelor's degree at Auburn University. The distance education capacity 
is intended to better integrate marine and estuary research into 
education activities.
    The Center for Excellence in Forestry, Paper, and Chemical 
Technology at Alabama Southern Community College is believed to be a 
unique educational opportunity in the Southeastern United States due to 
the merging of four individual technology training programs. These 
programs are: (1) Industrial Maintenance, (2) Electronics and 
Instrumentation, (3) Paper Process, and (4) Chemical Process training.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goals for these projects include the development of a 
veterinary technician training program and integration of marine and 
estuary research into classrooms at Faulkner State Community College; 
and to establish a state-of-the-art wood paper process and chemical 
process laboratory at Alabama Southern Community College.
    The fiscal year 1998 objectives for Faulkner State College were to 
establish a distance education web to enhance integration of marine and 
estuarine environmental research and to establish a 2+2 veterinary 
technician program with an emphasis on marine/aquaculture. The distance 
education web is in place and has been tested. In addition, classrooms 
have been tested and some faculty have been trained in the use of the 
media/hardware. After further assessment, it was decided that the 
proposed Veterinary Technician Program would not be cost effective. 
With the fiscal year 1999 proposal, Faulkner proposed instead, to 
establish a 2+2 Environmental Science degree program.
    The fiscal year 1998 objectives for Alabama Southern Community 
College was to have completed, tested, and placed into operation the 
chemical, pulp, and paper process laboratories in the areas of (1) 
Process Control, (2) Crystallization, (3) Batch Reactor, and (4) 
Digester by June, 2000. The Process Controls laboratory is nearly 
complete. The others are under design and the project is on-line for 
completion as originally proposed.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Funds were appropriated for this grant beginning in fiscal 
year 1998. In fiscal years 1998, 1999 and 2000, $500,000 was 
appropriated each year. A total of $1,500,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided to support this project?
    Answer. No non-Federal funds have been identified to support this 
project.
    Question. Where is this work to be carried out?
    Answer. The project will be conducted at the Faulkner State 
Community College Aquaculture Center in Alabama and at the Alabama 
Southern Community College Center for Forestry, Paper, and Chemical 
Technology.
    Question. What is the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The Alabama Southern Community College project proposal 
indicates a two year budget for project completion. The Faulkner State 
Community College proposal was for one year only. The objectives have 
not yet been met but are well underway.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project had a merit review before it began in fiscal 
year 1998. Subsequent projects were peer reviewed by the respective 
institutions for the fiscal year 1999 allocation.
                    environmental research, new york
    Question. Please provide a description of the research that has 
been funded under the environmental research grant.
    Answer. The environmental research in New York has several major 
goals. These are: (1) to better understand the impacts of nutrient 
flows, principally nitrogen, from agriculture on non-agricultural 
ecosystems, forests, wetlands, and water resources in mixed ecosystem 
landscapes; (2) to improve knowledge of agricultural contributions to 
greenhouse gas emissions and effects of projected climate change on 
crop production; and (3) to develop innovative approaches and 
technologies for improving the efficiency of agricultural production. 
New thrusts include: (1) to improve understanding of the impacts of 
land application of biosolids on the sustainability of New York 
agriculture and on water quality, and to develop management practices 
and guidelines for sustainable use of biosolids in New York 
agriculture; and (2) to evaluate spatial and temporal variability of 
crop yields within fields and to develop management practices that 
increase productivity, increase the efficiency of use of inputs, and 
reduce environmental impacts of agriculture.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. Programs supported by the special grant are 
multidisciplinary in nature, involving technical scientists from a 
range of disciplines, together with social scientists and economists. 
Due to the complexity of agriculture and environmental interactions at 
all levels, the needed research is complex and requires much time. 
Additionally, translation of knowledge from plot or field studies to 
larger scales, such as landscape to regional and global, is needed to 
provide information that is useful to policy makers.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. One goal of the program is to identify impacts of nitrogen 
flows from agricultural lands on adjacent natural ecosystems, forests 
and wetlands, and water resources, and to devise management strategies 
to minimize these impacts. Leaching of nitrogen from maize based 
cropping systems has been shown to be higher when organic sources of 
nitrogen, manures and plow-down alfalfa, are used as nitrogen sources 
for crop growth compared to use of inorganic fertilizers. A computer-
based nitrogen decision support system to improve recommendations for 
on-farm nitrogen management is being used in New York.
    A second goal of the program is to investigate several interactions 
between agriculture and climate change. Studies of methane fluxes to/
from soils showed that northern hardwood forests are both a source and 
a sink for this powerful greenhouse gas and overall may be a net source 
of methane. In contrast, upland agricultural systems were consistently 
found to be a sink for methane. Use of legume green manures to supply 
nitrogen in an organic production system increased methane emissions 
two-fold, creating a conflict between a sustainable agriculture 
practice and the environment.
    No-tillage agriculture was shown to increase preservation of 
existing soil organic carbon but accumulation of carbon derived from 
crop inputs was higher with conventional tillage. Inputs of carbon to 
soils from root exudates and residues were found to be more important 
to carbon sequestration in soils than were residues from the tops of 
plants.
    Soil quality assessments at the Chesapeake farms sustainable 
agriculture project on Maryland's Eastern shore, where various cropping 
systems are being compared with the conventional corn-soybean rotation, 
have shown that soil quality improves as the cropping system becomes 
more complex, involves less tillage, and has more organic inputs.
    Question. this work been underway and how much has been 
appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1991 
with an appropriation of $297,000. The fiscal years 1992-1993 
appropriation was $575,000 per year; $540,000 in fiscal year 1994; and 
fiscal years 1995 through 1999, $486,000 each year. The appropriation 
for fiscal year 2000 is $400,000. A total of $4,817,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. In fiscal year 1991, Cornell University provided $27,893 
and the State of New York provided $118,014. In fiscal year 1992, 
Cornell University provided $37,476 and the State of New York $188,915. 
In fiscal year 1993, Cornell University provided $13,650 and the State 
of New York $243,251. In fiscal year 1994, the State of New York 
provided $214,989. In fiscal year 1995, the State of New York provided 
$233,085. In fiscal year 1996, the State of New York provided $388,301. 
In fiscal year 1999, the State of New York provided in excess of 
$400,000 to support this research.
    Question. Where is this work being carried out?
    Answer. This research is being conducted at Cornell University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original estimate was for a 5-year program and many of 
the initial objectives in the nitrogen and climate change areas have 
been met. New objectives evolved from the original work and the program 
was also oriented to consider broader dimensions of environmental 
management, particularly strategies for community-based watershed 
management, involving linkage of technical knowledge with social and 
local governmental perspectives and needs. Estimated completion dates 
for current program elements are:
  --Watershed science and management
  --Effects of elevated carbon dioxide on crop yield potential
  --Remington farms sustainable agriculture project--a 10-year project
  --Carbon storage in soils
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project was peer reviewed in 1997 and 1998. Overall, 
the project was rated very high. Specific ratings included the 
following:
  --Outstanding scientific merit.
  --Appropriate methodology.
  --Excellent previous accomplishments.
  --The project has potential for significant impact concerning the 
        relationship of agriculture to global change.
  --The proposal is well conceived and well written.

              ENVIRONMENTAL RISK FACTORS/CANCER, NEW YORK

    Question. Please provide a description of the work that has been 
funded under the Environmental Risk Factors/Cancer, New York, grant.
    Answer. The agency has requested the University to submit a renewal 
grant proposal.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, and local need for this 
research?
    Answer. The American Cancer Society estimated that approximately 
175,000 women in the United States will be newly diagnosed with breast 
cancer during 1999 and that 43,000 will die from this disease. The role 
of environmental risk factors, such as pesticides, is of concern to 
women, the agricultural community, and policymakers. This project, 
emphasizing risk reduction information, will work at filling that void.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original and continuing goals of this research are:
  --To establish and expand the database of Critical Evaluations on the 
        current scientific evidence of carcinogenicity for selected 
        agricultural chemicals. This will include writing Critical 
        Evaluations on the breast cancer risk of chemicals used in 
        agricultural settings and the role of selected agrochemicals in 
        childhood cancer.
  --To communicate effectively information in the database to a variety 
        of audiences, including the scientific community, Federal 
        agencies, public health professionals, the agricultural 
        community aid the public, using printed materials and 
        electronic formats on the internet.
  --To ensure that the public will have access to science-based 
        information written in non-technical language about 
        environmental factors and the risk of breast cancer and 
        childhood cancers.
  --To increase the knowledge and use of practical strategies aimed at 
        breast cancer risk reduction for residents in rural areas. 
        Efforts to address this objective will include: (1) simple, 
        attractive, printed educational materials tailored for families 
        in rural areas; (2) videotape-based educational workshops for 
        use with groups of rural women.
  --To effectively incorporate breast cancer risk reduction messages 
        into health care and health screening settings in rural areas. 
        This will include enhancement and adaptation of the BCERF 
        interactive computer display, developed in this current project 
        year, for use in health care settings and at cancer screening 
        events in rural areas.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1997, 
and in fiscal years 1997, 1998 and 1999 $100,000 was appropriated per 
year, and in fiscal year 2000 $170,000 was appropriated for a total of 
$470,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were as follows:
  --$150,000 New York State appropriations for fiscal year 1996.
  --$250,000 per year in New York State funds was provided for fiscal 
        years 1977 and 1998.
  --$350,000 in New York State funds for 1999 and the same requested 
        for fiscal year 2000.
    Question. Where is the work being carried out?
    Answer. This research and outreach is conducted at Cornell 
University. Ithaca, NY.
    Question. What was the anticipated completion date for the original 
objective of the project? Have those objectives been met? What is the 
anticipated completion date or additional or related objectives?
    Answer. This was a new project which began in April 1997. Because 
of the success of meeting the original objectives in NYS, BCERF efforts 
are being continued and directed toward regional efforts. The 
anticipated completion date is June 30, 2001.
    Objectives met:
  --The bibliographic database was established during year one and is 
        updated and expanded each year. It currently has over 4,000 
        entries with over 250 added each quarter. Also, it includes 
        full bibliographies of all pesticide and dietary/lifestyle 
        scientific critical reviews.
  --Critical Evaluations: the breast cancer risk of seven pesticides--
        four in fiscal year 1997, three in fiscal year 1998--have been 
        completed. The completion of two additional Critical 
        Evaluations is anticipated by the end of the current fiscal 
        year.
  --Science-based information material--fact sheets--have been 
        developed for the seven pesticides and for four pesticide-
        related issues. Also, four fact sheets were developed on diet/
        lifestyle breast cancer risk factors, and three on general 
        information on breast cancer. Eight additional fact sheets are 
        to be developed in the current fiscal year.
  --Two video teleconferences and an in-service have been held and 
        evaluated. Follow-up telephone surveys of 1997 facilitators at 
        BCERF satellite video conference downlink sites and 
        participants at the June 1997 on-campus training program was 
        completed, and an analysis of response data was initiated.
  --The interactive computer Rural Exhibit was completed in 1999 and 
        evaluated during Summer/Fall 1999.
  --Tile BCERF website was revamped in 1997-1998 and relaunched in 
        September 1998. The number of browsers accessing tile BCERF 
        home page rose from 380 to 450 hits per month during the summer 
        of 1998 to 1,053 hits in November 1998 and 3,490 hits in 
        December 1998. Hits remain high with an average of about 3,000 
        per month.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. As a relatively new project, a complete evaluation has not 
been conducted, although the proposal is currently under review. 
Periodic progress reports have been made throughout the year. The 
project is moving towards achieving its desired goals. A final 
evaluation will be made after June 30, 2001. BCERF has evaluated most 
components of the program, with further evaluation planned. To date, 
BCERF has done an evaluation of the video teleconferences and in-
service and has had the pesticide fact sheets reviewed by focus group--
breast cancer survivors and women not having breast cancer. The 
participants brought a variety of perspectives to the discussion, 
providing BCERF with a wealth of important feedback on fact sheets and 
educational approach. Some of the conclusions drawn from this 
evaluation have already resulted in simple changes made in the 
preparation of current fact sheets. Other feedback from this evaluation 
will inform planning efforts for the education component in general.
    Evaluation played a key role in the development of the interactive 
computer rural exhibit. To develop the exhibit, qualitative and 
quantitative information was gathered about the knowledge, attitudes 
and beliefs of rural women regarding environmental risk factors and 
breast cancer. In addition, BCERF conducted brief surveys of rural 
women attending several rural conferences and events. The complete 
exhibit was tested at two farm shows and the New York State Fair in 
Fall 1999, partnering with professionals and organizations, such as 
those providing mobile mammography.
    To evaluate the value of Critical Evaluations to scientists and 
Federal agency personnel, a fax-back survey has been sent. The majority 
of respondents 88 percent so far have found the Critical Evaluations to 
be relevant to their work.

                 ENVIRONMENTALLY SAFE PRODUCTS, VERMONT

    Question. Please provide a description of the research that has 
been funded under the grant.
    Answer. Cooperative State Research, Education, and Extension 
Service has requested the university to submit a grant proposal that 
has not yet been received. The research will address the development of 
an environmentally friendly wood finish formulated with whey, a 
protein-based biopolymer that can replace standard polymer finishes 
that emit volatile organic compounds.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. This research addresses a national need to find alternative 
wood finishing products that are nontoxic and environmentally 
preferable.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. This grant is new and the research will build upon existing 
expertise to offer new products with good performance for use in the 
furniture and toy manufacturing industries.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and the appropriation for fiscal year 2000 is $170,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. This is a new grant and since the proposal has not yet been 
received, the source and amount of non-Federal funds for this research 
is not known.
    Question. Where is this work being carried out?
    Answer. This work will be carried at the University of Vermont.
    Question. What is the anticipated completion date for the original 
objectives of the project? Have those objectives been met: What is the 
anticipated date of additional or related objectives?
    Answer. This project is expected to be completed in three years.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the evaluation conducted.
    Answer. Since this is a new grant, no evaluation has been 
conducted.

                    EXPANDED WHEAT PASTURE, OKLAHOMA

    Question. Please provide a description of the research that has 
been funded under the Expanded Wheat Pasture, Oklahoma grant.
    Answer. This project was designed to develop improved 
supplementation programs and new systems for technology delivery to 
reduce production risk of raising cattle on wheat pasture. The work 
involves evaluation of grazing termination date on grain and beef 
production, assess the impact of wheat cultural practices, and develop 
an economic model to evaluate alternative decisions on grain/beef 
production. Additional effort is directed toward development of cool 
season perennial forage grasses to complement wheat pasture. The 
proposal for fiscal year 2000 has been requested.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes that this work addresses 
the needs of wheat/cattle producers of Oklahoma as a primary focus. 
However, it would appear to have application regionally in adjacent 
wheat growing States.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to develop 
economically-viable management systems for use of wheat for 
supplemental pasture for beef cattle before the crop starts making 
grain. This work has already shown how the use of feed supplements can 
increase net profit from cattle grazing on wheat pasture. The study has 
identified management practices, e.g. date of planting, cultivar 
selection, grazing intensity, and date of cattle removal that produce 
the optimum grain yield and cattle gain. A Wheat/Stocker Management 
Model has been developed as a decision aid to help producers assess 
income risk in the operation. Work is underway on a Wheat Grazing 
Systems simulation model.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1989 
and appropriations were as follows: fiscal year 1989, $400,000; fiscal 
year 1990, $148,000; fiscal year 1991, $275,000; fiscal years 1992-
1993, $337,000 per year; fiscal year 1994, $317,000, and fiscal years 
1995 to 2000, $285,000 each year. A total of $3,524,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were as follows: $175,796 State appropriations in 1991; $174,074 State 
appropriations in 1992; and $236,584 State appropriations in 1993. The 
non-Federal support for 1994 was $238,058 for State appropriations. 
Funds for 1995 were $275,426, for 1996 were $120,000, for 1997 were 
$190,510, for 1998 were $224,500, and for 1999, $222,650.
    Question. Where is this work being carried out?
    Answer. The research is being done at Oklahoma State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. This project started in 1989 with a projection of 10 years 
to complete the research objectives. Some objectives are nearing 
completion while others will require further study. A number of wheat 
cultivars have been identified which will tolerate grazing and still 
produce economic grain yields. The grazing cut off date for grain 
production has been established. However year to year variation need 
additional study in order to develop a reliable decision support 
system. The revised projected completion date is 2004.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This program is reviewed annually. Each year's funding 
cycle is peer reviewed internally and by the agency National Program 
Leaders for scientific merit and relevance. Results from this project 
are currently being used by ranchers to help with management decisions 
concerning stocker cattle grazed on wheat that will be harvested for 
grain. Current work is designed to refine the current information and 
identify wheat cultivars and grazing management for optimum economic 
return.

                   EXPERT IPM DECISION SUPPORT SYSTEM

    Question. Please provide a description of the research that has 
been funded under the Expert Integrated Pest Management Decision 
Support System grant.
    Answer. A prototype information and decision support system was 
developed in collaboration with Purdue University and the Department of 
Energy's Argonne National Laboratory that integrates and manages 
information from multiple data sources. Development of this system now 
continues with the National Science Foundation Center for Integrated 
Pest Management at North Carolina State University. Components of the 
Pest Management Information Decision Support System include information 
on the United States Environmental Protection Agency review status of 
pesticides, crop losses caused by pests, status of minor use 
registrations, current research in progress, and priorities of 
integrated pest management implementation teams.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The Pest Management Information Decision Support System is 
fully operational and serves national, regional, and local needs for 
research and extension activities. The Food Quality Protection Act has 
been the driving force for the development and usage of this software 
program. At the national level, the system provides rapid access for 
the United States Department of Agriculture, and Environmental 
Protection Agency helping to address pest management concerns and 
information to support the regulatory decision making process. It 
provides a mechanism for decision transparency and for all stakeholders 
to interact with the priority setting process. The ultimate result will 
be to help insure that farmers have adequate alternatives for managing 
pests at the specific local level.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the Pest Management Information Decision 
Support System was to refine the process of identification for 
Integrated Pest Management needs of the United States Department of 
Agriculture, the Environmental Protection Agency, and States. This goal 
reinforces the State and Federal partnerships to disseminate important 
pest management information for improved decision making and 
environmental quality, and to address future needs. In 1996 and 1997, 
the program addressed and responded to the Memorandum of Understanding 
and supplemental Memorandum of Understanding between the United States 
Department of Agriculture and Environmental Protection Agency. The 
supplemental Memorandum of Understanding was signed in April, 1996, at 
which time there were 58 pesticides and 374 uses identified and 
prioritized. Twenty-five minor use crops were identified in the 1997 
Pest Management Alternatives Request For Proposals as crops-at-risk due 
to regulatory actions. Results were also used to establish priority 
work identified for support by the regional Integrated Pest Management 
grants program Request For Proposal.
    The Pest Management Alternatives Program Work-Bench of the Pest 
Management Information Decision Support System was beta tested in 1999 
and has been delivered to the public domain and the present product 
(data base access) is available on the world wide web at . Pest Management Information Decision Support 
System had undergone a complete rewrite during this last year. It has 
now been rewritten, using Java and Cold Fusion Structured Query 
Language queries, with all data now stored on a Structured Query 
Language Windows NT server. This means that no software other than the 
standard browser is required to access the information.
    The Pest Management Information Decision Support System user 
interface has also been completely rewritten. It is a much friendlier 
interface, that allows users to search a multitude of specific pest 
management databases, either concurrently or separately, by crop, pest 
and/or tactic and retrieve data summaries or the entire record from all 
of the databases included. Each database now has a specific explanation 
of its source, the information contained within, and when last updated. 
Finally an automated update retrieval from many of the database sites 
such as the Inter-regional Project-4, Pipeline, Crop Profiles, and 
National Center for Food and Agricultural Policy Pesticide Use Database 
has been developed.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. This work began in 1994 with development of the concept and 
design, and has proceeded through steps including database 
identification and specific development of a prototype and software. 
Current development have brought the product to the web and provides 
multiple database search capabilities for ease of data access. In 
fiscal year 1994, we expended $40,000 of Cooperative State Research, 
Education and Extension Service administrative funds and $90,000 from 
Science and Education Evaluation Funds to initiate collaborative work 
with the Argonne National Laboratory. In fiscal year 1995, we expended 
$172,000 as a Cooperative Agreement with Purdue University and Argonne 
National Laboratory from the Pest Management Alternative Special Grant 
Funds and $5,000 from Pesticide Impact Assessment Program funds. In 
fiscal year 1996, we expended $177,000 in a cooperative agreement with 
Purdue University and Argonne National Laboratory from Pest Management 
Alternative Special Grant Funds, $21,000 from Research, Education and 
Economics Mission area Evaluation Funds, and $40,000 from Pesticide 
Impact Assessment Program. In fiscal year 1997-1998 we expended 
$165,425 and $177,000 to Purdue University and Argonne National 
Laboratory. In fiscal years 1999 and 2000, we are expending $177,000 to 
North Carolina State University center for Integrated Pest Management 
to implement, enhance and maintain the web-based system and provide 
access to multiple databases.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. It is difficult for us to estimate the amount of non-
Federal funds supporting the Pest Management Information Decision 
Support System. Purdue University, Cornell University and North 
Carolina State University have contributed non-Federal resources in the 
form of dollars and personnel time. The National Science Foundation 
Center for Integrated Pest Management at North Carolina State 
University is supported in large part by corporate funds, part of which 
have underwritten Center personnel salaries. The informational data 
bases, which are accessed by the Pest Management Information Decision 
Support System, have been developed and generated by States and 
universities and represent considerable investments in time and 
resources.
    Question. Where is this work being carried out?
    Answer. Presently, the bulk of the work is carried out in 
Washington, D.C. and in Raleigh, North Carolina. Cooperative State 
Research, Education and Extension Service has National Program Leaders 
in Integrated Pest Management, Pesticide Impact Assessment Program, and 
Inter-regional Project-4 program areas working on the Pest Management 
Information Decision Support System. The Center for Integrated Pest 
Management at North Carolina State University manages the web server 
where the pest management information system is located and is 
developing the multiple concurrent database search and decision support 
capability. Interaction and information is provided by every State in 
our system. We are in the process of strengthening the role of Land 
Grant partners in this program and additional database access is being 
developed through the Center for Integrated Pest Management, at North 
Carolina State University and through a sub-contract with George Mason 
University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Our original estimate in 1994 was two-to-three years with 
adequate resources to complete developmental work. However, the design 
considerations became more complex with the 1996 passage of the Food 
Quality Protection Act requiring an expansion and change in information 
data bases. In addition, advances in web technology has greatly 
expanded the potential and use of the system to all people wanting 
information on pesticide use and pest management alternatives. 
Additional databases have been added to both the data access and 
decision support aspects of the project. The Pest Management 
Information Decision Support System team is now working directly with 
many data providers and users, including Inter-regional project 4, 
National Agriculture Statistics Service, the Cooperative State 
Research, Education and Extension Service, Office of Pest Management 
Policy, Environmental Protection Agency, commodity groups, and 
agribusiness to assure that needed data are available, consistent, 
current, and searchable. The Pest Management Information Decision 
Support System program is a key component in providing USDA, EPA, 
Congress, and the Office of Pest Management Policy with finger-tip 
access to new and rapidly changing data bases, making research 
information accessible to assist the regulatory decision making 
process.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation.
    Answer. The Pest Management Information Decision Support System 
underwent two reviews in 1997. The first was a formal review of the 
entire program in June, 1997 which recommended: (1) focusing the system 
on the needs of the Pest Management Alternatives Program, (2) the 
timely delivery of a software product to USDA, and (3) the development 
of a plan to sustain the system in a user-friendly, widely available 
formal. A second review which was conducted in November, 1997, focused 
strictly on the Pest Management Alternatives Program Work-Bench 
surfaced the following recommendations: (1) to expand the WorkBench 
linkages to additional relevant databases, (2) investigate the 
potential of placing the system on the World Wide Web for greater 
access and utility, (3) market the system to potential users, and (4) 
link to high quality databases to support and enhance data integrity of 
the WorkBench. In August, 1998 a progress review was conducted to 
evaluate the engineered software product and it was determined that a 
web accessible multiple database search capability was essential for 
the system. A concept review conducted in September, 1998, and at this 
review the functionality of a web-based decision support system was 
first demonstrated.

             FARM AND RURAL FINANCE, ILLINOIS AND ARKANSAS

    Question. Please provide a description of the research that has 
been funded under the farm and rural business finance program.
    Answer. The Center for Farm and Rural Business Finance at the 
University of Illinois and the University of Arkansas is supported, in 
part, by the Federal funding for this project. The Center conducts a 
program of research and information on the financing of farms and rural 
businesses in the United States. The plan of work focuses on the 
financial management performance of farm and rural businesses, 
evaluation of financial markets and credit institutions serving rural 
America, and the impacts of public policies and regulations on the 
structure and performance of rural financial markets. During the past 
year, 17 projects have been conducted through the Center. They address 
financial issues facing farmers and rural businesses that range from 
financial risks faced by hog producers to farmland turnover rates to 
lending trends among large commercial banks. Professional staff at the 
two institutions are engaged in both joint and separate projects.
    Question. What is the national, regional, or local need for this 
research?
    Answer. The current financial stress in various regions and sectors 
of the farm economy, the changing structure within the agricultural 
sector, and financial implications of risk management strategies and 
technical change have created a national need for this research. The 
level of financial stress varies across commodities and with regional 
variation in yields and product mix. Analyses are needed to assess the 
financial impacts of agricultural policies and programs that provide 
various dimensions of the ``safety net.'' Changes to the Federal income 
tax, capital gains tax and estate tax provisions can have significant 
impacts on owners of agricultural assets. Research is needed to 
identify impacts on individuals and those that may affect local 
institutions.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal is to assist farmers, ranchers and rural 
businesses with research-based information on financial management as 
they deal with increasingly complex financial decisions. During this 
past year the program has conducted projects on the relationship 
between financial risk and farm size, financial aspects of various 
production technologies and management practices of small and medium-
sized pork producers, the effect of technical change on rural 
commercial bank delivery systems, and regulatory costs in rural 
lending. Projects are being completed on the post-acquisition 
performance of banks resulting from recent mergers, levels and trends 
in small farm and small business lending across different types of 
commercial banks, and the measurement and classification of the 
financial performance of agribusiness firms. Additional projects have 
developed a model of working capital management applicable to a wide 
variety of selected agribusiness firms and have identified primary 
risks associated with lending to integrated farm production units. 
Other projects are measuring the longer term impacts of changes in the 
Federal tax laws on the financial performance of Illinois farms, 
evaluating the financial characteristics of rural banks and assessing 
their competitiveness in rural financial markets, and identifying the 
financial characteristics of high performing agricultural banks. A 
project at the University of Arkansas has analyzed the effects of 
financing in accelerating the cattle cycle.
    Question. How long has the work been underway, and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work has been underway since 1992. Appropriations were 
$125,000 in fiscal year 1992, $125,000 in fiscal year 1993, $118,000 in 
fiscal year 1994, $106,000 per year in fiscal year 1995 through fiscal 
year 1997, $87,000 per year in fiscal year 1998, fiscal year 1999 and 
fiscal year 2000. Appropriations through fiscal year 2000 total 
$947,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal sources and funds provided for this program 
in fiscal year 1992 totaled $259,427 with $58,427 in State 
appropriations, $189,000 from industry and $12,000 from miscellaneous 
sources. In fiscal year 1993, the total was $287,890 with $94,588 in 
State appropriations,$133,000 from industry and $25,000 from 
miscellaneous sources. In fiscal year 1994, the total was $391,000 with 
$221,000 coming from State appropriations, $45,000 from industry and 
$125,000 from the National Research Initiative competitive grants 
programs. In fiscal year 1995 the total was $185,000 where $46,000 came 
from State appropriations, $62,500 from industry and $76,500 from 
miscellaneous sources. In fiscal year 1996, the total was $344,000 
where $294,000 was appropriated from State sources and $50,000 from 
private sources. In fiscal year 1997, $125,000 was appropriated from 
State sources, $103,000 was received through a National Research 
Initiative grant, and $130,876 was received from the Council on Food 
and Agricultural Research. In fiscal year 1998, $176,250 was received 
from a Fund for Rural America grant, $65,000 from a CSREES Special 
Research Grant, and $20,000 from miscellaneous sources. In fiscal year 
1999, $133,500 was received from the Illinois Agricultural Experiment 
Station in the form of faculty-researcher salaries; the Arkansas 
Agricultural Experiment Station was providing $49,500 in similar 
support; and the Illinois Farm Development Authority provided $125,000. 
Non-Federal support for fiscal year 2000 has not been identified.
    Question. Where is the work being carried out?
    Answer. Researchers and professional staff conducting this program 
are located at the University of Illinois and the University of 
Arkansas.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objectives of the program, as amended with 
additional funding and new termination dates now extend to fiscal year 
2000. Initial objectives have been met; however changing financial 
conditions in the farm and rural business environment continue to add 
new dimensions to these original objectives. Anticipated completion 
dates of these amended objectives extend through fiscal year 2000.
    Question. When was the last agency evaluation of this project. 
Provide a summary of the latest evaluation conducted.
    Answer. In addition to the scientific and peer reviews conducted at 
the institutions, the program is evaluated periodically within the 
agency through direct contact with the Director of the Center and the 
project leaders, as reports are received, and annually when proposals 
are submitted. The latest evaluation occurred in March, 1999 when the 
most recent comprehensive report was received. Agency criteria are used 
to evaluate the program in terms of whether objectives are relevant and 
consistent, appropriate methods are being used, time lines are being 
met to a reasonable extent, and results are being disseminated through 
reports and scientific publications. The major objectives of the 
program are being met and results from specific projects are being 
shared through regional research committees and other outlets as they 
evolve. The latest evaluation shows 18 separate projects underway with 
many nearing completion. Results are applicable to issues within the 
rural finance community. A National Symposium for Agricultural Finance 
Executives provides a valuable service and visibility for the Center. 
The program has produced an impressive number of publications. Articles 
have been published in leading U.S. agricultural and finance journals 
and in international outlets.

               FEED BARLEY FOR RANGELAND CATTLE, MONTANA

    Question. Please provide a description of the research that has 
been funded under the Feed Barley for Rangeland Cattle grant.
    Answer. This project supports research on the nutritional value of 
barley cultivars as feed for beef cattle. This research will assist the 
breeding and selection of superior barley types that can be more 
competitive with other feed grains and improve farmer income from 
barley crops grown in rotational systems in the Northern Great Plains. 
The project was subjected to a merit review.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. Barley is grown extensively as a feed grain in the United 
States. Based both upon chemical analysis and the experience of some 
cattle feeders, the principal investigator believes barley should have 
a feed value on a par with corn or wheat. However, currently barley is 
listed as inferior to both corn and wheat in feed hand books and is, 
therefore, discounted in the feed market. Comprehensive feeding studies 
of various barley types will be conducted to document the value as a 
feed grain for beef cattle.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to determine the 
true relative feeding value of barley for feeder cattle, and thereby 
improve the economic return to barley producers.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1996 
with an appropriation of $250,000; for fiscal year 1997, $500,000; for 
fiscal years 1998 and 1999, $600,000 each year; and for fiscal year 
2000, $637,500. The total appropriation is $2,587,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Non-Federal funds for this project were $160,000 in 1996, 
$174,500 in 1997, and $168,000 in 1998. No information is available for 
1999.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at Montana State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Completion of the original objectives is anticipated in 
fiscal year 2001. Integrating of findings into management systems is 
expected by fiscal year 2005 with outreach and information 
dissemination completed by fiscal year 2010.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project is evaluated annually. It undergoes a 
scientific merit review by two Department Heads and three peer faculty 
members. It is reviewed again by a CSREES National Program Leader upon 
submission to the agency.

                          FLORICULTURE, HAWAII

    Question. Please provide a description of the research that has 
been funded under the floriculture program grant.
    Answer. The research carried out with these funds involves 
wholesale and retail U.S. and Japan market research, development of new 
varieties for aesthetic values and pest resistance, and pest management 
strategies to meet quarantine needs and consumer expectations.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The researcher believes the tropical cut flower and foliage 
industry in Hawaii, which includes anthurium, orchids, flowering 
gingers, bird of paradise, heliconia, protea, and cut foliage is worth 
over $50 million primarily in out-of-state sales. Development of 
disease resistant cultivars and quarantine pest management strategies 
that reduce pesticide usage are high priority issues at the national 
level.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of the research was to develop superior 
Hawaii anthuriums, orchids, protea, and exotic tropical flower 
varieties with disease resistance, particularly to anthurium blight 
which devastated the Hawaii anthurium industry through the mid-1980's 
and reduced Hawaii's market share. Additionally, research focused on 
development of post-harvest handling practices and quarantine pest 
control. To date, a new anthurium cultivar has been patented and 
released. Additional blight resistant cultivars are being propagated 
and tested by the anthurium industry. Disease resistant protea 
germplasm has been obtained from South Africa and is being used in the 
protea breeding program. A post-harvest hot water dip treatment has 
been developed and is being used commercially on tolerant cut-flower 
species to meet quarantine requirements.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1989, $300,000; fiscal years 1990-1993, $296,000 
per year; fiscal year 1994, $278,000; and fiscal years 1995-2000 
$250,000 each year. A total of $3,262,000 has been appropriated since 
1989.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were as follows: State appropriations of $87,937 in 1995, approximately 
$77,000 in 1996, $56,680 in 1997, and $62,600 in 1998 for a total of 
$207,217 since 1995.
    Question. Where is this work being carried out?
    Answer. Research is being conducted by the University of Hawaii at 
Manoa and Hilo.
    Question. When was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The objectives in the original project were to maintain 
Hawaii floricultural industry competitive. This objective continues to 
be the principal direction for the projects. Because the industry and 
the markets are changing pests are becoming either resistant or newer 
strains. And quarantines are changing with technology the objective 
remains valid.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The individual projects funded under this Special Research 
Grant are evaluated through merit review to ensure that good science is 
being used. This evaluation is the major tool used to award funds to 
the projects.

        FOOD AND AGRICULTURE POLICY INSTITUTE, IOWA AND MISSOURI

    Question. Please provide a description of the research that has 
been done at the food and agriculture policy institute program.
    Answer. The Food and Agriculture Policy Research Institute--FAPRI--
was established by Iowa State University and the University of 
Missouri, Columbia, in 1984. The purpose of the institute is to conduct 
comprehensive analysis and disseminate results about the economic 
impacts of U.S. food, farm, and trade policies to agricultural 
producers, agribusinesses, and public policymakers. Iowa State conducts 
research on the economic interrelationships within and between domestic 
and foreign food and agricultural markets from the farm gate to market 
destinations; develops and maintains databases and analytical support 
systems to facilitate the analysis of agricultural and trade policy 
issues; and evaluates the impacts of U.S. and foreign commodity supply, 
demand, and public policy programs on agricultural trade. The 
University of Missouri maintains models of the domestic agricultural 
economy and directs its efforts primarily to the analysis of domestic 
policy issues. The two universities maintain linkages with a number of 
other universities who provide data and analytical support to the 
system. The universities maintain a comprehensive analytical modeling 
system of the U.S. and international food and agricultural sectors to 
evaluate near- and long-term economic implications of alternative farm 
policies for the basic commodities. Each year, and more often if 
conditions require, the system is used to provide economic information 
on potential impacts out to 10 years in the future of farm policies on 
farm prices, income, output, government program costs and means to 
enhance the management of farm programs at the national level.
    Question. According to the research proposal, or the principal 
researchers, what is the national, regional, or local need for this 
research?
    Answer. The Nation's agricultural sector and its components are 
subject to numerous Federal policies and programs. FAPRI is the only 
publicly supported, non-Federal organization with the analytical 
capability to assess and evaluate the numerous public policies and 
programs affecting the agricultural sector and report results to a 
broad constituency including farmers, agribusinesses, and Federal and 
State policymakers.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal was to develop the analytical capability 
to assess and evaluate U.S. farm policies on the U.S. agricultural 
sector and disseminate this information to farmers, farm and other 
agricultural organizations and public policymakers. The mission has 
been expanded to include assessment of trade and environmental policy 
impacts and their interaction with the agricultural sector at national, 
regional, and farm levels. The models in place are also used to assess 
fiscal and monetary policy implications and impacts of new technologies 
such as biotechnological innovations on the agricultural sector.
    Both institutions maintain large econometric models and data sets 
which are regularly updated to analyze farm and trade policy 
alternatives and the impacts of various programs on the several sub 
sectors of the agricultural economy. This update was especially 
valuable for conducting analysis to assess policy options for the 1996 
farm bill. During the past year, the FAPRI completed 35-40 studies 
addressing policy issues such as assessments of the 1996 Farm Bill, 
alternative ethanol programs, USDA's proposed milk market order reform, 
U.S.-Canada agricultural trade, the importance of fast track to U.S. 
agriculture economic recession in the Middle East and the economic 
meltdown in Russia. Numerous studies were completed addressing 
improvements made to the empirical modeling system to improve domestic 
and international policy capabilities. The FAPRI staff has made 
numerous public appearances throughout the U.S. to agricultural groups 
and Congressional committees and Executive branch groups addressing 
policy issues.
    Question. How long has the work been underway and how much has been 
appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal years 1984-1985, $450,000 per year; fiscal years 1986-
1987, $357,000 per year; fiscal year 1988, $425,000; fiscal year 1989, 
$463,000; fiscal year 1990, $714,000; fiscal years 1991-1993, $750,000 
per year; fiscal year 1994, $705,000; fiscal years 1995-1996, $850,000 
each year, and fiscal year 1997-2000, $800,000. The total amount 
appropriated is $11,171.000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
are as follows: $260,355 State appropriations, $113,565 industry, and 
$37,913 miscellaneous for a total of $411,833 in 1991; $321,074 State 
appropriations, $51,500 industry, and $35,100 miscellaneous for a total 
of $407,674 in 1992; $234,796 State appropriations and $70,378 industry 
for a total of $305,174 in 1993; $78,286 State appropriations, $43,925 
industry, and $29,750 miscellaneous in 1994 for a total of $151,961 in 
1994; $80,155 State appropriations, $37,128 industry, and $42,236 
miscellaneous for a total of $159,519 for 1995; $124,123 in State 
appropriations with no other funding for 1996; $79,000 in State 
appropriations, $50,000 industry and $25,000 miscellaneous for a total 
of $154,000 in 1997; and $88,800 State appropriations, $75,200 
industry, and $34,687 miscellaneous for a total of $198,687 in 1998.
    Question. Where is this work being carried out?
    Answer. The program is carried out at the Center for Agriculture 
and Rural Development, Iowa State University and the Center for 
National Food and Agricultural Policy, University of Missouri.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. While individual projects show progress towards achieving 
the goal, this is a continuing program of research and analysis for the 
purpose of assessing farm and related policy actions and proposed 
actions likely to affect the agricultural sector and its components.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The annual proposal is carefully reviewed for adherence to 
stated objectives and progress before the special research grant is 
awarded. It is also peer reviewed prior to its submission. No formal 
evaluation of this program has been conducted.

                         FOOD IRRADIATION, IOWA

    Question. Please provide a description of the research that has 
been funded under the food irradiation grant.
    Answer. Since the Linear Accelerator Facility was placed in 
operation in March 1993, studies on the effect of irradiation on shelf-
life extension, safety and quality of ground beef, beef steaks, ham, 
pork chops from loins, chicken breasts, and turkey have been conducted. 
Studies combining irradiation with high hydrostatic pressure and 
cooking, using whole chicken breasts, turkey and ham, have been 
conducted to determine the combination of these treatments that will 
yield a shelf-stable product while maintaining high eating quality. 
Several studies were conducted to determine whether consumers can 
detect a difference between irradiated and non-irradiated ground beef 
patties. Experiments were also conducted to investigate consumer 
acceptance of pork products irradiated to prevent trichinosis. Test 
markets of irradiated chicken breasts were conducted to determine 
consumers' willingness to pay for irradiated products. Studies on the 
effect of packaging materials on quality of irradiated meat have been 
completed. Quality changes in ready-to-eat meat and poultry products 
irradiated to control Listeria are under investigation. The fiscal year 
2000 funds are supporting research from May 1, 2000 through June 30, 
2001.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes consumers' attention and 
concern about the safety of fresh meat and poultry has increased with 
recent outbreaks of foodborne illness from E. coli 0157:H7 and Listeria 
monocytogenes. The meat industry has also expressed interest regarding 
the quality of irradiated products, and how this process can be used to 
yield high quality fresh meats and ready-to-eat products that are free 
of pathogens. The recent massive recall of over 50 million pounds of 
frankfurters and luncheon meats due to illness caused by Listeria 
monocytogenes contamination has resulted in huge economic losses. 
Additionally, researchers from eight other research institutes have 
used the irradiation facility for research projects. Thus, the 
principal researcher believes this research to be of national, regional 
and local need.
    Question. What was the original goal of the research and what has 
been accomplished to date?
    Answer. The original goal of the research was to generate knowledge 
necessary to develop a research and technology transfer program leading 
to commercial use of irradiation of foods, whereby consumers would be 
provided with food products with enhanced safety. The effectiveness of 
irradiation, using an electron beam accelerator, in destroying known 
pathogenic bacteria in pork and beef has been determined. Mathematical 
models have been developed to predict the growth of bacteria in low-
dose irradiated ground pork. Demonstration of irradiation technology 
has been presented to some commercial firms, and plans are being 
developed for some large scale test markets.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1991 
when $100,000 was appropriated for this project. The appropriations for 
fiscal years 1992 and 1993 were $237,000 per year; fiscal year 1994, 
$223,000; fiscal years 1995-1997, $201,000 each year; and fiscal years 
1998-2000, $200,000 per year. A total of $2,000,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year 2000?
    Answer. The project received $1,037,270 in State of Iowa funds--$1 
million of which was for capital construction--in fiscal year 1991; 
$37,942 in State funds and $67,800 in industry grants in fiscal year 
1992; $68,897 in State funds, $78,300 in industry grants and $9,666 in 
user fees in fiscal year 1993; $70,652 in State funds, $35,420 in 
industry grants and $47,788 in user fees in fiscal year 1994; $72,772 
in State funds, $100,000 in industry grants and $55,211 in user fees in 
fiscal year 1995; $81,540 in State funds, $115,300 in industry grants 
and $50,963 in user fees in fiscal year 1996; and $77,963 in State 
funds, $253,450 in industry grants and $46,550 in user fees in fiscal 
year 1997; and $100,200 in State funds, $205,900 in industry grants and 
$36,200 in user fees in fiscal year 1998; and $125,000 in State funds, 
$213,800 in industry grants and $34,900 in user fees in fiscal year 
1999.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at Iowa State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. The principal investigator anticipates that the project 19s 
original objectives will be met within a few years after the USDA final 
rules are issued for ready-to-eat meat and poultry products.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. A review of the proposal supporting the fiscal year 1999 
appropriation was conducted on February 24, 1999. Previous studies 
funded under this project have provided useful information toward 
understanding how irradiation can be useful in eliminating or reducing 
foodborne pathogens in meat products. It is anticipated that the 
proposed research will continue to further the understanding of how 
irradiation can be used to improve shelf-life and enhance safety of 
meats and meat products.

               FOOD MARKETING POLICY CENTER, CONNECTICUT

    Question. Please provide a description of the research done under 
the Food Marketing Policy Center grant.
    Answer. The Food Marketing Policy Center was established in 1988 at 
the University of Connecticut at Storrs. The Center seeks to improve 
the performance of the food production and marketing system by 
conducting research on food and agricultural marketing and related 
policy questions. The Center is primarily an economic research 
organization, but it conducts interdisciplinary research as appropriate 
and it communicates results to the public. Key users include farm and 
consumer organizations, agricultural business firms, public agencies, 
State legislatures, and the U.S. Congress. The research proposal was 
subject to an administrative review and a peer review by the university 
prior to submission to CSREES.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The research addresses an ongoing national need to monitor 
the performance of the U.S. food system and to recommend policies that 
improve performance for the benefit farmers, merchants, processors, and 
consumers.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The ongoing research goal is to identify marketing problems 
and assess alternatives that improve economic performance of the U.S. 
agricultural and food marketing sector. The Center serves as a core 
research group for Regional Research Project NE-165, Private 
Strategies, Public Policies, and Food System Performance. The research 
agenda includes industrial organization, strategic marketing, economics 
of food safety, cooperatives, and public policy including antitrust and 
regulation.
    The Center is a prolific provider of high quality theoretical and 
empirical work, and makes significant scientific, management, and 
policy contributions. The Center has prepared about 50 working papers, 
40 policy research reports, 20 policy issue papers, 8 books and 
numerous chapters, a number of MS and PhD theses, and has distributed 
scientifically important research articles to researchers, industry, 
Federal and State legislators, and decision makers.
    This grant annually supports ten to fifteen research projects in 
two problem areas: impacts of changes in strategies, technologies, 
consumer behavior and policies on the economic performance of the food 
system, and impacts of private and public strategies on improvements in 
food safety and quality. Projects include competitive strategy analysis 
of cooperatives and investor-owned firms; firm dominance in food 
manufacturing; advertising; mergers, product relatedness and 
performance outcomes; effects of market structure and concentration on 
promotional activity; testing theories of oligopoly conduct; 
relationships between market structure, firm position and price levels; 
strategic responses to food safety and nutritional regulation; and 
trade agreement effects on food quality and trade.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1988, $150,000; fiscal year 1989, $285,000; fiscal 
year 1990, $373,000; fiscal years 1991-1993, $393,000 per year; fiscal 
year 1994, $369,000; fiscal years 1995-1998, $332,000 each year; and 
fiscal years 1999-2000, $400,000 a year. A total of $4,484,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
are State appropriations as follows: $234,259 in fiscal year 1991; 
$231,741 in fiscal year 1992; $201,288 in fiscal year 1993; $234,557 in 
fiscal year 1994; $219,380 in fiscal year 1995; $134,399 in fiscal year 
1996; $135,490 in fiscal year 1997; $164,772 in fiscal year 1998; and 
$163,895 in fiscal year 1999.
    Question. Where is the work being carried out?
    Answer. The research is being carried out at the University of 
Connecticut and the University of Massachusetts.
    Question. What was the anticipated completion date for the original 
objectives if the projects? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1987 was for 24 months. According 
to the principal researcher, the objective of conducting policy-
oriented research on food manufacturing and distribution industries to 
assist State and Federal policy makers in improving the performance of 
the food system is still an ongoing public concern, given increasing 
levels of concentration in food processing. The current phase will be 
completed in 2003.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. CSREES performed a merit review of the project in April 
1999, as it evaluated the 1999 project proposal, and determined that 
``the PI and associated researchers are nationally and internationally 
recognized and are clearly competent to execute this project. Funded 
research will take place at the Center . . . and in collaboration with 
researchers at the London Business School, University of Nebraska, 
Rutgers University, Montana State University, and USDA.'' The proposal 
also was subjected to peer review by experts with scientific knowledge 
and technical expertise.

                    FOOD PROCESSING CENTER, NEBRASKA

    Question. Please provide a description of the research that has 
been funded under the food processing center grant.
    Answer. The University of Nebraska Food Processing Center has been 
conducting short-term, highly applied research projects to assist small 
and mid-sized food processing companies and entrepreneurs to develop or 
improve processes and products and to develop new food processing 
enterprises. Projects were selected based on the estimated economic 
impact of the technical assistance or the criticality of the technical 
assistance to the future of the firm or venture. Priorities were placed 
on projects relating to the safety of the food product or process and 
to the fulfillment of regulatory mandates such as nutrition labeling, 
use of approved and effective ingredients, and adherence to regulations 
imposed by foreign governments. In addition, several research projects 
were conducted to improve or assess the quality, extend the shelf-life, 
or assess or improve the processing efficiency of specialty food 
products which impacted several processors or used alternative 
agricultural products.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes the primary impact of 
this project will be statewide. Small and mid-sized food processing 
companies and entrepreneurs have limited technological capabilities for 
addressing issues related to product development, process development, 
product and process evaluation, food safety, quality assurance, and 
regulatory mandates. The short-term research and technology transfer 
projects conducted as part of this overall project will aid these 
companies in appropriately addressing these oftentimes complicated 
issues.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the research, as stated previously, is to 
assist small and mid-sized food processing companies and entrepreneurs 
to develop or improve processes and products and to develop new food 
processing enterprises. Technological evaluations were conducted for 89 
individuals or companies interested in developing new food processing 
businesses. These evaluations included formulations, processes, 
processing equipment, packaging, shelf-life, sensory, nutritional 
attributes, microbiological quality, regulatory considerations, and 
other factors. Additionally, microbiological analyses, shelf-life 
assessments, sanitation audits, and nutritional analyses were conducted 
for numerous Nebraska food companies.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1992. 
The appropriations were $50,000 per year for fiscal years 1992-1993; 
$47,000 for fiscal year 1994; and $42,000 for fiscal years 1995-2000 
each year. A total of $399,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year 2000?
    Answer. The Food Processing Center received $402,389 in State funds 
and $1,993,914 in food industry grants and miscellaneous sources from 
1992 through 1999.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at the University of Nebraska.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. Because this project supports ongoing technical assistance 
to clients, the objectives are ongoing.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. An agency science specialist conducts a merit review of the 
proposal submitted in support of the appropriation on an annual basis. 
A review of the proposal was conducted on March 31,1999. Progress under 
previous grants for this project appears to be satisfactory, with 
numerous examples of assistance cited and summaries of short-term 
projects provided by the principal investigator.

                          FOOD QUALITY, ALASKA

    Question. Please provide a description of the research that has 
been funded under the Food Quality, Alaska grant.
    Answer. Research will be aimed at establishing the Salmon Quality 
Implementation Project. The project has two parts. The first part is 
the evaluation, design, and implementation of a voluntary quality seal 
that can be attached to salmon that meet the existing standards for 
premium and number one grade. The second part is a series of workshops 
and training sessions on salmon quality handling and maintenance for 
workers at all levels of the industry, from harvesting to retail.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The seafood industry is Alaska's largest employer and main 
source of revenue in many communities along its 38,000 miles of 
coastline. The salmon fishery is second only to groundfish in providing 
the most value in the industry. It is the mainstay of many traditional, 
family-owned businesses. The salmon industry is regional, involving 
thousands of fishermen and processing workers from Washington State, 
Oregon, California and throughout the nation that come to Alaska to 
participate in the fishery. In recent years, the Alaska salmon industry 
has suffered economically from increased competition from international 
salmon farmers, mainly in Norway and Chile. They have made great 
inroads in many traditional markets, surpassed Alaska in salmon 
production, and now set the product standard in the marketplace. One 
key for American businesses to recapture and strengthen their salmon 
markets is to guarantee and promote the quality of wild Alaska salmon. 
This project will provide the industry with the research and 
information needed to accomplish this.
    Question. What was the original goal of the research and what has 
been accomplished to date?
    Answer. The original goal of this research was to ensure a 
consistent and predictable level of handling and quality for Alaska 
seafood. In doing so, the project will help Alaska seafood processors 
strengthen or maintain their place in domestic and international 
markets. Because this is a new grant, no progress has yet been 
reported.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1999 
and the appropriation for fiscal years 1999 and 2000 $350,000 each for 
a total of $700,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year 2000?
    Answer. The State of Alaska, the Alaska Seafood Marketing Institute 
and the industry will contribute considerable personnel hours to 
perform the work described in the application. The State will 
contribute the time of several staff people to research and help 
establish the voluntary quality seal program. Nine hours a week of 
staff time through the end of the fiscal year (31 weeks) would account 
for approximately $10,000. The Alaska Seafood Marketing Institute will 
have a staff person set up training workshops throughout Alaska.
    Question. Where is this work being carried out?
    Answer. The work will be administered at the University of Alaska 
Fairbanks. Field work will be carried out in numerous Alaska fishing 
communities.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. The anticipated completion date for the quality and 
handling training portion of the project is July 1, 2000. The 
anticipated completion date for the voluntary quality seal portion of 
the project is December 31, 2000. The project managers will able to 
report at that time on their success at meeting project objectives.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The proposal received in support of the fiscal year 1999 
appropriation was reviewed for merit by a CSREES specialist on August 
27, 1999.

                          FOOD SAFETY, ALABAMA

    Question. Please provide a description of the research that has 
been funded under the Food Safety, Alabama grant.
    Answer. Auburn Research Centers Food Safety Program is developing a 
method of food inspection that involves the placement of a sensor chip 
on food items. The goal is for these chips to automatically inventory 
and assess the safety at any point from source to consumption of 
appropriate fresh food products sold in the U.S.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. Most food-borne illness can be attributed to bacteria. The 
sensor chips developed at Auburn University will target detection of 
the bacteria that causes most of these illnesses. This technology could 
result in financial savings nationally, regionally, and locally through 
the prevention of food-borne illness and its related costs. Up to 33 
million Americans become ill each year from food borne disease. 
Estimates indicate that as many as 9,000 of these individuals will die 
with another one million suffering permanent disabilities. The USDA 
estimates that foodborne illness costs the U.S. economy $14.2 billion 
in lost productivity annually. This project will improve the safety of 
our food supply chain leading to an improved quality of life for every 
citizen and resident of the United States. In addition to these costs 
to the public and the nation, the costs to industry of settling civil 
litigation due to foodborne disease can be immense. The 1993 Jack-in-
the-Box hamburger incident, which infected 433 individuals, resulted in 
lawsuit settlements of $126 million dollars. This research when 
implemented should greatly reduce the incidence of foodborne illness.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this project is to reduce the 
incidence of food-borne illness through the use of a sensor chip that 
will assess the safety of food items as they move through the food 
chain. The research will be conducted through June 2000 so the results 
will be available after that time. Already to date, the researchers 
have demonstrated a new method for the detection of Salmonella bacteria 
that has the potential to greatly reduce detection times. Current 
industrial methods require that a sample of suspect food be taken to 
the lab where tests require a minimum of 6 to 48 hours to determine a 
food is safe to eat. The new technology can identify harmful levels of 
Salmonella bacteria in a few minutes and will be packaged as a portable 
hand-held unit that may be used on the food production line. 
Additionally, Auburn University has demonstrated a working stamp size 
radio frequency identification sensor tag that can be used to 
automatically inventory and trace food within seconds. This tag stores 
information from farm to its final destination and can be interrogated 
to rapidly provide information to identify the source of a 
contamination or food problem should it be detected at a latter date 
downstream.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in June, 1999. The 
appropriation for fiscal year 1999 was $300,000 and for fiscal year 
2000 is $446,250. A total of $746,250 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year 2000?
    Answer. Non-Federal State funds of $577,350 have been allocated to 
additionally sponsor the research in fiscal year 2000.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at Auburn University, through 
the Auburn Research Center for Detection and Food Safety.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. The anticipated completion date for the original objectives 
will be one year following the date of the award. The award date was 
June 15, 1999. Already the project has achieved over 50 percent of the 
first year objectives.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project has been underway for less than 6 months. 
Normally evaluations are conducted on an annual basis which would make 
the next evaluation due after June 2000.

                 FOOD SYSTEMS RESEARCH GROUP, WISCONSIN

    Question. Please provide a description of the research that has 
been done under the Food Systems Research Group program.
    Answer. The Group conducts research on contemporary issues 
affecting the organization and competitiveness of the U.S. food system 
in domestic and international markets. The issues include new 
technologies, market structure, firm behavior, and government policies 
and programs. Studies have been completed on pricing of cheddar cheese, 
fed cattle and hogs; changes in private label product markets; causes 
of structural change in the flour milling, soybean oil milling, wet 
corn milling, cottonseed milling, beef packing, and broiler processing 
industries; competition in U.S. food markets; and the relationship 
between U.S. food market structure and the industry's performance in 
global markets. The research proposal was subject to an administrative 
review and a peer review by the university prior to submission to 
CSREES.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal researcher believes that the U.S. food system 
is changing rapidly in response to a large number of global economic, 
social, and technological changes. Research is needed to determine the 
effects of these changes on the system's organization and performance, 
and to ascertain needed adjustments in public policies based upon sound 
research. There is a national need to assess and evaluate the 
organization and performance of the Nation's food industry to ensure 
that it continues to satisfy performance expectations of farmers and 
consumers and adheres to acceptable standards of conduct. In spite of 
the growing concentration in food production-processing and increasing 
public policy questions concerning the performance of this industry, 
few organizations like the Food Systems Research Group are providing 
research needed for public and private decision making.
    Question. What was the original goal of this research, and what has 
been accomplished to date?
    Answer. The original goal was to assess and evaluate the 
organization and performance of the U.S. food industry and provide 
recommendations for improvements. Recent research developed models to 
estimate allocative efficiency in broiler, beef and pork subsectors; 
allocative inefficiency appears in all three because participants do 
not adequately anticipate dynamic market changes; vertical integration 
in broilers has greatly improved production efficiency but not 
allocative efficiency. The strategic behavior of Wisconsin agribusiness 
firms was documented in three case studies: one firm operates in the 
mature artificial breeding industry; the other two deal with relatively 
high input costs for cheese production. Other work continues to focus 
on the impact of ``tough competition'' on industry performance. In 
1996, the project published its analysis showing manipulation of prices 
on the National Cheese Exchange by Kraft General Foods. Subsequently, 
USDA discontinued using Exchange prices in calculating basic formula 
milk prices, the Exchange closed, and the Chicago Mercantile Exchange 
opened a new cheese market. In December 1998, the University was able 
to publish additional materials previously held back by legal 
proceedings.
    The project has completed numerous studies on economic structure 
and performance issues of the U.S. food manufacturing and distribution 
system. Basic research is conducted on market theories; effects of 
mergers, new technologies, and firm conduct on industry structure and 
organization; factors affecting industry prices, profits, efficiency 
and progressiveness; and impact of public policies and regulations on 
food system organization and performance.
    Question. How long has this work been underway, and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal years 1976-1981, $150,000 per year; fiscal years 1982-
1985, $156,000 per year; fiscal years 1986-1989, $148,000 per year; 
fiscal year 1990, $219,000; fiscal years 1991-1993, $261,000 per year; 
fiscal year 1994, $245,000; fiscal years 1995-1998, $221,000 per year; 
fiscal year 1999, $225,000; and fiscal year 2000, $425,000. A total of 
$4,897,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
are as follows: State appropriations of $120,304 in 1991; $119,448 in 
1992; $85,188 in 1993; $96,838 in 1994; $59,435 in 1995; $50,636 in 
1966; $56,421 in 1997; $64,004 in 1998; and $75,115 in 1999.
    Question. Where is the work being carried out?
    Answer. The grant supports research at the University of Wisconsin, 
Madison.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have these objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1976 was for a period of 36 
months. The current phase of the program will be completed in fiscal 
year 2003.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. CSREES performed a merit review of the project in July 
1999, as it evaluated the 1999 project proposal, and concluded: ``The 
Food Systems Research Group at the University of Wisconsin does 
excellent research on structure, conduct and performance of selected 
segments of the food industry and publishes in respected journals. 
Researchers have won many professional awards. Much of the work 
provides empirical tests of competing theories. In spite of the growing 
concentration in food production-processing and increasing public 
policy questions concerning the performance of this industry, few 
organizations like the University of Wisconsin are providing research 
needed for public and private decision making.''

          FORAGES FOR ADVANCED LIVESTOCK PRODUCTION, KENTUCKY

    Question. Please provide a description of the research that has 
been funded under the grant.
    Answer. The Cooperative State Research, Education and Extension 
Service has requested the university to submit a grant proposal that 
has not yet been received.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The need for this research is to provide improved forages/
livestock management systems for Kentucky and adjacent areas.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research is to improve the 
economics of livestock production through the use of advanced 
production systems.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and the appropriation for fiscal year 2000 is $212,500.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. This is a new project and no non-Federal funds have been 
provided to date.
    Question. Where is this work being carried out?
    Answer. Research will be conducted at the University of Kentucky 
Research Station.
    Question. When was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
is fiscal year 2004.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency has not yet received the project proposal. It 
will be reviewed and evaluated prior to awarding fiscal year 2000 
appropriations.

                      FORESTRY RESEARCH, ARKANSAS

    Question. Please provide a description of the research that has 
been done under the Forestry Research grant.
    Answer. The Arkansas Forest Resources Center offers programs of 
research, education, and outreach to the landowners of Arkansas and the 
surrounding region. This has been accomplished through continuing 
education events for landowners, the development of a series of 
distance-learning tutorials, and the funding of 20 assistantships for 
the first two classes of graduate students in the new forest resources 
master's program. A partial list of workshops includes: Uneven-aged 
Silviculture of Loblolly and Shortleaf Pine Forest Types, Environmental 
Law & Policy, Timber Income Tax Update, Thinning Methods and 
Operations, Introduction to Arc View 3.0, Estate Planning, Forest 
Finance Applications: Basic Tools for Daily Practice, and Opportunities 
in Forest Regeneration. The educational thrust has combined Center and 
private dollars to establish one of only three of the country's Arc 
View Learning Centers for natural resources. To better provide the 
highly educated professionals needed in the natural resources 
professions, educational tutorials are being developed in dendrology-
tree ID, plant morphology, silvics--that aid in the (1) transfer of 
students in community colleges to institutions with forest resources 
offerings, and (2) forest resources education of non-majors at 
institutions without forest resources faculty. Furthermore, the 
University of Arkansas activated a new Master of Science program in the 
Fall 1998.
    Research projects address issues of species diversity, richness, 
redundance, and the resilience of disturbed and undisturbed hardwood 
stands of the Mississippi River floodplain. Furthermore, research has 
indicated that neotropical migratory birds are indicators of ecosystem 
health. Factors influencing their breeding range, include habitat 
destruction/alteration and forest fragmentation. Thus, issues of re-
establishment and structure of hardwood stands are important for 
timber, non-timber values, and the quality of life enjoyed regionally, 
nationally, and internationally. Also, other projects are contributing 
to the development of (1) a biological control agent for the southern 
pine beetle, (2) alternative forest crops for the economically-
depressed Delta region, and (3) technologies for enhanced fiber and 
wood production from nonindustrial and industrial lands. Newer projects 
include an important regional social science study of the resource 
ethical values held by people of the southern United States and a 
comprehensive study for forest growth and yield.
    Question. According to the research proposal, or the principal 
researchers, what is the national, regional, and local need for this 
research?
    Answer. With the reduced levels of production of wood products from 
the Northwest, southern forests are increasingly having to produce a 
major portion of wood products for the United States. This increased 
demand and production make it critical that the forestry community 
understand the possible environmental effects of forestry practice. 
Social implications of the conflicts between forest production and 
environmental quality will become more and more important. 
Collectively, the projects address the sustainable management of 
southern forests.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the research is to develop alternative forest 
management strategies for achieving multi-resource objectives; i.e., 
production of timber, wildlife, recreation and other values of the 
forest on private industrial and nonindustrial forest lands and public 
lands. Significant progress has been made in several areas. Some 
examples include: developing intensive fiber farming systems as 
alternatives to soybeans for Mississippi Delta farmers, taking the 
first step toward biological control of the southern pine beetle by 
discovering the nutrient needs of predators of the beetle so predators 
can be grown and studied in artificial cultures. The first survey of 
nonindustrial landowners in Arkansas for 15 years has been conducted. 
The survey shows that because of the average age of landowners, 60+ 
years, there will be a massive change in ownership in the next 10-20 
years. Landowners continue to not be aware of assistance programs. The 
survey also indicated a concern about government programs and possible 
intervention on private land. This information will be useful in 
understanding future timber supply trends from private holdings and in 
the design of assistance and educational programs.
    Ongoing projects include a broad array of topics, competitively 
awarded within the Center. These include best management practices, 
ecological characteristics, effects of different forest management 
regimes, stream-sided buffer zone effectiveness, effects of winter 
logging, and secondary processing efficiency.
    Question. How long has the work been under-way and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows:

                                                                   Grant
        Grant Year                                              Received
1994..........................................................  $470,000
1995..........................................................   523,000
1996..........................................................   523,000
1997..........................................................   523,000
1998..........................................................   523,000
1999..........................................................   523,000
2000..........................................................   523,000
                    --------------------------------------------------------------
                    ____________________________________________________

      Total................................................... 3,608,000

    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-fiscal funding and its source provided to this 
grant in 1994 was $411,726 State appropriations and $380,000 industry 
for a total of $791,726; $491,301 State appropriations and $785,262 
industry for a total of $1,276,563 for 1995; a total of $695,204 from 
State and industry sources for 1996; a total of $1,115,341 from these 
sources in 1997; and an estimated total of $1,000,000 for 1998. For 
1999, the State legislature appropriated approximately $850,000 above 
the 1998 level.
    Question. Where is the work being carried out?
    Answer. The Arkansas Forest Resources Center is administered from 
the School of Forest Resources on the campus of the University of 
Arkansas at Monticello. Individual studies are being conducted at the 
University of Arkansas at Fayetteville and several locations across the 
State.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Grants were received 1994-1999 with funds distributed for 
use over the 3 to 5 years following the activation year. Projects are 
on schedule; work from 1994 and 1995 funding are nearing completion. 
Forestry research is long term. Center objectives and selected projects 
will be continued beyond the life of individual grants using the 
infrastructure and capacity developed with these Special Research 
Grants.
    Question. When was the last agency evaluation of the project? 
Provide a summary of the last evaluation conducted.
    Answer. In 1991, an agency team visited the University and reviewed 
faculty qualifications, supporting sources, and the feasibility of the 
proposal. The team exit report indicated the faculty was highly 
capable, the infrastructure needed strengthening, and the proposal 
concepts were feasible. Since 1991, there has not been a formal program 
review. A review planned for the year 2000 has been rescheduled for 
2001 because of a change in forest resources leadership at the 
University.

       FRUIT AND VEGETABLE MARKET ANALYSIS, ARIZONA AND MISSOURI

    Question. Please provide a description of the research that has 
been funded under the fruit and vegetable market analysis program.
    Answer. The purpose is to provide timely knowledge and analysis of 
the impacts of trade, environmental, monetary, and other public 
policies and programs upon the Nation's fruit and vegetable industry to 
farmers, agribusinesses, and policymakers through a program of 
empirical assessment and evaluation.
    Question. According to the research proposal, or the principal 
researchers, what is the national, regional or local need for this 
research?
    Answer. The U.S. fruit and vegetable sector is experiencing 
increased growth from greater domestic and export demand. However, the 
growth of this sector depends upon its ability to compete domestically 
and internationally and to conform with the regulatory environment in 
which it operates. This program of research provides increasingly 
critical information to farmers and policymakers on the implications 
and impacts of various policies and programs such as environmental, 
trade, labor, and food safety. It is the only such program providing 
analysis of the total U.S. sector.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal is to develop the analytical capability to assess 
and evaluate public policies and programs impacting the U.S. fruit and 
vegetable industry and disseminate the results to policy makers, 
industry organizations, producers, and other users. Proposals have been 
submitted that outline long-range plans and specific projects for 
funding. Models have been developed for 18 major (as measured in 
production, consumption, and trade) U.S. fruits and vegetables 
representing 80 percent of the farm value of the U.S. fruit and 
vegetable industry. Trade models for those commodities with a 
significant import and/or export sector will also be developed. These 
models feed in to a larger food and agricultural sector model to 
support analysis of cross commodity and policy effects.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1994. 
The appropriation for fiscal year 1994 was $329,000; for fiscal years 
1995-1998, $296,000 each year; and for fiscal years 1999, $320,000; and 
for fiscal year 2000, $320,000. A total of $2,153,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funding and its source provided to this 
grant in 1994 was $50,073 State appropriations and $11,000 industry for 
a total of $61,073; $21,876 State appropriations and $36,624 industry 
for a total of $58,500 for 1995; a total of $62,400 from State and 
industry sources expected for 1996; and $50,000 each year from these 
sources in 1997 and 1998.
    Question. Where is the work being carried out?
    Answer. The work is being carried out at Arizona State University 
and the University of Missouri.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The university researchers anticipate that work will 
support ongoing, changing projects to look at the impact of various 
public policy proposals on the U.S. fruit and vegetable industry.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. We have conducted no formal evaluation. However annual 
proposals are peer reviewed for scientific merit and relevance; also 
each annual budget proposal is carefully reviewed and work progress is 
compared with prior year's objectives. Informal discussions with 
congressional staff indicate that the analyses are extremely useful.

                 GENERIC COMMODITY PROMOTION, NEW YORK

    Question. Please provide a description of the research that has 
been done under the generic commodity promotion program.
    Answer. The grant supports, in part, the National Institute on 
Commodity Promotion Research and Evaluation which provides objective 
analyses of national and State commodity checkoff programs designed to 
enhance domestic and export demand for U.S. agricultural products. 
``Checkoff'' programs provide funds from producers to pay for 
advertizing and promotional programs. The overall project proposal was 
peer reviewed at the university level; a competitive peer review 
process is used to select specific research projects.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal researcher states that producers are 
contributing about $1 billion annually to commodity research and 
promotion funds designed to expand the domestic and export markets for 
their products. The number of commodity groups participating and the 
size of the funds available could continue to grow. The 1996 FAIR Act 
requires all federally-constituted research and promotion boards to 
evaluate their programs at least every five years. Accurate evaluations 
require the development of sophisticated techniques that differentiate 
the impact of research and promotion expenditures from several other 
market influencing factors.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal is to determine the economic effectiveness of 
generic promotion programs designed to increase the sales of 
agricultural commodities in domestic and international markets. 
Accomplishments over the last five years include: Understanding key 
economic relationships in the advertising and promotion of milk and 
dairy products, beef, cotton, and eggs, and the exports of beef, pork, 
and wheat; developing new methods of estimating the relationships among 
advertising, promotion, government support programs, and government 
policy; developing new methods of measuring advertising ``wearout;'' 
determining the sensitivity of results using various methods; 
explaining the effect of socioeconomic and market factors on the impact 
of advertising; estimating optimal allocation of advertising 
expenditures by type of media; comparing the relative returns from 
generic and brand advertising. The Institute has sponsored educational 
workshops and conferences for promotion board leaders, and for elected 
and appointed public officials responsible for developing public policy 
and administering checkoff programs.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by the grant began in fiscal year 1994. 
The appropriation for fiscal year 1994 was $235,000; for fiscal years 
1995-1999, $212,000 each year; and for fiscal year 2000, $198,000. A 
total of $1,493,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal matching funds and sources allocated to 
this grant by Cornell University are as follows: $97,333 a year in 
State appropriations for 1994-96; $125,650 for 1997; and $130,430 each 
for 1998 and 1999. Collaborating institutions performing work under 
subcontracts also contribute non-Federal matching funds.
    Question. Where is this work being carried out?
    Answer. The work is being carried out at Cornell University in 
collaboration with eight other land-grant universities.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have these objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1994 was for a period of 21 
months, however, the need to evaluate the benefits of commodity 
promotion and research programs is a growing regional and national 
concern, as producers take on greater responsibility for marketing 
their products. An increasing number of promotion and research programs 
are being evaluated. The current phase of the program will be completed 
in 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. CSREES performed a merit review of the project in February 
1999, as it evaluated the 1999 project proposal, and determined that 
``the project has sound objectives and procedures that are helping 
private and public decision makers effectively expand markets for U.S. 
agricultural products leading to a highly competitive agricultural 
production system and enhanced economic opportunity for Americans. The 
principal investigator is well recognized for his leadership in this 
area of research. Research results appear in several peer reviewed 
professional journals and popular press, and researchers have ongoing 
dialog with private and public decision makers.

                             GLOBAL CHANGE

    Question. Please provide a description of the research that has 
been funded under the global change grant.
    Answer. Radiation from the sun occurs in a spectrum of wavelengths 
with the majority of wavelengths being beneficial to humans and other 
living organisms. A small portion of the short wavelength radiation, 
what is known as the Ultraviolet or UV-B Region of the spectrum, is 
harmful to many biological organisms. Fortunately, most of the UV-B 
radiation from the sun is absorbed by ozone located primarily in the 
stratosphere and does not reach the surface of the earth. The discovery 
of destruction of the stratospheric ozone layer and development of the 
ozone hole over polar regions has raised concern about the real 
potential for increased UV-B irradiance reaching the surface of the 
earth and the significant negative impact this could have on all 
biological systems including man, animals, and plants of agricultural 
importance. There is an urgent need to determine the amount of UV-B 
radiation reaching the earth's surface and to learn more about the 
effect of this changing environmental force. The Cooperative State 
Research, Education and Extension Service, CSREES, is in the process of 
establishing a network for monitoring surface UV-B radiation which will 
meet the needs of the science community of the United States, and which 
will be compatible with similar networks being developed throughout the 
world. The fiscal year 1999 grant supports work thru September 2000.
    This grant is part of a government-wide initiative. The research is 
closely coordinated with the National Aeronautical and Space 
Administration, the National Oceanographic and Atmospheric 
Administration, the Environmental Protection Agency, the Smithsonian, 
the National Science Foundation, and the Department of the Interior. 
All these Federal agencies are involved in the U. S. Global Change 
Research Program Inter-agency UV-Monitoring Network Plan.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal researcher believes destruction of the 
stratospheric ozone layer, our shield from the full intensity of solar 
radiation, continues to increase. This creates a high priority need for 
information to document not only the levels of UV-B radiation reaching 
the earth's surface, but the climatology of that radiation. The United 
States, and the rest of the world, needs to know the strength of the 
UV-B radiation reaching the earth and the potential impact on all forms 
of life, especially animal and plant life of agriculturally important 
species. The principal researcher believes this research to be of 
national as well as regional and local importance.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The purpose of the USDA UV-B Network is to provide 
accurate, geographically dispersed data on UV-B radiation reaching the 
surface of the earth and to detect trends over time in this type of 
radiation. A primary problem which had to be overcome in order to reach 
this goal was the development of instrumentation adequate to make the 
measurements required for the monitoring network. A major advance 
occurred during 1996 with the availability to the network of a new 
multi-band instrument which will provide the spectral information 
needed to support both biological and atmospheric science research and 
to serve as ground-truth for satellite measurements. These instruments 
have been deployed and are currently in operation at twenty-six 
monitoring sites across the United States, including Hawaii. The 
researchers plan to have additional sites in Alaska, Puerto Rico, 
Oregon, North Carolina, and Oklahoma, but these plans are on hold due 
to lack of funding to support their installation and operation.
    Two grants to design and build six advanced spectro-radiometers 
have been awarded under the National Research Initiative Competitive 
Grants Program. These instruments are to be used in a research network 
to make precise measurements of the total UV-B spectra at selected 
research sites. The first of these instruments failed to meet spectral 
performance standards when tested and calibrated by the National 
Institute of Science and Technology. An alternative design which 
resulted in a much larger and more difficult instrument to deploy has 
been developed. The first of the advanced instruments was deployed at 
Department of Commerce research site at Table Mountain near Boulder, 
Colorado during the fall of 1998. The second and third were installed 
at a Department of Energy solar radiation research site in Oklahoma and 
at an Agricultural Research Service Plant Stress site in Beltsville, 
Maryland during 1999. Additional funding will be required to support 
the deployment of additional research instruments.
    To gain experience in network operation, broadband instruments 
along with ancillary instruments were installed at ten sites and have 
been in operation for the last 64-72 months. These sites are now 
equipped with a full compliment of instruments including the new multi-
band instrument. Sixteen additional sites developed since 1997 are 
similarly equipped with broadband and the new multi-band UV instrument. 
Data from each site is transmitted daily to Colorado State University 
for preliminary analysis, distribution and archiving. These data are 
available, within 24 hours of collection, on the Internet via a World 
Wide Web Site located in the Natural Resources Research Laboratory at 
Colorado State University. The Department of Agriculture is also a 
participant in the development of a central calibration facility at 
Department of Commerce facilities in Boulder, Colorado. The purpose of 
the central calibration facility is to ensure uniform and acceptable 
calibration and characterization of all instruments used in interagency 
UV-B monitoring programs.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1992, 
and the appropriation for fiscal years 1992-1993 was $2,000,000 per 
year; fiscal year 1994 was $1,175,000; fiscal year 1995 was $1,625,000; 
fiscal year 1996 was $1,615,000; fiscal year 1997 was $1,657,000; and 
fiscal years 1998, 1999 and 2000 were $1,000,000 per year. A total of 
$12,982,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
are as follows: $162,000 State appropriations in 1993; $183,106 State 
appropriations in 1994; and $285,430 provided by Colorado State 
University in 1995.
    Question. Where is this work being carried out?
    Answer. Colorado State University is managing the operating 
network, which when completed will include all regions of the country. 
At least thirty sites are planned for the climatological network 
including sites in Hawaii, Alaska and Puerto Rico in order to provide 
broad geographic coverage. Ten sites have been operational with broad 
band instruments for up to six years and twenty-six sites are now 
operational with new generation instruments. The research level network 
began with the first instrument installed at the Table Mountain, 
Colorado instrument intercomparison site and the second and third have 
been installed at the Department of Agriculture Plant Stress Laboratory 
at Beltsville, Maryland and The Department of Energy Solar Radiation 
site near Ponca City, Oklahoma as part of the Atmospheric Radiation 
Measurements field network in 1999.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. As with other weather and climate observations, this 
network will be an ongoing need for the predictable future. These 
measurements will provide information on the nature and seriousness of 
UV-B radiation in the United States and will provide ground truth 
validation to other predictions of UV-B irradiance. The project has 
nearly met its first objective of the establishment of a climatological 
network to monitor UV-B radiation at the surface of the earth. Years of 
operation will be required to measure trends in UV-B radiation and to 
develop models to predict the climatology of UV-B radiation.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency has assigned two technical staff to continuously 
monitor activities in the global change research program. A team of 
three experts in UV-B radiation measurement technology reviewed 
specifications for the development of the advanced spectroradiometers 
in July, 1996 prior to the procurement of major components of the 
instrument. A panel of radiation spectra scientists were brought in to 
review data derived from the new multi-band instruments in December 
1996 to advise on the interpretation and analysis of data derived from 
these instruments. Agency staff is in contact with program management 
on a weekly basis and has visited the program headquarters six times 
during the last year. The annual plan of work has been reviewed by 
three scientists prior to approval by the agency. A review of the UV-B 
Monitoring Program by a panel of technical experts from outside the 
Department is planned for 2000.

              GLOBAL MARKETING SUPPORT SERVICES, ARKANSAS

    Question. Please provide a description of the research that has 
been done under the global marketing support services program.
    Answer. The Global Marketing Support Services project provides 
leadership for a comprehensive program to integrate Arkansas into the 
global economy. It provides market analyses and other research to 
identify marketing opportunities, and provides access to essential 
databases for people interested in conducting their own research. The 
research effort supports several educational activities, including 
workshops, educational materials, one-on-one technical assistance that 
help mostly small and moderate size businesses understand and enter the 
export market The research proposal received a peer review at the 
university prior to submission to CSREES.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal researcher believes the emerging importance 
of global trade to the nation's economy and the reduction of trade 
barriers world-wide present unprecedented opportunities for cooperative 
public-private-university research to develop expertise not only in 
Local markets, but in world markets as well.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal is to develop a university research and service 
organization to support international trade development activities by 
local area businesses. During the past year, two market analyses were 
done for Slovakia, and work was initiated for countries in Central and 
South America. As a result of previous work, a Panamanian business 
leader visited Arkansas firms in 1999. Two ``Export Marketing--Getting 
Started'' workshops were held; six firms received one-on-one assistance 
and have significantly increased their interest in international 
marketing. Six factsheets were completed and distributed. An Internet 
website was used to distribute information, and an Internet 
international market was developed. The project developed stronger ties 
with the Small Business Development Council, Arkansas Economic 
Development Commission and the U.S. and Foreign Commercial Service as 
partners in educational and technical assistance activities.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1994. 
The appropriation for fiscal year 1994 was $47,000; for fiscal years 
1995 through 1997, $92,000 per year; and for fiscal years 1998 through 
2000, $127,000 per year. A total of $704,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were $90,000 per year in State appropriations for 1994 through 1996; 
$51,700 for 1997; $80,000 for 1998; and $83,000 for 1999.
    Question. Where is this work being carried out?
    Answer. This research is being conducted at the University of 
Arkansas, Fayetteville.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have these objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1994 was for a period of 12 
months, but the objective of expanding the export capacity of small to 
medium-sized agribusiness firms will not be met until 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. CSREES performed a merit review of the project in February 
1999, as it evaluated the 1999 proposal, and determined that ``the 
project is helping agribusiness expand markets for U.S. Agricultural 
products leading to a highly competitive agricultural production system 
and enhanced economic opportunity for Americans. The principal 
investigator provides very good leadership for the project and 
integrates it into the overall research, education and extension 
functions of the university to provide relevant and useful assistance 
to Arkansas firms.''

                         GRAIN SORGHUM, KANSAS

    Question. Please provide a description of the research that has 
been funded under the Grain Sorghum grant.
    Answer. This project was designed to improve the yield improvement 
of grain sorghum cultivars by developing early maturing hybrids with a 
longer grain filling period. The research focuses on identification of 
sorghum germplasm, which have a longer grain filling period or earlier 
maturation date. These traits may be used to shift more of the 
production to grain and less to vegetative growth, thus enabling more 
efficient use of the limited water supply. These funds are awarded to 
scientists working on sorghum at Kansas State University.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The focus of this research is toward the non-irrigated 
lands of Kansas where sorghum can produce a grain crop under conditions 
that would not be possible with corn and is, therefore, very important 
in the rotation with wheat. While the research is directed toward 
Kansas conditions, it would also apply to adjoining States. Germplasm 
research of national significance could potentially be supported by the 
competitive grants awarded under the National Research Initiative or 
the Initiative for Future Agriculture Food and Systems.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research is to identify germplasm 
and use it to develop grain sorghum cultivars that mature earlier and 
produce more grain. Initial studies have identified genetic 
characteristics controlling grain yield under a range of climatic 
conditions. Researchers have identified several sorghum lines, which 
have a grain-filling period as much as one-third longer than U.S. 
adapted parent lines. Analyses show that variability exists, the trait 
is genetically controlled, and incorporation into adapted germplasm can 
be accomplished. Simulation of expected production gains has been 
initiated.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 1997 
and the appropriation for fiscal years 1997 through 2000 was $106,000, 
for a total of $424,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. In 1998, Kansas State provided support via salaries and 
associated fringe benefits of $31,852, associated indirect costs of 
$14,652, and in-kind costs of $45,580, for a total of $92,084 and 
$95,700 for 1999.
    Question. Where is this work being carried out?
    Answer. These funds are awarded to Kansas State University, which 
allocates the money to Kansas State University scientists working on 
sorghum.
    Question. When was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The objectives of this project, which began in 1997, are to 
develop sorghum parental lines with genetically longer grain fill 
duration and identify changes in management necessary to optimize grain 
production in these lines. Five years or more are required to 
accomplish the objectives. The first objective has been completed. The 
researchers expect to complete the next three original objectives by 
2004 and subsequent objectives by 2006. Preliminary results have 
contributed toward the understanding of factors controlling grain yield 
and the development of higher yielding sorghum cultivars for Kansas.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project is subjected to the institutional review and 
approval process, as well as review by an agency scientist. In 
addition, stakeholder input was obtained through formal and informal 
methods. The institutional review of the project confirmed that high 
priority issues of the sorghum industry in Kansas and other sorghum 
producing States were being addressed.

        GRASS SEED CROPPING SYSTEMS FOR SUSTAINABLE AGRICULTURE

    Question. Please provide a description of the research that has 
been funded under the Grass Seed Cropping Systems for Sustainable 
Agriculture grant.
    Answer. This program was developed to provide management systems 
for sustainable grass seed production without field burning of the 
straw residue following harvest which results in adverse air quality 
problems. Grass seed yields are often significantly reduced the 
following season if the residue is not burned.
    Funds from this grant are awarded competitively to scientists at 
Oregon State University, the University of Idaho, and Washington State 
University engaged in research on grass seed production. Each award has 
passed a merit review by peer scientist.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes that according to 
information provided by technical committees representing researchers 
and the grass seed industry, the need for this research is to develop 
sustainable systems of seed production that do not depend on field 
burning of straw residue. Much of the grass seed for the United States, 
including lawn grasses, is produced in the area. Field burning of straw 
residue creates unacceptable levels of air pollution and yields of some 
cultivar decline without burning.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal for this project is to develop grass seed 
production systems that do not depend on field burning of straw 
residue. To date, joint planning by State experiment station 
administrators and researchers from the three States with industry 
input have developed an integrated regional research effort to solve 
the problem.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1994. 
The appropriation for fiscal year 1994 was $470,000, and for fiscal 
years 1995-2000, $423,000 each year. A total of $3,008,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal support for this project in fiscal year 
1994 was $266,055, $298,052 for fiscal year 1995, $282,053 in 1996 
$301,650 in 1997, $310,700 in 1998, and $346,500 in 1999.
    Question. Where is this work being carried out?
    Answer. The research will be conducted by the three State 
agricultural experiment stations in Idaho, Oregon and Washington.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Completion of the initial objectives was anticipated to 
take five years and, were partially completed in 1999. Revised goals 
leading to application of new management systems have been developed 
and should be completed in 2004.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The entire project is reviewed annually by a steering 
committee for focus and relevance. The combined proposal is reviewed by 
the agency before funds are awarded.
    Considerable progress has been made toward identifying the 
consequences of phased out field burning of straw residue on grass seed 
production. Current and future effort are directed toward development 
of sustainable systems without field burning. This program is subject 
to annual comprehensive evaluation by a team of peer scientist, 
industry representatives, and farmers. The results are used to guide 
research for the next year. Each proposal is subjected to the 
institution project approval process and reviewed by the agency 
National Program Leader.

                         HUMAN NUTRITION, IOWA

    Question. Please provide a description of the work that has been 
funded under the Human Nutrition, Iowa grant.
    Answer. This research aims to develop animal and plant foods with 
nutritionally optimal fat content and to improve utilization of foods 
containing non-nutrient health protectants, components that may reduce 
health risks. The research includes food production and processing, 
human and animal nutrient utilization, consumer food choices, and 
economic impacts of designed food to support optimal nutrition. The 
fiscal year 1999 grant supports research efforts of 30 investigators 
from seven disciplines through June 2000. CSREES requested that the 
university submit a grant proposal for fiscal year 2000 which is now 
under CSREES merit review.
    Question. According to the principal researcher, what is the 
national, regional or local need for this research?
    Answer. The research addresses food quality, nutrition and optimal 
health. Much of the research focuses on improving the nutritional 
quality of foods important to the economy of the Midwest, while making 
those improvements economically feasible. Ongoing research focuses on 
increasing health protective lipids and plant chemicals in human foods. 
Such foods have recently been called functional foods and the 
development of functional foods is of high priority to the food 
industry. Recent strategies have included genetic modification of plant 
foods for animal and human diets.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the Center for Designing Foods to Improve 
Nutrition, the administrative unit for this grant, is to improve human 
nutrition and health maintenance by determining how to improve animal 
and plant food fat content and how to increase availability of health-
protectant factors in the human food supply.
    The Center's research group on soybean health effects has 
established an international reputation for the soybean isoflavone 
database. Studies of isoflavone absorption and bioavailability 
indicated different human phenotypes in the intestinal breakdown of 
isoflavones. Ongoing studies are determining genetic and environmental 
factors responsible for these differences. Results suggest that 
consumption of soybeans with isoflavones during menopause help to 
maintain bone density. One project focuses on the structural features 
of flavones and related compounds that are effective in preventing 
colon cancer. Results suggest that combining flavonoids at low doses 
may enhance the ability in prevention of colon cancer.
    Additional projects are focusing on other phytochemicals that are 
widely distributed in plant foods and may account for many of the 
beneficial properties associated with eating fruits and vegetables. 
Another project has identified a bioactive compound from cinnamon that 
may potentiate the action of insulin to help overcome insulin 
resistance in type II diabetics. Recent research using the Center's 
unique analytical facilities determined that a normal dietary intake of 
the carotenoid, lutien, interferes with the generation of vitamin A 
from beta-carotene, a major carotenoid precursor for vitamin A.
    Other accomplishments include development of strategies for 
enriching yogurt, milk, eggs and pork with conjugated linoleic acids 
commonly called CLA. These compounds have unique cancer preventive 
properties and are derived from animal fats. Eggs were shown to be a 
particularly good human food for increasing dietary CLA. Other ongoing 
research identified fractions of human milk that enhance iron 
absorption by human colon cells. Such a milk factor was long expected 
to be responsible for the unique high iron absorption by human infants 
fed mothers' milk. The identification of this factor will have 
important benefits for infant feeding and for improving iron 
fortification. In the area of behavior modification, Center scientists 
developed a two-credit college course for freshmen that successfully 
prevented weight gain, whereas control students who did not participate 
gained 7.8 kilograms over the sixteen-month study period.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1991 
with an appropriation of $300,000. The fiscal years 1992-1993 
appropriation was $500,000 per year; $470,000 in fiscal year 1994; 
$473,000 per year in fiscal years 1995 through fiscal year 2000. A 
total of $4,608,000 has been appropriated.
    Question. What are the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were as follows: $293,000 university, $312,869 industry, and $14,000 
miscellaneous in 1991; $90,000 State appropriations, $473,608 
university, $131,160 industry, and $116,560 miscellaneous in 1992; 
$307,500 State appropriations, $472,081 university, and $222,267 
industry in 1993; $486,000 university and $254,000 private in 1994; 
$210,000 university and $200,000 private in 1995; $613,770 university 
and $207,811 private in 1996; $690,736 university and $458,000 private 
in 1997; $502,124 university and $700,000 private in 1998; and $363,000 
university, $3,109,000 private and $2,617,000 other Federal in 1999.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at the Center for Designing 
Foods to Improve Nutrition, Iowa State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original overall objective to design foods to improve 
nutrition is continuing to be addressed. A new set of related 
objectives will be completed in 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The grant proposals for fiscal years 1998 and 1999 have 
undergone extensive scientific peer review by the grantee. Progress and 
objectives were further reviewed in May 1999, by the Center's newly 
formed External Advisory Council and their recommendations are being 
implemented.

                       HUMAN NUTRITION, LOUISIANA

    Question. Please provide a description of the work that has been 
funded under the Human Nutrition, Louisiana grant.
    Answer. Obesity remains a worldwide epidemic. The grant entitled 
``Dietary Fat and Obesity'' examines three aspects of this problem. 
Will the replacement of dietary fat reduce body weight in overweight 
men? Will fluctuations in daily fat intake influence the ability to use 
fat? How do good and bad fatty acids produce their differences?
    Question. According to the principal researcher, what is the 
national, regional or local need for this research?
    Answer. If dietary fat plays a role in the epidemic of obesity, 
reducing fat intake might help alleviate its consequences. In 
collaboration with industry, the effects of a commodity-derived fat 
substitute made from sugar and soybean oil, which can lower the intake 
of available fat, is under investigation.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The overall goal of this grant is to identify the basis for 
the susceptibility to obesity of people who eat high-fat diets and to 
understand how they differ from those people who are resistant to 
becoming obese when eating a high-fat diet. In the first project, 
researchers have just completed a year-long feeding study in which one 
group received a standard diet that was compared with two low-fat 
diets. The data that are now being analyzed suggest that overweight men 
lose weight when eating the special commodity-derived fat replacement, 
but not when eating a standard diet. In the second project, studies on 
the effect of varying the intake of fat from day to day suggest that 
the adaptation is similar to a single change. This implies important 
sensing mechanisms respond rapidly but are not well understood. Data 
from the third project, dealing with dietary fatty acids and insulin 
sensitivity, clearly show that trans fatty acids acutely increase 
insulin secretion and/or reduce insulin clearance, and that this effect 
is more pronounced in people with certain genetic characteristics. 
Longer-term feeding studies with trans fatty acids in healthy young men 
and women showed that trans fatty acids do not have strong effects on 
insulin action if a low-fat diet is consumed.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1991, 
and the appropriation for fiscal years 1991-1993 was $800,000 per year 
and for fiscal years 1994-2000 was $752,000 per year. A total of 
$7,664,000 has been appropriated.
    Question. What are the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were as follows: $523,100 State appropriations in 1991; $515,100 State 
appropriations and $2,216,606 private in 1992; $536,100 State 
appropriations and $940,000 private in 1993; $627,000 state 
appropriations and $3,775,000 private in 1994; $546,100 State 
appropriations and $3,100,000 private in 1995; $1,471,000 State 
appropriations and $2,488,000 private in 1996; $1,998,000 State 
appropriations and $2,104,000 private in 1997; $987,000 State 
appropriations and $1,892,000 private in 1998; and $1,004,000 State 
appropriations and $3,136,000 private in 1999.
    Question. Where is this work being carried out?
    Answer. Research will be conducted at the Pennington Biomedical 
Research Center, Louisiana State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original overall objective was to understand the 
relationship of dietary fat to the development of obesity, and this 
objective hasn't changed. The anticipated completion date for the 
specific related objectives is 2001. The objectives to be completed 
over the remaining time of the grant will be reviewed by an external 
advisory team.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. In March 1999 an on-site panel of researchers evaluated the 
proposed objectives and experimental protocols. The critiques from this 
site visit were used to revise the final proposal. Another site visit 
is planned in 2000 to assess the progress, and evaluate a new set of 
relative objectives, and future research protocols.

                       HUMAN NUTRITION, NEW YORK

    Question. Please provide a description of the work that has been 
funded under the Human Nutrition, New York grant.
    Answer. This grant continues to bring together investigators who 
focus on issues that range from improving our understanding of key 
roles of nutrients at the molecular level to the development of 
improved strategies to enable consumers to adopt newly created 
knowledge easily and effectively. At the molecular end of the spectrum, 
emphasis is given to nutrient-gene interactions and at the consumer 
end, emphasis is given to the role that a supportive environment plays 
in enabling consumers to make desired changes in their eating patterns. 
The fiscal year 1999 grant supports research through September 2000 and 
the focus shifted to address the individualization of nutrient 
requirements from a broad multidisciplinary perspective.
    Question. According to the principal researcher, what is the 
national, regional or local need for this research?
    Answer. In the past decade, and in particular the past five years, 
there has been an explosion of knowledge concerning individual 
differences in the genetic control of metabolism which underlay disease 
processes and health maintenance. Because metabolism cannot exist 
without the provision of nutrients, and because nutrients influence 
genetic control, an understanding of genomics is fundamental to the 
development of nutritional sciences, from the biological to the social. 
Further, knowledge of individuality will become critical for the 
development of appropriate nutrition programs and policies, ranging 
from food system concerns, to the philosophy and design of dietary 
guidelines and guidance, to the implementation and evaluation of food 
assistance programs. For all of these applications there is a need for 
an integrated consideration of individual differences, not just in 
biology, but also in personal and cultural experience with food and 
other lifestyle and environmental exposures.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. Dietary Guidelines emphasize a reliance on plant-based 
foods. This emphasis is designed to control caloric consumption, reduce 
fat intake, modify the composition of ingested fats, enhance the 
consumption of foods associated with reduced cancer risk and 
simultaneously insure that nutrient needs are met in the proportion 
that is recommended. The researchers continue to address information 
gaps that relate to these health goals and to the policy aims for their 
implementation and that limit the more effective enhancement of 
consumer practices. This grant supported 25 research and outreach 
projects over the past year including 14 new awards in fiscal year 
1999.
    Selected highlights of the work in community outreach included the 
expansion of the Sisters in Health program to ten additional counties 
in New York State. This research-based nutrition education program 
encourages low income women to eat more fruits and vegetables through 
active experiences with foods in a positive social setting and has 
reported a 30 percent increase in fruit and vegetable consumption by 
participants. Another project supported the Community Food Security 
planning sessions that were held in six counties in New York State. 
Members of the groups have incorporated the insights and plans obtained 
from these sessions into their existing programs and activities.
    The new initiative in genomics led to a study of the regulation of 
folate metabolism during neural development in a mouse model system. 
Disruption in folate metabolism due to nutritional deficiency and/or 
genetic predisposition is responsible for the occurrence of 
approximately 60 to 70 percent of neural tube birth defects including 
spina bifida. Using transgenic and gene knock-out approaches, 
researchers identified key genes that regulate folate metabolism 
exclusively during neural development. They are elucidating the 
molecular association between certain genes and nutrient status in the 
disease process, thereby defining the relative contribution of both 
nutrition and genetics in these folate-related birth defects. Other 
work in genomics include a study of the potential role of Receptor 
Associated Protein as a chaperone of lipoprotein lipase by employing 
mice with deletion of a critical gene. Lipoprotein lipase is a pivotal 
enzyme that regulates lipid metabolism. The enzyme is found mainly in 
adipose tissue and muscles but not in the liver. Recent work may have 
identified the molecular basis for the lack of expression of this 
enzyme in the liver.
    Question. How long has this work been underway, and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1989, $450,000; fiscal years 1990-1991, $556,000 
per year; fiscal years 1992-1993, $735,000 per year; fiscal year 1994, 
$691,000; fiscal years 1995-2000, $622,000 each year. A total of 
$7,455,000 has been appropriated.
    Question. What are the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were as follows: $154,056 State appropriations and $2,456 private in 
1991; $238,430 State appropriations and $60,746 private in 1992; 
$19,401 State appropriations and $22,083 private in 1993; $202,441 
State appropriations and $1,175 private in 1994; $296,794 State 
appropriations in 1995; $348,127 in State appropriations and $39,593 
private in 1996; $133,162 State appropriations in 1997; $8,185 
university appropriations, $166,752 State appropriations, and $7,905 
private in 1998; and $6,395 university appropriations, $164,244 State 
appropriations, and $7,414 private in 1999.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at Cornell University, New 
York.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original overall objective to integrate nutrition goals 
and food systems is continuing to be addressed in fiscal year 1999. The 
university changed the focus to complement the university's initiative 
in genomics and to human and social science issues that relate to food 
and nutrition. Progress has been consistent with the proposed time 
lines. They anticipate completing the specific related objectives in 
2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. CSREES made a site visit on May 27, 1999, to evaluate the 
change in focus. The grant proposal for fiscal year 1999 was also 
subjected to independent peer review coordinated through the Cornell 
Agricultural Experiment Station. Based on reviewer recommendations, two 
proposed objectives were not funded and modifications were made to 
experimental designs of other projects.

                   HYDROPONIC TOMATO PRODUCTION, OHIO

    Question. Please provide a description of the research that has 
been funded under the Hydroponic Tomato Production, Ohio grant.
    Answer. The Cooperative State Research, Education, and Extension 
Service has requested the university to submit a grant proposal that 
has not yet been received. Cultural practices, greenhouse design, and 
economics will be evaluated for Ohio and adjacent areas. Tomato 
production will be evaluated as an alternative enterprise to other 
crops.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The research is needed to develop and evaluate management 
protocols for economical production of green houses tomatoes as an 
alternative crop for Ohio and adjacent areas.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goals of the research is to provide 
recommendations for management systems for successful operation of 
green house tomatoes as an alterative crop.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1998 
and the appropriation for fiscal year 1998 was $140,000, and for fiscal 
years 1999 and 2000 is $200,000 each year. A total of $540,000, has 
been appropriated.
    Question. What is the source and amount of non-Federal provided by 
fiscal year?
    Answer. The non-Federal funds provided for support of the project 
are $19,400 for fiscal year 1998 and $24,500 for 1999.
    Question. Where is this work being carried out?
    Answer. The research will be conducted by the Ohio State 
Agricultural Experiment Station at selected locations in Ohio.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The principal investigator for this project anticipates 
completion of the original objectives in fiscal year 2002. New 
objectives related to grass breeding are projected for completion in 
2004.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project was subjected to a peer review in the 
institution and again reviewed by the agency National Program Leader 
when initialed in 1998.

              ILLINOIS-MISSOURI ALLIANCE FOR BIOTECHNOLOGY

    Question. Please provide a description of the research that has 
been funded under the Illinois-Missouri Alliance grant.
    Answer. The Illinois-Missouri Alliance has initiated a competitive 
grants program in agricultural biotechnology for research in targeted 
priority areas of need related to corn and soybeans. The scope of 
interest includes production, processing, marketing, utilization, 
inputs and support services, along with economic, social, 
environmental, and natural resource concerns. The Alliance has 
solicited research project proposals from scientists at Illinois and 
Missouri and other midwestern institutions, and has conducted peer 
reviews for science quality, commercial feasibility and potential 
economic impact to select the proposals that will be funded. In 1999 
the Alliance awarded three new research grants at three institutions 
totaling $590,000.
    In 1998 the Alliance started an on-line magazine called AgBioForum 
devoted to the economics and management of agricultural biotechnology. 
The purpose of AgBioForum is to provide unbiased timely information and 
new ideas leading to socially responsible and economically efficient 
decisions in science, public policy, and private strategies pertaining 
to agricultural biotechnology. In its first year of operation, 
AgBioForum experienced over 145,000 hits from individuals in 
universities, industry, government, and international organizations.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal investigator has indicated that the goal of 
the Alliance is the pre-commercial development of emerging 
biotechnology discoveries for agriculture. The midwestern region 
produces more than half of the nation's output of corn and soybean 
crops, and is critical to domestic food security and United States 
competitiveness in global agricultural markets. Alliance grants are 
awarded on a regional basis to advance corn and soybean production in 
the Midwest. The Alliance is implementing a research strategy that it 
hopes will generate important biotechnological developments that are 
rapidly adaptable to unique local soil, climatic and socioeconomic 
conditions of the region. Alliance grants are awarded to projects with 
a clearly defined marketable product or service derived from 
biotechnology research.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. Fiscal year 1999 was the fifth year of funding for the 
Alliance. The research program focuses on the two major commodity 
crops, corn and soybeans, as produced, processed and marketed in the 
midwest. The goal of this biotechnology program is to fund integrated 
research and development projects that will lead to specifically 
defined practical technologies for commercialization. The projects 
funded in fiscal year 1999 include efforts to: (1) engineer maize to 
produce an isoflavone that is important in human health, (2) develop 
molecular markers for resistance of soybean to the sudden death 
syndrome fungus and then move resistance into commercial cultivars, and 
(3) to develop the genetic basis for asexual seed production in 
tripsicum, a close relative of maize.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through 2000?
    Answer. The work supported by this grant began in fiscal year 1995. 
The appropriations for fiscal years 1995 and 1996 were $1,357,000 each 
year, for fiscal year 1997, $1,316,000, and for fiscal years 1998 
through 2000, $1,184,000 per year, bringing the total appropriations to 
date to $7,582,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The Alliance has not specified a required amount of 
matching funds, but it is expected that most projects will have 
commitments for significant direct and in-kind non-Federal support. 
Since Alliance projects are still underway, the exact amount of the 
non-Federal contribution is still unknown. The non-Federal contribution 
is expected to be substantial, and a system for accounting for future 
non-Federal contributions is in place.
    Question. Where is this work being carried out?
    Answer. The research projects identified for funding in fiscal 
years 1995 through 1999 are being conducted at the University of 
Illinois, the University of Missouri, Iowa State University, 
Northwestern University, Southern Illinois University, and the 
Agricultural Research Service.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Each project proposal for Alliance funding has a target 
date for completion. The four initial projects were three-year studies 
with anticipated completions at the end of fiscal year 1998. Most of 
the second and third rounds of projects are also three-year studies 
with anticipated completions at the end of fiscal years 1999 and 2000, 
respectively.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The Illinois-Missouri Biotechnology Alliance was evaluated 
for scientific merit by an agency peer review panel on February 25, 
1999. The panel recommended approval of the project pending receipt of 
supplemental information on administrative aspects of the project. The 
supplemental information was received and we are satisfied that the 
program is being administered in compliance with the purpose of the 
grant. A peer review panel will be convened to re-evaluate the project 
upon receipt of a proposal for fiscal year 2000.

           IMPROVED DAIRY MANAGEMENT PRACTICES, PENNSYLVANIA

    Question. Please provide a description of the research that has 
been funded under the Improved Dairy Management Practices grant.
    Answer. The research focuses on developing methods to help dairy 
farmers in the adoption of new technology and management practices 
which lead to improved dairy farm profitability. Individual research 
projects funded by the grant are determined by a competitive peer 
review process administered by the Institution using peers from 
Institutions located primarily in other States.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes the local need is for the 
identification and implementation of profit enhancing management 
strategies for Pennsylvania dairy farms in response to changing market 
conditions and emerging technologies. The current focus is to develop 
economically-viable solutions to issues confronting Pennsylvania dairy 
farmers such as dealing with animal waste in an environmentally-
friendly manner, reducing the cost of forage production systems, 
including grazing systems, and to develop a better understanding of 
decision processes by dairy farmers.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goals of this research remain the same, which 
is the development of methods to help dairy farmers in the adoption of 
new technology and management practices which lead to improved dairy 
farm profitability. A farm management survey is complete and analysis 
of results is in progress. Farm financial models have been developed 
and are undergoing a field test on selected farms. Workshops to teach 
elements of business management to dairy farmers have been conducted, 
and survey instruments are in place to monitor effectiveness of 
workshops. Research is currently underway to develop improved models 
for nutrient management on northeastern dairy farms, to evaluate the 
potential role of intensive grazing systems to replace harvested 
forage, and to better understand how decisions are made by dairy farm 
families. Refinement of an expert computer-based system to assist dairy 
farmers in controlling the udder disease, mastitis, is underway. A 
study to evaluate the induction of lactation on dairy profitability is 
underway. An additional study to evaluate the impact of improved 
protein nutrition during late gestation on dairy cow performance has 
been initiated.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1992 
and the appropriation for fiscal years 1992 and 1993 was $335,000 per 
year. The fiscal year 1994 appropriation was $329,000 and $296,000 each 
year in fiscal years 1995-2000. A total of $2,775,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. During fiscal year 1992, $354,917 were from State funds, 
and $16,000 from Industry, for a total of $370,417. During fiscal year 
1993, $360,374 were from State funds and $16,000 from Industry for a 
total of $376,374. Information is not available for fiscal years 1994-
1999.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at Pennsylvania State 
University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The principal researcher anticipated completion of the 
original objectives by March 1994. The original objectives were met. 
Availability of continued funding has permitted the institution to 
develop a competitively awarded grant program within the institution to 
address priority issues related to management of dairy farms. Proposals 
are reviewed and ranked by peers from other institutions prior to 
award. It is anticipated that awards from the fiscal year 2000 
appropriation will be complete in September 2002. Keeping with the 
Administration's policy of awarding research grants competitively, no 
further Federal funding for this grant is requested.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency accepts technical review of specific proposals 
funded by this grant on an annual basis. The overall proposal is review 
by the agency on an annual basis. In addition, technical staff has 
conducted on-site review of the program in 1993 and in 1995. The 
overall objective of the work funded by this grant has direct 
relationship to the development of Integrated Management System as well 
as to aspects of animal production systems on animal well-being and 
impact on the environment.

             IMPROVED EARLY DETECTION OF CROP DISEASE, N.C.

    Question. Please provide a description of the research that has 
been funded under the grant.
    Answer. CSREES has requested the university to submit a grant 
proposal that has not yet been received.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal investigator is preparing to submit a 
proposal, but at this time no additional information is available.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and the appropriation for fiscal year 2000 is $170,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
are not known at this time.
    Question. Where is the work being carried out?
    Answer. Research will be conducted at the University of North 
Carolina-Greensboro.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. This is a new grant.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This is a new project that will undergo merit review when 
received.

                   IMPROVED FRUIT PRACTICES, MICHIGAN

    Question. Please provide a description of the work that has been 
done under the improved fruit practices grant.
    Answer. Funds from this grant will be awarded competitively to 
scientist at Michigan State University working with these crops. This 
research will involve a multidisciplinary approach to reduce chemical 
use on apple, blueberry, and sour cherry, three important Michigan 
fruit crops, and improve the management of dry edible beans and sugar 
beets. Research will be conducted on crop management techniques and 
reduced chemical use.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes Michigan's need for this 
research is to develop and maintain/expand their tree fruit and small 
fruits industry. There is a need to improve the culture and management 
of dry edible beans and sugar beets.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The planned objectives of the research are to reduce the 
chemical contamination of the environment from fruit production and 
improve production practices for beans and beets through 
multidisciplinary research, including pesticides, and the development 
of new nonchemical production methods.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1994. 
The appropriation for fiscal year 1994 was $494,000, and for fiscal 
years 1995-2000, $445,000 each year. A total of $3,164,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
in fiscal year 1994 were $437,338 from State appropriations and 
$135,000 from industry, for fiscal year 1995 were $574,494 from State 
appropriations and $127,000 from industry and a total of $908,969 for 
1996. The non-Federal funds for 1997 totaled $752,500. The non-Federal 
funds for 1998 total $729,145, and for 1999 $1,332,300.
    Question. Where is this work being carried out?
    Answer. Research will be conducted at Michigan State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The Principal Investigators have reported significant 
progress toward improved cultural practices for these speciality crops 
which is expected to reduce the need for chemical pesticides, and 
expect to complete the original objective by the end of fiscal year 
1999. Long-term goals are expected to take an additional five years 
with a projected completion date of 2004.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This project has not been subjected to a comprehensive 
review. The annual proposals including all of its sub projects are 
subjected to peer review before submission to the Cooperative State 
Research, Education, and Extension Service before they are approved. 
The project has progress toward the objective of developing management 
practices and strategies for economical production of specialty crops 
in Michigan with reduced chemical pesticide use.
    This program is evaluated at the end of each research cycle and 
priorities adjusted for the next years funding. The evaluation is 
performed by scientists at Michigan State University.

                 INFECTIOUS DISEASE RESEARCH, COLORADO

    Question. Please provide a description of the research that has 
been conducted under the Infectious Disease Research, Colorado grant.
    Answer. The purpose of this project is to establish a 
multidisciplinary research center to study infectious animal diseases 
which have a critical economic impact. The ``Center for Economically 
Important Infectious Animal Diseases'' will work collaboratively with 
universities and State and Federal agencies. The focus will be on the 
impact of such diseases on international trade.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for the 
research?
    Answer. The need for this research is to provide valid risk 
assessment models for diseases which affect international trade and 
animal and public health. Livestock producers and the industry need 
this type of information to enable them to make correct disease 
management decisions. The Center will utilize commodity advisory groups 
to prioritize specific disease problems and will focus on those 
diseases with the greatest potential for economic impact.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal is to establish a regional center that will foster 
interactive work on risk assessment, disease control, and minimize the 
economic impact of disease outbreaks in livestock. The Center has been 
successful in obtaining additional funding from a variety of sources to 
initiate studies on diseases such as vesicular stomatitis and 
tuberculosis. The coordinating structures have been established and the 
Center is poised to make excellent progress during the next year.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1999 
with appropriations in fiscal year 1999 of $250,000 and in fiscal year 
2000, $255,000, for a total of $505,000.
    Question. What is the source and amount of non-Federal funds by 
fiscal year?
    Answer. In fiscal year 1999 the project also received the following 
funds: other Federal agency grants, $85,750; private foundation grants, 
$39,488; State, $33,120.
    Question. Where is this work being performed?
    Answer. The research is being conducted at the College of 
Veterinary Medicine, Colorado State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date is 2003. The work is 
proceeding on the designated schedule and it is expected that the 
objectives will be met in a timely manner.
    Question. When was the last agency evaluation of this project? 
Provide a summary of it.
    Answer. Because the project was just initiated in fiscal year 1999, 
no evaluation has been done at this time. However, the first review 
will be conducted later in fiscal year 2000, on the first anniversary 
of the initiation of the project.

          INSTITUTE FOR FOOD SCIENCE AND ENGINEERING, ARKANSAS

    Question. Please provide a description of the research that has 
been funded under the Institute for Food Science and Engineering grant.
    Answer. As the flagship center for the Institute of Food Science 
and Engineering, the Center for Food Processing and Engineering has as 
its objectives to facilitate and encourage value-added research and 
improve the processing of agricultural products.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes the Institute will 
provide technical support and expertise to small and mid-sized food 
processors that usually do not possess adequate expertise in-house. The 
economy of the southern region will be improved through the creation of 
new jobs and a high multiplier effect from the research. The Institute 
will develop and disseminate scientific information and provide 
educational programs related to value-added further processing, storage 
and marketing of food products. These efforts will assure food safety, 
improve the sensory and nutritional quality of food and meet the 
nutritional requirements and food preferences of a changing society.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research is to establish an 
Institute of Food Science and Engineering at the University of 
Arkansas-Fayetteville. The Institute for Food Science and Engineering 
and the Center for Food Processing and Engineering are operating. 
Research projects at the Center include: postharvest management 
practices for rice, such as studies of physicochemical properties, 
bacterial load of rice products, and milling systems, and development 
of methods to improve the texture and dill flavor of pickles, and the 
color of acidified pickled vegetables, with estimated impact to the 
pickle industry of $500,000 annually. Researchers have developed 12 
mechanized systems for total vineyard mechanization which maintain or 
improve juice and wine quality. Research on physicochemical properties 
of potatoes and bitterness in carrots and have had estimated economic 
impacts of several million dollars. Research on elecrochemical flow-
through systems for chicken processing water and near infrared/mid-
infrared imaging for large scale fruit processing have important 
applications in industry. Institute staff, including the Descriptive 
Sensory Panel, have assisted both national food processing companies 
and small commercial kitchens in process development, with an impact of 
up to $2,000,000 annually on the Arkansas vegetable processing 
industry. The Institute's Center of Excellence presents workshops in 
the United States as well as planning train the trainer courses in 
Mexico and Central America to improve the safety of imported fresh 
fruit and vegetables. To date, 70 publications, two IMPACT reports and 
a quarterly newsletter have served to keep the industry and fellow 
scientists informed of research and technology transfer activities.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1996. 
The appropriation for fiscal years 1996 and 1997 was $750,000 each 
year, $950,000 for fiscal year 1998, and $1,250,000 each for fiscal 
years 1999 and 2000. A total of $4,950,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year 2000?
    Answer. The non-Federal funds and sources provided for this grant 
include $184,700 in State funds and $93,000 from industry in fiscal 
year 1996, and $187,357 in State funds and $320,403 industry funds in 
fiscal year 1997. Thus far in fiscal year 1998, industry has provided 
$93,599, with firm commitments of an additional $55,000. The State has 
also provided facilities and administrative and clerical support 
estimated at $303,694 through June 30, 1998. The Institute has also 
received $48,000 to establish the Food and Agriculture Organization 
Center of Excellence.
    Question. Where is this work being carried out?
    Answer. Research will be conducted at the University of Arkansas at 
Fayetteville.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. The principal researcher anticipates that work will be 
completed on the original goals in fiscal year 2002. The goals of this 
project related to establishing the centers of the Institute have not 
been fully met. The Center for Food Processing and Engineering and the 
Center for Food Safety and Quality are in operation; activation of the 
Center for Human Nutrition is scheduled for 1999. The objectives 
related to research and service to industry, food entrepreneurs and the 
general public would continue to be ongoing.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. An agency science specialist conducts a merit review of the 
proposal submitted in support of the appropriation on an annual basis. 
In a review of the proposal on April 14, 1999, the assessment was that 
satisfactory progress was demonstrated in meeting the goals of the 
Institute.

                       INTEGRATED PEST MANAGEMENT

    Question. Please provide a description of the research that has 
been funded under the Integrated Pest Management research grant.
    Answer. This research grant develops new pest management tools to 
address critical pest problems identified by farmers in an agricultural 
production region. Funds are distributed through the Regional 
Integrated Pest Management--IPM--Grants Program, which provides 
competitively-awarded grants to develop new pest management tactics to 
replace management tools lost as a result of regulatory action, pest 
resistance, and other factors. The Regional IPM Grants program supports 
research and extension projects that identify new pest management 
tactics, validate the effectiveness of new tactics in a production 
setting, and help producers implement these tactics by providing 
education and training programs. Proposals submitted to the Regional 
IPM Grants Program undergo technical and merit review at the regional 
and national levels.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research.
    Answer. The ability of the Nation's agricultural production system 
to keep pace with domestic and global demand for food and fiber is 
dependant on access to safe, profitable, and reliable pest management 
systems. For a variety of reasons, including the Food Quality 
Protection Act of 1996--FQPA--and pest resistance, many of the chemical 
control options farmers and other pest managers have relied on for many 
years are no longer available. The loss of these important tools is 
likely to continue at an accelerated rate over the next several years, 
and will have significant impacts on pest management systems in the 
United States over the next decade. The ``minor use'' crops--high value 
crops grown on relatively few acres--will be particularly hard hit 
during this period. For these reasons and others, it is essential that 
farmers be provided with new pest management tools and better 
information so they can remain competitive in today's global 
marketplace. These research grant funds are an important part of the 
Department's plan to assist farmers in finding effective pest 
management alternatives so they can adjust to changes in pesticide 
availability resulting from implementation of FQPA.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this research is to provide farmers with new 
pest management options that allow them to reduce dependance on 
pesticides, improve profitability, and protect vital natural resources. 
The research supported by this research grant has made important 
contributions to increasing knowledge about new approaches to pest 
management, but the need for continued investment in this area of 
research is greater than ever. The following are some accomplishment 
examples:
  --In Massachusetts, an Integrated Pest Management approach for fresh 
        sweet corn was developed using early season applications of 
        Bacillus thuringuienses followed by an application of vegetable 
        oil. This system is effective and economical and meets the 
        requirements for organic production and allows small-acreage 
        sweet corn growers to produce the crop without relying on 
        insecticides.
  --In Arkansas, a ``friendly'' fungus was discovered that attacks 
        cotton aphids, a major pest of cotton. The aphid fungus saves 
        Arkansas cotton growers millions of dollars each year by 
        reducing the need to apply aphid insecticides.
  --In Kentucky, researchers developed a simple management system for 
        Japanese beetles that allows landscapers to determine the 
        optimum timing for insect management. This management system 
        has resulted in better use of resistant varieties and has 
        reduced pesticide use.
    Question. How long has this work been underway and how much as been 
appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1981, $1,500,000; fiscal years 1982 through 1985, 
$3,091,000 per year; fiscal years 1986 through 1989, $2,940,000; fiscal 
year 1990, $2,903,000; fiscal year 1991, $4,000,000; fiscal years 1992 
and 1993, $4,457,000 per year; fiscal year 1994, $3,034,000; and fiscal 
years 1995-2000, $2,731,000 each year. A total of $60,861,000 has been 
appropriated since fiscal year 1981.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. A study of the sources of non-Federal funds that contribute 
to this research effort was conducted in 1993-94 with the following 
results. In fiscal year 1993, State appropriations, $841,017, product 
sales, $33,987, industry grants, $17,081, and other, $31,737; for 
fiscal year 1994, State appropriations, $2,303,458, product sales, 
$77,157, industry grants, $210,110, and other, $216,552. These studies, 
which have not been repeated since 1994, demonstrate a trend toward 
greater annual State investments in Integrated Pest Management 
programs.
    Question. Where is the work being carried out?
    Answer. Scientists in all States are eligible to compete for this 
funding on a competitive basis. This research is currently being 
carried out by Colleges of Agriculture in more than 30 States.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Due to the passage of FQPA in 1996, the economic and 
environmental pressures facing U.S. agriculture today are at least as 
great today as they were in 1981 when Federal funds were first 
appropriated for this research grant. It is important for government to 
address the needs of agricultural producers by supporting research and 
extension efforts to develop alternative pest management approaches. It 
is anticipated that the need for this work will only increase as new 
pests emerge, existing pests become resistant to current control 
methods, as new pesticide regulations are implemented, and as national 
and international markets shift.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Evaluation of this project is a continuous process. 
Projects funded by this research grant are awarded through a 
competitive process that includes relevance, technical, and merit 
review by multi-disciplinary panels. Progress reports are reviewed to 
evaluate accomplishments and special attention is given to studies 
involving new control strategies relating to at-risk sites with pest 
management usage patterns impacted by FQPA implementation.

                INTEGRATED PRODUCTION SYSTEMS, OKLAHOMA

    Question. Please provide a description of the research that has 
been funded under the Integrated Production Systems, Oklahoma grant.
    Answer. This grant focuses on the development of efficient 
management systems for production of watermelons and blackberries under 
intensively-managed conditions. The work will address biotic and 
abiotic production components under Southeastern Oklahoma conditions 
for use in production guidelines. This will include planting densities, 
fertilizer studies, weed management and insect and disease control.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for the 
research.
    Answer. The principal researcher believes the need for this 
research is focused on the local area of Southeastern Oklahoma, an area 
that is economically-depressed and in need of alternative crops to 
diversify the dominant cow/calf livestock production.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to develop new and 
alternative crops to supplement and diversify the cow/calf livestock 
agriculture of Southeastern Oklahoma with emphasis on horticultural 
crops. Work to date has shown promise for strawberries, blackberries, 
cabbage, melons and blueberries. CD-ROM technology transfer to research 
results to support an expert system will be developed for grower use.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Work supported by this grant started in fiscal year 1984 
and the appropriations were: fiscal year 1984, $200,000; fiscal year 
1985, $250,000; fiscal year 1986, $238,000; fiscal years 1987-1989, 
$188,000 per year; fiscal years 1990-1991, $186,000 per year; fiscal 
year 1992, $193,000; fiscal year 1993, $190,000; fiscal year 1994, 
$179,000; fiscal years 1995-1998, $161,000 each year and fiscal years 
1999-2000, $180,000 per year. A total of $3,190,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were as follows: $165,989 State appropriations in 1991; $160,421 State 
appropriations in 1992; and $164,278 State appropriations in 1993. Non-
Federal support for 1994 was $141,850 for State appropriations. Funds 
for fiscal year 1995 were $129,552, for 1996 $146,000, for 1997 
$152,000, for 1998, $148,000; and for 1999 $151,000.
    Question. Where is this work being carried out?
    Answer. This research is being done at the West Watkins 
Agricultural Research and Extension Center at Lane, Oklahoma, a branch 
of the Oklahoma State Agricultural Experiment Station.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objectives of this project were to develop 
production systems for alternative crops with economic potential for 
southeastern Oklahoma. Each year's funding cycle has addressed specific 
crop and management objectives to be completed over two years time. 
These short term objectives have been met for each of the completed two 
year projects. However the original objective of developing alternative 
cropping systems is very long term and have not been completed. The 
current project is projected for completion in 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Each of the annual project proposals has been put through 
the institutions' review and is reviewed by an agency scientist before 
approval. In addition to the annual review of individual proposals, a 
comprehensive review of the Lane Agricultural Center, where this 
research is conducted, was conducted in 1993. This review revealed that 
work supported by this grant is central to the mission of that station 
and represents an important contribution to the agriculture of the 
area.
    This work has provided practical management information for farmers 
of southeastern Oklahoma that has improved their ability to 
economically-produce small fruit and vegetable crops. This project is 
evaluated internally at the end of each year in order to set priorities 
for the next year.
    international agricultural market structures & institutions, ky
    Question. Please provide a description of the research that has 
been done under the International Agricultural Market Structures and 
Institutions program.
    Answer. The International Agricultural Market Structures and 
Institutions project began late in fiscal year 1999 as a means of 
helping U.S. agriculture discover new ways to increase its global 
market share. The project analyzes food consumption trends and food 
distribution systems; evaluates the impact of actual and potential 
changes in local policies; identifies potential markets for food 
products produced in southern U.S. States.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. U.S. firms need to become more aggressive in international 
markets, but these markets are unfamiliar to many firms. The structure 
of international markets and the institutions that serve them are often 
different than in domestic markets, and the structures and institutions 
are continuously changing. Very few southeastern agribusinesses have 
the necessary research and intellectual resources to study 
international markets; they rely on their public institutions, such as 
the University of Kentucky, to assist them in discovering and 
exploiting export market windows.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal is to increase the international marketing success 
of American farmers and agribusinesses by increasing their 
understanding of international markets and the impact of policies that 
affect those markets.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1999. 
The appropriation for fiscal years 1999 and 2000 was $250,000 a year. A 
total of $500,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Non-Federal funding for this grant was $135,000 from State 
appropriations in 1999.
    Question. Where is this work being carried out?
    Answer. The work is being conducted at University of Kentucky in 
Lexington.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have these objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1999 was for a three-year project 
ending in 2002. Work is ongoing for the original objectives. Additional 
funds in 2000 will extend the project to 2003.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This was a new project in 1999 when CSREES performed a 
merit review of the original proposal and noted that: ``The University 
of Kentucky has faculty with expertise to conduct such a study. The 
principal investigator has been engaged in such work for several years, 
has conducted projects in other countries, and has been the 
university's director of international programs.''

                  INTERNATIONAL ARID LANDS CONSORTIUM

    Question. Please provide a description of the research that has 
been funded under the International Arid Lands consortium.
    Answer. Fiscal year 2000 is the seventh year that Cooperative State 
Research, Education, and Extension Service has funded the International 
Arid Lands Consortium. The Forest Service supported the program during 
fiscal year 1993 to develop an ecological approach to multiple-use 
management and sustainable use of arid and semiarid lands. Projects 
that began in 1996-1999 will continue to be funded to address issues of 
land reclamation, land use, water resources development and 
conservation, water quality, and inventory technology, and remote 
sensing. All proposals are peer reviewed and awarded competitively, 
whereby the principal investigator must be from a Consortium member 
institution.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes the consortium is devoted 
to the development, management and reclamation of arid and semi-arid 
lands in the United States, Israel, and elsewhere in the world. The 
International Arid Lands Consortium will work to achieve research and 
development, educational and training initiatives, and demonstration 
projects. The current member institutions are the University of 
Arizona, The University of Illinois, Jewish National Fund, Jordan's 
Higher Council for Science and Technology, New Mexico State University, 
South Dakota State University, Texas A&M University, Kingsville and 
Nevada's Desert Research Institute. Affiliate membership includes 
Egypt's Ministry of Agriculture and Land Reclamation Undersecretary for 
Afforestation. The United States Department of Agriculture's Forest 
Service works very closely with The International Arid Lands Consortium 
through a service-wide memorandum of understanding.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of the Consortium was and continues to be 
acknowledged as the leading international organization supporting 
ecological sustainability of arid and semi-arid lands. To date, 63 
projects have been funded, 43 of which are to conduct research and 
development, 11 for demonstration projects, and 9 for international 
workshops. Funds approximating $4.04 million have been used to fund 
these projects.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The International Arid Lands Consortium was incorporated in 
1991. Funds were appropriated to the Forest Service in 1993. Additional 
funds were received during each of the years that followed. $329,000 
has been appropriated from Cooperative State, Research, Education, 
Extension Service for fiscal years 1994 through 1998, and $400,000 for 
fiscal years 1999 and 2000 each for total appropriations of $2,445,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Members of the International Arid Lands Consortium have 
provided funds to support the Consortium office in Tucson, Arizona, and 
for printed materials as needed. Each member has provided travel and 
operations support for semi-annual meetings, teleconferences, and other 
related activities. In fiscal years 1993-1996, $60,000 in State 
appropriations were provided. Industry provided $84,083 and $100,000 in 
fiscal years 1993 and 1995, respectively. Additional funds of $34,000 
were received during 1996 from the Egyptian affiliate member to enhance 
future collaboration. Funds of $50,000 from industry were received 
during 1998-1999.
    Question. Where is this work being carried out?
    Answer. Research is currently being conducted at the University of 
Arizona, South Dakota State University, Texas A&M University, 
Kingsville, New Mexico State University, University of Illinois, 
Nevada's Desert Research Institute, and several research and higher 
education institutions in Israel, Jordan and Egypt.
    Question. What was the anticipated completion date for the original 
objectives of the projects? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives.
    Answer. All research and demonstration projects that started during 
1993-1995 have been completed. The projects started in 1996-1997 are 
expected to be completed within 12 months depending upon the nature of 
the project. Projects started during 1998-1999 will be completed within 
2 years. Several demonstration projects were completed and 6 
international workshops were held during 1994 through 1999. The 
International Arid Lands Consortium is an organization with long-term 
goals.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The cognizant staff scientist reviews the project semi-
annually and has determined that the research is conducted is in 
accordance with the mission of the agency.

                     IOWA BIOTECHNOLOGY CONSORTIUM

    Question. Please provide a description of the work that has been 
funded under the Iowa Biotechnology Consortium grant.
    Answer. This Consortium is the focal point for cooperative 
biotechnology research endeavors between Iowa State University, the 
University of Iowa and the City of Cedar Rapids to recover and utilize 
byproduct materials arising from new and emerging industries in 
biotechnology with an emphasis on fermentation wastes and agribusiness. 
Both fundamental and applied research studies are being conducted to 
reduce the burden of agricultural bioprocessing wastes on municipal 
waste management systems and to transform components of these 
agricultural wastes into commercially viable products. The overall 
project involves a coordinated approach by a diverse group of 
investigators, and funding decisions for individual studies within each 
participating institution are based on a competitive peer review 
process with letter and panel evaluations.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The environmental burden associated with agriculture and 
the agricultural processing industries is recognized as a growing 
problem in the United States. These researchers believe that 
technological breakthroughs are possible to recover and recycle energy, 
chemicals, and materials from agriculture-related wastes. Although 
these principal investigators are working with wastes that are 
generated in the State of Iowa, similar waste streams are generated by 
agricultural industries across the United States.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goals of this project were aimed at enhancing 
the recovery and utilization of by-product materials arising from new 
and emerging industries using biotechnology. Recycling agricultural 
wastes, isolating useful byproducts and developing value added 
processing remain the primary thrusts of the project. A cadre of 
scientists has been established by the Consortium to assist in finding 
uses for the by-product waste streams generated by agricultural 
processing. The Consortium is also making important progress in 
bioconversion, biocatalysis, membrane concentration, and bioseparation 
of by-products. Recently, new studies have been initiated on: value-
added products related to culture of polysaccharide-producing bacteria; 
screening of agricultural seed processing fractions for biocatalysts; 
conversion of lignocellulose to lactic acid; the use of waste by-
products as feeds for livestock and aquacultural species; composting 
strategies for waste streams; and exploitation of mico-organisms that 
colonize extreme environments found in food processing plants.
    Question. How long has this work been under way and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1989, $1,225,000; fiscal year 1990, $1,593,000; 
fiscal year 1991, $1,756,000; fiscal year 1992, $1,953,000; fiscal year 
1993, $2,000,000; fiscal year 1994, $1,880,000; fiscal years 1995-1996 
$1,792,000 each year; fiscal year 1997, $1,738,000; and in fiscal years 
1998 through 2000, $1,564,000 each year. A total of $20,421,000 has 
been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Non-Federal funds and sources provided for this grant were 
as follows: $623,803 from the State of Iowa, $42,813 from the city of 
Cedar Rapids in 1991; $768,287 from the State of Iowa, and $365,813 
from the city of Cedar Rapids in 1992; $858,113 from the State of Iowa, 
and $170,000 from the city of Cedar Rapids in 1993; $841,689 from the 
State of Iowa, and $36,000 from the City of Cedar Rapids in 1994; 
$1,016,505 from the State of Iowa, and $36,000 from the city of Cedar 
Rapids in 1995; $862,558 from the State of Iowa, and $40,000 from the 
City of Cedar Rapids in 1996; $1,044,864 from the State of Iowa, and 
$50,000 from the City of Cedar Rapids in 1997; $303,549 from the State 
of Iowa, and $50,000 from the City of Cedar Rapids in 1998; and 
$293,461 from the State of Iowa, and $59,400 from the City of Cedar 
Rapids in 1999.
    In addition, leveraging of Federal grant monies has been obtained 
in the form of industrial matching funds or contracts for related 
projects. Some of the more noteworthy awards are as follows: $20,000 
from Archer Daniels Midland; $342,720 from Ajinomoto; $40,000 from 
BASF; $18,000 from Bluestem Solid Waste Agency; $1,748,975 from 
Cargill; $177,200 from Heartland Lysine, Inc.; $48,000 from Horizon 
Technology, Inc.; $75,274 from Iowa Corn Promotion Board; $65,200 from 
Iowa Energy Center; $80,273 from National Corn Growers Association, 
$25,000 from National Pork Producers Council; and $11,500 from 
PathoGenesis Corporation.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at Iowa State University and 
the University of Iowa, in collaboration with the City of Cedar Rapids. 
In addition, field studies are being conducted at various sites through 
out Iowa, including the facilities of participating industries located 
in Cedar Rapids and other Iowa communities.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have these objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The Consortium was originally created as a partnership 
between the City of Cedar Rapids and the participating universities to 
assist the City in dealing with wastes associated with corn and oat 
processing and milling, biocatalysis to produce high-fructose syrups, 
and one of the largest fermentation facilities in the world. More 
recently, new biotechnology industries have been attracted to Cedar 
Rapids and have added greatly to the volume of industrial waste 
streams. No firm date was established to complete this research at the 
beginning of the project. The researchers have worked closely with the 
City and the industries generating these agricultural wastes since 
1989, and the nature of the studies has evolved as significant progress 
has been made in analyzing waste streams and in devising laboratory 
procedures for extracting useful products. The City of Cedar Rapids is 
planning to invest funds from other sources in special waste treatment 
facilities to conduct large scale tests of new treatment methods. 
Several years will be required to complete these tests and to refine 
separation technologies.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The Iowa Biotechnology Consortium proposal is composed of a 
selected group of studies that are individually peer reviewed within 
the universities. Once the complete proposal is submitted to CSREES, it 
is again evaluated for scientific merit by an agency biotechnology peer 
panel that makes recommendations regarding approval for the award. The 
Iowa Biotechnology Consortium proposal for fiscal year 2000 has not yet 
been received, and once available a CSREES review panel will be 
convened to review and evaluate the proposed studies in the grant 
application and to make recommendations regarding overall approval of 
the project. In addition, the panel will assess progress during the 
past year as a part of the approval process and post-award management. 
A site visit was made by a National Program Leader to the research 
facilities of the University of Iowa during the past year, and the 
Program Manager is planning to conduct an on-site assessment of 
research at Iowa State University during the coming year.

                       IR-4 MINOR CROP MANAGEMENT

    Question. Please provide a description of the research that has 
been funded under the IR-4 Minor Crop Management grant.
    Answer. The Pest Management for Minor Crops (IR-4) Program is a 
highly effective effort between the State Agricultural Experiment 
Stations, CSREES, and the Agricultural Research Service. IR-4 provides 
the national leadership, coordination and focal point for obtaining 
data to support the regulatory clearance through the U.S. Environmental 
Protection Agency (EPA) for pesticides and biological control agents 
for specialty food crops such as fruits and vegetables as well as non-
food crops like turf and ornamentals. In many cases, the agricultural 
chemical industry can not economically justify the time and expense 
required to conduct the necessary research for products with limited 
market potential. With assistance from IR-4, registration-related costs 
are manageable, and producers of a large number of small acreage crops 
such as vegetables, fruits, nuts, herbs and other specialized crops 
have access to necessary pest control products. In order to accomplish 
the above, a four step process has been developed. Step one involves 
research prioritization. Because of limited resources, IR-4 requests 
and receives input from stakeholders on potential research projects. 
Yearly workshops are conducted that involve growers, commodity 
organizations, university research and extension specialists, EPA staff 
and industry representatives to determine which projects are the most 
critical to minor crop agriculture. Step two is research planning. 
Research protocols are written after careful review and comments from 
stakeholders. Step three is research implementation. A typical IR-4 
program consists of both field and laboratory phases. For the field 
work, researchers apply the crop protection chemical to the target crop 
according to the experimental protocol. The crop is harvested and 
transferred to the laboratories where the chemical residues in the 
crop, if any, are determined. All field and laboratory research is 
conducted under EPA Good Laboratory Practices. Step four is data 
submission and approval. The data are critically reviewed and formatted 
into a regulatory package and submitted to the EPA for their review. If 
appropriate, the EPA will approve the submission and grant a tolerance 
to use the chemical on the target minor crop.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. This is a national effort which identifies needs by a 
network of users, commodity groups, and State university and Federal 
researchers. This research is highly significant to national and 
regional as well as local needs. The basic mission of IR-4 is to aid 
producers of minor food crops and ornamentals in obtaining needed crop 
protection products. IR-4 is the principal public effort supporting the 
registration of crop protection products and biological pest control 
agents for approximately $40 billion minor crop industry representing 
40 percent of the total farm crop value in the U.S.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal is to obtain minor use pesticide registrations 
with a high priority placed on those pesticides classified as Reduced 
Risk, assist in the maintenance of current registrations and to assist 
with the development and registration of biopesticides. For 1999, IR-4 
submitted data to EPA that supported 632 new minor food use clearances. 
During the past three years, over 960 new minor food use clearance 
requests were submitted to IR-4 from growers, State and Federal 
scientists and extension specialists. The Food Use part of the IR-4 
Program continues to have a high productivity which, according to EPA, 
supports 40 percent of all EPA pesticide registrations. Since the 
program's inception in 1963, IR-4 has been granted over 5000 food use 
clearances.
    For ornamental crops in 1999, IR-4 submitted 532 pesticide 
clearance requests to EPA. Since 1977, IR-4 has assisted with the 
registration of over 7000 crop protection chemicals and biological pest 
control agents on nursery stock, flowers and turf grass. The ornamental 
industry accounts for over 25 percent or $11 billion of the total minor 
crop value in the U.S. Biopesticides have been an important IR-4 thrust 
since 1982. EPA granted 58 IR-4 supported biopesticide food use 
clearances in 1999 compared to 48 biopesticide clearances in 1998.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from appropriated funds as 
follows: Program redirection in fiscal year 1975, $250,000; fiscal year 
1979, $500,000; fiscal years 1976-1980, $1,000,000 per year; fiscal 
year 1981, $1,250,000; fiscal years 1982-1985, $1,400,00 per year; 
fiscal years 1986-1989, $1,369,000 per year; fiscal year 1990, 
$1,975,000; fiscal year 1991, $3,000,000; fiscal years 1992-1993, 
$3,500,000; fiscal year 1994, $6,345,000; fiscal year 1995 through 
1997, $5,711,000 per year; and fiscal years 1998 through 2000, 
$8,990,000 per year. A total of $79,499,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were as follows: $891,856 State appropriations and $65,402 industry in 
1991; $1,002,834 State appropriations and $104,292 industry in 1992; 
$1,086,876 State appropriations and $310,133 industry in 1993; $550,160 
State appropriations, $408,600 industry, and $924,169 miscellaneous in 
1994; $775,432 State appropriations, $266,714 industry, and $751,375 
miscellaneous in 1995; and an estimated $800,000 State appropriations, 
$250,000 industry, and $800,000 miscellaneous in each years of 1996 
through 1999.
    Question. Where is this work being carried out?
    Answer. Field work is performed at the State and Territorial 
Experiment Stations. Laboratory analysis is conducted primarily at the 
California, New York, Florida and Michigan Agricultural Experiment 
Stations with assistance by the Puerto Rico, Hawaii, North Dakota, 
North Carolina, Washington, Virginia, and Idaho Agricultural Experiment 
Stations. Field Research Centers located in Hawaii, Oregon, Washington, 
California, Wisconsin, Michigan, North Dakota, South Dakota, North 
Carolina, Florida, Tennessee, Texas, New Jersey, New York, Maryland and 
New Hampshire conduct the field residue program. Protocol development, 
data assimilation, writing petitions and registration processing are 
coordinated through the New Jersey Agricultural Experiment Station. 
Agricultural Research Service is conducting minor use pesticide studies 
at field locations in California, Georgia, Ohio, South Carolina, Texas, 
and Washington. Agricultural Research Service laboratories in Georgia, 
Maryland, and Washington are cooperating with analyses.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Selected categories of the Special Research Grants Program 
address important national and regional research initiatives. IR-4 is 
involved in research on biological systems that by their nature are 
ever changing and presenting new challenges to agriculture. The IR-4 
workload is anticipated to be long term because of the sensitivities 
about food safety and the environment, and the eventual loss of a large 
number of conventional pesticide registrations for minor crops because 
of the 1996 Food Quality Protection Act--FQPA. The FQPA presents a 
serious challenge to minor crop pest management. It is estimated that 
there will be significant loss of conventional pesticide registrations 
for minor crops. IR-4 has developed a strategy to minimize the impact 
of loss of the critical pest control tools needed by our domestic minor 
crop growers. The IR-4 strategy involves the following factors: first, 
facilitating regulatory clearance of Reduced Risk pesticides for minor 
crops; second, when appropriate, develop risk mitigation measures for 
existing minor use registrations; third, assist with the registration 
of biologically-based pest control products for minor crops; and 
fourth, register and maintain pesticides essential to integrated pest 
management systems--IPM.
    With the implementation of the 1995 Strategy Plan, IR-4 has 
achieved significant accomplishments. Since FQPA requires that the EPA 
review all of the almost 10,000 tolerances by fiscal year 2006, it is 
anticipated that IR-4 program will have a significant challenge to help 
bring new crop protection solutions to minor crop growers well into the 
next century.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Each year the grant applications are peer reviewed and 
reviewed by CSREES' senior scientific staff. A summary of those reviews 
indicate excellent progress in achieving the objective of providing 
safe pest controls for minor uses. In December 1997, CSREES sponsored a 
Peer Review of the Project by a panel chaired by a retired 
Administrator of USDA-ARS and representatives from the USDA, EPA, 
commodity groups, the food processing industry, the crop protection 
industry and the land grant university system; a report was issued 
January 1998. The report covered the areas of response to FQPA, Project 
operations, accomplishments, good laboratory practices, the ARS 
companion program and future outlook with specific recommendations for 
each area. The review panel was ``in unanimous agreement that IR-4 is a 
very successful program which serves an important need to producers of 
agricultural products for ultimate consumption by the American public. 
The program is effectively and efficiently administered by a dedicated 
professional staff''. The goal in 2000 and beyond will be to build on 
this basis and fully implement the recommendations of the panel. This 
review and previous reviews have resulted in significant improvement in 
the IR-4 program's productivity and quality of research. Additionally, 
the customers served by IR-4 have provided input to the program to 
enhance its effectiveness.

                JOINTED GOATGRASS (AEGILOPS CYLINDRICUM)

    Question. Please provide a description of the research that has 
been funded under the Jointed Goatgrass grant.
    Answer. Research is conducted as sub-projects by more than 30 
scientists in 10 western and mid-western States on systems for 
suppression of jointed goatgrass in winter wheat production systems. 
Research includes integrated cultural management, reduction of seed in 
the soil, identification of more competitive wheat varieties and crop 
rotations, and modeling to predict economic outcomes of changing 
management practices. The premier research projects continue to be four 
regional, long-term integrated management studies conducted across nine 
States. In these studies, various cultural control practices such as 
seeding rates, row spacing, planting dates, seed size, competitive 
varieties, fertilizer placement, crop rotations, and tillage practices 
are being evaluated as an integrated management system for the 
suppression of jointed goatgrass. Research is also being conducted on 
genetic diversity in the jointed goatgrass population, soil conditions 
responsible for persistence of jointed goatgrass seedbank, timing and 
intensity of tillage on seed persistence in the soil, gene flow between 
wheat and jointed goatgrass, identification of crop traits that make 
wheat more competitive against jointed goatgrass, and making the 
bioeconomic model more user friendly. All funded projects have a 
technology transfer component and a national extension coordinator 
insures that growers and extension personnel are fully informed about 
all options for the managing this devastating weed. The National 
Extension Coordinator is housed at Colorado State University.
    Question. According to the research proposal or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. Jointed goatgrass infests nearly five million acres of 
winter wheat lands in the west and mid-west. Through the efforts of the 
national program, the rate of spread of this weed has decreased 
significantly in the past 5 years. However, jointed goatgrass still 
costs U.S. wheat producers an estimated $145 million annually in lost 
yield, reduced quality, production of less profitable crops, increased 
management costs, and reduced land values. Control of jointed goatgrass 
in a standing wheat crop is impossible with currently available 
technology because seed survives in the soil for five years or more, 
and because jointed goatgrass is genetically related to wheat. Jointed 
goatgrass has increased rapidly in the past 25 years in part because of 
the widespread adoption of conservation tillage systems. Jointed 
goatgrass proliferated in such systems, and it greatly impedes the 
universal adoption of such practices. The principal investigator and 
the National Association of Wheat Growers believe this research is of 
high national and regional importance.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this project is to reduce the devastating 
effect of jointed goatgrass on winter wheat production and quality, and 
to prevent the spread of this weed into new, non-infested areas. 
Numerous individual cultural control practices have been evaluated in 
several States as to their effectiveness for the suppression of jointed 
goatgrass and on the growth and yield of wheat. Four regional, long-
term integrated management projects have been established where three 
or more individual cultural control practices have been combined into 
an integrated management system for the suppression of jointed 
goatgrass in winter wheat. Results from these projects show that 
combining three or more individual cultural control practices into an 
integrated management system will suppress jointed goatgrass and 
improve the yield and quality of winter wheat. Significant progress has 
been made in understanding gene flow between wheat and jointed 
goatgrass. This information will be very valuable in managing the 
introduction of herbicide-resistant wheat for the control of jointed 
goatgrass. A bioeconomic model has been constructed that combines 
jointed goatgrass population biology information, weather data, and 
responses of jointed goatgrass and wheat to various cultural control 
practices, and predicts wheat yields, response of jointed goatgrass, 
and economic outcomes from changing production practices. In 1999, a 
symposium on jointed goatgrass was held as part of the Western Society 
of Weed Science meetings. At this symposium, ten papers were presented, 
outlining the latest research and technology transfer activities of 
this national program. Information presented at this symposium was used 
to establish new priorities for this program and to guide the program 
for the next five years. Since 1994, six regional symposia have been 
held to transfer to producers and extension personnel the latest 
information on the identification, biology and management of jointed 
goatgrass in winter wheat. A World Wide Web site (http://
www.ianr.unl.edu/jgg) has been established and updated annually to 
further enhance information transfer. Also, a videotape, a poster and a 
slide set have been produced to assist extension personnel in 
transferring to producers information on jointed goatgrass biology and 
management.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grain began in fiscal year 1994. 
The appropriation for fiscal year 1994 was $329,000; for fiscal years 
1995-1997, $296,000, each year; $346,000 for fiscal year 1998; and 
$360,000 in fiscal years 1999 and 2000 bringing the total 
appropriations to $2,283,000.
    Question. What is the source and amount of no-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were as follows: for 1994, $82,198 State appropriations, $82,256 from 
industry, and $14,871 miscellaneous; for fiscal year 1995, $67,442 
State appropriations, $38,496 from industry, and $13,304 miscellaneous; 
for each fiscal year 1996-1997, an estimated $70,000 State 
appropriations, $50,000 from industry, and $14,000 miscellaneous; for 
1998 $231,335 State appropriations, $42,570 from State wheat 
commissions, and $15,000 miscellaneous; and for fiscal year 1999, 
$258,122 State appropriations, $87,750 State wheat commissions, and 
$72,100 miscellaneous.
    Question. Where is this work being carried out?
    Answer. The research is being conducted by university scientists in 
10 western States with serious infestations including Washington State 
University, who is the principal coordinating institution and receives 
the grant, Colorado, Kansas, Nebraska, Oklahoma, Utah, Oregon, Idaho, 
Montana, Wyoming, and South Dakota.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The project was initiated to accomplish significant results 
in five years, and significant accomplishments have been made. However, 
the jointed goatgrass problem will require an additional five more 
years to accomplish all of the objectives and to have effective 
management practices available for producers to control jointed 
goatgrass in winter wheat.
    Question. When was the agency evaluation of this project? Provide a 
summary of the last evaluation conducted.
    Answer. Each year the sub-grants are peer reviewed for scientific 
merit and adherence to the program objectives by a panel of scientists 
and producers. The overall grant is reviewed annually by CSREES's 
scientific staff. Sub-contract grants to the various universities are 
awarded using a peer review process coordinated by Washington State 
University.

             LIVESTOCK AND DAIRY POLICY, NEW YORK AND TEXAS

    Question. Please provide a description of the research that has 
been done under the livestock and dairy policy program grant?
    Answer. The purpose of this grant is to assess the possible 
economic impacts on the U.S. livestock and dairy sectors from various 
macroeconomic, farm, environmental, and trade policies and new 
technologies. Both Cornell University and Texas A&M University conduct 
analysis of these policies and disseminate the information to 
policymakers, farmers, and agribusinesses. Cornell focuses on sector-
level dairy policies, and Texas A&M focuses on policies affecting 
livestock and dairy at the farm level.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. Information on the implications of new and alternative 
farm, trade, and macroeconomic policies affecting the livestock and 
dairy sectors is of special interest to policy-making officials, 
farmers, and others. Such information enables farmers and 
agribusinesses to make necessary adjustments to their operations to 
enhance profitability and for national public officials to consider 
alternatives to sustain adequate supplies and minimize costs. The 
principal researchers believe this research to be of national, regional 
and local significance.
    Question. What was the original goal of this research and what has 
been done to date?
    Answer. The original goal was to establish a specialized research 
program that could provide timely and comprehensive analysis of 
numerous policy and technological changes affecting livestock and dairy 
farmers and agribusinesses and advise them and policymakers promptly of 
possible outcomes. This goal has been achieved and the program 
continues to provide timely assessments and evaluations of provisions 
and proposed changes in agricultural policies, the General Agreement on 
Tariffs and Trade, and the North American Free Trade Agreement; various 
income and excise tax measures; and alternative pricing measures for 
milk. The institutions were integrally involved in several current 
studies relating to dairy provisions in the 1996 farm legislation. 
These studies contributed significantly to the development of proposed 
regulations called for in this legislation. Both institutions maintain 
extension outreach programs to disseminate results of their analysis 
throughout the United States. They have organized a national Dairy 
Markets and Policy Extension committee to advise and assist them in 
this effort. This latter committee was especially helpful to USDA in 
educating farmers about proposed milk marketing order changes last 
year.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1989, $50,000; fiscal year 1990, $518,000; fiscal 
years 1991-1993, $525,000 per year; fiscal year 1994, $494,000; fiscal 
years 1995-1997, $445,000 each year and fiscal year 1999, $475,000; 
fiscal year 2000, $475,000. A total of $5,767,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
are as follows: $37,420 State appropriations in 1991; $162,086 State 
appropriations and $133,278 product sales for a total of $295,364 in 
1992; and $301,817 State appropriations, $1,412 industry, and $7,121 
miscellaneous for a total of $310,350 in 1993; $24,702 State 
appropriations, and $5,961 industry for a total of $30,663 in 1994; 
$235,526 State appropriations for 1995; $250,000 in State 
appropriations for 1996; and approximately $245,000 in State funding 
for 1997 and 1998.
    Question. Where is this work being carried out?
    Answer. The research is being conducted at Cornell University and 
Texas A&M University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. This program is of a continuing nature for the purpose of 
assessing existing issues and proposed policy changes affecting the 
livestock and dairy industries.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. We have conducted no formal evaluations of this project. 
Annual proposals for funding, however, are peer reviewed for relevance 
and scientific merit. Our agency contact is also in regular contact 
with principal researchers at each institution to discuss progress 
toward project objectives.

                   LOWBUSH BLUEBERRY RESEARCH, MAINE

    Question. Please provide a description of the research that has 
been funded under the lowbush blueberry research program grant.
    Answer. Interdisciplinary research is being conducted on many 
aspects of lowbush blueberry culture and processing including 
investigations into factors affecting processing quality, biological 
control of insect pest, sustainable pollination, weed, disease, and 
fertility management, cold heartiness, and group water protection.
    Question. According to this research proposal, or the principal 
investigator, what is the national, regional, or local need for this 
research?
    Answer. Maine produces 99 percent of all lowbush blueberries or 33 
percent of all blueberries in the United States. This work is of major 
local interest, and helps maintain the continued availability and high 
quality of this native fruit commodity.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original research goal was to provide answers to unique 
lowbush blueberry production, pest, and processing problems. Research 
to date indicates that the field sanitizer was able to use heat to 
control insect pests without adversely affecting plant growth, while 
providing a non-chemical alternative for pest management. Biological 
control agents were sued to control fireworms. Lowbush blueberry yields 
were increased by use of native and alfalfa leafcutter bees. Mechanical 
harvesting was found to be effective and had yields and fruit quality 
comparable to hand harvest, providing growers with a more efficient 
tool to harvest blueberries. Products for the use in food industry are 
being extracted from cull berries therefore improving utilization and 
reducing waste.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1990, $170,000; fiscal year 1991, $202,000; fiscal 
years 1992-1993, $185,000 per year; fiscal year 1994, $208,000; and 
fiscal years 1995-2000, $220,000 per year. A total of $2,270,000 has 
been appropriated to date.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Direct industry support was about $65,000 from 1996-2000 
per year.
    Question. Where is this work being carried out?
    Answer. Research is being carried out at the University of Maine.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objectives have not yet been met. The 
University of Maine researchers estimate that the project will be 
concluded at the end of fiscal year 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The last agency merit review of this project was January, 
1999. Research accomplishments included investigations of post 
emergence, grass specific herbicides to control weeds rather than the 
use of broad spectrum; timing of fertilization treatments and 
comparisons of various fertilizer combinations have indicated that 
fertilizers containing nitrogen increase yields. Other research 
accomplishments include the insect management of blueberry maggots 
through behavioral control and the use of less toxic chemicals from 
control of blueberry flea beetles.

                        MAPLE RESEARCH, VERMONT

    Question. Please provide a description of the research that has 
been funded under the Maple Research Grant?
    Answer. The research is designed to increase understanding of the 
sources of heavy metal contamination in maple sap and syrup and explore 
methods of reducing or eliminating lead and other heavy metal 
contaminant levels in the finished product through alteration of 
manufacturing equipment and production practices.
    Question. According to the research proposal, or the principal 
researchers, what is the national, regional, or local focus for this 
research?
    Answer. Maple products are an important cultural heritage, and a 
significant source of seasonal income in maple producing areas of rural 
America. Identifying sources of heavy metal contaminants during 
processing, and exploring methods to reduce or eliminate contaminants 
from maple products is important in assuring consumers that these food 
products are not harmful.
    Question. What was the original goal of this research and what has 
been accomplished?
    Answer. The goal of this research is to conduct investigations on 
maple tree physiology, the ecology and management of maple stands, and 
related aspects of the maple syrup industry in Vermont and the 
Northeast. The primary goal of this work has been to identify and 
eliminate sources of lead and other heavy metal contaminants in maple 
syrup.
    Question. How long has the work been underway and how much has been 
appropriated by fiscal year through fiscal year 2000?
    Answer. Work under this project began in fiscal year 1985. Annual 
appropriations in support of this project are as follows: fiscal year 
1985--$100,000; fiscal years 1986 and 1987--$95,000 per year; fiscal 
years 1988 and 1989--$100,000 per year; fiscal years 1990 through 
1993--$99,000 per year; fiscal year 1994--$93,000; fiscal years 1995 
through 1997--$84,000 each year; fiscal years 1998 through 2000--
$100,000 per year. A total of $1,532,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal years?
    Answer. Non-Federal fiscal support for this project is provided by 
two primary sources and one secondary source. The primary sources are 
State appropriations and product sales. The secondary source is local 
support, but that support is not available each year. The total non-
Federal contribution from these sources provides an average 86 cents 
for every dollar of Federal funding. Early in the project the total 
non-Federal contribution was 60 cents for every dollar and most 
recently one dollar, ten cents for every dollar of Federal funding.
    Question. Where is this work being carried out?
    Answer. This research is being conducted at the Vermont 
Agricultural Experiment Station.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have these objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The work from this project, relative to maple tree 
physiology and management of maple stands has been completed. The 
objective of identify sources of heavy metals in maple syrup products 
and subsequently reducing them is underway. The anticipated completion 
date is 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Project proposals and progress reports are reviewed and 
evaluated annually by the U.S. Department of Agriculture. Satisfactory 
progress has been made on tree physiology and maple tree (sugar bush) 
management. Progressive work on identifying sources and controlling 
maple syrup contaminants is in place and is being monitored by the 
department.

                           MEADOWFOAM, OREGON

    Question. Please provide a description of the research that has 
been funded under the grant.
    Answer. This funding will be used to: develop meadowfoam cultivars 
with increased seed yield, lodging resistance, oil concentration, and 
insect resistance; increase seed, field test and deploy several new 
experimental cultivars; enhance the genome map of meadowfoam; develop 
DNA markers for molecular breeding and genetic analysis in meadowfoam; 
and map genes affecting self-pollination, seed yield, oil content, and 
insect resistance. The proposal will be internally and externally 
reviewed for scientific merit. This research will be reviewed by State 
and Federal scientists and administrators for merit and progress.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. This research is needed to increase the productivity of 
meadowfoam as an edible and industrial oilseed crop. Meadowfoam oil is 
a basic feedstock for lubricants, cosmetics, and personal care 
products. Oregon State University has recently developed a food grade 
meadowfoam oil that should open edible oil markets for this crop. This 
research is needed to expand the range of production of meadowfoam and 
to supply United States farmers with competitive cultivars (varieties) 
for commercial production.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to increase the 
productivity of meadowfoam as an oilseed crop for United States 
farmers. This research led to the development of a new variety of 
meadowfoam that outyielded existing cultivars by 800 kilograms per 
hectare in 1999. Seed increases and advanced field tests are underway 
for this cultivar. Significant progress was made on the development of 
high-throughput DNA markers for use in molecular breeding. These 
markers are being used to elucidate the genetics of several 
economically important traits in meadowfoam.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in 1999 and the 
appropriation for fiscal year 1999 was $300,000, and for fiscal year 
2000, $300,000. A total of $600,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Non-Federal funds have not been provided.
    Question. Where is this work being carried out?
    Answer. The breeding research is being conducted at Corvallis, 
Oregon. Cultivars are being field tested at four sites in the western 
United States including Corvallis and Medford, Oregon, Mt. Vernon 
Washington, and Davis, California, and three sites in the eastern 
United States including Blacksburg, Virginia, and two as yet 
unspecified sites.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional and related objectives?
    Answer. The anticipated completion date for the original objectives 
is June 2001. Progress has been made towards each of the stated 
objectives; however, we are still in the middle of the first year and 
thus cannot fully report on progress. To date, the first field 
experiments were planted in October 1999 and will be harvested in July 
2000. Results will be assessed after harvest.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Evaluation of this project will conducted annually based on 
the annual progress report and discussions with the principal 
investigator as appropriate. The evaluation is conducted by the 
cognizant staff scientist who has determined that research to date is 
in accordance with the mission of the agency.

                   MICHIGAN BIOTECHNOLOGY CONSORTIUM

    Question. Please provide a description of the work that has been 
funded under the Michigan Biotechnology Consortium grant.
    Answer. The objective of the Consortium's research program is to 
develop bioprocessing technology to manufacture products from 
agricultural raw materials; to increase the utilization of agricultural 
raw materials; reduce agricultural surpluses; degrade agricultural and 
associated wastes, thereby decreasing environmental costs of 
agricultural products and processes; and to reduce the need to import 
foreign petroleum.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes that the development of 
value-added products from agricultural raw materials will increase 
their utilization, reduce commodity surpluses and environmental costs 
and decrease the need for foreign petroleum thus contributing 
significantly to local, regional and national priorities. Biotechnology 
research of national significance could potentially be supported by 
competitive grants awarded under the National Research Initiative or 
the Initiative for Future Food and Agricultural Systems.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this research is to select and develop market-
viable technologies for the production of industrial products from 
agricultural raw materials. The Consortium has used funding from the 
Special Grants program to develop technologies now in the marketplace. 
Examples include the production of lactic acid from corn which resulted 
in the building of a $200 million plant in Nebraska. Agricultural 
resources were used as a feedstock for plant growth formulations that 
enhance productivity and reduce plant stress, biodegradable plastic 
resins for compostable films used in lawn/leaf litter bags, 
agricultural mulch films, etc., biodegradable plastic resins for 
injection molded products such as disposable cutlery, all-natural food 
flavors, calcium magnesium acetate deicer and biodegradable adhesives. 
The byproduct of cheese production (whey) was used to produce high 
quality, high value optically pure chiral intermediates for 
pharmaceuticals and agrochemicals.
    A sand/manure separation system for dairy farms was developed to 
cost-effectively separate manure from sand and recycle both components. 
Numerous enzymes have been characterized and are now in use to provide 
value added modifications in the processing of agricultural products. 
Improved methods to clean up herbicides, pesticides and other 
agricultural materials have been developed. Many of the technologies 
developed have been commercialized through several licenses and eight 
new company startups.
    Special Grant funding in fiscal year 1999 allowed the Consortium to 
develop high value animal feeds from agricultural residues, paint 
removers, biobased polymers for medical applications, liquid crystals 
and metals recovery, naturally occurring bioactive compounds and 
biocontrol agents, inks that are not hazardous aromatic products, fruit 
brandy, specialty mushrooms and methods to improve the economics of 
ethanol production. Funding also supported a technology transfer 
program that brought researchers from over 30 land grant universities, 
Federal laboratories and State Departments of Agriculture together with 
Consortium researchers to review numerous commercially promising 
biobased agricultural technologies.
    Question. How long has this work been under way and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1989, $1,750,000; fiscal year 1990, $2,160,000; 
fiscal year 1991, $2,246,000; fiscal years 1992-1993, $2,358,000 per 
year; fiscal year 1994, $2,217,000; fiscal year 1995, $1,995,000; 
fiscal years 1996 and 1997, $750,000 per year; and fiscal years 1998 
through 2000, $675,000 per year. A total of $18,609,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds provided for this grant were as 
follows: $1,750,000--State of Michigan, $160,000--industry and 
$1,000,000 from miscellaneous in 1991; $1,750,000--State of Michigan, 
$175,000--industry and $1,000,000 from miscellaneous in 1992; 
$1,750,000--State of Michigan, $100,000 from industry in 1993; 
$1,750,000--State of Michigan, $175,000--industry and $100,000 from 
miscellaneous in 1994; $200,000--State of Michigan, $2,035,000 from 
industry in 1995; $1,250,000--State of Michigan, $350,000--industry and 
$6,000,000 from miscellaneous in 1996; $402,000--industry and 
$10,000,000 from miscellaneous in 1997; $500,000--State of Michigan and 
$1,060,000 from industry in 1998; and $1,400,000--State of Michigan and 
$1,356,000 from industry in 1999. A total of $34,263,500 has been 
provided to support this work by non-Federal sources.
    Question. Where is this work being carried out?
    Answer. The research is being conducted on the campus of Michigan 
State University and at the Michigan Biotechnology Institute 
International. Demonstrations of technology occur throughout the United 
States.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The Consortium reports specific milestones for technology 
development over a five year period. Specific milestones for 
technologies which will be commercialized in fiscal year 1999 were 
established in fiscal year 1995 and updated annually. The Consortium 
has been successful in effectively closing the gap between research and 
commercialization in the five-year period.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The Michigan Biotechnology Institute was evaluated for 
scientific merit by an agency peer review panel on February 25, 1999. 
The panel recommended approval of the project pending receipt of 
supplemental information on administrative aspects of the project. A 
merit review panel will be convened to re-evaluate of the project upon 
receipt of a proposal for fiscal year 2000.

         MIDWEST ADVANCED FOOD MANUFACTURING ALLIANCE, NEBRASKA

    Question. Please provide a description of the research that has 
been funded under the Midwest Advanced Food Manufacturing Alliance 
grant.
    Answer. The stated purpose of the Midwest Advanced Food 
Manufacturing Alliance is to expedite the development of new 
manufacturing and processing technologies for food and related products 
derived from United States produced crops and livestock. The Alliance 
involves research scientists in food science and technology, food 
engineering, nutrition, microbiology, computer science, and other 
relevant areas from 12 leading Midwestern universities and private 
sector researchers from numerous U.S. food processing companies. 
Specific research projects are awarded on a competitive basis to 
university scientists with matching funds from non-Federal sources for 
research involving the processing, packaging, storage, and 
transportation of food products. Projects selected for funding are 
merit reviewed by non-participating university scientists, industry 
scientists and scientists from professional organizations. Close 
cooperation between corporate and university researchers assure that 
the latest scientific advances are applied to the most relevant 
problems and that solutions are efficiently transferred and used by the 
private sector.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
project?
    Answer. The principal researcher believes the food manufacturing 
industry is the number one manufacturing industry in the Midwestern 
region and that opportunities for trade in high value processed food 
products will grow exponentially on a worldwide basis. The Alliance is 
positioned to fill the void in longer range research and development 
for the food industry. Though the focus is regional, it is anticipated 
that impacts may also be local and national.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal, as stated previously, was to expedite the 
development of new manufacturing and processing technologies for food 
and related products derived from United States produced crops and 
livestock. This is accomplished by conducting a research proposal 
competition among faculty from the 12 participating universities to 
fund research projects where matching funds are available from 
industry. Fourteen projects were funded from fiscal year 1994 funds 
with completion and final reports due by May 1, 1996. Ten projects were 
funded from fiscal year 1995 funds with anticipated completion and 
final reports due by August 31, 1997. Ten projects were also funded 
from fiscal year 1996 funds with anticipated completion and final 
reports due by May 31, 1998. Eleven projects were funded from fiscal 
year 1997 funds with anticipated completion and final reports due by 
May 31, 1999. Nine projects were funded from fiscal year 1998 funds 
with anticipated completion and final reports due by May 31, 2000. 
Eleven projects were funded from fiscal year 1999 funds with 
anticipated completion and final reports due by May 31, 2001. Proposals 
are reviewed for scientific merit by independent scientists, and final 
selection of projects includes consideration of industrial interest and 
commitment on non-Federal matching funds.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1994. 
The appropriation for fiscal year 1994 was $470,000, and for fiscal 
years 1995-2000, $423,000 each year. A total of $3,008,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year 2000?
    Answer. Industry matching funds were $823,148 in fiscal year 1994, 
$414,164 in fiscal year 1995, $576,600 in fiscal year 1996, $429,579 in 
fiscal year 1997, $557,549 in fiscal year 1998, and $490,496 in fiscal 
year 1999.
    Question. Where is this work being carried out?
    Answer. The work is being coordinated by the Nebraska Agricultural 
Experiment Station at Lincoln. Specific research projects are also 
being conducted at 8 other universities that are part of the Alliance.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. The overall objectives of the Alliance are ongoing. Funding 
supports the continuing and evolving needs and opportunities for foods 
manufactured and processed from U.S. produced crops and livestock.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. An agency science specialist conducts a merit review of the 
proposal submitted in support of the appropriation on an annual basis. 
A review of the proposal was conducted on February 24, 1999. The 
principal investigator has provided descriptions of projects funded by 
this grant. Scientifically sound, industry-relevant projects appear to 
be the basis of the project, with impact results expected.

                  MIDWEST AGRICULTURAL PRODUCTS, IOWA

    Question. Please provide a description of the research that has 
been done under the Midwest Agricultural Products program.
    Answer. The Midwest Agribusiness Trade Research and Information 
Center does applied research to improve the global competitiveness and 
marketability of agricultural products produced in the Midwest and 
disseminates the results to small and medium-sized agribusinesses. 
Projects include analyses of potential international markets for U.S. 
agricultural products and equipment/technology; attitudes of foreign 
consumers; development of new/improved U.S. products to meet foreign 
needs. The overall project proposal was peer reviewed at the university 
level, and individual research activities are reviewed by the principal 
investigator and other faculty.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal researcher believes that agribusiness firms 
in the United States, especially small to medium-sized firms, have a 
large unrealized potential to expand export sales and foreign business 
ventures. These untapped opportunities exist in the Pacific Rim and in 
emerging markets such as Mexico, China, and Eastern Europe. The 
reluctance of small to medium-sized firms to explore these market 
opportunities is, in part, due to the high cost of market information 
and analysis and the perceived high risk of doing business in new 
markets. This project meets the needs of these firms at the local, 
regional, and national level.
    Question. What was the original goal of this research, and what has 
been accomplished to date?
    Answer. The goal is to enhance the exports of agricultural 
commodities, value-added products, and equipment produced by Midwestern 
agribusiness firms by providing research and educational programs as 
well as assistance to individual firms. Recent results include studies 
on improving the U.S. position in world soybean trade; global 
competitiveness of U.S. pork subsector; challenges and responses for 
marketing in large developing Asian countries such as China and India. 
The soybean study focused on the ability of U.S. firms to provide 
quality products designed for specific international market uses. 
Analyses of international markets include Hungary and the Baltic 
States. Several market development studies, conducted in cooperation 
with overseas firms, have resulted in ongoing relationships with U.S. 
firms; an Iowa firm is negotiating a sale of feed processing equipment; 
another Iowa firm has formed a joint venture in ovine genetics. The 
primary audience is small- to medium-sized agribusiness firms because 
they often lack the resources to conduct studies or acquire sufficient 
marketing information necessary for international trade.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1992. 
The appropriation for fiscal years 1992-1993 was $700,000 per year; 
fiscal year 1994, $658,000; and fiscal years 1995-2000, $592,000 per 
year. A total of $5,610,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
are as follows: $185,495 State appropriations and $373,897 industry for 
a total of $559,392 in 1992; $183,192 State appropriations and $318,966 
industry for a total of $502,158 in 1993; $127,948 State appropriations 
and $500,394 industry for a total of $628,342 in 1994; $258,053 State 
appropriations and $389,834 industry for a total of $647,887 for 1995; 
$165,425 State appropriations for 1996; $162,883 State appropriations 
for 1997; and $143,850 State appropriations and $51,384 industry for a 
total of $195,234 in 1998. $72,934 State appropriations and $45,860 
industry for a total of $118,794 in 1999. Industry contributions were 
not reported for fiscal years 1996 to 1997.
    Question. Where is the work being carried out?
    Answer. The program is carried out by Iowa State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have these objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1992 was for a period of 24 
months, however, the objective of expanding the export capacity of 
small to medium-sized agribusiness firms is an ongoing regional and 
national concern. The current phase of the program will be completed in 
2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. CSREES performed a merit review of the project in January 
1998, as it evaluated the project proposal for 1999, and concluded that 
``the project has sound objectives and procedures that are helping 
agribusiness effectively expand markets for U.S. agricultural products 
leading to a highly competitive agricultural production system and 
enhanced economic opportunity for Americans.'' Research results appear 
in several peer-reviewed professional journals and the popular press.

                       MILK SAFETY, PENNSYLVANIA

    Question. Please provide a description of the research that has 
been funded under the milk safety grant.
    Answer. The overall goal of the milk safety program is to provide 
insight into factors that help ensure an adequate and safe milk supply. 
The research has focused on factors that affect milk production, 
processing, manufacturing, and consumption; including computer models 
for risk assessment. Special attention has been given to ways of 
preventing and/or treating pathogens that enter the milk supply.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes that the question of 
microbial safety is of paramount interest to the milk/dairy industry at 
all levels--national, regional and local. Dairy products have been 
associated with several large outbreaks of staphylococcal food 
poisoning. Coagulase negative Staphylococcus, Listeria monocytogenes 
and pathogenic E. coli species, including E. coli O157:H7, are of 
public health concern. The population of infants, elderly, and 
immunosuppressed individuals at highest risk in the U.S. continues to 
grow rapidly. Understanding the growth of these microorganisms will 
provide pathways to minimize the occurrence of food poisoning related 
to milk and dairy products. For products which receive minimal thermal 
processing or which may be preserved primarily by acidification, 
development of additional means of controlling the growth of these 
foodborne pathogens is of critical importance in guaranteeing a safe 
milk supply. Ensuring the safety of dairy products impacts not only 
consumer health and confidence in the safety of the food supply, but 
economic viability as well.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The research is aimed at minimizing or eliminating future 
foodborne disease outbreaks from milk and dairy products. Researchers 
demonstrated that when subjected to a sublethal heat shock prior to 
pasteurization, Listeria monocytogenes becomes much more heat-resistant 
than previously thought, likely requiring the design of new 
pasteurization guidelines to ensure the safety of dairy products. They 
also developed a simple, fast, sensitive, specific and inexpensive 
method for the detection of Listeria monocytogenes in dairy products 
that will allow dairy processors to rapidly and easily screen for the 
presence of this pathogen in their products and in the processing 
environment. A computer model of Listeria monocytogenes growth in dairy 
foods under dynamic refrigeration conditions and during extended 
storage has been developed and partially validated. This will equip 
producers and processors with a powerful tool for further enhancing the 
safety of fluid milk and dairy product. Discoveries of factors 
influencing growth of Staphylococcus aureus could be used to prevent or 
contain growth of this pathogen in foods. Researchers have identified 
and sequenced a gene from this bacterium that is essential for growth 
under stressful conditions. Consumer research has identified 
characteristics of consumers most likely to have a high general concern 
about milk and dairy product safety and nutrition. In addition, 
consumers indicate more trust in farmers' efforts to ensure food safety 
than in the efforts of other segments of the food system. Research has 
also indicated that consumers are concerned about food safety, but do 
not know a great deal about such important hazards as Salmonella, E. 
coli, and Listeria. Researchers have examined the effects of water 
availability on the production of enterotoxins by S. aureus and found 
that the presence of certain nutrients within the environment, or food 
product, can greatly stimulate enterotoxin production when water 
availability is low. These results have important implications 
concerning the safety of certain food products, including those 
containing dairy ingredients.
    Question. How long has the work been underway and how much has been 
appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded for milk consumption and milk 
safety from funds appropriated as follows: fiscal years 1986 through 
1989, $285,000 per year; fiscal year 1990, $281,000; fiscal year 1991, 
$283,000; fiscal year 1992, $284,000; fiscal year 1993, $184,000; 
fiscal years 1994-1998, $268,000 per year; fiscal year 1999, $250,000, 
and fiscal year 2000 $297,500 A total of $4,059,500 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The University estimates that non-Federal funds contributed 
to this project include the following costs and salaries: $265,000 for 
fiscal year 1991; $224,700 for fiscal year 1992; $142,600 for fiscal 
year 1993; $252,168 for fiscal year 1995; and $621,903 for fiscal year 
1998; and $460,423 for fiscal year 1999. No data available for fiscal 
years 1994, 1996, and 1997.
    Question. Where is the work being carried out?
    Answer. The research is being conducted at the Pennsylvania State 
University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. The researchers anticipate that research supported by this 
grant should be concluded in 2000. Continuing and evolving needs 
related to the safety of milk and dairy products are expected to reveal 
new related objectives.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. An agency science specialist conducts a merit review of the 
proposal submitted in support of the appropriation on an annual basis. 
The proposal supporting the fiscal year 1999 appropriation was reviewed 
on August 12,1999 and the agency science specialist concluded that the 
projects addressed important issues related to safety of milk and dairy 
products, were scientifically sound, and that satisfactory progress was 
being demonstrated using previously awarded grant funds.

                         MINOR USE ANIMAL DRUGS

    Question. Please provide a description of the research that has 
been funded under the minor use animal drug program grant.
    Answer. The National Agricultural Program to Approve Animal Drugs 
for Minor Species and Uses--NRSP-7--was established to obtain the Food 
and Drug Administration approval of animal drugs intended for use in 
minor species and for minor uses in major species. The objectives of 
the program are to identify the animal drug needs for minor species and 
minor uses in major species; generate and disseminate data for the 
safe, effective, and legal use of drugs used primarily in therapy or 
reproductive management of minor animal species; and facilitate the 
Food and Drug Administration in obtaining approvals for minor uses. 
Studies are conducted to determine efficacy, target animal safety, 
human food safety, and environmental safety. The shortage of drugs for 
minor food animal uses is a concern well recognized by animal 
producers, veterinarians, animal scientists, and regulators. The funds 
for the special research grant are divided between the four regional 
animal drug coordinators and the headquarters at Cornell University for 
support of the drug approval program. The NRSP-7 funds are being 
utilized by the State Agricultural Experiment Stations where the 
regional animal drug coordinators are located as well as by other 
stations to develop data required for meeting approval requirements. 
Participants in the research program consist of the regional 
coordinators, State Agricultural Experiment Stations, USDA's 
Agricultural Research Service, schools of veterinary medicine, and the 
pharmaceutical companies. Research priorities are continually updated 
through workshops and meetings with producer groups representing 
species categories such as small ruminants, game birds, fur-bearing 
animals, and aquaculture species. Each request for drug approval is 
evaluated by the technical committee according to established criteria 
which include significance to the animal industry, cost of developing 
the necessary data, availability of a pharmaceutical sponsor, and food 
safety implications. All grants are reviewed for relevance to industry 
needs and undergo scientific peer review.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. Animal agriculture throughout the United States has relied 
on chemical and pharmaceutical companies to provide their industry safe 
and efficacious drugs to combat diseases and parasites. The high cost 
incurred to obtain data to approve these drugs, when coupled with 
limited economic returns, has limited the availability of approved 
drugs for minor uses and minor species. The economic losses due to the 
unavailability of drugs to producers for minor species and minor uses 
threatens the economic viability of some segments of the animal 
industry. The need for approved drugs to control diseases in minor 
species and for minor uses in major species has increased with 
intensified production units and consumer demand for residue-free meat 
and animal products. The program provides research needed to develop 
and ultimately culminate in drug approval by FDA for the above 
purposes. The goals are accomplished through the use of regional animal 
drug coordinators as well as a national coordinator to prioritize the 
need, secure investigators at Federal, State and private institutions, 
and oversee the research and data compilation necessary to meet Federal 
regulations for approval. All drug approvals are national, although 
industry use may be regional. For example, certain aquaculture and the 
game bird industries are concentrated in specific geographic sections 
of the country. The administration believes this research supports 
national, regional and local needs.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of the NRSP-7 Minor Use Animal Drug 
Program was to obtain approval by the Food and Drug Administration for 
animal drugs intended for use in minor species and for minor uses in 
major species. This continues to remain the dominant goal of the 
program. In recent years, the research program has expanded or given 
additional emphasis to aquaculture species, veal calves and sheep. The 
importance of environmental assessment, residue withdrawals and 
occupational safety have increasingly been given more attention during 
the approval process to help assure consumer protection.
    Since the beginning of the program, over 300 requests have been 
received from animal producers, universities and veterinarians for the 
development of data in support of the filing of a New Animal Drug 
Approval. Currently, data representing 28 Public Master Files have been 
published in the Federal. The Public Master File publication enables 
pharmaceutical companies to extend their label claims to minor species 
by referencing the published file in their New Animal Drug Approval 
filing. Furthermore, these data also enter the public domain as 
presentations to professional groups, publication of peer-reviewed 
articles and inclusion in the Food Animal Residue Avoidance Databank. 
Through these channels, NRSP-7 provides data supporting the safe and 
effective use of therapeutics in minor species by consumers. Moreover, 
the Minor Use Animal Drug Program has averaged an expenditure of only 
about $200,000 for each drug approved for minor species.
    In 1999, two Public Master Files, based on data submitted by NRSP-
7, were published in the Federal Register indicating drug approval by 
the Food and Drug Administration. They were: Sulfadimethoxine/
ormetoprim for control of coccidiosis in Chukar partridges and 
amoxicillin for treatment of bacterial pneumonia in sheep. In addition, 
three Public Master Files were submitted to the Food and Drug 
Administration by NRSP-7 for review. The three drugs and their use are: 
oxytetracycline for otolith marking of fish, ceftiofur for bacterial 
pneumonia in goats, and ivermectin pour-on for hypodemosis in American 
bison. In addition to the development of data for Food and Drug 
Administration review, the NRSP-7 program initiated a species grouping 
program. Designed to make the drug approval process more efficient for 
all minor species, research was begun that will enable game birds and 
fish to be evaluated on the basis of one or two marker species. With 
species grouping, safety and efficacy studies of a drug in one species 
could be extrapolated to other species within the same class. 
Considering that the aquatic and game bird classes contain at present 
10 and 8 economically significant production species, respectively, 
rates of Public Master File publications could be increased many-fold. 
The Center for Veterinary Medicine of the Food and Drug Administration 
is cooperating and supporting this program to the fullest extent, 
thereby demonstrating a prime example of Federal interagency 
collaboration in coordination with academic institutions, 
pharmaceutical industries and commodity interests to effectively meet 
an urgent public health need.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from appropriated funds in the 
amount of $240,000 per year for fiscal years 1982-85; $229,000 per year 
for fiscal years 1986-1989; $226,000 for fiscal year 1990; $450,000 for 
fiscal year 1991; $464,000 per year for fiscal years 1992 and 1993; 
$611,000 for fiscal year 1994; and $550,000 per year for fiscal years 
1995-2000. A total of $7,391,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were as follows: $156,099 State appropriations, $29,409 industry 
contributions and $11,365 miscellaneous in 1991; $265,523 State 
appropriations, $1,182 product sales, $10,805 industry contributions 
and $59 miscellaneous in 1992; $212,004 State appropriations, $315 
industry contributions and $103 miscellaneous in 1993; $157,690 State 
appropriations and $7,103 miscellaneous in 1994; $84,359 State 
appropriations in 1995; $191,835 non-Federal support in 1996; $357,099 
non-Federal support in 1997; $104,596 State appropriations and $97,375 
industry contributions in 1998; and $317,225 State appropriations and 
$9,678 industry contributions, and $7,000 miscellaneous in 1999.
    Question. Where is this work being carried out?
    Answer. The grants have been awarded to the four regional animal 
drug coordinators located at Cornell University, the University of 
Florida, Michigan State University and the University of California-
Davis, and to program Headquarters at Cornell University. Research is 
conducted at these universities and through allocation of these funds 
for specific experiments at the State Agricultural Experiment Stations, 
the Agricultural Research Service, the U.S. Department of Interior, and 
in conjunction with several pharmaceutical companies.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. Selected categories of the Special Research Grants program 
address important national/regional research initiatives. The overall 
objectives established cooperatively with FDA and industry remain 
valid. However, specific objectives continually are met and revised to 
reflect the changing priorities for FDA, industry, and consumers. 
Research projects for this program have involved 20 different animal 
and aquaculture species with emphasis given in recent years to research 
on drugs for the expanding aquaculture industry and increasing number 
of requests from the sheep, veal calf, and game bird industries. The 
program involves research on biological systems that by their nature 
are ever changing and presenting new challenges and/or threats to 
agriculture.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency conducted a formal review of the Minor Use 
Animal Drug Program in 1997. An external review team of experts 
representing animal drug research and development, the veterinary 
profession, the pharmaceutical industry, and academia, found the 
program to be very productive. Recommendations from the review included 
(1) improve the visibility of the Minor Use Animal Drug Program, (2) 
improve working relationships with the veterinary and pharmaceutical 
communities, (3) and acquire additional support for the program by 
pharmaceutical companies, universities, and the Federal Government to 
meet the identified national needs with emphasis on responsiveness to 
industry needs and food and environmental safety. In 1999, stakeholders 
representing the sheep, aquaculture, goat, and game bird industries met 
with CSREES administration and NRSP-7 representatives to define 
research priorities for the Minor Use Animal Drug Program. Annually, 
grant proposals are scientifically peer reviewed and twice a year the 
agency and program representatives meet with the Food and Drug 
Administration representatives to evaluate progress and to prioritize 
research requests. Workshops are held periodically to identify 
priorities for the program whereby producers, pharmaceutical companies, 
FDA, and researchers participate.

                      MOLLUSCAN SHELLFISH, OREGON

    Question. Please provide a description of the research that has 
been funded under the Molluscan Shellfish grant.
    Answer. The agency requested that the university submit a grant 
proposal that has yet to be received. A molluscan shellfish germplasm 
repository was established with funds from this grant and has played a 
key role in the genetic improvement of cultured shellfish stocks on the 
west coast. With specific shellfish stocks that are being made 
available to commercial growers, a broodstock selection program is 
currently underway to determine stocks with traits desirable for 
commercial culture. Additionally, the repository is used to establish a 
population of tetraploid pacific oysters for use in the production in 
triploid oysters and has established a population of Kumamoto oysters.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The researchers indicate that there is a national need for 
a molluscan broodstock development program. This line of research will 
benefit the commercial shellfish industries on the west coast and 
nationally through the conservation of shellfish lines with desirable 
traits, studies involving genetic manipulation to increase disease 
resistance and enhance growth, and judicious husbandry practices 
utilizing molluscan shellfish resources.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goals of this research program are to establish a 
repository for molluscan shellfish germplasm, to establish breeding 
programs for commercial production of molluscan shellfish, and to 
establish a resource center for the industry researchers, and other 
interested parties in the United States and abroad. The oyster 
broodstock selection program was implemented in partnership with 
industry and performance trials of selected stocks continue at 
commercial sites. Tetraploid oysters are being produced for use in the 
production of triploid seedstock to be used in commercial production 
trials. A temperature-controlled algae culture facility has been 
constructed to provide adequate nutrition to the oysters used in the 
studies. Oyster broodstock conditioning systems have been developed and 
in 1999, over 120 families were evaluated at commercial sites
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1995 
with an appropriation of $250,000; fiscal year 1996 was $300,000; and 
$400,000 in each of fiscal years 1997 through 2000. A total of 
$2,150,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The university estimates a total of $135,454 of non-Federal 
funding in fiscal year 1995 primarily from State sources; in fiscal 
years 1996, 1997, 1998, and 1999, no cost sharing was provided.
    Question. Where is this work being carried out?
    Answer. Research will be conducted at Oregon State University.
    Question. What was the anticipated completion date for the original 
objective of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Specific research objectives outlined in the original 
proposal were completed in 1996. Researchers have broadened the scope 
of the project from the original objectives and it is anticipated that 
these objectives will be completed in 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The proposal is put though the university's peer review 
process and is reviewed on an annual basis by the Program Managers, the 
Program Specialist, and is consistent with United States Department of 
Agriculture guidelines. The researchers are asked to the develop a 
research proposal consistent with the National Science and Technology 
Council's Strategic Plan for Aquaculture Research and Development. The 
university is required to submit an accomplishment report when the new 
proposal is submitted to the agency for funding. The 1999 review 
concluded that the researchers were well qualified and work in close 
cooperation with the private sector. Progress on previous work is well 
documented and the work complements other research being funded though 
the United States Department of Agriculture on molluscan shellfish.

           MULTI-CROPPING STRATEGIES FOR AQUACULTURE, HAWAII

    Question. Please provide a description of the research funded under 
the Multi-Cropping Strategies for aquaculture research grant in Hawaii.
    Answer. The agency requested that the university submit a grant 
proposal that has yet to be received. The original goal of this program 
was to identify and develop sustainable and commercial opportunities 
inherent in the Molokai aquaculture community while maintaining the 
cultural and physical environment unique to Molokai. In fiscal year 
1993, the university redirected this research program to address the 
opportunities of alternative aquaculture production systems, including 
the ancient Hawaiian fish ponds on the island of Molokai. A community-
based research identification process has been used to identify and 
develop specific research projects and prioritize objectives in this 
program. Current research includes work in the area of water quality 
characterization to accelerate permitting of aquaculture systems. Field 
testing of alternative species in the ancient Hawaiian fish ponds also 
continues.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal researchers indicate that the primary need 
for this research is to assist the native Hawaiians in improving the 
profitability and sustainability of the ancient Hawaiian fish ponds and 
other appropriate aquaculture systems as part of a total community 
development program on the Island of Molokai.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this program was to develop technology 
for the co-production of shrimp and oysters in aquacultural production 
systems. Research led to the development of oyster production systems 
that have been field tested under commercial conditions. The objective 
of the program is to implement sustainable subsistence and commercial 
development of Molokai fish ponds while maintaining the culture and 
physical environment unique to Molokai. Production methods have been 
developed for native species including Pacific threadfin, Moi, and 
seaweed and studies involving shrimp and ornamental fish production are 
underway. Additionally, studies addressing water quality issues 
necessary for permitting of the ancient Hawaiian fish ponds for 
aquaculture are being conducted.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. This research was initiated in fiscal year 1987 and 
$152,000 per year was appropriated in fiscal years 1987 through 1989. 
The fiscal year 1990-1993 appropriations were $150,000 per year; 
$141,000 in fiscal year 1994; and $127,000 in fiscal years 1995-2000, 
each year. A total of $1,959,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The university reports a total of $137,286 of non-Federal 
funding for this program in fiscal years 1991-1994, $318,468 in fiscal 
years 1995-1996, $116,730 in fiscal year 1997, $197,000 in fiscal year 
1998, and no non-Federal funds are available for this project for 
fiscal years 1999 and 2000.
    Question. Where is this work being carried out?
    Answer. Research is being conducted through the University of 
Hawaii on the island of Molokai.
    Question. What was the anticipated completion date for the original 
objective of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The completion date for the original project was 1993. The 
original objectives were met. The specific research outlined in the 
current proposal will be completed in fiscal year 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The proposal is placed through the university's peer-review 
process, is reviewed by the Program Managers and Program Specialist on 
an annual basis, and is consistent with United States Department of 
Agriculture guidelines. The researchers are asked to the develop a 
research proposal consistent with the National Science and Technology 
Council's Strategic Plan for Aquaculture Research and Development. The 
university is required to provide an accomplishment report when the new 
grant proposal is submitted to the agency for funding. Adequate 
progress has been reported on specific tasks by agency-funded personnel 
and activities. The research is relevant and addresses an important 
opportunity for the aquaculture industry on Molokai.

                    MULTI-COMMODITY RESEARCH, OREGON

    Question. Please provide a description of the research done under 
the Multi-Commodity Research program?
    Answer. This research provides agricultural market research and 
analysis to support Pacific Northwest producers and agribusiness in 
penetrating new and expanding Pacific Rim markets for value-added 
products. It examines the potential for increasing the competitiveness 
of Pacific Northwest agriculture through improvements in food 
production, processing, and trade by assisting decision makers in 
developing economic and business strategies. The research proposal was 
peer reviewed at the university prior to submission to CSREES.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. Oregon and other Pacific Northwest States produce a wide 
variety of agricultural commodities and products with export potential 
to Pacific Rim countries. Research and analysis are necessary to guide 
agricultural producers and processors in assessing markets, developing 
market strategies, and creating appropriate value-added products.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this research project is to gain better 
specific understanding of the technical, economic, and social 
relationships that define Oregon's value-added agricultural sector, and 
examine how these factors affect the economic performance of the 
sector. This project investigates and develops innovations in value-
added agriculture to improve the economic performance of the 
agricultural and food manufacturing sectors in the Pacific Northwest.
    Work in progress has resulted in research output in four topic 
areas: market research, packaging research, sensory research, and food 
processing industry strategic planning. Output includes development of 
a World Wide Web site for PNW exports, data bases, survey work, and 
collaborative research activity with industry and with institute and 
university researchers in selected Asian countries. Many high quality 
manuscripts, working papers, journal articles, and graduate theses have 
been produced.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The research began in fiscal year 1993. The appropriation 
for fiscal year 1993 was $300,000; fiscal year 1994, $282,000; and 
fiscal years 1995 through 2000, $364,000 for each year. The total 
amount appropriated is $2,766,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Non-Federal funding for this grant $177,574 in State 
appropriations in 1993, and $162,394 in 1994. The project involves the 
use of Oregon State University administrative personnel, equipment, 
utilities and facilities that are indirect costs to the project. These 
costs constitute an Oregon State University contribution to the project 
that is not allowable as a reimbursable expense. Because the Oregon 
State appropriations process penalizes the University for reporting 
nonreimbursed indirect costs, the university has not reported the 
amount of non-Federal funds appropriated for fiscal years 1995-2000.
    Question. Where is the work being carried out?
    Answer. The research is carried out at Oregon State University in 
Corvallis, and at the Northwest Food Innovation Center in Portland, 
Oregon.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1993 was for a period of 12 
months, however, the goal of enhancing Oregon's value-added 
agricultural sector in an ongoing regional and national concern. 
Progress on the original objectives is as follows: baseline data have 
been accumulated; an economic growth assessment model is being refined; 
global competitiveness is being assessed for value-added Pacific 
Northwest agricultural products; targets for performance are being 
worked out with agricultural industries; and trade teams have been 
involved in assessing the ability of U.S. based industries to meet the 
demands for noodle production for Asian markets. The current phase of 
the program will be completed in 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. CSREES performed a merit review of the project in January 
1999, as it evaluated the 1999 project proposal, and determined that: 
``This institution has a highly productive history regarding this 
research. Outputs and accomplishments in 1998 include 4 scientific 
journal articles and 1 scientific paper presentation; participation in 
8 domestic and 2 international professional, scientific and industry 
meetings; participation on 2 multistate research committees; completion 
of 2 MS theses and 1 Ph.D. dissertation; and 1 patent application.''

             NATIONAL BIOLOGICAL IMPACT ASSESSMENT PROGRAM

    Question. Please provide a description of the work that has been 
funded under the National Biological Impact Assessment Program grant.
    Answer. The National Biological Impact Assessment Program supports 
the environmentally responsible use of biotechnology products to 
benefit agriculture and the environment. This grant provides funding 
for the Information Systems for Biotechnology which is a national 
resource in agricultural biotechnology information. The Information 
Systems for Biotechnology provides information to the research 
community regarding biotechnology regulations and the environmental 
issues associated with small and large scale releases of genetically 
modified organisms. It provides searchable databases, documents and 
resource lists on the internet, a monthly News Report with over 2,200 
subscribers, custom software to assist in risk assessment and 
management, and printed reference materials.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The National Biological Impact Assessment Program provides 
information on biotechnology not found anywhere else. This program 
fulfills an important national need to provide scientists easy access 
to relevant information that will facilitate conducting research that 
complies with the oversight and regulatory requirements for testing 
biotechnology products, and foster the safe application of 
biotechnology to benefit agriculture and the environment. The 
Information System for Biotechnology was the first on-line system to 
address the rapidly expanding information needs of the agricultural 
biotechnology research community and institutional biosafety 
committees. It continues to be one of the most comprehensive sources of 
information on this topic.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal was to facilitate and assess the safe 
application of new techniques for the genetic modification of plants, 
animals and microorganisms to benefit agriculture and the environment. 
Since its inception in 1989, the Program has developed tools and 
resources to provide scientists, regulators, teachers, administrators, 
and the interested public with value-added information in a readily 
accessible form. It has developed into a sophisticated computer-based 
information system and internet site that responds to more than 4200 
requests per month from over 40 countries. The site carries documents 
pertaining to regulatory oversight of biotechnology products, policy 
statements, and risk assessment and risk management information. 
Searchable databases include records of all environmental releases of 
genetically engineered organisms conducted under authority of the 
Department of Agriculture, institutional biosafety committees, State 
regulatory contacts, biotechnology research centers and companies. A 
monthly News Report, covering research, regulatory, legal and 
international issues, is distributed to 1700 e-mail and 500 print 
subscribers. Biosafety training workshops have been conducted for 
public and private sector scientists and State regulatory officials. A 
major recent activity was publication of the proceedings of a risk 
assessment workshop on Ecological Effects of Pest Resistance Genes in 
Managed Ecosystems, that was held January 31-February 3, 1999. Over 800 
copies have been distributed by request. Also, a guidebook for safely 
conducting transgenic research in greenhouses titled ``Greenhouse 
Research with Transgenic Plants and Microbes: A Common Sense Guide to 
Containment'' has been published.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1989, $125,000; fiscal year 1990, $123,000; fiscal 
years 1991-1993, $300,000 per year; fiscal year 1994, $282,000; and 
fiscal years 1995-2000, $254,000 per year. A total of $2,954,000 has 
been appropriated. There are no other potential sources of funding from 
other Cooperative State Research, Education, and Extension Service 
programs.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Virginia Tech contributes administrative and clerical 
support which amounts to approximately $5000 per year.
    Question. Where is this work being carried out?
    Answer. The grant award is with Virginia Tech. Current partners in 
the program include the University of Minnesota and the Institute for 
Biotechnology Information.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Ensuring the environmentally responsible use of 
agricultural biotechnology products is an ongoing and important task. 
Opportunities for plant and animal improvement through biotechnology 
are expanding as more genes are identified and new methods are 
developed for introducing specific, beneficial genes into plant and 
animal populations. As these genetically enhanced crops and livestock 
are adopted commercially, assuring long term safety and efficacy will 
be a high national priority.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. An external panel of scientists reviewed this program in 
1994. The review report was highly complimentary of this project and 
recommended continuation of the program. Another external review is 
being planned for the year 2000. The current proposal was peer-reviewed 
at Virginia Tech prior to submission and was also peer-reviewed by the 
agency.

          NEMATODE RESISTANCE GENETIC ENGINEERING, NEW MEXICO

    Question. Please provide a description of the work that has been 
funded under the Nematode Resistance Genetic Engineering Project grant.
    Answer. This research is designed to investigate naturally 
occurring compounds from diverse sources that may confer pesticidal 
resistance if introduced into agronomic plants. The main target pests 
are no longer plant parasitic nematodes but include insects as well. 
The work is using molecular biological techniques to incorporate genes 
into agronomic plants which will shorten the time frame to produce 
transgenic plants. This project was not awarded competitively but has 
undergone peer review at the university level and merit review at 
CSREES.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal researcher believes that the successful 
development of these techniques and subsequence transfer of genes with 
insecticidal and/or pesticidal activity into agronomic plants will 
provide an environmentally sound system for all plants susceptible to 
pests. The principal researcher believes that project has the potential 
for both regional and national application.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to provide an 
alternative approach for the control of plant parasitic nematodes 
through the use of molecular biological technologies to transfer 
pesticide resistance to plants. More recently, a insecticidal protease 
inhibitor gene has been used in transformed plants. A unique technique 
utilizing insect intestinal membrane vesicles were used as tools for 
detection of specific protein binding domains. The synthetic gene, 
CRY3A Bt has been successful for four years in field trails with 
transformed potato in managing Colorado potato beetles.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1991 
and the appropriations for fiscal years 1990-1993 were $150,000 per 
year; $141,000 was appropriated in 1994; and $127,000 in fiscal years 
1995-2000, each year. A total of $1,353,000 has been appropriated thus 
far.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funds and sources provided for this grant 
were as follows: $65,000 State appropriations in 1991; $62,000 in State 
appropriations in 1992; $75,000 in State appropriations in 1994; and 
$75,000 State appropriations in 1995. For 1996, the University and the 
Plant Genetic Engineering Laboratory are providing matching 
contributions in faculty and staff salaries, facilities, equipment 
maintenance and replacement, and administrative support. In 1997, there 
were no matching non-Federal funds. In 1998 and 1999, State 
appropriated funds were $48,000 and $71,000, respectively. In 2000, the 
non-Federal funds are $70,000.
    Question. Where is the work being carried out?
    Answer. Research is being conducted at the New Mexico State 
University, and at collaborating universities in the region.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objectives have not as yet been met. The 
estimated completion date for this project is in 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The last evaluation of this project was a merit review 
conducted in January, 1999. In summary, the overall goal of this 
project is to use molecular technology to develop pesticide capability 
in plants of agronomic importance. A plant transformation system was 
developed to improve the historically difficult transformation 
efficiently of monocots. In field trails of transformed eggplants and 
potatoes, high levels of effectiveness against insects have been found. 
Other constructs are being used in many crops to determine resistance 
to nematodes and other crop pests.

               NEVADA ARID RANGELANDS INITIATIVE, NEVADA

    Question. Please provide a description of the research that has 
been funded under the grant.
    Answer. The Cooperative State Research, Education, and Extension 
Service has requested the university to submit a grant proposal that 
has not yet been received.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The need for this research is to develop management systems 
to protect Nevada's arid range land from invasive weeds and wildfires.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research is to develop research 
management and educational programs to promote healthy productive and 
sustainable use of Nevada rangeland.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and the appropriation for fiscal year 2000 is $255,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. This is a new project. No non-Federal funds have been 
provided at this time.
    Question. Where is the work being carried out?
    Answer. Research will be conducted at the University of Nevada 
Research Station.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The project is under development, however anticipated 
completion for the original objectives should be 5 years.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project is under development and will be evaluated 
prior to funding.

                     NEW CROP OPPORTUNITIES, ALASKA

    Question. Please provide a description of the research that has 
been funded under the grant.
    Answer. Cooperative State Research, Education, and Extension 
Service has requested the university to submit a grant proposal that 
has not yet been received. The research will address the feasibility of 
growing wild rice as an alternative crop in Alaska.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. This research addresses a local need to find an alternative 
crop for the State of Alaska.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. This grant is new and the research will build upon existing 
expertise to offer new opportunities for crop diversification.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and the appropriation for fiscal year 2000 is $425,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. Since this is a new grant, and a proposal has not yet been 
received, the source and amount of non-Federal funds for this research 
is unknown.
    Question. Where is this work being carried out?
    Answer. This work will be carried at the School of Agriculture and 
Land Resources management at the University of Alaska, Fairbanks.
    Question. What is the anticipated completion date for the original 
objectives of the project? Have those objectives been met: What is the 
anticipated date of additional or related objectives?
    Answer. This project is expected to be completed in three years.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the evaluation conducted.
    Answer. Since this is a new grant, no evaluation has been 
conducted.

                    NEW CROP OPPORTUNITIES, KENTUCKY

    Question. Please provide a description of the research that has 
been funded under the grant.
    Answer. CSREES has requested the university to submit a grant 
proposal that has not yet been received. The research will promote 
economically sustainable crop production, new crops, and expanded crop 
uses in Kentucky. Improved plant and innovative production systems 
through integrated research in plant ecology, biochemistry, physiology 
and genetics, will be developed. Technology and information support for 
Kentucky farmers and for the economic base of the State will be 
provided.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. This research addresses a regional need to find alternative 
crops to replace tobacco.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. This grant is new and the research will build upon existing 
expertise to offer new opportunities for crop diversification, 
technology transfer and demonstrations.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and the appropriation for fiscal year 2000 is $595,000.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. This is a new grant and no non-Federal funds have been 
provided.
    Question. Where is this work being carried out?
    Answer. This work will be carried at the University of Kentucky and 
at various locations across the State.
    Question. What is the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated date of additional or related objectives?
    Answer. This project is expected to be completed in three years.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the evaluation conducted.
    Answer. This is a new grant and no evaluation has been conducted 
yet.

            NONFOOD AGRICULTURAL PRODUCTS PROGRAM, NEBRASKA

    Question. Please provide a description of the research that has 
been funded under the Nonfood Agricultural Products Program grant.
    Answer. This work focuses on the identification of specific market 
niches that can be filled by products produced from agricultural 
materials, developing the needed technology to produce the product, and 
working with the private sector to transfer the technology into 
commercial practice. Major areas of application include starch-based 
polymers, use of tallow as diesel fuel, improvements in ethanol 
production, use of vegetable oil as drip oil for irrigation wells, as a 
two cycle engine oil, and as a chain saw bar oil, production of 
levulinic acid, the extraction of wax from grain sorghum and production 
of microcrystalline cellulose from crop biomass. The Dean and Director 
of Agricultural Research has initiated a review process that parallels 
the process used for Experiment Station projects. Two to three faculty 
member are asked to critically review the proposal using criteria as 
described by Cooperative State Research, Education and Extension 
Service in the letter soliciting proposals for 1999.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes our ability to produce 
agricultural commodities exceeds our needs for food and feed. These 
commodities are environmentally friendly feedstocks which can be used 
in the production of many biochemicals and biomaterials that have 
traditionally been produced from petroleum. The production of the 
commodities and the value-added processing of these commodities is 
regional in scope.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The objectives are to identify niche markets for industrial 
utilization of agricultural products, improve and develop conversion 
processes as needed for specific product isolation and utilization, 
provide technical, marketing and business assistance to industries, and 
coordinate agricultural industrial materials research at the University 
of Nebraska, Lincoln. Accomplishments include commercialization of 
soybean based drip oil for irrigation wells. Bruning Grain Co. 
Marketing ``Soy Bio Drip.'' MCC Technologies, Inc. continues to refine 
the processing requirement and develop a business plan for production 
of microcrystalline cellulose from crop residues such as corn cobs, 
wheat straw and cellulose via a reactive extrusion process developed by 
the university's Industrial Agricultural Products Center. Various 
hardness grades of plastic particle media blast using a combination of 
commercially available biodegradable polymers have been produced. A 
water resistant starch-based foam has been developed and a patent 
disclosure has been submitted. A commercialization strategy is being 
developed. Also, an alternative process for producing biodiesel has 
been developed and will be disclosed soon. All of these 
commercialization projects are the result of research efforts, most of 
which have been supported by the Nonfood Agricultural Products Program. 
Two Small Business Innovation Research, Phase I, proposals have been 
funded for technologies developed at the Center. A Phase II proposal is 
currently being written on loose fill packaging. A Phase II proposal on 
levulinic acid is anticipated.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The funding levels for this project are $109,000 in 1990; 
$110,000 per year in fiscal years 1991-1993; $103,000 in fiscal year 
1994; $93,000 in fiscal year 1995; and $64,000 in fiscal years 1996-
2000 per year. A total of $955,000 has been appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. The non-Federal funding for this project is: in fiscal year 
1992, $315,000; fiscal year 1993, $330,000; fiscal year 1994, $330,000; 
fiscal year 1995, $309,000; fiscal year 1996, $251,000; fiscal year 
1997 $250,000; fiscal year 1998, $340,000; and fiscal year 1999, 
$260,000 . These funds were from Nebraska Corn, Soybean, Wheat, Sorghum 
and Beef Boards, World Wildlife Fund, Nebraska Bankers Association, 
United Soybean Board and National Corn Growers Association, 
Bioplastics, Inc., Biofoam, Inc. and M.C.C. Technologies, Inc.
    Question. Where is this work being carried out?
    Answer. This work is being conducted at the Industrial Agricultural 
Products Center, L.W. Chase Hall, University of Nebraska, East Campus, 
Lincoln, Nebraska.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The objectives of the original projects were completed. 
Specific objectives have been identified in each renewal request.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This project is evaluated based on the annual progress 
report. The cognizant staff scientist has reviewed the project and 
determined that the research is conducted in accordance with the 
mission of this agency.

              OIL RESOURCES FROM DESERT PLANTS, NEW MEXICO

    Question. Please provide a description of the research that has 
been done under the Oil Resources from Desert Plants, New Mexico.
    Answer. The Plant Genetic Engineering Laboratory has been exploring 
the potential for the production of high value industrial oils from 
agricultural products. The effort has been focused on transferring the 
unique oil producing capability of jojoba into oilseed rape and 
soybean. With the development of technology to both isolate the enzyme 
components of oil biosynthesis and successfully transform the target 
plants, significant advances have been made with jojoba. In addition, 
oil enzymes have been studied in castor, oilseed rape, desert primrose, 
cyanobacteria, and meadowfoam.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes desert plant sources of 
valuable oils for industrial applications are typically low yielding 
and limited in climatic areas for farm production. Genetic engineering 
offers an opportunity to move genetic capability to high yielding major 
crops. Many of the oils and their derivative acids, waxes, and others 
can directly substitute for imports of similar polymer materials, 
especially petroleum.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the research is to transfer the unique oil 
producing capability of jojoba and other native shrubs into higher 
yielding crops such as oilseed rape and soybean. This is a form of 
metabolic engineering and it requires the transfer of coordinated 
groups of genes and enzymes into the host plant to catalyze the 
necessary biochemical reactions. Recent progress includes successful 
transformation of tobacco and alfalfa plants with oil metabolism genes 
from the meadowfoam plant and a cyanobacterium.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. This research began in fiscal year 1989 with a $100,000 
grant under the Supplemental and Alternative Crops program. Grants have 
been awarded under the Special Research Grants program as follows: 
fiscal year 1990, $148,000; fiscal years 1991-1993, $200,000 per year; 
fiscal year 1994, $188,000; fiscal years 1995-1996, $169,000 each year; 
and fiscal years 1997 through 2000, $175,000 per year. A total of 
$2,074,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Matching funds from State and private sources used to help 
fund this project were $27,747 in fiscal year 1998 and $71,000 in 
fiscal year 1999. New Mexico State University and the Plant Genetic 
Engineering Laboratory also provide $90,000 for in-kind support per 
year including faculty salaries, graduate student stipends, facilities, 
equipment maintenance, and administrative support services.
    Question. Where is this work being carried out?
    Answer. The research is being conducted by the Plant Genetic 
Engineering Laboratory at New Mexico State University, Las Cruces, New 
Mexico.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. An estimate of the total time required to complete all 
phases of the project is 3-4 years. The application of this research 
for improved management of natural resources will evolve and expand as 
technology in the area advances.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The Oil Resources from Desert Plants, New Mexico project 
was evaluated for scientific merit by an agency peer review panel on 
February 25, 1999. The panel recommended approval of the project 
pending receipt of supplemental information on administrative aspects 
of the project. The Institution conducts an internal peer review of 
this project by scientists with expertise in this area of research. A 
panel of scientists will be convened to re-evaluate the project upon 
receipt of a proposal for fiscal year 2000.

                 ORGANIC WASTE UTILIZATION, NEW MEXICO

    Question. Please provide a description of the research that has 
been funded under the Organic Waste Utilization, New Mexico grant.
    Answer. Composted dairy waste is utilized as a pretreatment to land 
application. Composting dairy waste before land application may 
alleviate many of the potential problems associated with dairy waste 
use in agronomic production systems. Composting may also add value to 
the dairy waste as a potential landscape or potting medium. High 
temperatures maintained in the composting process may be sufficient for 
killing enteric pathogens and weed seeds in dairy waste. Noxious odors 
and water content may be reduced via composting. Composted dairy waste 
may be easier to apply, produce better seed beds, and not increase soil 
salinity as much as uncomposted dairy waste. Changes in the physical 
structure of the soil are being monitored for the effects of composted 
vs uncomposted amendments. This project undergoes annual peer review 
from academic institutions and experts from government and state 
agencies, and industrial partners.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes the research will address 
the utilization of dairy waste combined with other high-carbon waste 
from agriculture and industry, including potash and paper waste, for 
composting. This approach to waste management will have high impact for 
states where dairy and agriculture are important industry sectors. This 
is especially true for New Mexico and the southwest United States where 
the dairy business is growing rapidly. This research will also provide 
an additional pollution prevention tool for the industrial sectors 
dealing with potash and paper waste. The principal investigator 
believes this research to be of local, regional and national 
importance.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of the research was and continues to 
determine the feasibility of simultaneously composting dairy waste from 
agriculture and industry. The research will determine effects of 
utilizing composted waste, as opposed to raw waste, as a soil amendment 
on plant growth, irrigation requirements, and nutrient and heavy metal 
uptake. Phase I, to determine the feasibility of simultaneous 
composting dairy waste with available high carbon wastes from 
agriculture and industry, has been completed. Phase II, to determine 
the appropriate ratios of waste to carbon substrate for successful 
composting is completed. Phase III, to determine the kinetics of 
nutrient release and effects of composted material on heavy metal 
uptake will be completed next year. The study of the second and third 
year application of the compost will be undertaken this year. This will 
identify the long term soil impact resulting from compost application.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1996 
and the appropriation for fiscal year 1996 was $150,000, and for fiscal 
years 1997 through 2000, $100,000 per year. A total of $550,000 has 
been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds for the duration of this grant from 
the state appropriation is $75,000. There is another $50,000 in-kind 
support from the industrial partners. Additionally, a sum of $15,000 
from the New Mexico State Highway Department has been leveraged by this 
project.
    Question. Where is this work being carried out?
    Answer. This work is being carried out in New Mexico under the 
direction of the Waste-Management Education and Research Consortium in 
collaboration with The Composting Council and industrial partners, such 
as Envio in Ohio, Plains Electric, and McKinley Paper in New Mexico.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Completion date of the initial phases I and II was March 
2000 and the project has progressed according to the specified targets. 
Phase III is ongoing and will be completed by early 2001. Phase IV was 
added last year to evaluate the multi-year compost application on 
parameters such as plant growth, soil water retention and soil 
salinity.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This project has been evaluated based on the semi-annual 
progress report and research findings presented at conferences. The 
cognizant staff scientist has reviewed the project and determined that 
this research is conducted in accordance with the mission of this 
agency.

                    PASTURE & FORAGE RESEARCH, UTAH

    Question. Please provide a description of the research that has 
been funded under the Pasture and Forage Research, Utah grant.
    Answer. This is a multidisciplinary effort to develop profitable 
and sustainable pasture and forage management systems. The Cooperative 
State Research, Education, and Extension Service requested Utah State 
University to submit a grant proposal that has not yet been received.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The proposed research under this Special Research Grant 
will address issues related to forage production and utilization in 
Utah.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this project is to develop a 
comprehensive guide for the management of irrigated pastures to assist 
livestock producers reduce cost and increase net returns.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1997 
and the appropriation for fiscal year 1997 was $200,000, and for fiscal 
years 1998 through 2000 was $225,000 per year. A total of $875,000 has 
been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Non-federal funds in support of this project and related 
activities were $360,200 for 1997, $356,000 for 1998 and $364,000 for 
1999.
    Question. Where is this work being carried out?
    Answer. Research will be conducted at the Utah Agricultural 
Experiment Station.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The principal investigators anticipate the completion date 
for these objectives to be in 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The grant is peer reviewed annually through the 
institutions project approval process as well as by the agency National 
Program Leader and the last on-site review took place in November 1999. 
The evaluation summary noted that the program, as implemented at the 
farm level, has already produced significant results in addressing 
problems of 4-H in Utah and the surrounding area.

                PEACH TREE SHORT LIFE IN SOUTH CAROLINA

    Question. Please provide a description of the research that has 
been funded under the Peach Tree Short Life in South Carolina grant.
    Answer. Progress continued in 1999 with focus on the evaluation and 
longevity and productivity of Guardian rootstocks on peach tree short 
life sites in the southeast and replant sites throughout North America. 
More fundamental work has involved the biochemical characterization of 
the egg-kill factor produced by a bacteria on nematode eggs. Other 
basic studies involved the cloning of genes associated with production 
and expression of toxins from bacteria. New studies were initiated on 
the use of solarization to reduce nematode populations for peach tree 
replant. This project was not awarded competitively but has undergone 
peer review at the university level and merit review at CSREES.
    Question. According to the research proposal , or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. According to the principal researcher the problem of 
disease on peach, nectarine, and plum trees in the southeastern United 
States effects is very great. More than 70 percent of peach acreage in 
the southeast is affected. Research continued on the improvement of 
rootstocks and the use of the cultivar Guardian BY520-9 which has now 
been released in 22 states including California, New Jersey and 
Michigan where bacterial canker is a problem.
    Question. What was the original goal of this research and what has 
been accomplished to date.
    Answer. The goal of this research was the continued evaluation of 
productivity of peach Guardian BY520-9 rootstocks on peach tree short 
life and investigations into novel management for ring nematodes by 
bacteria. Recent accomplishments include the increase in bulk 
commercial production of Guardian seed while two new Guardian 
selections have had very good nursery trails. Guardian rootstock 
continues to be tested in 22 states and is performing well. A marker 
for a gene for rootstock resistance to two root-knot nematode species 
was sequenced and successfully used to correctly sort current 
commercial rootstocks according to their known nematode resistance or 
susceptibility. A major find is that the egg-kill factor produced by 
the bacteria kills root-knot nematode eggs as well as ring nematode 
eggs.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1981, $100,000; fiscal years 1982-1985, $192,000 
per year; fiscal years 1986-1988, $183,000 per year; fiscal year 1989, 
$192,000; fiscal year 1990, $190,000; fiscal years 1991-1993, $192,00 
per year; fiscal year 1994, $180,000; fiscal years 1995-2000, $162,000 
per year. A total of $3,527,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources for this grant were as 
follows: $149,281 state appropriations in 1991; $153,276 state 
appropriations in 1992; $149,918 state appropriations in 1993; $211,090 
state appropriations in 1994; $193,976 in state appropriations in 1995; 
$169,806 in state appropriations in 1996 and 1997; $150,693 in state 
appropriations in 1998; $92,099 in 1999; and $92,099 in state 
appropriations in 2000.
    Question. Where is this work being carried out?
    Answer. This research is being conducted at South Carolina 
Agricultural Experiment Station.
    Question. What as the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The researchers anticipate that the work may be completed 
in fiscal year 2001. Adequate progress has been made to assure that the 
objectives will be met before the completion date.
    Question. What was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The last agency evaluation of this project was a merit 
review completed in January, 1999. In summary, the evaluation of peach 
rootstocks with resistance to peach tree short life is of continued 
importance in managing this disease. The use of biological control 
strategies in suppression of plant parasitic nematodes are a 
complementary area of research in that it can enhance disease 
management by protecting the peach rootstocks. Solarization of orchard 
sites prior to peach tree replanting significantly altered the 
microbial community and suppressed nematode multiplication in the 
rhizosphere. Some accomplishments were the increased production and 
release of commercial Guardian seed and continued evaluation of 
rootstock in 22 states and provinces. A molecular techniques that 
separates resistant and susceptible peach rootstocks was validated.

                   PEANUT ALLERGY REDUCTION, ALABAMA

    Question. Please provide a description of the research that has 
been funded under the Peanut Allergy Reduction, grant.
    Answer. The industry, in conjunction with Alabama A&M University, 
Auburn University and the University of Georgia are trying to develop a 
response to the problem of peanut allergy being experienced by greater 
numbers of people and have determined that research is needed in the 
following areas:
  --the possibility of reducing the allergenic potential of peanuts 
        through bioengineering and traditional breeding targeted at 
        modifying the peanut proteins responsible for causing allergic 
        reactions;
  -- development of vaccines and other means to desensitize people with 
        peanut allergies; and
  -- development of better marketing, handling and processing methods 
        to reduce allergy risks.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. Peanut allergies present a major problem for the growth of 
the peanut industry nationally, regionally and locally.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goals of this research are to (1) reduce the 
allergenic potential of peanuts through bioengineering and traditional 
breeding targeted at modifying the peanut proteins responsible for 
causing allergic reactions; (2) develop vaccines and other means to 
desensitize people with peanut allergies; and (3) develop better 
marketing, handling and processing methods to reduce allergy risks.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant begins during this fiscal 
year 2000. The appropriation for fiscal year 2000 is $425,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year 2000?
    Answer. A grant proposal is expected from a consortium of 
universities, among them are Alabama A&M University, Auburn University, 
and the University of Georgia. Since grant proposals have not yet been 
received, the source and amount of non-federal funds for this research 
is not known.
     Question. Where is this work being carried out?
    Answer. The research is expected to be carried out in Alabama.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. Since grant proposals from the cooperating universities of 
the consortium have not yet been received, the anticipated completion 
date and completion of objectives is not yet known.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Since grant proposals from the cooperating universities of 
the consortium have not yet been received, the date of the last agency 
evaluation is not yet known.

               PEST CONTROL ALTERNATIVES, SOUTH CAROLINA

    Question. Please provide a description of the research that has 
been funded under the Pest Control Alternatives grant.
    Answer. This grant supports research and technology transfer to 
provide growers with alternatives for managing pests and to implement 
the use of new alternatives reducing the sole reliance on chemical 
pesticides.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The investigators contributing to the research and 
technology transfer at South Carolina believe that need for the 
development of alternatives for managing pests on vegetables is a 
regional and national problem. Contributions from the South Carolina 
work are projected by South Carolina to impact vegetable production in 
the Southern region and consumers of vegetable production from the 
Southern region.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. Studies conducted during 1999 demonstrated that Bacillus 
thuringiensis formulations and combinations with botanicals such as 
neem controlled a number of insect pests important on collards. 
Comparisons were conducted with commonly used conventional pesticides. 
Clearly, microbial products or microbial materials in combination with 
botanicals such as neem, can control caterpillars on leafy greens 
without the use of broad spectrum chemical insecticides. Fresh cowpea 
pods were treated with different concentrations of neem to determine 
the effects on the southern green stinkbug. Numbers of feeding 
punctures were significantly reduced when pods were treated with neem. 
Also, treatment caused deformed adults that could not feed or 
reproduce. Because neem is ``soft'' on beneficial insects and spiders, 
it may be considered as a part of an ecologically-compatible program of 
insect control in several vegetable crops.
    Field studies conducted during 1999 have shown that applications of 
the entomopathogenic nematode, Steinernema fletiae, are as effective in 
reducing damage from the squash vine borer as standard insecticide 
sprays. Foliage sprays of a Bacillus thuringiensis formulation were 
also effective in reducing damage by this pest.
    Plant-feeding insects and predators were monitored by two different 
methods in 5 species of medicinal plants during the spring and summer 
of 1999. Except for one small, localized outbreak of whiteffies, the 
natural enemies kept potential posts in check, Major predators included 
ladybeetles, Nabis sp., Geocoris spp., and spiders in the genus 
Pardosa. These preliminary results show that any insect management 
program on medicinal herbs should avoid altogether the use of chemical 
insecticides. Seedless watermelon were more resistant to powdery mildew 
than seeded ones. Losses to powdery mildew should be less with seedless 
than with seeded varieties. 19Munchkin' and 19Baby Boo' mini-pumpkins 
were the most productive varieties among 11 mini-pumpkins tested. 
Collards produced by crossing collard and cabbage germplasm had 
increased vigor and favorable color, size and shape for the fresh 
market. South Carolina county extension agents were provided technology 
transfer information by Clemson University research scientists 
participating in this research. Topics included, (1) conservation of 
indigenous natural enemies, (2) augmentation of predators and 
parasitoids, (3) age of microbial agents in cultivated systems and (4) 
nematodes as biocontrol agents. County agents should be more informed 
about the practical use of biological control agents as alternatives to 
chemical insecticides.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1992 
and the appropriation for fiscal years 1992 and 1993 was $125,000 per 
year. In fiscal year 1994 the appropriation was $118,000 and in fiscal 
years 1995 through 2000, $106,000. A total of $1,004,000 has been 
appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. South Carolina has provided approximately $200,000 in 
personnel support and operating dollars per year from State 
appropriations based on the PI's estimate.
    Question. Where is the work being carried out?
    Answer. This research and technology transfer program is being 
conducted at the South Carolina Agricultural Experiment Station, 
Clemson University at Clemson, Florence, and Charleston, South 
Carolina.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objectives of the project were for five years. 
The project was revised in 1998. Research on objective A: to develop 
and evaluate microbial pest control agents for control of plant 
pathogens and insect pests of vegetables, is diffuse and non-
conclusive. It would be far superior for continued work in this area to 
be submitted to competitive peer review programs where the 
investigators would need to clearly focus specific activities and 
receive the benefit of the comments of peer scientists. Objective B: to 
determine the efficacy of innovative cultural practices for vegetable 
production systems in South Carolina and Objective C: to assess the 
role of indigenous predators, parasites, and pathogens in controlling 
insect pests; determine environmental and biological factors that 
influence the abundance and distribution of these indigenous 
beneficials; and consider the presence of natural enemies, as well as 
pests, in management decisions. These are areas where the most progress 
appears evident and has been cited in the accomplishments. The base of 
information and orientation of the research in these areas is adequate 
and of such quality that the investigators could compete well in 
competitive grant programs such as sustainable agriculture or regional 
Integrated Pest Management grant programs, and would benefit from the 
peer review process. Progress in these areas is an ongoing process as 
explanations are sought for the results being obtained. Objective D: to 
evaluate and develop germplasm, breeding lines and cultivars for 
resistance to major pathogens of commercially important vegetables and 
Objective E: to transfer new technology to user groups, have not at 
this time, demonstrated progress which could be anticipated from 
ongoing conventional sources of funds.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This project is evaluated annually when the grant is 
processed. An agency evaluation of this project is to be scheduled for 
the last part of fiscal year 2000.

                      PEST MANAGEMENT ALTERNATIVES

    Question. Please provide a description of the research that has 
been funded under the Pest Management Alternatives special grant.
    Answer. This special research grant supports projects that help 
farmers respond to the environmental and regulatory issues confronting 
agriculture. These special grant funds support research that provides 
farmers with replacement technologies for pesticides that are under 
consideration for regulatory action by EPA and for which producers do 
not have effective alternatives. The passage of the Food Quality 
Protection Act of 1996 (FQPA) makes this special research grant of 
critical importance to the Nation's farmers.
    New pest management tools are being developed to address critical 
pest problems identified by farmers and others in a crop production 
region, and to identify new approaches to managing pests without some 
of the most widely used pesticides. Farmers have identified the lack of 
effective alternative pest management tactics as a primary reason for 
not implementing IPM on their farms. Where effective alternative 
tactics have been developed, they are widely and rapidly implemented by 
farmers. These special research grant funds are distributed on a 
competitive basis to all eligible research institutions through the 
Pest Management Alternatives Program or PMAP. Research priorities for 
PMAP are established with the help of a database analysis system, which 
draws upon the expertise of the land-grant university system, commodity 
groups, and others.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research.
    Answer. The ability of the Nation's agricultural production system 
to keep pace with domestic and global demand for food and fiber is 
dependant on access to safe, profitable and reliable pest management 
systems. For a variety of factors, farmers and other pest managers have 
fewer chemical control options available to them than they did at the 
beginning of the decade, and this trend is likely to continue at an 
accelerated rate. The Food Quality Protection Act of 1996 (FQPA) will 
have significant impacts on pest management systems in the United 
States over the next decade, and the ``minor use'' (high value crops 
grown on relatively few acres) will be particularly hard hit. For these 
reasons and others, it is essential that farmers be provided with new 
pest management tools and better information so they can remain 
competitive in today's global marketplace.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. This research is conducted to help farmers respond to the 
environmental and regulatory issues confronting agriculture by 
providing them with new options for managing pests. The research 
supported by this special grant is identifying new ways to manage pests 
without key pesticides that may no longer be available as FQPA is 
implemented. Some highlights of the research funded through PMAP 
include technology that reduces organophosphates in apples, modified 
cropping systems that replace herbicide use in pumpkins and squash, 
surface amendments that reduce aerial pesticide pollutants, development 
of pest and natural enemy thresholds to improve pest scouting on wheat, 
models to improve pesticide use efficiencies in minor fruit crops, 
improved insecticide and herbicide spray technology, new selective 
insecticides to control broccoli insects, and use of non-traditional 
oil sprays to control mites on apples.
    Question. How long has this work been underway and how much as been 
appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal years 1996 through 2000, $1,623,000 each year. A total 
of $8,115,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Non-federal funds are not required by this grants program.
    Question. Where is the work being carried out?
    Answer. All State agricultural experiment stations, all colleges 
and universities, other research institutions and organizations, 
Federal agencies, private organizations or corporations, and 
individuals are eligible to compete for this funding. This research is 
currently being carried out by State Agricultural Experiment Stations 
and other research organizations located in 20 States.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The economic and environmental pressures facing U.S. 
agriculture today are greater today than in 1996 when federal funds 
were first appropriated for this special research grant. There will be 
a need for continued investment in research to develop new approaches 
to managing pests for the foreseeable future as the Food Quality 
Protection Act of 1996 is implemented.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Each new draft RFP and all project proposals are evaluated 
annually by multi-disciplinary relevancy and merit review panels. A 
joint USDA/EPA workshop to evaluate the progress and scope of the 
program was held in Arlington, VA on May 11th, 1999. The conclusions 
were that the program was on course and making good progress, and could 
do more with additional funding. The projects supported by this special 
research grant have consistently provided key knowledge needed in 
developing new approaches to pest management. The focus on pesticides 
targeted by FQPA assures that critical pest management alternatives are 
being addressed. PMAP has supported 82 projects in 29 States since it 
started five years ago.

                   PHYTOPHTHORA ROOT ROT, NEW MEXICO

    Question. Please provide a description of the research that has 
been funded under the Phytophthora Root Rot grant.
    Answer. Work has continued to focus in general on the development 
of strategies for sustainable vegetable production in irrigated lands. 
This research includes continued work on the search for Phytophthora 
root rot resistance in chilies, identification of molecular markers for 
rot tolerant genes, investigation on irrigation modification as a means 
to manage root rot, and soil bed temperature control as a means to 
manage disease.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal researcher believes that since Phytophthora 
disease threatens chili production in west Texas, New Mexico, and 
Eastern Arizona, this problem is of state and regional significance.
    Question. What is the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal was to improve chile production through 
genetically superior cultivars, combined with new improved cultural 
practices. Researchers have developed a highly effective disease screen 
that selects resistant seedlings, found that genes for resistance to 
root rot do not provide protection against Phytophthora foliar blight, 
that a wild species of Capsicum is immune to the fungus, and that 
molecular markers are useful to introgress genes for tolerance.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1991 
with an appropriation of $125,000 for that year. The fiscal years 1992-
1993 appropriation was $150,000 per year; $141,000 in fiscal year 1994; 
and $127,000 in fiscal years 1995-2000, each year. A total of 
$1,328,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Non-federal funds from state appropriations and the 
California Pepper Commission were $255,614, in 1997; $253,614 in 1998; 
and state appropriations in 2000 are $250,000.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at New Mexico State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
was 1995. These objectives have not been met. Related programs deal 
with research and development efforts designed to prevent or manage 
diseases impacting vegetable production in irrigated areas, and 
cooperators estimate that the objectives of these programs should be 
met by 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The last merit review was made in January, 1999. In 
summary, the development of resistant cultivars and research on 
interactions of Capsicum and Phytophthora for developing strategies for 
irrigated crop growers to be competitive in the international economic 
arena continued. More than 40,000 seedlings were screened for 
resistance to root rot and/or foliar blight in the greenhouse. Several 
individual plants from cayenne, jalapeno, and new Mexican pod types 
were found to possess both root-rot and foliar blight resistance. 
Unfortunately due to an introduction of curly top virus the field 
evaluation were lost this year. However, other research continues to 
identify molecular makers linked to foliar blight.

         PLANT, DROUGHT, AND DISEASE RESISTANCE GENE CATALOGING

    Question. Please provide a description of the research that has 
been funded under the Plant, Drought, and Disease Resistance Gene 
Cataloging grant.
    Answer. This research grant identifies, characterizes, and catalogs 
genes that enhance the ability of agricultural crops to resist stress 
caused by drought and disease organisms. The project constructs, carts, 
and distributes Cana libraries for genes that are differentially 
expressed in response to drought or disease pressure. Work is also 
being done to sequence DNA of these genes, to characterize their 
patterns of expression, and to develop databases to share information 
with other scientists.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. This research will improve the drought and disease 
resistance of agricultural crops in New Mexico and throughout the 
United States. This work has applications throughout the Nation, 
especially in the arid and semi-arid production regions.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. This research project was supported so that better adapted 
agricultural crops could be developed for difficult environments in New 
Mexico and throughout the United States. New Mexico State University 
established the facility, developed a database to catalogue Cana, and 
began the initial work of sequencing and cataloging genes into 
biologically informative groups. To date, scientists have isolated the 
appropriate DNA to construct libraries of drought-stress induced 
transcripts from three different chile genotypes, one grass, and one 
clover. Additionally, they have selected the germplasm to characterize 
for other species.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1998 
and has been with appropriations of the following amounts: fiscal years 
1998 and 1999, $150,000 per year; fiscal year 2000, $212,500. A total 
of $512,500 has been appropriated since fiscal year 1998.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. In fiscal year 1998, New Mexico Agricultural Experiment 
Station provided $8,444 in non-federal funds. The funds covered a 
portion of the salary for the two principal investigators.
    Question. Where is this work being carried out?
    Answer. The research is primarily conducted at New Mexico State 
University. Collaborations with Los Alamos National Lab and the 
National Center for Genome Resources have been established.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. When it was initiated in fiscal year 1998, this project was 
designed to demonstrate significant accomplishments within a five-year 
time frame. The principal investigators report significant progress has 
been made in achieving project objectives.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The last agency evaluation of this project was an agency 
merit review which took place last March, 2000. This evaluation noted 
that the faculty at New Mexico State University have been conducting 
research on genes involved in disease and drought resistance on a wide 
range of crops and have recently developed expertise and collaborative 
efforts in bio-informatics. Work has begun on two new databases in the 
areas of plant metabolism and cell biology. When the cDNA libraries are 
constructed, curated and distributed, scientists from around the world 
will have access to this database information. It was noted that this 
project addresses high priority objectives in plant genetics which are 
directed to economically important crops and approval of funding was 
highly recommended.

                            POTATO RESEARCH

    Question. Please provide a description of the research that has 
been funded under the grant.
    Answer. Scientists at several of the State Agricultural Experiment 
Stations are breeding new potato varieties, high yielding, disease and 
insect resistant potato cultivars, adapted to the growing conditions in 
their particular areas, both for the fresh market and processing. 
Research is being conducted in such areas as protoplast regeneration, 
somoclonal variation, storage, propagation, germplasm preservation, and 
cultural practices. Congressional language for fiscal years 1997, 1998, 
1999, and 2000 has directed CSREES to award these funds on a 
competitive basis. In each of the years, CSREES published a request for 
proposals in the Federal Register and awarded grants competitively 
based on a scientific peer review.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. This research effort addresses needs of the potato 
producers and processors throughout the United States.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal was to improve potato production through 
genetics and cultural practices as well as improve storage for quality 
potatoes for processing and fresh market. This research has resulted in 
a number of new high yielding, good quality, disease and insect 
resistant cultivars, which are now being used in the processing 
industry and in the fresh market. Regional comprehensive breeding 
programs have been developed to produce cultivars targeted to the 
specific growing conditions of that region. A number of the new 
cultivars have also been adaptable to other regions. These programs 
have also had success in identifying resistance to pests and pathogens 
in wild germplasm and are developing expertise to incorporate genetic 
engineering approaches as traditional components of the program.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1983, $200,000; fiscal year 1984, $400,000; fiscal 
year 1985, $600,000; fiscal years 1986-1987, $761,000 per year; fiscal 
year 1988, $997,000; fiscal year 1989, $1,177,000; fiscal year 1990, 
$1,310,000; fiscal year 1991, $1,371,000; fiscal years 1992 and 1993, 
$1,435,000 per year; fiscal year 1994, $1,349,000; fiscal years 1995 
through 1998, $1,214,000; and for fiscal years 1999 and 2000, 
$1,300,000 per year. A total of $19,252,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
were as follows: $401,424 state appropriations, $4,897 product sales, 
$249,830 industry, and $30,092 miscellaneous in 1991; $567,626 state 
appropriations, $6,182 product sales, $334,478 industry, and $44,323 
miscellaneous in 1992; $556,291 state appropriations, $9,341 product 
sales, $409,541 industry, and $44,859 miscellaneous in 1993; $696,079 
state appropriations, $21,467 product sales, $321,214 industry, and 
$226,363 miscellaneous in 1994; $935,702 state appropriations, $35,376 
product sales, $494,891 industry, and $230,080 miscellaneous in 1995; 
and an estimated $900,000 state appropriations, $10,000 product sales, 
$400,000 industry, and $200,000 miscellaneous in each of 1996, 1997, 
1998, and 1999.
    Question. Where is this work being carried out?
    Answer. The research work is being carried out at the Cornell, 
Idaho, Maine, Michigan, North Dakota, Oregon, Pennsylvania, Washington, 
North Carolina, New Jersey, and Colorado State Agricultural Experiment 
Stations. The grant to Colorado is divided by Colorado with the 
California and Texas Agricultural Experiment Stations.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The project was initiated to accomplish significant results 
in about five years. Because the research is based on genetic varietal 
development, progress is developing new potato varieties takes from 5 
to 10 years.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Beginning in fiscal year 1997, these funds have been 
awarded on a competitive basis using a scientific peer review. In 
addition, CSREES conducts a formal meeting with representatives from 
the potato industry to review research needs and provide input to the 
agency on the merits of the proposals.

                    PRECISION AGRICULTURE, KENTUCKY

    Question. Please provide a description of the research that has 
been funded under the Precision Agriculture, Kentucky grant.
    Answer. The Cooperative State Research, Education and Extension has 
requested the university to submit a grant proposal that has not yet 
been received. Research will evaluate site-specific practices for 
production of corn and soy beans under field conditions. The work will 
compare various combinations of management practices using site-
specific technology and evaluate economics of its application.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The need for this research is to provide objective 
information about precision agriculture technologies to assist farmers 
in the development of management systems that are productive, 
economical, and environmentally benign.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research is to evaluate site 
specified technologies and develop recommendations for their use in 
crop management systems.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1999 
and the appropriation for fiscal year 1999 was $500,000 and 2000 is 
$850,000, total of $1,350,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. This is a new project which has not yet began and, 
therefore, no non-federal funds have been used.
    Question. Where is this work being carried out?
    Answer. The research will be conducted at the Kentucky Agriculture 
Experiment Station.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for this project is 2003.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project will be evaluated upon receipt of the required 
grant proposal.

                    PRE-HARVEST FOOD SAFETY, KANSAS

    Question. Please provide a description of the research that has 
been conducted under the Pre-Harvest Food Safety, Kansas grant.
    Answer. Longitudinal studies on the fecal shedding of Escherichia 
coli 0157:H7 (E. coli 0157:H7) by cattle on beef cow-calf ranches are 
being done to determine the impact of various routine management 
practices on the shedding rate. The purpose of the research is to 
develop an understanding of the management factors that contribute to 
the incidence of E. coli 0157:H7 in beef cattle. During the past year, 
the project has been enlarged to included more monitoring of 
environmental and wildlife samples to determine reservoirs for E. coli 
0157:H7.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for the 
research?
    Answer. The presence of E. coli in beef animals sent to slaughter 
can contribute to the contamination of meat products produced from such 
animals. This has increased the need for control measures that could 
reduce the incidence of such food-borne human pathogens in food animals 
during the production cycle. With the implementation of mandatory 
Hazard Analysis Critical Control Point programs for E. coli 0157:H7 in 
slaughter plants, there is increased pressure for the livestock 
producer to deliver animals to slaughter with reduced prevalence of E. 
coli 0157:H7. This type of research has been identified as critical by 
all food animal commodity groups as well as public health officials and 
consumers.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal was to determine the incidence of E. coli 
0157:H7 in large versus small beef cow-calf operations and describe the 
management factors that contribute to or affect the rate of shedding of 
organisms in the feces of such animals. E. coli 0157:H7 has been 
detected in 3.11 percent of monthly fecal samples (n=3152), with 4.57 
percent of the 2058 animals having at least one positive sample. Fecal 
shedding was normally transient; only one animal was positive on more 
than one sampling date. In addition, there was a difference in 
prevalence between farms. Sources of drinking water were also examined 
and 3.5 percent of 199 water samples were positive. Of particular 
interest was that 8.3 percent of 24 creek/stream samples and 2.9 
percent of 103 pond samples were positive. In addition, isolates of E. 
coli 0157:H7 have been obtained from wildlife, especially deer. 
Management practices on the ten farms are being examined to determine 
if there are specific risk factors that can be identified.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1996. 
The appropriations for fiscal years 1996 through 2000 was $212,000 per 
year. A total of $1,060,000 has been appropriated.
    Question. What is the source and amount of non-federal funds by 
fiscal year?
    Answer. Non-Federal funds have been contributed to this project as 
follows: In fiscal year 1996 non-federal funds were $150,000 in state 
appropriations and $91,450 in contributed indirect costs; 1997 non-
federal funds were $165,000 in state appropriated funds and $90,300 in 
contributed indirect costs; 1998 non-federal funds were $175,000 in 
state funds and $91,500 in contributed indirect costs; 1999 non-federal 
funds were $109,957 in state funds and $90,800 in contributed indirect 
costs.
    Question. Where is this work being performed?
    Answer. This research is being conducted at Kansas State 
University, University of Nebraska-Lincoln, and at ranches in Kansas, 
Nebraska, and Colorado.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date was October 1, 1998 for the 
original objectives. However, the project was not initiated until 
several months after the expected start date of October 1,1995 and the 
original objectives were completed in late spring of 1999. As the 
project has progressed, the Principal Investigator has added other 
important questions to the original research plan and has planned to 
look more closely at management interventions that could help reduce 
the incidence of E. coli shedding in beef cattle. During the past year, 
the project has added objectives which are focused on environmental 
issues such as prevalence of E. coli 0157:H7 in wildlife as well as in 
various water supplies used by the cattle. Thus the project is expected 
to continue for some time after the original expected period of time.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project was evaluated by an on-site visit on October 
28-29, 1997. The evaluation noted that the project team was doing an 
excellent job and the interactive collaboration was outstanding. The 
research team has been successful in bringing other participants into 
the program. The project leader provided a very comprehensive written 
report on November 3, 1998, including manuscripts currently under 
review for publication, which has permitted a further assessment of the 
continued progress on this important project. Several scientific papers 
have been given at scientific meetings and manuscripts are being 
published as rapidly as data are assembled, analyzed, and prepared for 
publication.

             PRESERVATION AND PROCESSING RESEARCH, OKLAHOMA

    Question. Please provide a description of the research that has 
been funded under the Preservation and Processing Research grant.
    Answer. Research has focused on the effects of preharvest and 
postharvest factors on the market quality of fresh and minimally 
processed horticultural products, including marigolds, pecans, 
watermelons, peaches, and sage. Researchers are developing harvester 
prototypes for marigold flowers and drying and threshing systems for 
marigold petal drying and separation. A fruit orienting mechanism is 
being developed for incorporation into an on-line grading system. An 
integrated harvesting and postharvest handling system is being 
developed for fresh market and processing market horticultural 
products. Research continues on methods to determine textural 
properties of pecans, determine optimum operating parameters for 
supercritical carbon dioxide and other alternative extraction 
technologies, and develop and optimize modified atmosphere packaging 
techniques and partial oil extraction for pecan shelf life extension.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes that technological 
improvements in fruit, nut and vegetable handling systems are needed to 
supply domestic markets and support continued participation in 
international commerce, which is a national need. New environmentally 
friendly processing systems have been developed and are being 
commercialized in Oklahoma, with broad application to numerous crops 
with international marketing potential. Processing systems under 
development for commercial adaptation will support market expansion of 
pecans and sage, affecting product market potential and value 
regionally. Improvements in postharvest handling and processing are 
necessary to support growth of the state and national horticulture and 
related agricultural industries and ensure competitive involvement in 
national and international commerce of commodities uniquely suited for 
production in Oklahoma. New extraction facilities will continue to have 
a positive impact on local economies, incorporating a new value added 
processing industry, providing local employment opportunities and 
providing a new local market for Oklahoma produced commodities.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the research has been to define the major 
limitations for maintaining quality of harvested fruits, vegetables and 
tree nuts and prescribe appropriate harvesting, handling and processing 
protocols to extend shelf life and marketability of harvested 
horticultural commodities, thus maintaining profitability of production 
systems and assuring an economic market niche for Oklahoma producers 
and food processors. A systems approach to develop complementary 
cropping, harvesting, handling and processing operations has resulted 
in development of improved handling systems for cucurbit, tree fruit 
and herb crops. Nondestructive processing systems for partial oil 
reduction of tree nuts have been developed to extend shelf life and 
lower the calorie content for the raw or processed product. A new food 
extraction facility has started operations in Oklahoma.
    Question. How long has the work been underway and how much has been 
appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1985, $100,000; fiscal year 1986, $142,000; fiscal 
year 1987, $242,000; fiscal years 1988 and 1989, $267,000 per year; 
fiscal year 1990, $264,000; fiscal year 1991, $265,000; fiscal year 
1992, $282,000; fiscal year 1993, $267,000; fiscal year 1994, $251,000; 
and fiscal years 1995-2000 $226,000 each year. A total of $3,703,000 
has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year 2000?
    Answer. State funds have been provided as follows: fiscal year 
1991, $126,900; fiscal year 1992, $209,783; fiscal year 1993, $219,243; 
fiscal year 1994, $308,421; fiscal year 1995, $229,489; year 1996, 
$366,570; fiscal year 1997, $397,881; fiscal year 1998, $205,662; and 
fiscal year 1999, $206,334. The State also invested $16,100,000 for 
development of an Agricultural Products and Food Processing Center and 
approximately $2 million dollars annually to staff and operate the 
facility.
    Question. Where is the work being carried out?
    Answer. This work is being conducted at the Oklahoma State 
Agricultural Experiment Station, in conjunction with ongoing production 
research at the Wes Watkins Agricultural Research and Extension Center 
and the South Central Agricultural Research Laboratories.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. It is expected that ongoing research will be completed in 
2002. Additional related objectives beyond this date would address 
further opportunities for horticulture industry growth, innovative food 
processing technologies and associated economic development.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. A review of the proposal supporting the fiscal year 1999 
appropriation was conducted on March 31, 1999. The project was 
evaluated as part of a comprehensive site review in the fall of 1995, 
with a recommendation by the review team to continue and expand the 
value-added product development.

                        RANGELAND ECOSYSTEMS, NM

    Question. Please provide a description of the research that has 
been funded under the Rangeland Ecosystems, NM grant?
    Answer. Current research is focused on the ecology of noxious and 
invasive weeds that are endemic to New Mexico's rangelands. Competitive 
research grants have been awarded that deal with studying the 
physiological and toxicological effects of these weeds on livestock.
    Question. According the research proposal, or the principal 
researchers, what is the national regional, or local focus for this 
research?
    Answer. Noxious weeds are a serious problem in the southwestern 
United States About one-fifth of the rangeland in Texas and more than 
one-half in the New Mexico is infested to some degree. Under this 
program, researchers are working to develop an integrated weed 
management approach in rangeland ecosystems for that region.
    Question. What has the original goal of this research and what has 
been accomplished?
    Answer. Accomplished research led to understanding of broom 
snakeweed and other noxious weeds including a better understanding of 
plant's strategy for invasion and persistence. The primary focus of 
research at this time is addressing the need for an integrated weed 
management approach for noxious weeds, especially broom snakeweed.
    Research is addressing three general areas which are ecology and 
management, biological control and toxicology and animal health. One 
specific accomplishment is the biological control arena; several plant 
pathogens and insects are proving to be effective in broom snakeweed's 
control.
    Question. How long has the work been underway and how much has been 
appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1989, $100,000; fiscal year 1990, $148,000; fiscal 
year 1991, $150,000; fiscal years 1992 and 1993, $200,000 per year; 
fiscal year 1994, $188,000; fiscal years 1995 and 1996, $169,000 each 
year; fiscal year 1997, $175,000; fiscal year 1998, $185,000; and for 
fiscal years 1999 and 2000, $200,000 per year. A total of $2,084,000 
has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
were as follows: $249,251 state appropriations in 1991; $200,110 state 
appropriations in 1992; $334,779 state appropriations in 1993; $302,793 
state appropriations in 1994; $294,451 state appropriations in 1995; 
and an estimated $300,000 in state appropriations in each fiscal year 
of 1996, 1997, 1998 and 1999.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at New Mexico State University 
and throughout the State of new Mexico in actual field conditions.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The project was initiated in 1991. Considerable progress 
has been made on many of the original objectives. Currently, additional 
and related objectives have evolved and anticipated completion date for 
these is 2004.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Each year the grant is peer reviewed with oversight by an 
administrative executive committee within the College of Agriculture 
and Home Economics at New Mexico State University. Additionally, 
CSREES' senior scientific staff review the progress of the grant. Those 
reviews indicated progress in achieving the objectives.

                      RED SNAPPER RESEARCH/ALABAMA

    Question. Please provide a description of the research that will be 
funded under the Red Snapper Research grant, Alabama.
    Answer. The agency is in the process of requesting the university 
to submit a grant proposal for this new research activity.
    Question. According to the research proposal, or the principal 
research, what is the national, regional or local need for this 
research?
    Answer. The researchers indicate that there is a regional need for 
red snapper research because of its importance to the Gulf states and 
the fact that it is presently considered to be an over-fished species 
by commercial and recreational interests. Current harvest limitations 
mandated by Federal actions have resulted in economic losses to coastal 
communities. Research will provide critical knowledge in efforts to 
restore native populations and stimulate the development of aquaculture 
enterprises in the Gulf region.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. This is a new research grant to be funded in fiscal year 
2000.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and the appropriation for fiscal year 2000 is $510,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The university estimates that significant non-federal 
funding will be provided in fiscal year 2000 primarily from state 
sources to cover salaries of the principal investigators. As the 
program develops, additional non-federal funding is expected.
    Question. Where is this work being carried out?
    Answer. The research will be conducted through the Alabama 
Agricultural Experiment Station at the Claude Peteet Mariculture Center 
located in Gulf Shores in collaboration with the Alabama Marine 
Resources Division.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
is fiscal year 2001. The project will be initiated in fiscal year 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency will evaluate the progress of this new project 
on an annual basis. The university will be required to submit an 
accomplishment report each year when the new proposal is submitted to 
the agency for funding. Since this is the first year of the program, 
the agency will conduct an external peer review of the proposal. The 
fiscal year 2000 review will be completed within three weeks of 
submission of the proposal. The researchers will be requested to 
develop a research proposal consistent with the National Science and 
Technology Council's Strategic Plan for Aquaculture Research and 
Development.

                  REGIONAL BARLEY GENE MAPPING PROJECT

    Question. Please provide a description of the work that has been 
funded under the Regional Barley Gene Mapping Project grant.
    Answer. The Regional Barley Genome Mapping Project is a multi-
disciplinary, multi-institutional project to develop a genome map of 
barley. Specific objectives are to: construct a publicly-available 
medium resolution barley genome map; use the map to identify and locate 
loci, especially quantitative trait loci controlling economically-
important traits such as yield, maturity, adaptation, resistance to 
biotic and abiotic stresses, malting quality, and feed value; provide 
the framework for efficient molecular marker-assisted selection 
strategies in barley varietal development; identify chromosome regions 
for further, higher resolution mapping with the objective of 
characterizing and utilizing genes of interest; and establish a 
cooperative mapping project ranging from molecular genetics to breeding 
that will be an organizational model for cereals and other crop plants. 
All funds are awarded on a competitive basis.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes barley breeders 
nationwide need information about the location of agriculturally-
important genes controlling resistance to biotic and abiotic stresses, 
yield, and quality factors in order to rapidly develop new, improved 
cultivars and respond to disease and pest threats. This project 
provides that information along with appropriate molecular markers to 
track these traits through the breeding and selection process.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this project has been to develop a 
restriction fragment length polymorphism map for barley and associated 
important genetic traits to provide closely linked molecular markers 
for barley breeders. The project has developed comprehensive linkage 
maps defining the entire barley genome in three experimental 
populations and determined the location, number, effect, and 
interaction of genes determining a range of economically-important 
traits. Additionally, the project has supported the development and use 
of an array of genomics tools that are publicly available. Technical 
papers have been published to report research results to the scientific 
community.
    Question. How long has this work been under way and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1990, $153,000; fiscal year 1991, $262,000; fiscal 
years 1992-1993, $412,000 per year; fiscal year 1994, $387,000; fiscal 
years 1995-1998, $348,000 each year; fiscal year 1999, $400,000; and 
fiscal year 2000, $425,000. A total of $3,843,000 has been 
appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
were as follows: $203,760 from industry in 1991; $212,750 from industry 
in 1992; $115,000 from industry in 1993; and $89,000 from industry in 
1994; and $35,000 from the State of Washington and $108,000 in other 
non-federal funding, for a total of $143,000 in 1995. Non-federal funds 
were $163,000 for 1996 and $178,240 in 1997. In 1998, the project 
received $35,000 from industry. Non federal for 1999 were estimated at 
$156,000.
    Question. Where is this work being carried out?
    Answer. Research is being conducted in the following state 
agricultural experiment stations; Oregon, Colorado, Washington, 
Montana, Idaho, North Dakota, Minnesota, New York, Virginia and 
California.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objective was to produce a genetic map of 
agronomically-important traits of the barley genome. The anticipated 
time to complete this task was estimated at ten years with completion 
in 1999. The initial goals have been exceeded; however, maps are never 
``done''. The next step will be physical mapping of gene rich regions 
in order to study the genes and understand pathways. Researchers will 
focus on quality and disease resistence. This phase is projected for 
completion in 2004.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. In 1998, the special grant proposal was subjected to the 
project approval process at Oregon State University, which is the lead 
university, and reviewed by an agency scientist. This project is made 
up of many competitively-awarded mini grants. A subgroup of the 
National Barley Improvement Committee, which is composed of elected 
representatives of research, growers, and industry, serves as the peer 
panel to review and select proposals based on relevance to the original 
objectives and scientific merit. Multi-disciplinary, multi-
institutional, and continuing projects are given the highest priority. 
The overall project and its mini-grants have been judged to be 
scientifically sound and appropriate for the stated objectives, based 
on comments and rating from peer scientists which is done on each 
support prior to selection.

               REGIONALIZED IMPLICATIONS OF FARM PROGRAMS

    Question. Please provide a description of the research that has 
been done under the program on Regionalized Implications of Farm 
Programs grant.
    Answer. The University of Missouri continuously provides 
regionalized analysis of alternative farm program designs. This 
includes providing farm level analysis of national changes in 
agriculture policy.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The need for this research is to give farm-level or micro 
view of macro-level changes; and to provide as accurate and robust an 
analysis as possible in order to point out regional differences in 
policy alternatives.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original, as well as current, goal was and continues to 
be to provide the farm community, agribusiness groups, and public 
officials information about farm, trade, and fiscal policy implications 
by developing regionalized models that reflect farming characteristics 
for major production regions of the United States. The researchers have 
developed a farm level policy analysis system encompassing major U.S. 
farm production regions. This system interfaces with existing 
agricultural sector models used for farm, macroeconomic, and trade 
policy analysis. The universities have expanded the number and types of 
representative farms to 80. Typical farm models also are being 
developed for Mexico and Canada under a collaborative agreement for use 
in analyzing impacts of the North American Free Trade Agreement.
    Policy studies completed this past year at the request of 
policymakers and farm groups included analysis of the impacts of 
marketing loan provisions on farmers' economic viability; drought on 
farm income and farm viability; early provision of Agricultural 
Marketing Transaction Act (AMTA) payments, risk management accounts; 
and other crop insurance and disaster assistance alternatives.
    Results of these analysis were presented to more than 60 different 
groups across the U.S., including, of course, both congressional 
agriculture committees. The Agricultural Food Policy Center (AFPC) web 
site, which contains copies of all Working and Briefing Papers, was 
visited more than 345,000 times during May-November, 1998.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1990 
and the appropriation for fiscal year 1990 was $346,000. The fiscal 
years 1991-1993 appropriations were $348,000 per year; $327,000 in 
fiscal year 1994; and $294,000 in each of the fiscal years 1995 through 
1999. The fiscal year 2000 is $294,000. A total of $3,481,00 has been 
appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
were as follows: $288,843 State appropriations and $46,773 industry for 
a total of $335,616 in 1991; $45,661 State appropriations in 1992; 
$33,979 State appropriations in 1993; $40,967 State appropriations in 
1994; $161,876 State appropriations in 1995; $187,717 State 
appropriations for 1996; and $137,100 for 1997; and $161,400 for 1998.
    Question. Where is this work being carried out?
    Answer. Research is being conducted by the Texas A&M University and 
University of Missouri at Columbia.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. This program is of a continuing nature for the purpose of 
assessing the impacts of existing policies and issues and proposed 
policy and program changes at the individual firm level for feed grain, 
wheat, cotton, rice, oilseed and livestock producers. In addition, the 
representative farms are constantly being updated as farming practices 
change. Currently the researchers are making adjustments for the 
increasing use of Bt and Round-Up Ready seeds.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. No formal evaluation of this project has been carried out; 
however, the CSREES representative is in frequent communication with 
the principal investigator concerning policy analysis procedures and 
studies.

                           RICE MODELING, AR

    Question. Please provide a description of the research that has 
been funded under the Rice Modeling grant.
    Answer. The purpose of this research project is to develop a 
regional, national and global rice industry model for use in analyzing 
the impact of changes in domestic and foreign public policies on 
production, trade, stocks, substitute crops, farm prices and domestic 
as well as global consumption.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. Research is needed to assist both the U.S. rice industry 
and national policymakers in assessing the impact of existing and 
proposed changes in public policies for rice. This research enables 
improved analysis of both international and domestic policy changes on 
rice production, stocks, prices of substitute crops and consumption. It 
has been, and is being used to analyze the impacts of farm policy 
proposals on the U.S. rice industry, to analyze the impact of WTO and 
the Uruguay Round agreements on U.S. trade, to analyze the impact of 
emerging rice importing and exporting countries on U.S. rice exports, 
and to analyze the market for different rice types (qualities) and 
seasonal demand and supply factors that affect the global rice market. 
The principal researcher believes this research addresses national, 
regional and local needs.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to develop 
international, national and regional models to analyze the impact of 
foreign and domestic policy changes, and forecast changes in 
production, trade, stocks, prices of substitute crops, farm prices, and 
consumption.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work actually began about four years ago and federal 
research grants from various sources have totaled roughly $2 million 
prior to this year. The work supported by this grant began in fiscal 
year 1996. The appropriation for fiscal years 1996 and 1997 was 
$395,000; for fiscal years 1998, 1999, and 2000, $296,000, for a total 
appropriation of $1,678,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds over the 4 years prior to this year 
totaled approximately $500,000. For the 1996 fiscal year, state 
appropriations were $178,000; and for 1977 and 1998, $150,000.
    Question. Where is the work being carried out?
    Answer. The research is being carried out at the University of 
Arkansas-Fayetteville and the University of Missouri-Columbia.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The domestic portion of the rice model has been completed. 
The international modeling research is a little over half completed and 
the researchers estimate another 5 years is required. The purpose of 
constructing the models, however, is to provide on-going analysis of 
the impact of various policy proposals on the U.S. rice industry.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. We have conducted no formal evaluation of this project. 
However, annual proposals are peer reviewed for relevance and 
scientific merit. Also, each annual budget proposal is carefully 
reviewed for adherence to stated objectives and annual progress is 
discussed with the principal investigators.

                       RURAL DEVELOPMENT CENTERS

    Question. Please provide a description of the research that has 
been funded under the Rural Development Centers Program grant.
    Answer. The overall objectives of the research agenda of the five 
rural development centers are to: Improve economic competitiveness and 
diversification in rural areas; support management and strategic 
planning for economic development; create community capacity through 
leadership; assist in family and community adjustments to stress and 
change; and promote constructive use of the environment. The function 
of the Centers is to increase the productivity of regional faculty both 
in doing research on rural issues and in using that research to do 
effective outreach with rural communities. These projects have 
undergone a merit review.
    Question. According to the research proposal, or one of the 
principal investigators, what is the national, regional or local need 
for this research?
    Answer. In the context of a global society, rural communities and 
rural economies are increasingly complex and multi-dimensional. People 
living in rural America face an ever increasing number of public issues 
and problems needing resolution. Yet the number of research faculty 
addressing broader rural issues is declining in many places. The multi-
disciplinary, multi-state work supported by the Centers is even more 
crucial in this context. The four Centers initiate, facilitate, and 
evaluate research that has direct, positive impacts on the social and 
economic well-being of individuals, families, communities, small towns 
and rural places. Center-supported research addresses such rural 
development issues as rural economic diversification, workforce 
preparation, the changing demography of rural places, transitions in 
agriculture, small business and retail trade opportunities, the impacts 
of welfare reform, the capacity of state and local governments to meet 
changing public assistance needs, management of natural and 
environmental resources, public lands policy, water quality, physical 
infrastructure, food assistance issues among vulnerable populations, 
education and strengthened human capital, forest stewardship, and 
access to vital community services. Specific research priorities emerge 
from on-going dialog with stakeholders and clients in each region and 
are reviewed annually by the Centers and their Boards of Directors. In 
addition, in 1999 the Center Directors began a collaborative process to 
identify critical rural development issues shared across regions and to 
establish a collaborative national rural research agenda. Together the 
Centers enhance the capacity of people and communities to carry out 
expanding responsibilities in the design, management, and financing of 
government programs and in building healthy, viable communities and 
families across rural America.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The Rural Development Center mission is to strengthen rural 
families, communities, and businesses by facilitating collaborative 
research and extension education through land-grant institutions and 
their partners in the various regions. Research programs are undertaken 
after evaluating broader regional and national priorities. Following 
are some accomplishments of selected research activities conducted 
under the auspices of various centers.
    The Southern Regional Development Center (SRDC) is nationally 
recognized for its Information Briefs, prepared to shed light on the 
host of challenges and opportunities facing governments, communities 
and people in the South. In a special 1998-71999 series, for example, 
SRDC sponsored research by land-grant faculty on the South's experience 
of major welfare reform in the United States. The ``Welfare Reform 
Briefs'' now help national, state, and local leaders and officials 
understand and respond to the devolution of government services, rural 
transportation issues and welfare reform, family economics and 
individual development accounts, the cost of living, rural earnings 
capacity, job opportunities for low-income people, and child care 
issues. Most recently, SRDC launched its ``Millennium Series,'' 
research on persistent problems in the rural South as well as 
optimistic trends. Research underway addresses wage levels, strategies 
to strengthen the economic health of agricultural and non-agricultural 
firms, rural racial and ethnic diversity, rapid urbanization and its 
effects on natural and environmental resources, the demand for better 
educated workers, progress advancing labor force skill levels, 
entrepreneurial opportunities and strategies to diversify the rural 
economy, the changing structure of families and related family services 
needs, and barriers to health care quality and access. The planned 
series of 35 policy briefs will stimulate public dialogue needed to 
create vibrant, healthy rural communities in the rural South.
    Like the other Centers, the SRDC links the research sponsors with 
extension education in several ways. For example, with land-grant 
faculty in the southeast, the SRDC developed and sponsors the Southern 
Regional Community Development Institute. Diverse extension educators 
(agriculture, natural resources, family and youth development, 
community development, and middle management) spend five days attending 
sessions on understanding community, strategic planning, asset-mapping, 
social infrastructure, local government, problem-solving, economic and 
sustainable development, and leadership skills. Started in 1998, demand 
for the training is strong, and SRDC has scheduled its third Institute 
for summer 2000. Another initiate begun in 1999, the Mid-South Delta 
Institute, is an on-going participatory research and training program 
designed to help community leaders of northwest Mississippi expand 
their understanding of themselves and their communities through asset-
mapping, strategic planning, building partnerships, and consensus-
building.
    The North Central Regional Center for Rural Development (NCRCRD) 
has an extensive repertoire of research informing policy and community 
development programs. Its contributions have won national recognition 
in the areas of workforce preparation, state of the art community 
visioning and strategic planning, social indicators for community and 
economic planning, and federal program assessment including the 
Empowerment Zone/Enterprise Community initiative and national workforce 
preparation programs. NCRCRD supported research also enhances the 
scientific methods land-grant faculty use in applied research on rural 
development. For example, land-grant faculty supported by NCRCRD 
demonstrates the power and utility of clustering geographic and 
demographic data and linking geodemographic clusters to Agriculture 
Census and Decennial data. Other research analyzes the future of small 
rural trade centers as providers of public services, th dynamics of 
rural retail trade, and the most critical needs of rural business 
communities. Through its workshops, conferences, training programs, and 
newsletter, Rural Development News, NCRCRD provides research results 
and related educational materials to rural development professionals in 
land-grant and partner institutions and organizations across the 
country.
    Industrial recruitment has been one of the most popular methods of 
economic development in the U.S. But increasingly, the cost 
effectiveness of this strategy is being questioned by researchers and 
practitioners. With the help of research and related training programs, 
communities are capitalizing on an alternative strategy called Business 
Retention and Expansion (BR&E). This builds on local economic 
development efforts by creating teams of local leaders to help 
communities improve their business climate and identify and address 
impediments to growth and retention of existing businesses. The 
Northeast Regional Center for Rural Development (NERCRD) supported the 
development of BR&E materials that are now used in training workshops 
across the country, sponsored by Business Retention and Expansion 
International. Economic development professionals across the U.S. and 
in Canada have purchased these materials and use them locally to retain 
and expand existing businesses and reduce the high costs associated 
with industrial recruitment strategies. Shared internationally, the 
materials also have been translated into French and Polish.
    NERCRD also funded research to assess the consumer credit knowledge 
of rural poor and ethnic minorities and determine their use of credit 
and management practices. Based on the research, an educational program 
that focuses on the wise use of consumer credit has been developed and 
offered to a diverse extension audience. This program also contributed 
to a video that promotes the MONEY 2000 program, encouraging 
participants to save and/or reduce debt by $2,000 by the end of the 
year 2000. The video is distributed widely by extension personnel 
within the region and nation and is used by financial counselors at 
several military bases. It helps families living paycheck-to-paycheck 
and struggling with low savings or high household debt. Since it was 
launched in 1996, MONEY 2000 has helped over 7,000 people in more than 
30 states increase their net worth by more than $3 million.
    New programs underway at the Western Rural Development Center 
(WRDC) include research to enhance home-based and micro business 
opportunities and a ``rapid growth toolkit'' to help communities 
address land and natural resource use issues in the midst of economic 
growth. This builds on the Center's long-standing support for research 
on the impacts of tourism and its economic impact and promise in the 
west. In addition, WRDC has been active in BR&E related research. Using 
a WRDC supported BR&E expansion program, New Mexico State University 
Extension has helped communities expand their economic base by saving 
and creating local jobs, and BC Hydro in Burnaby, British Columbia 
recently requested and received permission to adapt the Business R&E 
program materials for use in rural Canada.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1971, $75,000; fiscal year 1972, $225,000; fiscal 
year 1973, $317,000; fiscal years 1974-1981, $300,000 per year; fiscal 
years 1982-1985, $311,000 per year; fiscal years 1986-1987, $363,000 
per year; fiscal year 1988, $475,000; fiscal year 1989, $500,000; 
fiscal year 1990, $494,000; fiscal years 1991-1993, $500,000 per year; 
fiscal year 1994, $470,000; fiscal years 1995-1998, $423,000 per year; 
fiscal year 1999, $523,000; and fiscal year 2000, $523,000. A total of 
$11,164,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Non-federal funds available to the four Regional Centers 
for Rural Development were: fiscal year 1991, $1,117,000; fiscal year 
1992, $790,000; fiscal year 1993, $900,000; fiscal year 1994, $776,591; 
and fiscal year 1995, $710,0050; for a total of $4,293,641 across the 
five years for which there are complete data. Non-federal partners 
sponsoring research and related extension programs through the Centers 
since 1995 include the Farm Foundation, the University of Kentucky's 
Tennessee Valley Authority Rural Studies Program, the W. K Kellogg 
Foundation, the Upjohn Institute, the Kerr Center for Sustainable 
Agriculture, the National 4-H Council, and the Heartland Center. Other 
federal partners include the EPA, Small Business Administration, and in 
USDA--Rural Development, Economic Research Service; Agricultural 
Research Service; Forest Service; SARE; and National Resource and 
Conservation Service. In short, in recent years the Centers have 
established an impressive record of brokering partnerships with private 
foundations and non-governmental organizations, as well as other 
federal partners, to meet their goals and extend the impact of their 
allocated federal dollars.
    Question. Where is this work being carried out?
    Answer. The regional rural development centers include the 
following: Northeast Regional Center for Rural Development; 
Pennsylvania State University; North Central Regional Center for Rural 
Development at Iowa State University; Southern Rural Development Center 
at Mississippi State University; and Western Rural Development Center 
at Oregon State University. There is also a rural development project 
at North Dakota State University which receives funding from the annual 
Rural Development Centers appropriation. Most of the research sponsored 
by the four regional centers is actually performed by resident faculty 
at land-grant universities in the respective region through 
subcontracts from that center's grant.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives.
    Answer. The regional rural development centers were established to 
provide an on-going ``value added'' component to link research and 
extension and by doing so to increase rural development under the 
special conditions in each region. The work of the Centers is being 
carried out in all 50 states and in some territories. The Centers 
compile a report of annual accomplishments and share those with the 
states in the region. Accomplishments are now shared through 
sophisticated, interactive web sites. The list of needs is constantly 
evolving and is being addressed through projects that are matched to 
the constantly shifting local agenda. The current phase of the program 
will be completed in fiscal year 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The Centers enlist the help of academic and private/public 
foundations personnel on advisory committees and boards of directors to 
help establish operating rules and provide professional, technical 
counsel and peer evaluation of Center projects and the investigators. 
The projects are evaluated annually by the advisory committees and the 
boards of directors against the five key issue areas and the objectives 
of each project for relevance, achievement, and initial impacts. 
Follow-up evaluation is carried out by the Center staffs in order to 
assess long-term impacts of these projects on local communities.

                        RURAL POLICIES INSTITUTE

    Question. Please provide a description of the research that has 
been funded under the Rural Policies Institute grant.
    Answer. The Rural Policy Research Institute is a consortium of 
three universities designed to create a comprehensive approach to rural 
policy analysis. The Institute conducts research and facilitates public 
dialogue to increase public understanding of the rural impacts of 
national, regional, state, and local policies on rural areas of the 
United States.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. There is a need to estimate the impacts of changing state 
and national programs and policies on rural people and places. 
Objective public policy analysis can provide timely and accurate 
estimates of the impacts of proposed policy changes to allow more 
reasoned policy discussions and decisions. The principal researcher 
believes this research meets national, regional and local needs.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of the Rural Policy Research Institute 
(RUPRI) was to create a new model to provide timely, accurate, and 
unbiased estimates of the impacts of policies and new policy 
initiatives on rural people and places. During the past four years, 
RUPRI has analyzed the impact of market-driven health reform and 
impacts of specific health policy alternatives on rural people; the 
impact of implementing the Telecommunications Act of 1996, including 
use of the Universal Service Funds; the impact of welfare reform on 
rural communities. RUPRI has developed complex models to provide 
quantitative estimates of economic, demographic, and fiscal effects of 
policy alternatives on local communities of different types and in 
different regions. During those same four years, RUPRI has provided 30 
analyses for congressional hearings and briefings on critical issues 
affecting rural America, 100 policy research papers, and developed a 
popular website. RUPRI's work is published and cited in numerous 
academic journals, discussed in the media, and widely used by policy 
decision makers at all levels of government.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by these grants began in fiscal year 
1991 and the appropriation for fiscal year 1991 was $375,000. The 
fiscal year 1992 appropriation was $525,000; for fiscal year 1993, 
$692,000; for fiscal year 1994, $494,000; and fiscal years 1995-2000, 
$644,000 each year. A total of $5,950,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Aggregated non-federal funds to support the Rural Policy 
Research Institute across the three universities involved include 
unrecovered indirect costs, salary support from university and other 
non-federal sources, and various other grants, contracts, and 
reimbursable agreements. They amounted to $316,458 for fiscal year 
1991; $417,456 in fiscal year 1992; $605,302 in fiscal year 1993; 
$537,834 in fiscal year 1994; $584,516 in fiscal year 1995, for fiscal 
year 1996, $576,782; $186,859 in 1997; $153,614 for 1998; and an 
estimated $168,450 for 1999. Total to date including the 1999 estimate, 
is $3,547,271.
    Question. Where is this work being carried out?
    Answer. The Institute's member universities are: the University of 
Missouri-Columbia; the University of Nebraska-Lincoln; and Iowa State 
University, Ames.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1991 was for a period of 24 
months, however, rural communities continue to be impacted by major 
socio-economic changes as well as state and federal policy changes. The 
current phase of the program will be completed in 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. CSREES performed a merit review of the project in February 
1999, as it evaluated the 1999 project proposal, and determined that: 
``RUPRI is an effective interdisciplinary, multistate effort that 
supports the mandates for collaboration in the Agricultural Research, 
Extension and Education Reform Act of 1998. Its work supports CSREES 
strategic goals of enhancing economic opportunity and quality of life. 
The principal investigator and participants are well qualified to 
conduct the project.''

                     RUSSIAN WHEAT APHID, COLORADO

    Question. Please provide a description of the research that has 
been funded under the Russian Wheat Aphid grant.
    Answer. Funding will support two key areas of research that are 
needed to assure long-term and sustainable Russian wheat aphid 
management. These are:
  --Discovering new crop genes which provide resistance to the Russian 
        wheat aphid and incorporating them into commercially acceptable 
        wheat varieties, and
  --Integrating the available control tactics into the most effective, 
        efficient, and environmentally sound production systems for the 
        Great Plains.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The Russian wheat aphid is an exotic pest that entered the 
western United States without its normal complement of biological 
control agents. This insect has rapidly become the most important 
insect pest of wheat in the western United States. From 1986-1991, the 
total economic impact was estimated to be in excess of $657 million. In 
the same period, some 17.5 million pounds of insecticides were used 
nationally for Russian wheat aphid control. The cost to American 
farmers of insecticide treatments was over $70 million. In addition, 
the intense use of insecticides on a crop that previously received 
little insecticide treatment raised concerns about the impact on water 
quality, human health, food safety, non-target organisms, and general 
environmental quality. Direct losses in Colorado have been as high as 
$27 million in a single year with an average direct loss of above $11 
million per year, since 1987.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goals of the research are to:
  --Discover new crop genes which provide resistance to the Russian 
        wheat aphid and incorporate them into commercially acceptable 
        wheat varieties, and
  --Integrate the available control tactics into the most effective, 
        efficient, and environmentally sound production systems for the 
        Great Plains. The techniques of molecular genetics are being 
        employed to reach the goal of identifying new genes for 
        resistance to Russian wheat aphid and incorporating them into 
        commercially acceptable wheat varieties. Several DNA marker 
        technologies used in other plant species have been successfully 
        adapted for mapping Russian wheat aphid resistance genes in 
        wheat. These include restriction fragment length polymorphism 
        and amplified fragment length polymorphism techniques as well 
        as microsatellite markers. Restriction fragment length 
        polymorphism markers were initially used to map two Russian 
        wheat aphid resistance genes--Dn4, the one used in 19Halt' and 
        Dn2, an additional resistance gene that might be suitable for 
        inclusion in a cultivar containing two resistance genes.
    A new Russian wheat aphid resistance gene (Dn7), identified by 
other researchers in South Africa, 94M370, has been crossed with 
susceptible wheat to generate materials for use in molecular genetic 
analysis of Dn7 and to incorporate the gene into wheat. Dn7 is one of 
the resistance genes that is being targeted for molecular cloning in 
the Colorado State program.
    Two kinds of DNA libraries were developed from 94M370 as additional 
sources of clones for RFLP mapping: a Pst-I genomic library and a cDNA 
library. These libraries are very useful because they allow screening 
for clones in such a way that the DNA from rye can be distinguished 
from wheat DNA.
    In another set of experiments, a cDNA library was made from mRNA 
extracted from leaf tissues of 94M370. One thousand randomly picked 
clones from this library are being sequenced. The sequenced clones from 
the 94M370 library also will be used in the mapping effort.
    In addition, the mapping effort of this project will be 
strengthened by access to cDNA libraries that will be produced under a 
National Science Foundation grant awarded to a team of U.S. wheat 
researchers for the purpose of developing tools for wheat genomics.
    Once a genetic map is developed, the next step in positional 
cloning is to determine the physical location of the markers on the 
chromosomes and the physical distance between the markers. This step is 
being accomplished by the use of fluorescence in situ hybridization 
(FISH) techniques.
    In order to routinely detect DNA markers on chromosomes by 
fluorescence in situ hybridization, clones containing large DNA inserts 
are required. Bacterial artificial chromosomes will be used to meet 
this requirement. Two Bacterial artificial chromosome libraries are 
available from other research teams as sources of probes for the FISH 
experiments. These were screened with five markers linked to either Dn2 
or Dn4 and positive Bacterial artificial chromosomes were identified 
for all five markers. Fluorescence in situ hybridization using these 
Bacterial artificial chromosome clones to wheat metaphase chromosomes 
are underway.
    A critical factor in the success of fluorescence in situ 
hybridization is the routine availability of complete chromosome 
spreads that are flat and free of cytoplasmic material. Procedures have 
been developed for preparing wheat chromosome spreads that are flat and 
intact.
    Another critical factor in the fluorescence in situ hybridization 
experiments is the ability to distinguish the target chromosome from 
the rest of the wheat chromosomes. Target chromosomes include 1RS/1BL, 
which contains Dn7; 1D, which contains Dn4; and 7D, which contains Dn2. 
Several techniques are being used to distinguish the desired 
chromosomes.
    Progress has been made in Integrating Tactics for Management of the 
Russian wheat aphid. In 1998, experimental dryland cropping systems 
were established in eastern Colorado. To be as realistic as possible, 
two of these are located in growers fields and have been designed with 
grower input and are managed jointly with the grower-cooperator. Long-
term studies were initiated to compare the experimental systems with 
typical wheat production systems in the area. The experimental systems 
were designed to optimize the effects of environmentally sound pest 
management tactics (particularly resistant cultivars, the effects of 
cultural practices, such as planting date, harvesting date, grazing, et 
cetera., and biological control, such as reducing Russian wheat aphid 
numbers through the actions of predators and parasites. In addition, 
the experimental systems were designed to optimize water use efficiency 
and other agronomic and profitability factors.
    At each location, wheat and other adapted dryland crops are grown 
in proximity to each other so that interactions among various crops and 
various production practices can be studied. Rotations over time of 
wheat with other crops also are being investigated. These large-scale 
experimental systems will be ideal arenas in which to determine the 
best way to apply the knowledge already gained about specific aspects 
of Russian wheat aphid biology and ecology, production practices, and 
the effectiveness of naturally occurring Russian wheat aphid parasites 
and predators. These large-scale experimental cropping systems also 
will provide valuable information on Russian wheat aphid management to 
wheat growers who are considering adding additional crops to their 
dryland cropping systems.
    In 1999 data were collected on a wide variety of agronomic and pest 
variables. Initial observations on Russian wheat aphid indicated 
enhanced biological control in the more diverse, experimental cropping 
systems. The enhancement occurred just prior to planting the fall wheat 
crop which is one of the most critical points in Russian wheat aphid 
seasonal dynamics.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1998 
and the appropriation for fiscal years 1998, 1999 and 2000 is $200,000 
for a total of $600,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year.
    Answer. State appropriations and the Colorado Wheat Administrative 
Committee have demonstrated strong support for this effort. The total 
per year is approximately $775,000 in new funding from the state of 
Colorado and redirected funds from within the university.
    Question. Where is the work being carried out?
    Answer. Research will be conducted on the campus of Colorado State 
University, at Colorado State University research stations, and on the 
farms of cooperators throughout Colorado. Outreach and extension 
activities will be focused on wheat growers in Colorado, Nebraska, 
Wyoming, Kansas, New Mexico, Texas, and Oklahoma.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. This project is anticipated to continue for a total of five 
years with a completion date of July 2003.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This project was evaluated by a Cooperative State Research, 
Education and Extension Service site visit on February 4 and 5, 1999. 
Laboratory, greenhouse and field research facilities available for the 
research program are considered to be excellent. Greenhouse space 
appears adequate for the work and the units are well adapted for the 
wheat breeding program. Rearing facilities and the support personnel 
for maintaining a source of aphids used for bioassays are excellent. 
Research laboratories are very well equipped for the studies, either 
proposed or underway and there is strong technical support for the 
research which involves application of techniques of molecular genetics 
to wheat breeding. The research scientists represent strengths in both 
classical or traditional wheat breeding and new molecular genetics-
based wheat breeding. The group also has strong, well recognized 
expertise in Russian wheat aphid biology, ecology and management as 
well as in dryland wheat production systems used in the Great Plains 
states. The project is a multifaceted, multi-disciplinary program which 
is directed toward long-term solutions for Russian wheat aphid 
management utilizing a viable combination of approaches which requires 
the type of facilities and equipment available at this location.

         SEAFOOD HARVESTING, PROCESSING, AND MARKETING, ALASKA

    Question. Please provide a description of the research that has 
been funded under the Seafood Harvesting, Processing, and Marketing 
grant.
    Answer. This is a new project to be started in fiscal year 2000. 
Research related to seafood safety, quality and by-product utilization 
will be supported by this grant. CSREES has requested the University to 
submit a proposal, which has not yet been received, in support of 
fiscal year 2000 funds.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. This will be determined after the proposal is received from 
the principal investigator.
    Question. What is the original goal of the research and what has 
been accomplished to date?
    Answer. This will be determined after the proposal is received from 
the principal investigator.
     Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. This is a new project for fiscal year 2000. For fiscal year 
2000 $552,500 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year 2000?
    Answer. This will be determined as the project progresses.
    Question. Where is this work being carried out?
    Answer. Research will be conducted by scientists at the University 
of Alaska, Fairbanks.
    Question. What is the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. This will be proposed by the principal investigator(s) 
soon.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. As this is a new project, no evaluation has been conducted 
at this time.
       seafood harvesting, processing, and marketing, mississippi
    Question. Please provide a description of the research that has 
been funded under the Seafood Harvesting, Processing, and Marketing 
grant.
    Answer. Research related to seafood safety, quality and by-product 
utilization has been supported by this grant. Research conducted 
included: (1) microbial population changes during retail display of 
shrimp,
    (2) development of an impedance-based method to rapidly detect 
microorganisms on shrimp, (3) determine physical, chemical, 
microbiological, and sensory differences between pond and tank 
aquaculture tilapia, and (4) evaluate processes for utilization of 
uncooked shrimp processing by-products for production of flavor 
extracts. Funds from the fiscal year 1999 grant are supporting research 
through September 30, 2000. A proposal in support of fiscal year 2000 
funds will be requested to (1) evaluate the potential of the xanthene 
colorant phloxine B to control Listeria monocytogenes on ready-to-eat 
shrimp and (2) determine the survival of organic acid exposed Listeria 
monocytogenes in a simulated gastrointestinal model.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes that national needs 
reflected in the project include providing consumers with affordable 
alternative seafood products. Alternative sources of seafood protein 
are needed because of a drastic decline in natural harvests due to 
overexploitation. Other national needs addressed in this project 
include reducing pollution during seafood and aquaculture food 
processing by converting byproducts into value-added food ingredients 
or materials. Regionally, much is unknown about the short and long-term 
effects of the new seafood HACCP regulations on the livelihood of 
Mississippi seafood and aquaculture food producers and processors who 
are typically small and lack sufficient resources to remain 
competitive. Continuation of this project will provide continued 
assistance to Gulf-Coast seafood processors in meeting new U.S. 
regulations as well as new international regulations that are important 
for Mississippi export products. Locally, catfish processors are a 
major employer of the severely economically depressed Delta region of 
Mississippi. By further enhancing the value of catfish products, this 
project seeks to improve the livelihood of individuals both on the Gulf 
coast and in the aquaculture region of the state.
    Question. What was the original goal of the research and what has 
been accomplished to date?
    Answer. The original goals of the research were to improve the 
quality and safety of catfish and improve the utilization of catfish 
byproducts and underutilized marine species. Due to successes of the 
original project, subsequent efforts are focusing on additional uses of 
seafood and aquaculture foods by improving processing strategies and 
providing alternative products from waste materials. The project has 
thus expanded to include crab, shrimp, oysters, freshwater prawns, 
hybrid striped bass, tilapia, and crawfish.
     Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1990 
when $368,000 was appropriated for this project. The appropriations for 
fiscal years 1991-1993 were $361,000 per year; fiscal year 1994, 
$339,000; and fiscal years 1995-1999, $305,000 each year. For fiscal 
year 2000 $305,000 has been appropriated. A total of $3,867,500 has 
been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year 2000?
    Answer. The State of Mississippi contributed $1,949 to this project 
in fiscal year 1991; $41,286 in fiscal year 1992; $67,072 in fiscal 
year 1993; $91,215 in fiscal year 1994; $147,911 in fiscal year 1995; 
and $61,848 in fiscal year 1996. Product sales contributed $7,044 in 
1991, $13,481 in 1992, $13,704 in 1993, and $5,901 in 1994. Industry 
grants contributed $14 in 1992 and $31,796 in 1993. Other non-federal 
funds contributed $80 in fiscal year 1991, $838 in 1992, and $17,823 in 
1993. The total non-federal funds contributed to this project from 1991 
through 1996 was $501,962. In fiscal year 1998, $151,286 in state 
funds, $8,790 in self-generated funds, and $23,877 in other non-federal 
funds were obtained. Information on funding in 1999 and 2000 is not 
currently available.
    Question. Where is this work being carried out?
    Answer. Research is being conducted by scientists in the 
Departments of Food Science and Technology and Agricultural Economics 
of the Mississippi Agricultural and Forestry Experiment Station at 
Mississippi State University and at the Coastal Research and Extension 
Center, Seafood Processing Laboratory, in Pascagoula, Mississippi.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. The original, scheduled date of completion of the 
objectives will be September 30, 2000. The work for fiscal year 1999 is 
still in progress. A progress report on the achievement of the 
objectives was due by March 15, 2000. It should be noted that the work 
on this project over the last fiscal year was severely curtailed due to 
extensive damage to the seafood processing pilot plant and destruction 
of the office facility, both located in Pascagoula, due to a hurricane.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. An agency science specialist conducts a merit review of the 
proposal submitted in support of the appropriation on an annual basis. 
The last review of the proposal was conducted on June 28,1999. At that 
time, the agency science specialist believed that the projects 
addressed needs and interests of the regional seafood and aquaculture 
industries.
                      seafood safety/massachusetts
    Question. Please provide a description of the research that has 
been funded under the grant.
    Answer. The agency is in the process of requesting the university 
to submit a grant proposal for this new research activity.
    Question. According to the research proposal, or the principal 
research, what is the national, regional or local need for this 
research?
    Answer. The researchers indicate the need to strengthen the local 
and Northeast region fisheries industry by addressing and solving 
priority seafood safety issues critical to assuring public health and 
maintaining consumer confidence in a variety of economically important 
fisheries products.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. This is a new research grant to be funded in fiscal year 
2000.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and the appropriation for fiscal year 2000 is $255,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The university estimates that significant non-federal 
funding will be provided in fiscal year 2000 primarily from state 
sources to cover salaries of the principal investigators. As the 
program develops, additional non-federal funding is expected.
    Question. Where is this work being carried out?
    Answer. Research will be conducted at the University of 
Massachusetts--Amherst, Chenoweth Laboratory of the Department of Food 
Science through the Agricultural Experiment Station.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
is fiscal year 2002. The project will be initiated in fiscal year 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency will evaluate the progress of this new project 
on an annual basis. The university will be required to submit an 
accomplishment report each year when the new proposal is submitted to 
the agency for funding. Since this is the first year of the program, 
the agency will conduct an external peer review of the proposal. The 
fiscal year 2000 review will be completed within three weeks of 
submission of the proposal.

                      SMALL FRUIT RESEARCH, OREGON

    Question. Please provide a description of the research that has 
been funded under the Small Fruit Research grant.
    Answer. Funding for this special grant has been used to enhance the 
production and quality of small fruits-blackberry, blueberry, 
caneberry, cranberry, marionberry, raspberry, strawberry and grape in 
the Pacific Northwestern states of Idaho, Oregon, and Washington. 
Research has been focused on crop genetics, production/physiology, pest 
management, berry/grape processing, marketing, and wine production. 
Proposals are selected after examination of their relevance to 
priorities identified within the region.
    Question. According the research proposal, or the principal 
researcher, what is the national, regional and local need for this 
research?
    Answer. There is a considerable demand for fresh and processed 
berry products in the United States. The demand is also high in urban 
Asian markets where consumer interest for berry products is strong. 
Currently, international marketing of Northwest small fruit commodities 
involves the sale of traditional products. Research on international 
consumer preferences, packaging, and products continues to be 
essential. The importance of berry and grape crops to the region has 
long been recognized by the three Northwest states: Washington, Idaho 
and Oregon. These crops are mainstays of high-value, specialty 
horticulture. The universities and small fruits industry have made a 
strong commitment to the improvement of these crops as evidenced by the 
high level of internally developed resources for research and 
marketing. Thus, the Northwest Center for Small Fruit Research has 
developed effectively over the last 8-10 years into its present fully 
established form.
    Question. What was the original goal of this research, and what has 
been accomplished to date?
    Answer. Genetic improvement of small fruit cultivars continues to 
be a powerful tool using germplasm collection and identification, field 
evaluation of new germplasm and advanced selections from breeding 
programs, virus identification and elimination, and approaches that 
utilize genetic engineering. Research is identifying cultivars and 
developing cultural practices that growers can utilize to reduce crop 
losses. Research is evaluating and investigating nutritional factors, 
cultural management, temperature stress, effects of pruning, micro 
propagation, cold hardiness/low temperature injury and effects of 
viticulture practices on wine quality of winery processing on wine 
quality. Small fruit research continues to reap acclaim for its 
components involving industry-driven cooperation between industry, 
state and federal research. Its genesis as a small-fruits program 
reflects the contributions of plant biology, the commitment to 
facilitating the efficiency of research and the coordination of 
marketing throughout a multi-state region. The Center represents an 
innovative organization which has created a cooperative strategy for 
university, USDA's--Agricultural Research Service, and industry small 
fruit programs.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000.
    Answer. The initial support for this grant was an appropriation in 
fiscal year 1991 for $125,000. The fiscal appropriation for 1992 and 
1993 was $187,000 per year; fiscal year 1994 was $235,000; fiscal years 
1995-1998 were $212,000 each year; fiscal year 1999 was $300,000; and 
was $300,000 for fiscal year 2000. A total of $2,182,000 has been 
appropriated.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. This project involves the use of OSU administrative 
personnel, equipment, utilities and facilities that are indirect costs 
to the project. These costs constitute an OSU contribution to this 
research project, which is not allowable as a reimbursable expense 
under this project. The recent passage of Oregon's tax limitation laws 
reduce revenues that restrict our ability to cost share. Thus, our 
policy is that we do not provide any cost sharing or matching funds for 
this or other agreements in which we receive no indirect costs. We are 
committed to providing the required collaborative efforts by Oregon 
State University scientists and administrators to complete the work 
described in this proposal.
    Question. Where is the work being carried out?
    Answer. The research is being conducted at Oregon State University, 
Washington State University and the University of Idaho. Oregon State 
University is the lead institution for this project.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objectives of small fruit research are still 
valid researchable issues because they encompass research focused on 
such diverse topics as: crop genetics, production/physiology, pest 
management, berry/grape processing, marketing, wine production, 
international consumer preferences, and specialty horticulture. Much 
progress has taken place in meeting the research objectives in these 
topics but this is a continuing process with priorities annually re-
evaluated to appropriately adjust research direction within the project 
objectives as well as their relevance to priorities identified within 
the region.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. There has not been an overall agency evaluation of this 
project. However, the project evaluation process is accomplished 
annually by peer reviewers whom are chosen and organized by expertise 
according to the five technical working groups with input from the 
designated Agricultural Experiment Station Representatives in 
Washington, Oregon and Idaho. In fiscal year 1999, for example, there 
were 19 project reports which were evaluated for each of the recipients 
of grants. Each submitted proposal is peer-reviewed by a panel of five 
individuals (three scientists and two industry representatives) and is 
grouped into one of the Center Technical Working Groups, namely 
genetics, pest management, production/physiology, processing/packaging, 
and marketing. Each proposal is evaluated on the following criteria: 
(1) The nature of the proposed research and its relevance to the needs 
of the small fruit industries; (2) The relevance of the proposal to 
current small fruit research designated priorities; (3) The scientific 
expertise of the scientists involved--training, experience, and 
accomplishments relative to specific areas of small fruit research; (4) 
The appropriateness of the level of funding requested, vis-a-vis, 
availability of funds; and (5) The likelihood of success. Reviewers 
complete an evaluation sheet for each proposal, rating the five 
criteria on a scale of one to ten, with ten being the best. Previously 
awarded projects are given special consideration in order to allow for 
funding for up to three years (when appropriate progress is 
demonstrated). Compilation of evaluations are distributed to the three 
Agricultural Experiment Station Directors and the USDA-ARS 
Horticultural Crops Research Laboratory Research Leader, who make the 
final determination of funding for each proposed project. Notification 
of awards are made in December. The peer review of all proposals is 
coordinated and processed through the Northwest Center for Small Fruit. 
An agency-level site review of the Small Fruit Research project will be 
performed in the coming year.

      SOUTHWEST CONSORTIUM FOR PLANT GENETICS AND WATER RESOURCES

    Question. Please provide a description of the work that has been 
funded under the Southwest Consortium for Plant Genetics and Water 
Resources Program grant.
    Answer. New Mexico State University, Los Alamos National 
Laboratory, Texas Tech University, the University of Arizona, and the 
University of California at Riverside entered into a cooperative 
interdisciplinary research agreement constituted as the Southwest 
Consortium for Plant Genetics and Water Resources to facilitate 
research relevant to crop adaptation to and semi-arid regions. The 
overall goal of the Consortium is to bring together multi-disciplinary 
scientific teams to develop innovative advances in plant biotechnology 
and related areas to bear on agriculture and water use in and semi-arid 
regions. All grants made to the participating Institutions are awarded 
competitively by a scientific peer review process.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. This research is highly significant to national, regional, 
and local needs. The Consortium is conducting an integrated program 
that identifies specific problems of southwest agriculture, coordinates 
water and biotechnology research aimed at solving these problems, and 
facilitates the transfer of this information for commercialization. The 
specific research objectives of the Consortium include the development 
of crops with resistance to drought and temperature extremes, adverse 
soil conditions, and pests and parasites.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research is to enhance the 
adaptation of agricultural crops to and semi-arid crop environments. 
Five participating institutions have developed research plans 
consistent with the Consortium's goals. Mini-grants to support research 
that would solve problems unique to southwest agriculture are awarded 
competitively following peer review. Specific attention is given to 
interdisciplinary agricultural research. Since its inception in 1985, 
the Consortium has provided essential support for the establishment of 
baseline data on new, forward thinking research relevant to the 
improvement of and lands agriculture. Accomplishments include the 
identification of chromosome regions conferring water use and 
transpiration efficiency in wheat, an analysis of the impacts of water 
stress on host plant resistance to aphids and whiteflies on melon, and 
an evaluation of genetic variation of water-soluble carbohydrates in 
spring wheat and salt-tolerance mechanisms.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1986 
and has been provided with appropriations of the following amounts: 
fiscal year 1986, $285,000; fiscal years 1987 through 1989, $385,000 
per year; fiscal year 1990, $380,000; fiscal years 1991 through 1993, 
$400,000 per year; fiscal year 1994, $376,000; and fiscal years 1995 
through 2000, $338,000 per year. A total of $5,424,000 has been 
appropriated since fiscal year 1986.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The Consortium's lead institution, New Mexico State 
University, reports matching non-federal funds of $80,000 in state 
appropriations in 1992 and $100,000 in 1993 through 1998. Non-federal 
funds spent on this project originate from the five institutions that 
participate in the Consortium and support researchers' salaries, 
facilities, equipment maintenance, and administrative assistance.
    Question. Where is this work being carried out?
    Answer. Research is being conducted by the member institutions of 
the consortium, which includes New Mexico State University; Los Alamos 
National Laboratory, Texas Tech University; the University of Arizona, 
and the University of California at Riverside.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The project was initiated in 1986 and accomplished 
significant results in the first five years. Additional and related 
objectives have been developed and anticipated completion date for 
these is 2001. The Consortium is successfully achieving its objectives 
through the funding of new interdisciplinary projects each year.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Mini-grants are awarded competitively to support research 
that will solve problems unique to agricultural production in the 
Southwest. The mini-grant selection process is competitive. Proposals 
are evaluated by external peer reviewers, the Consortium Steering 
Committee, and the Consortium Scientific Committee. The review process 
includes pre-proposal screening by the Consortium Steering and 
Scientific committees, and review of all new proposals by external and 
internal panels. An internal review of a progress report on each 
project is completed before the second year of funding is released.

                         SOYBEAN CYST NEMATODE

    Question. Please provide a description of the research that has 
been funded under the Soybean Cyst Nematode grant.
    Answer. The research being funded by this grant is crucial to the 
development of effective management strategies to understand host 
parasite relationships of the pathosystems and each of its components. 
Work has dealt mainly with identifying Heterodera glycines-resistant 
genes and incorporating them into agronomically superior cultivars. 
Basic studies elucidate the fundamental biology of the cyst nematode in 
regard to new management strategies. Applied work dealt with evaluating 
production systems and to new management strategies. This project was 
not awarded competitively but has undergone peer review at the 
university level and merit review at CSREES.
    Question. According to the research proposal, or the principal 
investigator, what is the national, regional, or local need for the 
research?
    Answer. The principal researcher believes that although this 
research is focused on the soybean cyst nematodes in Missouri, the 
problems are of regional and national significance. The soybean cyst 
nematode, Heterodera glycines is the most serious pest of soybean in 
the United States. The problems continue to increase in the Midwest 
where 12 states have yield reductions in soybean because of this 
nematode. Due to the nematodes ability to adapt to resistant varieties 
over time, new varieties are continually needed.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this research is managing soybean cyst nematode 
through the various management strategies including the development of 
new resistant soybean varieties. To date, several nematode resistant 
soybean lines have been or will be released. The need for breeding 
soybean lines to develop resistant varieties with a broad spectrum of 
resistance continues. More fundamental research involves the 
utilization of new molecular technologies to identify genes responsible 
for resistance. DNA fingerprinting of 118 soybean lines have identified 
several different genes for soybean cyst nematode resistance. Other 
aspects of the work relates to field management strategies for these 
nematodes. Studies on nitrogen fertilizers and tillage have indicated 
that these may not be important in management of soybean cyst nematode.
    Question. How long has work been underway and how much has been 
appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1979, $150,000; fiscal years 1980-1981, $250,000 
per year; fiscal year 1982, $240,000; fiscal years 1983-1985, $300,000 
per year; fiscal years 1986-1989, $285,000 per year; fiscal year 1990, 
$281,000, fiscal year 1991, $$330,000; fiscal years 1992-1993, 
$359,000, fiscal year 1994, $337,000; fiscal years 1995-1997, $303,000 
per year; fiscal year 1998, $450,000; fiscal year 1999, $475,000 and 
fiscal year 2000, $475,000. A total of $6,880,000 has been 
appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
were as follows: $105,012 state appropriations in 1991; $84,368 state 
appropriations in 1992; $168,017 state appropriations in 1993; $118,725 
state appropriations in 1994; $33,498 in 1995 and 1996; $33,723 in 
state appropriations in 1997; $37,445 in state appropriations in 1998; 
$201,994 in 1999; and an estimated $200,000 in 2000.
    Question. Where is this work carried out?
    Answer. This research is being conducted at the Missouri 
Agriculture Experiment Station and the University of Missouri.
    Question. What is the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Many objectives are being met but genetic interaction of 
the soybean cyst nematode/soybean is extremely complex. The anticipated 
completion date of the continuing research is 2004-2006.
    Question. What was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The last evaluation of this project was a merit review in 
January, 1999 and the renewal project will be evaluated in 2000. In 
summary, continued development of new management strategies for the 
soybean cyst nematode is extremely important. Progress continues with 
new varieties with nematode resistance being released yearly as well as 
excellent progress in other management strategies. Certified seed of 
MPV437-NRR was made available to farmers in 1999. A new soybean 
variety, 19Anand' was released this year. Another high yielding soybean 
strain, S96-1908 was developed that is resistant to all races of 
soybean cyst nematodes and is being evaluated in the uniform tests. 
More fundamental research involves the utilization of new molecular 
technologies to identify genes responsible for resistance. Seven 
genetic markers associated with loci controlling resistance to soybean 
cyst nematode were found in Peking which may be useful in marker 
assisted selection for resistant lines. Other aspects of the works 
relates to field management strategies for these nematodes including 
effects of nutrient uptake on nematode development. A seven year study 
of the effects of soybean cyst nematode on soybean growth and 
development was recently completed. It showed among other things, that 
a grower's choice of tillage methods and date of planting are 
relatively unimportant in their strategy to control soybean cyst 
nematodes. Another study indicated that nitrogen accumulation and 
fixation are limited under high soybean cyst nematode infections.

               STEEP--WATER QUALITY IN PACIFIC NORTHWEST

    Question. Please provide a description of the research that has 
been funded under the STEEP--Water Quality in the Pacific Northwest 
grant.
    Answer. The STEEP III study was established in 1996 as the third 
phase of the tri-state STEEP Program entitled ``Solutions to 
Environmental and Economic Problems,'' to meet the needs of farmers and 
ranchers in the Pacific Northwest in solving severe problems with soil 
erosion and water quality, while maintaining economically and 
environmentally sustainable agricultural production. An open call for 
research proposals is held by three cooperating states, Idaho, Oregon, 
and Washington. Awards are made competitively after both internal and 
external peer reviews within the states, and merit review by the 
agency. The project is in a new phase, and is just known as STEEP, as 
the STEEP III objectives have been completed.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. According to the research proposal, the soils of the 
Pacific Northwest wheat region are subject to severe wind and water 
erosion, which has taken a heavy toll of the topsoil in a little more 
than 100 years of farming. Due to the hilly terrain, water erosion has 
reduced potential soil productivity in the high rainfall areas of the 
region by about 50 percent. Wind erosion has reduced productivity on 
the sandy soils in the lower rainfall areas. Also, off-site 
environmental costs of water erosion are large. Although many of these 
are difficult to measure, they include damage from sediment to 
recreational areas, roadways, and other areas which costs taxpayers 
millions of dollars annually. Wind erosion, which occurs mostly in the 
spring and fall, also can be costly and environmentally damaging to air 
quality, and causes increasing concerns for human health and safety 
from blowing dusts. Water quality degradation is of increasing concern 
in the agricultural areas of this region, since sediment is a major 
pollutant of surface water runoff which may also carry potential 
chemical contaminants. The complex hydrology of the region's landscape 
has made it difficult to identify the sources of these chemicals in 
surface and ground waters. A new major emphasis has been the funding of 
direct seed research in combination with a reduction in summer fallow 
and more complex crop rotations. Direct seed is synonymous with no till 
where tillage is eliminated or reduced to a very minimum. Consequently 
soil and wind erosion are reduced significantly, improving soil and 
water quality and contributing to salmon recovery.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The primary goals are: to obtain and integrate new 
technical/scientific information on soils, crop plants, pests, energy, 
and farm profitability into sustainable, management systems; to develop 
tools for assessing the impacts of farming practices on soil erosion 
and water quality; and to disseminate conservation technology to the 
farm.
    The original STEEP and following STEEP II and STEEP III projects 
for erosion and water quality control, have provided growers a steady 
flow of information and technologies that have helped them meet 
economic, environmental, and resource conservation goals. Through the 
adoption of these technologies, the researchers believe that growers of 
wheat, barley, and other alternative crops have been able to reduce 
soil erosion by water and wind, improve water quality, and maintain or 
increase farm profitability. This has been accomplished through a tri-
state, multi-disciplinary, multi-agency approach of basic and applied 
research, along with technology transfer and on-farm testing to assist 
growers with applying these research findings on their farms. The on-
farm testing program has directly involved growers and stakeholders in 
the planning and conduct of the research and educational efforts--and 
has helped growers evaluate conservation options, such as residue 
management, to meet conservation compliance requirements.
    STEEP programs have helped position farmers with new conservation 
technologies, such as direct seeding management systems, well in 
advance of deadlines to meet current and anticipated policy 
requirements. This preparation protects farmers against potential 
penalties and loss of government program benefits. The new emphasis on 
direct seeding has significantly reduced summer fallow through more 
annual cropping, and through more emphasis on alternative crops.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1991, 
and the appropriations for fiscal years 1991-1993 were $980,000 per 
year; in fiscal year 1994, $921,000; in fiscal year 1995, $829,000; and 
in fiscal years 1996-2000, $500,000 per year. A total of $7,190,000 has 
been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
were as follows: $938,812 state appropriations, $63,954 product sales, 
$156,656 industry, and $16,994 miscellaneous in 1991; $1,025,534 state 
appropriations, $75,795 product sales, $124,919 industry, and $88,696 
miscellaneous in 1992; $962,921 state appropriations, $62,776 product 
sales, $177,109 industry and $11,028 miscellaneous in 1993; $1,069,396 
state appropriations, $46,582 product sales, $169,628 industry, and 
$22,697 miscellaneous in 1994; and $1,013,562 state appropriations, 
$31,314 industry, and $107,151 miscellaneous in 1995. In 1996, 
Washington received $231,724 state appropriations; Oregon passed 
Measure 5 which reduced revenues and imposed funding restrictions so 
they were unable to provide any non-federal cost-sharing or matching 
funds; and Idaho contributed $81,525 state support, and $86,242 in 
estimated non-federal grant support, for a total non-federal 
contribution of $167,767. In 1997, Washington received $197,234 state 
appropriations; Oregon continues to have Measure 5 as law and continues 
to be unable to provide any non-federal cost-sharing or matching funds; 
and Idaho contributed $27,235 state support and $24,525 in estimated 
non-federal grant support for a total non-federal contribution of 
$51,760. In 1998 and 1999, these same general levels of support have 
been continued.
    Question. Where is this work being carried out?
    Answer. The work under STEEP will be done at laboratories and field 
research sites at the University of Idaho, Oregon State University, and 
Washington State University. Cooperative on-farm testing will be 
conducted in cooperation with growers on their fields in Idaho, Oregon 
and Washington.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The STEEP II project was completed in 1995, and the results 
were compiled in a final, 5-year report in January 1997, showing that 
the original objectives have largely been met. The STEEP III project 
started in 1996 and will continue through the year 2000 as a 5-year 
project.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency's program manager annually reviews progress 
reports, proposes new research on the STEEP Program, and attends the 
annual meetings to assess progress. The program is evaluated within the 
states each year by three committees: grower, technical, and 
administrative. Annual progress is reported at an annual meeting and 
compiled into written reports. These reports and the meeting are 
reviewed annually. Grower and industry input is solicited at the annual 
meeting on research objectives and accomplishments. The most recent 
evaluation was made at the January 2000 annual meeting which 
highlighted direct-seeding technology. This successful meeting 
attracted many growers, scientists, and agricultural experts from the 
tri-state region. Farmer surveys are also distributed at each annual 
meeting, and results compiled to assess whether objectives are being 
successfully achieved.

                  SUSTAINABLE AGRICULTURE, CALIFORNIA

    Question. Please provide a description of the research that has 
been funded under the grant.
    Answer. CSREES has requested the university to submit a grant 
proposal that has not yet been received.
    Question. According to the research proposal or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. Since this is the first year of funding for this project, 
and the research proposal has not yet been received, that question 
cannot be Answered at this time.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. Since the research proposal has not yet been received, and 
the project has not yet been funded, there are no stated goals nor 
accomplishments to report at this time.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and the appropriation for fiscal year 2000 is $255,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Since the project has not yet been funded, there are no 
non-federal funds to report at this time.
    Question. Where is this work being carried out?
    Answer. The specific locations for this work in California are not 
yet available.
    Question. What was the anticipated completion date for the original 
objectives of this project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The objectives and completion date have not yet been 
determined.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last agency evaluation conducted.
    Answer. No evaluation has yet taken place since the project has not 
yet begun.

                   SUSTAINABLE AGRICULTURE, MICHIGAN

    Question. Please provide a description of the research that has 
been funded under the Sustainable Agriculture, Michigan program grant.
    Answer. This project is intended to develop agricultural production 
systems that are highly productive and profitable and which provide 
high quality ecosystem services to local communities and to the 
environment. It examines how to achieve a high nutrient flow from soil 
to crops and animals, and back to soil, with low loss to ground and 
surface waters. The grant is allocated, by the Michigan Agricultural 
Experiment Station, to priority areas within the general area of 
sustainable agriculture. Grants are awarded based on research merit and 
proposal submission.
    Question. According to the research proposal or the principal 
researcher, what is the national, regional, or local need for this 
research.
    Answer. The principal researcher believes there is a need to better 
understand the biological processes occurring Michigan's high-nutrient-
flow crop and animal systems. With high water tables, networks of lakes 
and slow-moving streams, and concern about environmental standards, 
field contamination by agricultural production materials is a high 
priority.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The objective of this research is the identification, 
quantification and description of production ecology information to 
permit its use in a significant way in farm management decision making. 
Key areas addressed include soil carbon and nitrogen flows, soil 
nematode population management and weed seed predation and seedbank 
management.
    Accomplishments to date include the development of on-farm compost 
demonstration sites, collection of research data and computer software 
models on water table management, completion of initial research trials 
on rotational grazing at three sites in Michigan, widespread testing of 
cover crops in several crop rotation systems, and tests of the use of 
nematology community structure as a method of detecting difference 
among farming systems. Findings from this project have demonstrated 
that rotational grazing reduces production costs, and increases net 
profits, compared to traditional cow management. This project has also 
shown that composting is an effective way of stabilizing livestock 
waste, controlling odor, and improving nutrient composition for later 
land application. Cover crop development as an integrated tool is 
becoming quite advanced. Frost seeding of wheat with clover is 
increasingly used; approximately one-third of Michigan's wheat acreage, 
by some estimates, is overseeded. Results are being integrated into a 
series of practical publications partially supported by this grant. The 
first in the series, ``Michigan Field Crop Ecology,'' received an 
American Society of Agronomy award in 1998 for excellence as an 
Extension publication. A second volume, on field crop pest ecology, and 
similar volumes for fruit and vegetable ecology are under development.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1994 
with an appropriation of $494,000; $445,000 were appropriated in fiscal 
years 1995 through 2000, bringing total appropriations to $3,164,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Matching funds were provided at the state level for 
$511,900 in fiscal year 1994, $372,319 for fiscal year 1995, and 
$359,679 in fiscal year 1996. Matching support was not reported in 
fiscal years 1997 through 1999.
    Question. Where is this work being carried out?
    Answer. This work is being carried out in Michigan at several 
locations by Michigan State University. Locations include the Kellogg 
Biological Station, the Upper Peninsula Experiment Station, and farms 
around the state.
    Question. What was the anticipated completion date for the original 
objectives of this project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original project, begun in 1994, was proposed through 
April of 1997. Its specific objectives were met, with additional 
objectives addressed in subsequent related proposals. The current 
project is currently scheduled to go through June 30, 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last agency evaluation conducted.
    Answer. A formal evaluation of the Principal Investigator's program 
was concluded in 1997, commissioned by the C.S. Mott Foundation through 
an independent consultant. The project continues to have annual peer 
review. According to the Principal Investigator, the proposal has gone 
through the normal Michigan State University review process. First, all 
teams and collaborators of the project have met and reviewed the entire 
proposal with several suggestions and changes being incorporated. 
Secondly, research administrators in the fields of agronomy/soil 
science and entomology/pest management covering the major dimensions of 
the proposal have reviewed it for scientific appropriateness and 
accuracy as well as for overall balance and likelihood of achieving 
objectives. Their comments have been included as revisions to the 
proposal.

            SUSTAINABLE AND NATURAL RESOURCES, PENNSYLVANIA

    Question. Please provide a description of the research that has 
been funded under the Sustainable Agriculture and Natural Resources, 
Pennsylvania project.
    Answer. This project studies the cycling of nutrients in soil and 
crops with special emphasis on the development of indices for 
measurement of soil health. Specific goals are to identify indicators 
of a soil ecosystem that maintains a high level of active soil organic 
matter, and to develop nutrient and carbon budgets for managing on-farm 
cropping systems.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. Degradation of soil health/quality is a most serious 
problem for agriculture both in the mid-Atlantic region and throughout 
the nation. State governments both regionally and nationally are 
attempting to address the issue of soil and water degradation in 
cropping systems and in intensive animal agriculture. Traditional soil 
test results are not providing the needed answers for effective 
nutrient management.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to understand the 
cycling of nutrients and to use that knowledge to develop practical 
indicators of soil quality and health. If farmers are to manage their 
farm lands properly, indicators of soil quality and health must be 
developed that can be used by agricultural producers and consultants. 
Efforts under this project have been devoted to this goal with 
significant accomplishments to date. Management practices have been 
found to affect soil microbiology, and the fate of nutrients from crop 
residues and legume cover crops is being elucidated. A significant 
indicator of soil quality has been identified: measurement of the 
decomposition of filter paper has been shown to be an effective 
indicator of plant residue decomposition, which in turn has been shown 
to be highly correlated to nitrogen mineralization and also shows 
promise as an indicator of soil biological activity. Experiments are 
underway to refine this approach.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported under this grant began in fiscal year 
1993. The appropriation for fiscal year 1993 was $100,000; $94,000 in 
fiscal years 1994 through 1998; $95,000 in fiscal years 1999 and 2000, 
for a total of $760,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. According to the principal investigator, non-federal funds 
from university, state, and private industry sources were as follows: 
$195,901 in 1996, $369,574 in 1997, $324,724 in 1998, and $36,469 in 
1999.
    Question. Where is this work being carried out?
    Answer. Research is being conducted by the Pennsylvania State 
University with cooperators throughout the state, at the Hunter 
Rotation Experiment at Penn State's R.E. Larson Research Center near 
Rock Springs, Pennsylvania, at the Rodale Institute Research Center 
near Kutztown, Pennsylvania, and on farms around the state.
    Question. What was the anticipated completion date for the original 
objectives of this project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The project has met the specific objectives set forth in 
the original project which began in 1993 with an ending date in 1995. 
The continuing project addresses additional objectives related to the 
overall goal. The ending date for the current project objectives is 
June 30, 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last agency evaluation conducted.
    Answer. There has not been a formal evaluation of this project, but 
progress reports have been submitted to the agency and reviewed by our 
scientific staff. The project undergoes regular internal evaluation and 
assessment as part of Penn State's major effort in soil quality and 
nutrient management research.

               SUSTAINABLE AGRICULTURE SYSTEMS, NEBRASKA

    Question. Please provide a description of the research that has 
been funded under the integrated crop and livestock research program 
for Nebraska.
    Answer. This project is aimed at integration of field crops, animal 
production, agroforestry, livestock waste management, and diversified 
enterprises to meet production, economic, and environmental quality 
goals.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. Farmers and ranchers in Nebraska and throughout the Midwest 
face increasing difficulties in maintaining profitable operations that 
are sustainable under increased production costs and more stringent 
environmental regulations. They continue to seek alternative production 
systems, integration of crop and animal enterprises, value-added 
products, including those from woody perennials, and new marketing 
approaches to secure more of the food dollar. Work on crop residue 
utilization is highly important to assess the loss of erosion 
mitigation when grazing occurs as well as the benefits of winter forage 
to production of lean beef. Erosion is still a major problem with 
monoculture cropping, and work with contour strips, residue management, 
and animal grazing is essential to provide good recommendations to 
farmers for how to manage fragile lands.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. This project has addressed a number of questions related to 
the management of integrated crop and livestock enterprises. The work 
on composting has Answer.ed questions about the costs of composting, 
improved the nutrient content of compost, and evaluated different 
spreading technologies. The work on contour strip cropping, residue 
management, no-till planting, and cover crops has demonstrated ways to 
reduce erosion on highly erodible land. Studies of grazing on corn 
residues under different tillage and management systems are determining 
the forage value of residue and the impact of grazing on subsequent 
crop production.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. This project began in fiscal year 1992, with an 
appropriation of $70,000; subsequent appropriations are as follows: 
$70,000 in fiscal year 1993; $66,000 in fiscal year 1994; and $59,000 
in fiscal years 1995 through 2000. Total appropriations to date are 
$560,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Matching funds provided for this research include state 
funds in the amount of $25,313 for fiscal year 1992; $26,384 for fiscal 
year 1993; $27,306 for fiscal year 1994; $36,091 in fiscal year 1995; 
and $24,267 in fiscal year 1996. No matching funds were reported in 
fiscal years 1997 through 1999.
    Question. Where is this work being carried out?
    Answer. Research is being conducted by the University of Nebraska 
at several locations in Nebraska, with the major part of the project at 
the Agricultural Research and Development Center near Mead, Nebraska.
    Question. What was the anticipated completion date for the original 
objectives of this project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original project proposed work through March of 1994. 
The current project proposes work addressing additional related 
objectives through March 31, 2002. It is expected that current 
objectives of the project will be met by this time period.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last agency evaluation conducted.
    Answer. There has not been a formal evaluation of this project, but 
progress reports have been submitted to the agency and reviewed by our 
scientific staff. The grant was awarded competitively within the 
University of Nebraska, and the integrated farm project has been 
reviewed annually for technical merit and progress toward goals by the 
internal review process of the university.

                    SUSTAINABLE BEEF SUPPLY, MONTANA

    Question. Please provide a description of the research that has 
been funded under the Sustainable Beef Supply, Montana grant.
    Answer. The Sustainable Beef Supply, Montana project is a 
cooperative effort between Montana State University and the Montana 
Stockgrowers Association to develop a system to provide information 
feedback among various segments of the beef industry. This may be one 
of only a very few joint efforts between a university and a commodity 
group currently in progress in the United States. A systems approach is 
being utilized to monitor and track calves from ranches in Montana to 
feedlots in other states and eventually to the packing plant. 
Information collected throughout the production cycle is shared among 
all owners of the cattle.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The need for this research is to develop a reliable and 
predictable supply of safe, consumer-friendly beef of high quality. The 
beef industry is becoming more consumer focused, and specific quality 
and consistency targets are being established in all segments of the 
industry. To meet consumer needs and return additional revenue to 
cattle producers, a systems network must be in place to ensure that a 
high quality and consistent product is being produced. Central to this 
networking approach is the exchange of information among all segments 
of the industry from producer to consumer.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goals of this project are: Develop and conduct 
educational programs on how to attain beef quality assurance standards, 
provide certification of feeder calves that have met defined management 
protocols, and provide information feedback from the feedlot and 
packing plant to the cow-calf producer to determine if the feeder 
calves met requirements for quality, consistency, safety, and red meat 
yield. A training manual was developed and 1,000 copies were 
distributed. Thirty-five quality assurance educational programs were 
conducted in Montana and county extension agents were trained to 
deliver this program to producers. Approximately 25,000 calves were 
certified. A statewide audit of ranchers has been initiated to 
determine what value-added practices are being utilized related to 
breeding, health management, nutrition and marketing. A research 
project involving 2,000 calves at 12 ranches has been initiated to 
determine if a standardized weaning protocol of vaccinations and 
nutrition can reduce the morbidity of calves after they enter the 
feedlot.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1999. 
The appropriation for fiscal year 1999 was $500,000 and for fiscal year 
2000 was $637,500 for a total appropriation of $1,137,500. There are no 
other sources of funding available from other CSREES programs.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The Montana Department of Agriculture has contributed 
$15,000 and the Montana Stockgrowers Association has contributed $5,000 
in fiscal year 2000.
    Question. Where is this work being carried out?
    Answer. Research will be conducted at Montana State University and 
on cooperating Montana ranches.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. It is anticipated that it will take three to four years of 
funding to fully achieve the objectives of this project. Progress to 
date has been very encouraging. Approximately 1,000 producers have 
received quality assurance training and 25,000 calves were certified as 
being managed under specified best management practices. The goal is to 
certify 75,000 calves annually in this program.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This is a new project and is not far enough along to be 
effectively evaluated. The project was peer-reviewed at the University 
before submission. The proposal was also merit reviewed by the agency 
prior to funding.

         SUSTAINABLE PEST MANAGEMENT FOR DRYLAND WHEAT, MONTANA

    Question. Please provide a description of the research that has 
been funded under the Sustainable Pest Management for Dryland Wheat, 
Montana grant.
    Answer. Montana State University researchers are studying the 
influence of four cropping sequences and two tillage systems on 
insects, weeds, plant pathogens, nutrient management, physical and 
biological properties of soil, economic profitability, and 
environmental benefits. The research is being conducted on large 
experimental blocks in the three different dryland farming regions of 
northern, central, and eastern Montana. Each site differs 
climatologically and agronomically from one another yet represents a 
significant production area within the state.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. This project addresses pest management issues under 
different cropping sequences and tillage practices utilized in the 
Northern Great Plains for dryland wheat production. The wheat-fallow-
wheat system used by many farmers in the region favors the build up of 
many pests. Dollar losses due to insects, competitive weeds, and plant 
pathogens in dryland wheat production in Montana alone are staggering. 
For example, annual losses attributed to wheat stem sawfly exceeds $25 
million; wild oat infestations causes an estimated $50 million in 
harvest losses and management costs; and wheat streak mosaic has a 
monetary loss of $37.5 million. These and other pests also increase 
reliance on pesticides for crop protection which impacts environmental 
quality, increases production costs, and causes secondary pest 
outbreaks and resistance. The agronomic, environmental, and economical 
benefits of diversified crop rotations are numerous, but these benefits 
are largely unknown or not documented in dryland wheat production. As a 
result of this multi-disciplinary project, we can significantly reduce 
the economic impact of agriculturally important pests, improve soil 
health, reduce production costs, and improve production efficiency.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The second cropping season was completed at the 
northcentral site in 1999. Data were collected from 26 different 
cropping sequences grown under two tillage systems. Crops grown 
included spring wheat, pea, chickpea, and lentil, cool oilseed, for 
example, mustard, warm oilseed, or safflower, and sunflower. Numerous 
physical and chemical attributes of the soil were measured again in 
1999 including available nutrients, soil aggregate characteristics, pH, 
forms of nitrogen, bulk density, salinity, water flow rates and water 
holding capacity. There was no detectable wheat streak mosaic virus and 
there was no evidence of foliar fungal diseases in any of the wheat 
plots. Crop data taken included dates of plant emergence, vegetative 
dry matter, yield components, and straw residue. Above ground insects 
in different crop rotations were estimated by sweep samples, sticky 
traps and pheromone traps. Soil-inhabiting arthropods were sampled by 
removing soil cores from selected cropping sequences.
    The first cropping season was completed at the central location in 
1999. The crop rotations include 5 sequences of cereals, oilseeds, 
legumes and forages grown under high and low input systems. High input 
treatments included seeding at the recommended times for maximizing 
yields, seeding at recommended rates, band applying nitrogen 
fertilizer, and implementing a standard herbicide program. Low inputs 
were characterized by delaying seeding of cereal until annual weeds 
have emerged, seeding small grains at 90 lb/ac, and applying herbicides 
only as needed. Data were recorded throughout the growing season at 
this site in 1999 on physical and chemical attributes of soils, plant 
pathogens, insects, weeds, and crop emergence, vegetative dry matter, 
yield components, and residue cover.
    The main treatment effects and cropping sequences at the third 
research site in northeast Montana are currently being established. 
Ground preparation through mechanical tillage and herbicide 
applications at this site began in fall 1998. The entire 25 acre site 
was cropped to spring wheat in 1999.
    Related investigations currently supported by this project include 
a weed science study delineating the spatial distribution of wild oats 
and wheat stem sawfly in dryland spring wheat. A second project focuses 
on the chemical ecology of wheat stem sawflies. We now have convincing 
evidence that male and female sawflies produce different compounds that 
are vital in locating mates. Experiments have been designed to collect, 
isolate and identify chemical volatiles released by sawflies. A dozen 
compounds have been identified as components of pheromones released by 
sawflies. An experimental trap design with a synthetic pheromone lure 
was field tested in 1999 and proven to be effective in attracting 
sawflies. Thus, the feasibility of using sawfly pheromones to manage 
this ubiquitous pest appears achievable.
    Question. this work been underway and how much has been 
appropriated by fiscal year through fiscal year 2000?
    Answer. This work supported by this grant began in fiscal year 1997 
and the appropriation for fiscal year 1997 was $200,000, for fiscal 
years 1998 and 1999, $400,000 per year and for fiscal year 2000, 
$425,000. A total of $1,425,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Non-federal funds of $42,000, $80,000 and $80,000 from the 
Montana Wheat and Barley Committee were provided for project support 
during 1997, 1998 and 1999, respectively. The Montana Agricultural 
Experiment Station provided $25,000 in state support. Private 
industries provided $5,000 during 1999.
    Question. Where is the work being carried out?
    Answer. Research is being conducted in three distinct dryland areas 
of Montana in the north, central and northeast, located on producer 
owned land. Each field site is within 45 miles of a Montana State 
University Agriculture Experiment Station research center.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The project was initially proposed for a duration of 3 
years. However, this project is envisioned as a long term project and 
will require a total of 12 years to see it to completion.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Yearly progress reports will be used to track the 
effectiveness of the program of research with the first agency 
evaluation scheduled for October 2000. Assessment of the precision of 
biological control organisms and estimates of profitability, 
marketability, and risk will be used to assess progress.

                 SWINE WASTE MANAGEMENT, NORTH CAROLINA

    Question. Please provide a description of the research that has 
been funded under the Swine Waste Management, North Carolina, grant.
    Answer. During the past year, this multi-disciplinary project has 
expanded existing university efforts that have included plans to 
develop a prototype system for the treatment of animal waste which will 
be used to study and optimize new and innovative swine waste treatment 
processes. Specifically, the current project is focusing on the 
following topics: biological safety and nutrient quality of phosphoric 
acid-preserved animal mortality products processed by rendering, 
extrusion, and fluidized-bed cooking/dehydration; beneficial effects of 
swine manure biosolids on plant disease suppression; evaluation of 
alternative compost products; use of processed animal waste as a 
nitrogen and phosphorus source for Fraser Fir Christmas trees; 
production of a commercially viable feed ingredient from animal wastes, 
cull sweet potatoes and soybean hulls; routine techniques for 
monitoring the nutritional value of processed animal waste; residual 
dietary phytase activity; and phosphorus, calcium and nitrogen content 
in fresh and composted manure.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The urgency for addressing environmental concerns relative 
to the intensive production of livestock and poultry continues to 
intensify in the United States. This is reflected by strategies 
currently proposed jointly by the U. S. Environmental Protection Agency 
and U. S. Department of Agriculture. In North Carolina, where livestock 
and poultry production account for approximately $5 billion in farm 
gate income annually, issues of adequate land area for recycling animal 
manures for crop uptake of nitrogen and phosphorus in some counties of 
intensive animal agriculture is especially sensitive. North Carolina is 
also currently in the process of implementing odor rules that will 
impact animal agriculture. Several other states and local regions are 
facing the same concerns. It is anticipated that deliverables from this 
research project will have a local, state and national impact.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The specific goals for this project include the following. 
Utilize the North Carolina State University Animal Poultry Waste 
Management Center waste processing facility to develop optimum methods 
processing animal waste-based nutrients for use as value-added 
products. Installation of solid separation system at the Animal Poultry 
Waste Management Center waste processing facility. Collect samples and 
establish supply sources of various types of animal waste by-products 
for conducting commercial scale processing and end-product evaluations. 
Evaluate materials processed for plant nutrients or feedstuffs. Set up 
and conduct field demonstration involving potential market use for 
value-added products produced. Complete summary of data for publication 
and presentation at workshops, conferences and professional meetings
    These goals required assimilation of a multidisciplinary research 
team, and completion of facilities that are able to heat treat, 
dehydrate, blend, extrude, compost and pelletize the by-products to 
produce potentially valuable organic fertilizers or feed supplements. 
These tasks have been completed, and the individual projects described 
previously are underway.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1997 
and the appropriation for fiscal year 1997 was $215,000; fiscal year 
1998 was $300,00; fiscal year 1999 was $500,000; and fiscal year 2000 
is $500,000. A total of $1,515,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. This federally funded project has helped leverage funds 
procured from the state as well as private sector. For example, during 
the past fiscal year approximately $735,000 in state funds have been 
provided--for the development and demonstration of alternative swine 
waste treatment technologies--plus approximately $150,000 from industry 
and commodity groups in support of objectives related to this project.
    Question. Where is this work being carried out?
    Answer. This work is being conducted at North Carolina State 
University in Raleigh, North Carolina.
    Question. What was the anticipated date for the original objectives 
of the project? Have those objectives been met? What is the anticipated 
completion date of additional or related objectives?
    Answer. The original anticipated completion date was February 1999. 
Project objectives were not completed by this date. The time to 
complete processes associated with equipment, facilities and safety 
plans required for this project, coupled with unavoidable 
administrative delays in the secondary award process from federal and 
university level for this project, required a request for extension of 
the completion date to February 2000. It is anticipated that most 
project objectives will be completed by February 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The CSREES conducted an evaluation of the progress of this 
work during January, 2000. The project has made significant progress 
towards meeting the original goals.

         TILLAGE, SILVICULTURE, AND WASTE MANAGEMENT, LOUISIANA

    Question. Please provide a description of the research that has 
been funded under the Tillage, Silviculture, and Waste Management 
Research Grant?
    Answer. This research has six components: Rice and Cotton Tillage, 
Bald Cypress and Water Tupelo Silviculture, and Dairy and Poultry Waste 
Management. More specifically, the Rice Scientists are looking for ways 
to improve stand establishment; the Cotton Scientists are focusing on 
the use of tillage systems to combat harmful insect populations; the 
Waste Management Scientists are quantifying the environmental and 
economic effectiveness of approved dairy and poultry waste disposal 
systems; and the Silviculturists are conducting a problem analysis on 
factors affecting Bald Cypress and Water Tupelo regeneration. The 
project is annually subjected to the university's merit review process.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal researchers hypothesize that the crops, 
forests, and waste issues addressed by this project extend beyond the 
state borders, thus this research has, at a minimum, multi-state to 
regional application.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goals were to: improve conservation tillage in 
rice and cotton farming; determine the effectiveness of no-discharge 
dairy waste treatment facilities; determine acceptable land treatment 
levels for poultry waste disposal; and to evaluate wetland forest 
regeneration processes. All components of the project have established 
research studies and are monitoring progress. For fiscal year 1998 the 
silviculture component was placed on hold and a sweet potato project 
was added. This decision was prompted by a staffing change in the 
Department of Forestry and Wildlife. Prior to this decision, an 
annotated bibliography of Bald Cypress Silviculture was completed and 
the responsible scientists had begun work on Water Tupelo regeneration.
    Question. How long has the project been underway, and how much has 
been appropriated, by fiscal year, through fiscal year 2000?
    Answer. The work began in fiscal year 1994. The appropriation for 
fiscal year 1994 was $235,000. For fiscal years 1995-2000 the 
appropriation was $212,000. This sums $1,507,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. State funding in support of these areas of research exceeds 
$750,000 annually.
    Question. Where is the work being carried out?
    Answer. Investigations are being conducted on the main campus at 
Louisiana State University--LSU--as well as the LSU's Experiment 
Stations at Calhoun, Crowley, Chase, Winnsboro, St. Joseph, and 
Washington Parish, Louisiana.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have these objectives been met? What is the 
anticipated completion date of additional or related projects?
    Answer. The original work was scheduled for completion in 1999. 
Early term objectives have been met. The added experiments have closing 
dates ranging from fiscal years 1999 to 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted?
    Answer. The last field evaluation was completed on December 12, 
1995. The evaluation summary complimented the scientists on the 
interdisciplinary components associated with this project, along with 
their investigative procedures, report writing, and external 
networking.

                       TOMATO WILT VIRUS, GEORGIA

    Question. Please provide a description of the research that has 
been funded under the tomato wilt virus research program grant.
    Answer. This project supports research to help in the reduction of 
major crop losses in the southeastern United States due to Tomato 
Spotted Wilt Disease. Research focuses on vector biology and the virus 
transmitted by the vector. This project was not awarded competitively 
but has undergone peer review at the university level and merit review 
at CSREES.
    Question. According to this research proposal, or the principal 
investigator, what is the national, regional, or local need for this 
research?
    Answer. Tomato Wilt Virus has become a major yield-limiting 
constraint on a number of very important food crops. This is a problem 
world-wide, but in the last ten year spread throughout the Southeastern 
states. Since this virus was first observed in Georgia in 1986, it has 
caused an estimated $100 million crop loss to the state. The wide host 
range of the virus and its vector make this a disease that is difficult 
to manage. The new strategies to manage this virus in Georgia will be 
applicable to all states where it occurs.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this research is to reduce losses in the major 
crops grown in the Southwest due to spotted wilt. This requires 
identifying the sources of virus and vectors, determining the dynamics 
of the thrips species that transmit the virus, elucidating how the 
virus is acquired by thrips to identify possible genes to enhance virus 
resistance in plants, and adapting to crops in the Southeast the Risk 
Assessment Index for spotted wilt that is currently in implementation 
and refinement at the University of Georgia for peanut.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. This grant began in 1999 and has been supported at the 
level of $200,000 in fiscal years 1999 and 2000. A total of $400,000 
has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds provided for this grant are $84,736 
for 1999.
    Question. Where is this work being carried out?
    Answer. Research is being carried out at the University of Georgia 
and The Coastal Plain Experiment Station.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objectives have not been met since this is a 
complex research area. The anticipated completion date for the 
continuing research is 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project has undergone peer review at the University 
level and an agency merit review in January, 1999. In summary, some 
progress has been made on all objectives of this research. Some 
progress has been made in understanding the relationship of cellular 
receptor proteins in the guts of the vector. This will aid in the 
identification, characterization and eventually cloning of these genes 
that then could be modified against the virus. Progress was also made 
in investigating the source of inoculum and seasonal dynamics of the 
vector. This included identification of several weed species that are 
alternative virus hosts. The Risk Assessment Index for management of 
spotted wilt disease was used to evaluate peanut cultivars and 
determine how they fit better into management of the virus on peanut.

                      TROPICAL AQUACULTURE/FLORIDA

    Question. Please provide a description of the research that has 
been funded under the grant.
    Answer. The agency is in the process of requesting the university 
to submit a grant proposal for this new research activity.
    Question. According to the research proposal, or the principal 
research, what is the national, regional or local need for this 
research?
    Answer. The researchers indicate that the ornamental fish industry 
is unique and important to the local economy where 69 percent of the 
total domestic production of ornamental fish occurs in Hillsborough 
County and 95 percent of the total production of ornamental fish is in 
southern Florida. At a national level, the United States imports 60-70 
percent of the ornamental fish sold. This results in a significant 
trade deficit that can be reduced by increased domestic production.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. This is a new research grant to be funded in fiscal year 
2000.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and the appropriation for fiscal year 2000 is $170,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The university estimates that significant non-federal 
funding will be provided in fiscal year 2000 primarily from state 
sources to cover salaries of the principal investigators and operating 
expenses for the laboratory. As the program develops, additional non-
federal funding is expected.
    Question. Where is this work being carried out?
    Answer. Research will be primarily conducted at the University of 
Florida's Tropical Aquaculture Laboratory located in Ruskin with some 
work to be done also at the main campus.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
is fiscal year 2001. The project will be initiated in fiscal year 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency will evaluate the progress of this new project 
on an annual basis. The university will be required to submit an 
accomplishment report each year when the new proposal is submitted for 
funding. Since this is the first year of the program, the agency will 
conduct an external peer review of the proposal. The fiscal year 2000 
review will be completed within three weeks of submission of the 
proposal. The researchers will be requested to develop a research 
proposal consistent with the National Science and Technology Council's 
Strategic Plan for Aquaculture Research and Development.

                   TROPICAL AND SUBTROPICAL RESEARCH

    Question. Please provide a description of the research that has 
been funded under the tropical and subtropical research program grant.
    Answer. Tropical and Subtropical Research--T STAR--Program is 
operating in coordination with the T STAR Caribbean and the T STAR 
Pacific Administrative Groups. State Agricultural Experiment Stations 
that are members of the Caribbean group are Florida, Puerto Rico, and 
the Virgin Islands; members of the Pacific group are Hawaii and Guam. 
The proposals are peer reviewed and are then selected for funding by 
the administrative groups.
    Non-member institutional interests are represented by the Executive 
Director of the Southern Region Agricultural Experiment Station 
Directors, who is a member of the Caribbean group, and the Executive 
Director of the Western Region Agricultural Experiment Station 
Directors, who is a member of the Pacific group. The Agricultural 
Research Service also has representation on the two groups, as does the 
CSREES scientist who manages the T STAR grant program.
    Funds for the program are divided equally between the two Basin 
Administrative Groups. The research objective of the program developed 
by the principal is to improve the agricultural productivity of many of 
the subtropical and tropical parts of the United States. Special 
research grants have been awarded for research on controlling insect, 
disease, and weed pests of crops; increasing the production and quality 
of tropical fruits, vegetables, and agronomic crops; promoting 
increased beef production through development of superior pastures; 
detection of heartwater disease of cattle and the influence of heat 
stress on dairy cattle reproduction; better use of land and water 
resources; developing computer models for efficient crop production 
systems and animal feeding systems; developing computer models for 
land-use decisions; using biotechnology methodologies for improving 
plant resistance to viral and bacterial diseases; using biotechnology 
to develop non-chemical, or biological, strategies for controlling 
insect pests; and potential for growing new speciality crops.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes this program provides 
research-generated knowledge that enables informed choices in the 
responsible use of natural resources, facilitates the health and well 
being of American citizens through improved food safety and nutrition, 
provides frontline protection for the rest of the nation's farms and 
ranches from serious plant and animal diseases and pests, and enhances 
the ability of U.S. farmers to produce crops efficiently and 
economically and/or to introduce new crops and agricultural products 
with export potential to gain market share abroad. On a regional basis, 
the T STAR program addresses the unique challenges of practicing 
tropical agriculture, that is, presence of pests year-round, heat 
stress, post-harvest processing to meet regulatory requirements for 
export, etc. The local need of Americans living in tropical regions of 
the nation for T STAR knowledge-based products is to design and 
implement sustainable agricultural development within fragile tropical 
agroecosystems--particularly on tropical islands--and to develop new 
crops and niche markets.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to increase the 
production and quality of tropical crops; control pests and diseases of 
plants and animals; promote increased beef production; and conserve 
land and water resources. Grants have supported research on control 
strategies for Melon thrips; the biochemical nature of resistance to 
rust in nutsedge; development of bioherbicides for nutsedges; 
development of tomato cultivars with resistance to the spotted wilt 
virus; development of pheromones for monitoring and controlling the 
citrus root weevil; reducing the effects of heat stress in dairy 
cattle; development of a decision support system for vegetable 
production; finding cucurbits with resistance to silverleaf, developing 
a computer program for optimal supplementation strategies for beef and 
dairy cattle on tropical pastures; characterizing new strains of citrus 
tristeza virus in the Caribbean basin; determining the economic 
threshold for the citrus leaf miner on limes; using viral replicase 
genes to engineer rapid detection methods for geminiviruses; developing 
makers of bacterial spot resistance genes in tomato; breeding snap and 
kidney beans for resistance to golden mosaic virus and for heat 
tolerance; searching for resistance to papaya bunchy top disease; 
developing weed control for yam production; and bioengineering ringspot 
virus resistance in papaya.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The operation of the tropical and subtropical research 
program was transferred from the Agricultural Research Service to the 
CSREES, with funding being first provided in fiscal year 1983. Funds in 
the amount of $2,980,000 per year were appropriated in fiscal years 
1983 and 1984. In fiscal year 1985, $3,250,000 was appropriated. In 
fiscal years 1986, 1987, and 1988, $3,091,000 was appropriated each 
year. $3,341,000 was appropriated in fiscal year 1989. The fiscal year 
1990 appropriation was $3,299,000. The fiscal years 1991-1993 
appropriations were $3,320,000 per year; $3,121,000 in fiscal year 
1994; $2,809,000 in fiscal years 1995-1996 per year; and $2,724,000 per 
year in fiscal years 1997 through 2000. A total of $54,718,000 has been 
appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. For fiscal year 1997, more than $1 million of non-federal 
funds were provided to the T STAR program from state appropriations; 
for 1998 $856,000; and for 1999 $158,500. These state funds were in the 
form of faculty salary time commitments and indirect costs covered by 
the institutions.
    Question. Where is this work being carried out?
    Answer. This research is being conducted in Florida, Puerto Rico, 
Virgin Islands, Hawaii, and Guam. Work is also being done in other 
Pacific and Caribbean countries through agreements between institutions 
but not using Federal funds.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional re related objectives?
    Answer. Research on tropical crop and animal agriculture to 
increase productivity net profits, decrease harmful environmental 
impacts, conserve water, and natural resources. Objectives for some 
projects have been completed and new objectives addressing new issues 
are being developed in this ongoing project.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The projects that are funded by the T STAR Special Research 
Grant have been peer reviewed by panels of scientists in the United 
States to assure that good science is undertaken. Also, as part of the 
grant renewal process, progress reports are reviewed by the two 
Administrative Groups and by the grant manager at the national level. 
Workshops in which research results and their application for 
agricultural production are developed are conducted every two years. 
Research papers are published in the appropriate regional, national, 
and international forums available.
    The development in 1995 of the Strategic Plan for T STAR provided a 
mechanism to define priorities, examine program direction, and 
recommend operational changes. One of the principal points considered 
was to bring the Caribbean and Pacific Basin components closer and 
better coordinated. T STAR and the coordination which it implies was an 
outcome that will make this program better. Each sub project is peer 
reviewed annually at the initiating institution by the T STAR panel and 
by the agency National Program Leaders.

                       TURKEY CARNAVIRUS, INDIANA

    Question. Please provide a description of the research that has 
been funded under the Turkey Coronavirus, IN grant.
    Answer. The objectives of the research will be to:
  --develop enzyme-linked immunosorbent assays for detecting antibody 
        to turkey coronavirus and turkey coronavirus antigen in turkey 
        flocks,
  --elucidate immune responses in turkey poults infected with turkey 
        coronavirus, and
  --determine which immunity, humoral and /or cellular, will provide 
        the most effective protection for turkey poults against turkey 
        coronavirus infection.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The need for this research is that the turkey industry 
plays a major role in animal agriculture in the U.S. This enteric 
disease of young turkey poults, called turkey poult enteritis or poult 
enteritis mortality syndrome, has contributed to significant economic 
losses by producers in Indiana, North Carolina, South Carolina, 
Virginia and other states. The cost to the industry is in the millions. 
Currently, no effective medication or vaccination is available for 
control and prevention of the disease. Although turkey poults that 
recover from the coronaviral enteritis may develop long-term immunity, 
little is known about the specific immunity. The proposed research will 
lead to further study on the understanding of immunological interaction 
between turkey poults and individual turkey coronaviral proteins and 
subsequent development of recombinant or a deoxyribonucleic acid 
vaccine for effective prevention of the disease. The enzyme-linked 
immunosorbent assays that will be developed in this research will 
provide an efficient tool for diagnosis and control of turkey poult 
enteritis.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the research was to develop enzyme-linked 
immunosorbent assays for monitoring antibody to turkey coronavirus and 
turkey coronavirus antigen in turkey flocks during acute outbreaks or 
recovery and in routine health monitoring and to develop effective 
vaccines to protect turkey poults against turkey coronavirus infection.
    The investigators' laboratories have successfully propagated turkey 
coronavirus from intestines of infected turkey poults in 22-day-old 
turkey embryos, purified turkey coronavirus from the embryo intestines 
and have demonstrated an acute enteritis with decreased body weight 
gain in 7 or 10-day-old turkey poults by oral inoculation of the 
purified turkey coronavirus. This establishes an infection model to 
study immunology, pathogenicity, and pathogenesis of turkey 
coronavirus.
    Turkey coronavirus has failed to adapt to grow in cell cultures 
after numerous attempts, hindering the development of antibody-capture 
enzyme-linked immunosorbent assay--ELISA--for antibody to turkey 
coronavirus that requires a large amount of highly purified turkey 
coronavirus antigens. Nevertheless, another alternative antigen source 
for ELISA has been investigated. Antibody to turkey coronavirus was 
found to be cross-reactive with infectious bronchitis virus antigen. An 
antibody-capture ELISA for detection of antibody to turkey coronavirus 
utilizing commercially-available ELISA plates coated with infectious 
bronchitis virus antigens is being developed. Since large numbers of 
clinical samples can be handled by ELISA rapidly and accurately, 
successful development of ELISA for antibody to turkey coronavirus will 
provide the turkey industry with a sensitive and specific tool for the 
diagnosis and control of turkey coronavirus infection.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1999. 
The appropriation for fiscal year 1999 was $200,000 and for fiscal year 
2000 was $200,000, for a total of $400,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Non-federal funds expended on this project in fiscal year 
1999 were $72,311.06. These funds included $25,200 from state funds and 
$47,111.06 from a private commodity group.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at Purdue University in the 
Department of Veterinary Pathobiology and the Animal Disease Diagnostic 
Laboratory.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
is December 31, 2001. At present the project is on target to meet its 
stated objectives in the designated time period.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This project was initially funded on July 19, 1999 and no 
evaluation has been performed since that time.

                          URBAN PESTS, GEORGIA

    Question. Please provide a description of the research that has 
been funded under the Urban Pests, Georgia grant.
    Answer. This research is focused on urban pests with specific 
emphasis on termites and ants. This project has been evaluated annually 
by CSREES.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal researcher believes subterranean termites and 
ants are significant economic pests in the Southeastern United States. 
Damage and control costs for termites in Georgia were estimated at 
$44.5 million in 1993. It is estimated that professional pest control 
operators apply over 23 million pounds of active ingredients in and 
around homes each year. Chemicals currently registered for controlling 
these pests are less efficacious than desired and applied at an 
intensity that exceeds most agricultural settings.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the termite research is to better understand 
the biology of subterranean termites and their responses to selected 
environmental cues in order to design monitoring, risk assessment, and 
precision-targeting control strategies using conventional and 
alternative methods. Additionally, an objective is to improve the 
identification of subterranean termites to the species level through 
studies of the termite genome, cuticular chemistry, morphometric 
characteristics and termite behavior. Specific accomplishments in the 
termite research are as follows: Multi-disciplinary research using 
morphometric comparisons, agonism bioassays, chemotaxonomic phenotypes, 
mark-release-recapture and genetic analysis shows that subterranean 
termite populations display a multiple-queen colony organization. This 
field research also proved that termite movement between established 
feeding sites is not random. It demonstrates that current understanding 
of termite population structure must be reconsidered. It is clear from 
this work that termite population structure cannot be determined using 
only a single technique, like the current industry standard of mark-
release-recapture, and that the organization of termite populations is 
dynamic. This work raises questions concerning the implementation of 
termite baiting control tactics and claims of structural protection 
using the current termite baiting technology which in the past four 
years has become a multi-million dollar industry in the United States. 
This same multi-disciplinary research approach has demonstrated that 
the Formosan termites from 7 separate sites in the Atlanta, Georgia, 
Metro Area were from a single maternal line and that this maternal line 
originated from New Orleans, Louisiana not, Charleston, South Carolina 
as originally suggested. The research also provided strong evidence 
that the subterranean termite species that is infesting areas in and 
around Paris and Southwestern France is from the United States, not 
southern Europe. Research on new chemistries demonstrated that the 
currently registered non-repellent termiticides require longer than 10 
minute exposure times at concentrations at least twice the current 
registered application rates to effect greater than 90 percent 
mortality in the termites tested in bioassay. This work cannot explain 
the purported field efficacy of the new termite control concept of the 
``treatment zone'' which allows termites to penetrate the soil but 
kills them before they breach the barrier and infest a structure. Field 
and laboratory research with insect pathogenic fungi used as a 
biological control agent indicate that multiple soil applications are 
required and that population impacts are likely limited to the area of 
application not disparate feeding sites. Laboratory research on wood 
treatments using borate materials indicates that these materials 
discourage termite feeding but not exploration for additional, 
untreated wood. Tests designed to treat infested structural wood using 
a new insecticide chemistry provided evidence of killing termites at 
sites untreated by the insecticide but known to be visited by the 
population of termites in the treated area.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1991 
and the appropriation for fiscal years 1991-1993 was $76,000 per year. 
In fiscal year 1994 the appropriation was $71,000 and in fiscal years 
1995 through 2000 the appropriation was $64,000 each year. A total of 
$683,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
by fiscal year were as follows: 1991--none, 1992--$26,000, 1993--
$18,000, 1994--$59,530, 1995--$59,539, 1996--$30,000, 1997--$80,00, 
1998--$50,000, and 1999--$100,000.
    Question. Where is the work being carried out?
    Answer. This research and technology transfer program is being 
conducted at the University of Georgia, Department of Entomology, 
Athens, Georgia.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The grants have been processed on a year to year basis 
pending the availability of funds, however, the original objectives 
were essentially a five-to eight-year plan of work. CSREES 
entomologists judge that excellent progress has been made in meeting 
the objectives, especially on foraging behavior and the identification 
and development of termite baits.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This project has been evaluated on an annual basis by 
CSREES through progress reports and by evaluation of contributions 
presented through the Entomological Society of America meetings in 
December of 1999.

                        VIDALIA ONIONS, GEORGIA

    Question. Please provide a description of the research that has 
been funded under the Vidalia Onions, Georgia grant.
    Answer. The research has concentrated on developing pungency 
testing procedures to improve quality and sensory consistency of 
Vidalia onions.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for the 
research?
    Answer. Vidalia onions are a specialty crop of extreme importance 
to the economy of certain areas of Georgia. The project is directed 
toward improving product quality and the nationally and internationally 
economic competitiveness of this production system.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The research has demonstrated that chemical tests can be 
used to accurately predict the pungency of onions prior to harvest, and 
perhaps flavor categorization, to consumers. The results have also 
indicated that several diseases affecting onions are the most serious 
problem in regard to quality and production.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The project was funded for $84,000 for 1998; for $100,000 
in fiscal year 1999; and for $100,000 in fiscal year 2000. A total of 
$284,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year.
    Answer. The non-federal funding for this project for the last two 
years was $193,137 from the state of Georgia and $251,427 in private 
funding.
    Question. Where is the work being carried out?
    Answer. The work is being conducted at the Coastal Plain Experiment 
Station in Tifton, Georgia and in test plots in several commercial 
field sites.
    Question. What was the anticipated completion date for the original 
objections of the project? Have those objectives been met? What is the 
anticipated completion date of additional objectives?
    Answer. The anticipated duration for the original project was five 
years. The initial objective of establishing procedures for pungency 
testing has proceeded ahead of schedule. The plant disease problems 
that have emerged will likely require several additional years, 
although the incidence and severity of these diseases are highly 
variable from year to year.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This project is in its second year and a CSREES review has 
not yet been done.

            VITICULTURE CONSORTIUM, NEW YORK AND CALIFORNIA

    Question. Please provide a description of the research that has 
been funded under the Viticulture Consortium grant.
    Answer. The University of California and Cornell University in New 
York conducted research on varietal responses of grapes, modeling of 
water requirements, management of diseases including Phyloxera and 
other cultural aspects of grape production. Funds were used by the lead 
institutions to fund projects in the various grape producing states 
within their region. Grants were made based on peer reviewed proposals 
and selected competitively by regional groups based on priorities 
developed by researchers, extension, and industry personnel.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The research being carried out is designed to help the 
viticulture and wine industries remain competitive in the U.S. and in 
the global market. Further, disease and insect problems are a concern 
of the industry, especially in new strains of phyloxera while overall 
improvement in all cultural management approaches to grape production 
need to continue.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research is to maintain or 
enhance the competitiveness of the U.S. Viticulture and wine industry 
in the global market.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1996-1997, $500,000 per year; fiscal year 1998, 
$800,000; fiscal year 1999, $1,000,000 and $1,000,000; in 2000. A total 
of $3,800,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Each year the viticulture industry provides matching 
contributions in excess of the appropriated federal funds.
    Question. Where is the work being carried out?
    Answer. Research is being carried out in 8 eastern states and 
California through 18 grants.
    Question. What is the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The research priorities set by the guidance group have not 
been met. The research is varied and complex and will take many years 
to complete.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project underwent merit review in January, 1999. The 
research proposals are peer-reviewed in both regions before selection. 
The review group is composed on industry, research, and extension 
personnel that are experts in viticulture.

                       WATER CONSERVATION, KANSAS

    Question. Please provide a description of the research that has 
been funded under the water conservation program grant.
    Answer. This research program is designed to develop and 
disseminate technical and economic information on the efficient use of 
water for irrigated crop production in western Kansas. The program has 
the following objectives: 1. Develop regression models to estimate the 
longevity of subsurface drip irrigation systems using calculations of 
annual system performance deterioration based on 13 years of operating 
pressures and flow rates; 2. Evaluate utilization of livestock effluent 
with subsurface drip irrigation and its effect on water redistribution 
and corn water use patterns; 3. Develop best management practices for 
nitrogen fertigation using subsurface drip irrigation systems for corn; 
4. Estimate the long run economic impacts of irrigation efficiency 
improvements for irrigated corn, wheat, and grain sorghum in the farm 
sector and affiliated sectors of the High Plains economy; 5. 
Disseminate irrigation research information and best management 
practice recommendations to Kansas irrigators through a series of 
extension bulletins and updates based on research-based information.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The need to conserve water has focused attention on more 
efficient alternatives such as subsurface drip irrigation. This 
research will be of particular significance within the state and 
region. However, it also has national and international applications as 
advanced irrigation systems, such as subsurface drip irrigation, will 
be needed to improve irrigation water use efficiency in the next 
century. Economic research initiated in 1998 is examining the impact of 
adoption of improved water conservation techniques on the entire 
regional economy rather than just on the short term economics faced by 
the individual irrigator. This research will help society determine 
whether society should have a role in providing incentives to increase 
adoption rates of water conservation technology.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The research goal is to determine the feasibility of 
subsurface drip irrigation and other alternative irrigation systems in 
western Kansas to sustain irrigated corn production to support the beef 
feedlot industry. The project also supports an educational effort 
through collection and dissemination of information on efficient 
irrigation methods. Subsurface drip irrigation acreage is increasing in 
Kansas and farmers are obtaining results on their own farms.
    The computer program Irrigation Economics Evaluation System--IEES--
was distributed by the Kansas State University Cooperative Extension 
Service and is being used by Kansas irrigators. A report has been 
published which documents the data requirements and algorithms used in 
the model. A users guide is also available.
    A report entitled ``Economic Analysis of Alternative Irrigation 
Systems for Continuous Corn and Grain Sorghum in Western Kansas,'' has 
been completed. The results of this study indicate that a low drift 
nozzle, center pivot system is the most profitable center pivot system 
to use for irrigation of corn and grain sorghum. Overall, a surge flood 
system was the most profitable because of its relatively low ownership 
costs. Although the subsurface drip system shows some potential, it is 
only economically feasible when above-average crop yield and price 
conditions exist.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1993 
with an appropriation of $94,000; $88,000 in fiscal year 1994; and 
$79,000 in fiscal years 1995-2000 each year. The total funds 
appropriated are $656,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal state of Kansas funds provided to this 
project were as follows: 1997, $119,659 state funds; 1998, $135,993 
state funds; and 1999, $129,850 state funds.
    Question. Where is this work being carried out?
    Answer. The research is being conducted at Kansas State University. 
The field portion of the research is being conducted on Research 
Centers at Colby and Garden City, Kansas. Additional work is being 
carried out on campus at the Departments of Agronomy and Agricultural 
Economics in Manhattan, Kansas.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original anticipated completion date for the project 
was 1998. One of the most important objectives of the study is to 
evaluate longevity of the subsurface drip irrigation systems. These 
sites are unique to the region and very little information is available 
on system longevity. Pressing water quality problems of a regional and 
national scope has necessitated a change in the objectives to 
developing nutrient management practices under subsurface drip 
irrigation and utilization of livestock wastewater with subsurface drip 
irrigation. Additionally, changes in the federal farm program which 
allow greater planting flexibility has an effect on how irrigators make 
water/land allocation decisions. Field and economic studies related to 
allocation strategies, nutrient management, and wastewater utilization 
should be completed in three years. The projected completion date is 
2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project has been peer reviewed in January 2000. The 
reviewers felt the project concept to be valid and the timetable for 
accomplishments to be on target.

                       WEED CONTROL, NORTH DAKOTA


    Question. Please provide a description of the research that has 
been funded under the Weed Control, North Dakota grant.
    Answer. A major focus has been developing and evaluating systems to 
reduce herbicide use in crop production. The experiments of longest 
duration are field evaluations of sustainable, reduced tillage and 
conventional crop rotation systems to ascertain changes in weed species 
and densities and in economic returns over time when weed management is 
reduced. Another emphasis has been weed biology, particularly 
understanding the unique physiological and genetic traits of herbicide-
resistant kochia and wild oat in an effort to recommend the most cost-
effective management alternatives. Another goal has been to improve the 
efficiency of postemergent herbicide use by utilizing additives that 
maximize weed control with reduced amounts of herbicide and by reducing 
spray volume and adapting new nozzle designs that improve application 
techniques.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The research address new methods to control weeds using 
systems control. The principles concerning effective use of additives 
with postemergent herbicides are being applied to improving the 
efficiency of postemergent herbicide use across the nation. Similarly, 
adaptation of herbicide application technology that allows reduced 
spray volumes while sustaining herbicide effectiveness is of nationwide 
benefit. The increased understanding of the inheritance and management 
of herbicide resistance in kochia and wild oat will be beneficial to 
management of these weeds in the central and northern regions of the 
United States where these weeds are abundant and cause major losses 
annually. The long-term field experiments should provide useful 
information on the positive and negative impacts of reduced weed 
management systems wherever spring-sown small grains are the primary 
crop.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The initial major activity was a long-term series of 
experiments to evaluate changes in weed species and populations and the 
economic returns in conventional, sustainable and reduced tillage 
systems with rotations that are up to four years long. The research was 
initiated in 1993, but atypical wet conditions occurred for the first 
three years. It is felt that at least two complete cycles of crop 
rotations (eight years) will be necessary to accurately assess what 
farmers can expect from adopting new management systems.
    The research to improve the efficiency of herbicides lead to 
development of the principle that effectiveness of many postemergent 
herbicides can be improved by using additives that dissolve the 
herbicide. This principle was utilized to develop a basic pH adjuvant 
that improves the effectiveness of several postemergent herbicides.
    The research with genetics of herbicide-resistant kochia has 
determined that inbreeding depression occurs when this naturally cross-
pollinated plant is self-pollinated to develop genetically uniform 
plants, which are desirable for many research objectives related to 
inheritance of genetic traits. However, this discovery also 
demonstrates that cross-pollination must be maintained in kochia for 
research intended to accurately simulate genetic changes and 
competition with crops that may occur in a field.
    Resistance of wild oat to many of the major herbicides used for its 
control in the United States has been documented, including resistance 
to imazamethabenz which has not been reported previously. Molecular 
biology and physiological studies have been initiated to better 
understand the cause of imazamethabenz resistance in wild oat, so 
management strategies can be recommended. Initial research has 
demonstrated that weed control by herbicides applied to weeds of 
recommended size has been equally effective when spray-drift-reducing 
or conventional nozzles are used. Because drift-reducing nozzles 
produce large droplets, the next step of evaluation is being initiated 
to determine whether small weeds are treated and controlled effectively 
when drift-reducing nozzles are used.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through year 2000?
    Answer. The support by this grant began in fiscal year 1992 and 
appropriation for fiscal years 1992 and 1993 was $500,000 per year; 
$470,000 in fiscal year 1994; and $423,000 per year in fiscal years 
1995 through 2000. A total of 4,008,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
were as follows: $27,030 state appropriations in 1992; $48,472 state 
appropriations in 1993; $41,969 state appropriations in 1994; $71,847 
state appropriations in 1995; $62,134 state appropriations in 1996; 
$78,579 state appropriations in 1997; and an estimated $70,000 state 
appropriations in 1998 and 1999.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at the North Dakota State 
University.
    Question. What was the anticipated completion date for the original 
objective of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original completion date for the long-term rotation 
experiment, utilizing the conventional, reduced tillage and sustainable 
management systems, was anticipated to be a minimum of five years, but 
the experience with atypically environmental conditions suggest that 8 
to 10 years will be necessary to attain a relatively steady state or 
logical end of the research. The current intent is to continue the 
research until at least 2002. The problems encountered due to the 
inbreeding depression in kochia suggests that it will be difficult to 
determine the true genetic nature of inheritance of herbicide 
resistance in this weed as quickly as projected. Due to the discovery 
of herbicide resistance of wild oat to imazamethabenz, the genetic and 
molecular biology research to characterize the nature of this 
resistance is just getting a good start. It is anticipated that the 
genetic and biology research with kochia and wild oat will need to 
continue until at least fiscal year 2002.
    Question. When was the last Agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. A scientific peer review of the written proposal was 
conducted in fiscal years 1998 and 1999 by CSREES prior to awarding the 
grant. Based on comments from the reviewers, CSREES is planning to 
conduct an onsite scientific peer review of this grant.

                       WETLAND PLANTS, LOUISIANA

    Question. Please provide a description of the research that has 
been funded under the Wetland Plants, Louisiana, grant.
    Answer. CSREES has requested the university to submit a grant 
proposal that is currently in preparation.
    Question. According to the principal researcher, what is the 
national, regional or local need for this research?
    Answer. There is local, regional, and national need for this 
research. Coastal wetlands erosion is a serious environmental problem 
in many coastal locations around the United States. The problem is 
particularly severe in Louisiana where an acre of coastal wetlands is 
lost to erosion every 20 minutes. Current technologies, even at great 
expense, can only slightly reduce these losses. The research this grant 
is funding has the potential to provide a significant improvement with 
respect to both the magnitude and expense of future coastal erosion 
control efforts.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to develop an 
economically-feasible approach to controlling coastal wetlands erosion 
that would utilize vegetation to retain areas threatened by erosion and 
to rebuild lost land. To accomplish this, a system that incorporates 
agricultural principles involved in crop production is required. 
Specifically, a seed-based system utilizing appropriate planting 
material is required. While last year was the first year of funding for 
this project from CSREES, progress has been rapid in developing this 
seed-based system, and field trials in the marsh were initiated in 
1999.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1999, 
and the appropriation for fiscal years 1999 and 2000 was $600,000 per 
year for a total of $1,200,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
are as follows: $18,391 state appropriations, $5,319 industry grants, 
and $8,691 miscellaneous in 1999. In addition, the university had 
$110,081 in unrecovered indirect costs.
    Question. Where is the work being carried out?
    Answer. Research is being conducted at the Louisiana Agricultural 
Experiment Station.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Since this is a new program, the original objectives have 
not yet been met.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This is a new project, and there has been no prior agency 
evaluation. An agency evaluation is planned for fiscal year 2000 
following one year of project operation.

                         WHEAT GENETICS, KANSAS

    Question. Please provide a description of the research that has 
been funded under the Wheat Genetics, Kansas grant.
    Answer. This project provides partial support for the Wheat 
Genetics Resource Center at the University of Kansas. The Center 
focuses on collection, evaluation, maintenance, and distribution of 
exotic wheat-related germplasm needed to develop new wheat cultivar 
resistant to disease, insects and environmental stress.
    Question. According to the research proposal or the principal 
research, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes most cultivated varieties 
of wheat are derived from common sources. They lack the rich genetic 
diversity needed to develop resistance to diseases, insects, and 
environmental stress. The replacement of genetically-rich primitive 
cultivar and land races by modern, more uniform cultivars all over the 
world is causing erosion of wheat germplasm resources. New pests or 
those that have overcome varietal resistance pose a constant threat to 
the Nation's wheat production. Genetic resistance often resides in wild 
relatives of wheat. The researchers believe this program, which was 
established in Kansas, is providing service to wheat breeders 
nationally and internationally.
    Question. What was the original goal of this research and what has 
been accomplished?
    Answer. The original goal of this research was to enhance the 
genetic diversity available to wheat breeders nationally and 
internationally by collecting, evaluating, maintaining, and 
distributing germplasm derived from wild relatives of wheat. To date, 
39 germplasm releases have been made containing new genes for 
resistance to such pests as Hessian fly, greenbug, leaf rust, soil-
borne mosaic virus and Russian wheat aphid. Germplasm stocks with 
resistance to leaf rust and powdery mildew are under development. 
Evaluation of germplasm for important resistance genes was carried out 
by Center scientists and cooperating institutions. Center scientists 
have introduced antifungal protein genes into the wheat plant to 
enhance its survival against pathogen attacks. One transgenic wheat 
line gave enhanced resistance to wheat scab, a devastating disease of 
wheat. In 1998, the Center filled 20 requests from U.S. wheat breeders 
for seed from the germplasm collection and 10 requests for seed of 
germplasm releases, as well as 34 requests from international breeders.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. Work supported by this grant began in fiscal year 1989. 
Appropriations were for fiscal year 1989, $100,000; fiscal year 1990, 
$99,000; fiscal year 1991, $149,000; fiscal years 1992-1993, $159,000 
per year; fiscal year 1994, $196,000; fiscal years 1995-1997, $176,000 
each year, and $261,000 for fiscal years 1998, 1999, and 2000. A total 
of $2,173,000 has been appropriated.
    Question. What is the source and amount of nonfederal funds 
provided by fiscal year?
    Answer. The nonfederal funds provided for this grant were as 
follows: $609,309 in 1991; $531,167 in 1992; and $730,082 in 1993, 
$468,960 in 1994; $563,671 in 1995; $457,840 in 1996; $495,820 in 1997; 
$155,279 in 1998 and $452,600 in 1999. Sources include state 
appropriations, product sales, and other organizations, such as state 
commodity associations.
    Question. Where is this work being carried out?
    Answer. This research is being conducted at Kansas State University 
at the Wheat Genetics Resource Center. The principle investigator also 
reports collaborative projects with other departments at Kansas State 
University, as well as other institutions in the U.S.
    Question. When was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The collection, evaluation, and enhancement of wheat 
germplasm is a continual process. Therefore, this project does not have 
a defined completion date. Some objectives related to germplasm 
evaluation have been completed in fiscal year 1999 and other objectives 
which are related to other genetic sources are still in the 
developmental stage.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This project was peer reviewed by the institution, Kansas 
Agricultural Experiment Station, and was found to address important 
issues in the winter wheat industry in Kansas and other states. The 
research has been productive based on germplasm releases and peer-
reviewed journal articles and other publications. Additionally, each 
annual proposal is reviewed by an agency scientist.

                       WOOD UTILIZATION RESEARCH

    Question. Please provide a description of the research that has 
been done under the wood utilization grant.
    Answer. The research includes: developing processes to upgrade wood 
products made from small-diameter or low quality trees to higher value 
structural applications; catalyzing the formation of new business 
enterprises; reducing environmental impact while improving systems for 
timber harvesting and fores products manufacturing; increasing the life 
of wood in use through preservation and good design; and assisting 
industry to be more innovative.
    Question. According to the research proposal, or the principal 
researchers, what is the national, regional, or local need for this 
research?
    Answer. The forest products industry is very fragmented with many 
small firms which benefit from publicly-sponsored research. Research 
provides the woodworking machinery and tooling industry with the 
technology needed to be more competitive in the global economy. Most of 
the companies helped by this research are too small to afford in-house 
research groups. Shifts in resource availability and increased costs of 
the timber that is still available demand more complete utilization in 
order for wood to remain competitive.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal is to generate new knowledge that will benefit the 
wood industry and the environment. New scientists are trained. 
Consumers benefit from better and more environmentally-sound products. 
Among the major accomplishments of the eight centers are (1) design of 
glue-laminated beams that are reinforced with plastics to save 25-40 
percent of the wood fiber that would otherwise be needed, (2) 
technology to apply wood preservatives using super fluids to reduce 
environmental problems associated with present commercial treatments, 
(3) better harvesting systems that are efficient and environmentally 
acceptable, (4) increase of wood machining speeds and reduction of saw 
blade width to increase productivity and save raw material, (5) a 
patented system to apply pressure and vibration to prevent enzymatic 
sapstain which degrades hardwood lumber by $70 to $200 million per 
year, (6) reduction of quantity of wood bleaching chemicals needed by 
wood pulp producers, (7) design and strength of wood furniture frames 
to minimize wood requirements, (8) adoption of European frame saw 
technology to composite lumber to provide a new raw material source for 
industry, (9) improved technology to nondestructively scan standing 
trees for mechanical properties of the wood, (10) reduced warp in 
structural lumber produced from small-diameter trees, (11) 
characterization of the wood products industry, (12) heartwood 
formation, (13) recovery of preservatives from treated wood, (14) 
installation of a statistical process control system has been installed 
in one sawmill with impressive cost savings, and (15) development of 
cost effective and environmentally-friendly processes for removing high 
value chemicals from bark.
    Question. How long has the work been underway and how much has been 
appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1985, $3,000,000; fiscal years 1986 through 1989, 
$2,852,000 per year; fiscal year 1990, $2,816,000; fiscal years 1991 
and 1992, $2,852,000 per year; fiscal year 1993, $4,153,000; fiscal 
year 1994, $4,176,000; fiscal years 1995 and 1996, $3,758,000 per year; 
fiscal years 1997 and 1998, $3,536,000 per year; fiscal year 1999, 
$5,136,000, which provided a half million increase for the six existing 
centers, and $1,000,000 for the two new centers; and $5,136,000 in 
fiscal year 2000, which provided $577,000 to establish a new center in 
Alaska. Total appropriations are $56,117,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The following are non-federal funds provided by state:
  --Mississippi State University non-federal funds were: State 
        appropriations, $2,498,800, $2,178,725, $2,353,225, $2,331,691, 
        $2,778,535, $2,582,617, $2,543,017, and $2,717,448 for 1991, 
        1992, 1993, 1994, 1995, 1996, 1997, 1998, and 1999, 
        respectively. In addition, industrial funds averaged $876,057 
        for the 5 years from 1995 to 1999 in support of the Mississippi 
        Forest Products Laboratory.
  --Oregon State University state appropriations were: $1,337,962, 
        $1,394,304, $1,256,750, $1,252,750, $1,417,755, $1,117,000, 
        $1,100,000, $1,352,000, and $1,337,000 for 1991, 1992,1993, 
        1994, 1995, 1996, 1997, 1998, and 1999, respectively. Estimated 
        non-public support was $731,000 this year.
  --Michigan State University non-federal contributions were $605,000, 
        $590,000, and $700,000 for 1997, 1998, and 1999, respectively.
  --Three new locations were added in 1994: University of Minnesota-
        Duluth non-federal match was $590,000, $550,000, $560,000, 
        $371,930, $307,532, and $510, 939 for 1994, 1995, 1996, 1997, 
        1998, and 1999, respectively.
  --North Carolina State University was $126,000, $165,000, $135,000, 
        $163,216, $323,134, and $518,258 for 1994, 1995, 1996, 1997, 
        1998, and 1999, respectively.
  --University of Maine was $600,000, $445,723, $459,100, $477,464, 
        $526,210, and $148,032 for 1994, 1995, 1996, 1997, 1998, and 
        1999, respectively.
  --Two new centers were added in 1999: The University of Tennessee 
        non-federal funds for 1999 were $150,987. The consortium of the 
        Universities of Idaho and Montana and Washington State 
        University non-federal funds for 1999 were $305,000.
    Question. Where is the work being carried out?
    Answer. There are nine locations. The initial three--Oregon State 
University, Mississippi State University, and Michigan State 
University--were joined by the University of Minnesota-Duluth, North 
Carolina State University, and the University of Maine in fiscal year 
1994. In 1999, they were joined by a center at the University of 
Tennessee, and a second center at the University of Idaho, which 
includes a consortium of Idaho, Montana, and Washington State. In 2000, 
funds for a wood utilization center in Alaska were appropriated. This 
center is just getting organized now.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objective was to build and maintain three 
strong regional centers of wood utilization research. These centers 
have been established, and six more centers have been added. Projects 
begun in 1999 will be completed by 2003.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. On site reviews of centers are conducted on a rotating 
basis. Each center's plans are reviewed yearly or more frequently. 
Progress reports are reviewed yearly. Center directors met together for 
joint planning in June 1996 and in February 1999. Centers all have 
advisory committees or research committees which meet periodically. 
CSREES conducts informal on-site reviews periodically. The Minnesota 
and Oregon sites were visited in 1996, and the North Carolina site was 
visited in 1997. Oregon State was visited in 1998. A Departmental panel 
reviewed the original three centers in 1992 and 1993. At that time, the 
original objectives were broadened to address environmental concerns. 
The centers are helping industry meet environmental objectives by 
conducting research leading to sustained timber production; extending 
the timber supply through improved processing; developing new 
structural applications for wood; and developing wood extractives to 
substitute for pesticides, preservatives, and adhesives.

                             WOOL RESEARCH

    Question. Please provide a description of the research that has 
been funded under the wool research grant.
    Answer. The overall goals for this research are to develop 
objective measures of wool, mohair, cashmere and other animal fibers to 
improve the quality of wool products while enhancing the profitability 
of the U.S. sheep and Angora goat industries. Specific objectives 
include: develop and evaluate measurement techniques for rapid 
objective evaluation of wool, mohair, cashmere and other animal fibers; 
increase the use of objective measurements to increase fiber 
production, quality and income to producers, and increase consumer 
acceptance of fabrics made from these fibers. The fiscal year 1999 
grants terminate between August 2000 and June 2001. The 2000 grant 
proposals will soon be requested by the agency. All grants are reviewed 
for relevance to industry needs and undergo scientific peer review.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. Collaboration exists among researchers in Texas, Wyoming 
and Montana associated with this grant and other federal, university 
and industry scientists to assure responsiveness to the needs of those 
involved in wool and mohair production, marketing and processing. The 
sheep and goat industries and the principal researchers believe that 
this research to be of national, regional and local need. The research 
on wool, conducted by means of this grant, represents the only research 
efforts in the U.S. focused on improving the efficiency of measuring 
and assuring wool, mohair and cashmere quality for garments made from 
these fibers.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The overall goal for this research is to develop objective 
measures of wool, mohair, cashmere and other animal fibers with a focus 
on improving the efficiency of determining the quality of products made 
from these fibers while enhancing the profitability of the sheep and 
Angora goat industries. Research accomplishments included the 
development of rapid and inexpensive measurements of fiber diameter, 
distribution of animal fibers, and other fiber properties such as fiber 
length and color. Each of these properties are very important for 
grading and processing to determine ultimate softness, durability, dye 
characteristics, comfort, and garment price. Within the past year, 
evaluation of laser and near-infrared spectroscopy techniques have been 
completed by the three cooperators in this project in collaboration 
with Yocom-McColl Testing Labs, the main animal fiber testing lab in 
the United States. Two of the principal investigators authored an 
article in the American Society for Testing and Materials on standard 
methods of test for these instruments that are now in the final stages 
of acceptance by the Society, and therefore, the U.S. textile industry. 
In part, due to our efforts of this grant, all animal fibers tested for 
fiber diameter distribution by this commercial laboratory are now 
tested using one or the other of these new instruments. This has 
resulted in labor savings, thereby a reduction in the price for some 
associated fiber tests. Producers, traders, and processors now receive 
more accurate fiber data at reduced cost and with shorter turnaround 
times. Because this form of testing is also recognized by the 
international textile community, U.S. animal fibers are now more 
readily accepted and accessible as international commodities. 
Additional instruments, primarily for measuring length and strength, 
have also been evaluated with the ultimate objective of better 
describing domestic wool that will eventually permit electronic trading 
of animal fibers. These measurements impact the efficiency of the sheep 
and Angora goat industries, the effectiveness of monitoring the quality 
and consistency of imported products, and the satisfaction of buyers of 
wool, mohair and cashmere textiles. Other experiments aimed at 
enhancing our ability to establish the value of specialty animal fibers 
were successfully completed and reported for mohair, cashmere and other 
fibers. Experiments were also conducted to identify more productive 
rams and billie goats; to select for finer and more valuable mohair in 
Angora goats; to establish the genetic, nutrition, and management 
requirements for the concurrent production of lean lamb meat and high 
quality wool; and to demonstrate the economic advantages to producers 
of skirting and classing their raw wool prior to marketing. Research 
and education efforts have kept U.S. processors and producers current 
on the status of the wool markets world wide. It is important that the 
U.S. producers of wool, mohair, and cashmere are competitive in the 
world market and that consumers are assured high quality textiles.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Grants have been awarded from appropriated funds in the 
amount of $150,000 per year for fiscal years 1984-1985; $142,000 per 
year for fiscal years 1986-1989; $144,000 for fiscal year 1990; 
$198,000 for fiscal year 1991; and $250,000 per year for fiscal years 
1992-1993; $235,000 for fiscal year 1994; $212,000 per year for fiscal 
years 1995-1997; and $300,000 per year for fiscal years 1998-2000. A 
total of $3,481,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
were as follows: $150,913 state appropriations, $11,800 product sales, 
$5,817 industry, and $3,556 miscellaneous in 1991; $111,394 state 
appropriations, $25,451 product sales, $41,442 industry contributions 
and $3,068 miscellaneous in 1992; $152,699 state appropriations, 
$39,443 product sales, $40,804 industry contributions and $3,556 
miscellaneous in 1993; $150,094 state appropriations, $35,284 product 
sales, $36,484 industry contributions and $3,556 miscellaneous in 1994; 
$67,345 state appropriations, $10,000 product sales, and $34,325 
industry contributions in 1995; $39,033 non-federal support in 1996; 
$174,486 non-federal support in 1997; $200,307 state appropriations and 
$13,000 industry contributions in 1998; and $202,854 state 
appropriations, $14,385 industry contributions, and $34,000 
miscellaneous in 1999.
    Question. Where is this work being carried out?
    Answer. The research is in progress at the Texas A&M University, 
Texas Agricultural Experiment Station at San Angelo, the University of 
Wyoming at Laramie, and Montana State University at Bozeman.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. The original objectives to improve the efficiency and 
profitability of wool, mohair and cashmere production and marketing are 
still valid and subject to further research.. Specific objectives for 
individual laboratories and experiments are continually revised to 
reflect the changing research priorities for the wool, mohair, and 
cashmere industries and to satisfy consumer demands for products from 
these fibers. It is anticipated that current research will be completed 
by fiscal year 2005.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. An external review of the overall wool research program was 
conducted in 1998 in Las Cruces, New Mexico by a team consisting of 
industry experts and peers from the scientific community. The review 
team concluded that the program was very productive and beneficial to 
the United States wool, mohair, and cashmere producers as well as the 
allied fiber industries. Research achievements, noted by the review 
team, included program input for testing methods and standards used to 
buy and sell wool for international trade.
    In addition to the program review, grant proposals are annually 
reviewed and the research facilities are periodically visited. The 
principal investigators meet annually to evaluate progress and re-
evaluate research priorities according to industry needs. Because the 
research encompassed in this grant is a component of a regional 
research project, accomplishments are reported annually to scientific 
peers and representatives from the sheep, goat, wool, mohair, and 
cashmere industries. In addition, the overall regional research project 
is peer reviewed every third year.

                RESEARCH FEDERAL ADMINISTRATION PROJECTS
            AGRICULTURAL DEVELOPMENT IN THE AMERICAN PACIFIC

    Question. Please provide a description of the research that has 
been funded under the Agricultural Development in the American Pacific 
program.
    Answer. The Agricultural Development in the American Pacific (ADAP) 
is a primary means for land-grant research, extension, and instruction 
programs of the five participating institutions of American Samoa 
Community College, College of Micronesia, Northern Marianas College, 
University of Guam, and University of Hawaii, to collaborate and 
cooperate to enhance their impact on Pacific tropical agriculture and 
communities. ADAP is a mechanism to address common regional client-
based issues while maintaining cultural, rural, economic, and 
environmental integrity. This research grant is awarded 
noncompetitively to a program planned and approved by the five involved 
land-grant institutions.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes the five participating 
institutions are geographically dispersed yet facing many similar 
issues which can best be served through extensive networking and 
communication. ADAP facilitates communications and seeks to raise 
levels of academic achievement and improve the quality of education. 
ADAP's most unique feature is that twice each year it brings together 
the five Deans/Directors to discuss agriculture and human resources 
issues facing isolated, tropical ecosystems in the Pacific, and to plan 
and implement activities to address those issues. Priorities are 
categorized in three areas: sustainable systems, collaborations/
partnerships, and communication systems. Activities range from joint 
and collaborative efforts to overcome taro leaf blight in the Pacific, 
to seeking recognition of Pacific tropical agriculture by the National 
Association of State Universities and Land-Grant Colleges.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. ADAP's goals are to develop human resources within the 
institutions, to manage more effectively agricultural programs within 
and among the institutions, and to focus available resources on 
critical agricultural issues of the Pacific. Ongoing projects include 
animal health surveys, livestock waste management, dietary guidelines 
for Pacific foods, youth-at-risk assessment, artificial insemination 
demonstration/education, and market information collaboration with 
``state'' Departments of Agriculture. ADAP is now working jointly with 
the 22-nation Secretariat of the Pacific Community in developing a 
paraveterinary program. This program will use distance learning and 
site visits to train students from the cooperating nations and 
territories in animal health. This is a critical need for the Pacific 
region. Both ADAP and the Secretariat of the Pacific Community will 
contribute money as well as skilled personnel to assist in this 
project. In another regional cooperative effort, ADAP led a retreat for 
strategic planning among the ``state'' and national Departments of 
Agriculture in the Pacific region in July 1999. That retreat identified 
food insecurity as a major issue for Pacific island nations, and ADAP 
is formulating a forum in collaboration with the Secretariat of the 
Pacific Community to address the issue.
    Question. How long has this work been underway and how much has 
been appropriated, by fiscal year, through fiscal year 2000?
    Answer. This work was funded for seven years with an annual 
appropriation of $650,000 to the former Extension Service. In fiscal 
year 1994, an appropriation of $608,000 was made to CSREES to continue 
the ADAP program. In fiscal year 1995 the appropriation was $527,000. 
The fiscal years 1996 and through 2000 appropriations were $564,000 
each year. The appropriation total to CSREES is $3,955,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Non-federal funds are not provided. Unspecified in-kind 
support, such as facilities, equipment, and administrative support, are 
provided by each institution and, in some specific projects, by non-
ADAP collaborating institutions.
    Question. Where is this work being carried out?
    Answer. This work is being carried out by American Samoa Community 
College, College of Micronesia, Northern Marianas College, University 
of Guam, and the University of Hawaii.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The ADAP program has been achieving original program 
objectives, particularly in the areas of improvement in institutional 
capacity and communications. It is anticipated that an additional 5 to 
10 years will be needed to fully achieve collaborative integration of 
the American Pacific land-grant programs.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. A formal review of the ADAP program was conduted July 1-10, 
1997, and included visits by review team members to American Samoa 
Community College, College of Micronesia, Northern Marianas College, 
University of Guam, and University of Hawaii. ADAP incorporated review 
recommendations in preparing and adopting a new five-year 1997 
strategic plan. An agency specialist conducts a merit review of the 
proposals submitted in support of the appropriation annually. In a 
review of the April 1999 proposal, progress was judged satisfactory.

             AGRICULTURAL WASTE UTILIZATION, WEST VIRGINIA

    Question. Please provide a description of the research that has 
been funded under the Agricultural Waste Management, West Virginia 
grant.
    Answer. The West Virginia Department of Agriculture is conducting a 
project to validate the applicability and effectiveness of anaerobic 
filtration for treating municipal and agricultural wastes. POWER 
anaerobic filtration is a leading-edge technology specifically 
developed to biologically recover nutrients and energy from organic 
waste streams and produce an effluent which meets discharge permit 
requirements.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The current need for this technology is local, national, 
and international. The beneficiaries of this technology will be both 
the people and the environment anywhere in the world where problems of 
food, fertilizer, and energy shortages are currently in conflict with 
the preservation of environmental quality. The direct benefits include 
enhanced and expanded waste water capacity, creation of new jobs, and 
revenue from by-products and water quality improvement.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal was to determine the applicability of 
anaerobic digestion to convert organic waste materials to energy in the 
form of biogas, thereby reducing the amount of organic matter for 
disposal. The goal will go beyond the testing of waste materials in the 
digester and proceed with a program to compare the microbiological 
loading of rivers, where known environmental pollution is measurable, 
and where the total bacterial concentration in the rivers could be 
determined in real-time with a bioprobe. Several demonstration tests 
have been conducted on municipal solid waste, municipal sludge, poultry 
mortality and poultry litter. These demonstrations have validated the 
applicability of this technology to a waste stream formulated to reduce 
measurable river and stream pollution.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1998 
and the appropriation for fiscal year 1998 was $360,000; fiscal year 
1999 was $250,000; and fiscal year 2000 was $425,000. A total of 
$1,035,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Non-Federal funds are not being expended.
    Question. Where is this work being carried out?
    Answer. Research is conducted at Moorefield, West Virginia and West 
Virginia State College, Charleston, West Virginia.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date of the original objectives 
is June 30, 2000. These objectives are within the original schedule. 
The additional objectives should be completed by June 30, 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. An on-site evaluation of the project was conducted in 
January 2000. The pilot scale digester has been operating continuously 
since 1995, treating a variety of municipal and agricultural wastes. In 
1999 it has primarily been used to treat poultry litter and poultry 
mortalities. The components of the primary digester are: mix tank, 
holding tank, grit removal trap, feed tank, insulated digester with 
mixing capability, screen separator for the effluent, biogas treatment 
to remove impurities, engine unit that runs on biogas, and a computer 
that controls the mixing and feeding of the digester. In June 1999 an 
anaerobic filtration unit was added to further treat the effluent of 
the primary digester. The anaerobic filtration unit operates at 
approximately 100 degrees Fahrenheit, while the primary digester 
operates at 130 degrees Fahrenheit. The anaerobic filtration unit is 
filled with pieces of plastic pipe to provide additional surface area 
for the bacteria to grow upon and thereby converting more of the 
organics into biogas. Data on treatment efficiencies for both digesters 
have been collected. The samples collected are analyzed at the 
laboratories of the West Virginia Department of Agriculture in 
Moorefield, WV. The typical analyses consists of: total solids, 
volatile solids, volatile fatty acids, total kjeldahl nitrogen, 
phosphorus, pH, and fecal coliform. The treated effluent is applied 
daily to nearby pasture land. The separated solids are collected and 
sent to West Virginia State College for use in field studies to 
determine plant growth response to the nutrients.

                 NATIONAL ALTERNATIVE FUELS LABORATORY

    Question. Please provide a description of the research that has 
been funded under the National Alternative Fuels Laboratory (NAFL) 
grant.
    Answer. Through a nationally-marketed collaboration program in 
which the NAFL matches about half of its USDA funding with nonfederal 
money to work on industry-relevant research, NAFL staff have (1) 
developed a U.S. Federal Aviation Administration-certified lead-free 
ethanol- and biodiesel-containing alternative to leaded aviation 
gasoline that should be commercially available at Midwest airports by 
March 2000, (2) resolved ethanol-in-gasoline performance and 
environmental issues to accelerate the use of ethanol, (3) initiated 
new biomass fuel developments including a process to produce butanol--a 
high octane gasoline additive that helps reduce automobile evaporative 
and tailpipe emissions--from agricultural resources, (4) initiated and 
coordinated the 27-member Red River Valley Clean Cities Coalition to 
increase the number of alternative fuel vehicles in regional public and 
private fleets, and (5) built E85 refueling sites in North Dakota.
    Question. According to the research proposal or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. As stated by former CIA director R. James Woolsey, our 
nation needs to develop commercially viable alternatives to fossil 
fuels to ensure energy security, improve air quality, and provide 
employment. It is crucial to national security and economic development 
that these new fuels are accurately represented in the marketplace and 
given an opportunity to compete fairly with traditional fossil fuels. 
The NAFL provides unbiased scientific data on fuel performance and 
environmental effects. Regional need for the research derives from the 
need to support regional agriculture and associated industries through 
(1) development of new biomass fuel industries based on new crops and 
conventional crop residues and (2) development of economic uses for 
agricultural co-products.
    Question. What was the original goal of this research, and what has 
been accomplished to date?
    Answer. The primary original goal was to develop a database of at-
the-pump-sampled conventional, reformulated, and alternative 
transportation fuels sold in the upper Midwest and throughout the U.S. 
to enable comparison of current and historical fuels on the basis of 
chemical and physical properties. This fuels database is being expanded 
to include how gasoline chemistry affects air quality and fuel 
performance. Another original goal was to provide information on 
conversion of crop residues, agriculture processing wastes, high-
cellulose-content municipal wastes, and other biomass materials to 
alternative fuels. The NAFL program supported North Dakota's first two 
public E85 refueling sites, initiated an ongoing industry-supported 
effort to develop and build a new ag co-product-to-lactic acid plant in 
the Grand Forks region--lactic acid is a building block for new bio-
based polymers--helped resolve ethanol blend evaporative emissions 
issues and E85 engine cold-start problems, and initiated an ongoing 
industry collaboration to demonstrate the viability of producing and 
utilizing biomass-based butanol, a clean-burning gasoline and diesel 
fuel additive.
    Question. How long has this work been underway, and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The NAFL work began in fiscal year 1991 and was, in part, 
sponsored by this grant. USDA appropriations in fiscal year 1991 
through fiscal year 1993 were $250,000 per year. Later awards were 
$235,000 in fiscal year 1994, $204,000 in fiscal year 1995, and 
$218,000 per year in fiscal years 1996 through 2000. A total of 
$2,279,000 has been appropriated over 10 years.
    Question. What is the source and amount of nonfederal funds 
provided by fiscal year?
    Answer. To date in fiscal year 1999, $85,000 in nonfederal 
collaborative funding has been secured from the American Coalition for 
Ethanol, the South Dakota Corn Utilization Council, and the American 
Lung Association of Minnesota. A total of $1,160,000 in nonfederal 
funds has been secured for performance of NAFL program objectives over 
the duration of this grant. During fiscal year 1991 through fiscal year 
1993, nonfederal funding from the State of Illinois totaled $630,000. 
For fiscal year 1994, nonfederal funding of $105,000 was secured from 
the American Corn Growers' Association, the Renewable Fuels 
Association, and others. For fiscal years 1995, 1996, 1997, and 1998, 
nonfederal funding totals of $50,000, $60,000, $140,000, and $90,000, 
respectively, were secured from corn grower organizations, state 
agriculture departments, alternative fuels technology companies, and 
regional economic development agencies.
    Question. Where is this work being carried out?
    Answer. The work is performed at the University of North Dakota 
Energy & Environmental Research Center--EERC--in Grand Forks. The EERC 
is a research, development, demonstration, and commercialization 
facility that employs about 200 scientists, engineers, and support 
personnel.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The completion date for the original objectives was April 
30, 1992. The objectives were met. The work was then expanded to 
include partnerships with industry and agriculture. The NAFL has been 
established as a center of expertise for development and demonstration 
of bio-based fuels, investigating fuel chemistry effects on engine 
performance and air quality, dissemination of accurate and objective 
information regarding ethanol in gasoline, and ethanol feedstock 
assessment and process development. Additional tasks include 
commercializing an ethanol-based aviation gasoline, implementing 
industry collaborations to produce lactic acid and butanol from 
regional agricultural resources, and administering the Red River Valley 
Clean Cities Coalition. These tasks should be completed by 2002.
    Question. What was the last agency evaluation of this project? 
Provide a summary of the last evaluation.
    Answer. In June 1998, the USDA conducted an on-site evaluation, and 
the NAFL program was given a very favorable review. The program 
continues to be a model for federal-private sector collaborations. 
Personnel have continued to meet or exceed program objectives detailed 
at the initiation of each annual performance period.

                   ANIMAL WASTE MANAGEMENT, OKLAHOMA

    Question. Please provide a description of the research that has 
been funded under the Animal Waste Management, Oklahoma grant.
    Answer. This research project is designed to develop sustainable, 
environmentally safe, and ecologically-sound best management principles 
and practices for beneficial animal waste applications for ``High 
Plains Agriculture'' in support of rural economic development through a 
Federal-state-local partnership. Emphasis will be placed on the rapidly 
expanding hog industry in the semiarid region, but information gained 
will also be applicable to the beef and dairy industries which play 
major roles in agriculture production in the region. .
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The Oklahoma Panhandle region and contiguous counties in 
the states of Colorado, Kansas, New Mexico and Texas generated $2.9 
billion in sales of agricultural products in 1997. The Oklahoma 
Panhandle is the most productive agricultural region in the state with 
agricultural receipts in excess of $937 million, which represents 31 
percent of the receipts in the region. The majority of sales are 
related to livestock production and the rapid expansion of the hog 
industry in this semiarid region has only strengthened that position. 
Oklahoma has moved to 9th in position in the U.S. for swine sales and 
Texas County, has risen to 3rd nationally with nearly $200 million in 
swine sales from a position of 645th in 1992. The rapidly expanding 
swine industry was projected to add $650 million in pork and value 
added products in Oklahoma in 1997 with the slaughter and processing of 
over 4 million hogs per year. The semiarid agro-ecosystem is unique 
with climatic conditions consisting of low rainfall that promotes both 
dryland and irrigated agricultural practices; extremes in high and low 
temperatures; soils characterized with alkaline pH, low in organic 
matter, and high in calcium carbonate. This unique agro-ecosystem makes 
information gained from more humid environments inapplicable.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this research was to develop best 
management practices that will protect ground water supplies from 
pollution of nutrients, salts, and pathogens; maintain air quality; and 
minimize odors derived from the entire hog-house, lagoon, land-
application, soil-cropping and or rangeland production system, thus 
maintaining the quality of life in the rural sector. Field work has 
been initiated and initial work shows a positive response to animal 
waste applications. Initial studies of ammonia loss from applications 
indicate there can be significant losses following land applications.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1998 
and the appropriation for fiscal years 1998, 1999 and 2000 is $250,000 
per year. A total of $750,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year 2000?
    Answer. Non-federal funding from state and industry totals 
$659,000.
    Question. Where is this work being carried out?
    Answer. This work has been initiated at The Oklahoma Panhandle 
Research and Extension Center located in Goodwell, Oklahoma. Further 
work will continue to be done at this site. The Center will provide the 
land area and a portion of the facilities and equipment necessary to 
conduct the major portion of the study. Other study sites have 
developed on private land in cooperation with swine operations in the 
panhandle region.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original completion date was February 29, 2000. To 
document the results for these objectives more than one growing season 
will be needed. Completion of these objectives and additional 
objectives related to these will be February 28, 2003.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This project was evaluated at the end of December 1999 when 
the summary report of the 1998-99 accomplishments was submitted. To 
date seven proceedings or abstracts have been published in national or 
regional forums. Results to date indicate: (1) Significant amounts of 
ammonia will be volatilized, lost as a gas, almost immediately 
following effluent application to bare soils, (2) Swine effluent 
applications to corn, sorghum and forages demonstrate that it is an 
acceptable method to supply nutrients for crop production, and (3) 
There is a significant increase in soil phosphorus levels from 
application of swine lagoon sludge to soil. This and other important 
technology was transferred at the High Plains Animal Water Management 
Conference, hosted in conjunction with the Oklahoma Panhandle Research 
and Extension Center, at Goodwell, Oklahoma. Those in attendance 
included the general public, producers, governmental officials, 
extension personnel and researchers from Arkansas, Colorado, Kansas, 
New Mexico, Oklahoma and Texas.

                  BIOTECHNOLOGY RESEARCH, MISSISSIPPI

    Question. Please provide a description of the research that has 
been done under the Biotechnology Research Grant, Mississippi.
    Answer. The Agency has requested Alcorn State University to submit 
a grant proposal that has not yet been received. This is a new special 
grant for which there have been no previous awards.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The overall purpose of this project is to establish a 
Biotechnology Center at Alcorn State University that will focus on 
plant biotechnology research geared toward small farmers in 
Mississippi. Emphasis will be placed on improving the productivity and 
efficiency of crops and plants grown by small farmers in order to 
improve profitability and ensure long-term viability.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of the research is to enhance Alcorn State 
University's research efforts in biotechnology through genetic 
improvement research utilizing biotechnology techniques and to improve 
the livelihood and viability of limited-resource producers in 
Mississippi and the Southeast.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Preliminary work funded by the State has been underway for 
approximately six years. This is a new special grant and $425,000 has 
been appropriated for fiscal year 2000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. State funds and a $150,000 grant from the World Bank in 
fiscal year 1996 have supported this work in previous years.
    Question. Where is this work being carried out?
    Answer. The research is being conducted at Alcorn State University, 
Lorman, Mississippi, and at field locations in Preston and Mound Bayou, 
Mississippi.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The principal investigator anticipates completing the 
original objectives of the project in two years. Additional or related 
objectives have not been specifically identified at this time.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. As a new special grant for which a proposal has not yet 
been received, this project has not yet been evaluated. A merit review 
panel will be convened to evaluate the project upon receipt of a 
proposal for fiscal year 2000.

           CENTER FOR AGRICULTURE AND RURAL DEVELOPMENT, IOWA

    Question. Please provide a description of the research that has 
been done under the Center for Agriculture and Rural Development 
program.
    Answer. The research monitors the final form and implementation of 
the Uruguay Round Agreement and evaluates its impacts on global trade 
and implications for U.S. agriculture.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. As the Uruguay Round--UR--Agreement implementation 
proceeds, researchers will monitor the development of these policy 
changes and analyze the likely impacts of these decisions with emphasis 
on obtaining differential impacts for developing economies, developed 
economies and those in transition. Researchers will also explore 
possible directions for the next Round or Mini-round of the World Trade 
Organization.
    The original goal is to assess and evaluate various proposals 
affecting agricultural trade, to provide analytical support to the 
Office of the U.S. Trade Representative, and to provide information to 
farmers and agribusiness firms on the competitive implications of trade 
agreements. Theoretical studies and empirical and descriptive analyses 
of policy issues and technical problems pertaining to the Uruguay round 
of negotiations were completed and provided to negotiators and the 
agribusiness community. Knowledge developed in this phase is now being 
used to monitor the effects of the Uruguay Round Agricultural 
Agreement--URA.
    This grant supports six projects focusing on URA and the World 
Trade Organization--WTO--monitoring and implementation problems; 
implications of the URA and WTO for Eastern Europe, Baltic, and the 
Newly Independent States; development of a model to assess the North 
American Free Trade Agreement and its linkages with the General 
Agreement on Tariffs and Trade; trade implications of U.S. food and 
development aid in developing countries; integration of China into 
world agricultural markets; and special projects as requested for the 
U.S. Trade Representative's office. Major emphasis is placed on 
developing and improving international livestock and grain sector 
models.
    Question. How long has this work been underway and how much has 
been appropriated, by fiscal year, through fiscal year 2000?
    Answer. This research program was initiated in fiscal year 1989. 
Grants have been awarded from funds appropriated as follows: fiscal 
year 1989, $750,000; fiscal years 1990 and 1991, $741,000 per year; 
fiscal years 1992-1993, $750,000 per year; fiscal year 1994, $705,000; 
fiscal year 1995, $612,000; fiscal year 1996, $655,000; and fiscal 
years 1997 through 1999, $355,000; fiscal year 2000, $355,000. A total 
of $7,124,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
are as follows: $111,210 State appropriations and $175,616 
miscellaneous for a total of $286,826 in 1991; $113,779 State 
appropriations and $173,117 miscellaneous for a total of $286,896 in 
1992; $120,138 State appropriations and $164,707 miscellaneous for a 
total of $284,845 in 1993; $161,000 State and $30,000 miscellaneous for 
a total of $191,000 in 1995; $70,000 State appropriations and $44,000 
miscellaneous for a total of $114,000 in 1996; $60,325 in State 
appropriations and $61,5000 in miscellaneous funds for a total of 
$121,825 in 1997; and $72,000 in State appropriations and $75,000 in 
miscellaneous funds for a total of $147,000 in 1999.
    Question. Where is the work being carried out?
    Answer. The research program is carried out by the Center for 
Agriculture and Rural Development at Iowa State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objectives of the project envisioned the 
development of models capable of providing guidance to policymakers, 
researchers, and farmers and others of the impact of agricultural trade 
proposals on the U.S. agricultural sector. As such the objectives are 
on-going.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. We have conducted no formal evaluations; however, each 
annual proposal is peer reviewed for relevance and scientific merit. 
Also, an informal evaluation of this project takes place as a part of 
each annual project review and approval process.

              CENTER FOR INNOVATIVE FOOD TECHNOLOGY, OHIO

    Question. Please provide a description of the research that has 
been funded under the Center for Innovative Food Technology Grant.
    Answer. Funds from the fiscal year 1999 grant are supporting 
research projects to (1) develop techniques for applying powdered 
material onto snack foods and shredded cheeses, (2) assess the 
usefulness of artificial intelligence to predict finished product 
quality from incoming ingredient attributes in vegetable and meat 
processing applications, (3) develop methods to convert the waste 
product whey from dairy operations into a saleable product, (4) refine 
the techniques for producing extended shelf life milk products in PET 
containers, and (5) evaluate applications for real time process control 
in the milling industry using Near Infrared reflectance systems. Fiscal 
year 1999 funds are supporting research from March.1999 through 
February 29, 2000. A proposal in support of the fiscal year 2000 
appropriation will be requested.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The principal researcher believes the value-added food 
processing industry is the largest industry in Midwestern states, 
including Ohio where the industry contributes over $17 billion to the 
annual economy. From an economic development point of view, processing 
and adding value to crops grown within a region is the largest possible 
stimulus to that region's total economic product. This program aims to 
partner with and encourage small and medium sized companies to 
undertake innovative research that might otherwise not be undertaken 
due to risk aversion and limited financial resources for research and 
development in these companies. The principal researcher believes that, 
although the initial impact of this research will be regional, the 
recipient organization of this grant is part of a technology transfer 
network and proactively seeks opportunities to deploy technologies 
developed through this research to the food industry on a national 
basis.
    Question. What was the original goal of the research and what has 
been accomplished to date?
    Answer. The original goal of the research was to develop innovative 
processing techniques to increase food safety and quality or reduce 
processing costs. The coatings project has developed methods to extend 
product shelf life while reducing costs, and the neural network project 
has developed a model for predicting the harvesting time that will 
optimize product quality and economic return to the grower, processor, 
and consumer. The dairy project has developed a method that allows 
fluid milk processors to lower their costs. The milling project has 
developed methods for improving quality of milled flours by developing 
improved process control systems.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1995. 
The project received appropriations of $181,000 in fiscal years 1995 
through 1997, $281,000 in fiscal year 1998, and $381,000 each in fiscal 
years 1999 and 2000. A total of $1,586,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year 2000?
    Answer. In fiscal year 1995, non-federal funds included $26,000 
from state funds and $70,000 from industry memberships. In fiscal year 
1996, non-federal funds included $26,000 in state funds and $80,000 in 
industry funds. In fiscal year 1997, non-federal funds included $35,000 
in state funds and $95,000 in industry memberships. In 1998, $35,000 in 
state funds and $105,000 in private industry memberships contributed to 
the support of the project. In 1999, $62,000 in State of Ohio funds, 
and $115,000 from private industry were used to support the project.
    Question. Where is this work being carried out?
    Answer. Research is being conducted in the laboratories of the Ohio 
State University and at various participating companies in Ohio, 
Illinois, and Pennsylvania.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional related objectives?
    Answer. The principal investigator anticipates that some projects 
supported by the fiscal year 2000 grant will be completed by February 
28, 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. An agency science specialist conducts a merit review of the 
proposal submitted in support of the appropriation on an annual basis. 
The last review of the proposal was conducted on April 15, 1999. At 
that time, the agency science specialist believed that the projects 
addressed issues relevant to food manufacturing, were scientifically 
sound, and that satisfactory progress was being demonstrated using 
previously awarded grant funds.

                CENTER FOR NORTH AMERICAN STUDIES, TEXAS

    Question. Please provide a description of the research that has 
been done under the Center for North American Studies program.
    Answer. The purpose of this grant is to develop linkages with 
educational and other institutions in Mexico and Canada in order to 
share data and faculty, conduct research identifying trade 
opportunities and marketing problems, conduct policy analyses, and 
develop a broad range of training programs preparing agricultural firms 
for international marketing opportunities. The research proposal was 
peer reviewed at the university prior to submission to CSREES.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The program director believes that citizens of the United 
States, Mexico and Canada have some similar concerns about the impact 
of the North American Free Trade Agreement, and that new, innovative 
approaches involving international cooperation are needed to assess and 
evaluate these issues. Research and training are needed to provide 
information to evaluate alternatives for expanding U.S. exports and to 
resolve potential social, economic, and environmental conflicts.
    Question. What was the original goal of this research, and what has 
been accomplished to date?
    Answer. The goal is to promote strong agricultural ties among the 
three North American countries, foster greater cooperation in resolving 
critical agricultural issues of common interest, and ensure the 
continued competitiveness of U.S. agriculture. Recent research results 
include an investigation of technical trade barriers; a study of the 
impact of El Nino and La Nina on fruit and vegetable production; 
impacts of the North American Free Trade Agreement on livestock, meat, 
feed, fruit and vegetable trade; a range management watershed study 
along both sides of the Rio Grande River; and competitive response of 
Texas food marketers to the Agreement. A new publication series was 
started in June 1998, and four research papers were published. Recent 
training and education programs include a televideo conference on 
International Marketing Opportunities for the 21st Century with 
participants in five states; and 37 seminars/workshops for producers 
and agribusinesses to increase the international capacity of U.S. firms 
was attended by over 2,600 people in 1998. Collaborative work included 
a workshop on International Strategic Alliances workshop developed 
jointly with a Mexican and a Canadian university; an expanded database 
on Mexican agriculture; and a video conference for a Mexican 
agribusiness audience.
    Question. How long has this work been underway, and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Work supported by this grant began with an appropriation of 
$94,000 in fiscal year 1994; $81,000 in 1995; and $87,000 for 1996 
through 2000. A total of $610,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and derived from the State of Texas 
for salaries and benefits. Amounts provided for this grant are as 
follows: $39,000 State appropriations in fiscal year 1994; $54,000 in 
1995; $60,000 per year in 1996 and 1997; $84,500 in 1998; and $80,000 
in 1999.
    Question. Where is the work being carried out?
    Answer. The program is being carried out at Texas A&M University 
through the Texas Agricultural Experiment Station in collaboration with 
other segments of the Texas A&M University System and Louisiana State 
University Agricultural Center.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have these objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1994 was for a period of 12 
months. The current phase of the program will be completed in the year 
2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation.
    Answer. CSREES performed a merit review of the project in January 
1999 and concluded that ``the project has sound objectives and 
procedures for helping U.S. firms to be successful in North American 
markets for agricultural products, thereby achieving CSREES goals of a 
highly competitive agricultural production system and enhanced economic 
opportunity for Americans.'' The principal investigator is well 
recognized for his leadership in the area of international trade.

                    CLIMATE CHANGE RESEARCH, FLORIDA

    Question. Please provide a description of the research that has 
been funded under the Climate Change Research grant.
    Answer. CSREES requested the University to submit a grant proposal 
which has not yet been received. Funds have not previously been 
appropriated for this research.
    Question. According to the research proposal, or the principal 
investigator, what is the national, regional or local need for this 
research?
    Answer. The need for this research will be described upon receipt 
of a formal project proposal.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The research is not yet underway.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
with an appropriation of $170,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Information on non-federal funds and sources is not 
available.
    Question. Where is this work being carried out?
    Answer. In the absence of a research proposal, location of the 
research can not be determined.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. This will be determined upon receipt of an acceptable 
research proposal.

                         COTTON RESEARCH, TEXAS

    Question. Please provide a description of the research that has 
been funded under the Cotton Research, Texas, grant.
    Answer. CSREES has requested the university to submit a grant 
proposal for fiscal year 2000, that has not yet been received. Texas 
A&M and Texas Tech Universities have developed an integrated research 
effort to address cotton production issues using a comprehensive 
approach in order to strengthen the cotton industry in the high plains. 
Priority productions and marketing issues will be studied.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The proposed project is expected to help support a broad 
based program to address priority research needs of cotton grown on the 
Texas high plain. The specific issues will include production, 
processing, marketing, and utilization.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this project is to improve cotton production in 
West Texas and expand the demand for cotton grown in the area.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1998. 
The appropriation for fiscal years 1998-1999 is $200,000 per year, and 
$170,000 for fiscal year 2000. A total of $570,000 has been 
appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds are from the State of Texas and 
provide salaries and benefits for experiment station employees. Funds 
supporting the project were $156,000 in fiscal year 1998 and $149,000 
in 1999.
    Question. Where is this work being carried out?
    Answer. The work will be conducted at the Texas A&M University 
Research and Extension Center, Lubbock and Texas Technical University 
Campus.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The principal investigators anticipate the developmental 
phase of this project, which will establish priorities and provide 
planning for a long-term comprehensive program, should be completed in 
fiscal year 2004.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project received a comprehensive review and evaluation 
at its inspection by Texas A&M and Texas Tech Universities and the 
agency National Program Leader. It will be evaluated annually 
throughout its lifetime.

       CURRICULUM DEVELOPMENT/MISSISSIPPI VALLEY STATE UNIVERSITY

    Question. Please provide a description of the research that has 
been funded under the Curriculum Development and Strengthening-
Mississippi Valley State University grant.
    Answer. Funds were used to strengthen academic programs, including 
accreditation and re-accreditation. Of the ten programs eligible for 
accreditation, nine have been accredited. Assessment of the criteria 
has begun for the remaining eligible program. Academic programs have 
been broadened to include more agriculture-related courses consistent 
with the needs of students from the Mississippi Delta, students from 
other parts of the State, as well as out-of-state students. Curriculum 
additions have had a positive impact on student enrollment. Courses 
continue to be modified to reflect the needs of graduates as well as 
employers in the Mississippi Delta, with particular emphasis on those 
areas that employers have the greatest need. The funds continue to 
provide enhancements related to other program and administrative 
support areas that positively impact program delivery and 
administration at Mississippi Valley State University.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
proposal?
    Answer. The primary need for this project is to satisfy a local 
need. The need is for strengthening university capacity and curriculum 
development at Mississippi Valley State University. Degree programs in 
Accounting, Mass Communications and Public Administration have been 
added since the 1988 plan was developed. The Criminal Justice program 
has been developed into a departmental unit with social work in order 
to provide for improved administration and academic counseling. A 
master's program in Criminal Justice is now offered. The baccalaureate 
major in chemistry and the master's program in Elementary Education 
have been reinstated.
    Question. What was the original goal of this project and what has 
been accomplished to date?
    Answer. The original goal was to provide funding to strengthen the 
academic programs of the university. This funding has strengthened the 
fiscal and academic areas of the university. The University's cash flow 
and cash availability have remained steady and sufficient all year 
long. Student recruitment has improved to show a positive ratio between 
applications received and students admitted. Approximately one half of 
the applicants are enrolled. Increased quality of instruction and 
programs have benefitted students. This is reflected in the higher 
graduation rate, increased student enrollment, enriched faculty and 
improved community relationship.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. This program was initiated in fiscal year 1987. Grants have 
been awarded from funds appropriated as follows: fiscal year 1987, 
$750,000; fiscal years 1988 and 1989, $625,000 per year; fiscal year 
1990, $617,000; fiscal year 1991, $642,000; fiscal years 1992 and 1993, 
$668,000 per year; fiscal year 1994, $593,000; fiscal year 1995, 
$544,000; fiscal years 1996-2000, $583,000 per year. A total of 
$8,647,000 was appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Mississippi Valley State University received State and 
private funding during the period of this grant. The State figures 
provided here are for enhancement funds gained above the University's 
standard formula generated funds. The sources and amounts are as 
listed:

                                                     SOURCE
----------------------------------------------------------------------------------------------------------------
                           Fiscal year                                 State          Private          Total
----------------------------------------------------------------------------------------------------------------
1997............................................................  ..............        $168,640        $168,640
1988............................................................  ..............         186,036         186,036
1989............................................................         $68,658         190,258         258,916
1990............................................................         207,879         369,358         577,237
1991............................................................         333,263         337,700         670,963
1992............................................................         349,427         470,220         819,647
1993............................................................          35,750         358,680         394,430
1994............................................................         590,890         568,970       1,159,860
1995............................................................         841,654         530,300       1,371,954
1996............................................................       1,197,917         590,824       1,788,741
1997............................................................         309,717         755,629       1,065,346
1998............................................................         313,738         538,423         852,161
1999............................................................         909,419         389,812       1,299,231
----------------------------------------------------------------------------------------------------------------

    Question. Where is this work being carried out?
    Answer. These funds are intended to strengthen programs at 
Mississippi Valley State University. The program has been carried out 
on the campus at Itta Bena and at off-campus sites in Anguilla and 
Greenville and the Greenwood Center since the Spring Semester of 1996.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objectives completion date was June 1992, and 
the primary objective of erasing the financial deficit was accomplished 
at that time. The university has been operating on a sound financial 
basis as of July 1993. Academic program strengthening has progressed 
very well. The objectives of the current grant will be completed by 
September 30, 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The program staff in the agency conducts an annual 
evaluation of reports submitted by the principal investigator. The 
evaluation reflects steady enhancement in curriculum development and 
improved support for strengthening administrative units. The Department 
of Education doubled efforts to seek two new programs at the 
undergraduate level in the areas of Special Education and Early 
Childhood. The department enhanced the faculty through two fronts-
technology upgrade and scholarship. A number of technology workshops 
were provided for faculty in collaboration with the Institute for 
Effective Teaching Practice. These workshops were aimed at helping 
faculty to incorporate technology into their teaching. In pursuance of 
the National Council of Accreditation of Teacher Education--NCATE--
accreditation visit in year 2000, the department undertook a series of 
activities aimed at enhancing the teacher education programs as well as 
ensuring reaccreditation. These activities included: attending American 
Accreditation of Colleges for Teacher Education--AACTE--and NCATE 
national meetings, revisiting and reassessing curricular and 
programmatic requirements. Core Curriculum has received special 
attention during the year. Annual revisions were completed for all core 
courses in each discipline. Strong emphasis was placed on Writing 
Across the Curriculum. The University Testing Center has undergone 
significant growth. Staff development has continued in technology 
utilization skills. Since more standardized tests are becoming 
computer-based, the Center has developed a plan for increased computer 
testing.

                        DATA INFORMATION SYSTEM

    Question. Please provide a description of system development 
activities that have been funded.
    Answer. CSREES continues to fund activities under contract with a 
major information technology firm for the design and development of the 
Research, Education, and Economics Information System--REEIS. 
Previously funded tasks that have been completed include the conduct of 
an inventory of databases targeted for inclusion in REEIS; a 
comprehensive assessment of information needs and practices within the 
Research, Education, and Economics mission agencies and State partner 
institutions; design and development of a Web accessible catalog of 
databases identified in the inventory; a comprehensive review of state-
of-the-art information technology systems available for use in 
developing the system; and design and development of a REEIS proof-of-
concept prototype that is currently undergoing critical review and 
evaluation. An additional task was completed under a separate contract 
that provided for an outside expert to conduct a review and evaluation 
of Web interfaces to the REEIS Database Catalog. Also, a cooperative 
agreement with the University of Arkansas was also established to 
provide national leadership in coordinating the efforts a National 
Steering Committee charged with guiding the continuing development of 
the system. The Committee has met on a regular basis with the next 
meeting planned for August, 2000. Currently underway, and critical to 
the development of REEIS, is a comprehensive interagency data modeling 
effort designed to identify and describe data, data relationships, and 
sources of data from across the research, extension, education, and 
statistics domains of the Research, Education, and Economics mission 
agencies and State partner institutions. This will serve as the basis 
for the development of alternative system architectures and the 
population of the REEIS prototype with actual data from selected core 
databases that are to be included in REEIS. Funding has also been 
provided under the REEIS initiative for the design and development of 
an Evaluation and Accountability System for Extension--EASE--which has 
been targeted for linkage in REEIS.
    Question. What is the national, regional or local need for this 
activity?
    Answer. At present, USDA's Research, Education, and Economics--
REE--mission agencies and their university partners lack a central, 
integrated, user-friendly electronic information system capable of 
providing access to thousands of programs and projects for which they 
are responsible that focus on food, agriculture, natural resources, and 
rural development. Such an information system is increasingly needed to 
enable the Department and its partners to readily conduct baseline and 
ongoing assessments and evaluations of research, education, extension, 
and economic programs and projects. In recent years, this need has 
become more urgent for several reasons. First, the United States needs 
a visionary publicly funded research and development program to produce 
essential knowledge and innovations for meeting growing competition in 
a global market--which is largely attributable to the expanding 
research and development efforts of foreign nations. Second, a 
comprehensive information system is needed to serve as a primary 
reference source for development of new research and education programs 
on such diverse issues as increasing productivity in agriculture and 
processing, improving the safety and quality of food, and enhancing the 
sustainability of the environment and rural communities. Third, 
Federal/State policy makers and administrators are requiring empirical 
analyses to account for historical, current, and future use of public 
funds to provide a basis for redirecting funds to higher priority 
issues. Fourth, the Government Performance and Results Act--GPRA--has 
imposed reporting demands which current databases and decentralized 
information systems are not prepared to adequately satisfy. It is also 
envisioned that REEIS will play a key role in implementation of the 
Agricultural Research, Extension, and Education Reform Act--AREERA--of 
1998. In this regard, REEIS would be well-positioned to:
  --Provide linkages for decision making among REE agencies,
  --Enable consistent reporting on identical or similar issues,
  --Provide the public with understanding of the role and mission of 
        REE agencies,
  --Expand REE's outreach to a broader base of constituencies,
  --Provide a better vehicle to facilitate interaction among REE 
        agencies and their university partners,
  --Link commonalities of research, extension, and teaching projects 
        and programs through a single interface, and
  --Foster global interactions.
    Additionally, REEIS will serve to expand the Federal partnership by 
facilitating coalition-building with other Federal agencies.
    Question. What was the original goal of this initiative and what 
has been accomplished to date?
    Answer. The original goal of this initiative was to develop an 
information system that provides real-time tracking of research, 
extension and education projects and programs; has the capability to 
communicate vertically between field, State and Federal locations; 
enables the REE agencies and their partners to conduct rapid and 
comprehensive policy assessments and program evaluation analysis; 
facilitates assessment of technologies and practices employed in 
extension, education, economics, and research activities at the field 
and/or regional levels; provides clear and transparent public access to 
relevant parts of the information; and provides information management 
tools to enhance the timeliness and accuracy of REE-wide responses to 
inquiries about program objectives and expenditures.
    Since launching of the REEIS initiative, substantial system 
planning and development work has been completed. Work accomplished 
under a series of multi-task contracts with a private sector 
information technology firm was instrumental in meeting major 
milestones considered to be critical components and a prerequisite to 
the design, development, and implementation of REEIS. Major tasks 
included the conduct of a comprehensive strategic information audit of 
information practices and needs within the REE agencies and partner 
institutions; the identification and inventory of major research, 
extension, education, and economics/statistics databases maintained or 
supported by the REE mission agencies; the design, development, and 
preparation of the REEIS Database Catalog Prototype that affords Web 
access to the inventory of 38 databases initially identified as 
candidates for inclusion in REEIS; the design and evaluation of the Web 
interface to the REEIS Database Catalog; a comprehensive review of 
state-of-the-art information technology systems available for use in 
developing REEIS; and the design and development of a Web accessible 
REEIS proof-of-concept prototype.
    Plans in fiscal year 2000 include the development and assessment of 
alternative system architectures, development and testing of a REEIS 
prototype populated with actual data from selected core databases, 
updating and maintenance of the Information Systems Technology database 
and the REEIS Database Catalog, and initial implementation and 
operation of the REEIS system, including training of REEIS users and 
technical system operators.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Congress first appropriated $0.4 million for REEIS in 
fiscal year 1997 to begin planning its design and development. The 
fiscal year 1998 appropriation was $800,000. This was followed by 
appropriations of $1.0 million in fiscal year 1999 and $2.0 million in 
fiscal year 2000. A total of $2.25 million is requested in fiscal year 
2001.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Non-federal funding does not apply at this time.
    Question. Where is this work being carried out?
    Answer. Leadership responsibility for REEIS resides within the 
CSREES Science and Education Resources Development unit. This provides 
for effective linkage within the REEIS platform of the Current Research 
Information System, the Food and Agricultural Education Information 
System, and other appropriate research, extension, education, and 
statistics databases. The REEIS leadership works closely with the four 
Research, Education, and Economics mission agencies and the university 
system to ensure that primary users as well as key stakeholders are 
involved in the REEIS development process. A sizeable effort continues 
under contract with a major private sector information technology firm 
for the design, development, testing, and implementation of REEIS. One 
staff person assigned full time to manage and coordinate agency 
contracting activities currently serves as the REEIS technical 
information program manager. Plans are to recruit for the positions of 
a REEIS Director and a support staff person in fiscal year 2000, 
followed by computer and technical information specialists in future 
years to operate and maintain the system.
    Question. What was the anticipated completion date for the original 
objective of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. It is anticipated that REEIS will become operational during 
fiscal year 2000. The requested increase for fiscal year 2001 is 
required to achieve broad implementation. Included is the need to 
conduct ongoing, iterative needs assessments within the mission area 
and with its partners to align information system products and services 
with strategic information requirements necessary for meeting agency 
mission and goals and satisfying GPRA reporting requirements. Updating 
and maintenance of technical system assessments, conducting ongoing 
information technology evaluations, and enhancements of REEIS user 
interfaces will be essential to ensure currency and responsiveness over 
the life of the system. The additional funding will allow also for the 
enlistment, training, and retention of essential personnel and staff 
and provide for the enhancement of several legacy systems and databases 
to permit effective inclusion in REEIS.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Progress and accomplishments stemming from the REEIS 
initiative have undergone and continue to undergo review and evaluation 
by the REE mission agencies, the REEIS National Steering Committee, our 
State partner institutions, and outside sources. The most recent 
evaluation of the project was conducted in December, 1999 by a 
Department-wide information technology review board which approved the 
project for continued support as a mission-critical system. Factors 
considered in the evaluation included REEIS system objectives, its 
support of mission area strategic goals, strategies for managing risk, 
the degree of return on investment, and the level of support for the 
Secretary's priorities. An earlier evaluation of this project was 
conducted at the June, 1999 meeting of the REEIS National Steering 
Committee, comprised of representatives of the REE mission agencies, 
university partners, and key stakeholders. Committee members were 
presented the opportunity to critique the REEIS proof-of-concept 
prototype in terms of its potential for responding to primary users, 
satisfying primary uses, and meeting priority system requirements. An 
interagency REEIS team is in the process of performing technical 
evaluations of a series of successive iterations of the prototype. In 
May, 1999 a two-day REEIS retreat was held to review project status and 
make recommendations as to future tasks for the development and 
implementation of the system. Based on participant recommendations, a 
comprehensive interagency data modeling effort is underway to identify 
and describe in detail data and sources of data that are to be included 
in REEIS and which reside within the research, extension, education, 
and statistics domains of the Research, Education, and Economics 
mission agencies and their State partner institutions. A review by REE 
agency policy officials, budget and GPRA staff, national program 
leaders, and senior managers of the final set of system requirements 
resulting from the needs assessment was completed in February, 1999.

                     GEOGRAPHIC INFORMATION SYSTEMS

    Question. Please provide a description of the research that has 
been funded under the geographic information system program.
    Answer. The purpose of this program is to promote collaborative and 
innovative transfer of systems technologies to state and local 
governments and others in the public and private sectors. The current 
program is being carried out by the non-profit National Consortium for 
Rural Geospatial Innovations in America--NCRGI. The directors and 
participants of the Consortium are the sub-contractors who are carrying 
out the program by working on agro-environmental problems at the 
national, regional, state and neighborhood levels. They represent a 
wide spectrum of site-based expertise including six academic 
institutions, one regional development authority, and the Southwest 
Indian Polytechnic Institute site added by Congress in 1997. This 
institutional arrangement has helped fill a role in linking some of the 
otherwise disparate efforts of agencies and academic institutions to 
apply them in the now seven regions of the country.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal researcher believes that local officials are 
facing increasingly complex land management issues that require rapid 
access to resource knowledge and databases for decision making. This 
project is needed to transfer relevant technology to state and local 
governments, including Native American communities whose limited 
training budgets and sometimes-isolated location, make it difficult to 
use the latest technology. The technology developed by the Consortium 
is useful in improving the management of natural resources. While 
concentrating on issues related to agriculture, the independent, non-
profit nature of the National Consortium for Rural Geospatial 
Innovations in America facilitates linkages across disciplinary and 
institutional barriers, and makes it possible to use analyses at the 
state and local levels which were initiated at the federal level. While 
the early phases of the geographic information system concentrated on 
building information systems related to rural, physical, and natural 
resources, the current challenge is to integrate human economic, social 
and demographic information in order to better understand the 
relationship of human communities to the landscape. At the other end of 
the spatial scale, the role of the public sector in geographic 
information system-based precision farming technologies, data capture, 
and information synthesis is the subject of a current study group.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this work was to serve as a pilot 
project for the transfer of geographic information systems technology 
related to natural resources to local governments.
    The Consortium has carried out this function. Economic and 
biological data are being presented in various formats to state and 
local governments and individuals. Through its 7 regionally distributed 
sites, including the new Southwest Indian Polytechnic Institute site in 
New Mexico, the Consortium has implemented a variety of geographic 
systems technologies to local governments--both rural and urban. These 
include the recent expansion of transfer of geographic information 
technology through various distance education and Internet 
technologies. It is anticipated that the fiscal year 2000 grant will 
support work under this program through March 2001. The proposal for 
this work in 1999 has been received and reviewed.
    Question. How long has this work been under way and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1990, $494,000; fiscal year 1991, $747,000; fiscal 
years 1992 and 1993, $1,000,000 per year; fiscal year 1994, $1,011,000; 
fiscal year 1995, $877,000; fiscal year 1996, $939,000; fiscal years 
1997 through 1999, $844,000 per year; and fiscal year 2000, $850,000. A 
total of $9,450,000 has been appropriated since the beginning of the 
program.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. For fiscal year 1990 through fiscal year 1997, to date, the 
work in this program had $5,009,834 in non-federal support. In fiscal 
year 1990, non-federal support was $714,940 consisting of equipment, 
databases, and other miscellaneous contributions from foundations, 
city, and state governments. In fiscal year 1991, non-federal support 
was $25,000 from county government. In fiscal year 1992, non-federal 
support was $366,016 from county government, computer companies, and 
state governments consisting of equipment, software, facilities, and 
miscellaneous support. In fiscal year 1993, non-Federal support was 
$713,900 consisting of financial and miscellaneous support from 
foundations, county and state governments. In fiscal year 1994, the 
non-federal support was $713,643. In fiscal year 1995, the non-federal 
support was $987,000. In fiscal year 1996, it was $567,173. It was 
$456,582 in fiscal year 1997. In 1998 and 1999, non-federal dollars 
exceeded $1,000,000, and it is anticipated that they will again in 
2000.
    Question. Where is this work being carried out?
    Answer. The National Consortium for Rural Geospatial Innovations in 
America is administratively centered at the University of Wisconsin-
Madison. The University of Wisconsin-Madison, functioning as the Great 
Lakes center, continues a long history of involvement in the 
application of this technology at the local level with strong focus on 
soils/land-use and the institutional aspects of the integration of a 
new technology. The southeastern center in Valdosta, Georgia, in 
affiliation with the South Georgia Regional Development Center, has 
developed a comprehensive plan of the City of Adel as a model for other 
urban centers in the ten-county region. The southwestern center, in 
Fayetteville, Arkansas serves several local governments through its 
training facilities at the University of Arkansas, basing its technical 
approach on expertise and past experiences with the Federally developed 
system known as GRASS. They have developed pilot projects for some 
local jurisdictions and state level databases, which they have provided 
online. Central Washington University focuses on training for state 
planning and on three local governments and the Yakima Nation in the 
Yakima watershed. The north central center in Grand Forks, North 
Dakota, in affiliation with the University of North Dakota, focuses on 
relating real time weather data to other spatial attributes. The 
University of Wisconsin-Madison, functioning as the Great Lakes and 
Administrative center, continues a long history of involvement in the 
application of this technology at the local level with strong focus on 
soils/land-use and the institutional aspects of the integration of a 
new technology. Native American communities are being reached through 
the newly-developed Southwestern Indian Polytechnic Institute 
facilities in Albuquerque, New Mexico. Two new sites were added in 
fiscal year 99. They are Pennsylvania State University and the GIS 
Consortium at Wilkes University and Kings College in Pennsylvania. 
These two sites have replaced the NCRI-Chesapeake site and will be 
involved in providing GIS solutions to environmental problems that 
local government and regional planning commissions are dealing with in 
the Upper Susquehanna/Lackawanna Watershed.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objectives to build institutional frameworks 
for developing and disseminating geographic and related information to 
local decisionmakers is constantly evolving. Each site has developed 
approaches to addressing regional needs for modern technologies, and 
many innovative applications have been implemented. Technologies, 
including Internet-based educational and information exchange, have 
been developed to respond to the Consortium's customers. The Consortium 
has been asked to include these new technologies in order to bring its 
primarily rural users into new eras of public education and information 
management.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Proposals have been internally reviewed by Departmental 
personnel in different agencies. Beginning in 1995, the program has 
also been externally reviewed by local advisory committees and 
qualified professionals inside and outside of government. Their various 
comments and suggestions are sent to the agency and have helped with 
the favorable merit reviews.

                     GULF COAST SHRIMP AQUACULTURE

    Question. Please provide a description of the research that has 
been funded under the Gulf Coast Shrimp Aquaculture grant.
    Answer. The agency requested that the Oceanic Institute, and the 
Gulf Coast Research Laboratory submit a grant proposal that is 
currently under review. Recent research has addressed three major areas 
of research including: stock improvement; disease control; and 
sustainable culture technology. A number of important viral pathogens 
of marine shrimp have been identified and protocols have been 
established for the detection of viral pathogens that have decimated 
the shrimp industry world-wide. Improved viral detection techniques 
have led to the development of specific pathogen-free stocks of 
commercial importance. Researchers have responded rapidly to the 
multiple viral diseases that have significantly impacted the United 
States shrimp farming industry. Researchers will intensify efforts 
aimed at preventing new introductions of exotic viral pathogens both in 
commercial and wild shrimp stocks.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The principal researcher indicates that there is potential 
to enhance domestic production of marine shrimp through aquaculture in 
order to reduce the approximately $3 billion annual trade deficit in 
marine shrimp. Research continues to improve the supply of high quality 
seed, improve shrimp health management, improve biosecurity and 
environmental protection, and enhance production efficiency in shrimp 
culture systems. The United States has the opportunity to become a 
major exporter of shrimp seed and broodstock, disease control and 
biosecurity technologies, products, and services.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal was to increase domestic production of 
marine shrimp through aquaculture. Researchers have responded to severe 
disease outbreaks caused by the introduction of exotic viral pathogens 
into United States shrimp farms and recent studies have focused on the 
prevention and detection of shrimp viral diseases which have decimated 
domestic commercial production. Production of specific-pathogen free 
and specific-pathogen resistant seed and broodstock, biosecure and 
environmentally compatible productions systems, and improved feeds and 
feeding strategies for broodstock maturation and larval production will 
all enhance United States production technology while preventing the 
introduction of exotic pathogens into commercial and wild shrimp 
stocks. Diagnostic and disinfection techniques for a number of 
important viral pathogens have been developed. In addition, scientists 
are developing high-health genetically improved stocks and evaluating 
these animals under commercial production conditions.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. Grants have been awarded from funds appropriated as 
follows: fiscal year 1985, $1,050,000; fiscal year 1986, $1,236,000; 
fiscal year 1987, $2,026,000; fiscal year 1988, $2,236,000; fiscal year 
1989, $2,736,000; fiscal year 1990, $3,195,000; fiscal year 1991, 
$3,365,000; and fiscal years 1992-1993, $3,500,000 per year; fiscal 
year 1994, $3,290,000; and fiscal year 1995, $2,852,000; fiscal year 
1996, $3,054,000; and fiscal years 1997 through 2000, $3,354,000. A 
total of $45,456,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The United States Marine Shrimp Farming Consortium 
estimates that non-federal funding for this program approaches 50 
percent of the Federal funding for fiscal years 1991-2000. The source 
of non-federal funding is primarily from state and miscellaneous 
sources.
    Question. Where is this work being carried out?
    Answer. The work is being carried out through grants awarded to the 
Oceanic Institute in Hawaii and the Gulf Coast Research Laboratory in 
Mississippi. Research is also conducted through subcontracts with Tufts 
University, the Waddell Mariculture Center in South Carolina, the Texas 
Agricultural Experiment Station, and the University of Arizona.
    Question. What was the anticipated completion date for the original 
objective of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original specific 
research objectives was 1987. The original specific objectives have 
been met, however new challenges to the United States farm-raised 
shrimp industry continue the need for shrimp culture research. 
Researchers anticipate that the specific research outlined in the 
current proposal will be completed in fiscal year 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This project proposal is reviewed annually by the agency's 
Program Managers and the Program Specialist and is consistent with 
United States Department of Agriculture guidelines. Participating 
institutions are required to submit a detailed accomplishment report 
with the submission of each new grant proposal. The 1999 review of the 
program found that the progress during the last twelve months has been 
well documented and the proposal is well written. Research objectives 
are being met and the proposed research is consistent with the National 
Science and Technology Council's Strategic Plan for Aquaculture 
Research and Development. Facilities and expertise are very good and 
the close linkages between the researchers involved and the United 
States shrimp farming industry has greatly enhanced the 
commercialization of the research findings from this project. The 
United States Marine Shrimp Farming Project continues to address 
important research needs of the industry and has played a critical role 
in developing management strategies for protecting both wild and 
cultured stocks from the introduction of viral pathogens. The agency 
conducted an on-site review of this program in October, 1999. The 
agency is awaiting the final report of the review team.

            LIVESTOCK MARKETING INFORMATION CENTER, COLORADO

    Question. Please provide a description of the research that has 
been done under the Livestock Marketing Information Center program.
    Answer. This is a new project and Colorado State University is 
submitting its first grant proposal in fiscal year 2000. The project 
will enhance the ability of the Center to provide objective analyses of 
livestock markets and make recommendations to livestock producers.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. Recent changes in the structure of the livestock industry 
and in farm legislation have forced producers to pay more attention to 
market signals. Market prices have become more volatile because of 
changing domestic and international markets, thereby increasing 
producers' need for high quality market information and interpretation.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal is to increase the ability of livestock producers 
to make good business decisions in a changing global economy.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by the grant begins in fiscal year 2000 
with an appropriation of $170,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The Center includes a consortium of faculty from 22 
universities; participating universities contribute about $170,000 of 
non-federal funds a year.
    Question. Where is this work being carried out?
    Answer. The work will be carried at the Livestock Marketing 
Information Center, Denver, Colorado in cooperation with Colorado State 
University and 21 other universities.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have these objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The objectives and duration of the project will be 
specified in the grant proposal to be submitted in fiscal year 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This is a brand new project. CSREES will carefully review 
the proposal when it is received.

                      MARICULTURE, NORTH CAROLINA

    Question. Please provide a description of the research that has 
been funded under the Mariculture, North Carolina grant.
    Answer. The agency requested that the university submit a grant 
proposal that has yet to be received. The long-term goal of the project 
is to develop methods for mass propagation of marine finfish for 
commercial cultivation and possible stock enhancement. Specific 
objectives include development of growout technologies from juvenile to 
marketable stages and broodstock husbandry practices of selected marine 
species including the southern flounder and the black sea bass.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The Principal Investigators forecast an increasing need for 
the development of aquacultural production systems and methodologies 
for a variety of marine finfish. Results from this research will have 
broad application in the identification and development of marine 
species with commercial potential in the United States.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this research program is to develop sustainable 
aquaculture production systems for marine finfish. Captive mutton 
snapper were successfully matured and spawned and the resulting larvae 
reared through the juvenile stages. Juveniles were supplied to 
commercial and governmental organizations for commercial grow-out 
trials. Initial results appear promising with good survival rates and 
excellent feed conversion ratios. Captive-spawned mutton snapper are 
currently being raised to maturity and methods are being evaluated to 
control gonadal maturation through temperature and light manipulation 
and hormone treatment.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1998. 
The appropriation for fiscal year 1998 was $150,000, and for fiscal 
years 1999 and 2000, $250,000 was made available. A total of $650,000 
has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The university estimates that approximately $115,000 of 
non-federal funds were provided for this project in fiscal year 1998 
and $61,941 were provided for fiscal year 1999. These funds came 
primarily from state and private sources.
    Question. Where is this work being carried out?
    Answer. The research will be conducted at the Center for Marine 
Science Research at the University of North Carolina at Wilmington.
    Question. What was the anticipated completion date for the original 
objective of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The project was initiated in fiscal year 1998. The original 
goals continue to be addressed. The anticipated completion date for the 
current proposal is fiscal year 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The Program Managers and Program Specialist evaluate the 
progress of this project on an annual basis and is consistent with 
United States Department of Agriculture guidelines. The proposal is 
well-written and the objectives are clearly stated. The methodology and 
experimental design are sound. The research is relevant and addresses a 
potential opportunity for the aquaculture industry. Facilities are 
excellent and have been enhanced through this program. The research 
team is well-qualified and has the appropriate background. Literature 
and justifications for research are provided.

               NATIONAL CENTER FOR PEANUT COMPETITIVENESS

    Question. Please provide a description of the research that has 
been done under the National Center for Peanut Competitiveness grant.
    Answer. The grant supports an interdisciplinary research and 
education program to enhance the competitiveness of the U.S. peanut 
industry by examining alternative production systems, developing new 
products and new markets, and improving product safety.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. Peanuts are a very important crop in several southern 
states. In many counties, peanuts provide more than 50 percent of all 
crop income. Peanut producers have been major beneficiaries of 
government income protection programs, but Federal farm and trade 
policies are changing and producers must become more competitive and 
market oriented.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The project helps peanut producers be more competitive in 
the global market. Recent results include: economic feasibility 
analyses of alternative production and risk management practices; a 
computerized expert system adapted for hand-held computers to help 
farmers reduce pest control costs; the addition of economic factors to 
a computerized disease risk management system. The Center attracted 
some additional funding from other sources to purchase hand-held 
computers to run the pest management program for a number of producers.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1998. 
Appropriations have been as follows: $150,000 in 1998; $300,000 in 
1999; and $300,000 in 2000. Total appropriations to date total 
$750,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
are as follows: in fiscal year 1998, the state of Georgia contributed 
$141,181 and the state of Alabama, $15,000; in 1999, the state of 
Georgia contributed $504,354 and the state of Alabama, $67,553.
    Question. Where is this work being carried out?
    Answer. The Center is located at the University of Georgia at 
Griffen and involves cooperators from nearby peanut producing states, 
such as Auburn University in Alabama.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have these objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1998 was for a period of 36 
months, however, the need to improve the competitiveness of U.S. peanut 
growers continues to grow. The current phase of the program will be 
completed in 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. CSREES performed a merit review of the project in August 
1999, when it evaluated the current year's project proposal, and 
concluded that ``the project has sound objectives and procedures for 
helping the U.S. peanut industry become competitive, thereby 
contributing to the CSREES goals of a highly competitive agricultural 
production system and enhanced economic opportunity for Americans.'' 
The principal investigator and other faculty named in the proposal are 
recognized for their leadership in the industry.

                 PM-10 STUDY, CALIFORNIA AND WASHINGTON

    Question. Please provide a description of the research that has 
been funded under the PM-10 study, California and Washington research 
grant.
    Answer. The PM-10 study in California and Washington addresses the 
effects of emissions of PM-10 and PM-2.5 sized particulates, or dust, 
from agricultural land on air quality and development of control 
strategies. These studies are being conducted by scientists at the 
University of California-Davis and the Washington State University, in 
cooperation with Federal, state, and local agricultural, environmental, 
and health agencies, and farmers and growers in both states. The 
California program has focused on developing and refining methods to 
accurately measure and detect the sources of PM-10 and PM-2.5 emissions 
from various agricultural susceptible California crops and soils. In 
addition, the California research has been expanded to include dust and 
gaseous emissions from cattle feedlots, dairies, and poultry industry. 
This is related to livestock operations. The Washington State 
University scientists are using refined instruments on field sites to 
measure and predict the effects of wind erosion and agricultural 
practices in the Columbia River Basin region on PM-10 and PM-2.5 
emissions, under both natural wind erosion and with portable wind 
tunnel studies. Alternative cropping and tillage practices, residue 
management, and weed control practices are being developed and compared 
for control of PM-10 and PM-2.5 emission pollution under Columbia River 
Basin conditions.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. There has been growing national concern over the potential 
health and safety aspects of air pollution from dusts and suspended 
particulate matter resulting in passage of the 1990 Clean Air Act, as 
well as state air quality laws in both California and Washington. 
Because of particular problems from PM-10 and PM-2.5 emission in the 
arid regions of the Western United States, research on the role of 
agricultural operations in intensively cultivated soils in California 
and the Columbia River Basin, as sources of PM-10 and PM-2.5 emissions.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goals of this research were to measure the PM-
10 emission rates from significant crop and tillage practices, to 
determine the source of PM-10 emissions on soils in agricultural 
regions of central and southern California and the Columbia River Basin 
in the Pacific Northwest, and to explore cost-effective alternative 
agricultural practices to control these emissions. More recently, 
studies of finer PM-2.5 particulates have been included because of 
their recognized potential health risks. In California, field 
measurements are being continued on both PM-2.5 and PM-10 emissions on 
production practices on almonds, figs, walnuts, cotton, wheat, and on 
ammonia emissions from dairy farms and feedlots. Similar studies in the 
Columbia River Basin are being conducted in Washington on a number of 
agricultural practices in the rain-fed and dryland croplands. 
Susceptible climatic and soil conditions and tillage and cropping 
practices have been identified and are being used to develop prediction 
tools to assist growers to adopt alternative practices to reduce 
potential air pollution by PM-10 and PM-2.5 particulate emissions. 
During 1998 an intensive study was undertaken to evaluate emission 
differences in almond harvesters. Data has been taken in California to 
assess land preparation techniques.
    A Light Detection and Ranging system has been developed at the 
University of California at Davis that makes it possible to take a 
snapshot of the shape of an emission plume from a source such as a 
harvester, and to make estimates on the amount of particulate material 
emitted into the atmosphere and its subsequent transport. Efforts 
continue to calibrate the Light Detection and Ranging System.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in March 1994. The 
appropriation for fiscal year 1994 was $940,000; fiscal year 1995, 
$815,000; and for fiscal years 1996 through 2000, $873,000 per year. A 
total of $6,120,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. In California, the program is matched by State funds in the 
form of salaries, benefits, and operating costs. In Washington, there 
were no state or non-federal funds in support of the PM-10 project in 
1994 and 1995. In 1996, state support was $22,566, and in 1997, state 
support was $102,364. Similar funding was continued in 1998 and 1999.
    Question. Where is this work being carried out?
    Answer. This work is being directed by participating scientists at 
the University of California-Davis and at the Washington State 
University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date of the original objectives 
of this project is 2000. The first four objectives of the project on 
soil particle characterization are anticipated to be completed in 1999. 
The objectives on field control will continue. In 1998, a manual for 
practices was developed and circulated for use by growers in Washington 
State to reduce wind erosion on agricultural land. Implementation and 
development of these management practices will be a major role of this 
project in the future. Quarterly and annual reports on the Washington 
State project to date are available.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency's Program Manager annually reviews the research 
progress reports and proposed new research and attends the annual 
meetings of the program to assess progress. The program is also 
evaluated each year by technical, administrative, and agency personnel. 
Progress is reported at research review meetings three times a year, 
with the November 1998 advisory committee members. A formal on-site 
review by a panel of experts was conducted of the Washington program in 
November 1997, and a similar review of the California program is 
planned in the near future.

              PRECISION AGRICULTURE, ALABAMA AND TENNESSEE

    Question. Please provide a description of the research that has 
been funded under the Precision Agriculture, Alabama and Tennessee 
grant.
    Answer. CSREES has requested the university to submit a grant 
proposal that has not yet been received. This grant will develop needed 
training for farmers in the use Global Positioning Systems, 
Geographical Information Systems, Remote Sensing and Variable Rate 
Technology for precision farming application.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. This project will focus on the Southeastern area of the 
U.S. However results will apply to anywhere precision farming is 
applied.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of this project is to provide training 
for farmers in the use of precision farming technology.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and is funded at $425,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. This is a new project and therefore no non-federal funds 
have been provided.
    Question. Where is this work being carried out?
    Answer. The project will be conducted at the United States Space 
and Rocket Center Huntsville, Alabama and the Tennessee Valley Research 
and Extension Center at Belle Minci, Alabama.
    Question. When was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
was 2004.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. This project is under development and has not yet been 
evaluated.

                        WATER QUALITY--ILLINOIS

    Question. Please provide a description of the research that has 
been funded under the water quality program grant.
    Answer. The Illinois Groundwater Consortium grew out of a fiscal 
year 1990 appropriation of $500,000 to Southern Illinois University at 
Carbondale to focus on the short- and long-term effects of agricultural 
chemical contamination on the environment, the groundwater, and 
ultimately, human health and welfare. As a result of this 
appropriation, the University joined forces with the Illinois State 
Geological Survey, Illinois State Water Survey, the University of 
Illinois Cooperative Extension Service, and the University of Illinois 
Agricultural Experiment Station to create the Illinois Groundwater 
Consortium. The Consortium's primary mission, then and now, is to work 
effectively toward providing a scientifically-valid basis upon which 
meaningful agricultural chemical management and regulatory decisions 
can be based. The Consortium has worked to address the concerns of the 
agricultural and agrichemical industries as well as the valid concerns 
of the agencies charged with protection of environmental quality. 
Projects supported with Consortium funding are peer reviewed by 
researchers at 35 different universities and agencies from across the 
Nation, and results are presented and critiqued annually at the 
Consortium's Research Planning Conference.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. The fiscal year 1998 appropriation was targeted to research 
pertaining to the impacts, recovery, and remediation of the Midwestern 
region after flooding. The 1993 and 1995 flooding of the Mississippi, 
Missouri, and Illinois Rivers, and their tributaries, created 
devastating effects on the farm lands, communities, and natural 
resources of the area. These effects have major implications for 
agricultural practices, water quality, and public policy decisions. 
This natural catastrophe has resulted in a need for further studies 
examining the impact of the flooding on surface/groundwater, soils and 
their rehabilitation, biodiversity, and on economic and public policy 
in the region. In addition, there is the need to disseminate results to 
the public to enable the Consortium findings to be beneficial in the 
near term to those needing the information. To facilitate this work, 
the Consortium expanded its participant institutions to include 
Southern Illinois University at Edwardsville. Southern Illinois 
University at Edwardsville's strategic location in the heart of the 
flood damage area, as well as its qualified research scientists who 
work in the Consortium's high priority research areas, strengthen the 
capabilities of the Consortium. The highest priorities of the 
Consortium are: (1) the funding of research upon which public 
policymakers working on land use or groundwater protection issues in 
flood plain areas can base decisions and (2) the broad dissemination of 
this information. The projects funded by the Consortium are providing 
researchers opportunities to obtain data upon which larger projects can 
be built. Without this initial data, funding from other competitive 
sources would be difficult to obtain. The Consortium has tried to 
expand its efforts through a proposal for funds from the Fund for Rural 
America. This application received good feedback but was not funded. A 
revised proposal to similar funding sources is planned in the 
continuing efforts to expand the basic and applied impacts of the 
Consortium's research.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The Illinois Groundwater Consortium was established to 
coordinate and support research on agricultural chemicals in Illinois 
groundwater. The recent Midwest flood of the Mississippi, Missouri, and 
Illinois Rivers, and their tributaries, created devastating effects on 
farm lands that have major implications for agricultural practices and 
water quality in the region as well as effects in other states in the 
Midwest. The Consortium would like to be a leader in providing 
information to facilitate short-term and long-term systems studies of 
the effects of flooding on groundwater and surface water upon which to 
base policy management decisions. Research areas characterizing short-
term and long-term projects completed, underway, or proposed for each 
research area include:
Short-term
    Effect of extended inundation on soil productivity.
    Movement of chemicals--pesticides, herbicides, heavy metal, other 
chemicals--from flooded soils into surface and groundwater.
    Impacts on soil fertility and nutrient balance caused by flooding.
    Changes in nitrogen-fixing bacteria or pesticide microbic activity 
due to flooding.
    Impacts of flooding on plant and aquatic life, including endangered 
and dangerous species, and microbial communities.
    Effectiveness of riparian buffer strips under flooded conditions.
    Groundwater quality changes resulting from flood related land-use 
developments in both the bottomlands where farming practices change and 
in the uplands where new communities are being developed.
Long-term
    Effectiveness of methods of remediation for flooded soils.
    Changes in surface and groundwater quality over time with changes 
in flooding conditions.
    Changes in soil chemistry and productivity over time.
    Long-term effects and recovery of microbic activity.
    Effects of time on recovery and eradication of plant and aquatic 
life.
    Recommendations for long-term, systems-based planning and 
management for watershed and bottomland management.
    Examination of public policy decisions with implications for 
agriculture and water quality in light of flooding effects and 
recovery.
    Long-term implication for public policy decisions and management of 
the river systems.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Research grants have been awarded from funds appropriated 
as follows: fiscal year 1990, $494,000; fiscal year 1991, $600,000; and 
fiscal years 1992-1993, $750,000 per year; fiscal year 1994, $666,000; 
fiscal year 1995, $460,000; fiscal year 1996, $468,000; fiscal years 
1997 and 1998, $465,000 per year; and fiscal year 2000, $297,500. A 
total of $5,415,500 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
were as follows: $255,891 state appropriations in 1991; $447,237 state 
appropriations in 1992; $644,054 state appropriations in 1993; and 
$623,124 state appropriations in 1994. Non-federal and state funds for 
1995-1997 have exceeded the federal funds.
    Question. Where is this work being carried out?
    Answer. The work is being carried out by the Illinois Groundwater 
Consortium and coordinated by the Carbondale campus of Southern 
Illinois University. The research is being conducted by staff at the 
University of Illinois, Southern Illinois University-Carbondale, the 
Southern Illinois University-Edwardsville, the Illinois State 
Geological Society and the Illinois State Water Survey at locations 
across the State of Illinois and in Missouri.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. This project was planned as a 5-year study of the impacts 
and recovery of flooding in the Midwest. In the original proposal and 
subsequent proposals, we identified both short-term objectives which 
are project goals that could be accomplished within 1-2 years and long-
term objectives which are project goals that could be accomplished 
within 2-5 years. In calendar year 1997, we completed 3 years of 
studies involving 26 projects, and in calendar year 1998, we began 4 
new projects and continued 12 projects. These projects were spread 
across areas identified as high priority, including studies of flood 
impacts on soil productivity and remediation, movement of chemicals in 
water and soils, bacteria and microbial life, plants and aquatic life, 
and on public policy impact. Results of projects completed in previous 
years and progress reports on projects underway are published each year 
as part of the Proceedings of the annual conference of the Illinois 
Groundwater Consortium and in the Illinois Groundwater Consortium's 
Groundwater Bulletin. Dissemination of both of these publications is 
broad-based, utilizing mailing lists to public and private institutions 
and individuals kept by the University of Illinois Cooperative 
Extension Service, the Illinois Groundwater Consortium, as well as 
dissemination through related conferences and workshops. Progress in 
meeting short-term and long-term objectives has been excellent. The 
most complex task is coordinating research projects on flood issues 
involving multiple issues, such as biological, social, economic and 
political issues, where effective solutions await the expansion of 
research databases. Due to waterborne contaminant problems within the 
Mississippi River Basin and sub-basins, it is anticipated that the 
projects will continue beyond the year 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. From its beginning, the projects funded through the 
Illinois Groundwater Consortium involve reviews by at least three 
faculty/researchers drawn from 35 different universities, state, and 
federal labs and surveys, USDA's research laboratories, and other 
research centers. The reviewers rate proposals on criteria pertaining 
to scientific merit, quality of the research team, likelihood of the 
work resulting in publications and grant support from other sources, 
and relatedness of the project to the key objectives of the Illinois 
Groundwater Consortium. This peer review system enables the 
Consortium's Advisory Committee to select projects with high scientific 
merit from the group of proposals submitted for funding consideration. 
The titles, principal investigators' names and affiliations, and 
budgets are submitted to the USDA for review along with the 
Consortium's proposal for funding.

                      WATER QUALITY--NORTH DAKOTA

    Question. Please provide a description of the research that has 
been funded under the water quality, North Dakota program grant.
    Answer. The original goal of this research was to develop an 
understanding of the occurrence, transport, and fate of agricultural 
chemicals found in representative field settings in the Northern Great 
Plains region of the United States. In 1996, the scope of the program 
was expanded to include additional water management issues in the Red 
River of the North drainage basin. The Red River Water Management 
Consortium, a partnership between public and private sectors, was 
established to address critical water quality and quantity issues in an 
area where agriculture is the predominant industry. A major objective 
of the Red River Water Management Consortium is to use results from the 
initial phases of this research program to find economical, practical, 
and timely technological solutions to water problems of the region. By 
providing cofunding for the program, Red River Water Management 
Consortium members become active stakeholders in the research and 
ensure the practicality of the work performed.
    The focus of current work is on:
  --the assessment, development, and implementation of new technologies 
        for addressing water quality and quantity concerns within the 
        basin;
  --water resource assessment and analysis, including the development 
        of mechanisms for providing easy access to water-related 
        information so proper water management decisions can be made;
  --the determination of agricultural, industrial, municipal, and 
        recreational impacts on water resources, both current and 
        potential, and the identification of potential solutions to 
        water quality and quantity problems and needs;
  --water quality monitoring and coordination of monitoring activities;
  --education and information dissemination on water issues facing this 
        region of the United States; and
  --the development of a watershed management strategy for the Red 
        River of the North Basin focusing on water quality and quantity 
        to ensure continued economic development of the area.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. The original focus of the work was on agricultural 
chemicals in groundwater which potentially presents both a public 
health and an environmental quality problem of significant short- and 
long-term importance. The goal of this work was to provide a 
scientifically valid basis upon which meaningful agricultural chemical 
management and regulatory decisions could be made. The establishment of 
the Red River Water Management Consortium provided a mechanism for 
transferring results of the initial research to vested stakeholders of 
the region and for addressing water quality and quantity issues 
resulting from agricultural practices and development. The overall goal 
of the Red River Water Management Consortium is the development of a 
long-term watershed management strategy focusing on water quality and 
quantity which can be used as a model for watershed management in other 
agricultural regions in the United States.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original goal of the research program was to understand 
the occurrence, transport, and fate of agricultural chemicals in 
representative field settings in the northern Great Plains region so 
scientifically-valid decisions could be made for their management and 
regulation. Work on five of the seven sites originally instrumented 
under this program has been completed. Research at the two remaining 
sites is directed toward Answer.ing questions that have arisen during 
the course of this research program, specifically to determine the 
long-term trends in nitrate concentrations in surficial aquifers under 
irrigated agriculture and to determine the source and trends for 
sulfate.
    Results from this program have been reported in journals, 
conference proceedings, and through presentations at national, state, 
and local meetings. To date, more than 40 presentations or publications 
have resulted. In addition, two doctoral dissertations and one master's 
thesis have resulted from this program.
    Finally, the researchers have established the Red River Water 
Management Consortium as a mechanism for transferring the results of 
the initial research to vested stakeholders in the region and to the 
general public in order to address water quality and quantity problems 
resulting from agricultural practices and agricultural development.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. In 1989, $1.0 million was appropriated under the 
groundwater research program. Beginning in 1990, funds have been 
earmarked under the Direct Federal Administration program. Work 
supported by this grant was initiated in fiscal year 1990 with an 
appropriation of $987,000. Subsequent appropriations have been $750,000 
in fiscal year 1991, $500,000 per year in fiscal years 1992-1993; 
$470,000 in 1994; $407,000 in fiscal year 1995; $436,000 in fiscal 
years 1996-1998; and $340,000 in fiscal year 2000. A total of 
$6,602,000 has been appropriated for this water quality research 
program.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Red River Water Management Consortium members provide co-
funding to support their participation in the program. Cofunding 
provided by Red River Water Management Consortium members for fiscal 
year 1996 totaled $59,700 and for fiscal year 1997 totaled $80,000. 
Interest in this program continues to grow, and it was expected that at 
least $100,000 in cost-share would be obtained during fiscal year 1998 
through membership fees. These funds are provided directly to the 
program and do not include in-kind costs incurred by the participants 
which are estimated to be several hundred thousand dollars.
    Field activities to determine the long-term trends of nitrate and 
sulfate and to determine the source of sulfate are being conducted in 
cooperation with the North Dakota State Water Commission, which is 
providing an estimated cash equivalent funding in the amount of $33,660 
for sample analysis and approximately $12,000 for field 
instrumentation. Instrumentation of sites occurred in fiscal year 1997, 
and sampling and analysis continued through fiscal year 1999.
    Consortium members' dues are also used to provide in-kind services 
for match in other projects being performed by the Red River Water 
Management Consortium. A major project sponsored by the U.S. 
Environmental Protection Agency and local contributors to restore 
riparian areas in the Red River of the North Basin has been funded and 
will provide $175,000 for consortium activities over the next 4 years. 
The amount of in-kind services provided from Consortium member fees is 
$9,000 per year.
    The U.S. Corps of Engineers has contracted through the Red River 
Water Management Consortium a $100,000 6-month effort to improve the 
decision making capability regarding ongoing flooding within the Devils 
Lake Basin, a sub-basin of the Red River of the North Basin. This work 
is intended to produce decision support tools, forecasts, data, and 
forums that can be continued to be used by the Corps St. Paul district, 
the states of North Dakota and Minnesota, the International Joint 
Commission, and the people of the Devils Lake region after the project 
has been completed.
    Question. Where is this work being carried out?
    Answer. Research is being conducted at the University of North 
Dakota through its Energy and Environmental Research Center and at 
field sites and agricultural product-processing facilities in North 
Dakota, Minnesota, and Montana. In addition, a portion of the pesticide 
research was conducted at North Dakota State University. Cooperative 
efforts have resulted in work also being performed at cooperative 
institution locations such as the University of Waterloo, Victoria 
University, University of Montana, the Red River Resource Conservation 
and Development Council offices, and the North Dakota State Water 
Commission.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
of the project, specifically the field-related research, was fall 1995. 
This research has been completed; and the sites have been 
decommissioned, with the exception of those relating to long-term 
nitrate and sulfate monitoring and analysis. Work on nitrate and 
sulfate trends and occurrence was scheduled for completion in 1999. The 
Red River Water Management Consortium was established in 1996 as a 
mechanism for transferring the information derived from this research 
program to the technical community and to the public for use in 
addressing water quality and quantity issues relating to agriculture 
and agricultural development. It is anticipated that Red River Water 
Management Consortium activities will continue for several years in 
order to meet the objectives as defined by the non-federal sponsors and 
the agency.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The last agency evaluation of this project was conducted in 
September 1996. CSREES' Technical Project Officer attended a meeting of 
the Red River Water Management Consortium to evaluate and determine the 
status of this effort, which is currently the focus of research program 
activities. Progress was made by the Consortium during its first year, 
and the program is an excellent example of how federal and state 
agencies, research and academic institutions, private industry, and the 
general public can work together to solve problems in an economical 
manner to benefit people, communities, and the Nation. All project 
objectives were met for the first-year Consortium activities.

               EXTENSION FEDERAL ADMINISTRATION PROJECTS
                      AGRICULTURE IN THE CLASSROOM

    Question. Please provide a description of the research that has 
been funded under the Ag in the Classroom grant.
    Answer. Agriculture in the Classroom is an academic program 
designed to promote agricultural literacy among kindergarten through 
12th grade--K-12--students. Funds appropriated for this program are 
used to leverage agricultural literacy activities in all fifty States, 
the District of Columbia, and U.S. territories by providing national 
leadership and guidance to State Agriculture in the Classroom 
Coordinators. This serves the educational needs of more than five 
million students through a network of more than 120,000 teachers 
annually. Activities during the past year include implementation of 
cooperative agreements to identify sound instructional materials that 
focus on the contribution of minorities to the food and agricultural 
system, establishment of a web site to provide faster and more cost-
effective dissemination of information and materials, and planning and 
conducting an annual national conference.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. This outreach program is directed toward the youth of 
America. In the Federal Agriculture Improvement and Reform Act of 1996 
Congress noted the importance of increasing the number of young 
Americans pursuing baccalaureate or higher degrees in the food and 
agricultural sciences. Agricultural literacy is a first step in 
creating interest and awareness of career opportunities in the food and 
agricultural sciences. Education studies cite that students learn best 
by example. Agriculture provides an excellent vehicle for providing 
hands-on learning experiences in a variety of academic disciplines 
including biological science, social science, language arts, and 
mathematics.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The original purpose of this outreach program was to 
promote agricultural literacy through the education system. The 
Secretary of Agriculture established the Agriculture in the Classroom 
Program in 1981 to help future generations become more agriculturally 
literate. Agriculture in the Classroom helps students understand the 
complexity of the total food and fiber system, appreciate its impact on 
the economy and society, and become citizens who support wise 
agricultural policies. The program encourages educators to integrate 
the critical role of agriculture in our economy and society into their 
teaching. The program provides leadership, counsel and education 
materials, and maintains a nationwide network of teachers, farmers, 
agribusinesses, and government officials who actively support the 
Agriculture in the Classroom mission. Cooperation between the Federal 
government and the agricultural community is strengthened through a 
Memorandum of Understanding between the National Agriculture in the 
Classroom Consortium and USDA.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal years to date.
    Answer. A total of $2,461,880 has been appropriated for this 
program as follows: fiscal year 1986, $76,000; fiscal years 1987 and 
1988, $74,000 per year; fiscal year 1989 $87,000; fiscal year 1990, 
$135,000; fiscal year 1991, $170,000; fiscal years 1992 and 1993, 
$208,000 per year; fiscal year 1994, $185,000; fiscal year 1995, 
$208,000; fiscal year 1996, $204,880; and fiscal years 1997 through 
2000, $208,000 per year.
    Question. What is the source and amount of non-Federal funds 
provided by fiscal year?
    Answer. This is not a grants program and does not require matching 
funds. Agriculture in the Classroom is highly leveraged through a 
variety of public and private funding that supports the State programs. 
The cooperative agreements that are in place have matching funds.
    Question. Where is the work being carried out?
    Answer. National leadership for the Agriculture in the Classroom is 
provided by the Higher Education Programs unit within the CSREES. Each 
State actually manages its own program. Overall, the national program 
impacts an estimated 120,000 teachers and over 5 million students 
annually in grades K-12.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related activities?
    Answer. Beginning in 1981, under the direction of the Secretary of 
Agriculture, an Agriculture in the Classroom program was initiated in 
every State, the District of Columbia, and in the U.S. territories. 
Each State has a viable program. The goal of promoting agricultural 
literacy among America's youth is a continuing effort to serve each new 
generation of students.
    In the past year, cooperative agreements have been implemented for 
the development of a high quality web site to coordinate and exchange 
ideas among each of the Agriculture in the Classroom State 
Coordinators, to sponsor national teaching awards, and further 
disseminate superior agricultural educational materials.
    Agriculture in the Classroom annually sponsors a National 
Agriculture in the Classroom Conference to bring the Agriculture in the 
Classroom community together to expand experiences, ideas, materials, 
information, and techniques among State programs, educators, 
governmental agencies, agribusinesses and agricultural organizations. A 
quarterly newsletter communicates agricultural educational topics. A 
Resource Guide and outreach to educational associations are planned to 
enhance the Agriculture in the Classroom efforts.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The State Agriculture in the Classroom program coordinators 
have formed a National Agriculture in the Classroom Consortium. This 
provides USDA with another source of stakeholder input for identifying 
and setting priorities. Evaluations have been conducted in several 
States. Findings are provided to the Executive Committee of the 
National Agriculture in the Classroom Consortium and to the National 
Program Leader.
    During each national conference formal evaluations are conducted. 
These are considered in defining future goals for the program. 
Participants find the conferences valuable for sharing ideas on 
projects and for obtaining resource materials. In response to 
evaluations a ``teacher friendly'' web site has been developed and 
efforts are underway to find, develop and disseminate new educational 
materials.

                       BEEF IMPROVEMENT--ARKANSAS

    Question. Please provide a description of the program that has been 
funded as the Arkansas Beef Improvement Program.
    Answer. The Arkansas Beef Improvement Program uses result 
demonstrations to demonstrate cost effective beef management practices. 
These demonstrations are conducted on family owned beef cattle 
operations. The type of demonstrations implemented on the farms is 
determined by the specific problems and needs of the rancher. Education 
gained is then transferred to other producers through beef cattle field 
days and presentations, 6-hour county workshops, factsheets and popular 
press articles.
    Question. What is the national, regional or local need for this 
program?
    Answer. When planning, implementing and monitoring demonstrations, 
a business plan is used with specific goals and objectives. Therefore, 
the overall educational goal is to teach that decision making process 
rather than the specific management practices. Management problems 
differ from farm to farm, region to region and from year to year. 
Therefore, emphasizing problem identification and evaluation, exploring 
management options and monitoring progress are procedures that can be 
used throughout the ranching industry.
    Question. What was the original goal of this program and what has 
been accomplished to date?
    Answer. The overall goal of the Arkansas Beef Improvement Program 
was to enhance the efficiency and profitability of the Arkansas beef 
cattle producer. This program uses demonstration farms to implement and 
evaluate management practices. There are four farms enrolled in whole 
farm demonstrations. These demonstrations are five-year commitments. 
Three farms are in year three of the program and one farm is in year 
one. There are eight special projects that address specific management 
problems. Depending upon the special project, they can last two to five 
years. Twenty farms either have been or are currently enrolled in 
special projects. A six-hour workshop was developed to teach other 
producers the decision making process used and practices implemented on 
demonstration farms. Twenty-six workshops in 21 countries have been 
conducted. A quarterly Arkansas Beef Improvement Newsletter, two 
Extension publications and monthly articles in the Arkansas Cattle 
Business publication are methods used to transfer information to the 
public.
    Question. How long has the program been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. $200,000 has been devoted to this project from fiscal years 
1993 through 1995 and in fiscal years 1996 through 2000, $197,000 was 
appropriated for a total of $1,585,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Arkansas provided $118,154 for this past year.
    Question. Where is the work being carried out?
    Answer. The four current whole farm demonstrations and eight 
special projects are located on beef producing farms located throughout 
the state of Arkansas. These farms are family owned and operated and 
vary in size and stocking rates.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The Arkansas Beef Improvement Program currently has four 
whole farm demonstrations and twenty special projects. Three of the 
whole farm projects will finish in 2001, and the fourth whole farm 
project will finish in 2003. The special projects include cowherd 
performance, pasture renovation, establishing a breeding and calving 
season, stocker cattle, hay quality and supplemental feeding, 
replacement heifer management, cull cow management, and stockpiled 
forages. These projects range from two to five years in length. As 
farms complete special projects; additional farms are selected for 
special projects. The management problems addressed in special projects 
changes depending upon the need at the time.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. A CSREES review of this project is conducted annually. The 
1999 review was positive, with mention made of the efforts to develop 
decision making skills among beef producers. A suggestion was made to 
expand the environmental protection aspects of the project.
                  botanic garden initiative, illinois
    Question. Please provide a description of the research that has 
been funded under the Botanic Garden Initiative, Illinois.
    Answer. CSREES has requested the university to submit a grant 
proposal that has not yet been received. The program is expected to 
increase student interest and understanding of science and other 
related subjects using gardening as the focus.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research?
    Answer. We have contacted the Chicago Botanic Garden regarding this 
special grant. Their anticipated research is expected to result in 
educational curricula, lesson plans, garden design and construction 
recommendations, and garden activities that will serve as a model for 
other cities throughout the U.S.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The anticipated goal of this research is to develop an 
innovative program that increases green spaces at Chicago's public 
schools and teaches elementary school students the value of plant 
science, math, nutrition, business, and literature. Students and 
teachers, in collaboration with the Garden, build and maintain gardens 
by using the Life Lab curriculum, a nationally acclaimed and widely 
used science curriculum.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant begins in fiscal year 2000 
and the appropriation for fiscal year 2000 is $106,263.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds sources provided for this grant have 
not been determined at this time, since the grant has not yet been 
received.
    Question. Where is this work being carried out?
    Answer. This work will be conducted at the Chicago Botanical 
Garden.
    Question. What was the anticipated completion date for the original 
objective of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. Current progress indicates the anticipated completion date 
for the original objectives is five years.
    Question. When was the last agency evaluation of this project? 
Provided summary of the last evaluation conducted.
    Answer. This is a new project which will begin in 2000; therefore 
no evaluation has occurred.
              conservation technology transfer, wisconsin
    Question. Please provide a description of the extension project 
that has been funded under the Conservation Technology Transfer, 
Wisconsin grant.
    Answer. This is a new project that will leverage funding at the 
University of Wisconsin with other federal, state and local sources to 
provide education and technical support to livestock producers 
regarding animal waste.
    Question. According to the proposal, what is the national, regional 
or local need for this project?
    Answer. The need for this project is to meet new federal 
regulations on animal waste to protect public waters and air quality. 
It can also serve as a regional model for the dairy industry.
    Question. What was the original goal of this project and what has 
been accomplished to date?
    Answer. The original goal of this project is to coordinate nutrient 
management assistance for livestock producers among multiple agencies 
and the private sector. It is a new project that has not yet received 
funding.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant will begin in fiscal year 
2000, and the appropriation for fiscal year 2000 is $170,022.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The non-federal funds and sources provided for this grant 
are expected to be $600,000 from state and local funds for fiscal year 
2000. As a new grant, commitments are still being secured.
    Question. Where is this work being carried out?
    Answer. This project will be conducted with individual producers 
throughout Wisconsin, in coordination with the USDA Agricultural 
Research Station in Madison.
    Question. What is the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date for the original objectives 
is one year from the date of fund transfer. As a new project, no funds 
have been received to date.
    Question. When was the last agency evaluation of this project?
    Answer. This new project will have an evaluation process included 
in the proposal.

                         DELTA TEACHERS ACADEMY

    Question. Please provide a description of the program that has been 
funded under the Delta Teachers Academy project.
    Answer. The National Academy proposes to continue its Delta 
Teachers Academy in the Lower Mississippi Delta Region--219 counties 
and parishes near the Mississippi River including portions of Arkansas, 
Illinois, Kentucky, Louisiana, Mississippi, Missouri and Tennessee--
focusing on educational improvement in core subject areas. The program 
was launched in 1992 with a pilot grant of $500,000 from the U.S. 
Department of Education. U.S. Department of Agriculture funding began 
in 1994. The program provides long-term academic enrichment to 
approximately 525 elementary and secondary school teachers at 35 sites 
by teaming them with university scholars for in-service training during 
the school year and with summer institutes. Through its Fellows 
Program, the Delta Teachers Academy sustains the professional 
development of more than 650 Academy graduates throughout the region. 
This grant is not awarded competitively; however, we require annual 
applications reporting the previous year's accomplishments and 
describing planned activities and expenditures for the coming year. 
These applications undergo merit review before the awards are made.
    Question. What is the national, regional, or local need for this 
project?
    Answer. The 219-county Lower Mississippi Delta region has been 
cited by the Educational Testing Service and the National Center for 
Education Statistics as notably lagging in student performance in core 
academic areas. According to the grant recipient, 33 percent of the 
children in the region live below the poverty line compared to 20.5 
percent nationally. In 1996, 60 percent of Louisiana's public school 
sample ranked ``below basic'' on the National Assessment of Education 
Progress test for eighth-graders. The USDA's Economic Research Service 
correlated poor educational performance, rural poverty, and limited 
economic development. The Delta Development Commission cited serious 
educational problems including poor student performance in core content 
areas, demoralized teachers with little opportunity for academic 
development, and region-wide difficulty in recruiting and retaining 
qualified teachers. The Commission noted that 75 percent of the 
region's workforce lacks the basic reading skills necessary for 
technical training, and specifically cited improved teacher training as 
one means for breaking the cycle of poverty and economic 
noncompetitiveness.
    Question. What was the original goal of the program and what has 
been accomplished to date?
    Answer. The original and continuing goal of the project is to 
address the problem of insufficient professional development 
opportunities for the elementary and secondary teachers of the seven-
state region. The Delta Teachers Academy focuses on core subjects of 
English, geography, history, mathematics and science. Some sites also 
focus on humanities, language arts, social studies, reading, civics and 
interdisciplinary subjects. The Delta Teachers Academy began by 
offering educational development activities for 100 teachers from 50 
rural districts at 10 sites. Training has expanded to 600 teachers at 
35 sites across the entire seven-state region. More than 750 graduates 
whose professional development is sustained through the Academy's 
Fellows Program lead teacher in-service training at their home schools. 
The project has improved student performance and teacher training, 
morale, recruitment and retention in the region.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. A total of $24.161 million has been appropriated to the 
Department of Agriculture for this project, including $2 million in 
fiscal year 1994; $3.935 million in fiscal year 1995; $3.876 million in 
fiscal year 1996; $3.850 million in fiscal year 1997; and $3.500 
million each year in fiscal years 1998 through 2000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. There are no non-federal funds identified for this project.
    Question. Where is the work being carried out?
    Answer. The Delta Teachers Academy project is coordinated out of 
The National Faculty's Southern Region office in New Orleans, 
Louisiana. The project is conducted at 33 sites in the seven-state 
Lower Mississippi Delta region including Arkansas, Kentucky, Illinois, 
Louisiana, Mississippi, Missouri, and Tennessee.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original objective was to provide three full years of 
training to each faculty team established by the Delta Teachers 
Academy. Training consists of four two-day academic sessions and one 
two-week summer institute for each team. This objective was met for the 
24 faculty teams funded under a fiscal year 1994 Department of 
Agriculture grant; for 15 additional teams funded in 1995; and for one 
team funded in fiscal year 1996. The 20 teams funded in fiscal year 
1997 have received two years of training and the 14 teams funded in 
fiscal year 1998 have received one year of training.
    Objectives for fiscal year 1999 included providing ongoing 
professional development of 33 teams consisting of 600 participants; 
adding two additional teams to maintain the level of service to 35 
teams throughout the region; instituting new procedures to better meet 
clientele needs based on an independent review completed by Westat; 
intensifying its individual and field-based approach; and drafting 
individual work plans for each site. The anticipated completion date is 
September 30, 2002.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. An assessment of the short-term impact of the Delta 
Teachers Academy by Westat, Inc. of Rockville, Maryland was completed 
in August 1997. Westat found the majority of participants reported that 
the Academy met their personal and professional needs by renewing their 
enthusiasm for teaching, improving self-confidence, increasing their 
sense of professionalism, improving their knowledge of specific content 
areas, enhancing teaching methods and interacting with peers. Teachers 
are applying what they have learned from the Academy in their 
classrooms. For example:
  --88 percent said the Academy prepared them to assume leadership 
        roles in their schools;
  --89 percent noted changes in student work habits, attitudes, 
        aspirations and achievements;
  --90 percent applied academic content from the program in their 
        classrooms;
  --78 percent used skills and strategies learned at the Academy in 
        their classroom teaching;
  --83 percent said their teaching approaches became more effective in 
        improving student learning.
    A U.S. General Accounting Office review of the Academy's programs 
was conducted in 1995. Report GAO/RCED-95-208 included summary 
statistics on more than 1,000 teacher evaluations of Academy sessions 
as well as the General Accounting Office's survey of participants. On 
average, participants reported that the Academy was more effective than 
any other teacher development program they had participated in, was 
very effective in renewing or enhancing knowledge in one or more 
academic subjects, and was generally effective in enhancing the 
teaching skills and strategies required for teaching challenging 
academic content.
    A site visit of the Delta Teachers Academy in New Orleans, 
Louisiana and the National Faculty's Summer Institute at Tulane 
University was conducted by the CSREES's National Program Leader for 
Higher Education and Evaluation in 1996. The visit confirmed that Delta 
Teachers Academy strengthened participating teachers' abilities by 
improving their knowledge base, helped them become leaders of other 
teachers by requiring them to conduct staff development at their home 
schools, and had a positive impact on student learning. School 
superintendents reported greater student enthusiasm, more homework, and 
higher test scores for students whose teachers were participants in the 
Delta Teachers Academy program.

        DIABETES DETECTION AND PREVENTION, WASHINGTON AND HAWAII

    Question. Please provide a description of the extension activity 
that has been funded under the Diabetes Detection and Prevention, 
Washington and Hawaii, grant.
    Answer. The grant supports research/demonstration and outreach 
activities designed to (1) detect undiagnosed diabetes through use of a 
non-invasive ocular fluorescence technique, and (2) promote 
collaborative efforts by CSREES and The Joslin Diabetes Center to 
develop and pilot test a model to provide diabetes screening, 
prevention education, and case management services for selected rural 
and urban populations in Hawaii and Washington.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional or local need for this 
research/demonstration program.
    Answer. This program grows out of a need to reach more of the 
millions of Americans who have undiagnosed diabetes. Diabetes is 
currently one of the leading causes of death and disability in the U.S. 
adult population, and is highest among certain racial and ethnic 
populations, especially Native Americans, African Americans, Hispanic 
Americans, and Asians and Pacific Islanders.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this research/demonstration and outreach 
project is to (1) provide screening for diabetes among selected rural 
minority patient populations in Washington and Hawaii using innovative 
detection technology and blood glucose measures; (2) diabetes education 
prevention and care materials; and (3) case management support and 
follow-up services for patient referrals.
    Among the accomplishments to date are the following:
  --CSREES has met with representatives of the Joslin Diabetes Centers, 
        and convened regular telephone conferences with representatives 
        of State Cooperative Extension Partners in Washington and 
        Hawaii, and all partners.
  --A Memorandum of Understanding has been prepared and approved by 
        USDA and Joslin Diabetes Center.
  --A revised proposal has been submitted by the Joslin Diabetes 
        Center, and the Hawaii and Washington Extension Programs which 
        clarifies the Project's objectives, and establishes roles and 
        expectations of each of the partners.
  --Prevention and care materials are in draft form and are being 
        reviewed by Cooperative Extension staff.
  --Cooperative Extension staff are being trained in delivery 
        techniques for diabetes care and risk reductions strategies.
  --Cooperative Extension staff are establishing local collaborations 
        with health agencies, and developing recruitment and 
        maintenance strategies.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1999 
with an appropriation of $550,000; the fiscal year 2000 appropriation 
is $550,000. The total appropriation is $1,100,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. There were no non-federal funds and sources provided for 
this grant.
    Question. Where is this work being carried out?
    Answer. The research and demonstration will be conducted at Joslin 
Diabetes Centers at Swedish Hospital in Seattle, Washington, and Straub 
Hospital in Hawaii. In addition, the Cooperative Extension offices in 
selected counties in Hawaii and Washington will be involved in program 
implementation.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completed date for the original objectives 
is 2002. The anticipated completion date of the revised objectives is 
2004.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The project did not get underway until late in fiscal year 
1999 because of the need to prepare and seek approval of the Memorandum 
of Understanding. Thus, an Agency evaluation has not yet occurred. A 
mid-year evaluation of program outputs and the delivery process to date 
will occur in July 2000.

                   EXTENSION SPECIALIST, MISSISSIPPI

    Question. Please provide a description of the program that has been 
funded as the Basic Weather Service for Research and Extension Project.
    Answer. The Basic Weather Service and Extension project is designed 
to fill a void in weather data due to closure of the Ag Weather Service 
facility in Stoneville, Mississippi. The funding will be used to gather 
and disseminate critical agricultural weather data for producers and 
researchers in Mississippi and surrounding states.
    Question. What is the national, regional or local need for this 
program?
    Answer. The grant proposal states that the Ag Weather Service 
facility was closed at Stoneville, Mississippi. This action has created 
a void in the availability of and access to critical weather data that 
producers and researchers use to make management decisions and to 
formulate work plans within the state and region. The weather data 
collected by this project serves a national need to provide a national 
database.
    Question. What was the original goal of this program and what has 
been accomplished to date?
    Answer. The goal of the project is to collect, maintain, and 
disseminate weather information for producers and researchers in 
Mississippi and surrounding states. Electronic weather stations and 
links with other web sites to deliver weather data have been installed 
and developed. The project is providing timely data to producers in the 
Delta.
    Question. How long has the program been underway and how much has 
been appropriated by fiscal year through 2000?
    Answer. The funding for fiscal years 1997 and 1998 was $50,000 each 
year and for fiscal years 1999 and 2000, $100,000 each year. A total of 
$300,000 has been appropriated.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The State of Mississippi through the Mississippi 
Cooperative Extension Service and Delta Research and Extension Center 
provided $41,350 in state appropriated funds to support this project in 
1997, 1998, and 1999.
    Question. Where is the work being carried out?
    Answer. The project will be conducted at the Delta Research and 
Extension Center in Stoneville, Mississippi.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of the additional or related objectives?
    Answer. One of the original objectives, installation of equipment 
to collect weather data and establishment of a website, has been 
completed. The agriculture community--producers, markets, suppliers of 
goods and services, and financial institutions--depend upon weather 
information as a guide for business planning and decision making. The 
National Weather Service has eliminated certain critical services to 
rural areas and to agriculture clientele. As agriculture implements new 
programs in pest management, crop production, and site-specific 
farming, near real-time weather data is needed for the success of these 
programs. Weather services provided by the Stoneville project will be 
in cooperation with and complementary to services provided by the 
National Weather Service. Additional objectives relating to the 
collection, process, and disseminate of timely weather data are needed 
in the Delta Region. Current funding supports the objectives to ensure 
these weather services are available to the region.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Evaluation of the project and Internet website is being 
conducted with an on-line survey instrument and through e-mail 
responses about the site. An advisory group has been identified and is 
functioning to provide feedback on the weather center's current status 
as well as assessing needs for future plans for the project's continued 
mission.

                 INCOME ENHANCEMENT DEMONSTRATION, OHIO

    Question. Please provide a description of the program that has been 
funded under the Income Enhancement Demonstration Project for Northwest 
Ohio.
    Answer. The Federal funds support the Agricultural Business 
Enhancement Center which plays a major role in the development of the 
agricultural sector of Northwest Ohio. The Center provides a variety of 
management training programs, helps farmers and other agribusinesses 
develop comprehensive business plans, and facilitates business 
networking. CSREES performs an annual merit review of this project.
    Question. According to the research proposal, or principal 
researcher, what is the national, regional, or local need for this 
program?
    Answer. The Center seeks to enhance the competitiveness of 
agricultural firms in Northwest Ohio and create greater economic 
opportunity for local residents. To be successful in business, farmers 
and other agribusiness firms must be able to adapt to a large number of 
major changes affecting the entire food system from the farmer to the 
consumer. These include changes in farm programs, globalization of 
markets, new technologies, information systems, consumers' concerns for 
food safety and nutrition, and society's concern for protecting the 
environment. Individuals, families, firms and communities in Northwest 
Ohio need to understand the changes, develop and implement effective 
strategies for dealing with change.
    Question. What was the original goal of this program and what has 
been accomplished to date?
    Answer. The original goal of the project was to help people develop 
new businesses and restructure and expand existing businesses in order 
to enhance incomes in Northwest Ohio. The Agricultural Business 
Enhancement Center conducts economic research on market opportunities, 
provides a variety of management training programs, helps individual 
farms and other agribusinesses develop comprehensive business plans, 
and facilitates networking with businesses in other regions of the 
United States and around the world. Recent accomplishments include the 
following: A group of growers formed a cooperative and contracted with 
the Ohio Turnpike Commission to operate farmers markets at rest stops; 
farmers expanded their use of the national Internet Hay Exchange; sugar 
beet grower associations are exploring the feasibility of reopening a 
closed processing plant; Christmas tree growers worked together to 
expand their market and increase sales; at an annual Women in 
Agriculture forum, 61 percent said workshop participation would improve 
management of the family farm, 78 percent would improve family 
relations, and 28 percent would improve farm income; Master Gardener 
volunteers were trained and provided over 6,000 hours to advise local 
home gardeners.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The project began in 1991. Appropriations have been as 
follows: $145,000 in fiscal year 1991; $250,000 per year in fiscal 
years 1992 through 1995; and $246,000 per year in fiscal years 1996 
through 2000. Appropriations to date total $2,375,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. The State of Ohio has appropriated the following funds: 
$35,100 in fiscal year 1991; $72,368 in 1992; $56,930 in 1993; $30,547 
in 1994; $49,935 in 1995; $51,432 in 1996; $48,664 in 1997; $53,736 in 
1998; and $56,186 in 1999.
    Question. Where is the work being carried out?
    Answer. The Agricultural Business Enhancement Center is located in 
Bowling Green, Ohio and serves eight counties in the Toledo 
Metropolitan Area. Project leadership is being provided by the 
Department of Agricultural Economics, Ohio State University, Columbus, 
Ohio.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have these objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1991 was for a period of 12 
months, however, the ongoing needs of producers and agribusinesses to 
adjust to major changes in the agricultural sector continues to provide 
the Center with many challenges. The current phase of the program will 
be completed in 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. CSREES performed a merit review of the project in February 
1999. In that review it was noted that: ``The fiscal year 1999 proposal 
is especially well done--for each of its 3 objectives, there are one or 
more goals, and each goal has procedures and evaluation plans.'' 
Throughout the year, the project director completed evaluations which 
clearly demonstrated the value of the project to citizens of Ohio.

                  INTEGRATED COW-CALF MANAGEMENT--IOWA

    Question. Please provide a description of the program that has been 
funded as CHIPS: Cow-Calf Integrated Resource Management Program.
    Answer. CHIPS is an integrated cow-calf resource management program 
that originally targeted an eleven county area in southeast Iowa. The 
intent of the program is to impact the area's economy by maximizing the 
profit potential of individual livestock operations. Program 
technicians work one-on-one with participating beef operations, 
utilizing a variety of management services designed to assist these 
producers as enterprise decisions are made. The program has grown to 
extend services to over 200 beef producers in over 60 Iowa counties.
    Question. What is the national, regional or local need for this 
program?
    Answer. The agricultural economy of Iowa and surrounding states has 
suffered over the past several years due primarily to low commodity 
prices, especially corn, soybean, and hog enterprises. Selected areas 
of Iowa have also been challenged with extreme weather conditions that 
have impacted many beef operation current and long-term financial and 
managerial decisions.
    To address this rapidly changing agricultural infrastructure, the 
program has adjusted its direction and focus to meet the management and 
technical needs of Iowa beef producers. Program technicians and staff 
work closely with participants to collect and analyze individual 
operation data. This information is necessary as management 
recommendations are developed to enhance the performance and economic 
stability of the operation. This approach supports individual economic 
survival as well as strengthening the local and regional economic 
community.
    The Iowa cattle industry is exploring strengthening its position by 
building a new beef harvesting facility. This involves cooperation of 
many industry representatives. If this effort becomes a reality, the 
importance and need for such programs will continue to grow and expand. 
Producers will need continued technical assistance and expanded 
services as long-term decisions are made to supply a high quality, 
source verified, environmentally sound product to consumers.
    Question. What was the original goal of this program and what has 
been accomplished to date?
    Answer. The overall goal of the program is to have a positive 
effect on the area's economy by improving the long-term profit 
potential of the local cattle industry. Objectives include improving 
the understanding of producers about cow-calf production on highly 
erosive land, providing intensive technical assistance to develop goals 
and individualized farm recommendations and helping producers develop 
management skills to improve efficiency and lower costs of production. 
Over 220 cow-calf operations are to be involved in 2000.
    Over the past several years, the program has expanded in 
geographical area, clientele and technicians. The program has grown 
from one technician and 11 counties in 1992 to seven technicians 
providing services to over 60 counties in Iowa. These technicians serve 
over 220 cooperators that manage over 18,000 beef cows.
    During the 1998-99 fiscal years, technicians conducted over 1,330 
farm and office visits. Numerous management areas were addressed during 
these one-on-one contacts. Over 27,000 head of calves and beef cows 
were weighed and over 4,000 breeding animals were permanently 
identified. A total of 33 performance analysis records incorporating 
financial and performance information were individually analyzed. More 
than 560 forage and soil samples were collected and approximately 300 
ration projections were developed for cooperators.
    Networking projects are emphasized by the program. Examples include 
the heifer development program, regional steer tests, educational 
efforts in conjunction with the Iowa Beef Center, Iowa State University 
Extension and the Iowa Quality Beef Program.
    Question. How long has the program been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. $138,000 was approved for fiscal year 1992; $138,000 for 
fiscal year 1993; $276,000 for fiscal year 1994; $350,000 for fiscal 
year 1995; $345,000 for fiscal year 1996; $345,000 for fiscal year 
1997; $300,000 per year in fiscal years 1998 and 1999; and $250,000 in 
fiscal year 2000. Federal funding through fiscal year 2000 totals 
$2,442,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Cooperators pay fees of approximately $3.00 per beef cow on 
a sliding scale that adjusts for herd size. In fiscal year 1999, 
approximately $47,000 in fees were collected.
    Question. Where is the work being carried out?
    Answer. The program is operated in six designated technician areas 
in Iowa. Services and technical support are offered to producers in 
approximately 60 Iowa counties.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The objectives and goals of the program have been modified 
to meet the needs of cooperators and adjust to the rapidly changing 
cattle industry. The program initially projected to address the 
objectives in a three-year time frame. However, due to the expansion of 
the program in both geographical area and cooperator numbers, services 
and technical assistance have been modified to accommodate the numerous 
changes experienced by the industry.
    Over the past several years, the program has made considerable 
progress in achieving its goals. Cooperators are utilizing more of the 
data collection and record keeping programs that are offered. This data 
collection process has been important as producers make long-term 
decisions. The Iowa beef industry faces a challenging and exciting 
time. With the beef harvest facility initiative underway, the support 
and assistance offered to producers needs to be modified and adapted. A 
three-year time frame for the development and initiation of the Iowa 
Beef Network is expected.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The last annual review of this project was conducted by the 
agency in May, 1999. This review was positive, with special note taken 
of the expansion of the project to include a greater number of beef 
producers, promotion of a sound business approach to on-farm record 
keeping and management practices, and the efforts to extend this 
knowledge to other beef producers of the State.

        NATIONAL EDUCATION CENTER FOR AGRICULTURAL SAFETY, IOWA

    Question. Please provide a description of the extension project 
that has been funded under the National Education Center for 
Agricultural Safety grant.
    Answer. The mission of the National Education Center for 
Agricultural Safety is to reduce the level of preventable illnesses, 
injuries and fatalities among agricultural populations. The National 
Education Center for Agricultural Safety serves farmers, ranchers, 
their families and employees by providing hands-on training and 
education programs at the Center. The center works in conjunction with 
the ``Farmedic'' program and teaches agricultural families how to 
handle farm emergencies by providing First on the Scene and First 
Responder courses. It also provides training for rural firefighters and 
paramedics who respond to rural emergencies.
    The National Education Center for Agricultural Safety is located in 
Peosta, Iowa on the Northeast Iowa Community College Campus. Phase Two 
of the center's construction program has just been completed, allowing 
the center to provide training in ``real life situations''. Experience 
in handling grain bin entrapments, farm equipment entanglements, manure 
pit rescues, tractor over-turns, livestock, and utility emergencies are 
provided. Regularly scheduled training includes general First Aid and 
Cardiopulmonary Resuscitation courses.
    The center has assisted local farmers and small corporations to 
screen workers for employment health risks and conducts health 
education programs on hearing conservation, skin cancer prevention and 
prevention of swine confinement worker and animal health problems.
    The center operates an 11,000 square foot facility that was funded 
by the state of Iowa with matching private donations. The USDA grant 
provides salaries and operating funds, corporate and private donations 
provide needed programs and equipment. The National Safety Council and 
Northeast Iowa Community College underwrite additional operational 
costs not covered in the USDA grant or donations.
    Question. According to the extension proposal, or the project 
director, what is the national, regional and local need?
    Answer. The project director believes this training to be of 
national, regional, and local need. According to information compiled 
by the National Safety Council, 800 farmers and ranchers died in farm 
work incidents in 1998. Nearly 50 percent of these fatalities were 
related to work with farm tractors and equipment. Many of the training 
programs conducted at this new training center are focused on issues 
related to safe machinery operations. Included are safe tractor 
operation programs for youth and young adults and safety equipment 
retrofitting of farm equipment in cooperation with farm machinery 
manufacturers.
    One common thread for most fatal injury incidents in U.S. 
agriculture is that they are preventable. To prevent these serious 
injuries and deaths, the National Education Center for Agricultural 
Safety develops interactive training for the many at-risk audiences, 
including senior farmers, children and youth, and farmers who work 
part-time off the farm. These programs are offered in many local, 
regional, and national settings and are aimed at increasing awareness 
and knowledge about the hazards that impact farmers, ranchers, their 
families, and their employees.
    Question. What was the original goal of this training center and 
what has been accomplished to date?
    Answer. The original and continuing goal of this project is to 
develop, implement and evaluate diverse training methods for meeting 
the desired training objectives of at-risk agricultural audiences. For 
example, the training center has developed and is currently testing the 
feasibility of delivering agricultural safety and health information 
over fiber optic systems in the Midwest. This training is designed for 
firefighters and emergency medical service providers who respond to 
farm chemical emergencies. By using a fiber optics delivery technology, 
the training center is able to reach over 20,000 volunteer firefighters 
and rescue personnel with the latest methods for mitigating farm 
chemical and fertilizer fire, explosion and spill and leak emergencies.
    The training center's 12 acre site is also now equipped with 
confined spaces facility for delivering important hands-on training on 
manure storage hazards and silo gas risks for U.S. dairy farmers. This 
$60,000 private donation enables the center's staff to present real-
life scenarios about the risks associated with naturally-occurring 
gases in production agriculture.
    It should also be noted that many of the center's programs are 
developed for safety professionals who work with farmers and ranchers 
across the nation. These programs are designed for train the trainer 
initiatives that greatly expand the education and training 
opportunities for farm populations that would otherwise be at risk due 
to the unavailability of effective training.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. The work supported by this grant began in fiscal year 1998 
with an allocation of $195,000, and has remained at this level through 
fiscal year 2000. The total appropriation to date has been $585,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Non-federal funds and sources of donations were as follows: 
In 1998, non-federal funds included $450,000 state appropriation 
dedicated to the construction of Phase II; and $75,000 of miscellaneous 
donations and in-kind contributions received from Deere & Company, 
Dupont Corporation, Double L Group, Ltd, Melroe Company, Dubuque Racing 
Association and Theisen's Farm, Home and Auto, Inc. In 1999, non-
federal funds totaled $135,200 from the same sources as 1998 and 
additional state, non-profit organizations and private sources.
    Question. Where is this work being carried out?
    Answer. Training and educational initiatives under this grant are 
being conducted at the National Education Center for Agricultural 
Safety, located on the campus of Northeast Iowa Community College in 
Peosta, Iowa.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The anticipated completion date of the original objectives 
is approximately March 31, 2000. Many of these objectives have already 
been met. Anticipated completion date of additional objectives is March 
31, 2001.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. A CSREES merit review of the project application and site 
review were conducted in the spring of 1999. Another site visit is 
scheduled for June 2000. The project will be completing its second 
fiscal year on March 31, 2000. The National Education Center for 
Agricultural Safety utilizes external farm safety and health evaluators 
and two advisory committees to maintain its focus on the most pressing 
issues affecting the safety and health of our nation's agricultural 
populations.
    Wisconsin-Stout's Northwest Wisconsin Manufacturing Outreach Center 
with direct consultation and long-term in-plant assistance delivered 
primarily through the efforts of university Project Managers. Direct 
assistance may be delivered through Co-op students, staff of the 
University of Wisconsin System, both two-and-four year institutions, 
and Extension services; the Wisconsin Technical College System; 
secondary schools; the private sector, professional societies, and 
private consultants, or attendance at state or national seminars. The 
project also draws on many other state resources to add expertise and 
capacity to network facilitation and in-plant extension activities. The 
project has undergone a merit review.
    Question. What is the national, regional, or local need for this 
program?
    Answer. America's manufacturers continue to face tremendous global 
competition. There are enormous pressures to improve the quality of 
products; reduce the time consumed to bring new products to market; and 
there remains an ever increasing demand to reduce the costs of 
products. Currently there is a strong movement in manufacturing to use 
speed-to-market combined with new product introduction as a tool to 
obtain a competitive advantage. While high quality and cost 
efficiencies continue to be mandatory commitments for today's 
manufacturers, great value is now being placed on speed-to-market. 
Large companies are not the only ones influenced by these trends. Small 
and medium size manufacturers often supply directly to the market or 
are vital elements of a supply chain. Hence, they must be able to 
respond quickly to changing market conditions while continuously 
improving productivity and product quality.
    Question. What is the original goal of this program and what has 
been accomplished to date?
    Answer. The Manufacturing Technology Transfer program's principal 
objective is the development of a competitive, secure manufacturing 
base through the mechanism of industrial extension. The program 
principally targets small and medium size manufacturers in rural 
Wisconsin. This funding will: continue to provide valuable industrial 
extension service to the target audience; support the continued 
empirical development of an industrial extension model; and investigate 
the use of new manufacturing technologies to support global 
competitiveness of manufacturers. Productivity improvements were 
reported by the companies showing impressive economic impact to the 
region through client operations assessments and plant evaluations, 
strategy development for continuous improvement, implementation of new 
organizational and operational methods, implementation of new 
manufacturing technologies, establishment of quality assurance/total 
quality systems, establishment of ongoing training programs, on-site 
instruction in new technologies, improved methods, and processes.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. This project has been underway since fiscal year 1992 and 
was funded for $165,000 per year in fiscal years 1992 through 1995, and 
for $163,000 in fiscal years 1996 through 2000 for a total of 
$1,475,000.
    Question. What is the source of and amount of non-federal funds 
provided by fiscal year?
    Answer. University of Wisconsin-Stout provides $24,367 as in kind 
match. Funds from other state, University, and partner resources are 
pooled with USDA funds to carry out the described efforts.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1992 was for a period of 12 
months. However, the Manufacturing Technology Transfer Program was 
developed as a continuously evolving industrial extension strategy for 
serving the needs of the manufacturing community. The Manufacturing 
Technology Transfer program is measured by success in meeting the 
objectives of the past five years' proposals, including the delivery of 
modernization assistance and development of an industrial extension 
model. The current phase of the program will be completed in 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. To measure the success of the project, a client evaluation 
process has been developed which includes an evaluation questionnaire. 
Evaluations are performed both by program staff, and by an objective, 
third-party survey house. Evaluations indicate significant forward 
strides in job creation, new businesses, expanded productivity, and 
enhanced international competitiveness. An agency evaluation of this 
project was last performed by the Department of Commerce in 1999.

      PILOT TECHNOLOGY TRANSFER PROJECTS, OKLAHOMA AND MISSISSIPPI

    Question. Please provide a description of the program that has been 
funded under the Oklahoma and Mississippi Technology Transfer Projects.
    Answer. The original work involved the transfer of uncommercialized 
technologies from Federal laboratories and universities to rural 
businesses and communities. The objectives have evolved to providing 
more one-on-one assistance to small manufacturers. This type of 
assistance responds to the stated needs of the small manufacturing 
community and fills a recognized gap in the existing service provider 
community. This innovative and unique program has opened an entirely 
new clientele base for Cooperative Extension, small rural manufacturers 
in Oklahoma. This project has undergone a merit review.
    The original project in Mississippi focused upon the exploration, 
evaluation, development, and education/transfer of innovative 
technologies throughout the state such as agribusinesses, rural 
businesses and industries, communities, and local governments. In 
Mississippi, these original goals are still the guiding principle of 
the project. Specific objectives and activities of the project have 
been modified as the project and new technologies have been invented 
and introduced.
    Question. What is the national, regional, or local need for this 
program?
    Answer. Manufacturing extension programs throughout the country 
have identified one-on-one engineering technology assistance as a need 
for small manufacturers as they attempt to become more competitive and 
profitable. The Oklahoma Manufacturing Extension Partnership has 
received national acclaim for its noteworthy and highly effective 
partnership with the Land Grant University. This partnership was forged 
in 1995 by the Technology Transfer Program and continues today as the 
model Applications Engineering Program. As the Applications Engineering 
Program has begun to address more of the manufacturing engineering 
issues on a state-wide basis, the Technology Transfer Program has been 
exploring new ways of providing technology assistance to the small 
manufacturers. The Technology Transfer Program will begin augmenting 
its manufacturing engineering and technology service with Advanced 
Manufacturing Management Systems assistance to include: Resource 
Planning and Control, Manufacturing Operations Costs Analysis and 
Control, Manufacturing Process Simulation, and Electronic Commerce.
    Question. What is the original goal of this program and what has 
been accomplished to date?
    Answer. The primary goal of these programs is to contribute to an 
increase in business productivity, employment opportunities, and per 
capita income by utilizing technology and information from Federal 
laboratories, Rural Enterprises of Oklahoma, Inc. of Durant, Oklahoma; 
Mississippi State Food and Fiber Center; Vocational-Technical Education 
System; Center for Local Government Technology; Cooperative Extension 
Service; and other university departments and non-campus agencies.
    The original project in Mississippi focused upon the exploration, 
evaluation, development, and education/transfer of innovative 
technologies to various throughout the state such as agribusinesses, 
rural businesses and industries, communities, and local governments. In 
Mississippi, these original goals are still the guiding principle of 
the project. Specific objectives and activities of the project have 
been modified as the project and new technologies have been invented 
and introduced.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Funding appropriated to date is as follows: $350,000 per 
year in fiscal years 1984 and 1985; $335,000 in fiscal year 1986; 
$333,000 per year in fiscal years 1987 through 1990; $331,000 per year 
in fiscal years 1991 through 1995; and $326,000 per year in fiscal 
years 1996 through 2000. Total appropriations is $5,652,000.
    Question. What is the source and amount of non-federal funds?
    Answer. Oklahoma State University and Mississippi State University 
have provided considerable amounts of matching support from state funds 
over the life of the project. Over the past four years, support has 
included a significant portion of engineering faculty salaries as well 
as the administrative support of county and district extension staff.
    Mississippi State University has provided a considerable amount of 
matching support from state funds each year of the project. Matching 
funds have been at least equal to the amount of the Federal funds 
provided for the project in the past 10 years. Matching funds have 
included faculty salaries, technology equipment, travel, commodities, 
and administrative support. Additional non-federal funds have been 
provided.
    Question. Where is this work being carried out?
    Answer. The work is being carried out at Mississippi State 
University and Oklahoma State University and, more importantly, on the 
shop floors of the small rural manufacturers. Work related to this 
project is being carried out at the University, in some of 
Mississippi's Community Colleges, on the Internet, and in every county 
in Mississippi. Demonstrations, educational workshops, Internet access, 
video-conferencing sessions, satellite conferences, and one-on-one 
sessions have been conducted in businesses, local government offices, 
Extension offices, schools, farms, and even homes where appropriate.
    Question. What is the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1984 was for 12 months. The 
original objectives have been, and continue to be met. Although 
individual client projects have a beginning and end, the technology 
transfer process is continuous. Over the past years, specific and 
measurable annual objectives and the achievement of objectives have 
been documented in annual reports. The objectives of both programs have 
been to continue the delivery of high-quality engineering assistance 
and technology transfer services to small manufactures, conduct joint 
workshops, client referral, and joint research and application 
projects, and demonstrate a value of service to clients many times 
project operating costs.
    In Mississippi the original project contained objectives designed 
to be completed in 12 months. However, the first year clearly 
demonstrated that fully reaching objectives related to the transfer of 
new technology not only takes longer to achieve, but becomes a never 
ending process as the challenge is constantly changing as new 
technologies are developed. The technology transfer process is an 
extended and a continuous process. Over the past years, specific annual 
objectives and activities have been set and achieved and have been 
documented in annual reports. The objectives and activities of the 
current project are designed to be completed in fiscal year 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. Site visits and merit reviews have been conducted annually 
on these projects as well as client surveys by project staff 
themselves. Survey results have documented job creation, productivity 
enhancement, and local community economic activity. The Technology 
Transfer Program has impacted the integration of emerging technologies 
that are benefitting the citizens, ranging from assisting small 
businesses and industries in integrating new computer hardware and 
software for conducting electronic commerce, to providing extensive on-
line information resources. The Technology Transfer Funds have served 
as a catalyst for the development of a long range telecommunications 
network plan for the total extension service to link all county 
extension offices and research centers directly to the Mississippi 
data/video backbone and provide access to the Internet.
    Evaluation for the Technology Transfer Project in Mississippi has 
been both formative and summative. The effectiveness of all project 
activities is carefully reviewed and input is gathered from the 
individuals who participate in the training sessions to determine if 
the objectives of the project are being achieved. Evaluations of every 
educational workshop and activity are conducted on a regular basis and 
have consistently yielded outstanding marks. At the end of each year, a 
careful review of project demonstrations/exhibits/presentations, as 
well as the number of individual served, are reviewed. Perhaps the best 
indicator of success has been the continued increase in the demand for 
these technology-related activities. Also, Mississippi State University 
Extension Service annually reviews its implementation of new 
technologies to insure that these technologies are being utilized in 
the most effective manner possible. This project has allowed the 
Mississippi State University Extension Service to make significant 
progress in educating the clientele it serves. No State Extension 
Service provides more technology transfer education than Mississippi 
for its personnel. This training equips our county personnel to be more 
effective technology transfer educators and advisors to outside 
clientele to the point where county personnel are now conducting their 
own technology transfer training sessions. For example, Newton County 
personnel have provided at least 10 workshops in the past year for 
county clientele.

                   PILOT TECHNOLOGY PROJECT WISCONSIN

    Question. Please provide a description of the program that has been 
funded under the Wisconsin Pilot Technology Project.
    Answer. Primary industrial extension activity of the Manufacturing 
Technology Transfer program is the delivery of technical assistance to 
manufacturing companies. Executive direction in determining the 
assistance required will be provided by the University of Wisconsin-
Stout's Northwest Wisconsin Manufacturing Outreach Center with direct 
consultation and long-term in-plant assistance delivered primarily 
through the efforts of university Project Managers. Direct assistance 
may be delivered through Co-op students, staff of the University of 
Wisconsin System, both two-and-four year institutions, and Cooperative 
Extension services; the Wisconsin Technical College System; secondary 
schools; the private sector, professional societies, and private 
consultants, or attendance at state or national seminars. The project 
also draws on many other state resources to add expertise and capacity 
to network facilitation and in-plant extension activities. The project 
has undergone a merit review.
    Question. What is the national, regional, or local need for this 
program?
    Answer. America's manufacturers continue to face tremendous global 
competition. There are enormous pressures to improve the quality of 
products; reduce the time consumed to bring new products to market; and 
there remains an ever increasing demand to reduce the costs of 
products. Currently there is a strong movement in manufacturing to use 
speed-to-market combined with new product introduction as a tool to 
obtain a competitive advantage. While high quality and cost 
efficiencies continue to be mandatory commitments for today's 
manufacturers, great value is now being placed on speed-to-market. 
Large companies are not the only ones influenced by these trends. Small 
and medium size manufacturers often supply directly to the market or 
are vital elements of a supply chain. Hence, they must be able to 
respond quickly to changing market conditions while continuously 
improving productivity and product quality.
    Question. What is the original goal of this program and what has 
been accomplished to date?
    Answer. The Manufacturing Technology Transfer program's principal 
objective is the development of a competitive, secure manufacturing 
base through the mechanism of industrial extension. The program 
principally targets small and medium size manufacturers in rural 
Wisconsin. This funding will: continue to provide valuable industrial 
extension service to the target audience; support the continued 
empirical development of an industrial extension model; and investigate 
the use of new manufacturing technologies to support global 
competitiveness of manufacturers. Productivity improvements were 
reported by the companies showing impressive economic impact to the 
region through client operations assessments and plant evaluations, 
strategy development for continuous improvement, implementation of new 
organizational and operational methods, implementation of new 
manufacturing technologies, establishment of quality assurance/total 
quality systems, establishment of ongoing training programs, on-site 
instruction in new technologies, improved methods, and processes.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. This project has been underway since fiscal year 1992 and 
was funded for $165,000 per year in fiscal years 1992 through 1995, and 
for $163,000 per year in fiscal years 1996 through 2000 for a total of 
$1,475,000.
    Question. What is the source of and amount of non-federal funds 
provided by fiscal year?
    Answer. University of Wisconsin-Stout provides $24,367 as in kind 
match. Funds from other state, University, and partner resources are 
pooled with USDA funds to carry out the described efforts.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1992 was for a period of 12 
months. However, the Manufacturing Technology Transfer Program was 
developed as a continuously evolving industrial extension strategy for 
serving the needs of the manufacturing community. The Manufacturing 
Technology Transfer program is measured by success in meeting the 
objectives of the past five years' proposals, including the delivery of 
modernization assistance and development of an industrial extension 
model. The current phase of the program will be completed in 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. To measure the success of the project, a client evaluation 
process has been developed which includes an evaluation questionnaire. 
Evaluations are performed both by program staff, and by an objective, 
third-party survey house. Evaluations indicate significant forward 
strides in job creation, new businesses, expanded productivity, and 
enhanced international competitiveness. An agency evaluation of this 
project was last performed by the Department of Commerce in 1999.

                  RANGE POLICY DEVELOPMENT, NEW MEXICO

    Question. Please provide a description of the research that has 
been funded under the Range Policy Development grant.
    Answer. The Range Policy Development project has collected local 
economic data throughout the State. Local data have been used to 
develop an economic model to help explain the relationships among local 
economies and primary industries. The model enables policymakers to 
better understand how local and State economies are tied to primary 
industries, especially those industries that use public lands. The 
initial focus of the project has been on the livestock grazing 
industry.
    Question. According to the research proposal, or the principal 
researcher, what is the national, regional, or local need for this 
research?
    Answer. In New Mexico and throughout the western states, many local 
economies are dependent on the use and management of public range and 
forest lands. However, there exists a great deal of disagreement about 
the true level of dependence of individual communities on these public 
land-based industries and, consequently, disagreement about the local, 
statewide, and regional impacts of public policies that alter the use 
and management of these lands. Through better understanding of how 
public lands impact local and regional economies, we now can predict 
the outcomes of potential legislation or amended land use policies, 
resulting in policies that enhance, rather than detract from, local 
economies. The model was used to analyze the economic impacts of 
rangeland reform. The Bureau of Land Management--BLM--and Governor's 
State team chose to use the tool--Input/Output Model--and the method to 
analyze the Resource Advisory Council--RAC, fall back, and county 
alternatives for the State Environmental Impact Statement--EIS.
    Question. What is the original goal of this program and what has 
been accomplished to date?
    Answer. The model has been requested by the U.S. Forest Service to 
help improve Region 3 Land Use Plan amendments in response to newly 
listed Threatened and Endangered Species. New Mexico is in the process 
of developing detailed input-output models for each county, from local 
and state tax revenue data. Economists are following up with workshops 
across the state to present information from economic forecasts to 
local decision makers. Further, the project calls for increasing the 
utility of the models by expanding the scope of the database to include 
oil, gas, cheese processing, dairy and food livestock industries in 
addition to the grazing enterprises.
    Question. How long has this work been under way and how much has 
been appropriated through fiscal year 2000?
    Answer. This project was initiated in December 1994. The total 
appropriation for the project has been $1,162,240. The award of 
$197,000 for 2000 has been made to allow completion of the analysis of 
Draft EIS and Final EIS for BLM-U.S. Department of the Interior in 
conjunction with the State of New Mexico. The document is a proposed 
Statewide Resource Management Plan Amendment/Final EIS and is entitled 
``New Mexico Standards for Public Land Health and Guidelines for 
Livestock Grazing Management.''
    Question. What is the source and amount of non-federal funds to 
support this project?
    Answer. The project budget does not indicate any non-federal 
support. However, Agricultural Research Stations in five other States 
have economists currently working to expand upon the New Mexico 
project, ultimately to build a regional model.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. According to the project director, most of the original 
objectives of the first phase have been accomplished. The second phase 
of the project was initiated September 15, 1999. This phase will 
investigate the hypothesis that recreation--in particular, Federal land 
based dispersed recreation--generates sufficient revenue to offset the 
significant and now documented economic contributions of the 
consumptive industries, such as range, forestry and mining, and crop 
and livestock agriculture. Recreation expenditure patterns and economic 
cycles will be investigated. Production agriculture and range livestock 
are vital segments of rural economies. These sectors produce 
sustainable long-term income and wealth and are the basis of the 
customs and culture of rural economies. The anticipated completion date 
is September 30, 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The proposal for continued funding underwent merit review 
by an agency team of National Program Staff in May 1997, and a review 
of progress to date was conducted by the project liaison in September 
1997. The reviews focused on criteria including the relevance of the 
project goals, the suitability of the proposed research methods, and 
the extent of progress made toward addressing the goals of the project. 
Both reviews found that phase one objectives had been met, and adequate 
progress had been made toward the objectives of the second phase of the 
project.

                       RURAL DEVELOPMENT, ALASKA

    Question. Please provide a description of the program that has been 
funded under the Rural Development, Alaska Project.
    Answer. This program is being designed to assist technical 
assistance delivery to distressed communities in Alaska. The grant has 
not been distributed to date and no programmatic actions have occurred 
to date.
    Question. What is the national, regional, or local need for this 
research?
    Answer. Changes occurring in the management and utilization of 
public lands and changes occurring in rural economies as a result of 
global competition and changing market conditions need to be assessed 
in terms of impacts on small and rural communities in distress.
    Question. What was the original goal of this program and what has 
been accomplished?
    Answer. The original goal of this program was to improve technical 
assistance to distressed Alaskan rural communities.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year 2000?
    Answer. The work supported by this program began in fiscal year 
2000 with an appropriation of $276,285.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. No non-federal funds have been provided for this project.
    Question. Where is the work being carried out?
    Answer. The work is to be carried out in rural communities in 
Alaska.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original grant proposal has not been submitted to date.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. No program activities and no evaluation have been carried 
out to date.
             rural development through tourism, new mexico
    Question. Please provide a description of the program that has been 
funded under the Rural Economic Development Through Tourism--REDTT--
Project in New Mexico.
    Answer. The Rural Economic Development Through Tourism Project 
involves applied research and outreach focused on locally-based tourism 
development strategies to enhance economic opportunity in small and 
rural communities in New Mexico. Components of the agenda support 
training of local leadership and tourism professionals, strategic 
planning and market development, and technical assistance to 
communities. Proposals submitted are submitted for internal review and 
evaluation within the agency. Recommendations are presented to enhance 
impact on regional and national agendas.
    Question. What is the national, regional or local need for this 
program?
    Answer. This is an on-going pilot project to demonstrate the 
effective development and implementation of applied research, training, 
education, and technical assistance related to rural tourism as a 
development strategy. The grant has demonstrated that a long-term 
commitment of resources and activity can lead to effective development 
of tourism resources and build new market opportunities and tourism 
products for small communities. This project would provide an excellent 
proposal for the Fund for Rural America.
    Question. What was the original goal of this program and what has 
been accomplished?
    Answer. The applied research and outreach project was designed by 
the State Cooperative Extension Organization to increase the ability of 
the public sector to enhance economic opportunity for rural communities 
through tourism development. A regional task force composed of 
Extension professionals and community leaders from business, industry, 
education, and government--local, state, and Federal--was developed to 
guide and advise the development and implementation of locally-based 
programming and research. The results include video training materials, 
a public relations package, image studies and profiles, regional 
tourism guides, development of tourism bus packages, festival planning 
workshops, development of regional tours, and a mini-grants program for 
tourism development.
    Question. How long has this work been underway and how much has 
been appropriated through fiscal year 2000?
    Response . In fiscal years 1992 through 1995 the amount of $230,000 
per year was appropriated. The appropriation for fiscal years 1996-1977 
was $227,000 per year; for fiscal year 1998 was $247,000; for fiscal 
years 1999 and 2000, $280,000 per year. Total appropriated funds to 
date is $2,181,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Fiscal year 1992 included $38,764 in state matching funds. 
Fiscal years 1993, 1994, 1995 and 1996 included $39,360 per year of 
state matching funds. Fiscal years 1997 and 1998 include $39,040 per 
year state matching funds.
    Question. Where is this work being carried out?
    Answer. Applied research and outreach is being carried out through 
New Mexico State University.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original completion date was September 30, 1993. The 
original objectives of this research have been met. The additional 
objectives being presented for the 1999 year will be completed by 
September 30, 2000. Year 2000 proposal has not been submitted to date.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency evaluates the merit of research proposals as 
they are submitted. No formal evaluation of this project has been 
conducted. The principal investigators and project managers submit 
annual reports to the agency to document impact of the project. Each 
year, the project has demonstrated significant accomplishment in the 
reports submitted. Impacts include significant increases in attendance 
of local festivals, increase in number of tour bus visits to New 
Mexico, training to over 700 tourism employees in the region, and 
establishment of a number of new businesses. Agency evaluation of the 
project includes peer review of accomplishments and proposal objectives 
and targeted outcomes.

                      RURAL DEVELOPMENT, OKLAHOMA

    Question. Please provide a description of the program that has been 
funded under the Rural Development, Oklahoma Project.
    Answer. This program provides financial and technical assistance to 
small business to create and retain jobs in rural Oklahoma and to 
stimulate the local economies. The program is carried out through 
financial services, business incubators, problem-solving assistance to 
small and medium-sized manufacturers and technical assistance to rural 
small businesses. The program is expanding to include assistance to 
rural small businesses to enter international trade. The program 
continues to evaluate new products and processes that may result in new 
industries or be applied to improve existing manufacturing processes. 
The project has undergone a merit review.
    Question. What is the national, regional, or local need for this 
research?
    Answer. The increased demand for small business financing and 
technical assistance verifies the need for the program. Each year 
financing secured for small businesses has significantly increased. The 
demand for business incubators is also on the rise. Last year, Rural 
Enterprises, REI agreed to manage two more business incubators bringing 
the total REI-managed facilities to thirteen. Also, small businesses 
continue to need access to technical and business management 
assistance, worker training, and international trade assistance in 
order to stay competitive in domestic and world markets.
    Question. What was the original goal of this program and what has 
been accomplished?
    Answer. The original goal of the program was to create jobs in 
rural Oklahoma by providing systematic access to improved technology, 
training, financial and business management assistance. REI is a 
Certified Development Corporation for the Small Business Administration 
as well as a designated Certified Development Financial Institution. As 
a result, REI has been successful in obtaining financing for 
entrepreneurs and rural small businesses totaling $119,060,129. Special 
technical assistance efforts have included problem-solving assistance 
to small manufacturers; training and dissemination of information on 
ISO9000 to assist rural businesses compete with a global market; 
providing manufacturers with a ``Quick View Assessment'' program which 
enables manufacturers to compare their facilities and operations with 
other companies across the United States; and working one-on-one with 
small businesses providing on-site assistance with inventory control, 
cash flow management, and marketing.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Appropriations to date are as follows: $433,000 per year in 
fiscal years 1988-89; $430,000 in fiscal year 1990; $431,000 in fiscal 
year 1991, $300,000 per year in fiscal years 1992-95; $296,000 per year 
in fiscal years 1996-97; $150,000 per year in fiscal years 1998-2000. 
Appropriations total $3,969,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. No non-federal funds have been provided for this project.
    Question. Where is this work being carried out?
    Answer. The work is being carried out at Rural Enterprises, Inc., 
REI in Durant, Oklahoma.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. The original proposal in 1988 was for a period of 12 
months. However, the objectives of Rural Enterprises, Inc. are on-going 
because of the nature of the activity. The clientele is diverse and 
decentralized. The engineering and management consultation model being 
pursued with individual clients results in a situation where hundreds 
of problems are being pursued simultaneously and when solved are 
replaced by new issues resulting from international competition, 
regulations, training needs, and changeover costs. The next phase of 
the program will be completed in fiscal year 2000.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. REI itself conducts an on-going evaluation process to 
measure the organization's effectiveness and efficiency in 
accomplishing its objectives and this is documented on a quarterly 
basis through our reporting system. Over 6,000 jobs have been created 
and retained for new and expanding businesses as a result of this 
program. While the program has met its key objective of job creation in 
rural Oklahoma, the nature of its outreach effort continues to evolve 
and change as business sustainability and profitably confront new 
challenges within small and rural communities.

                     RURAL REHABILITATION, GEORGIA

    Question. Please provide a description of the program that has been 
funded under the Rural Rehabilitation project in Georgia.
    Answer. The program has tested the feasibility of providing 
satellite-based adult literacy education, in association with 
vocational rehabilitation services, to handicapped adults in rural 
Georgia. The program has developed curriculum, tested and adapted 
technology, established student recruitment and retention strategies, 
expanded to Statewide coverage, and provided successful adult literacy 
education.
    Question. What is the national, regional, or local need for this 
program?
    Answer. A state task force has estimated that 25 percent of 
Georgia's adult population is functionally illiterate. Functional 
illiteracy is regarded in Georgia as a form of disability. The extent 
of adult functional illiteracy is similar throughout much of rural 
America.
    Question. What was the original goal of this program and what has 
been accomplished to date?
    Answer. The original goal of this program was to prove that 
distance learning can be an effective tool for reaching and teaching 
functionally illiterate adults in rural areas. This program has 
demonstrated that satellite-based literacy training, in cooperation 
with vocational rehabilitation services, can successfully provide adult 
literacy education designed to improve critical reading, writing, and 
thinking skills, for handicapped rural adults. Over the past 9 years, 
test scores and attendance and completion rates of students in the 
satellite-based program have shown that distance learning is an 
effective delivery system for instructing low-level readers and non-
readers. Test scores and attendance rates of students in this program 
have been comparable to those of students in traditional, urban 
classes. The project is currently working to perfect a process for 
internet based instruction and student assessment.
    Question. How long has this work been underway and how much has 
been appropriated by fiscal year through fiscal year 2000?
    Answer. Funding for this program was initially appropriated in 
fiscal year 1989, and the program has been in operation since March 
1989. Through fiscal year 2000, appropriations for this program have 
been as follows: $129,000 in fiscal year 1989; $256,000 in fiscal years 
1990, 1991, and 1992; $250,000 in fiscal years 1993, 1994, and 1995; 
and $246,000 in fiscal years 1996, 1997, 1998, 1999 and 2000 for a 
total of $2,877,000.
    Question. What is the source of and amount of non-federal funds 
provided by fiscal year?
    Answer. The fiscal year 1998 source of non-federal funds provided 
for this program are state appropriated funds from the Georgia 
Department of Adult Education. Prior years sources also included 
private contributions from the Woodruff Foundation and other local 
foundations. Through fiscal year 1998, the total amount of non-federal 
funds provided the project has been $8,006,901. The breakdown by fiscal 
year is: $164,000 in fiscal year 1988; $270,500 in fiscal year 1989; 
$809,675 in fiscal year 1990; $656,765 in fiscal year 1991; $65,000 in 
fiscal year 1992; $1,019,821 in fiscal year 1993; $20,000 in fiscal 
year 1994; $872,500 in fiscal year 1995; $1,500,000 in fiscal year 
1996; $1,319,320 in fiscal year 1997; and $1,309,320 in fiscal year 
1998.
    Question. Where is this work being carried out?
    Answer. The Georgia Tech Satellite Literacy Project is sponsored 
and operated by four organizations: Georgia Institute of Technology's 
Center for Rehabilitation Technology, the Center for Rehabilitation 
Technology, Inc., Literacy Action, Inc., and the Georgia Department of 
Technical and Adult Education. The program grantee is CRT, Inc., a 
private, not-for-profit business advisory board to the Center for 
Rehabilitation Technology, College of Architecture, Georgia Institute 
of Technology, from which the literacy instruction has been provided.
    Question. What was the anticipated completion date for the original 
objectives of the project? Have those objectives been met? What is the 
anticipated completion date of additional or related objectives?
    Answer. It was anticipated that it would take 3 years to 
demonstrate that distance learning can be an effective tool for 
reaching and teaching functionally illiterate adults in rural areas. 
That original objective was met in Fiscal 1991. Additional objectives 
since fiscal year 1991 have been to expand the outreach of the 
satellite based adult literacy program to enough additional sites 
throughout the State of Georgia so that all potential participants have 
reasonable access to the program, and to continually upgrade the 
quality of class programming and the technical capacities of the 
system. The fiscal year 1997 technological upgrades expanded the 
capacity of the program more than 25-fold, from 77 to over 2,000 
downlink sites, and a six-fold increase in broadcast hours, and made 
materials available as supplemental tools to all Georgia literacy 
classes. As of December 1997, the Georgia Tech Satellite Literacy 
Program is in a period of transition from that of providing literacy 
instruction via direct television broadcasts to classrooms to that of 
development and dissemination of technology-based instructional aids. 
The project has been renamed the Lifelong Learning Network, or LNN. 
This change is being made based upon the request of the major sponsor, 
the Georgia Department of Technical and Adult Education, Office of 
Adult Literacy. The LNN will develop and produce video-based 
instructional supplements, technology-based curriculum and training for 
adult literacy practitioners, and multi-media projects for literacy 
students.
    Question. When was the last agency evaluation of this project? 
Provide a summary of the last evaluation conducted.
    Answer. The agency receives annual reports on the project that are 
used, together with agency merit review, to assess its progress. Based 
on these reports, the agency has found that the project has made steady 
progress in demonstrating the feasibility of utilizing distance 
learning technology and teaching methods to provide adult literacy 
education programs to handicapped adults throughout the State of 
Georgia. The project has been successful in applying the latest 
distance education technology to both control the program cost per 
participant and, most recently, to expand the availability of the 
program.

                         WOOD BIOMASS, NEW YORK

    Question. Please provide a description of the research that has 
been funded under the Wood Biomass Grant?
    Answer. The objective of this project is to expand, implement, and 
gain acceptance of short rotation woody crop biomass as a sustainable, 
renewable and environmentally friendly fuel source and as a feedstock 
for conversion into biobased industrial products. In addition, the 
project is supporting the promotion of low value fiber from the 
Nation's Central and Northern Hardwood forests regions.
    Question. According to the research proposal, or the principal 
researchers, what is the national, regional, or local need for this 
research?
    Answer. The principal researchers hypothesize that the project is 
of national interest. Biomass research studies through the U.S. 
Departments of Agriculture and Energy span 20 or more years. This work 
clearly demonstrates that the nation is in a position to scientifically 
produce environmentally affable fuels for power generation systems and 
other biobased industrial products. Except for co-generation plants, 
the current cost of conventional power supply fuels currently precludes 
the wholesale adoption of this technology. Complementing the planned 
fuel supply are many sidebar benefits including carbon offsets and 
sequestration, rural economic development, wildlife habitat, and 
reduction in soil erosion sedimentation and non-point source pollution 
associated with conventional agriculture. Valuing these and other 
products will make the economics of the system much more attractive. 
The applied research on the production system will be applicable across 
the Northeastern and Midwestern United States. Knowledge gained and 
lessons learned during the project will be applicable to similar 
projects across the country. The project is awarded non-competitively, 
but it is annually subjected to a CSREES Merit Review.
    Question. What was the original goal of this research and what has 
been accomplished to date?
    Answer. The goal of this project is to promote, through applied 
research and technology transfer, wood biomass as a sustainable wood 
supply for (1) power generation and other biobased industrial products, 
(2) alternative farm products, (3) wise stewardship of land resources, 
and (4) enhanced farm profitability.
    To accommodate these goals, scientists at the State University of 
New York College of Environmental Science and Forestry--SUNY-ESF--are 
planting willow trials and demonstration areas on several sites. Site 
preparation trials--including the use of cover crops, reduced tillage 
practices, and different herbicide regimes--and planting has occurred 
on several locations. Cornell University, a partner institution in the 
project, has hired a technology transfer specialist to coordinate 
educational activities resulting from this work. Common events include 
field days, news articles, presentations, tours of the demonstration 
farms, and exhibits.
    Question. How long has the work been underway and how much has been 
appropriated by fiscal year through fiscal year 2000?
    Answer. This aspect of the program began with an appropriation of 
$200,000 in fiscal year 1995. An additional $197,000 was appropriated 
by the Congress for fiscal years 1996 through 2000. This sums 
$1,185,000.
    Question. What is the source and amount of non-federal funds 
provided by fiscal year?
    Answer. Four state partners and approximately 18 private partners 
contribute resources at a ratio of nearly 1.5 to 1 for this project.
    Question. Where is the work being carried out?
    Answer. The fieldwork is being conducted on private and state land 
near Syracuse, New York. Electronic and print media allows Cornell's 
and SUNY-ESF's technology transfer activities to extend far beyond that 
point. Presentations have been made at international, national, and 
regional conferences and workshops. Numerous presentations have been 
made to local groups across the northeastern United States. The 
demonstration farms established under this project have been toured 
regularly by visitors from across the country and around the world.
    Question. What was the anticipated completion date for the original 
objectives of the project. Have those objectives been met? What is the 
completion date of additional or related objectives?
    Answer. The completion date for the original objectives of the 
project, willow cultivar planting was September 30, 1996. With the 
addition of some new dimensions to the project and the need to monitor 
the plots through the first growing cycle of 4 years, the completion 
date is now 2003. Because of the timing of one of the fiscal awards, 
some weather related problems and some land contract problems, all of 
the original objectives have not been met. Most of the unmet objectives 
should be completed in 2000.
    Question. When was the last agency evaluation of the project? 
Provide a summary of the last evaluation conducted.
    Answer. A field review of the project was conducted on August 20-
21, 1997. Excerpts from the review report include (1) positive 
accolades for their quarterly progress reports, (2) positive accolades 
for the outreach program being conducted by Cornell University, (3) 
praise for the scientific outreach by the principal investigators, (4) 
praise for connecting the willow biomass program to the poultry waste 
and riparian issues in New York state, and (5) praise for gaining the 
acceptance of willow biomass as an agricultural crop for state property 
tax purposes. On the concern side CSREES' project administrator flagged 
the delay in establishing the demonstration farm and requested 
diligence in bringing this aspect of the project to fruition. 
Subsequent reports from the project reveal that this aspect has been 
satisfactorily addressed. In addition to the above, the project is 
annually reviewed by the Salix (willow) Consortium.

          FOOD SAFETY INITIATIVE--NATIONAL RESEARCH INITIATIVE

    Question. The Administration identifies a portion of the National 
Research Initiative (NRI) as part of the President's Food Safety 
Initiative. Please provide the total amount of funding made available 
through the NRI for Food Safety Initiative research in each of the past 
three fiscal years. Provide a brief description of the research work/
project funded in each of these years and how it is contributing to 
meeting the goals of the President's food safety initiative, the amount 
of funding provided for the project, who is carrying out the work, and 
when the research work will be completed.
    Answer. The NRI awarded funds for Food Safety Initiative research 
in fiscal years 1997, 1998, and 1999 via the Ensuring Food Safety 
Program. The primary objective of this program is to increase our 
understanding of disease-causing microorganisms, their products, and 
naturally occurring toxicants in meats, poultry, seafood, and fresh 
fruits and vegetables. In fiscal year 1999, in response to increased 
funding, the NRI added the Epidemiological Approaches for Food Safety 
Program to provide the opportunity and the large grant amounts needed 
for epidemiologic/population studies on the farm or anywhere along the 
food production continuum. The NRI awarded a total of $2.5 million in 
1997, $2.9 million in 1998, and $11.1 million in 1999 for food safety 
research. Of the $11.1 million awarded in fiscal year 1999, $4.1 
million were awarded in the Ensuring Food Safety Program, $5.3 million 
were awarded in the Epidemiological Approaches for Food Safety Program, 
and the remaining $1.7 million were awarded for food safety research 
under other NRI programs. A brief description of each project funded by 
the NRI food safety programs in the past 3 fiscal years, including 
amount awarded, principal investigator--PI--and institution receiving 
the award, duration of the award, and a short project description, 
follows.
1999 Awards, epidemiological approaches for food safety:
    Microbial Contamination of Produce: A Field Study in the Lower Rio 
Grande Valley, Texas, $416,572, 3 years, University of North Carolina, 
Chapel Hill, C. Moe (PI). This study will look at farming and shipping 
practices on approximately 12 farms in the lower Rio Grande Valley of 
Texas with 3 vulnerable produce groups that are minimally processed and 
eaten raw--leaf lettuce/spinach, parsley/basil, green onions. Key 
agricultural practices where contamination may occur will be identified 
by measuring the microbial quality of produce at each step. Sources of 
fecal contamination will be determined.
    Risk factors for Salmonella and Campylobacter infections and drug 
resistance in dairy cattle, $765,447, 3 years, Michigan State 
University, J. Kaneene (PI). This is a 3 year longitudinal study of 130 
dairy herds to (1) identify the patterns of occurrence and shedding of 
Salmonella species and Campylobacter jejuni and associated risk factors 
on dairy farms in midwest and northeast. This study will also evaluate 
the relative sensitivity and specificity of different sampling 
frequencies; determine susceptibility profiles to a number of 
antimicrobial agents; compare conventional and organic dairy farms; and 
determine molecular mechanisms involved in reduced susceptibility and 
the development of resistance.
    Ecologic Assessment of Salmonella Enteritidis va typhimurium in a 
dairy milk shed, $600,000, 3 years, University of California, Davis, W. 
Sischo (PI). This study will monitor changes in S. typhimurium isolated 
from two county dairy milk sheds--400,000 dairy cattle--in central 
California and identify the genetic variants of these isolates. It will 
also determine spatial pattern of variants and assess the pathogen, 
environment, and management factors associated with persistent dairy 
herd infection. Included in this study is the determination of genetic 
and phenotypic diversity of human and bovine sources and the spatial 
and temporal dynamics of human and bovine sources.
    Ecology of antimicrobial resistance of enteric Salmonella and 
E.coli in cattle operations, $771,868, 3 years, The Ohio State 
University, T. Wittum (PI). This study will describe the on-farm 
ecology of Salmonella species and E.coli antimicrobial resistance 
patterns in intensively managed cattle operations. It will monitor 
dairy and feedlot cattle operations and identify patterns of 
antimicrobial use and other factors.
    Effect of water chlorination on prevalence of E.coli O157:H7 and 
Campylobacter in feedlot cattle, $325,528, 2 years, Washington State 
University, T. Besser (PI). This study will chlorinate the water 
supplies of 32 pens of feedlot cattle in two feedlots through the 
feeding period and compare the infection rate in these cattle to that 
of 32 pens of cattle consuming non-chlorinated water. It will also 
evaluate the effect of chlorination on water consumption and weigh 
gains.
    New methods for risk analysis of infectious animal diseases 
affecting food safety, $359,515, 2 years, Colorado State University, M. 
Salman (PI). This study's goal is to refine existing and developing new 
methodologies to allow for better risk analyses of foodborne diseases. 
It will compare different current approaches, develop new models and 
will validate these methods using two diseases as modules.
    Molecular epidemiology of Salmonella transmission in swine 
production systems, $885,294, 3 years, University of Illinois, R. 
Weigel (PI). The goal of this research is to identify critical control 
points for interventions to reduce Salmonella infection in modern swine 
production facilities. Specifically, it will identify reservoirs for 
Salmonella in ecosystems; characterize these isolates genetically; 
identify the degree of genetic diversity in different reservoirs; 
identify changes in genetic diversity over time; and use ecological and 
genetic information to infer probable modes of transmission. Eight 
large, multi-site modern swine production systems will be studied over 
15 months.
    Following Resistant Salmonella through the food chain: a molecular 
ecology approach, $814,564. 3 years, University of Georgia, J. Maurer 
(PI). This study will identify the diverse integron classes and their 
drug resistance genes in the chicken microflora and characterize their 
respective bacterial hosts. This study will follow transmission of the 
genes and integrons throughout the food chain. Samples will be taken 
from poultry at the hatchery, flock house, and the processing plant.
    Dynamics of Campylobacter transmission on poultry farms, $384,284 3 
years, The Ohio State University, Q. Zhang (PI). This study will 
attempt to elucidate the sources of Campylobacter infection in broiler 
chickens and examine the host and environmental factors that affect the 
transmission of the organism on broiler farms. It will identify 
potential sources and routes of transmission, the affect of immune 
status and the environment, and assess the effect of both vertical and 
horizontal transmission.
1999 Awards, ensuring food safety:
    Irradiation in a Combination Approach to Enhance Vegetable Safety, 
$128,000, 2 Years, Chapman University, A. Prakash (PI). This study will 
determine the optimum levels of irradiation, modified atmosphere 
packaging--MAP, and chlorination that will enhance safety while 
preserving sensory attributes such as texture, color, and flavor in 
selected vegetables, including shredded iceberg lettuce and shredded 
cabbage. The project is expected to reveal the efficacy of combination 
processing to address the emerging safety issues associated with 
minimally processed vegetables.
    Recalcitrance of Clostridium perfringens to High Hydrostatic 
Pressure Processing, $95,000, 2 Years, University of Delaware, D.G. 
Hoover (PI). The goal of this study is to obtain an accurate assessment 
of the response of the foodborne pathogen, Clostridium perfringens, to 
high hydrostatic pressure in order to better understand the mechanism 
of inactivation and identify those controllable factors most important 
in protection of this pathogen from the effects of high pressure 
processing in foods. A novel technology, high pressure processing of 
foods offers U.S. agriculture a commercially-viable non-thermal means, 
i.e., ``cold pasteurization'', for the processing of foods and 
beverages resulting in longer shelf-life and improved safety while 
maintaining sensory characteristics and nutrient content nearly 
identical to fresh or raw products.
    Are Virulent Strain-Specific DNA Sequences of Vibrio vulnificus 
Essential For Virulence? $150,000, 2 Years, University of Florida, P.A. 
Gulig (PI). Vibrio vulnificus is the leading cause of death in the U.S. 
associated with consumption of shellfish. This study will examine the 
relationship of virulent strain-specific DNA sequences to the disease 
process by determining if genes encoded on virulent strain-specific 
genomic sequences are essential for virulence, or if they are only 
markers for virulence by coincidence. By identifying virulence genes, 
we will contribute to understanding how this devastating food-borne 
pathogen can kill humans so rapidly after consumption of contaminated 
sea food. This information could be integrated into CDC, FDA, and State 
efforts to determine the epidemiology of infections and to develop 
interventions to reduce risk of V. vulnificus disease.
    Inactivation of Pathogens on Alfalfa Seeds, $114,319, 2 Years, 
University of Georgia, L.R. Beuchat (PI). The overall goal of this 
research is to develop a procedure to kill E. coli O157:H7 and 
Salmonella on alfalfa seeds without reducing the ability of the seeds 
to germinate and produce sprouts. Information gained from this research 
will be valuable in developing strategies to eliminate E. coli O157:H7 
and Salmonella from alfalfa seeds as well as other seeds intended for 
sprout production, thus greatly minimizing the risk of illness 
associated with eating of raw seed sprouts.
    Improving Pathogen Decontamination Treatments for Fresh Produce, 
$185,000, 2 Years, University of Georgia, J.F. Frank (PI). This project 
will determine strategies for removing or inactivating pathogenic 
bacteria at protected locations on the surfaces of fresh produce. Such 
strategies will involve application of sanitizing agents containing 
food grade solvents or surfactants that may penetrate to protected 
sites and provide an effective decontamination treatment. Results of 
this research will provide basic information necessary for the 
commercial development of fresh produce decontamination treatments.
    Genetic Markers and Pathogenesis Features of Listeria monocytogenes 
serotype 4b, $220,000, 3 Years, University of Hawaii, S. Kathariou 
(PI). Listeria monocytogenes is a troublesome food-borne bacterial 
pathogen because of its ubiquitous distribution, its ability to grow in 
refrigerated foods, and its involvement in severe and often fatal 
illness--listeriosis. Serotype 4b is of special interest, being 
involved in almost all common-source outbreaks of listeriosis and in 
numerous sporadic cases. This study will complete the molecular 
characterization of two gene clusters unique to serotype 4b strains in 
order to identify DNA-based diagnostic reagents for this serotype. This 
research may yield novel molecular reagents that will facilitate 
monitoring and detection of clinically important strains of Listeria 
monocytogenes.
    Identifying Factors that Promote Clearance of E. coli O157:H7 From 
Cattle, $265,000, 2 Years, University of Idaho, C.H. Bohach (PI). This 
research will test the hypothesis that cattle diet and colonic cell 
proliferation may be used in pre-harvest interventions to promote the 
clearance of E. coli O157:H7 from the gastrointestinal tract of cattle. 
This research directly contributes to the USDA NRI Food Safety program 
goals of decreasing the incidence of food-borne illness by increasing 
our understanding of the ecology of E. coli O157:H7.
    Molecular Mechanisms of Psychrotrophy in Listeria monocytogenes, 
$253,000, 3 Years, Illinois State University, B.J. Wilkinson (PI). The 
proposed research aims to: (1) increase our understanding of an 
important foodborne psychrotrophic--cold-growing--pathogen and how it 
resists the food preservation strategy of chilling; and (2) provide the 
scientific basis for improved control strategies for Listeria 
monocytogenes. The investigators are studying the membrane fluidity of 
the organism and the genes and proteins involved in its growth of at 
low temperatures.
    Molecular Biology of Fumonisin Biosynthesis in Gibberella 
fujikuroi, $100,000, 2 Years, Purdue University, C.P. Woloshuk (PI). 
Fumonisins are toxins produced in corn by the fungus Gibberella 
fujikuroi. Evidence has linked fumonisin with cancer in humans. With 
the likelihood of fumonisin concentrations being regulated world wide, 
the impact on the U.S. food industry will be substantial. The long-
range goals of this research are to understand fumonisin biosynthesis 
and to develop novel approaches for eliminating fumonisin contamination 
of food sources.
    Ecological Distribution of E. coli O157:H7 Strains in Agricultural 
Environments, $210,000, 2 Years, Kansas State University, J.M. Sargeant 
(PI). The goal of this project is to determine the distribution of 
genetically-identified E. coli O157:H7 isolates in agricultural 
environments, as a means to identifying the sources of infection for 
cattle. This information will allow for the development of land 
management and water-use practices and policies for the control and/or 
reduction in the overall prevalence of E. coli O157:H7 in agricultural 
food products.
    Characterization of Multiple Fluoroquinolone Resistance Among 
Bacterial Pathogens, $157,000.00, 2 Years, U.S. Food and Drug 
Administration, D.G. White (PI). The objectives of this project are to: 
(1) Characterize the genetic resistant determinants responsible for 
fluoroquinolone resistance among veterinary isolates of E. coli and 
Salmonella spp.; (2) Determine if veterinary fluoroquinolone use 
selects for bacterial isolates that are cross resistant to human 
therapeutic fluoroquinolones; and (3) Determine if the emergence of 
fluoroquinolone resistance among veterinary and foodborne bacterial 
pathogens is genetically related. The data will determine if there are 
potential public health implications regarding the use of 
fluoroquinolones in animals in the U.S.
    Detection of Viable Enterohemorrhagic Escherichia coli using 
Polymerase Chain Reaction and RNA-based Polymerase Chain Reaction, 
$111,000, 2 Years, Mississippi State University, M.A. Drake (PI). This 
project will develop methodologies to rapidly detect viable 
enterohemorrhagic Escherichia coli--EHEC. The methods will be applied 
to artificially-contaminated ground beef samples. The development of 
nucleic acid based methodologies to detect viable EHEC will be 
applicable to other foodborne pathogens and will provide a more rapid 
option for monitoring food safety.
    Extrusion Processing as a Means of Reducing Fusarium Mycotoxins in 
Cereal Foods, $128,000, 2 Years, University of Nebraska, L.B. Bullerman 
(PI). Toxin producing Fusarium molds pose major food safety hazards by 
invading corn and wheat in the field and producing their toxins in the 
grain. The goal of this research is to find the optimum conditions of 
extrusion processing which will destroy and reduce the amounts of 
deoxynivalenol, zearalenone, and fumonisins in contaminated corn and 
wheat under simulated industrial conditions to render the processed 
grain-based foods free of these toxins. This project will contribute to 
the safety of the food supply by improving the safety of cereal-based 
foods.
    A Membrane Fluidity Model for Sensitivity of Foodborne Pathogens to 
Preservatives, $230,405, 3 Years, Rutgers, the State University of New 
Jersey, T.J. Montville (PI). There is poor understanding of how 
Listeria monocytogenes, a food poisoning bacteria, survives in cold 
hostile environments once thought to kill bacteria or at least prevent 
them from growing. The cell membrane is the barrier that protects food 
poisoning bacteria from preservatives and the environment. This 
research determines how membrane properties regulate the sensitivity of 
the bacteria to preservatives, acidity, and cold. A better 
understanding of how the bacteria survive our attempts to kill them 
will provide new concepts that can be used to increase the 
effectiveness of current preservatives and processes, and thus, improve 
food safety.
    Specific Detection and Typing of Vibrio parahaemolyticus serotype 
O3:K6, $110,065, 2 Years, Cornell University, K.J. Boor (P.I.). The 
goal of this research is to enhance the safety of seafood consumed in 
the U.S. by developing a rapid strategy for detecting pathogenic V. 
parahaemolyticus in foods, specifically focusing on serotype O3:K6 
strains. The ability to distinguish between potentially dangerous 
isolates and the more prevalent nonvirulent vibrios will provide 
critically important tools that will allow public health workers to 
develop scientifically based guidelines for identifying water sources 
more likely to cause infection.
    Novel Strategies for Determining Thermal Destruction of 
Mycobacterium paratuberculosis, $87,784, 2 Years, Cornell University, 
K.C. Sasahara (PI). The American dairy industry annually loses $120 
million to Johne's disease, an incurable bacterial infection in cattle. 
Infected cattle shed Mycobacterium paratuberculosis into milk and 
feces, posing a possible health risk to humans. Although pasteurization 
of raw milk kills most spoilage and pathogenic microorganisms, 
isolation of M. paratuberculosis from humans suffering from Crohn's 
disease, an incurable inflammatory bowel disease with clinical symptoms 
similar to Johne's disease, suggests a possible causal relationship. To 
better establish whether M. paratuberculosis cells are killed by 
pasteurization, the investigator will develop a strategy for screening 
for the presence of M. paratuberculosis in raw and processed milk. This 
project will establish specific heat treatment parameters for the 
destruction of M. paratuberculosis and develop a rapid detection method 
to improve dairy herd health management.
    Transmission of Listeria monocytogenes in Food Systems, $192,000, 3 
Years, Cornell University, M. Wiedmann (PI). This project is designed 
to better understand the characteristics of different Listeria 
monocytogenes subtypes and to gain a better understanding of which 
specific L. monocytogenes subtypes cause human disease and how these 
types differ from those that cannot cause human disease. The 
investigators will comprehensively characterize L. monocytogenes 
isolates from humans, animals, and foods using both DNA fingerprinting 
methods and methods for evaluating a strain's ability to cause disease. 
This work will ultimately contribute to the development of science-
based food safety regulations that economically meet public health 
needs.
    Modeling Bacterial Pathogen/Biocontrol Competition With Changing 
Temperature, $117,369, 2 Years, USDA-Agricultural Research Service; 
North Carolina State University, F. Breidt (PI). This project will 
develop models for the growth and death of two or more competing 
microorganisms during changing environmental conditions. The computer 
simulations and mathematical models being developed will be used 
primarily as tools to investigate the mechanisms of microbial 
competition. It is hoped that the principles learned in these studies 
can be applied to the prediction and prevention of the growth of 
disease causing bacteria in a variety of foods.
    A Salmonella-based Vaccine to Prevent E. coli O157:H7 Infection in 
Cattle, $200,000, 2 Years, North Carolina State University, S.J. Libby 
(PI). In this study, investigators will use several live, attenuated 
vaccine strains of Salmonella expressing important surface proteins of 
E.coli O157:H7 to vaccinated calves. Vaccination of calves with 
Salmonella strains expressing surface proteins of E.coli O157:H7 will 
engender a mucosal immune response. By stimulating mucosal immunity, it 
is hoped that the E.coli O157:H7 will not have an opportunity to 
colonize the lower bowel of the calves. The reduction or elimination of 
E.coli O157:H7 from these vaccinated animals well be determined. Means 
to significantly reduce or eliminate E.coli O157:H7 from cattle will 
ensure a safer food supply.
    Characterization of Genes Regulating Aflatoxin Biosynthesis, 
$220,000, 3 Years, North Carolina State University, G.A. Payne (PI). 
Aflatoxins are toxic and carcinogenic compounds produced in food by the 
fungus Aspergillus flavus. Contamination often occurs before harvest 
and no effective control procedures are available. The goal of this 
research is to understand the factors that regulate aflatoxin 
biosynthesis such that plant gene products or synthesized compounds can 
be employed to inhibit aflatoxin formation.
    Development and Validation of Instruments to Evaluate Food Safety 
Education, $200,000, 2 Years, The Ohio State University, L. Medeiros 
(PI). Consumer education about the basic principles of food safety is 
an important component of preventing foodborne illnesses. Impact is 
difficult to document because of a lack of valid and reliable 
evaluation instruments. The goal of this project is to develop and 
validate an instrument that is suitable for evaluation of food safety 
educational programs for low-income, low-literacy audiences.
    Optical Biosensor Detection of Food Pathogens Based On Direct 
Measurement of Antibody/Antigen Binding, $180,000, 2 Years, University 
of Rhode Island, A.G. Rand (PI). The demands from consumers for fresh, 
less processed food has increased the need to ensure microbial safety 
of these products. This project provides the opportunity for a 
multidisciplinary effort to create specific biosensors for rapid and 
early detection of pathogen contamination. These devices have the 
potential for specifically selecting food pathogens from among the 
total microbial load within minutes and measuring the concentration as 
real-time analysis on site.
    Evalution of Jenseniin G as a Potential Food Preservative, $90,000, 
2 Years, Clemson University, S. Baker (PI). Bacteriocins, proteins 
produced by some bacteria which kill other bacteria, offer a defense 
against some foodborne pathogens. Currently, nisin is the only approved 
bacteriocin for use in foods in the United States. The development of 
additional bacteriocins for use as food preservatives is needed in the 
event organisms develop resistance to nisin or for use in foods in 
which nisin is ineffective. Jenseniin G, a bacteriocin produced by 
Propionibacterium jensenii, inhibits the outgrowth of the causative 
agent of botulism and is heat and pH stable. The objectives of this 
study are to increase the number of organisms which are sensitive to 
jenseniin G, characterize the mode of action of jenseniin G, and 
produce large amounts of jenseniin G.
    Mechanism of Pathogen Survival During Microwave Thermalization, 
$123,000, 2 Years, Virginia Polytechnic Institute & State University, 
J. Eifert (PI). It has been reported that microorganisms are more 
likely to survive in foods cooked using microwaves than foods cooked 
using conventional methods. This project will determine the mechanism 
of microorganism survival during microwave heating; determine the role 
of fat in the food product on inactivation of the microorganisms; study 
the effect of the presence or absence of steam on inactivation of the 
microorganisms; and develop mathematical models to describe the cooking 
process in the microwave oven in the presence or absence of steam. This 
research will result in procedures that can be used to develop 
microwave-heating procedures that will increase food safety.
    Molecular Characterization of the Campylobacter jejuni Adhesin to 
Fibronectin, $195,000, 3 Years. Washington State University, M.E. 
Konkel (PI). The ultimate goal of this study is to develop intervention 
and control methods to reduce the number of cases of human 
campylobacteriosis caused by Campylobacter jejuni and Campylobacter 
coli. Most cases of campylobacteriosis are sporadic in nature, 
resulting from the consumption of Campylobacter-contaminated chicken, 
unpasteurized milk, and unchlorinated water. The proteins that mediate 
the binding of C. jejuni to host cells are termed adhesins. The goal of 
this project is to further characterize one C. jejuni adhesin termed 
CadF, for Campylobacter adhesin to fibronectin. CadF may be useful as a 
vaccine candidate.
1998 Awards, ensuring food safety:
    Rapid Detection of Brevetoxin and Ciguatoxin Using Recombinant Na+ 
Channels, $90,000, 2 Years, University of South Alabama College of 
Medicine, S.D. Critz (PI). Contamination of shellfish by a marine toxin 
known as brevetoxin periodically threatens the health and safety of 
seafood consumers. This proposal will develop rapid and sensitive 
methods to test for brevetoxin and ensure seafood product safety.
    Role of Putative Pathogenicity Island in Campylobacter jejuni 
Virulence, $190,000, 3 Years, University of Arizona, L.A. Joens (PI). 
The goal of this study is to evaluate genes contained within a putative 
pathogenicity island in C. jejuni for their role in virulence. Genes 
within this island may be influential in defining the pathogenicity of 
the agent that will lead to control measures for decreasing the 
incidence of campylobacteriosis.
    Strategies to Eliminate and Prevent Microbial Contamination of Food 
Products, $70,000, 1 Year, University of Arkansas for Medical Science, 
C.M. Compadre (PI). The ultimate goal of this research is to develop 
effective methods to control, eliminate, and prevent microbial 
contamination of food products. The specific aims of this project are: 
to determine the effectiveness of the chemical cetylpyridinium chloride 
for decontamination of fresh fruits and vegetables.
    Bacteria for Competitive Exclusion of Salmonella enterica Species 
in Chickens, $185,000, 3 Years, University of Delaware, R.D. Joerger. 
The community of bacteria inhabiting the intestinal tract can prevent 
or impede the establishment of undesirable bacteria such as Salmonella 
enterica subspecies. The goal of the proposed research is to identify 
and isolate bacteria from the intestinal tract of chickens and to 
eventually test their effectiveness in reducing colonization of young 
chicks with Salmonella.
    Fluorescence-Based Chemical Sensor for Saxitoxin, $95,000, 2 Years, 
University of Miami, R.W. Gawley (PI). Saxitoxin is the primary 
constituent of the paralytic shellfish poisons. The investigators have 
discovered a molecular receptor that ``signals'' the presence of 
saxitoxin in solution by emitting light. The goal of this study is to 
begin the development of a photochemical sensor for the presence of 
saxitoxin which could be used to detect contamination of shellfish 
beds.
    Defining Genomic Sequences Specific to Virulent Vibrio vulnificus 
Strains to Assess Risk, $90,000, 1 Year, University of Florida, P.A. 
Gulig (PI). Currently, there is no practical test to determine if 
seafood products contain hazardous strains of Vibrio vulnificus. The 
goal of this study is to define DNA sequences specific to virulent 
strains and to develop simple DNA probe test(s) that can be used by 
industry and public health organizations to assess risk.
    Regulation of Lipopolysaccharide Micro Heterogeneity, $125,000, 2 
Years, USDA Agricultural Research Service, J. Guard-Petter (PI). This 
study is directed towards understanding the genetic changes that result 
in strain variation in the Salmonella enterica serovar Enteritidis--SE. 
Strain variation will be measured by the ability of strains to generate 
particular lipopolysaccharide structures while maintaining accelerated 
growth. This work will lead to a better understanding of environmental 
conditions that favor outgrowth of new strains of SE.
    Mechanism for Inactivation of Microorganisms by High Oxidation 
Potential Water, $120,000, 2 Years, University of Georgia, U.C. Hung 
(PI). High oxidation potential--HOP--water has been reported to have 
strong bactericidal effect on most pathogenic bacteria. The overall 
objective of this project is to study the fundamental principles 
involved in the inactivation of food microorganisms with HOP water. The 
application of this technology will ensure food safety at reduced cost, 
high food quality, and reduced danger from foodborne illness.
    Screening Corn for Resistance to Aspergillus flavus and Aflatoxin 
Accumulation, $100,000, 2 Years, Southern Illinois University, J.S. 
Russin (PI). Two traits in corn genotypes will be used to identify 
potential sources of resistance to Aspergillus flavus. Genotypes that 
exhibit these traits will be evaluated for resistance in field trials. 
Those that show resistance will be examined for the mechanism of 
resistance.
    Listeria monocytogenes: Ozone Inactivation, $95,000, 2 Years, 
University of Illinois, S.E. Martin (PI). The objectives of this study 
are to examine the effects of ozone on the pathogen Listeria 
monocytogenes. Ozone has recently been recommended for approval as 
Generally Recognized As Safe in food production. This study will 
determine important parameters of ozone-induced injury and death of L. 
monocytogenes in a food product--cabbage.
    Persistence of Salmonella typhimurium in Swine, $240,000, 3 Years, 
University of Illinois, R.E. Isaacson (PI). Salmonella typhimurium is 
one of the major causes of salmonellosis in humans. Pigs persistently 
infected with S. typhimurium are one of the major reservoirs of this 
pathogen. One means to reduce the risk of foodborne infections caused 
by S. typhimurium is to prevent pigs from becoming persistently 
infected. This project is designed to understand the mechanisms 
promoting persistent infections.
    Analysis of the Osmotic Regulation of Thermotolerance in Salmonella 
and E. coli O157:H7, $185,000, 3 Years, Purdue University, L. Csonka 
(PI). The investigators have found that betaine, which is found at high 
levels in edible plants such as spinach and cereal grains, blocks the 
ability of salt additives to increase the heat tolerance of bacteria. 
This project will carry out a comprehensive characterization of all 
available structural relatives of betaine for their ability to 
counteract the induction of increased thermotolerance by salt additives 
in food pathogenic bacteria. This procedure may uncover new food 
additives that might be used to increase the efficacy of thermal 
inactivation in food contaminating bacteria.
    Molecular Biology of Aflatoxin Biosynthesis in Aspergillus flavus, 
$160,000, 2 Years, Purdue University, C.P. Woloshuk (PI). Aflatoxins, 
produced by the fungus Aspergillus flavus, are toxic and carcinogenic 
compounds contaminating a variety of food products. This research 
project will investigate an unusual mutation in A. flavus to determine 
the mechanism responsible for the suppression of aflatoxin 
biosynthesis. This research will impact agriculture by furthering our 
understanding about the regulation of aflatoxin biosynthesis and 
contribute information leading to development of new strategies for 
eliminating aflatoxin contamination.
    Modeling Food Fluctuating Microbial Populations and Their Aperiodic 
Outbursts, $90,000, 2 Years, University of Massachusetts, M. Peleg 
(PI). This project will analyze the pattern of fluctuation of the 
number of microorganisms in food products and will use mathematical 
models and statistical methods to estimate the probability of 
occurrence of an outburst of unusually high numbers which could be 
considered a safety problem. These calculated probabilities can then be 
used as an indication of an impending microbial outbreak, and a s a 
tool to assess the efficacy of preventive methods in reducing the risk 
of foodborne illness.
    Genomic Analysis of Escherichia coli O157:H7 Populations from 
Cattle and Humans, $150,000, 2 Years, University of Nebraska, A.K. 
Benson (PI). The investigators have developed a powerful technique, 
termed high-resolution genotyping, that permits identification of even 
minor genetic differences between different E. coli O157:H7 strains. In 
the study, they will develop a database for rigorous assessment of 
isolates to identify genetic differences that may be related to 
persistence--strains that can be repeatedly isolated from a given herd 
of cattle over time. Ultimately, the results may provide a basis for 
understanding the impact of herd management practices on the population 
structure of E. coli O157:H7.
    Antimicrobial Use and Emerging Resistence of Salmonella typhimurium 
in Dairy Cattle, $120,000, 2 Years, Cornell University, L.D. Warnick 
(PI). This project investigates the effect of antibiotic treatment of 
clinical salmonellosis in dairy cattle on the occurrence of antibiotic-
resistant Salmonella typhimurium, a major animal and human pathogen. 
This will be done by identifying dairy herds with S. typhimurium-
infected cattle based on diagnostic laboratory culture results, 
obtaining antibiotic treatment information from farm records, and 
collecting fecal samples from cattle on the farm for Salmonella 
isolation and determination of resistance patterns. The study results 
will provide valuable information on the emergence of antibiotic-
resistant Salmonella typhimurium and specific drug-use practices which 
are associated with resistance.
    Identification of Human Enteric Viruses in Foods and Foodborne 
Disease Outbreaks, $140,000. 2 Years, North Carolina State University, 
L. Jaykus (PI). The purpose of this research is to refine molecular 
methods to detect human enteric viruses from foods and to further 
develop approaches for the investigation of outbreaks of foodborne 
viral disease. The successful completion of this project will provide 
rapid and economical methods for the detection of viral contamination 
of foods and the investigation of foodborne viral disease outbreaks. 
These benefits will ultimately improve the safety of food products, 
protect public health, and minimize financial losses due to viral 
contamination of foods.
    Stress-Induced Resistance to High Pressure in Listeria 
monocytogenes and Escherichia coli O157:H7, $90,000, 2 Years, The Ohio 
State University, A.E. Yousef (PI). High pressure processing is a 
novel, non-thermal technique for inactivating pathogens in food by the 
application of extremely high pressures. Since heat is not used in the 
process, negligible flavor and nutrient changes occur as a result of 
the high pressure treatment. Pathogenic bacteria are more likely to 
survive during food processing if they were exposed to conditions that 
make them resistant to preservation methods. This project will identify 
the potential causes for increased resistance of pathogens to pressure. 
The outcome of this project will help food manufacturers develop 
strategies to overcome and eliminate stress-adaptation in foodborne 
pathogens.
    The Molecular Epidemiology of Clostridium perfringens Type A Food 
Poisoning, $160,000, 2 Years, University of Pittsburgh, B.A. McClane 
(PI). Clostridium perfringens type A food poisoning is a common 
foodborne disease in the U.S. The diarrhetic and cramping symptoms of 
this illness are caused by C. perfringens enterotoxin--CPE. This 
project will evaluate four possible explanations for the strong 
association between chromosomal CPE isolates and food poisoning. These 
studies will improve the safety of the American food supply by 
distinguishing whether only chromosomal CPE isolates are able to cause 
food poisoning, or if isolates carrying an extrachromosomal CPE can be 
converted, by food-related stress, into chromosomal CPE isolates.
    Inactivation of Foodborne Pathogens Exposed to a Uniform Flow 
Discharge Plasma, $71,442, 1 Year, University of Tennessee, D.A. Golden 
(PI). The overall objective of this research is to evaluate the 
efficacy of a One Atmosphere Uniform Glow Discharge Plasma--OAUGDP--for 
its ability to destroy foodborne pathogens. The OAUGDP is a newly-
invented form of electron discharge which generates a uniform glow 
discharge plasma in atmospheres of various gases such as helium, carbon 
dioxide, and most importantly, air. The OAUGDP unit has the potential 
to be adapted as an in-line process suitable for application as a 
mechanism of pasteurizing foods and controlling foodborne pathogens.
    Sporulation Control of Enterotoxin Synthesis in Clostridium 
perfringens, $130,000, 2 Years, University of Tennessee. S.B. Melville 
(PI). Clostridium perfringens is a common source of food poisoning in 
humans. The ability of C. perfringens to produce a heat resistant spore 
not only leads directly to the production of enterotoxin, but also 
leads to increased outbreaks of the disease. Often, foods are prepared 
at high enough temperatures to kill vegetative cells, but not spores. 
The purpose of this study is to determine how the sporulation process 
regulated enterotoxin protein gene expression. Information about how 
heat-resistant spores and enterotoxin are produced by the cell can be 
used to develop better food handling procedures to reduce the incidence 
of this very common disease.
    Novel Antimicrobial Systems for Control of Foodborne Pathogens, 
$90,000, 2 Years. University of Wisconsin, E.A. Johnson (PI). In the 
presence of low concentrations of the food-approved flavorants 
nerolidol and farnesol, microorganisms are inhibited by markedly lower 
doses of certain antimicrobial agents and antibiotics. These compounds 
are derived from natural plant sources. In this study sensitization by 
flavorants and inactivation of foodborne pathogens will be 
investigated. The successful completion of this project will provide 
novel elimination and sanitation technologies to reduce the risk of 
foodborne disease from foods and food contact surfaces.
    DNA-Binding Proteins CspE and Dps Protect DNA at Low pH in 
Escherichia coli O157:H7, $115,000, 2 Years, University of Wisconsin, 
C.W. Kaspar (PI). It is hypothesized that acid tolerance of Escherichia 
coli O157:H7 is a contributing factor to the low-infectious dose noted 
for this human pathogen. Because DNA is sensitive to acidic--low pH--
environments and survival is dependent upon its protection, the goal of 
this project is to define the contributions of specific regulated 
proteins, known as CspE and Dps, to DNA proection in low pH 
environments such as foods and gastric fluid. Results from this study 
will provide industry and public health agencies with the much needed 
data to further refine strategies for control, identify areas of risk, 
and add to the scientific knowledge on the survival of E. coli O157:H7.
1997 Awards, ensuring food safety:
    The Role of Acid Resistance in Escherichia coli O157:H7 
Colonization and Disease, $227,000, 3 Years, University of South 
Alabama, J.W. Foster (PI). A crucial feature of Escherichia coli 
O157:H7 pathogenesis is its ability to withstand stomach acidity. The 
long term goal of this study is to develop new strategies that will 
diminish the infectious character of this pathogen through an 
understanding of the molecular basis of acid resistance in E. coli with 
emphasis on the superior acid resistance of O157:H7.
    Quantitative Viability Assays for Cryptosporidium parvum and 
Giardia lamblia, $44,000, 1 Year, University of California, Davis D.O. 
Cliver (PI). Cryptosporidium parvum and Giardia lamblia are common 
waterborne agents whose potential for transmission via foods is 
increasingly being recognized. The objectives of this study are to 
develop quantitative viability assays for C. parvum and G. lamblia and 
to evaluate the methods in trials of killing the protozoan oocysts or 
cysts by various means pertinent to food safety. The tests will be 
applied in inactivation trials with viable oocysts or cysts in foods of 
interest--e.g., apple juice, shellfish--or in water that might be used 
in food processing.
    Molecular Stress Physiology of Listeria monocytogenes, $113,000, 2 
Years, Illinois State University, B.J. Wilkinson (PI). This study will 
look at the underlying mechanisms involved that permit Listeria 
monocytogenes to grow at low temperatures. The investigators will 
attempt to identify novel genes and proteins involved in growth at low 
temperatures. It is hoped that these studies will provide the 
scientific basis that will lead to novel methods of control of Listeria 
and improved methods of detection of the organism.
    Detoxification of Fumonisin by a Simple Fructose Reaction in Corn 
for Food, $110,000, 2 Years, Iowa State University, S. Hendrich (PI). A 
suspected cancer-causing agent in humans, fumonisin B1--FB1--requires 
its amine group, a simple nitrogen-containing portion of the molecule, 
for its toxic action. Reacting this amine with simple sugars, such as 
fructose, is likely to block fB1 toxicity. The objectives of this study 
are to determine the toxicity of fructose-fB1 products in feeding 
studies in pigs and rats and to determine the processing conditions for 
the reactions of fructose and glucose with fumonisin to occur in corn-
based foods. These studies may provide a practical approach to the 
problem of natural toxins, increasing the safety of the food supply by 
detoxifying a natural toxin that occurs in corn everywhere.
    Salmonella enteritidis Heterophil Resistance, $164,000. 3 Years, 
Iowa State University, T.T. Kramer (PI). The investigators have 
isolated two less virulent Salmonella enteritidis--SE--mutants which 
are only briefly shed by infected chickens, are effective in protecting 
birds against virulent challenge, and prevent egg transmission of 
virulent SE. In this study, they will use these mutants to study the 
molecular basis of SE virulence and to identify genes involved in 
immune cell resistance so that safer vaccines can be developed.
    Extracellular Sporulation Signals of Clostridium perfringens, 
$148,000, 3 Years, University of Massachusetts, R. Labbe (PI). 
Clostridium perfringens is a leading cause of human foodborne illness 
in the U.S. This organism produces heat resistant spores. An 
enterotoxin is produced by some strains during sporulation and 
therefore the sequence of events leading to spore formation are 
especially important. The investigators have identified a sporulation 
factor produced by both enterotoxin-positive and negative strains which 
stimulate the onset of sporulation and enterotoxin formation by this 
organism. In this study they will develop conditions to optimize the 
levels of this factor and then attempt to isolate and characterize it.
    Enhanced Green Fluorescent Protein Expression in Escherichia coli 
to Study Adherence to Meat, $92,000, 2 Years, University of 
Massachusetts, L.S. McLandsborough (PI). This study will develop a 
microscopic experimental system that will investigate bacterial 
adhesion to meat surfaces at the cellular level. Knowledge of the 
interaction between bacterial and meat surfaces will lead to improved 
methods of detection and meat decontamination.
    Detection and Analysis of Staphylococcus aureus Enterotoxin A in 
Food, $133,000, 2 Years, Johns Hopkins University, L. Rasooly (PI). The 
goal of this project is to increase food safety by developing the next 
generation of detection and analysis methodology for bacterial toxins 
in food, using Staphylococcus aureus enterotoxin A--SEA--as a model. 
The project aims to develop two technologies: a cell culture based 
assay of SEA activity and biosensor methodology for immediate automated 
detection of SEA in food. Biosensor technology represents a new 
approach to food safety analyis: real-time analysis.
    Intimin: Candidate for an Escherichia coli O157:H7 Anti-
Transmission Vaccine, $232,456, 3 Years, Uniformed Services University 
of the Health Sciences, A.D. O'Brien (PI). Most cases of 
enterohemorrhagic Escherichia coli O157:H7--EHEC--disease have occurred 
after ingestion of undercooked, contaminated ground beef. Cattle are 
reported to be asymptomatically infected with the organims. EHEC have 
been shown to adhere to the intestinal epithelium of neonatal calves 
via a bacterial surface protein called intimin. The long-term goal of 
this project is to develop an inexpensive vaccine to prevent cattle 
from becoming infected with EHEC, and thus prevent transmission from 
cattle to humans.
    Survival and Virulence of Enterohemorrhagic Escherichia coli as 
Affected by pH and Water Activity, $87,000, 2 Years, University of 
Maryland, J. Meng (PI). A variety of foods have been implicated in 
Escherichia coli O157:H7 outbreaks, particularly foods of bovine 
origin. Certain foods such as apple cider and dry-cured salami that 
were considered safe and are generally not heated before consumption 
have been identified as transmitting vehicles in E. coli O157:H7 
outbreaks. Unlike O157:H7, most of the non-O157 EHEC serotypes have 
been isolated from sporadic cases, hence, the significance of food as a 
vehicle for transmitting non-O157 EHEC is not clear. This project will 
study survival of EHEC strains--mainly non-O157:H7--as affected by pH 
and water activity and virulence of EHEC strains as affected by pH and 
water activity.
    Symposia on Microbial Foodborne Hazards--Basic Research/Industry/
Regulatory Concerns, $6,000, 1 Year, U.S. Food and Drug Administration, 
V.K. Bunning (PI). The Food Microbiology Research Conference--FMRC--
focuses on the presentation of basic/applied research by scientists 
within academia, government, and industry. The FMRC meets every two 
years to advance knowledge and understanding in the area of food 
microbiology.
    Recombinant Antibodies to Natural Toxicants, $116,000, 2 Years, 
Michigan State University, J.J. Pestka (PI). This project seeks to 
genetically engineer novel antibodies to an important group of natural 
toxins known as the Fusarium mycotoxins which commonly contaminate 
wheat, corn, rice, and barley. From the perspective of food safety, the 
general approaches developed in this research will be amenable to 
improved detection of natural toxicants, chemical contaminants as well 
as bacterial pathogens and their toxins.
    Adhesins for Colonization of Chickens & Their Use in Preventive of 
Salmonellosis, $156,000, 3 Years, Washington University, R. Curtiss III 
(PI). The long-term objective of this study is to reduce or eliminate 
Salmonella colonization of poultry, which would in turn result in a 
reduction in the shedding of Salmonella in feces, its transmission to 
eggs, and the cross-contamination which occurs during processing. An 
understanding of the mechanism of Salmonella adherence to chicken cells 
could be particularly valuable when developing strategies to eliminate 
Salmonella contamination of poultry.
    Incidence and Fate of Moniliformin in Corn and Heat Processed Corn 
Products, $97,000, 2 Years, University of Nebraska, L.B. Bullerman 
(PI). Moniliformin is a highly toxic substance produced by Fusarium 
proliferatum and Fusarium sublutinans, molds commonly found on corn. 
The overall objective of this study is to determine the incidence and 
levels of moniliformin in U.S. corn and corn-based foods and the 
effects of heat, as applied in basic thermal processing of corn, on the 
stability of moniliformin.
    Modeling the Interactions of Pathogenic and Biocontrol Bacteria for 
Applications in Foods, $86,000, 2 Years, USDA-Agricultural Research 
Service, F. Breidt (PI). The objective of this research is to develop a 
safe method for preventing the growth of pathogenic bacteria in 
minimally processed, refrigerated foods. A biocontrol strategy will be 
sued which involves bacterial competition to accomplish this task. 
Lactic acid bacteria which are commonly used in various food 
fermentations--dairy, meat, vegetables--will be added as biocontrol 
agents to prevent the growth of pathogenic bacteria in minimally 
processed foods.
    Salmonella in Modern Swine Production Systems. Risk Factors for 
Fecal Shedding by Finished Pigs, $241,000, 3 Years, North Carolina 
State University, P.R. Davies (PI). Specific objectives of this project 
are to determine risk factors for Salmonella prevalence in finishing 
pigs raised on slotted concrete floors in barns managed all-in/all-out, 
withing multiple-site production systems and the relative importance of 
Salmonella infection in nurseries or the finishing environment as 
determinants of Salmonella infection in finishing hogs. The information 
obtained will be relevant to a large and increasing segment of the 
national swine industry and will aid in defining the most efficient 
options for reducing Salmonella in the pork supply.
    Experimental Campylobacter Vaccine, $138,000, 2 Years, University 
of Pennsylvania, I. Nachamkin (PI). Campylobacter jejuni is a major 
cause of gastrointestinal infection in humans. The goal of this study 
is to assess the ability of previously developed Campylobacter vaccines 
to confect cross protection with different flagella types of C. jejuni, 
determine the minimal amount of time needed post-immunization to confer 
protective immunity, determine the minimal C. jejuni challenge dose in 
which complete protection occurs, determine whether the bivalent 
vaccine confers protection against Salmonella infection, and determine 
the smallest flagellin fragment that can elicit protective immunity.
    Food Pathogen Biosensors for Rapid Safety Measurements of Meat, 
$96,205, 2 Years, University of Rhode Island, A.G. Rand (PI). Classical 
procedures for the detection of microbial pathogens in meats are slow 
and labor intensive. Rapid methods currently available are either 
complex, require potentially hazardous and expensive materials, or 
utilize a pre-enrichment step of 18-24 hours to grow enough cells for 
detection. This project will establish that biosensors employing 
immobilized antibodies specific for meat pathogens can be successfully 
utilized for biomonitoring of contamination in food products.
    Salmonella typhimurium Genes Required for Systemic Infection of 
Cattle, $90,000, 2 Years, Texas A & M University, R.M. Tsolis (PI). 
Little is known about genes allowing Salmonella typhimurium to cause 
systemic infection in cattle, an important meat source in the U.S. 
Since systemic infection can lead to a chronic carrier state, 
information about the mechanisms used by S. typhimurium to establish 
systemic infection is relevant to development of strategies to 
eliminate this pathogen from cattle. The goals of this project are the 
identification and characterization of bacterial genes which enable S. 
typhimurium to cause systemic infection in cattle.
    Fumonisins: Immunology, Genetics and Enzymology, $129,897, 2 Years, 
University of Wisconsin, F.S. Chu (PI). Using mutant cultures and a 
combination of immunochemical and chemical methods, the investigators 
will identify the major steps, intermediates, and enzymes involved in 
the biosynthesis of fumonisins. The methodology developed in the 
proposed work could be used for further studies of the conditions 
conducive to the formation of fumonisins in the field and during 
storage.

              REGIONAL CROP INFORMATION AND POLICY CENTERS

    Question. The President proposes first-time funding of $1,500,000 
for Regional Crop Information and Policy Centers program. Please 
explain why this new program is needed and why the goals of this 
program can't be fulfilled by other existing programs, and identify 
where each of the proposed Centers will be located.
    Answer. USDA has placed a high priority on the establishment of 
regionally-based Pest Management Center(s) as a means of strengthening 
its connection with production agriculture, research and extension 
programs, and agricultural stakeholders throughout the United States. 
Since passage of the Food Quality Protection Act--FQPA--in 1996, USDA 
and the Environmental Protection Agency--EPA--have recognized the need 
for a pest management information network that can quickly respond to 
information needs of the public and private sectors. When fully 
functional, Pest Management Centers will help agricultural producers, 
USDA, and its partner institutions identify, prioritize, and coordinate 
a national pest management research, extension, and education program 
implemented on a regional basis. The intent of the Center concept is to 
bring to the region a new level of coordination and stakeholder input 
to Federal and state pest management programs and activities. This 
effort will be directed toward coordinating expertise and resources 
located at colleges and universities throughout a multi-state region. 
The exact location of each of the centers will be determined by a 
competitive grants process. Criteria for selection includes: (1) the 
expertise present at site; (2) documentation of the ability to 
accomplish the Center objectives; (3) the ability to provide leadership 
to form a broad-based regional information network; (4) the ability to 
foster research, extension and education collaborations, 
interdisciplinary teams, and inter-institutional partnerships; (5) the 
adequacy, professional training and experience of Center staff; (6) 
evidence that stakeholders were consulted during proposal preparation 
and will participate in the operation of the Center; (7) the ability to 
establish partnerships with stakeholders to accomplish Center 
objectives; and (8) institutional support for the Center and a budget 
reflective of the Center objectives.

                           1994 INSTITUTIONS

    Question. Why does this budget propose to support infrastructure 
enhancement at the 1994 Institutions through an increase in the annual 
contribution into the endowment rather than through a separate line-
item in the budget?
    Answer. The critical need for infrastructure support at the 1994 
Institutions is well documented. While the purpose of the endowment 
fund is to support educationally related activities, often the 
classrooms and laboratories at the 1994 Institutions are in poor and 
unsafe condition. By providing the 1994 Institutions with a stable 
funding source for improving their educational facilities, college 
administrators will be more effective in planning institutional needs. 
This will create a better educational environment for both students and 
faculty and allow the 1994 Institutions to be more effective partners 
in the Land Grant community. Each 1994 Institution will be able to 
determine if its priority needs are educational activities or in 
infrastructure to support those educational activities, and be able to 
plan accordingly.

                      NATIONAL RESEARCH INITIATIVE

    Question. Is there a need in your view to establish better 
accountability measures of agricultural research outcomes for the 
National Research Initiative projects and other federally-funded 
agricultural research? I understand that NRI, for example, has no 
systematic documentation of accomplishments from past funded research. 
It has been suggested that competitively awarded ``evaluation grants'' 
might be one way to address this. Do you agree?
    Answer. While accountability for programs such as the National 
Research Initiative--NRI always could be improved, the NRI does 
systematically document accomplishments from funded research. Each 
awardee is required to produce annual and final technical reports. In 
addition, one of the most rigorous accountability measures for NRI 
supported projects is the renewal of the project. For a project to 
renew, it must go through a peer review and be analyzed by a panel of 
experts as to its accomplishments, its progress towards meeting its 
original stated goals, and its proposed work for the next funding 
increment. To renew, the project must also compete against other 
renewals and new projects. This systematic analysis of the supported 
research provides one of the most rigorous accountability measures 
possible.
    The NRI could better its accountability, not on a project by 
project basis, but on a program basis. This year as a pilot project, 
the NRI is using experts to assess the value of previously supported 
projects, what has resulted from these projects, and the state of the 
science in the Markets and Trade program area. While this is a pilot 
program, CSREES expects that valuable information will be produced and 
such an analysis could serve as a foundation for further programmatic 
evaluations. However, such an evaluation is costly and with the many 
programs within the NRI and elsewhere, it would be cost-prohibited to 
plan such an exercise for each and every program. Evaluation grants 
might offer an opportunity for this, however, additional funds should 
be provided for such purposes since the existing funding level for the 
NRI only allows support of about 20 percent of all submitted projects.

              SMITH-LEVER 3(D) FARM SAFETY AND AGRABILITY

    Question. The Administration again proposes to eliminate Smith-
Lever 3(d) farm safety funds and funding for the AgrAbility program 
after the Administration rescinded nearly $600,000 in fiscal year 2000 
appropriations provided for these programs. Why does the Administration 
propose to eliminate funding for these programs?
    Answer. This action is consistent with the Administration's belief 
that the most effective use of taxpayer dollars is through 
competitively-awarded, peer reviewed grants. Alternate funding from 
formula programs, State and local governments, and private sources 
could be used to support aspects of this program deemed to be of high 
priority at State and/or local levels. However, a new Youth Farm Safety 
Education and Certification program is proposed for $5.0 million in 
fiscal year 2001.

             YOUTH FARM SAFETY EDUCATION AND CERTIFICATION

    Question. A new program named Youth Farm Safety Education and 
Certification is proposed to be established with a funding level of $5 
million. Please describe this new program in detail (who would be 
eligible for the program, how funds will be awarded, and what 
activities will be funded, etc.). Also, how is this proposed new 
program different from the Smith-Lever 3(d) farm safety and AgrAbility 
programs the Administration proposes to eliminate?
    Answer. The Fair Labor Standards Act and selected state laws allow 
child agriculture workers to work at younger ages, for longer hours, 
and in more hazardous occupations than in other industries. Minors 16 
and 17 years of age are exempt from prohibitions on work in hazardous 
occupations identified by the Secretary of Labor, and 14 and 15 year 
old children are exempt from the hazardous occupation restriction if 
they possess a valid certificate documenting completion of safety 
training for tractor operation or other machine operation. This new 
Youth Farm Safety Education and Certification Initiative would 
establish a USDA-administered competitive grants program to states to 
provide formal safety training and certification targeted to youth age 
16-17 years. These grants would also be used for related purposes such 
as curriculum improvement for current safety programs and development 
of new safety education curricula for other agricultural occupations as 
needed. The initiative would provide funds to land-grant institutions 
in order to contract with qualified private businesses and community 
and youth organizations to deliver education and training, such as 4-H, 
Future Farmers of America, and other similar organizations that would 
provide safety education that prepares youth for safety certification.
    This initiative is intended to augment state and local vocational 
agriculture school funds for safety training by agricultural employers 
and other private businesses, and is intended to enhance the safety of 
young farm workers, while maintaining their employability in 
agriculture and minimizing disruptions to farm employers' access to 
youth workers.
    The Youth Farm Safety Education and Certification program supports 
specific formal training that is required by the Fair Labor Standards 
Act while the current Farm Safety program provides limited support for 
an Extension program developed by State or Territory Extension 
specialists that addresses a wide range of farm safety program needs 
identified by these specialists. The AgrAbility program is designed to 
assist farmers with disabilities to stay in farming.
    No Federal funds have been appropriated to support the current 
certification training required by the Fair Labor Standards Act for 14-
15 year olds. Thus, State Extension programs have struggled to find the 
resources to provide the training, keep training materials current, and 
conduct evaluations of the training.
                           1890 institutions
    Question. Provide a list, by 1890 institution, of the renovation 
and construction projects funded in fiscal year 1998 and fiscal year 
1999, the funds provided for each, and the amount required in future 
years to complete the project.
    Answer. Awards are made for the acquisition and improvement of 
agricultural and food sciences facilities and equipment, including 
libraries, so that the 1890 Land-Grant Insitutions and Tuskegee 
University may participate fully in the production of human capital in 
the food and agricultural sciences. These activities are ongoing and 
are proposed in a five-year plan of work. The first table indicates the 
past, current, and proposed appropriations to complete activities under 
the current five-year plan of work starting in fiscal year 1998. The 
second table is a chart which provides the progress to date on each of 
these projects, as well as the plans for each facility in fiscal year 
2000.

                                                                     1890 FACILITIES
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                            Fiscal Year
                                                         --------------------------------------------------------------------------------      Total
                                                               1998            1999            2000            2001            2002
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.................................................        $403,755        $449,013        $666,710        $666,710        $666,710      $2,852,898
Tuskegee................................................         403,755         449,013         666,710         666,710         666,710       2,852,898
Arkansas................................................         387,818         430,036         658,969         658,969         658,969       2,794,761
Delaware................................................         310,482         337,479         621,209         621,209         621,209       2,511,588
Florida.................................................         408,640         454,830         669,083         669,083         669,083       2,870,719
Fort Valley.............................................         448,874         502,734         688,627         688,627         688,627       3,017,489
Kentucky................................................         497,465         560,587         712,229         712,229         712,229       3,194,739
Southern................................................         379,624         420,281         654,989         654,989         654,989       2,764,872
Maryland................................................         356,775         393,076         643,890         643,890         643,890       2,681,521
Alcorn..................................................         392,395         435,487         661,192         661,192         661,192       2,811,458
Lincoln.................................................         495,381         558,109         711,217         711,217         711,217       3,187,141
North Carolina..........................................         511,065         576,736         718,817         718,817         718,817       3,244,252
Langston................................................         399,604         444,071         664,694         664,694         664,694       2,837,757
South Carolina..........................................         394,830         438,385         662,374         662,374         662,374       2,820,337
Tennessee State.........................................         455,003         510,031         691,604         691,604         691,604       3,039,846
Prairie View............................................         570,689         647,775         747,798         747,798         747,798       3,461,858
Virginia State..........................................         430,885         481,317         679,888         679,888         679,888       2,951,866
                                                         -----------------------------------------------------------------------------------------------
      Subtotal..........................................       7,247,040       8,088,960      11,520,000      11,520,000      11,520,000      49,896,000
                                                         ===============================================================================================
Federal Admin...........................................         301,960         337,040         480,000         480,000         480,000       2,079,000
                                                         ===============================================================================================
      Total.............................................       7,549,000       8,426,000      12,000,000      12,000,000      12,000,000      51,975,000
--------------------------------------------------------------------------------------------------------------------------------------------------------


               1890 FACILITIES PROGRAM SUMMARY OF PROGRESS
                      [Fiscal years 1999 and 2000]
------------------------------------------------------------------------
           Institution                   1999                2000
------------------------------------------------------------------------
Alabama A&M University Normal,    Develop             Enhance teaching
 Alabama.                          specifications      facilities for
                                   and bid requests    academic units in
                                   for connectivity    family, consumer
                                   of Interactive      and food
                                   Video Center and    sciences.
                                   Mobile Video       Establish a multi-
                                   Conference          media laboratory
                                   Laboratory.         to enhance
                                  Select architect     instruction and
                                   for renovation of   research lecture,
                                   teaching and        workshops and
                                   research            seminars.
                                   laboratories.      Initiate the bid
                                  Select architect     process to
                                   for replacement     replace the
                                   of heating and      laboratory and
                                   cooling system      field research
                                   for Hobson Bonner   equipment.
                                   Halls.             Convert extension
                                  Purchase research    laboratories in
                                   equipment.          accommodations
                                  Enhance Extension    for new program
                                   facilities/         efforts.
                                   equipment.
Tuskegee University Tuskegee,     Renovate and
 Alabama.                          upgrade Milbank
                                   Hall.
                                  Renovate and
                                   upgrade the
                                   Vocational
                                   Building as an
                                   Extension
                                   Activity Center.
                                  Upgrade gutters
                                   and repair
                                   Morrison-Mayberry
                                   Hall.
                                  Planning for
                                   improving and
                                   constructing
                                   teaching
                                   facilities.
                                  Renovate the
                                   Vocational
                                   Education
                                   Building.
                                  Construct Safety
                                   and Food
                                   Processing Center.
                                  Purchase equipment
                                   for the Extension
                                   Building.
                                  Complete the
                                   renovation of
                                   Milbank Hall.
                                  Renovate and
                                   convert the
                                   Vocation Building
                                   as an Extension
                                   Activity Center.
                                  Plan for teaching
                                   facilities.
                                  Install and seal
                                   flooring in
                                   Milbank Hall.
                                  Install draining
                                   system in Milbank
                                   Hall.
                                  Replace roof of
                                   the new wing of
                                   the Carver
                                   Research
                                   Foundation
                                   Laboratory.
                                  Acquire land and
                                   plan for rural
                                   tourism and
                                   business
                                   development
                                   laboratory.
                                  Construct Safety
                                   and Food
                                   Processing Center.
University of Arkansas Pine       Site improvements   Design for
 Bluff, Arkansas.                  at the University   renovation of
                                   of Arkansas at      Woodard Hall.
                                   Pine Bluff (UAPB)  Upgrade playground
                                   farm.               at the Child
                                  Support renovation   Development
                                   of Woodard Hall.    Center.
                                  Renovation of       Design of the
                                   Child Development   Child Development
                                   Laboratory.         Center.
                                  Renovate Agronomy   Renovation of
                                   storage building.   Agronomy Storage
                                  Acquire              Building.
                                   replacement farm   Construct an
                                   vehicles.           outdoor pavilion
                                  Purchase GIS         at the Lonoke
                                   survey system       farm site.
                                   equipment.         Purchase
                                  Purchase             instructional,
                                   instructional and   farm and research
                                   audio-visual        equipment.
                                   equipment.
                                  Design of the
                                   Sheep Facility.
                                  Construction of
                                   Fish Processing
                                   and Marketing
                                   Facility.
Delaware State University Dover,  Plan and construct  Construct an
 Delaware.                         a facility for      office,
                                   office,             laboratory and
                                   laboratory and      classroom
                                   classroom space.    building to
                                  Construction of      support the
                                   the herbarium.      research,
                                                       extension and
                                                       academic programs
                                                       and centralize
                                                       the location of
                                                       two academic
                                                       departments of
                                                       the School of
                                                       Agriculture,
                                                       Natural
                                                       Resources, Family
                                                       and Consumer
                                                       Sciences.
                                                      Complete
                                                       construction of
                                                       the herbarium.
Florida A&M University            Acquire land to     Determine
 Tallahassee Florida.              construct a         equipment and
                                   facility for        supplies needed
                                   research,           for the
                                   teaching and        Aquaculture
                                   extension           facility and
                                   aquaculture.        laboratories.
                                  Develop plans and   Develop plans and
                                   specifications      specifications
                                   for Aquaculture     for multi-purpose
                                   facility.           research,
                                                       teaching and
                                                       extension
                                                       facility.
                                                      Purchase computer
                                                       and office
                                                       equipment for
                                                       extension
                                                       offices.
                                                      Acquire materials
                                                       and supplies to
                                                       develop outreach
                                                       Environment
                                                       Science programs.
                                                      Acquire equipment
                                                       and furniture for
                                                       distance learning
                                                       classrooms.
                                                      Develop plans and
                                                       specifications
                                                       for enclosure at
                                                       teleconference
                                                       center.
Fort Valley State University      Plan for the        Construction of
 Fort Valley, Georgia.             construction of     the Family
                                   the Family          Development
                                   Development         Center.
                                   Center.            Acquisition and
                                  Acquire and          installation of
                                   improve             laboratory and
                                   laboratory and      demonstration
                                   demonstration       equipment.
                                   equipment.
Kentucky State University         Development of a    Establishment of a
 Frankfort, Kentucky.              Research,           Resource
                                   Extension and       Technology
                                   Teaching            Center.
                                   Aquaculture Field
                                   Station.
                                  Establishment of
                                   Resource
                                   Technology Center.
Southern University and A&M       Purchase and        Renovate meat
 College Baton Rouge, Louisiana.   install equipment   laboratory.
                                   including animal   Install video
                                   pens, electronic    equipment for
                                   timers, portable    conference
                                   bleachers,          center.
                                   portable panels,   Renovate the
                                   poultry coops.      facility (Pinkie
                                  Purchase a small     Thrift Hall) for
                                   vehicle.            the Division of
                                  Purchase fire and    Family and
                                   sound evacuation,   Consumer
                                   security and        Sciences.
                                   monitoring         Renovate the Meat
                                   systems for the     Processing
                                   Multi-purpose       Laboratory to
                                   Livestock Show      meet health
                                   Arena.              department
                                  Renovate the         standards.
                                   facility (Pinkie   Complete purchases
                                   Thrift Hall) for    and installation
                                   the Division of     of signage,
                                   Family and          equipment and
                                   Consumer Sciences.  furnishings for
                                  Bring the Meat       the Cooperative
                                   Processing          Extension
                                   Laboratory to       Administrative
                                   meet health         Complex and
                                   department          Center for Small
                                   standards.          Farms Research
                                  Plan to construct    and the Arena
                                   a facility to       Complex.
                                   store              Complete landscape
                                   agricultural        design, and
                                   chemicals.          design and
                                  Construct the        construction of
                                   Cooperative         parking lot for
                                   Extension           the Cooperative
                                   Administrative      Extension
                                   Complex and         Complex.
                                   Center for Small
                                   Farms Research
                                   and the Arena
                                   Complex.
University of Maryland Eastern    Design of the       Construction of
 Shore Princess Anne, Maryland.    Plant Science and   the Plant Science
                                   Teaching Research   and Teaching
                                   Facility.           Research
                                  Design of the Food   Facility.
                                   Science and        Construction of
                                   Technology Center.  the Food Science
                                                       and Technology
                                                       Center.
                                                      Purchase equipment
                                                       for the
                                                       Cooperative
                                                       Extension
                                                       facility.
Alcorn State University Lorman,   Planning of Center  Construction of
 MS.                               for                 Center for
                                   Biotechnology.      Biotechnology.
                                  Planning of Center  Planning of Center
                                   for Environmental   for Environmental
                                   Ecology and         Ecology and
                                   Natural Resources.  Natural
                                                       Resources.
                                                      Computer
                                                       Networking.
Lincoln University Jefferson      Renovation of       Continue
 City, MO.                         Bennett Hall.       renovation of
                                                       Bennett Hall.
North Carolina A&T State          Wire and connect    Construct new
 University Greensboro, NC.        offices and         greenhouse and
                                   classrooms in       small horse barn/
                                   Carver Hall to      corral in support
                                   University Fiber    of teaching
                                   Optic Network.      programs in
                                  Install new          horticulture and
                                   lighting,           animal sciences.
                                   ceiling, heating/  Enhance research
                                   air conditioning    capabilities of
                                   and window          Ward Hall in
                                   treatments to       support of multi-
                                   offices,            disciplinary
                                   classrooms, and     research and
                                   auditorium in       graduate
                                   Carver Hall.        education in food
                                  Renovate labs        safety, nutrition
                                   offices, and        and health.
                                   lounge area in     Enhance
                                   Ward Hall and       telecommunication
                                   construct new       s infrastructure
                                   labs and research   and capabilities
                                   areas to support    of research
                                   program             facilities; Ward
                                   activities in       Hall and C. H.
                                   food safety,        Moore Ag Research
                                   nutrition and       Facility and
                                   health.             School of Ag-TV
                                  Purchase             studio.
                                   scientific         Enhance
                                   equipment.          infrastructure of
                                  Wire and connect     research
                                   offices and labs    facilities, both
                                   in Ward Hall.       physical and
                                  Establish            equipment needs,
                                   teleconferencing    used in support
                                   and distance        of research and
                                   education           graduate
                                   capabilities in     education.
                                   Coltrane Hall.     Renovate and
                                                       expand extension
                                                       equipment/storage
                                                       building to
                                                       create bathrooms
                                                       and new offices,
                                                       conference room
                                                       and meeting
                                                       rooms.
Langston University Langston, OK  Construct/renovate  Construct/renovate
                                   Extension/          Research/
                                   Research Complex.   Extension
                                                       Building.
                                                      Construct/renovate
                                                       greenhouse.
                                                      Construct new
                                                       facility to house
                                                       teaching,
                                                       research and
                                                       extension
                                                       programs.
South Carolina State University   Construct/renovate  Construct
 Orangeburg, SC.                   Commercial          commercial dining/
                                   Foodservice         hospitality
                                   Management          facility.
                                   Laboratory.        Continue
                                                       renovation at
                                                       Staley Hall
                                                       auditorium.
                                                      Continue
                                                       renovation at
                                                       R.L. Hurst
                                                       Building.
Tennessee State University        Renovation and      Continue
 Nashville, TN.                    installation of     development of
                                   equipment for a     demonstration
                                   distance learning   areas of distance
                                   center.             learning center.
                                  Purchase            Renovate and
                                   equipment.          upgrade the child
                                                       development
                                                       laboratory.
Prairie View A&M University       Purchase office     Continue to
 Prairie View, TX.                 and audio-visual    purchase office
                                   equipment for the   and audio-visual
                                   Cooperative         equipment for the
                                   Agricultural        CARC.
                                   Research Center    Purchase vehicles
                                   (CARC).             for the CARC.
                                  Construct/renovate  Continue to
                                   H.S. Estelle 4-H    construct H.S.
                                   and Youth Camp.     Estelle 4-H and
                                  Renovate dairy       Youth Camp.
                                   goat center,       Purchase equipment
                                   creamery            for
                                   laboratory, meat    communications
                                   laboratory,         network.
                                   greenhouse, swine  Upgrade
                                   center, feed        communications
                                   mill, poultry       network with new
                                   center, and human   equipment and
                                   nutrition/food      connectivity for
                                   science             satellite video
                                   laboratories..      production.
                                                      Continue
                                                       renovation of
                                                       dairy goat
                                                       center, creamery
                                                       laboratory, meat
                                                       laboratory,
                                                       greenhouse, swine
                                                       center, feed
                                                       mill, poultry
                                                       center, and human
                                                       nutrition/food
                                                       science
                                                       laboratories.
Virginia State University         Further develop     Demolish current
 Petersburg, VA.                   the greenhouse      storage facility
                                   facility.           and construct a
                                  Construct the        new facility.
                                   greenhouse.        Construct a New
                                  Purchase bus.        Farm Service
                                  Procure equipment    Center.
                                   for the Plant      Develop an
                                   Science and         electronic
                                   Animal Science      Classroom.
                                   Labs.
------------------------------------------------------------------------

                  EXTENSION INDIAN RESERVATION PROGRAM

    Question. The administration asks for an increase of over $3 
million for Extension Indian Reservation Agents for fiscal year 2001. 
Are all reservations eligible for this program? How many extension 
agents are currently funded for fiscal year 2000 and at which 
reservations are they located? How many requests for extension agents 
are outstanding? How many agents can be added with this increase?
    Answer. The Extension Indian Reservation Program--EIRP--provides 
Extension agents and links the Land Grant University. The EIRP is 
designed for large reservations--100,000 acres or larger--that preclude 
adequate programming from existing county staffs. Reservations are 
isolated, seldom have industrial development or job opportunities, and 
often have high rates of unemployment, alcoholism, school-dropouts, and 
nutrition-related health problems. Gainful employment opportunities are 
tied to the limited natural resource base--mostly land and water. 
Agriculture is often the only feasible route to gainful employment. 
This program helps reservation residents to make the most of their 
cultural and natural resources in the production of crops and 
livestock; in the development of youth skills, self esteem, and 
educational achievement; in the maintenance of family health and well-
being; and in the achievement of an improved quality of life.
    The Reservation Extension agents help Native Americans to produce 
and market crops, livestock, and timber; to develop quality products to 
overcome isolated sales locations and quality or shipping discounts; to 
develop and exploit niche markets; to develop healthier life styles; to 
develop more nutritious diets; to forestall diabetes--a ubiquitous 
malady in Indians; to develop marketable life-skills; to stay in school 
until graduation; to pursue higher education; and to help themselves. 
There is widespread need for more of these programs that assist new and 
experienced farmers and ranchers; that provide linkages for ``Remote 
Area''--veterinary--Medicine programs on the reservations; and that 
encourage youth to achieve, develop leadership skills, stay in school, 
develop healthy life styles, and to pursue college educations that will 
be helpful to their families and others.
    Developing these skills will enable reservation residents to make 
direct use of their natural and cultural resources, rather than leasing 
them to outsiders and depending upon the Bureau of India Affairs--BIA--
to collect, mishandle, and distribute the receipts; or to depend upon 
welfare programs for sustenance.
    There is a need for about 85 such projects, based on reservation 
numbers and size. To date, only 25 are in operation because there has 
been no funding increase for this program since 1990. There is a 
backlog of 17 applications for this program. Other reservations have 
expressed interest, but have been discouraged from submitting 
applications until additional funding is available. The proposed 
increase to $5 million would allow the program to increase the level of 
support for many of the existing projects, and to add an additional 23 
Reservation agents.
    The present level of funding--$1.71 million, supports EIRP agents--
employees of the State Land-Grant University--on 25 reservations, 
distributed as follows:
    Alaska--1--(Tanana Chiefs Conf)
    Arizona--4--(Navajo [Window Rock], Hopi, San Carlos Apache, 
Colorado River Tribes.)
    Florida--1--(Seminole)
    Idaho--1--(Fort Hall)
    Mississippi--1--(Choctaw)
    Montana--4--(Flathead, Northern Cheyenne, Blackfeet, Ft. Belknap)
    N. Carolina--1--(Cherokee)
    N. Dakota--1--(Fort Berthold)
    New Mexico--3--(Jicarilla Apache, Zuni, Navajo [Shiprock] \1\)
---------------------------------------------------------------------------
    \1\ Administered by the University of Arizona, in cooperation with 
New Mexico State University and the Utah State University.
---------------------------------------------------------------------------
    Nevada--1--(Nevada tribes)
    Oklahoma--1--(Muscogee)
    Oregon--1--(Warm Springs)
    S. Dakota--2--(Pine Ridge, Rosebud)
    Washington--2--(Chehalis, Colville)
    Wyoming--1--(Wind River)
    Under the fiscal year 2001 proposal, the program would actively 
solicit applications for new projects from those reservations that have 
previously applied, and from all other qualified reservations. The 
Inter Tribal Agriculture Council estimates that a total of 86 agents 
are needed to adequately serve such reservations. The proposed increase 
would allow the EIRP to expand to a total of 48 reservation agents.

                      AGRICULTURE IN THE CLASSROOM

    Question. There is an increase in the President's budget that would 
double the funding for Ag in the Classroom. Please provide a brief 
explanation of this program (who qualifies for the funds; what 
activities are funded, etc.) How will the increased funding requested 
for the program be utilized?
    Answer. The Agriculture in the Classroom program is an effective 
vehicle to provide students and educators with accurate information 
about food and agriculture. The program integrates scientifically-valid 
agricultural information into a variety of academic disciplines 
including science, the social sciences, language arts, and mathematics. 
The program reaches over 120,000 teachers annually, impacting over 5 
million students.
    We reach teachers through a variety of activities such as a 
national web site linking State programs and other related agricultural 
projects, national teacher awards honoring outstanding teachers 
incorporating agricultural concepts into their curriculum, annual 
conferences attended by over 300 teachers and educators, and a network 
of State programs coordinated by the National Agriculture in the 
Classroom Consortium. In addition, we seek to make agricultural 
concepts a part of national initiatives such as the Millennium Green.
    In 1999, eight graduate-credit courses were offered throughout 
Missouri to better acquaint 200 teachers with agriculture and 
demonstrate how to integrate some facet of agriculture into the regular 
classroom curriculum. On average, each participating teacher will teach 
10 years, reaching over 50,000 children. Efforts of this nature are 
being replicated across the Nation. For the 1999-2000 school year, the 
Missouri Farm Bureau Foundation for Agriculture is providing $7,500 in 
mini-grants to K-12 teachers who demonstrate ability to enhance student 
knowledge of agriculture. Thirty-nine classrooms will directly benefit 
from this endeavor. Mini-grant programs in each State and territory are 
supporting projects that promote agricultural literacy efforts.
    Ohio's Agriculture in the Classroom program has been successful in 
developing a comprehensive educational kit in conjunction with Ohio 
State University. This kit meets the Ohio's Kindergarten through third 
grade competencies and helps prepare students for their State 
proficiency tests.
    Maryland's Agriculture in the Classroom program has been successful 
in educating teachers, students, and the public about agriculture with 
three Mobile Agriculture in the Classroom Laboratories. The themes for 
the mobile units are ``Aquatic Science,'' ``Agricultural Products,'' 
and the ``Biotechnology and Food Safety.''
    Additional funding would allow the Department and the Agriculture 
in the Classroom community to expand education outreach activities to 
under-represented groups, support regional demonstration projects, 
continue the integration of information technology to lower program 
delivery costs, and increase outstanding teacher recognition 
initiatives.
    Other planned initiatives include the development of materials 
which portray scientifically-accurate and technologically-advanced 
agriculture, dissemination of materials about career opportunities in 
the food and agriculture arena, research and evaluation of program 
components, an expanded network of educators involved in promoting 
agricultural literacy, and strengthened relationships between the 
Agriculture in the Classroom community and our partnering college and 
university systems.
            louisiana and mississippi rural health projects
    Question. Please give the Committee an update on the Louisiana and 
Mississippi rural health projects funded for the last several years.
    Answer. The Nurse Managed Family Health Care Center project 
conducted by Southern University and A&M College is a health promotion 
and disease prevention program for at-risk populations residing in 
rural and inner city neighborhoods in south Louisiana. Quality, cost-
effective, community-based health care services are offered through a 
collaborative practice model where graduate-prepared nurse faculty, 
nursing students, and physicians located in the community health 
outreach centers assist women, children and the elderly in promoting 
self-care health behaviors.
    Since the inception of the program in 1995, 400 nursing students 
have participated in this program. During 1999, in a partnership with 
Head Start, 500 children enrolled in Head Start were able to receive 
all their health screenings through the mobile health unit made 
available in this program. The mobile clinic also visited a rural 
clinic and homeless shelters in inner-city neighborhoods.
    This program continues to expand outreach to underserved 
populations and has been recognized in a number of publications.
    The Mississippi Rural Health Corps is a joint endeavor of the 
state's 15 community and junior colleges and the Mississippi State 
University Cooperative Extension Service. The purpose of the project is 
to improve rural health through the education of Mississippi residents 
and the training of health care professionals in rural practice. Loans 
have been made to 608 students enrolled in nursing and allied health 
professional courses. Of the 608 loans, 246 were awarded to students in 
an associate degree nursing program, 140 went to those in licensed 
practical nursing programs, with the remainder awarded to students in 
allied health professional programs. Four loans assisted nursing 
faculty to pursue advanced degrees.
    During 1999, 362 Corps students graduated. Since the inception of 
the program, 1,827 loan recipients have graduated. Each makes a 
commitment to practice for up to a maximum of three years in a rural 
setting.
    Other examples of the breadth of the outreach include the 
following: two nursing courses, one nutrition course, and three health 
seminars which were delivered to 17 locations throughout the state in 
1999. Extension agents reached over 60,000 clients with health related 
training and events. Mississippi Extension staff trained 2,461 lay 
health volunteers in early breast cancer detection who reached 16,400 
women with prevention information. Self-care education reached 1,732 
rural families with information on the safe use of medications.
    This program continues to expand outreach and graduate new health 
professionals.

        INTEGRATED RESEARCH, EDUCATION, AND EXTENSION ACTIVITIES

    Question. In the fiscal year 2000 budget the Administration 
requested that Smith-Lever 3(d) programs Water Quality, Food Safety, 
and Pesticide Impact Assessment be funded through the integrated 
research, education, and extension competitive grants program. How do 
you foresee the ability of the integrated authorities account to manage 
these programs?
    Answer. CSREES was created by merging the Cooperative State 
Research Service and the Extension Service in 1995. Since that time, 
CSREES has integrated the staff, functions, and goals of the two former 
agencies into a new agency to serve the American public with the 
highest quality agriculture and food system research, education, and 
extension programs. However, this integration could never be complete 
while no funding mechanism existed to link the functions of research, 
education, and extension together under a single program. The 
Agricultural Research, Education, and Extension Reform Act of 1998 
includes Section 406, Integrated Activities, giving CSREES the 
authority to develop programs which integrate these three functional 
areas. In fiscal year 2000, Congress appropriated $39.541 million under 
this funding authority.
    Funding research, education, and extension under the Integrated 
Activities authority holds several advantages. The integrated program 
is open to a broader array of colleges and universities. All colleges 
and universities, including the 1890 Institutions, Hispanic Serving 
Institutions, and non-land grant colleges of agriculture are eligible 
to compete for funds under these programs, thereby broadening the range 
of topics proposed and building research, extension, and education 
capacity of the non-1862 Land Grant community. Grants from the 
integrated authority programs are competitively awarded, as required by 
law; therefore, all proposals will be judged on technical merit, with 
only the best programs funded. Most importantly, the integrated program 
more closely links research programs with extension and education 
activities and transfers the results of the research to producers more 
quickly. For instance, in the pest management area, several programs 
are funded under integrated authorities: Pesticide Impact Assessment, 
Crops at Risk from FQPA Implementation, FQPA Risk Mitigation and Methyl 
Bromide Transitions. These programs address critical issues faced by 
producers who stand to lose important pest control tools to the 
implementation of FQPA. The research to develop new pest management 
systems must be immediately transferred to producers. The most 
effective way to promote this linkage is through a single integrated 
competitive program which evaluates each project on the basis of 
scientific merit and the linkage of research, extension, and education 
components.

                         INTEGRATED ACTIVITIES

    Question. There is a concern that there will be a funding gap when 
the funding runs out for water quality programs in June 2000 and when 
the funds will be awarded through the competitive basis that will 
result in the termination of staff members and a disruption of 
coordination activities between federal agencies and private sector 
groups. What is the Administration doing to avoid this situation?
    Answer. The integrated research, education, and extension Water 
Quality Program is designed to protect water from contamination by 
agricultural chemicals--including agricultural plant nutrients and 
pesticides--and has also included efforts to reduce the overall impact 
of agricultural practices in degrading the physical structure and 
biological support capacities of water bodies. The program is 
structured to allow the stakeholder community to be the group 
responsible for the identification of most critical problems, and for 
the development of approaches to resolve those problems. This approach 
has historically resulted in the CSREES' support of a broad array of 
projects and state programs designed to reduce nutrient loading to 
targeted water bodies.
    In fiscal year 2000, CSREES restructured its Water Quality Program, 
placing all of the available funding under the Integrated Authority 
outlined in Sec. 406 of the Agricultural Research, Extension, and 
Education Reform Act of 1998. This authority will be used to further 
integrate the activities of research, education, and extension on a 
common basis. Grants will be awarded on a competitive basis. Recipients 
who have received grants in previous years have the ability to request 
no cost extensions without additional funds, if appropriate, to 
existing grants which may ease the funding gap. Watersheds will serve 
as the common activity and reporting unit to be used within a regional 
coordination structure that will facilitate inter-state collaboration 
as well as collaboration with other Federal water quality programs. The 
objectives of these watershed-based activities would be to identify the 
causes of water quality degradation; conduct research filling the gaps 
that are critical to the development of water improvement practices and 
programs; implement watershed-scale improvement programs; monitor the 
efficacy of the improvement programs implemented; assess the costs and 
benefits of water quality management; and conduct evaluations closing 
the loop and improving our understanding of the drivers of water 
quality degradation.
    For fiscal year 2001, CSREES has requested an additional $3.204 
million to enhance current efforts by conducting integrated farm- and 
watershed-scale research, education, and extension on ways to reduce 
nutrient and pesticide delivery to streams and rivers draining into 
coastal ecosystems--including the Great Lakes. If funded, the CSREES 
Integrated Water Quality Program will promote a stronger linkage 
between research, education, and extension to ensure that education and 
outreach programs reflect the most current scientific knowledge 
resulting from the Research, Education, and Economics water quality 
research and development efforts.
    These additional funds will also be used to support interagency 
programs designed to assess and reduce nutrient delivery to impacted 
coastal areas.

                         SMALL FARMS INITIATIVE

    Question. The Administration proposes again the Small Farms 
Initiative in the fiscal year 2001 budget at a funding level of $4 
million. In what ways does this program propose to stop the decrease of 
the small farm? Can this program be carried out in conjunction with 
other programs that already exist?
    Answer. CSREES' Small Farms Program proposes to address the 
economic, social, and environmental problems that contribute to the 
decrease in small farms nationally. The Initiative will support Land 
Grant institutions and other partners who work with small farmers to 
develop effective research, education, and extension programs on:
  --Small farm specific research, rather than size neutral research;
  --Marketing strategies such as direct marketing, cooperative 
        marketing, and community-supported agriculture;
  --Helping beginning farmers establish viable farm operations;
  --Entrepreneurial and business skills that will help small farms deal 
        with their social and environmental issues; and
  --Facilitating the development of networks between farmers and 
        experts, in both the public and private sectors, that can help 

        SMALL FARMERS GAIN BETTER ACCESS TO INFORMATION AND TECHNOLOGY.

    The Small Farm Program will collaborate with other research, 
education, and extension programs. In fiscal year 1999, CSREES' Small 
Farm Program awarded four small grants to land-grant universities in 
four regions to conduct feasibility studies assessing the resources 
available for research and extension activities favoring small farmers 
and ranchers. The information in the reports from the land-grant 
universities will be useful to managers of the Small Farm Initiative 
because the report will identify integral institutions such as 
community-based organizations, non-profits, other government programs, 
and individuals that have interest in the small farm effort and will 
complement the work for effective research and extension to stop the 
decrease of small farms and ranches.

                           BIOBASED PRODUCTS

    Question. A new program named the Biobased Products Program has 
been proposed in the President's budget that proposes to increase 
economic opportunities for farmers by developing and expanding markets 
through research, development, and commercialization of products from 
bio-based resources. Does this program need to be authorized? Can you 
explain in detail the effort in this program to promote 
commercialization for ongoing projects within CSREES?
    Answer. Section 406 of the Agricultural Research, Education, and 
Extension Reform Act enables an integrated approach to research, 
education, and extension activities. The Biobased Products Program has 
been proposed under this authority.
    This proposed program targets the expansion of the domestic 
industrial base through research and development of agricultural raw 
materials as feedstocks for industrial products. Thus far, advances in 
agriculture have stressed crop production technologies without a 
comparable interest in new crops or conversion technologies to produce 
industrial products. Currently, projects within CSREES that address 
biobased product research and development are, for the most part, 
single issue projects and do not take into account barriers to 
commercialization that can occur at various points along the research 
and development continuum. The proposed program is based on a systems 
approach that will build upon currently funded projects and will 
encompass all phases of product development, from growing industrial 
crops, adding value to conventional crops, to demonstration of the end-
items. Integration of research, education, and extension activities is 
considered an efficient mechanism to accomplish the goals of this 
program.

                   METHYL BROMIDE TRANSITION PROGRAM

    Question. Can you give an initial status report on the Methyl 
Bromide Transition Program that has recently been funded? Do you feel 
that the program thus far has been successful enough in its initial 
stages to warrant such a large increase in funds? How many more 
competitive grants can you award with this increase?
    Answer. The Methyl Bromide Transition Program is being administered 
in fiscal year 2000 as a competitive grants program, and it is expected 
that 10 to 12 projects will be funded during the review process to be 
conducted in early July with the awards announced at that time. The 
proposed increase in funding for fiscal year 2001 would allow for about 
20 more grants to be funded during the next year. The use of methyl 
bromide is scheduled to be reduced from a 1991 baseline by 50 percent 
in 2001, by 70 percent in 2003, and by 100 percent in 2005. This will 
impact the U.S. tomato and strawberry industry, fruit and nut tree 
production, nursery stock production, the cut-flower industry, forest 
nursery production, ornamental crops, post-harvest treatments, and 
other uses. Due to the large number of U.S. production systems that use 
methyl bromide, the increase in funding is necessary to assure that 
alternatives can be developed rapidly for all needs.

                   METHYL BROMIDE TRANSITION PROGRAM

    Question. The Department stated that research, education, and 
extension would proportionately receive the funds for the Methyl 
Bromide Transition Program. Have you seen a need for one category to 
receive more of the funds than another category?
    Answer. The Methyl Bromide Transition Program was funded under 
Section 406, Integrated Research, Education, and Extension Competitive 
Grants Program--Pest Management. These funds support integrated, multi-
functional agricultural research, extension, and education activities. 
Depending upon the commodity, the degree to which an alternative to 
methyl bromide use on that commodity has been developed varies greatly, 
with some commodities having no proposed alternatives at this time. 
Therefore, it is expected that proposals will equally consider the 
research approach and the delivery of that research to the grower 
through extension and education programs. Due to the competitive nature 
of the program, we are not able to predetermine the ultimate 
combination of research, education, or extension that will be supported 
by these projects.
              anti-hunger and food security grants program
    Question. How does the proposed Anti-Hunger and Food Security 
Grants Program in the fiscal year 2001 budget differ from the program 
that the Administration proposed in last year's fiscal year 2000 budget 
and why is there a significant decrease in funds from last years 
proposal? Does this program need to be authorized?
    Answer. The Food Recovery and Gleaning grants proposed in fiscal 
year 1999 and fiscal year 2000 would have funded only food recovery, 
gleaning, rescue, and donation programs, but the Anti-Hunger and Food 
Security Grants proposed for fiscal year 2001 would fund, in addition 
to food recovery and gleaning projects, a far broader array of projects 
to reduce hunger, improve nutrition, strengthen local food systems, and 
help low-income families move towards self-sufficiency. USDA broadened 
the proposal in direct response to input from community-based groups 
throughout the country who communicated their belief that food 
recovery, gleaning, and donations programs would be most effective as 
part of more comprehensive efforts to deal with local food insecurity.
    The grants would be made available to any nonprofit group in the 
United States, including faith-based organizations. Such groups could 
include:
  --food banks;
  --church, synagogue, mosque, or temple-based soup kitchens or food 
        pantries;
  --community food security groups;
  --nonprofit small farmer or sustainable agriculture groups;
  --food recovery, food rescue, or gleaning organizations;
  --community gardening groups;
  --job training, assets development, and micro enterprise 
        organizations;
  --community action agencies;
  --youth service organizations;
  --nutrition education groups;
  --nonprofit farmers' markets and direct marketing organizations.
    The intent of the program will be to give out as many small and 
medium-sized grants as possible to provide seed money so that the grant 
recipients will be able to leverage other resources. Priority would be 
given to innovative public/private partnerships that comprehensively 
tackle local problems, as well as for the replication of successful 
model programs. Nonprofit groups have consistently commented that 
government and foundation funding that often focuses only on new--and 
unproven projects--is not always wise public policy, particularly when 
the funding streams will not fund the replication of programs that have 
proven their effectiveness. Thus, these grants will place a significant 
focus on helping nonprofit groups replicate projects that have already 
proven their effectiveness.
    The following are some examples of the types of projects that could 
be funded by the grants:
  --Enabling local emergency feeding organizations, which currently 
        focuses on the short-term goal of providing food to clients, to 
        increase their focus on longer-term and broader community food 
        security activities that both help their client move to self-
        sufficiency and strengthen local food systems.
  --Assisting small- and medium-sized farmers to sell their 
        agricultural products directly to school districts, government 
        hospitals, public universities, and other public institutions. 
        These projects have the potential to boost the income of 
        struggling family farmers and at the same time provide students 
        and others with improved nutrition by being able to eat fresher 
        products.
  --Starting or expanding community or school gardens that enable low-
        income residents to produce their own food; such projects can 
        help increase community self-reliance, increase the 
        availability of fresh produce in low-income areas, preserve 
        open space, teach young people about science, and even create 
        ``safe spaces'' that reduce crime.
  --Strengthening the infrastructure of food banks, food recovery 
        organizations, food rescue groups, and field gleaning 
        organizations necessary to increase the quantity and/or quality 
        of the excess food that is recovered and gleaned; funds could 
        be used for: (1) vehicles and fuel for transportation of 
        recovered food; (2) Volunteer coordinators as well as training 
        programs for volunteers; (3) preparing, printing, and 
        distributing handbooks, and instructional materials; (4) 
        heating and refrigeration equipment to ensure the safety of the 
        recovered food; (5) equipment to collect, sort, process, 
        dehydrate, transport, and distribute food.
  --Supporting peer-to-peer efforts in which senior citizens provide 
        nutrition, food, and other assistance to fellow senior 
        citizens.
  --Helping youth service or other community organizations increase the 
        involvement of community volunteers in anti-hunger and 
        community food security activities. This would advance the 
        volunteerism goals set jointly by President Clinton, former 
        President Bush, and former General Colin Powell. Funds could be 
        used for hiring staff to recruit and supervise volunteers, as 
        well as for training programs for volunteers.
  --Increasing connections between farmers' markets and other local 
        food security and anti-hunger activities.
  --Supporting the creation of new or expansion of existing community 
        kitchens, such as DC Central Kitchen, that combine rescuing 
        excess food with training low-income individuals for jobs in 
        the food service industry. Such programs have been extremely 
        successful in helping individuals move from poverty and 
        homelessness to self-sufficiency and independent living.
  --Enabling community groups to team up with local universities to 
        comprehensively map all food security-resources in their 
        community and then conduct outreach to ensure that more 
        community residents utilize those resources.
  --Expanding programs that engage chefs as volunteer nutrition 
        education instructors and tying nutrition education and 
        financial management training classes into broader community 
        food security efforts that comprehensively help low-income 
        families.
  --Supporting the development of small, food-related businesses and 
        micro enterprises in low-income communities, such as youth 
        farm-stand programs or efforts in which products grown in local 
        gardens are turned into salad dressing or baked goods.
  --Providing increased food and assets development assistance to help 
        working poor families to stay off welfare, increase their 
        ability to feed and support their families, and eventually move 
        into the middle class.
    In fiscal year 1999 and fiscal year 2000, USDA proposed in the Food 
and Nutrition Service's budget $20 million and $15 million in CSREES' 
budget for grants for food recovery and gleaning. The need for food 
banks, food pantries, soup kitchens, religious-based anti-hunger 
groups, community food security organizations, etc. to receive Federal 
assistance has increased in the past years with many organizations 
reporting a rise in the number of families needing assistance, 
particularly working families.
    The proposed grants do not require separate authorization.
                                 ______
                                 

                      DEPARTMENTAL ADMINISTRATION

           QUESTIONS SUBMITTED BY SENATOR CHRISTOPHER S. BOND

               CONTRACTS TO PRIVATE SOURCES FOR SERVICES

    Question. Please provide a description of estimates on the degree 
to which the Department contracts to private sources outside USDA for 
various services. Include in this description, estimated expenditures, 
mission areas, and FTE equivalents for the current fiscal year. 
Additionally, for the purposes of comparison, please include the same 
estimates for fiscal year 1995. Finally, please describe what process 
whereby decisions to contract out are analyzed and evaluated to insure 
that the service level is not compromised and cost-savings are accrued.
    Answer. USDA contracts out with private sources for a wide array of 
services. The information provided below generally represents contracts 
awarded for such services, with the exception of construction services. 
We do not collect data on FTE equivalents of contracting activity. 
Decisions to contract for services are made on a case-by-case basis by 
the requiring office. The decision process is governed by the 
instructions of the Office of Management and Budget in Circular A-76 in 
those situations where it applies. The procurement process is governed 
by A-76 and the instructions applicable in the Federal Acquisition 
Regulation. USDA has installed an internal oversight process for 
approval of advisory and assistance services in excess of $25,000. 
Services in this category are elevated to the Under and Assistant 
Secretaries for approval prior to contract award.
    [The information follows:]

                CONTRACTS TO PRIVATE SOURCE FOR SERVICES
                         [In millions of dollars]
------------------------------------------------------------------------
                                                        Fiscal year
             Mission Area and Agency             -----------------------
                                                   1995    1999    2000
------------------------------------------------------------------------
Farm and Foreign Agricultural Services:
    Farm Service Agency.........................    44.1    70.9    16.9
    Foreign Agricultural Service................     0.3  ......  ......
Food, Nutrition, and Consumer Services: Food and    24.2    23.8     0.4
 Nutrition Service..............................
Food Safety: Food Safety and Inspection Service.     3.4    15.6    10.6
Marketing and Regulatory Programs:
    Agricultural Marketing Service..............  ......     0.7  ......
    Animal and Plant Health Inspection Service..    17.1    11.6     1.5
Natural Resources and Environment:
    Forest Service..............................   254.5   361.7    77.5
    Natural Resources Conservation Service......    48.9    33.7     8.0
Rural Development Mission Area..................    55.3    34.7    15.9
Research, Education, and Economics: Agricultural    85.7    93.0    32.4
 Research Service...............................
Departmental Administration.....................    35.2    50.5    24.8
------------------------------------------------------------------------

                                 ______
                                 

                       ECONOMIC RESEARCH SERVICE

              QUESTIONS SUBMITTED BY SENATOR THAD COCHRAN

                  STRUCTURAL CHANGES AND CONCENTRATION

    Question. Can you give more information on an increase of over $1 
million dollars in the President's budget for an initiative on 
Structural Changes and Concentration in Food and Agriculture to improve 
the efficiency of the Agricultural Sector?
    Answer. ERS aims to significantly enhance its ability to address 
the growing issues of concentration and structural change in the food 
system. Broad areas of interest include: structural change in food and 
agricultural industries; expanded reliance on formal contracting as a 
means of organizing the production and exchange of agricultural 
commodities; and the role of new developments in biotechnology as they 
affect structural change and agricultural markets. The increased budget 
resources would be used to improve the agency's stock of relevant data; 
to perform policy relevant economic research on structure and 
concentration issues through internal agency research and through 
cooperative research projects with universities and other agencies; and 
to encourage interaction among researchers and dissemination of new 
knowledge through a series of conferences and workshops on specific 
topics. Actions would emphasize: (1) determining where and why 
concentration is occurring in the agricultural marketing chain; (2) 
examining opportunities and risks for farmers within this kind of 
market environment; and (3) providing analysis for the USDA and other 
parts of government regarding structural changes in agriculture.
    ERS efforts regarding market concentration are distinct from those 
of other USDA agencies because the focus of research and analysis is 
addressed broadly to all agricultural markets from producers to 
consumers. Concentration is occurring throughout the marketing chain, 
among input suppliers, production agriculture, commodity marketing, 
food processing, and wholesale and retail markets. At the same time, 
marketing arrangements like contracting, vertical integration, and 
various types of strategic alliances have emerged throughout the supply 
chain from producers to processors to retailers. In some instances, 
developments in biotechnology and intellectual property rights 
influence trends in industry concentration and the choice of marketing 
arrangements. Because concentration and changing marketing arrangements 
and scientific developments are interrelated, analyses of concentration 
and marketing arrangements must be largely integrated.
    This initiative will aid expansion and targeting of data collection 
related to changes in market structure and the identification of small 
and mid-size farms that are affected by these developments. Current 
data collection and research will indicate what portion of total 
agricultural production is grown under contract, the distribution of 
the mix of business strategies used by farmers, and will begin to 
determine the extent to which economic returns from contract growers 
differs from participants in cash market. This research will enhance 
ERS's ability to measure and analyze changes in concentration and 
provide assistance to USDA and the Department of Justice regarding 
potential impacts of concentration and merger activity. Finally, ERS 
will develop a forward-looking capacity to anticipate significant 
changes in markets and their potential economic impacts on farmers and 
consumers.

                          CARBON SEQUESTRATION

    Question. What are the details on the initiative on the Economic 
Incentives for Carbon Sequestration and Trace Gas Emissions Control in 
Agriculture to mitigate the dangerous effects of greenhouse gases that 
is proposed in the President's budget?
    Answer. This initiative will focus on the economic potential for 
domestic carbon sequestration and control of greenhouse gases (GHG) in 
agriculture, the use of economic incentives to encourage carbon 
sequestration on agricultural lands, and the potential to target USDA 
conservation programs to promote GHG mitigation activities in the farm 
sector.
    ERS would initiate three kinds of activities:
    Economic potential for domestic carbon sequestration and trace gas 
control in agriculture.--This component of the work would seek to 
establish the ``supply curve'' of trace gas control in agriculture. ERS 
has begun a three-year cooperative research agreement with the Natural 
Resource Ecology Laboratory in Colorado to investigate this topic. 
Funding for the first two years has been provided by the Fund for Rural 
America. Funding under this initiative would allow completion of the 
third year.
    Economic Incentives for Carbon Sequestration.--There are many ways 
to create economic incentives for sequestering carbon in agriculture. 
For farmers, however, the economic implications of even relatively 
specific proposals, such as a system of tradable carbon permits, can be 
very different depending on how such a program is implemented. 
Additionally, the nonpoint nature of soil carbon sequestration means 
that monitoring and enforcement could be a costly component of a 
tradable permit system. For this reason, other policy mechanisms that 
have been successfully used in agricultural conservation programs may 
have merit or there may be ways to target programs such as Conservation 
Reserve Program or Environmental Quality Improvement Program to meet 
trace gas control goals. Research to use economic valuation techniques 
to weight multiple objectives to better target these programs is 
underway at ERS. Initiative funds would allow this work to incorporate 
carbon sequestration and other trace gas control programs in such 
targeting schemes.
    The Global Potential for Agricultural Trace Gas Mitigation and 
Sequestration.--This component of the initiative would allow ERS to 
collaborate with researchers around the world to incorporate estimates 
of carbon sequestration in agricultural soils into global economic 
models such as ERS's FARM model as well as to consider the potential 
for other GHG mitigation efforts on agriculture. This would build on 
modeling work to estimate the impacts of climate change on agriculture 
and link this to the broader issue of threats to global agricultural 
sustainability such as water quantity and quality and land constraints 
and soil degradation.

                          RESEARCH PRIORITIES

    Question. What are the research priorities for fiscal year 2000?
    Answer. ERS research priorities for 2000 are as follows for each of 
the three program divisions:

Priorities for the food and rural economics division

    Restructuring of the Food System.--Processing, wholesaling, and 
retailing industries have been consolidating rapidly, following many 
mergers, acquisitions, and plant closures. These transformations are 
leading to larger and more specialized firms and plants with fewer 
buyers and sellers. A series of ERS studies is designed to examine the 
impact of these changes on businesses and consumers.
    Food Stamp Caseloads.--ERS research will identify the forces that 
explain the declining Food Stamp Caseloads including the impacts of the 
economy, welfare reform, and State administrative practices. The study 
will address the economic status of households and individuals leaving 
the program.
    Benefits of Safer Food.--In collaboration with the Centers for 
Disease Control and the Food Safety and Inspection Service, ERS will 
use data from the FoodNet active surveillance system to develop new 
estimates of the costs associated with foodborne pathogens. These 
finding will be used to rank pathogen-related diseases on the basis of 
their economic impact. This will help establish priorities for 
investments in food safety improvements, and to evaluate efforts to 
strengthen the food regulatory system.
    Low-Wage Low-Skill Workers in Rural Labor Markets.--ERS will study 
the characteristics of low-skill, low-wage workers in rural America. 
Focus will also be given to the availability of jobs, the geographic 
distribution of rural workers, and the long-run market prospects for 
low-income, low-skill workers.
    Economic Change in Rural Areas.--ERS will study the determinants 
and consequences of rural economic change in the 21st century. Analyses 
will focus on demographic diversity and the changing face of rural 
America; the socioeconomic well-being of rural residents; growth, 
decline and stability of the rural economy; implications of industrial 
restructuring on rural areas and challenges and policy implications for 
the future.
    Behavioral Nutrition.--ERS research will study children's food 
consumption and compare it to the Food Guide Pyramid. Food intakes will 
also be studied by source, at home and away, and eating occasion. The 
factors causing the displacement of milk by soft drinks will be 
addressed.

Priorities for the market and trade economics division

    Risk and Uncertainty in U.S. Agriculture.--ERS research is focused 
on factors influencing the degree of price and market risk, and 
economic implications of various risk management strategies. In early 
2001, a synthesis report will assess the current state of knowledge 
regarding price variability in U.S. and global markets.
    Unfinished Business and New Issues for Agriculture in the WTO.--ERS 
research is now focused on finalizing conceptual and empirical economic 
frameworks to analyze the unfinished business and new issues arising 
out of implementation of the Uruguay Round Agreement on Agriculture. 
Planned for early 2001, Options for Agricultural Trade Liberalization 
will provide a synthesis of quantitative analyses of the costs to the 
global and U.S. economies stemming from protectionist agricultural 
policies.
    Biotechnology and Agricultural Markets.--In 2000, ERS studies will 
examine the adjustment of marketing systems to the introduction of 
biotech crops, the pricing of biotech crops, and the implications of 
new genetically enhanced seeds on comparative advantage both in the 
U.S. and globally.
    Improved Capacity for Analysis and Forecasts of Demand and Supply 
Conditions in Commodity Markets and Major Regions.--ERS'commodity and 
regional market analyses provide timely economic outlook information on 
U.S. and global agricultural markets. In 2000, ERS will study the 
dynamics and changing structure of global food demand and its 
implications for U.S. agricultural producers and exporters. ERS will 
continue to develop new and innovative ways for users to access 
commodity market information.
    Structural Change in U.S. and Global Agriculture.--ERS will 
undertake a series of studies on how structural changes in U.S. and 
global commodity markets, such as the use of contracting, will affect 
U.S. producers and consumers. A forthcoming report, Understanding the 
U.S. Wheat Industry's Transition into the 21st Century, looks at 
challenges and opportunities confronting wheat producers due to U.S. 
farm policy changes, the pace of yield-enhancing research and new 
product development, and a more liberalized and competitive global 
marketplace.

Priorities for the resource economics division

    Analysis of Farm Sector Performance.--As part of USDA's 
interdepartmental responsibility to support estimation of the National 
Income and Product Accounts, ERS will measure, forecast, and explain 
indicators of economic performance for the U.S. farm sector and major 
crop and livestock groups. Particular attention is directed to the 
impact on farm income of adoption and use of technology, managerial 
decisions and practices, and government programs.
    Domestic Conservation Policy.--ERS will review the accomplishments 
under the conservation titles of the past 3 Farm Bills and evaluate 
options for a new generation of agri-environmental policies, to provide 
insights regarding program size, design, and implementation.
    Greenhouse Gas Emission Reduction, Carbon Sinks, and U.S. 
Agriculture.--ERS will examine the economic potential for domestic 
carbon sequestration and control of greenhouse gases (GHG) in 
agriculture, the use of economic incentives to encourage carbon 
sequestration on agricultural lands, and the potential to target USDA 
conservation programs to promote GHG mitigation activities in the farm 
sector.
    Adoption of Bio-engineered Crops.--ERS will assess the farm-level 
effects of the adoption of bio-engineered crops and identify the 
factors that have affected adoption. Manure Management for Water 
Quality Improvement. ERS will assess some of the issues in designing 
nutrient-based nonpoint source pollution control policies and to 
evaluate the economic and environmental characteristics of animal waste 
regulations on confined livestock and poultry farms.
    Small Farm Success.--ERS will examine the determinants of small 
farm success, with particular attention to farm type (stated occupation 
of the operator, financial resources, sales level), resource endowment, 
and choice of integrated management systems. Agricultural Trade and the 
Environment. ERS will analyze how trade liberalization agreements 
affect the environment, how domestic environmental policies affect 
trade flows, and how international environmental agreements can improve 
global environmental quality.

                  GEOGRAPHIC BREAKDOWN OF OBLIGATIONS

    Question. What is the geographic breakdown of obligations for 
fiscal year 1999?
    Answer. Below is a table that shows the geographic breakdown of 
obligations for fiscal year 1999.

Alabama.......................................................   $27,000
Arizona.......................................................   176,800
Arkansas......................................................    26,000
California....................................................   764,428
District of Columbia..........................................53,077,897
Florida.......................................................    90,000
Georgia.......................................................    99,828
Illinois......................................................   309,090
Indiana.......................................................   169,500
Iowa..........................................................   180,000
Kentucky......................................................    44,500
Louisiana.....................................................     7,100
Maryland......................................................   406,429
Massachusetts................................................. 3,601,543
Michigan......................................................   220,354
Minnesota.....................................................   197,500
Mississippi...................................................   182,900
Nebraska......................................................   755,556
New Jersey....................................................    18,500
New York......................................................   813,212
North Carolina................................................   212,812
Ohio..........................................................   360,000
Oklahoma......................................................    20,000
Oregon........................................................    59,100
Pennsylvania..................................................    15,000
Tennessee.....................................................    15,000
Texas.........................................................    38,700
Virginia......................................................   271,550
Washington....................................................   155,000
Wisconsin.....................................................   173,150
                    --------------------------------------------------------------
                    ____________________________________________________

      Total...................................................62,488,449
                                 ______
                                 

                       FOOD AND NUTRITION SERVICE

                           INCENTIVE PAYMENTS

    Question. How much in incentive payments will be made to States 
lowering their error rates in fiscal year 2000?
    Answer. It is estimated that in fiscal year 2000 States will earn 
$39 million for incentive payments by lowering their food stamp 
issuance error rates in fiscal year 1999.

             CHILD NUTRITION STATE ADMINISTRATIVE EXPENSES

    Question. What is the breakdown in increases requested by the 
fiscal year 2001 budget proposal for State Administrative Expenses for 
the Child Nutrition Programs? Why is an increase of $9,482,000 needed 
for fiscal year 2001?
    Answer. The level of funding required for Child Nutrition, State 
Administrative Expenses is dictated by section 7 of The Child Nutrition 
Act, as amended. This law requires that 1.5 percent of the amount of 
funds a State used in the second prior year for School Lunch and 
Breakfast, Special Milk and the Child and Adult Food Care Programs be 
made available to States for their administrative expenses for those 
same programs. Thus, the funding requested for fiscal year 2001 is 
determined by the actual expenditures in fiscal year 1999. All of the 
funds requested would be granted to States, usually the State education 
agency for school programs with some funding going to the State 
Agriculture agency to pay for their expenses incurred in handling 
commodities for schools and some to the State welfare agency if they 
administer the Child and Adult Care Food Program. I will provide 
additional data on how much funding is generated from each of the 
programs listed above.

        STATE ADMINISTRATIVE EXPENSES--EARNINGS: FISCAL YEAR 2001
                        [In thousands of dollars]
------------------------------------------------------------------------
                                Fiscal year                 Fiscal year
                                 1999 cash                  2001 State
                                payments to   Percentage  Administrative
                                  States                      expenses
------------------------------------------------------------------------
School Lunch Program........      $5,516,552        1.5         $82,748
School Breakfast Program....       1,354,843        1.5          20,323
Child and Adult Care Food          1,598,580        1.5          23,979
 Program....................
Special Milk Program........          18,075        1.5             271
                             -------------------------------------------
      Total.................       8,488,050        1.5         127,321
------------------------------------------------------------------------

                         SCHOOL BREAKFAST DEMOS

    Question. Please give the subcommittee an update on the School 
Breakfast demos.
    Answer. USDA is continuing preparations to commence the 
demonstration of universal free school breakfast in school year 2000-
2001. A rigorous study design has been developed with the assistance of 
a contractor and a panel of National experts. The design document, 
along with a literature review that summarizes the current knowledge 
about the relationship between breakfast and learning, was completed in 
December 1999; these documents are now available on the Food and 
Nutrition Service website.
    A Federal Register notice announcing the application process for 
school food authorities (SFAs) who wish to participate was published in 
early December 1999. School districts throughout the country have 
expressed interest in participating in the pilot project demonstration. 
A total of 386 school districts from 43 States submitted applications. 
Selection of the six school districts to participate in the pilot 
projects will occur in early Spring 2000. These districts will be 
selected to be geographically dispersed, with a blend of urban and 
rural areas, and consideration given to socioeconomic conditions.
    In addition, the process of selecting an evaluation contractor to 
collect and analyze data and produce a final report is underway. The 
request for proposals (RFP) for the evaluation of the pilot projects 
was mailed to over 60 potential offerors in February 2000. Proposals 
were submitted to FNS at the end of March; we expect to make a final 
selection of the evaluation contractor by early July 2000.

                    NUTRITION EDUCATION AND TRAINING

    Question. The fiscal year 2001 proposed budget has an increase of 
$2 million for Nutrition Education and Training. Was the study that was 
directed by the Committee used in forming this request?
    Answer. The request in the President's fiscal year 2001 budget of 
$2 million in funding for the Nutrition Education and Training (NET) 
Program is designed to help States maintain the nutrition education 
infrastructures they have built up through NET over the past 20 years. 
While the Administration is exploring budget options for the future 
that would implement the broader nutrition education coordination 
strategies outlined in the report directed by Congress, it has 
requested NET funding for a number of years as a critical tool to 
support nutrition education efforts at the State level.
    ``The Promoting Healthy Eating: An Investment in the Future'' 
report on nutrition education in Federal nutrition assistance programs, 
prepared by FNS pursuant to the Agriculture Appropriations Act for 
fiscal year 2000, identifies a number of important actions that would 
strengthen nutrition education within and across FNS programs. One of 
the actions identified was to restore the appropriation for NET. The 
report notes that ``Over the last 10 years, the inconsistency of NET 
funding levels has complicated the coordination and long-term planning 
of nutrition education services. While Team Nutrition has made 
available many creative nutrition education resources and strategies 
for State and local government, implementation is limited. Without the 
infrastructure supported by NET, States face diminished capacities to 
conduct programs and to perform the vital leadership functions of 
assessment, policy development and quality assurance needed to promote 
implementation.'' (p. 17)
    Nutrition education in the Child Nutrition Programs is designed to 
be supported through two complementary, integrated mechanisms--NET and 
Team Nutrition. NET has provided the infrastructure required by State 
and local agencies to deliver the Team Nutrition materials at schools 
and child care settings participating in the Child Nutrition Programs. 
Without NET, delivery mechanism for either National Child Nutrition 
Initiatives like Team Nutrition or more localized approaches and 
projects.

                      ALTERNATIVE PROTEIN PRODUCTS

    Question. On March 9, 2000, the Food and Nutrition Service issued a 
final rule that allows full replacement of meat, poultry, and seafood 
with Alternative Protein Products (APPs) such as soy and whey protein 
in the child nutrition programs.
    Why did the agency change the name of Vegetable Protein Products 
(VPPs) to Alternate Protein Products? Does not this name change infer a 
substitution rather than an alternate choice of one protein for 
another? Is it the agency's intent that Alternate Protein Products 
replace rather than substitute meat, poultry, and seafood available in 
the child nutrition programs?
    Answer. We changed the name of Vegetable Protein Products (VPPs) to 
Alternate Protein Products (APPs) to permit the use of protein products 
that are vegetable-based as well as products derived from animal 
sources such as whey-based protein products. In addition, we did not 
want to restrict the use of any alternate protein products that might 
be developed in the future that were not vegetable-based. We believe 
the term APPs, as opposed to the term VPP, most accurately reflects the 
fact that protein is available from a variety of sources, including 
vegetable-based sources. This name change was not intended to imply a 
replacement or a substitution, rather it was intended to provide 
schools with the flexibility of expanding their menus to offer children 
a meat alternative in addition to those currently available such as 
cheese, peanut butter and dry beans. It was our intention that 
Alternate Protein Products would expand the number of protein food 
items to satisfy the cultural, ethnic and special dietary needs of a 
diverse student body.
    Question. Why does the agency not require blended meat products 
with more than 30 percent (VPPs) be clearly identified and labeled in a 
non-misleading way?
    Answer. Food product labeling is regulated by both the Food Safety 
Inspection Service (FSIS) in USDA and by the Food and Drug 
Administration (FDA) in the Department of Health and Human Services. 
FSIS labeling regulations cover meat, poultry and egg products. FDA 
labeling requirements cover all other non-meat foods such as shellfish, 
fruit, milk and grain products. Current FSIS and FDA rules require food 
manufacturers to list, by common name, the ingredients used in the 
formulation of processed food products on the label for that product. 
Information about the source or type of protein will be clearly 
indicated in the ingredient listing, such as whey protein concentrate 
or hydrolyzed soy protein. However, according to FSIS and FDA 
regulations, percent labeling is voluntary.
    With regard to the point of service menu labeling, we encourage 
program administrators to provide menus that accurately describe menu 
items served to students and their parents to assist them in making 
choices that meet their dietary demands. Clear point of service menu 
labeling can assist students and their parents in making menu 
selections consistent with their dietary needs.
    We plan to work with representatives of the food industry, school 
food service directors, FSIS, FDA and other interested parties to 
develop voluntary labeling for both products and menus.
    Question. On days when products composed entirely of VPPs are 
served to fit the needs of religious and ethnically diverse 
populations, is a meat entree required to be served also? If not, why?
    Answer. On days when products composed entirely of APPs are served 
to meet the needs of religious and ethnically diverse populations, a 
meat entree is not required. However, we do believe that menu planners 
are likely to use APPs as a choice, not as the only entree available. 
This is consistent with the use of other meat alternates such as 
cheese, peanut butter and dry beans. Many factors go into menu planning 
for our programs--preferences of those consuming the meals, economics, 
availability of foods, and the need to meet program meal patterns as 
well as the nutrition standards, including the Dietary Guidelines for 
Americans' recommendation that people consume a variety of foods. We 
stress the importance of schools and institutions offering choices and 
believe this practice to be the general rule.
    Given these factors, we believe that menu planners will provide 
choices and variety to the greatest extent possible and that they will 
use APPs appropriately and will take into account the varied dietary 
demands of all program participants.
    Question. How is the agency ensuring that schools who use VPP/meat 
blended products are in a readily fortified form so that all products 
meet the same quality and consistency?
    Answer. Manufacturers are required to document that the amount and 
quality of protein meets the levels specified in the final rule. 
Further, schools may specify that products are fortified. Finally, 
manufacturers may participate in the Child Nutrition (CN) labeling 
program. The CN labeling program has reviewed labels of products 
containing VPP since 1984 and will continue to do so for APP labels. 
The CN labeling program, which is widely used by the food manufacturers 
who market their products to the Child Nutrition Programs, provides 
information on how products are to be credited under the meal patterns 
established for each program.
    Question. Why did the agency choose to not require fortification of 
these APPs when research shows that increased consumption of soy has 
been found to cause deficiency systems of calcium, magnesium, 
manganese, iron and zinc?
    Answer. The Food and Nutrition Service is not aware of any 
scientific research showing that increased consumption of soy has led 
to the deficiencies enumerated. However, we are aware of current 
research indicating that eating a variety of foods will generally 
ensure adequate mineral intake. This research further suggests that 
unrestricted use of highly fortified APPs could actually result in 
excessive intakes of iron and zinc.
    When the VPP regulations were first developed in 1983, we required 
that VPPs used in the school meals programs be fortified according to 
our specifications. When we recently revised the requirements on VPPs, 
we eliminated our special fortification requirement. The requirement 
had previously been eliminated for schools using the Nutrient Standard 
Menu Planning System. The new rule extends to all schools the option to 
purchase the same products available to commercial markets, as well as 
allowing the food industry to directly market their products to 
schools.
    USDA's nutrition standards for school meals require that meals, 
averaged over a week, meet one-third of the Recommended Daily Allowance 
(RDA) for key nutrients, including iron. Schools may continue to 
purchase fortified products if they are needed to ensure menus meet the 
nutrition standards. We believe the decision to purchase fortified 
products should rest with the local school, based on the nutrient 
content of other menu items. We believe that the food industry is in 
the best position to determine if and to what extent APPs should be 
fortified based on available research and the needs and preferences of 
consumers.

                          STUDIES AND REPORTS

    Question. FNS was directed to provide information to the committee 
relating to the effectiveness of adolescents and older children 
participating in the after-school program and provide views on the 
advisability of expanding the availability of free or reduced price 
meals under this authority to children under the age of 12. What is the 
status of this request?
    Answer. The enactment of the William F. Goodling Child Nutrition 
Reauthorization Act of 1998 (Public Law 105-336), on October 31, 1998, 
expanded the availability of afterschool snack programs in a 
significant manner. In essence, it made them available to every child 
through age 18 in every public and nonprofit private primary and 
secondary school in the Nation. It also made them available to children 
through age 18 that attend afterschool programs operated by public and 
nonprofit private organizations in areas in which at least half of the 
children are eligible for free and reduced price meals. The Department 
initially proposed expansion of the afterschool snack program in its 
1998 reauthorization proposals and fully supported the version of the 
provision enacted into law.
    FNS shares the belief reflected in the Committee's directive that 
afterschool programs are an effective way of providing supervision to a 
vulnerable population and that the availability of nutrition benefits 
can be helpful in drawing children to these programs. As we gain more 
experience under the existing provisions of the law, we may be in a 
better position to consider whether further expansion of benefits and/
or eligibility is warranted. We would certainly support an evaluation 
of the effectiveness of these programs after they have become more 
widely utilized.
                                 ______
                                 
                   FOOD SAFETY AND INSPECTION SERVICE

    Question. What is the status of the agency's efforts to streamline 
regulations and eliminate carcass by carcass requirements in the HACCP 
Inspection environment?
    Answer. FSIS has undertaken a comprehensive review of its 
regulations, policy notices, and policy memoranda for consistency with 
the HACCP-based inspection system. The review was announced in the 
December 29, 1995, Federal Register as an advance notice of proposed 
rulemaking (ANPR) entitled ``FSIS Agenda for Change: Regulatory 
Review.'' In it, the Agency said that it would determine which 
regulatory procedures and requirements were still needed and which 
needed to be modified, streamlined, or eliminated. The ANPR identified 
several categories of meat and poultry products inspection regulations 
that would be reviewed.
    Published on the same day as the ANPR--December 29, 1995--were some 
of the rulemakings needed to streamline existing requirements and carry 
out the FSIS food safety strategy. These included a proposed rule to 
eliminate the FSIS prior-approval system for substances added to meat 
and poultry products (FDA issued a companion rule) and a final rule 
eliminating unnecessary duplication in the approval system for meat and 
poultry labels. Since the ``Regulatory Review'' ANPR was published, 
several ``HACCP-consistent'' rulemakings occurring over the past three 
years have streamlined requirements or replaced prescriptive 
requirements with performance standards. These include: issuing a final 
rule eliminating prior approval requirements for facilities and 
equipment, eliminating prior approval requirements for proprietary 
substances and non-food compounds used in meat and poultry 
establishments, issuing a final rule on performance standards for the 
production of certain meat and poultry products, issuing a final rule 
on revised sanitation requirements for meat and poultry establishments, 
and issuing a final rule revising regulations governing the refusal, 
suspension, or withdrawal of inspection services (including 
determinations of HACCP system inadequacies).
    A number of dockets remain under development within the Agency with 
final publication expected during fiscal year 2000. These include 
regulations governing water retention in meat and poultry (proposed 
rule published September 11, 1998), chilling requirements for 
slaughtered poultry, processing and handling temperature requirements 
for meat and poultry, and the elimination of requirements for partial 
quality control programs (proposed rule published May 18, 1999).
    FSIS has also completed action on a list of priority regulatory 
changes provided to the Agency by the industry following a May 20, 1998 
hearing before the House Agriculture Subcommittee on Livestock, Dairy, 
and Poultry. The top five rulemakings requested by industry were those 
dealing with:
  --Procedures for industry appeals of FSIS decisions and rules of 
        practice for proceedings under the Federal Meat Inspection Act 
        (FMIA) and the Poultry Products Inspection Act (PPIA). A final 
        rule was published on November 29, 1999.
  --Sanitation at official establishments. A final rule was published 
        on October 20, 1999.
  --Substances approved for use in the preparation of livestock and 
        poultry products. FSIS simultaneously published the substances 
        final rule and the final rule on red meat irradiation on 
        December 23, 1999 so that future activity by FDA on 
        irradiation--as well as other additive approvals--can be 
        handled by FDA rulemaking without separate rulemaking by FSIS.
  --The elimination of prior approval of proprietary substances and 
        non-food compounds was accomplished in the Agency's final rule 
        on revised sanitation requirements, which was published on 
        October 20, 1999.
  --Performance standards for certain cooked meat and poultry products 
        were published in a final rule on January 6, 1999.
    Lower-priority actions specified by industry include rulemakings 
on: (1) performance standards for perishable and shelf-stable ready-to-
eat products (a proposed rule to be completed during fiscal year 2001); 
performance standards for perishable, non-ready-to-eat products (a 
proposed rule to be completed during fiscal year 2001); and, (3) the 
elimination of requirements for partial quality control programs (a 
final rule to be completed during fiscal year 2000).
    The Federal Meat Inspection Act and the Poultry Products Inspection 
Act require post-mortem inspection of all carcasses by Federal 
inspectors. Absent any amendment of these Acts, carcass-by-carcass 
inspection remains a requirement of the Federal meat and poultry 
inspection program. However, in a case recently brought before a 
District Court, it was ruled that the Secretary of Agriculture has the 
discretion to decide that the inspection of each carcass need not be 
``organoleptic.'' The implications of this decision may lead to further 
regulatory streamlining.
    Question. The budget request includes new language which authorizes 
the Secretary to transfer funds to FSIS to cover unbudgeted expenses in 
the event of a food safety emergency. Why is the Department's existing 
reprogramming authority not adequate in this case? Please provide a 
history of all occurrences of food safety emergencies in which the 
funds available to FSIS were insufficient to meet needs arising from 
the emergency.
    Answer. New appropriations language authorizing funding transfers 
is included in the budget request since the Secretary's previous 
authority to transfer funds between Agencies has expired. Two types of 
significant events would warrant use of the transfer authority: (1) a 
costly nationwide recall involving large amounts of product that would 
constrain the Agency's ability to fund its other food safety efforts; 
and (2) massive outbreaks of foodborne illness, such as that which 
might be the result of a bioterrorist action, which overwhelm the 
Agency's ability, given existing resources, to protect public health. 
Funds transferred in these situations would cover the cost of emergency 
personnel deployments, laboratory analysis, and inspector recruitment 
and hiring.
    During a bioterrorist event, FSIS would assume the lead in 
coordinating the local, State, and federal authorities that comprise 
the Foodborne Outbreak Response Coordination Group (FORCG). Proper 
execution of this role would require dedicated manpower and a state-of-
the-art communications capability. Additional personnel, travel, and 
equipment would also be needed to conduct on-site investigations in the 
``zone of contamination,'' as well as trace backs of many more 
implicated lots of product than in a usual investigation when only 1 or 
2 products are implicated. Emergency deployment of personnel and 
supporting resources would require emergency funding so as not to 
divert resources from core food safety activities.
    FSIS has in the past responded to food safety emergencies as they 
arise, however, the pace of the Agency's response is hampered by the 
need to first assess where within the Agency funds might be available 
to cover emergency personnel redeployments or increased laboratory 
costs as these emergencies arise. A large scale, nationwide, recall of 
product can result in direct costs to FSIS of over $300,000 in a brief 
period of time. It is estimated that FSIS could expend close to 
$200,000 for travel by public health and investigative staff and 
laboratory costs in the event of an act of bioterrorism in a major 
metropolitan area. Food safety emergencies late in a fiscal year are 
especially difficult since flexibility is limited when most funds are 
already obligated. In 1997, the costs related to a massive recall of 
ground beef produced in Nebraska caused the Agency to impose 
restrictions on travel by both support staff and processing inspectors, 
many of whom have patrol assignments visiting several establishments on 
a daily basis. The cost of this recall of ground beef was among a 
number of factors contributing to the Agency's fiscal year 1997 Anti-
Deficiency Act violations. Other high-priority activities of the Agency 
must be postponed or cancelled as funds originally budgeted to support 
them are redirected to deal with emergency situations. For example, as 
a result of the 1999 outbreak of listeriosis in ready-to-eat hot dogs 
and lunchmeat products, FSIS was unable to provide training for new 
Epidemiology Officers to coordinate emergency response activities at 
the State and local level. Other examples of postponed, high priority 
activities include inspector recruitment efforts and HACCP 
implementation programs, such as the HIMP Models project.
    The following is a listing of all product recalls and examples of 
food safety emergencies handled by FSIS over the previous five years:

                                       EXAMPLES OF FOOD SAFETY EMERGENCIES
----------------------------------------------------------------------------------------------------------------
                 YEAR                          PRODUCT                PROBLEM TYPE               LOCATION
----------------------------------------------------------------------------------------------------------------
2000.................................  BONELESS BEEF..........  POSSIBLE PRODUCT         GENESSEO, IL
                                                                 TAMPERING (SYRINGE).
1999.................................  BEEF CARCASSES.........  ALLEGED PRODUCT          MILWAUKEE, WI
                                                                 TAMPERING (INVOLVING
                                                                 CONTAMINATION WITH HIV
                                                                 TAINTED BLOOD).
1999.................................  PORK DUMPLINGS.........  ILLEGALLY IMPORTED PORK  COLUMBIA, MD
                                                                 DUMPLINGS FROM KOREA.
1999.................................  BEEF CARCASSES.........  PRODUCT ADULTERATED      COLUMBUS, NE
                                                                 WITH E. COLI O157:H57.
1999.................................  BEEF CARCASSES.........  INVESTGATION OF ALLEGED  WALLULA, WA
                                                                 UNSANITARY PRACTICES
                                                                 AND ADULTERATED
                                                                 PRODUCT.
1999.................................  BEEF CARCASSES.........  CUSTOM VIOLATION,        HARRSON, AR
                                                                 PRODUCT ADULTERATED
                                                                 WITH E-COLI O157:H7.
1999.................................  BEEF CARCASSES.........  ALLEGED DES FINDINGS IN  CHICAGO, IL
                                                                 SWITZERLAND.
1999.................................  CHICKEN BREASTS........  METAL CONTAMINATION IN   ROME, GA
                                                                 CHICKEN BREASTS.
1999.................................  HOT DOGS...............  HOT DOGS ADULTERATED     MADISON, FL
                                                                 WITH LISTERIA.
1999.................................  BEEF CARCASSES.........  E-COLI O157:H57          VARIOUS STATES
                                                                 OUTBREAK ON BEEF
                                                                 CARCASSES.
1998.................................  HOT DOGS...............  LISTERIA INVESTIGATION.  ZEELAND, MI
1998.................................  HOT DOGS...............  HOT DOGS ADULTERATED     FOREST CITY, AR
                                                                 WITH LISTERIA.
1998.................................  BEEF...................  SPOILAGE IN BEEF         OCALA, FL
                                                                 PRODUCTS.
1997.................................  POULTRY................  SPOILAGE IN POULTRY      ROGERS, AR
                                                                 PRODUCTS.
1997.................................  MEAT AND POULTRY.......  DIOXIN CONTAMINATION...  NATIONWIDE
1997.................................  GROUND BEEF............  E-COLI O157:H57          NATIONWIDE
                                                                 OUTBREAK IN GROUND
                                                                 BEEF PATTIES/BURGERS.
1996.................................  MEAT AND POULTRY.......  RODENT DEFILED PRODUCTS  TAMUNING, GUAM
                                                                 RECEIVED FROM OTHER
                                                                 COUNTRIES.
1996.................................  MEAT AND POULTRY.......  SPOILAGE IN MEAT AND     TROY, FL
                                                                 POULTRY PRODUCTS.
----------------------------------------------------------------------------------------------------------------

    Question. Please describe the arrangement under which the 
Agricultural Marketing Service performs egg safety activities through 
contract or cooperative agreement for FSIS, including the dollar amount 
of such agreements.
    Answer. FSIS has a cooperative agreement with the Agricultural 
Marketing Service (AMS) to cross-utilize AMS graders to perform routine 
egg product inspection and other related services. Included in the 
agreement is a provision that FSIS will provide egg products inspectors 
to perform routine egg grading and other service to AMS. The estimated 
amount of reimbursements provided to each agency is $130,000 for fiscal 
year 2000. These agreements will be proposed for modification under the 
new Egg Safety Action Plan.
    Question. Please provide an update on the FAIM program, including 
funds obligated to date and projected needs in future years.
    Answer. Nationwide FAIM implementation for Federal inspectors is 
scheduled to be completed over a five-year period. Implementation 
started in fiscal year 1996 and is on schedule to be completed at the 
end of fiscal year 2000. Although FAIM implementation will be completed 
on schedule by the end of fiscal year 2000, in fiscal year 2001 and 
future years, funding will be required to (a) replenish obsolete and 
depreciated equipment/software; (b) support a user population of 5,500 
inspectors with telecommunications, maintenance, technical support, and 
supplies; and (c) develop and deploy new software applications as the 
system evolves to meet new inspection requirements. A table of actual 
and estimated obligations is provided.
    [The information follows:]

Field Automation and Information Management

                        [In thousands of dollars]

        Fiscal year                                         Expenditures
1996..........................................................     7,230
1997..........................................................     9,485
1998..........................................................     8,023
1999..........................................................     7,524
2000..........................................................     8,893
2001..........................................................     8,023

    FSIS began an initiative to extend the FAIM project to the State 
inspection programs in fiscal year 1999 as a multi-year capital 
investment to assist States in meeting mandatory HACCP requirements. 
Under this initiative State inspectors receive identical equipment, 
software, training and technical support as FSIS inspectors. Completion 
of State FAIM implementation is dependent upon individual States 
obtaining the necessary matching funds. Fifteen States will have 
secured sufficient funding to complete FAIM implementation by the end 
of fiscal year 2000, and FSIS plans to work with the remaining 10 
States in fiscal year 2001 and future years. The State FAIM project's 
costs are segregated from Federal FAIM as a separate budget activity 
with laboratory upgrades and HACCP training under Special Assistance 
for State Programs. In fiscal year 1999 $2.2 million was spent for 
State FAIM and it is estimated that $3.9 million and funds carried over 
will be spent in fiscal year 2000 and fiscal year 2001.
    Question. The Senate report accompanying the fiscal year 2000 
appropriations act urges the Secretary to provide at least $3,200,000 
for Codex alimentarius activities for fiscal year 2000. Please provide 
the estimated level of Codex support provided for fiscal year 2000. Is 
the fiscal year 2001 request adequate to support the United States' 
participation in this organization?
    Answer. The direct funding of the activities of the U.S. Codex 
Office is provided for in the budget of the Food Safety and Inspection 
Service under the Codex budget activity. Estimated direct Codex funding 
is $707,000 in fiscal year 2000 and funding of $2,039,000 is proposed 
in fiscal year 2001. FSIS also funds travel for the chairman of the 
Codex Alimentarius in the amount of $30,000 for fiscal years 2000 and 
2001. Two former Foreign Agricultural Service (FAS) employees have been 
added to the Codex staff to work with the chairman. These amounts 
exclude spending by either other USDA agencies or other Departments in 
support of Codex activities such as the travel and personnel costs of 
the Agricultural Marketing Service (AMS), Foreign Agriculture Service 
(FAS), and U.S. Trade Representative, Commerce and State Department 
staff that are sent as delegates to meetings of Codex Committees. FAS 
also expends funds for programs of support to developing countries 
which indirectly advance U.S. Codex interests. Codex interests are 
served by Agricultural Attaches around the world in the handling of 
demarches to foreign capitals on specific Codex issues. Affixing firm 
dollar levels to these activities with respect to Codex is not 
practicable.
    FSIS' fiscal year 2001 budget request is adequate to fund the 
Agency's activities supporting the United States' participation in the 
Codex Alimentarius Commission.
    Question. Does the budget request assume enactment of legislation 
allowing interstate shipment of state inspected meat? If so, please 
provide a budget cross-walk that reflects fiscal year 2001 needs if 
this legislation is not enacted.
    Answer. The fiscal year 2001 budget includes an initiative for 
comprehensive reviews of all State Inspection Programs, which is 
justified in part to prepare for enactment of legislation to permit 
interstate shipment of State inspected meat and poultry. Whether or not 
this legislation is enacted, FSIS will increase the frequency and 
intensity of its State reviews to ensure HACCP compliance. Currently, 
State reviews are staggered over a three-year period. State programs 
inspect many of the very small plants, which recently implemented HACCP 
in January 2000. FSIS worked closely with the very small plants to 
provide needed technical assistance, and comprehensive reviews in 
fiscal year 2001 will provide follow-up assistance to address and 
resolve any compliance issues that may arise in the first year of 
HACCP-based State inspection. Reviewing all State programs in the same 
year will enable FSIS to assist the States in preventing problems that 
may develop if reviews are delayed for two or three years.
    Question. The budget request reflects $943,094 in fiscal year 1999 
funds which lapse. Please explain why it was therefore necessary for 
this subcommittee to provide $8,000,000 above the fiscal year 2000 
budget request for filling of inspector vacancies and recruitment of 
new inspectors.
    Answer. The $943,094 in unobligated fiscal year 1999 funds which 
lapsed was intentionally held in reserve to cover unforeseen upward 
adjustments in obligations. This reserve is intended to guard against 
unintentional violation of the Anti-Deficiency Act, which occurred in 
fiscal year 1997 and fiscal year 1998, and to ensure sound fiscal 
management of the food safety program. This amount is far less than the 
standard recommended reserve of two percent of the Agency's budget.
    Fiscal year 1999 unobligated funds which lapsed are only 11.8 
percent of the amount provided in fiscal year 2000 for filling 
inspector vacancies and for the recruitment of new inspectors to meet 
estimated increases in industry demand for new services. Had FSIS 
obligated all $943,094 for hiring additional inspectors in fiscal year 
1999, a significant increase in fiscal year 2000 inspection resources 
would still be needed.
                                 ______
                                 

                 NATURAL RESOURCES CONSERVATION SERVICE

                       FARM SAFETY NET INITIATIVE

    Question. Assuming that the President's Farm Safety Initiative is 
not enacted into law, what increases in conservation technical 
assistance would be needed for fiscal year 2001?
    Answer. Assuming that the President's Farm Safety Net Initiative is 
not enacted into law, an increase in Conservation Technical Assistance 
of $86 million over the fiscal year 2000 appropriated level is needed.
    Question. What would the adjusted ceiling for staff be should the 
Farm Safety Initiative not be enacted into law in fiscal year 2001?
    Answer. Should the Farm Safety Net Initiative not be enacted into 
law in fiscal year 2001, the adjusted staff year ceiling would be 
11,344 based on the assumption of a technical assistance reimbursement 
level of $75 million for the Wetlands Reserve and the Conservation 
Reserve Programs.

                     WATERSHED LOAN PROGRAM SUBSIDY

    Question. For fiscal year 2001 the President's budget request 
proposes $4.17 million in subsidy budget authority for a new $60 
million loan program. How many projects would be funded by this amount 
of loan authority?
    Answer. It is estimated that $60 million would address between 10 
and 20 rehabilitation projects. This is difficult to answer 
definitively, since the scope and complexity of needed work varies 
significantly with each project.
    Question. How will projects be chosen to receive loans for this 
work?
    Answer. NRCS will develop a risk-based ranking system to score loan 
applicants which would take in to account the greatest human health and 
safety, as well as environmental concerns. The applicants' 
qualifications for a loan would also need to be factored into the 
priority process.
    The rehabilitation program will be modeled after the Rural 
Utilities Service (RUS) Municipal Electric Loan Program, in terms of 
borrowers, defaults, interest, pre-payments, and loan characteristics.

                    FUNDS AVAILABLE FOR CRP AND WRP

    Question. How much funding is available for technical assistance 
for CRP and WRP due to the limitation on the use of CCC funds? Does the 
President's proposed budget request require the passage of legislation 
to provide technical assistance for CRP and WRP at $75 million from 
CCC?
    Answer. Fund transfers through the Commodity Credit Corporation 
(CCC) are limited by statute through the Section 11 cap. In fiscal year 
2000, NRCS's portion of these funds was $10.74 million.
    The President's budget proposes to increase the Conservation 
Reserve Program (CRP) acreage cap to 40 million acres and that the 
annual enrollment in the Wetlands Reserve Program (WRP) be set at 
250,000 acres.
    The Farm Service Agency (FSA) has estimated that the technical 
assistance needs in fiscal year 2001 would be $81,866,909 for NRCS and 
$4,593,883 for the Forest Service to implement the 40 million-acre CRP 
program. It would take $22.5 million to implement the WRP program as 
contained in the President's budget. Technical assistance funding for 
the two programs combined would equal $109.01 million.
    If NRCS receives the same level of funding from CCC that it did in 
fiscal year 2000 ($10.74 million) we would experience a $93.62 million 
shortfall. Without removal of the CCC Section 11 cap, or some 
designated additional discretionary appropriations, NRCS would not be 
able to implement these programs in fiscal year 2001.

      ADDITIONAL ASSISTANCE TO AMERICAN INDIANS AND ALASKA NATIVES

    Question. How does the department plan to focus additional 
resources to assist American Indians and Alaska Natives regarding their 
conservation needs other than through the designation of $16 million of 
EQIP funds in fiscal year 2001?
    Answer. If additional resources are allocated USDA will use them to 
do the following types of activities: Accelerated technical assistance 
through additional staff to support conservation planning and 
applications. Accelerated outreach with tribes regarding USDA programs 
and activities including field trials, field days, etc. Accelerated 
soil survey's of Native American lands.
    Question. If there is no increase in EQIP funds will the Department 
still earmark these funds for assistance to American Indians and Alaska 
Natives?
    Answer. The Department has earmarked $5 million (2.5 percent) in 
fiscal year 1997, $8.1 million (4.0 percent) in fiscal year 1998, and 
$8.7 million (5 percent) in fiscal year 1999 and fiscal year 2000 for 
EQIP activities on Native American and Alaskan Native lands. If there 
is no increase in the fiscal year 2001 EQIP budget, the Department will 
continue to earmark 5 percent of the EQIP allocation for Native 
American and Alaskan Native concerns.

                  OPERATION OF PLANT MATERIALS CENTERS

    Question. The fiscal year 2001 proposed budget would continue the 
operation of the plant materials centers at the fiscal year 2000 level 
of $9.1 million. The explanatory notes state that the ongoing plant 
materials development would continue at a somewhat reduced rate. What 
materials development is ongoing and what would be at a ``somewhat'' 
reduced rate?
    Answer. Level funding over the past several years has reduced our 
ability to perform studies on plant materials by approximately 12 
percent. In fiscal year 1999, over 14,000 plant collections were being 
evaluated on 73,000 plots by the Centers and 22 new plants were 
released for commercial production. If funding continues at a level 
rate as it has for the last 4 years, outputs from the Centers will be 
reduced. There are 26 plant materials centers around the country that 
maintain an ongoing program to develop plant technology for such 
critical issues as buffer strips, invasive species problems, and 
habitat restoration with native species. Products from this work have 
made significant contributions to conservation programs like, WRP, 
WHIP, CRP and others. Plant centers will become more limited in their 
ability to undertake new studies and to develop new technology and/or 
plant releases.

                   RESCISSION OF FINANCIAL ASSISTANCE

    Question. Why did a rescission of $7.8 million in financial 
assistance for Public Law 534 and Public Law 566 occur?
    Answer. The Department opted to utilize its authority to rescind 15 
percent of the financial assistance for Watershed and Flood Protection 
Operations as a means of complying with the omnibus budget bill while 
minimizing impact on technical assistance.

                IMPACT OF GENERAL PROVISION SECTION 717

    Question. How has the General Provision Section 717 of Public Law 
106-78 affected this agency?
    Answer. General Provision Section 717, Public Law 106-78 has had a 
positive impact on the agency by allowing NRCS to non-competitively 
enter into cooperative agreements with conservation partners under the 
Wetlands Reserve Program (WRP) to restore and protect America's 
wetlands.

                      EQIP NATIONAL PRIORITY AREAS

    Question. In the fiscal year 1999 Senate Report 105-212 and in 
fiscal year 2000 Senate Report 106-80, the Committee directed the 
agency to provide adequate funding for two designated National priority 
area pilot projects. It is the Committee's understanding that no funds 
have been obligated for the Mississippi Delta National Priority Area 
Pilot Project. However, in fiscal year 2000 the Colorado Salinity Basin 
National Priority Area Pilot Project received ``special emphasis'' 
dollars amounting to $1.3 million. How has this discrepancy occurred?
    Answer. In accordance with fiscal year 1999 Senate Report 105-212, 
the Department established two EQIP National Priority Areas; the 
Colorado River Basin Salinity Control Area and the Mississippi Delta 
Area. The Mississippi Delta National Priority Area received $1.3 
million in both fiscal years 1999 and 2000.

                          STUDIES AND REPORTS

    Question. The Committee directed the NRCS to provide the committee 
with a detailed analysis of the aging water systems for flood control 
structures and the hardship placed on the local conservation and flood 
control districts and to provide a comprehensive strategy for 
rehabilitation of these structures. The Committee has not received this 
analysis. What is the status of this analysis and strategy plan?
    Answer. The report is in draft form. The final report will be 
available on or before May 1, 2000.
                                 ______
                                 
                OFFICE OF THE CHIEF INFORMATION OFFICER

    Question. What is USDA's fiscal year 2001 Information Technology 
(IT) budget?
    Answer. According to the OMB Exhibit A-11 submitted in January 
2000, the Department plans to spend approximately $1,316,100,000 on its 
fiscal year 2001 IT budget.
    Question. What part of USDA's fiscal year 2001 budget is for new IT 
investments, such as acquisition of new technology?
    Answer. Consistent with revised reporting guidance of the Office of 
Management and Budget, USDA includes funding for new IT investments in 
the category of Development/Modernization/Enhancement. The latest 
report submitted to OMB estimates that approximately 50 percent of 
USDA's information technology budget is dedicated to this category.
    Question. How much of USDA's fiscal year 2001 IT budget represents 
costs for personnel, and what is the total number of FTE's that the 
fiscal year 2001 budget supports?
    Answer. Approximately 23 percent of the budget is for salaries and 
benefits for government personnel who perform information technology 
related functions 51 percent or more of their time. This supported an 
estimated 4,964 FTE's as of August, 1999.
    Question. How much of USDA's fiscal year 2001 IT budget is for 
contractor support services, and what did USDA spend for such services 
in fiscal year 1999/2000?
    Answer. According to our August 1999 OMB report, USDA contractor 
support services will be approximately 19 percent of the budget for 
fiscal year 2001. This includes maintenance used in support of 
equipment, software or other services. Contract support services for 
fiscal year 1999 and fiscal year 2000 are as follows:
  --Fiscal year 1999--$277,434,826
  --Fiscal year 2000--$293,831,647

         CAPITAL PLANNING AND INVESTMENT CONTROL (CPIC) PROCESS

    Question. USDA's OCIO budget says that the CPIC program has 
established a process for the Department to select, manage, and 
evaluate the results for all major investments in information 
technology.
    What were the major investments reviewed and approved for fiscal 
year 2001 by USDA's Executive Information Technology Investment Review 
Board as part of the CPIC process?
    Answer. The major investments reviewed, and decisions, for those 
investments in the ``Select'' and ``Control'' phases are included in 
the following charts. [The information follows:]

     RECOMMENDATIONS TO THE EITIRB REGARDING USDA MAJOR INFORMATION
               TECHNOLOGY INVESTMENTS FOR BUDGET YEAR 2001
------------------------------------------------------------------------
                                                          Investment
                                     Rank (H,M,L)          Decision
------------------------------------------------------------------------
Select Phase:
    Employment Complaints         High..............  Approve
     Tracking System.
    Integrated Acquisition        ..................  Defer
     System (IAS).
    Programs Funding Control      High..............  Defer
     System (PFCS).
    REE Information System        Medium/High.......  Approve
     (REEIS).
    Integrated Personnel System   High..............  Approve
     for the 21st Century (IPS
     21).
    Guaranteed Loan System (GLS)  High..............  Approve
    Multi-Family Integrated       High..............  Approve
     System (MFIS).
    Community and Utility         High..............  Approve
     Business System (CUBS).
    USDA Telecommunications       High..............  Defer
     Enterprise Network.
    International Trade Data      High..............  Approve
     System (ITDS).
    Entry, Processing, and        Low...............  Disapprove
     Inquiry System (EPIC)/
     Personnel Office Desktop
     Solution/PODS.
    Combined Administrative       High..............  Approve
     Management System (CAMS).
    Control Phase CORE            High..............  Continue
     Accounting System (CORE).
    Project 615.................  High..............  Continue
    Foundation Financial          High..............  Continue
     Information System (FFIS).
    Shared Information Systems..  High..............  Continue
Evaluate Phase:
    Processed Commodities         High..............  Continue
     Inventory Management System
     (PCIMS).
    Integrated System             High..............  Continue
     Acquisition Project (ISAP).
    Agency Financial Management   High..............  Continue
     System (AFMS).
    Food Stamp Program            High..............  Maintain
     Integrated Information
     System (FSPIIS).
    Integrated Personnel System   Medium............  Maintain
     (IPS).
    Field Automation and          High..............  Continue
     Information Management
     (FAIM).
    Management Services           Low...............  Terminate
     Information System (MSIS).
    Dedicated Loan Origination    High..............  Continue
     System (DLOS).
------------------------------------------------------------------------

    Question. Has the USDA established performance measures for each 
and every one of these IT investments? If so, what are they for each 
project. If not, why?
    Answer. In accordance with the Department's CPIC process, each 
agency is required to establish performance measures for their 
respective information technology investments during the ``select'' 
phase of capital planning and investment control for fiscal year 2002. 
Agencies with projects in the ``evaluate'' phase will conduct post-
implementation reviews to ensure that program missions are being met, 
and the performance measure accurately reflects contribution of the IT 
investment to the mission. As the CPIC process is now in its early 
stages within the Department, much of this is already being done. While 
USDA does not yet have performance measures for all of the IT systems 
listed above, the OCIO is working with each agency to develop mission 
and program related performance measures so that the CPIC process can 
be in full effect for the fiscal year 2002 budget process. Following 
are the performance measures for some of our major IT systems.
Research education and economics information system
    Performance measures are to be developed through modeling user 
behavior, through an ongoing Quality Assurance program to assess system 
performance, and through establishing user feedback mechanisms as part 
of system usage. Performance Indicators include:
  --Number of accesses per user profile
  --Number of reports requested per user access
  --Number of returns to access system
  --Number of changed user profiles
  --Quantifiable responses on Quality Assurance questionnaire
  --Character of responses on non-system surveys
Food safety and inspection service--field automation and information 
        management (FAIM) project
    Performance Goals for system implementation include:
  --Number of FSIS inspectors trained in FAIM each year through fiscal 
        year 2005
  --Number of FSIS computers deployed to the field each year though 
        fiscal year 2005
Forest service project 615--IT infrastructure
    The Forest Service (FS) is using the ``Hardware Management System--
HMS--to track Project 615 IBM acquisitions, including financial and 
inventory information and to develop replacement plans. The HMS tool 
provides guidance on replacement planning using market analysis and 
utilizing the output from Information Technology Investment Portfolio 
System--I-TIPs. The Agency's Project 615 implementation team is 
responsible for monitoring the achievement of Project 615 goals and 
outcomes. These goals and outcomes are defined in the FS GPRA 
Performance Plan. Performance Measures include:
  --Cost per seat. Anticipated computer system capital investment level 
        for hardware and software as currently planned is $1,600 per 
        seat per year.
  --To ensure that the IT infrastructure meets minimum performance 
        characteristics, yet stays within investment guidelines, 
        additional measures include disk space per seat, seat/server 
        capacity utilization, expected versus actual seats, useful life 
        remaining per unit equipment, and others.
    Some example target measures would be:
  --One gigabyte server-disk capacity per seat
  --75-85 percent seat/server capacity utilization
  --Actual versus expected seats of under 110 percent
    Field units report on their measures on a regular basis, 
documenting reasons for any deviations from performance targets. 
Quarterly summaries are prepared with aggregated results that are used 
in future planning.
    Implementation of the IBM System is critical to the successful 
accomplishment of the Forest Service mission. Listed below are key 
milestones and measures of success for this project.

----------------------------------------------------------------------------------------------------------------
              Date                              Milestone                 Measure of Success        Status
----------------------------------------------------------------------------------------------------------------
October 1998....................  Office automation on 615.............  95 percent of Data   Completed
                                                                          General office
                                                                          automation closed
                                                                          and transferred to
                                                                          615.
February 1999...................  Full 615 implementation..............  All offices          Completed
                                                                          equipped and
                                                                          operating with
                                                                          initial 615
                                                                          systems for all
                                                                          employees.
March 1999......................  All offices functional on 615........  All mission work     Completed
                                                                          accomplished on
                                                                          615 with initial
                                                                          system.
May 1999........................  Data General phased out..............  Existing systems     Completed
                                                                          transferred from
                                                                          Data General
                                                                          computers and made
                                                                          Y2K compliant on
                                                                          615.
October 1999....................  New accounting system................  FFIS implemented     Completed
                                                                          service wide
September 1999..................  New Office Automation (O/A) System...  Microsoft Office     Completed
                                                                          2000 installed on
                                                                          desktops.
January 2000....................  GIS project work standardized........  Existing GIS         Completed
                                                                          project work
                                                                          converted to core
                                                                          data standards.
June 2000.......................  Mainstream E-mail messaging system     All employees using  On Schedule
                                   (Lotus Notes) implemented.             the new messaging
                                                                          system integrated
                                                                          with the Office
                                                                          Automation system.
March 2001......................  GIS project work standardized........  90 percent of major  Plans in Progress
                                                                          information
                                                                          systems operating
                                                                          with corporate
                                                                          standards and
                                                                          support.
June 2001.......................  Enterprise Management standardized...  All server and       Plans in Progress
                                                                          desktops installed
                                                                          with and managed
                                                                          by enterprise
                                                                          systems management
                                                                          software.
----------------------------------------------------------------------------------------------------------------

Rural development--guaranteed loan system (GLS)

            Description of performance-based system:
    Rural Development and FSA are shifting from primarily making direct 
loans to making a significant number of guaranteed loans as part of 
their overall role in providing agricultural credit and rural 
development assistance. To achieve this objective, the automated system 
needs to support the full range of guaranteed loan business activities 
in order to:
  --Improve availability, accuracy, and timeliness of management 
        information;
  --Provide servicing offices with capability to maintain and manage 
        their guaranteed loan portfolio;
  --Improve the guaranteed program to be more attractive to lenders;
  --Provide the capability to effectively monitor lender performance;
  --Provide information required by congress, OMB, General Accounting 
        Office, Office of Inspector General, and United States 
        Department of Agriculture.
  --Fully comply with the Government-wide guidelines documented in the 
        Joint Financial Management Improvement Program (JFMIP) 
        Guaranteed Loan System Requirements.
            Performance Goals:
  --Achieve annual savings of $250,000 through reduced postage and 
        mailing costs, and a significant reduction in paper costs 
        facilitated by the use of electronic commerce.
  --Achieve reduction in non-performing loans through more timely and 
        accurate status information. The new system will allow the 
        Agency to monitor the status of guaranteed loans more closely. 
        This will allow the Agency to determine which loans are 
        experiencing problems and implement corrective action sooner. 
        This will result in a 5 percent reduction in non-performing 
        loans.
Rural development--dedicated loan origination and servicing system 
        (DLOS)

    DLOS is considered an earned value system in that it identifies 
baseline costs, schedules, and performance goals. The DLOS system was 
installed in the Production environment and the Centralized Servicing 
Center was established in fiscal year 1997 to provide the loan 
origination and servicing functions for RHS Single Family Housing 
borrowers. Performance indicators used to gauge the success of DLOS are 
monitored on an ongoing basis through management reviews and tracking 
of key factors including:
  --Borrower Delinquency Rates
  --Delinquent Loan Accelerations
  --Average Response Time in Call Center
  --Average Response Time in Field Support
  --Customer Service Call Abandon Rates in Call Center
  --Collections Call Abandon Rate
  --Accuracy of New Loan Set-ups
  --Collections Through Treasury Offset Program
  --Escrowing of Portfolio

Rural development--multi-family integrated system (MFIS)

    MFIS is considered an earned value system in that it identifies 
baseline costs, schedules, and performance goals. The MFIS system will 
be installed in the Production environment in fiscal year 2000. 
Performance indicators that will be used to gauge the success of MFIS 
and will be monitored on an ongoing basis through management reviews 
and tracking of key factors include:
  --Increase the Number of Supervisory Activities Performed
  --Reduce Classification ``D'' Projects (Not in Compliance) to Below 
        Current Levels
  --Reduce Delinquency Rates to Below Current Levels
  --Reduce the Average Time to Correct Project Findings
  --Decrease the Average Time Required to Review and Approve Project 
        Budgets
  --Decrease the Average Time Required to Perform Quarterly and Year-
        end Analysis.
    Question. How is USDA tracking the performance of all of its IT 
investments--in terms of improvements to the business it is supporting?
    Answer. The Department has taken great strides to fully institute 
its Capital Planning and Investment Control (CPIC) Process. Per the 
Office of Management and Budget passback language, the Department has 
forwarded the CPIC guide to OMB in March 2000. Integral to the CPIC is 
the evaluation of the contribution of an IT investment to the agency's 
mission as part of the selection process, monitoring of achievement of 
the investment's performance goals as part of the control process; and 
performance evaluation of each information technology system. OCIO is 
working with Departmental executives to increase the attention to the 
``control'' aspect of capital planning during the fiscal year 2002 
budget development process. OCIO, in conjunction with agency 
executives, will review performance of major investments against 
established goals, and is working on an individual basis with each 
agency to ensure that CPIC is applied effectively. Eight information 
technology systems are currently undergoing a post-implementation 
review based on the USDA CPIC guidance, to determine how well those 
systems met performance goals and contributed to agency mission.
    The Department has a senior level advisory group that reviews the 
major information technology--IT--investments in an effort to make 
recommendations aligned with the Department's missions and to maximize 
efficient and effective utilization of USDA's IT resources.
    For fiscal year 2001, the senior level advisory group's review 
encompassed IT investments designated major because of their size, 
scope, or strategic impact to the Department. The review criteria 
included impact on mission, risk, return on investment for new 
investments, along with performance criteria--cost, schedule, and 
performance goals--for systems that are underway. Additionally, IT 
investments in the Evaluate phase were evaluated against Post-
Implementation-Review criteria to determine how the systems were 
performing against the original design criteria. The senior level 
advisors reviewed and scored the investments based on supporting 
documentation prepared by the agencies and met early in December to 
develop a consensus on investment scores and priorities. The review 
process took approximately two weeks. Their report was reviewed and 
voted upon by the Executive Technology Investment Review Board--
EITIRB--prior to being forwarded to the Office of Management and 
Budget.
    Question. How does the CPIC process address managing and evaluating 
the investment for IT personnel, which are IT-related investments, to 
ensure that investments in personnel are still cost-effective as 
opposed to other options (i.e., outsourcing)?
    Answer. All costs for IT investments are evaluated through USDA's 
CPIC process. Prior to proposing investments to the Department, 
agencies evaluate alternatives for accomplishing IT investments, which 
may include using government personnel versus outsourcing. Investment 
proposals specifically identify the FTE's associated with initiatives 
and as directed by OMB Circular A-11 include the personnel costs for 
project management and direct support. In addition, the CPIC investment 
proposal process allows the EITIRB to evaluate the business case 
presented to justify new investments and their reliance on Federal 
support verses outsourcing as a delivery method.
    Question. How are investments for contractor support addressed in 
the CPIC process to ensure that the investment in contractor support is 
cost-effective?
    Answer. As stated above, all costs for IT investments are evaluated 
through USDA's CPIC process. Prior to proposing investments to the 
Department, agencies evaluate alternatives for accomplishing IT 
investments, which may include using government personnel versus 
outsourcing. Investment proposals specifically identify the FTE's 
associated with initiatives and as directed by OMB Circular A-11 
include the personnel costs for project management and direct support. 
In addition, the CPIC investment proposal process allows the EITIRB to 
evaluate the business case presented to justify new investments and 
their reliance on Federal support verses outsourcing as a delivery 
method. Reliance on contractor support to implement IT initiatives is 
often a result of a need for specific skills that cannot be obtained 
through the permanent workforce or is the result of a need for 
temporary support that is most efficiently provided through 
contractors.

                             IT MORATORIUM

    Question. The budget mentions that a supplemental activity to the 
CPIC is the IT acquisition moratorium. It says that under the 
moratorium, significant investments (over $25,000) are reviewed. It 
also says that during 1999, 249 IT acquisition moratorium waivers were 
approved. What was the total number of waivers requested in 1999?
    Answer. During fiscal year 1999 the OCIO processed 249 waiver 
requests for approximately $414.5 million.
    Question. What was the total value of the 249 waivers approved?
    Answer. During fiscal year 1999, 241 waivers were fully approved 
and two were partially approved to expend $386.6 million in fiscal year 
1999, 2000, and 2001 funds. Also,two waivers were fully denied and the 
requesting agency or OCIO canceled four.
    Question. If the OCIO approves such a large number of waivers, then 
does the Department really have an IT acquisition moratorium in place? 
In that regard, what was the total number and value of waivers denied 
in 1999?
    Answer. USDA's goal in instituting the IT acquisition moratorium 
was not to stop agencies from purchasing IT, but to ensure that they 
followed Departmental guidance on the Year 2000 problem and as much as 
possible, an IT architectural blueprint. Many approved waivers 
contained conditions or stipulations that the agencies must share IT or 
coordinate the purchases with other agencies. USDA's use of frequent, 
good communications with the Under and Assistant Secretaries, Agency 
Heads, and Agency Chief Information Officers has resulted in agencies 
understanding and complying with the changing direction of the 
moratorium. This was especially evident when Secretary Glickman's 
mandate that USDA direct more attention and funds to the Year 2000 
conversion effort was so successful. We have also used the moratorium 
to move USDA towards a comprehensive capital planning process that is 
recognized by OMB as being among the leaders of the Federal Government. 
During fiscal year 1999, two waivers were fully denied and the 
requesting agency or OCIO canceled four. Denied amounts totaled $27.9 
million in fiscal year 1999 and 2000 funds.

                    INFORMATION SYSTEMS ARCHITECTURE

    Question. USDA's OCIO budget states that the Department's February 
1997 version of its information systems technical architecture is being 
expanded and updated. If USDA does not continuously update its 
architecture, how can the Department then be positioned to use it as an 
effective tool to ensure it is cost-effectively meeting business needs 
as opposed to just putting a document on a shelf.
    Question. What processes are USDA's OCIO establishing to ensure 
that the architecture is continuously updated?
    Answer. The updated and expanded version of the architecture 
outlines USDA's architecture program, its future architecture 
direction, and its current baseline. The major components of the 
architecture program are principles and standards, current 
architecture, the architecture repository/database, future 
architecture, and the associated governance and transformation 
processes required to achieve the future architecture direction. We 
view the architecture on a continuum. The architecture is never 
completed but instead is managed using processes that respond to 
continuously changing programmatic requirements and technology 
advancements. USDA's approach to architecture aligns with the Federal 
Architecture Framework model as endorsed by the Federal CIO Council.
    Question. What steps will USDA take to incorporate the new business 
models and associated processes and technologies evolving from the e-
commerce revolution?
    Answer. USDA agencies are beginning to develop electronic-based 
services and program delivery mechanisms and USDA has already 
recognized the need to incorporate E-models into its architecture 
efforts. USDA's future architecture direction has an ``E'' focus. For 
both this year's and last year's IT planning cycles, USDA IT 
investments were evaluated based on whether or not electronic program 
delivery had been considered. Several agencies have already implemented 
systems or are in the process of designing them. While agencies 
recognize the need to change their business models to an electronic 
government model, much work remains to be done.

                               E-COMMERCE

    Question. USDA's OCIO budget includes about $1.3 million for 
contractor support and operating expenses to support E-government/
commerce at the Department. What are the overall planned expenditures 
in fiscal year 2001 across all USDA's agencies and offices on E-
government/commerce initiatives (broken out by agency)?
    Answer. The Department does not currently track expenditures for E-
government/commerce initiatives apart from overall IT or other related 
spending, such as training. Our fiscal year 2002 budget requests 
funding to develop a corporate strategy and approach to E-government/
commerce. Among other things, this would provide the Department the 
capability to develop common definitions and metrics to assess and 
measure E-government/commerce activities; and would include an 
inventory of existing and planned initiatives, including expenditures, 
across USDA.
    Question. What steps has the Department taken to ensure that there 
is a common, consistent USDA approach to E-government/commerce 
initiatives across the Department so that there is not duplication of 
effort?
    Answer. We fully recognize and appreciate the need to ensure that 
there is a common, consistent approach to E-government/commerce at the 
Department. The host of web sites run by USDA agencies are supported by 
scores of servers, and other technology, which is decentralized and 
often redundant across agencies and even at the state and regional 
level.
    The Department must act quickly and decisively to develop a 
corporate strategy for E-government to ensure that we maximize the 
resources that are being devoted to this effort with an emphasis on 
sharing lessons and leveraging solutions across USDA. To that end, the 
Department is in the process of establishing an E-government working 
group, under the direction of the Deputy CIO, with representation from 
all agencies and mission areas with E-government initiatives. The 
working group represents an important step towards establishing the 
common look to E-government that we desire.
    Most importantly, the funding we have requested in our fiscal year 
2001 budget will enable the Department to develop a coordinated 
strategy and ensure that cross-cutting issues which affect all USDA 
customers and employees are identified, prioritized and addressed as 
agencies pursue E-government initiatives. Our goals include developing 
a Department-wide strategy improving coordination, and developing 
standardized approaches to cross-cutting issues. These include data 
warehousing, data mining, electronic mail and other electronic 
directories, online forms, and privacy protection. Training our IT 
staff to integrate web-based applications into the Department's 
technical infrastructure is another integral component.
    Question. What specific programs and benefits (1) are already being 
delivered via the Internet, or (2) are expected to be delivered via the 
Internet in fiscal year 2001. (List programs/benefits for each agency/
office).
    Answer. USDA agencies have a number of E-government related 
initiatives in progress, with more applications being developed 
regularly. The Department has not yet ascertained which specific 
applications are being planned for fiscal year 2001. However, with a 
few exceptions, most USDA agencies are at the initial stage of E-
government where agencies are using the Internet to provide the public 
electronic access to information about the Department's programs and 
services, market information, as well as breaking news. For example:
    Today, via the Internet, farmers and agricultural producers can 
electronically view public information on USDA programs such as crop 
and production reports. They can download and fill-in application forms 
for temporary programs such as the Small Hog Operation Program, the 
Dairy Market Loss Assistance Program, Crop Disaster Program, the 
Livestock Assistance Program, and several forms for the Farm Service 
Agency's farm loan programs.
    The Natural Resources Conservation Service's--NRCS--PLANTS website 
provides a single source of standardized information about plants in 
the US and its territories. The database includes all sorts of 
information about plants, and is accessed by over 57,000 users per 
month.
    The Economics Research Service publishes online research reports, 
periodicals, new releases, issue papers, and other information on all 
aspects of the domestic and international farm and agricultural 
economy. Agricultural Outlook reports, state fact sheets, and 
Agricultural Trade data bases are all available to anyone with access 
to the Internet.
    The Rural Development agencies provide data over their web sites 
about all of their housing, infrastructure and job creating programs, 
as well as links to other sites of interest to the rural development 
community. Almost a million citizens viewed these web sites in 1999.
    Visitors to the web site of the Risk Management Agency--RMA, which 
manages Federal crop insurance, can access and search county actuarial 
tables online, by State or crop. There is also an education site to 
assist producers and agribusiness in understanding their risk exposure 
and responsibility.
    Another example is USDA's Forest Service--FS, which is 
participating in a one-stop recreation site with seven other Federal 
agencies. The site--www.recreation.gov--is part of the Vice-President's 
Access America initiative that was established to provide a single 
source of information about recreation on federal lands. Citizens can 
now reserve campground sites via the Internet. FS is also piloting a 
clearinghouse on the Internet for distributing information related to 
Forest Plan updates. The clearinghouse application allows the public to 
view information generated from the FS' Geographical Information System 
(GIS) and relate their comments on the plan to specific locations on a 
GIS map.
    The Agricultural Research Service--ARS--web sites provide Internet 
access to extensive resources for scientists, regulators, farmers and 
many other customers. ARS laboratories use the Internet to provide 
information about their missions, research programs, results, and 
analyses. Technical and semi-technical publications produced in-house 
are published electronically; and customers may now subscribe to the 
Agricultural Research magazine online. Some 1,500 stakeholders, 
including media outlets, commodity groups, educators, and others, have 
also signed up for a daily E-mail feed. An interactive web site for 
middle school students, ``Science for Kids,'' showcases ARS research 
results in ways that demonstrate the importance of agriculture in 
people's everyday lives and help students understand and appreciate the 
benefits of agricultural research.
    The National Agricultural Library--NAL--is also providing increased 
electronic access to its unparalleled storehouse of agriculture related 
information and to improve the services it provides. NAL maintains the 
Agriculture Online Access bibliographic database of more than 3 million 
citations to the literature of agriculture and related physical and 
social science subjects. NAL is also working in partnership with land-
grant universities and other institutions through the establishment of 
the Agriculture Network Information Center--AGNIC--that serves as a 
major focal point on the Internet for access to quality information, 
subject area experts, and other resources. Funding is needed for new 
technology to improve search systems that operate across multiple 
institutions and to expand the scope of these initiatives.
    The Department's main ``home page--www.usda.gov--has also recently 
been redesigned to provide visitors with information about critical 
Departmental issues and Secretarial initiatives, regardless of which 
agency or mission area they relate to. The homepage provides links to 
pages developed and maintained by USDA's agencies. Our E-government 
vision includes eventually providing customers a ``portal'' or main web 
site, similar to major private sector sites such as Yahoo.com, that 
will be organized by subjects, so that visitors can find the 
information they want regardless of which agencies might possess it.
    The Internet now makes it possible for the Department to provide 
real time information to the public about issues critical to their 
health and welfare. USDA's broadcast facilities, managed by the Office 
of Communications, provide a wealth of information to farmers daily 
through radio and satellite transmissions. Daily and weekly radio and 
news reports supply information about sign ups for farm programs; 
announce results of agricultural research; broadcast major policy 
changes; provide consumer news on food prices, nutrition, conservation, 
and the environment; and report vital economic news about crop prices 
and supplies, as well as crop weather conditions. However, the 
broadcast industry is moving quickly to digital standards that our 
existing equipment cannot meet. Our goal is to use the Internet to 
allow farmers, constituency groups, and the public to take full 
advantage of the programs, services, and data at USDA. This means that 
we must invest in the kinds of high-speed computers and 
telecommunications equipment necessary to handle the voluminous files 
required to electronically disseminate video, photographs, radio, and 
television messages in digital formats.
    Increasingly, USDA agencies are working with State and local 
partners, and other agencies, to develop applications that utilize the 
Internet to actually conduct E-business. Agencies are trying to meet 
the demands of their customers by moving beyond simply providing the 
public access to information via the Internet to implementing more 
advanced applications to conduct secure transactions online. Processes, 
from applying for grants to procuring products and services, are being 
web-enabled. For example:
    The Food and Nutrition Service--FNS--which is in the forefront of 
E-government through its highly successful Electronic Benefits 
Transfer--EBT--initiative, has plans to use the Internet to share 
information with its state partners; provide authorized users online 
access to information to help reduce fraud; and collect information 
directly from retailers who support the WIC program. FNS has also begun 
planning for an extranet environment that will allow entry to only 
users who have direct business with FNS. FNS currently uses an 
Electronic Data Interchange--EDI--system in its food distribution 
division that enables customers to process some 80 percent of the 
orders for the school lunch program. Of course, all of these 
applications are being developed with security and privacy as key 
components. FNS has also recently developed and deployed an online 
Healthy Eating Index (HEI), which allows citizens to input their diets 
and receive instant analysis of their nutritional strengths and 
weaknesses.
    Cooperative States Research and Extension Service--CSREES is a 
participant in the Inter-Agency Electronic Grants Committee in the 
development of standard processes, standard Federal data sets, and the 
design of a ``portal'' to Federal grants activities known as the 
Federal Commons. The portal will allow citizens and institutions to 
track the status of federal grant proposals online throughout the 
entire grants life cycle. When it is completed, constituents will be 
able to apply for grants electronically as well as receive award 
notices online. This kind of interagency initiative is key to 
government's ability to provide citizens with the kind of common 
interfaces to government they are demanding; however these projects are 
expensive and they depend upon means being found to support interagency 
funding that have yet to be developed. CSREES has actually been using 
electronic mail to send acknowledgement of proposal receipts for the 
past year, reducing turn around time by weeks from the normal paper 
intensive process. However, much more work must be done before citizens 
can actually submit their proposals online.
    The Farm Services Agency has already implemented an award winning 
E-business application--the Electronic Bid Entry System--that automates 
the bid entry portion of USDA's procurement of commodities that are 
exported under foreign food aid programs. With this system, bids for 
some $1.2 billion in food for farm aid can be opened and contracts 
awarded in two hours. Plus, up to the minute market prices improve 
competition, so that more people can be fed for each dollar in aid. 
More recently, FSA has developed a system which allows steamship lines 
to use the Internet to input bid data. Yet another E-business 
application allows FSA to issue payment statements to vendors via E-
mail, with estimated savings to vendors of almost $200,000 per year as 
a result.
    In 1997, USDA's Agricultural Marketing Service--AMS--became the 
first Federal agency to actually use the Internet in the rule-making 
process by posting proposed rules for the National Organic Program, 
which sets standards for organic produce, for comment on its web site. 
As a result, the agency reported receiving over five times the usual 
number of comments on the proposed rule. AMS is now focused on 
educating employees and managers about potential E-business 
opportunities; establishing a viable Internet infrastructure which is 
80 percent complete; providing adequate security for that 
infrastructure; training staff; and providing training to secure expert 
web building support to all AMS users.
    Rural Development--RD--agencies are developing web-based 
applications to allow more efficient operation of multi-family housing 
programs. Over 10,000 changes to tenant certifications, such as changes 
in income, etc, are received each month from borrowers. RD plans to 
enable those borrowers to transmit this information electronically or 
to enter data directly via a web page. Borrower and lender changes for 
RD and FSA guaranteed programs are now accepted via Intranet, and all 
RD community program reporting is now available through the web.
    The Animal and Plant Health Inspection Service--APHIS--just 
recently launched a new website that will allow customers to submit 
online applications to import fruits, vegetables, and animal products 
into the United States. APHIS' new website is designed to make the 
permit application process easier for our customers, and if it is as 
popular as can be expected, it will be expanded to include additional 
permit applications. Importers can access the site by going to APHIS' 
Home Page at www.aphis.usda.gov and clicking on Import Authorization 
System under hot issues.
    Question. USDA's OCIO budget also states that web-enabling service 
deliver will demand a high-performance and reliable enterprise 
telecommunications network. It says that to meet these expectations in 
fiscal year 2001, the Department will expand its network to all major 
state offices and that significant contract support will be required to 
securely expand the enterprise telecommunications network. What will 
the cost be in fiscal year 2001 to expand the network and how many 
states are being considered when you say all major state offices?
    Answer. Fiscal year 2001 reflects the Phase I implementation of our 
Universal Telecommunications Network that will be delivered to sixteen 
states where our major offices are located. Phase II will extend the 
Network to all fifty states. Phase I cost is projected at $4.5 million.
    Question. What will be the recurring annual operational and support 
annual costs for the network to the states, and what are estimated 
annual benefits?
    Answer. Our annual operational and suppport costs are projected to 
grow from a current $1.6 million to $6.1 million based on program 
delivery requirements and Electronic Government initiatives. The 
recurring annual costs are expected to increase as the program areas 
increase their dependence on information technology to support their 
missions. However the unit cost will decrease. For example, in the last 
two years USDA has increased its Internet capacity by seven-fold and 
increased network reliability while the costs to support these 
activities increased 3 fold. Each dollar bought more than 2.3 times 
than it previously bought.
    Question. What alternatives' analysis has USDA completed to show 
that it will be more cost-effective to expand its network to states to 
deliver web-enabling service delivery from such a large number of sites 
as opposed to delivery of web-based service from just one or two sites?
    Answer. USDA's initial architectural design is based on analysis 
done as part of the Service Center Initiative's LAN/WAN/Voice project. 
The understanding of program direction and future requirements is 
essential to effective network design. Network requirements are being 
collected from the program community so that the initial architecture 
can be independently verified and validated.

       COMMON COMPUTING ENVIRONMENT/SERVICE CENTER MODERNIZATION

    Question. Describe in detail how USDA will provide one-stop service 
to its customers in all 3,000 of its service center sites, especially 
since only about 700 sites will house all three service center 
agencies. Also describe the mission critical processes for implementing 
such a concept and the estimated milestones, time frames and resources 
required.
    Answer. About 700 of our 2,600 Service Centers will have all three 
agencies present. About 1,700 of the remaining 1,900 will have at least 
two agencies present, primarily the Natural Resources Conservation 
Service (NRCS) and the Farm Service Agency (FSA). Around 200 will be 
occupied by only one agency on a full-time basis.
    Our one-stop vision essentially means that service will be 
available anywhere, anytime and in a seamless manner. For customers 
with Internet access, this may mean that they may rarely or even never 
go to a physical office location at all. They will be able to 
electronically ``shop'' at the Service Center via the Internet to 
obtain information, set up appointments at their farm site, file 
program applications, and change or update information in the files.
    Customers who do not have access to the Internet or need ``hands 
on'' assistance, will be able to go to any one of the 2,600 Service 
Centers and obtain some level of service for all of the programs 
offered by the county-based agencies. That level of service will be 
different depending on which agencies have staff at that particular 
center and the progress in deploying a fully functional CCE. The 
following describes one-stop service for each of these office scenarios 
assuming that the CCE technology infrastructure is in place.
All three agencies present
    This would represent the optimum level of service. Each agency 
representative would be able to describe, in general, the program 
services available from the other two agencies, provide written 
material and introduce the customer to other agency counterparts if the 
customer was interested in other services. They would also be able to 
check the status of a pending item, such as a loan application, and 
provide that information to the customers. If needed, they could set up 
appointments with the counterparts or take information, such as a new 
telephone number, and put that information into a shared database.
One or two agencies present
    Same type of service described above except that for services for 
an agency not on site, the Service Center employees will depend upon 
technology to bridge from providing general information, such as 
application forms, to personal service on a particular program. For 
example, if the customer is interested in a service offered by Rural 
Development--RD, but there is no RD employee on site, an NRCS employee 
can provide general information and assistance. But, since their 
expertise is conservation and not lending, they would not be able to 
pre-qualify or process a loan application. With the CCE technology in 
place, however, they would be able to assist the customer in connecting 
to the nearest RD office through a user friendly KIOSK or computer 
terminal. Through an automated question/answer process, the customer 
could pre-qualify for a loan, submit a loan application, and schedule 
an appointment with the RD loan officer either at his or her base 
Service Center or at the NRCS only office. Another option would be to 
go on line directly using the KIOSK or computer terminal and a two-way 
video connection to discuss the loan application and needs with a 
remote RD loan officer.
    In the above instance, the full one-stop service would be provided 
via the technological connection with some assistance from the NRCS 
employee to help the customer get started and be comfortable with the 
process.
    In addition to the above examples, the one-stop concept also 
encompasses situations where a farmer may have parts of his or her 
farming operation in several counties or even crossing state lines. 
Currently, that individual has to visit each Service Center that 
services his or her dispersed operation. With CCE technology in place 
and the Geographic Information Systems that are a key part of that 
technology, the producer will be able to stop in only one of the 
Service Centers and sign up for programs or conduct other business 
covering the entire operation.
    The CCE is the essential linchpin for achieving the one-stop vision 
outlined above. This common information system will allow information 
to be shared both within a Service Center and between Service Centers. 
The current stove pipe and out-of-date technology supporting the 
Service Center operations today do not allow for this mobility of data 
and customer service. This infrastructure barrier must be removed in 
order to provide the ``anytime, anywhere'' one-stop shopping service 
that is needed. Without the open state-of the art enabling technology 
provided by the CCE, one-stop service cannot be achieved.
    With respect to major milestones, the CCE will be fully implemented 
at the end of fiscal year 2002, provided that adequate funding is 
provided for the capital investments necessary to acquire the key 
components at the specified times to meet that schedule. The 
implementation strategy identifies the key components of the CCE 
infrastructure and lays out their execution in a staged approach, 
providing immediate benefits and building capability to support 
reengineered business processes as they are implemented. These critical 
milestones for the implementation of the CCE are described in the 
following project plan Implementation Schedule for CCE components:
    [The information follows:]

    
    
    Question. Because most business planning for the common computing 
environment was completed prior to advent of Internet growth, (1) to 
what extent and specifically how does the Department intend to use the 
Internet to compliment current service delivery, and (2) what changes 
if any will integrating the Internet into service delivery have on CCE 
IT acquisition and maintenance costs in fiscal years 2000, 2001, and 
2002.
    Answer. Today, via the Internet, farmers and agricultural producers 
can electronically view public information on USDA programs, such as 
crop and production reports. They can download and fill-in application 
forms for temporary programs such as the Small Hog Operation Program, 
the Dairy Market Loss Assistance Program, Crop Loss Disaster Assistance 
Program, the Livestock Assistance Program, and several forms for FSA's 
farm loan programs. USDA is making additional forms available in 
electronic form, including applications for loan deficiency payments. 
However, these forms must still be faxed or mailed back to the 
Department for processing. This kind of electronic access is a good 
first step, as it saves having to visit a Service Center to obtain a 
form, and requires a minimal infrastructure investment (a web server 
accessible from the Internet). USDA is also currently providing a large 
variety of program information on its Web sites, including news 
releases, program fact sheets, program activity information, and office 
locators.
    As part of our Electronic Access Initiative--EAI--within the SCMI, 
the next level of electronic access planned is to enable farmers to 
complete and submit USDA forms over the Internet. Current paper forms 
often assume the customer is sitting with and being assisted by a 
Service Center employee. Many of the forms being converted to 
electronic format for access over the Internet must be enhanced with 
easy to understand instructions and when fully interactive prompt 
customers in a way that prevents submission without the customer having 
provided all the required information. The current technology 
infrastructure does not adequately support access to the Internet for 
USDA staff or full access via the Internet for customers. Achieving 
this level of access requires a fully implemented CCE under the SCMI of 
the county-based agencies. The EAI is developing electronic 
authentication (electronic signature) methods to verify the identity of 
the sender and the integrity of the content of the electronic document.
    Achieving the vision of electronic access to USDA programs offered 
through Service Centers so America's farmers and other rural residents 
can conduct their business with the Department online is an enormous 
undertaking. Additionally, submission of a document to the Department 
electronically does not mean that processing of the document is 
automated. Electronic access will require reengineering numerous 
existing programs and systems, as well as training employees in new 
roles, responsibilities, and technologies. From a technical 
perspective, Web-enabling USDA's business means investing in hardware, 
software, and telecommunications to securely connect the existing 
county-based USDA Service Centers to the Department's national network 
and the Internet. The level and timing of these investments play an 
important role in determining which electronic services the Department 
can provide to farmers and when it can provide them. CCE IT acquisition 
and maintenance estimated costs for fiscal years 2000, 2001, and 2002 
include support for these Internet based processes.
    USDA recently contracted for a major study to address the security 
issues associated with this initiative. The Department plans to use $1 
million of the fiscal year 2000 CCE appropriation to provide the 
initial web servers and security tools needed to start the process. 
Additional investments required for full electronic access are planned 
for fiscal year 2001 and 2002, as outlined in the CCE Implementation 
Plan.
    In April 1999, the Service Center Agencies began working on the EAI 
with the objective of establishing an infrastructure that enables them 
to make the web a mainstream way of doing business. Although the 
primary purpose of the project is to build the IT infrastructure 
necessary to support e-business, the program owners in the agencies are 
actively participating in pilots, process reengineering, staff 
assignments and other innovative activities.
    One of the major requirements for USDA to move forward with 
technology acquisitions was for it to have reengineered business 
processes for the service centers.
    Question. Has USDA completed reengineering business processes for 
the service centers?
    Answer. Business Process Reengineering--BPR--is at the heart of the 
Service Center Modernization Initiative--SCMI. BPR analyzes the service 
center agencies' current program and administrative processes to see 
how they can be streamlined and integrated to improve the effectiveness 
and efficiency of USDA's service to customers. Our BPR efforts to date 
have given us the understanding of our basic business processed needed 
to move forward with the CCE and have served as the basis for defining 
the CCE technology architecture. We recognize that the CCE will need to 
support business as we know it today, as well as any changes in 
business over the next decade. That is why our CCE architecture is 
designed around open, interoperable and scalable systems. We look at 
the CCE as the basic technology infrastructure to support county-based 
program delivery through the first decade of the 21st century. Failure 
to move forward will hamper our ability to service our customers and 
respond to the needs of the future.
    Question. If not, what is left to reengineer and when will this be 
completed?
    Answer. There are 20 active BPR projects focusing on core business 
areas such as lending, managing risk, conservation and environment, 
community development and outreach, and administration. Each of these 
projects is tested in a laboratory environment before being piloted in 
the field and deployed nationally.
    SCMI has initiated the reengineering design of approximately 60 
percent of the Service Center business processes and will reengineer 
the remaining 40 percent of the buisness processes as resources permit. 
The BPR project designed to strealine human resources administration 
has completed all testing and piloting and is being deployed 
nationally. BPR projects involving lending, community development, 
managing risk, conservation, and administrative areas are scheduled to 
complete testing and piloting in fiscal year 2000 and be deployed 
nationally in fiscal year 2001.
    Question. What are the estimated savings that USDA will achieve 
from processes already reengineered?
    Answer. CEE is also designed as a fully scalable infrastructure 
that can quickly respond to and support future business needs as 
dictated by new legislative or policy changes.
    The SCI Business Case developed in fiscal year 1998 provides an 
economic analysis and cost benefits for the implementation of the CCE 
and reengineered business processes. It shows a return on investment of 
40 percent over the full 10-year life span of the project. The 
calculated dollar value of benefits from staff time savings and 
improved efficiencies of operations total $5.486 billion over this 
period. This analysis has been validated by actual measurement of 
increased process efficiencies at two of the field pilot sites. In 
fact, staff reductions have already been made (over 10,000 from fiscal 
year 1993) and the technology tools and streamlined processes will be 
the only way this reduced staff can continue to deliver quantity 
service and meet the demands of cyclical workload such as that 
associated with natural and economic disasters.
    Question. USDA's budget for fiscal year 2001 shows that the 
department plans to spend $86 million for equipment for the CCE/Service 
Center Modernization. What will this investment acquire?
    Answer. The following table shows the planned investment for CCE 
components in fiscal year 2001.

    [The information follows:]

                                                               Estimated
        CCE Fiscal Year 2001 Investments                           Costs

Network/Communications Servers..........................     $32,240,000
Application Servers (includes GIS and public access 
    servers)............................................      15,000,000
Workstation/Server Software.............................       7,000,000
Enterprise GIS Software.................................       5,000,000
Relational Database.....................................       2,640,000
Peripheral Equipment (includes digital cameras and 
    portable data accessories)..........................       8,095,000
Printers................................................       6,150,000
Workstations............................................      10,000,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total.............................................      86,125,000

    Question. With the Internet, many companies can now deliver 
services to anywhere by having computer equipment at a central 
location. How is USDA's planned investment of $86 million going to move 
the Department to this capability and new business model that other 
companies are moving to?
    Answer. At this point we are very limited in our ability to do 
business with our producers electronically. Currently they can get on 
our Web pages and download information and application forms, but 
cannot submit them to us electronically. They are able to fill out the 
forms and then bring them to us or mail or fax them to our office.
    Moving forward to provide full electronic access to our programs 
and services is one of our top priorities. Our primary obstacles are 
that (1) many of our forms need to be redesigned to a user friendly 
format with clear instructions so that our customers can use them and 
(2) our current technology infrastructure is outdated and cannot 
support full electronic access. We now have an Electronic Access 
Initiative underway that will provide for staged roll-outs of 
infrastructure improvements, security and privacy protocol to support 
this effort. Also, agencies are working to redesign forms and 
instructions so that some interim improvements in this area can be 
made. We plan to use part of the $12.6 million appropriated by the 
Congress in fiscal year 2000 for CCE to acquire the infrastructure 
needed to support electronic access. We also expect to pilot several 
electronic access applications by mid 2001 and to provide full 
electronic access when the basic CCE infrastructure is installed at the 
county office level by the end of fiscal year 2002.
    Question. USDA's budget for the CCE shows $44.5 million was spent 
in fiscal year 2000 for other services and that another $50 million 
will be spent in fiscal year 2001 for other Services. What do these 
other services comprise?
    Answer.

                                            [In thousands of dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                    Fiscal year
                            Activity                             -----------------------------------------------
                                                                       1999            2000            2001
----------------------------------------------------------------------------------------------------------------
Program Management..............................................           1,770             600             600
BPR.............................................................           8,192          12,314          18,850
LAN/WAN/Voice...................................................          10,432           3,500  ..............
Base Data Acquisition...........................................          15,050          23,550          23,550
Common Computing Environment (CCE)..............................           1,707           4,500           7,000
                                                                 -----------------------------------------------
      Total Other Services......................................          37,151          44,464          50,000
----------------------------------------------------------------------------------------------------------------

    The program management funding represents support contracts for the 
change management training, improvement of customer service, and 
overall program management. The BPR amount represents support contracts 
for the development and pilot testing of reengineered processes. The 
LAN/WAN/Voice represents the contractor costs for installation and 
maintenance of equipment in LAN/WAN/Voice sites. The base data 
acquisition constitutes the digitizing of all soil, common land unit, 
and other data; and the purchase of ortho-imagery data from the 
Geological Survey Service. Finally, the CCE amount is for architecture, 
systems, and data integration studies.
    USDA is requesting $75 million under a special account for the CCE/
Service Center Modernization. The budget indicates that fund requested 
under this account would provide the essential capital investments that 
are needed to achieve the goal of a fully operational CCE in 2002.
    Question. Does this mean that USDA will only need the additional 
$75 million to complete the CCE implementation? What assurance can USDA 
give us that if the $75 million is funded, that USDA will not come back 
to request additional funds in fiscal year 2002 and thereafter?
    Question. Once USDA does fully implement the CCE, what does the 
Department estimate its annual costs will be to maintain, update, 
provide, provide communications, and manage the CCE?
    Answer. The estimated CCE total cost for fiscal year 2001 is $91.2 
million. The additional $16.2 million would come from the Service 
Center agencies' budgets. An additional $91.2 million would be needed 
in fiscal year 2002 to complete CCE implementation. After the fiscal 
year 2002 investment, the CCE installation would be largely complete. 
The maintenance and operations costs would be included in the Service 
Center agencies' budgets.
    When fully implemented, annual estimated costs for CCE vary between 
$146 million to $178 million, depending upon whether or not a major 
technology upgrade to CCE components is anticipated during that year. 
These costs are for the acquisition, maintenance, operation, 
telecommunications, and other related costs to support the CCE after 
its initial implementation. These include staff salaries and 
administrative costs that would also be incurred for the maintenance of 
the CCE. These are not, however, new costs that would need to be borne 
by the department, but a re-direction (with a significant reduction) of 
current spending to support and operate the legacy systems of the three 
Sevice Center agencies.

                SERVICE CENTER IMPLEMENTATION OVERSIGHT

    USDA's OCIO fiscal year 2001 budget narrative says that for service 
center implementation oversight the department, among other things, 
conducts independent verification and validations (IV&V's).
    Question. How much does OCIO plan to spend on IV&Vs in fiscal year 
2001 for the service center implementation, and what specific areas 
will the IV&Vs be focused?
    Answer. OCIO has projected a need to spend about $100,000 in fiscal 
year 2001 on IV&Vs related to Service Center implementation. IV&Vs are 
generally done on a specific technical or management issues that need 
outside, objective review and will be determined based on the progress 
of the overall project.
    Question. How many IV&Vs were completed in fiscal year 1999, and 
will be completed in fiscal year 2000, for the service center 
implementation?
    Answer. Two IV&Vs were completed in fiscal year 1999 and three are 
estimated to be completed in fiscal year 2000.
    Question. For those IV&Vs completed for the service center 
implementation, how many recommendations were made and how many of 
these recommendations have been implemented to date? Please discuss 
each recommendation and the actions taken by the Department to address 
each one.
    Answer. The two 1999 IV&Vs involved (1) a task to observe and 
evaluate work being done by FSA and the Service Center Implementation 
Team (SCIT) on a technical solution to connect FSA legacy systems to 
the network and (2) a task to review the process by which the SCIT 
identified and selected an Enterprise Geographic Information System--
GIS--software. The recommendations and follow-up actions for each of 
these IV&Vs follow:
FSA system 36 legacy system IV&V
    The IV&V evaluation made seven key recommendations. The 
recommendation and status of each follows:
    Recommendation.--Drop the IDEA gateway from the completion for 
architectural reasons because it is an interim solution that does not 
offer any long term migration path or hardware recovery.
    USDA Action/Status.--The IDEA gateway was dropped from 
consideration.
    Recommendation.--Prior to final selection, perform a load test in 
the lab and field-test a performance-based pilot to verify that the 
performance of the Microsoft SNA Server solution is adequate to support 
the largest service center on busy days.
    USDA Action/Status.--The additional testing was completed.
    Recommendation.--If the performance tests indicate that the 
Microsoft SNA Server cannot support the required performance metrics of 
the Service Center, then select the A/36 upgrade.
    USDA Action/Status.--The conclusion from this testing was that the 
Microsoft SNA solution performance metrics were not satisfactory. The 
FSA has selected and proposed the AS400 upgrade for the connectivity 
solution.
    Recommendation.--If the Microsoft SNA Server passes the performance 
test, then select it for the A/36 connectivity solution. By selecting 
the Microsoft SNA Server as the solution, USDA will gain other uses for 
the server. In order to take advantage of COTS applications and 
associated plans for future business requirements, the Service Centers 
will require a file server. The Microsoft SNA solution, while providing 
connectivity to the A/36 and associated legacy equipment, can be 
utilized to perform everyday LAN/WAN related support (file and print 
sharing, electronic mail, etc.). Further, since the IBM Mainframes in 
NITC are IP-enabled, once applications and data are either transferred 
or rewritten for use on another platform (Operating System and DBMS), 
the SNA connection (Dial Up XOT modem line) can be dropped.
    USDA Action/Status.--Because of the performance testing results, 
the Microsoft SNA solution was not selected.
    Recommendation.--Obtain a best and final cost from the selected 
vendor.
    USDA Action/Status.--We will obtain a best and final cost as part 
of the procurement process that will occur after a solution is decided 
upon.
    Recommendation.--In order to expedite deployment of the Microsoft 
SNA Server solution, should it be selected, consider reconfiguring 
2,600 of the 16,000 existing workstations already purchased or part of 
the 6,000 workstations to be purchased for use as the NT Server to host 
the SNA server. This will reduce start-up and deployment time. More 
robust NT Servers can later be procured to replace these converted 
workstations when their usage increases and funding allowed.
    USDA Action/Status.--As noted above, this solution was not selected 
and this recommendation has not been implemented.
    Recommendation.--Investigate the use of A/36 migration or porting 
software companies to help rehost FSA applications from the A/36 to the 
new target platform. This will help USDA save on the A/36 maintenance 
costs and potentially also save on the field software deployment costs. 
Furthermore, it could help ease the complexity of migration since FSA 
will only have to be concerned with one hardware platform.
    USDA Action/Status.--Some work in this regard was done by FSA, but 
an OCIO sponsored evaluation is currently underway to respond to this 
issue. This evaluation of connectivity alternatives sponsored by OCIO 
will be completed in May with a decision by the CIO expected by June 1, 
2000.
Evaluation of SCIT enterprise GIS software selection process
    The IV&V study made six key recommendations. The recommendations 
and status of each follows:
    Recommendation.--Due to the pace and structure of the overall 
Service Center Program, there are a number of system architecture 
issues that cannot be thoroughly investigated prior to GIS solution 
selection and therefore pose a significant risk. These issues include 
performance, maintenance, administration, and incomplete business case 
development. The USDA should undertake a study to understand the nature 
and potential magnitude of the risks posed by the current level of 
uncertainty and to develop migration plans to address these risks prior 
to deployment.
    USDA Action/Status.--The USDA GIS Team evaluated the IV&V 
recommendations and developed a risk mitigation strategy which was 
incorporated into their final recommendation document.
    Recommendation.--The USDA should perform both stress testing and 
performance testing before making the final selection of GIS products. 
This includes defining realistic environments (infrastructure and 
loads) and testing perspective vendor products in these environments. 
The results of performance testing should be used to assess 
implications on hardware suite acquisition and maintenance costs to 
achieve desired response times.
    USDA Action/Status.--The USDA GIS Team developed a series of 
discrete event simulation performance models to test candidate GIS 
architectures. These models were used to test the top software 
candidates. Additional models will be developed in the future to test 
other components.
    Recommendation.--The USDA should define system support requirements 
including software and hardware maintenance requirements, and data 
distribution and administration requirements. Assess vendor products 
implications on support costs to adequately install and maintain the 
system.
    USDA Action/Status.--The USDA Team incorporated consideration of 
support requirements and availability as part of their analysis and 
final recommendation for a GIS product.
    Recommendation.--Identify key GIS interfaces with other CCE 
components and assure that there are no incompatibilities. Ensure that, 
if there are requirements not derivable from the business case, they 
can be justified by some other means--reasonable performance, 
interfaces with existing/future products, product, and data support. 
Consider adding these requirements to the business case.
    USDA Action/Status.--The USDA GIS Team documented the interfaces 
and compatibility issues and developed an ``Enterprise GIS Business 
Requirements'' document that specifically addressed the business case 
issue pointed out in the IV&V.
    Recommendation.--The USDA should provide clear rationale for 
prioritizing the numerous functional capabilities demonstrated through 
the LTD. This prioritization should reflect a clear concept of how 
these capabilities will be transitioned to the field to achieve 
projected benefits.
    USDA Action/Status.--The USDA GIS Team provided documentation 
regarding the rationale and prioritization in the final recommendation 
document and the business requirements analysis.
    Recommendation.--The scope of the Draft CCE GIS Results Report 
produced by the AMS subcontractor should be modified to just present 
the results of the LTD. A separate report produced by the USDA GIS Team 
should develop recommendations as to how the USDA should proceed, 
taking into account the USDA prioritized functions.
    USDA Action/Status.--The USDA GIS Team chose not to limit the 
contractor to a presentation of the test results, but allowed the 
vendor to include a recommendation based on those results. The 
recommendation was non-binding on the government, but provided a third 
party, objective perspective. The team did prepare its' own report and 
recommendations as suggested by the IV&V.

  CONSOLIDATING/OUTSOURCING USDA HEADQUARTERS INFORMATION TECHNOLOGY 
                               FUNCTIONS

    Question. What analyses has USDA completed to determine where there 
would be opportunities to consolidate internal IT activities across 
agencies throughout the department?
    Answer. The Department is increasingly exploring opportunities 
where the USDA agencies might benefit from consolidated IT activities. 
An interagency team is currently working on several issues in the area 
of asset management. For example, the team is currently analyzing the 
potential benefits of USDA standardizing on one tool set for querying 
large data sets, a need which has been identified by several agencies.
    In November 1999, the Secretary directed the Chief Financial 
officer, working with the Chief Information Officer and the Assistant 
Secretary for Administration, to lead a group of senior executives in 
developing a corporate strategy for administrative/financial systems 
that affect the entire Department. The group will look at a range of 
systems, including accounting/budget execution and formulation 
functions, procurement, property, human resources, travel, and the 
associated telecommunications and security.
    The Department is working to establish a corporate or enterprise 
telecommunications network to support interoperability for interagency 
communications and data exchange among agencies and programs and 
enhance program delivery and eliminate redundant services, facilities, 
resources, and operations. An enterprise network is also an integral 
component of our efforts to strengthen cyber-security. With mergers 
occurring throughout the telecommunications industry, often resulting 
in reduced unit costs for telecommunications services, an enterprise 
network will enable USDA to leverage the apparent successes documented 
by our industry partners and take advantage of these reductions. The 
aggregation of telecommunications services and equipment from a 
corporate perspective can also significantly reduce the unit costs that 
are incurred by individual agencies by allowing the Department to take 
advantage of the economies-of-scale that exist. The bottom line is 
improved USDA program delivery.
    Another area where we are making progress with consolidating IT 
activities across agencies is at our National Information Technology 
Center (NITC), located in Kansas City and Ft. Collins. NITC already 
consolidates and centralizes some of the client server platforms across 
agencies; with several agencies running applications on NITC servers 
and reaping the benefits of a shared environment. FSA and RD have also 
consolidated some data warehouse operations on a single server procured 
by NITC. In addition, the data warehouse for our Foundation Financial 
Information System (FFIS), serving multiple USDA customers, is hosted 
on its own mainframe at NITC.
    This centralized approach to hosting agency IT applications at NITC 
benefits USDA agencies by offering: a 24 hour/day, 7 days/week, 365/366 
days a year operating environment; an Uninterruptible Power Supply 
(UPS), including a dual power feed UPS, and diesel generators; a secure 
infrastructure (including physical access to facility, security 
clearances, biometric entry controls, cameras, dry sprinklers, and 
halon fire suppressants); system administration/management (including 
Commercial-off-the-shelf (COTS) software support, storage management, 
operating system management, change and problem management, capacity 
and performance management, and help desk facility; disaster 
recovery(including backup recovery, off-site storage, and hotsite 
recovery program); and centralized hardware maintenance. Most 
importantly, it allows costs to be spread across all clients, while 
freeing up agency FTE to work on applications.
    The Service Center Modernization Initiative's Support Services 
Bureau is designed to consolidate internal IT activities across our 
county based agencies. In our view, the only way to successfully 
maintain and operate the shared CCE that we plan to put in place is by 
consolidating the three separate IT organizations of the Service Center 
agencies into one integrated staff. Otherwise, it is just a matter of 
time before the stovepipes begin to form and we no longer have a 
``common'' environment. That is why the Secretary is asking Congress to 
remove the restrictive fiscal year 2000 appropriations language that 
prevents us from moving forward with the Support Service Bureau.
    Question. What analyses has USDA completed to determine whether 
outsourcing for some of its IT functions would be cost-effective?
    Answer. In accordance with the Federal Activities Inventory Reform 
(FAIR) Act, the Department has developed a list of all functions that 
are not considered ``inherently governmental'' and thus could 
potentially be outsourced. However, we have not yet conducted any 
systematic analysis to determine whether or not outsourcing for 
specific IT functions would be cost-effective. I do plan to look at 
outsourcing in the area of software services--that is, determining 
where it might be cost effective for the Department to use application 
services providers (ASPs) to lease software, rather than buy and 
maintain it using our in-house technical staff.

                                SECURITY

    Question. USDA's CIO budget includes an increase of $6.6M for 
expanding its USDA Cyber Security Program and identifies numerous 
activities related to security that it will be undertaking.
    Answer. The $6.6 million includes funding for the following 
activities:
  --$1,392,000 for salaries, benefits, travel, and contract support for 
        the Cyber Security Program Office;
  --$1,280,000 to conduct risk assessments;
  --$2,325,000 for contract support to create a USDA Information and 
        Telecommunications Security Architecture, which will provide 
        the corporate products and services necessary to securely use 
        USDA's information assets (commensurate with the sensitivity 
        and value of those assets);
  --$1,200,000 for contract support to design and implement a USDA 
        Information Security Awareness and Training Program; and
  --$437,000 to develop a USDA Software Import Control and Licensing 
        Program;
    Question. What are the current general areas of security weaknesses 
at USDA that this program will address?
    Answer. The general areas of security weaknesses to be addressed by 
the cyber security Office are: Risk Management--vulnerability 
assessments, risk mitigation programs, monitoring of safeguards, 
building of risk management models, Telecommunications weakness, 
Internet access--firewall, intrusion detection, reporting--Logical 
access in tiers I Mainframe, II Minicomputers and servers, and III 
Workstations, configuration management, Operations, Critical 
Infrastructure, Disaster recovery, Security Awareness, Personnel 
security, insufficient and ineffective tools, Skills and Security and 
System Administration training.
    Question. What are the milestones and time frames and estimated 
total costs to fully address these weaknesses?
    Answer. The Department's Associate Chief Information Officer for 
Cyber Security began work in February, 2000. His early estimates are 
that, if funding is available, it will take at a minimum 3 years and 
could be dependent upon the magnitude of spending to adequately 
mitigate these weaknesses and to have the processes to adequately 
manage the risks. Specific milestones and time lines will be developed 
based upon the funding that is made available.
    Question. How much will be spent in fiscal year 2001 across USDA on 
information security management for staff, software and other related 
expenses? (Please break out the number of information security 
management staff in and total security dollars spent at each agency and 
office.)
    Answer. The following two tables provide that information. USDA 
does not collect data on security in the aforementioned categories. 
However, based on the most recent data, security expenditures are 
estimated to be devoted to the following categories: Personnel--64 
percent, System Protection--10 percent, Threat and Risk Assessment--7 
percent, Intrusion Monitoring and Response--7 percent, and Education 
and training--5 percent.
    [The information follows:]

                           TABLE 1. USDA INFORMATION TECHNOLOGY SECURITY BUDGET (BASED ON INFORMATION COLLECTED IN JULY 1999)
                                                                 [Dollars in thousands]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                             Security Budget (fiscal years)        Total IT Budget (fiscal years)            Percent for Security
                  Agency                  --------------------------------------------------------------------------------------------------------------
                                              1999        2000        2001         1999         2000         2001        1999        2000        2001
--------------------------------------------------------------------------------------------------------------------------------------------------------
AMS \1\..................................  ..........  ..........  ..........     $17,505      $15,978      $17,363   ..........  ..........  ..........
APHIS....................................        $367        $624        $624      37,645       31,060       38,324         0.97        2.01        1.63
ARS......................................         151         348         965      38,991       37,097       39,765         0.39        0.94        2.43
CR \1\...................................  ..........  ..........  ..........       2,355        1,943        2,277   ..........  ..........  ..........
CSREES...................................         778         738       4,732       7,308        8,527   ...........       10.65        8.65
ERS......................................         190         172         179       5,031        5,725        6,027         3.78        3.00        2.97
DA \1\...................................          88         160         185       3,014       10,408        8,080         2.92        1.54        2.29
FAS \3\..................................  ..........  ..........  ..........      10,103       11,538       14,002   ..........  ..........  ..........
FNS......................................         662         819         781     350,529      351,731      389,294         0.19        0.22        0.20
FS.......................................         505         972         911     304,705      306,644      297,481         0.17        0.32        0.31
FSA......................................         300         471         313     161,355      162,121      166,912         0.19        0.29        0.19
FSIS.....................................         192         252         500      28,456       26,748       46,531         0.67        0.94        1.07
GIPSA \1\................................  ..........  ..........  ..........       3,705        3,893        4,089   ..........  ..........  ..........
NAD \1\..................................  ..........  ..........  ..........         761          570          589   ..........  ..........  ..........
NASS.....................................         500         528       3,144      16,533       16,272       17,514         3.02        3.24       17.95
NRCS.....................................         903         758         820      96,021       66,447       67,255         0.94        1.14        1.22
OBPA \1\.................................  ..........  ..........  ..........         689          559          559   ..........  ..........  ..........
OC \1\...................................  ..........  ..........  ..........         513          525          972   ..........  ..........  ..........
OCE......................................           9           9           9         767          760          750         1.17        1.18        1.20
OCFO \2\.................................       2,266       2,527       2,905     162,454      183,997      191,321         1.39        1.37        1.52
                                                                                 (162,454)    (183,997)    (191,321)
OCIO \2\.................................       3,723       3,327       5,316      72,941       71,073       81,513         5.10        4.68        6.52
                                                                                  (59,872)     (60,988)     (63,799)
OGC......................................           4           5           5       1,490        1,591        2,441         0.27        0.31        0.20
OIG \1\..................................  ..........  ..........  ..........       5,272        5,743        3,241   ..........  ..........  ..........
RD.......................................         510         720       1,860      79,970       98,345      127,462         0.64        0.73        1.46
RMA \3\..................................  ..........  ..........  ..........      28,076       27,329       29,338   ..........  ..........  ..........
SCIT \1\.................................  ..........  ..........  ..........      35,193       85,796      237,994   ..........  ..........  ..........
                                          --------------------------------------------------------------------------------------------------------------
      Total..............................      10,370      12,470      19,255   1,246,480    1,286,216    1,544,501         0.83        0.97        1.25
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ No security budget estimates provided.
\2\ Numbers reflect total Appropriated and Working Capital Funding. Percentages computed for security are approximations. Not adjusted for collections
  in fiscal year 1999: $5,737,438; fiscal year 2000: $5,595,787; fiscal year 2001: $6,507,860.
\3\ These agencies submitted combined security budgets.


                              TABLE 2. USDA IT SECURITY STAFFING--FISCAL YEAR 1999
                                     (Percent of time Spent on IT security)
----------------------------------------------------------------------------------------------------------------
                                                                       Collateral Duty (Percent)
                         Agency                             FTEs   ---------------------------------  Contractor
                                                                       0-10      26-49      50-99      Support
----------------------------------------------------------------------------------------------------------------
FFAS...................................................         13  .........  .........  .........  ...........
FSA....................................................  .........  .........  .........  .........  ...........
FAS....................................................  .........  .........  .........  .........  ...........
RMA....................................................  .........  .........  .........  .........  ...........
FNCS...................................................          2         11  .........  .........  ...........
FNS....................................................          2         11  .........  .........  ...........
CNPP FOOD SAFETY.......................................          1          4  .........  .........  ...........
FSIS...................................................          1          4  .........  .........  ...........
M&RP...................................................          3         19          3          2          2
AMS....................................................          1         15          3          2          2
APHIS..................................................          1          1  .........  .........  ...........
GIPSA..................................................          1          3  .........  .........  ...........
NR&E...................................................          4        136          2          5           .5
FS.....................................................          2        135          2          3  ...........
NRCS...................................................          2          1  .........          2          0.5
RE&E...................................................          4          2          2          1  ...........
ARS....................................................          1  .........  .........          1  ...........
CSREES.................................................          1  .........          1  .........  ...........
ERS....................................................          1          2  .........  .........  ...........
NASS...................................................          1  .........          1  .........  ...........
RD.....................................................          5  .........  .........  .........          2
RBCS...................................................  .........  .........  .........  .........  ...........
RCD....................................................  .........  .........  .........  .........  ...........
RHS....................................................  .........  .........  .........  .........  ...........
RUS....................................................  .........  .........  .........  .........  ...........
STAFF OFFICES..........................................         39          7          6          1          2
OCFO...................................................         28          1  .........  .........  ...........
OCIO...................................................         11          3          6          1          2
All Other Offices......................................  .........          3  .........  .........  ...........
                                                        --------------------------------------------------------
      Total............................................         71        179         13          9          7
----------------------------------------------------------------------------------------------------------------

    The Forest Service was only agency to report field staff, who spend 
0-10 percent of their time on security related administrative tasks. 
FTEs provide both operational and policy support.
    Question. What performance measures has USDA established to measure 
the effectiveness, progress, and benefit of all the information 
security management activities? And where and how are they being 
tracked within USDA?
    Answer. The Department has recently established metrics to measure 
the effectiveness and progress for information security management 
activities in new systems under development--for example adherence to 
the five core information security requirements in the Department's 
Security Architecture--and is working on establishing the metrics for 
all information security management activities. The Office of the 
Associate Chief Information Officer for Cyber Security will track 
security management activities. They will be tracked through activity 
reports and on-site visits.
    Question. How much does USDA plan to spend in fiscal year 2001 to 
further implement its FFIS and related improvements?
    Answer. The implementation budget for fiscal year 2001 is $25.2 
million.
    Question. How much will have been spent through fiscal year 2000 to 
implement FFIS?
    Answer. To ensure a better understanding of the FFIS project budget 
and costs, in fiscal year 1999, the new project management team was 
asked to develop a budget that segregated implementation costs from the 
ongoing operational costs of implemented USDA agencies. Through fiscal 
year 1998, $57.4 million had been spent for development and 
implementation activities. This amount includes USDA personnel costs 
and contractor costs in support of the overall project and individual 
agency implementation efforts. It does not include any internal agency 
costs for business process re-engineering or similar activities. In 
fiscal year 1999, implementation costs were $16.9 million. For fiscal 
year 2000, one of the two most intensive years for implementation of 
USDA agencies, the implementation budget is $25.5 million. The total 
amount spent through fiscal year 2000 will be approximately $100 
million.
    Question. What are the milestones for completing the implementation 
of FFIS, and what will be the final costs?
    Answer.

------------------------------------------------------------------------
                                    FFIS Production
           Fiscal Year              Operation Date        Agency Name
------------------------------------------------------------------------
1998............................  October 1, 1997...  Office of the
                                                       Chief Financial
                                                       Officer, Forest
                                                       Service
                                                       (approximately 1/
                                                       3 of Forest
                                                       Service)
1999............................  October 1, 1998...  Risk Management
                                                       Agency
2000............................  October 1, 1999...  Remaining 2/3 of
                                                       Forest Service
                                                       and Food Safety
                                                       and Inspection
                                                       Service
2001............................  October 1, 2000...  Animal and Plant
                                                       Health Inspection
                                                       Service, Farm
                                                       Service Agency,
                                                       Natural Resources
                                                       Conservation
                                                       Service, and
                                                       Rural Development
2002............................  October 1, 2001...  Agricultural
                                                       Marketing
                                                       Service,
                                                       Departmental
                                                       Administration/
                                                       Staff Food and
                                                       Nutrition
                                                       Service, and
                                                       Research,
                                                       Education and
                                                       Economics Mission
                                                       area
2003............................  October 1, 2002...  Foreign
                                                       Agricultural
                                                       Service, Grain
                                                       Inspection,
                                                       Packers and
                                                       Stockyards
                                                       Administration,
                                                       and Six Non-USDA
                                                       Cross-Serviced
                                                       Agencies
------------------------------------------------------------------------

    Question. How many agencies are currently using FFIS to input their 
financial information, and when does the Department expect all 
agencies/offices to be using FFIS?
    Answer. The Forest Service, Food Safety and Inspection Service, the 
Risk Management Agency, and the Office of the Chief Financial Officer, 
about 44 percent of the USDA workforce, all rely on FFIS for their 
administrative accounting services. By October 1, 2000, four additional 
agencies, Rural Development, Animal and Plant Health Inspection 
Service, the Farm Service Agency, and the Natural Resource Conservation 
Service will utilize FFIS for these same services. The following table 
shows the number of USDA employees served by fiscal year.
    [The information follows:]

                                            USDA FFIS IMPLEMENTATIONS
----------------------------------------------------------------------------------------------------------------
                                                                                  Number of USDA   Percentage of
                           Fiscal Year                              Total USDA       Employees      Total USDA
                                                                  Employment \1\      Served         Workforce
----------------------------------------------------------------------------------------------------------------
1999............................................................         104,661             528            .005
2000............................................................         101,772          44,544           43.76
2001 \2\........................................................         104,220          75,257            72.2
----------------------------------------------------------------------------------------------------------------
\1\ Based on fiscal year 1999 Actual Staff Years.
\2\ Projected fiscal year 2001 Implementation.

    Question. To its credit, USDA recently made a successful transition 
into the year 2000. In preparing for Y2K, the Department spent more 
than $50 million to get its information systems ready. What were the 
positive lessons learned and how are they being applied today at USDA? 
Aside from making the actual transition itself, to what extent has the 
Department been able to capitalize on its Year 2000 investment and make 
added improvements in the Department-wide use of information 
technology?
    Answer. The Y2K experience enhanced the capability of USDA managers 
to use proven project management techniques to ensure completion of 
complex tasks on time and within cost:
    --Process owners and business resumption team leaders have an 
increased understanding of and skills in strategic planning and risk 
management, such as the use of assessment tools, mitigation and 
contingency planning, and management tracking, as well as greater 
appreciation for the value of exercises to test their plans and train 
critical staff members.
    --The Office of the Chief Information Officer (OCIO) developed 
capabilities and processes to centrally coordinate a set of major IT 
initiatives to leverage investments and promote Department-wide 
efficiencies that will be applicable to future IT investments and 
system rollouts, especially as investments are considered as part of 
the Department's Capital Planning and Investment Control (CPIC) 
process.
    This successful experience is the impetus for initial plans to 
establish an enterprise program management unit within OCIO. The 
purpose will be to plan, manage and evaluate proposed major IT 
investments to identify and take advantage of economies of scale, 
coordinate with the enterprise architecture development to establish 
consistency in IT investments, manage risk from a corporate 
perspective, and to track actual return on investment.
    Question. For the record, what was the total dollar amount spent by 
the Department on Year 2000 fixes and what does this include?
    Answer. Total overall Y2K spending obligations, including agency 
appropriations, is reflected in the following chart.

        Fiscal Year                                     Cost in Millions

1996..............................................................  $1.4
1997..............................................................  14.1
1998..............................................................  64.1
1999..............................................................  95.4
Est. 2000.........................................................  13.5
                                                                  ______
      Total....................................................... 188.5

    These funds were spent for: hardware upgrades and replacements; 
embedded chip and scientific equipment remediation; Independent 
Validation and Verification; telecommunications systems remediation; 
remediation of other systems; software upgrades and replacements; 
business continuity and contingency planning; program management; 
technical assistance to states; and outreach.

                              OTHER AREAS
               USDA INFORMATION TECHNICAL INFRASTRUCTURE

    Question. A primary goal for USDA's CIO has been the development of 
a Department-wide information and technical infrastructure to improve 
service delivery through more effective information systems and data 
management. What efforts are now underway in connection with this 
overall goal? Where does the Department stand on carrying out these 
initiatives and what are the time frames for their completion?
    Answer. USDA began its enterprise architecture initiative in 
September 1996. The USDA Information Systems Technology Architecture 
was published in February 1997. The architecture was developed as part 
of USDA's IT Modernization Plan. Since that time, the architecture has 
been used in the development of core business processes for each 
mission area for their Y2K business continuity plans, establishment of 
the applications baseline for the Y2K initiative, development of the 
proposed enterprise telecommunications network, and creation of the 
baseline architecture for use by the Service Center Initiative and the 
Common Computing Environment. In addition, the architecture processes 
have been integrated with the CPIC process to ensure architectural 
compliance.
    The February 1997 version is now being expanded and updated to 
address recommendations of the independent verification and validation, 
align USDA's architecture approach and model with the Federal 
architecture model, and broaden the architecture to include current 
industry best practices. We have also developed a direction for our 
future architecture that focuses on an enterprise-centric approach for 
shared information and applications. It recognizes the movement toward 
electronic government. The future architecture is also being developed 
based on the concept of technology domains, which represent common 
areas that USDA can approach from an enterprise perspective such as 
electronic signature and collaboration tools.
    We have also developed a draft ISTA Management Framework which 
includes on-going processes that, when finalized, will guide agencies 
regarding selecting business processes for improvement projects, 
working together to define specific technologies, standards, products 
and configurations that will be common across USDA, and standardizing 
USDA information systems across USDA, where there are common 
requirements
    Our fiscal year 2000 Architecture initiatives include: publishing 
the USDA ISTA in both paper and electronic forms; continuing outreach 
to agencies regarding education and awareness of architecture 
principles, standards, and processes; and implementing the ISTA 
Management Framework. This includes establishing the groups who will 
oversee and operate specific architecture processes.

                PRESIDENT'S DECISION DIRECTIVE (PDD) 63

    Question. Under the President's 1998 Decision Directive (PDD) 63, 
departments and agencies are required to develop infrastructure 
protection plans and strategies for achieving them by May 2000. What 
efforts are underway in connection with the implementing PDD63 at USDA? 
What is the status of the work and when will each effort be completed?
    Answer. USDA and its agencies has developed a strategy for 
protecting its critical infrastructures. Most Business Resumption and 
Disaster recovery plans are in the development stage except for our 
major computing facilities--NFC & NITC--which have executable Disaster 
Recovery plans. Efforts are underway to define the security risks and 
establish risk management processes. Funding of the $6.6 million is 
critical in establishment of the risk management process, performing 
vulnerability assessments, building a security architecture all of 
which are necessary for the successful implementation of PDD63.

                       IT ACQUISITION MORATORIUM

    Question. USDA has had an IT Acquisition Moratorium in place for 
several years that requires waivers for IT investments exceeding 
$25,000. In fiscal year 1999, many of the waivers granted by USDA 
involved acquisitions supporting Y2K-related improvements. What was the 
total number and dollar amount of waivers granted for non-Y2K-related 
acquisitions during the fiscal year 1999? With the Y2k crisis now over, 
does USDA plan to continue its IT moratorium and if so, what will be 
the basis for granting waivers?
    Answer. The total number and dollar amount of waivers granted for 
non-Y2K-related acquisitions during the fiscal year 1999 is 203 waivers 
at a total of $281 million.
    With the successful Y2K transition behind us, USDA recently 
restored the threshold back to the original level of $250,000 for 
information technology acquisitions needing Chief Information Officer 
approval. The $250,000 threshold was established when the IT 
acquisition moratorium originated in November 1996. In July 1997, 
Secretary Glickman directed USDA agencies to concentrate as many 
resources as possible on correcting the Year 2000 problem so the 
moratorium threshold was lowered to $25,000. Since the USDA transition 
was successful, the moratorium threshold was raised back to its 
original level except for administrative and financial systems. Again, 
Secretary Glickman wants USDA to focus on strengthening the corporate 
management of the Department's administrative and financial systems; 
the Chief Information Officer must approve all money expended on any 
administrative and financial systems. As stated in the answer to 
question 11, we are also using the moratorium to continue USDA's move 
towards a comprehensive capital planning process.
    Question. As part of the USDA's effort to develop Business 
Continuity and Contingency Plans for Y2K, agencies conducted business 
analysis assessments to identify their core business processes and 
mission-critical IT systems. How has USDA integrated the results of 
these agency assessments into its overall IT planning?
    Answer. As a direct consequence of its investment in Y2K 
preparations, USDA has many new or improved capabilities. The main 
collateral benefits of Y2K preparation include enhanced IT systems 
management capabilities and an improved focus on core business process 
support.

Enhanced systems management

    Business Continuity and Contingency Planning (BCCP) preparation 
included a thorough inventory of current IT assets. Assessment and 
preparation of IT systems for remediation necessitated updating IT 
architecture diagrams. Older systems, particularly desktop hardware and 
applications, have been updated or replaced to ensure Y2K compliance. 
The enhanced IT architecture and information will enable improved 
capital investment management decisions in the future.
    The experience of designing and implementing comprehensive hardware 
and software tests has improved USDA's capability to test new 
applications and components and will reduce the time and cost to deploy 
new applications.

Improved Focus on Core Business Process Support

    The tension of preparation for Y2K led to the identification and 
prioritization of core business processes and critical IT systems. The 
business focus on core processes had the benefit of increasing 
management awareness of the critical role of IT in daily business. This 
increased management awareness of dependence on IT for day-to-day 
business has led to improved coordination between program and IT 
personnel. Identification and prioritization of core business processes 
also revealed which IT systems are most critical and when, whether on a 
daily basis or periodically. Sustaining this awareness will aid in 
allocating scarce IT resources and will help continue improving the 
Department's Capital Planning and Investment Control process.

                 TELECOMMUNICATIONS ENTERPRISE NETWORK

    Question. Several years ago, in connection with USDA's work to 
develop an integrated overall IT architecture, the Department also 
embarked on an effort to establish an enterprise network to better 
integrate the Department's many disparate telecommunications systems. 
What is the status of that work and what has been accomplished thus 
far?
    Answer. Our previous attempts to establish a Telecommunications 
Enterprise Network--TEN was ultimately put on hold. However, we believe 
that a USDA enterprise network is now even more imperative. 
Consequently, armed with lessons from previous efforts, we are now in 
the process of identifying agency business requirements and redefining 
the architecture of a USDA telecommunications enterprise network to 
ensure that it meets the Department's and individual USDA agencies' 
requirements. Working jointly with the agencies, we are developing a 
framework that consists of technology standards, policies, change 
control mechanisms, and common processes. Consolidation and 
optimization opportunities are also being address using a collaborative 
approach. The Department will manage USDA's wide area network and 
perimeter security. USDA agencies will continue to administer security, 
metropolitan and local area networking and security.
    The Department's telecommunications network is analogous to the 
nation's highway system, with many local and state roads and highways 
feeding into the Interstate system--allowing traffic to flow across the 
country. Similarly, our telecommunications backbone consists of a 
corporate network with feeder networks managed at the agency level. Our 
vision is to develop a modern and efficient corporate network, which is 
the backbone of the Department's telecommunications operation.
    As you know, the operation of agency-specific stovepipe networks 
has historically resulted in reduced inefficiencies to program delivery 
and has hampered USDA's interoperability efforts. A corporate or 
enterprise network is necessary to support consolidated 
telecommunications operations; provide interoperability for interagency 
communications and data exchange among agencies and programs; enhance 
program delivery and eliminate redundant services, facilities, 
resources, and operations. Most importantly, an enterprise network is 
also an integral component of our efforts to strengthen cyber security.
    The formulation of the enterprise network infrastructure will 
provide us with the opportunity to implement a ``centralized 
management'' concept which will allow the department to monitor and 
measure network performance and result in improved planning and 
security functionality.
    Question. As part of its enterprise network, USDA also began 
reengineering telecommunications management processes throughout the 
department to address longstanding problems and achieve savings. What 
are the results and what savings have been achieved?
    Answer. We are taking steps to improve telecommunications 
management and more efficiently utilize our resources even as we work 
to transition to an enterprise network. For example, we have made 
progress in correcting deficiencies raised in previous GAO audit 
reports. To ensure that telecommunications services and leased 
telecommunications equipment are terminated upon office closures, a 
checklist to be used when closing offices was provided to the agencies. 
Steps have also been taken to eliminate redundant, uneconomical or 
unused services and equipment. In response to another GAO 
recommendation, we have developed a plan to establish a telephone fraud 
incident reporting mechanism between the long distance exchange 
carriers and USDA's System Network Control Center--SNCC--in Kansas 
City, MO. We are also taking advantage of every opportunity during the 
current FTS2001 transition to improve our performance in this area.
    We are confident that the USDA enterprise network solution makes 
good business sense and that the Department will benefit from 
significant unit cost reductions, (not necessarily savings), once it is 
implemented. Achieving ``savings'' will be difficult given the growing 
need for increased bandwidth and other services as more and more 
programs and services are made available over the Internet. Still, with 
mergers occurring throughout the telecommunications industry, often 
resulting in reduced unit costs for telecommunications services, an 
enterprise network will enable USDA to leverage the apparent successes 
documented by our industry partners and take advantage of these 
reductions. The aggregation of telecommunications services and 
equipment from a corporate perspective can also significantly reduce 
the unit costs that are incurred by individual agencies by allowing the 
Department to take advantage of the economies-of-scale that exist. The 
bottom line is improved USDA program delivery. Our phased approach to 
the implementation of an enterprise network is evolving. We anticipate 
that the enterprise network strategic plan will be fully documented 
this fiscal year. We will also begin the process of obtaining funding 
in fiscal year 2000 and look to complete that effort during fiscal year 
2001.

                              E-GOVERNMENT

    Question. USDA's OCIO has requested funding for E-Government 
related activities aimed at promoting the use of Internet-based 
technologies to make agency programs and services more accessible to 
customers. What plans have been developed for executing such 
initiatives and what programs do they involve?
    Answer. As noted earlier, USDA agencies have several initiatives 
already underway. Most encompass providing customers information on 
USDA programs and services, as well as market information, over the 
Internet. Other applications are being developed which would allow 
customers to actually transact business with the Department online. 
These include the Electronic Access Initiative in the Farm Services 
agencies that will allow farmers to download the forms they need, fill 
them out online, and electronically submit them back to the Department.
    The funds we have requested will enable the Department to develop a 
corporate strategy to implement E-government and are critical for 
implementing the recently passed Freedom to E-file legislation. At 
present, agencies are planning numerous initiatives without the 
necessary level of coordination at the Departmental level. A 
Department-wide E-government working group is being established to 
address this issue. Our plans include conducting an education and 
outreach campaign to ensure that all senior USDA program managers are 
aware of and understand the potential impact of E-government and their 
role in ensuring that USDA provides the kinds of services that our 
customers are increasingly expecting. Most importantly, our plan 
includes developing a corporate wide strategy to ensure the necessary 
level of coordination and to develop standard approaches to cross-
cutting issues. Once the strategy is in place, agencies can develop and 
implement specific plans in an environment which ensures that USDA will 
leverage resources across the Department.

                           INFOSHARE BALANCES

    Question. The Committee recommended that unobligated funds made 
available to the Office of the Secretary in fiscal year 1996 for 
``InfoShare'' be used to fund various activities related to information 
technology for which increased funding was requested in the President's 
fiscal year 2000 budget. Have ``InfoShare'' funds been proposed to meet 
any of these requirements? If so, what investments are proposed from 
unobligated ``InfoShare'' funds?
    Answer. Because of funding needs to support implementation of the 
Service Center Modernization--SCM--and Common Computing Environment--
CCE--all of the funds are being used for that purpose. Where possible, 
the Department is leveraging work done in support of SCM activities 
such as computer assistance and other work on computer and privacy 
issues, for the benefit of all of USDA. For example, in the process of 
analyzing requirements and solutions for intrusion detection for the 
SCM Electronic Access Project, the Department will utilize that process 
and information for the broader USDA environment.
                                 ______
                                 
     SUBMITTED QUESTIONS ON GOVERNMENT PERFORMANCE AND RESULTS ACT
              Questions Submitted by Senator Thad Cochran

      Cooperative State Research, Education, and Extension Service

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. CSREES has developed an annual Performance Plan that links 
to that of the Research, Education, and Economics--REE--Mission Area. 
The Plan relates program activities to the mission and goals of the 
agency--as described in the Agency strategic plan--to the budget 
request submitted in support of research, extension and education 
activities. More importantly, it reflects the role of CSREES in 
enabling land-grant universities and other partners who carry out the 
research and extension activities authorized in the CSREES budget, and 
frames our ability to use reports and databases to document 
accomplishments against expectations.
    Question. Could you describe the process used to link your 
performance goals to your budget activities? What difficulties, if any, 
did you encounter, and what lessons did you learn?
    Answer. We use a process of continuous dialogue with our land-grant 
partners to identify emerging issues that are of the highest priority 
to include in our budget. This takes place in quarterly meetings with 
system administrators, while program reviews are conducted by National 
Program Leaders, and during annual reviews of research and education 
programs. In all instances, these relate to issues of importance 
included in the Administrator's budget request. The difficulty we 
experienced is one of not being able to describe in sufficient detail 
the specific impacts of the Federal investment in research and 
education in advance of the completion of research and education 
activities by those institutions that receive funding. Using existing 
databases and the Research, Education, and Economics Information 
System--REEIS--which has not yet been completely developed, and our 
past experience with the land-grant system, we feel confident that 
projects are focused on issues important to the taxpayers and 
producers. This is reflected in the ``Impact'' statements that are 
being developed to share the results of research and education with the 
public. These impact statements relate to our agency performance goals 
and our budget activities.
    Question. Does the agency's Performance Plan link performance 
measures to its budget? Does each account have performance measures?
    Answer. The agency performance plan is linked to performance 
measures that relate to the President's budget. Because of the 
complexity of the agency budget and the large number of components in 
its accounts, individual components were aggregated around five broad 
agency goals for more efficient planning and reporting. Using the five 
goals gives a national, issue-based focus to programming planned and 
conducted in a dynamic process in the states by eligible partner 
institutions. All program and budget activities relate to one or more 
of the following CSREES Strategic Goals: (1) An Agricultural Production 
System that is Highly Competitive in the Global Economy; (2) A Safe and 
Secure Food and Fiber System; (3) A Healthier, More Well-Nourished 
Population; (4) Greater Harmony between Agriculture and the 
Environment; and (5) Enhanced Economic Opportunities and the Quality of 
Life among Families and Communities.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. Again, because of the complexity of the agency budget and 
the large number of components in its accounts, activities were 
aggregated in the performance plan around the five agency goals for 
more efficient planning and reporting. This means that the individual 
components in the account and activity structure do not have 
performance measures that are specifically linked to those accounts. We 
do however believe that we have enough flexibility to effectively link 
planning with the budget.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. CSREES does not plan to propose any changes to its account 
structure for fiscal year 2001.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. At this time, CSREES does not plan to propose any changes 
to the program activities described under that account structure.
    Question. How were performance measures chosen?
    Answer. Performance measures were chosen to reflect critical 
actions necessary to achieve shared and national priorities in 
agriculture and which describe the purposes and impact of the Federal 
investment in research, extension, and education.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. Our agency did not employ additional staff to collect and 
verify data, but utilized existing staff and data sources, such as the 
Current Research Information System--CRIS--Food and Agricultural 
Education Information System--FAEIS--and the Impact Data Base. We 
believe that these provide reliable sources of data in identifying 
performance measures. The 1998 Farm Bill also developed a Plan of Work 
requirement for institutions receiving formula funds in which 
institutions must list output and outcome measures that will be 
addressed in perspective planning--five years. This will become another 
data source when annual Plan of Work reports are submitted in March 
2001.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. No. The agency plan includes performance measures for which 
reliable data will be available for the first performance report.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    Answer. The key performance goals that we recommend the 
subcommittee use to track program results by goals are: Goal 1--Develop 
new and value-added products and improved production systems; Goal 2--
Develop and improve detection and prevention methods to reduce 
pathogens in foods, and decreased contaminants in the food supply; Goal 
3--To improve the health of consumers through changes in diet, quality 
of food, and food choices; Goal 4--To understand the compatibility of 
agricultural practices on the natural resource base and environment; 
and Goal 5--To improve economic and social indicators of community well 
being.
    Question. For each key annual goal, indicate whether you consider 
it to be an output measure (``how much'') or an outcome measure (``how 
well'').
    Answer. CSREES has performance plans for each of our strategic 
goals. An example of an output measure under Strategic Goal 1 would be 
to develop new and value added products. An outcome measure example 
would be improved risk management skills and practices of agricultural 
producers, and processors, and marketers.
    Question. State the long-term (fiscal year 2003) general goal and 
objective from the agency Strategic Plan to which the annual goal is 
linked?
    Answer. Our Strategic Plan is linked to five general goals: 1) 
Agricultural Production System that is Highly Competitive in the Global 
Economy; 2) A Safe and Secure Food and Fiber System; 3) A Healthier, 
More Well-Nourished Population; 4) Achieve Greater Harmony between 
Agriculture and the Environment; and 5) Enhanced Economic Opportunity 
and Quality of Life for Communities; and one agency specific goal--
Responsive and Effective Management Systems. Our annual performance 
goals are linked to the objectives and general goals contained in both 
the Annual Performance Plan and Strategic Plan. An example of an Annual 
Performance Goal is to develop and improve detection and prevention 
methods which links to the Objective to improve food safety by 
controlling or eliminating food-borne risks, and links to Strategic 
Goal 2 to provide a safe and secure food and fiber system.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. The agency plan reflects substantial internal and external 
partnership discussions to identify outcome/output measures which 
demonstrate that the goals in the plan have been met, including those 
noted in the previous answer.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Yes, the plan specifies agency and collective program 
activities as outputs and university partnership and grantees' work as 
the outcomes which address objectives. We support an annual process 
that ensures our success in using output and outcome measures. We are 
continuing to work with our partners to insure performance measures 
contained in our Annual Performance Report are updated and refined.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. Customer satisfaction measures for the agency will include, 
but will not be limited to expert assessments--such as would be needed 
to assess impacts of genome research and discovery--customer surveys--
such as would be needed to measure scope and effectiveness of selected 
extension programs--economic data or social survey data, and physical 
monitoring--such as would be valuable to determine effects of research-
based changes in best management practices affecting environmental 
quality of public health indicators. Examples of customers would 
include Federal agencies--e.g., the Agricultural Research Service, the 
Department of Energy, the National Science Foundation, the 
Environmental Protection Agency, colleges and universities, and 
producers and consumers of information related to the food and 
agricultural sciences.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. The agency identified approaches to addressing relevant 
national issues such as food safety, water quality, waste management, 
youth and families at risk, food genome initiative, pest management 
strategic, biobased products, and small farms in the formation of the 
budget. The measurable goals--and budget necessary to achieve the 
goals--contribute to achieving the strategic plan of CSREES.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. In collaboration with university partners, we will be able 
to describe the likely impact on programs and achievement of goals.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. We do not currently have the capacity; however, we are 
working to develop the technological capability to measure and report 
performance throughout the year. We have completed modernization of 
CRIS, are developing REEIS, and are in the final phases of a three-year 
project to establish integrated grants tracking and financial 
management. With university partners, we have developed a National 
Impact Data base and are updating the form and format of state plans 
and reports so that they can be submitted and updated through a World 
Wide Web-based system.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. The technology capable of measuring and reporting program 
performance is accessible to senior and mid-level managers. We have 
program analysts who assist in these efforts.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. Program related data bases are available for use by program 
and mid-level managers.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. Because of the complexity of the agency budget and its many 
lines, individual programs were aggregated around five general agency 
goals for more efficient planning and reporting. While the current 
account structure has offered a challenge in the way we respond to the 
requirements of GPRA, we feel we have been successful in using the five 
goals to give a national focus to programming that is planned and 
conducted in a dynamic process in the states by partner institutions 
and grantees.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. Although changes in the budget account structure might 
clarify linkage of dollars to results in a meaningful way, that is not 
the solution to the challenges CSREES faces in responding to GPRA. This 
becomes problematic because the CSREES budget structure is based on 
congressional authorities. Through a partnership with the system of 
State Agricultural Experiment Stations, land-grant and other colleges 
and universities, and other public and private research and education 
organizations, CSREES is USDA's principal link to the university 
systems for the initiation and development of agricultural research and 
education programs. Additionally, CSREES is the Federal partner in the 
Cooperative Extension system, a nationwide non-formal educational 
network. The challenge CSREES faces is capturing and reporting research 
and education results of our partners who conduct and deliver 
activities supported in the CSREES Budget. We are currently engaging 
our Partners in dialogue to help them understand. This will allow 
CSREES to be more responsive to the GPRA mandate. In concert with our 
Partners, we have prepared impact statements highlighting research, 
education, and extension accomplishments supported by the Federal 
investment.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee that the present structure?
    Answer. CSREES does not propose to modify its budget account 
structure at this time.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. CSREES does not propose to modify its budget account 
structure.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Although the Department has some personnel with cost 
accounting expertise, the Department's Chief Financial Officer has 
recognized the need for a Department-wide effort to enhance cost 
accounting expertise. $240,000 is included in the fiscal year 2001 
President's Budget request to provide such leadership. Currently, we 
are linking budget program activities to the goals in our annual 
performance plan. Ultimately, with additional fiscal year 2001 
resources and a better trained workforce, the Department will continue 
to implement improvements in this area.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial Cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as ``Activity-Based Costing,'' whereby the full cost is 
calculated for each of the activities of an agency. What is the status 
of your agency's implementation of the Managerial Cost Accounting 
requirement, and are you using Activity-Based Costing?
    Answer. USDA is in compliance with FASAB's cost accounting 
standards. The Department has identified responsibility segments, for 
which financial statement reporting is provided, employing full cost 
techniques that include unfunded pension and accrued annual leave, 
Federal Employment Compensation Act accrued expenses, GSA rent, 
depreciation, and other expense items that are appropriate. Currently, 
the Department uses several costing techniques, including Activity-
Based Costing, that permit us to determine the cost of our strategic 
goals and selected output activities.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all USDA agencies in 
order to provide standardized accounting methodologies and improve data 
integrity for management and reporting purposes for salaries and 
expenses and administrative operations. As the Department improves its 
basic accounting and reporting processes, it will be able to better 
identify activities and outputs for unit costing and will evaluate the 
various accounting methodologies available and incorporate the 
appropriate methodology for the activity being costed.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and results of these 
activities?
    Answer. Yes, we strongly believe that effective implementation of 
costing systems will vastly improve Federal planning, evaluation, and 
reporting at all levels of the organization.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to the goals?
    Answer. The dollars associated with the performance goals represent 
the total amount appropriated for CSREES programs including Federal 
administration funds retained by the agency to administer the programs. 
In addition, estimated reimbursable funds and mandatory funds for 
programs administered by CSREES are included.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. We have no specific regulatory reform measures associated 
with the development of the agency's performance plan.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. The strategic plan does mention external factors that could 
influence goal achievement. While we cannot predict how the factors 
will influence goal achievement, we attempt to engage customers and 
stakeholders in a way that would minimize the impact of external 
factors on programs.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. To anticipate and plan for the influence of external 
factors, we look to other Federal agencies for mechanisms to coordinate 
research and education programs. This permits joint identification of 
issues and the appropriate role of all participants. These steps help 
us to understand, predict, and respond to the external factors that 
influence goal achievement.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. While we cannot predict how the factors will influence goal 
achievement, we attempt to engage customers and stakeholders in a way 
that would help our agency respond to their concerns through the 
research and education programs that we manage.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. CSREES manages formula funds, special grants, and 
competitive grants in a way to minimize unnecessary program 
duplication. All programs/projects are subject to merit and peer review 
and internal reviews to address this concern.
    Question. If so, does the Performance Plan identify the overlap or 
duplication?
    Answer. The agency performance plan is written to eliminate the 
overlap and duplication of funding in support of programs.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Agencies should address management challenges and potential 
duplication. Our agency has included a specific agency goal 
``Responsive and Effective Management Systems.'' This includes 
strategies that improve information management systems and financial 
management.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. GPRA has challenged our agency to focus on those issues and 
program areas that are important rather than solely focusing on the 
funding mechanisms to support programs. With a diverse funding 
portfolio consisting of formula funds, competitive grants, multi-state, 
and integrated projects, we should be in a position to respond to 
issues that are of the greatest national importance.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. We will continue to use GPRA, as well as other 
accountability strategies, that demonstrate a willingness to respond to 
national programs of importance.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that to what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. We believe that we can with some degree of confidence 
establish milestones that demonstrate movement towards targets--outputs 
and outcomes.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. The questions raised under GPRA relate to accountability 
expectations associated with the budget. While we have always responded 
to questions of accountability, there appears to be a difference in 
expectations between the agencies and those who review the results of 
our expectations. As we submit future reports and receive feedback, 
these differences will be minimized, and we will be on target in 
reporting outputs and outcomes. For example, in the Performance Plan, 
we recognize that in our research and education activities, results and 
performance measures occur over time, and in many instances, over 
several years. However, when the performance plan is read, the reader 
expects all performance measures to be reported within one year.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Answer. CSREES is not requesting any waivers of non-statutory 
administrative requirements.
    Question. Specifically, are you requesting any relaxation of 
transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. CSREES is requesting no relaxation of transfer or 
programming controls in return for specific accountability commitments.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. We are supporting the revision of the REE mission area 
strategic plan. However, the agency does not expect to make substantive 
revisions to our strategic plan.
                                 ______
                                 

                 OFFICE OF BUDGET AND PROGRAM ANALYSIS

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. They link to OBPA's mission and sole program activity by 
assessing the quality, value, and usefulness of information provided to 
the Office of the Secretary and policy officials; they link to the 
strategic goals by measuring specific activities and products that 
support the provision of useful information.
    Question. Could you describe the process used to link your 
performance goals to your budget activities? What difficulties, if any, 
did you encounter, and what lessons did you learn?
    Answer. OBPA examined activities supported by its single budget 
account and established goals to evaluate the products and services it 
provides to its stakeholders while ensuring that they are consistent 
with Departmental policy and valuable to the decision making process. 
Quantifying the value of these products was the greatest challenge. 
This value is dependent, to a large degree, on subjective judgement of 
those parties OBPA supports. OBPA learned that it could capitalize on 
existing consultation processes to seek feedback on the utility of its 
products and services. Additionally, OBPA has learned to use some 
quantifiable measures under its management initiatives to gauge 
progress in staff development and training that is integral to 
successful performance.
    Question. Does the agency's Performance Plan link performance 
measures to its budget? Does each account have performance measures?
    Answer. Performance measures are associated with OBPA's single 
account.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification? Do you plan to propose any changes to your account 
structure for fiscal year 2001? Will you propose any changes to the 
program activities described under that account structure?
    Answer. The performance planning structure can be easily related to 
OBPA's single account. We are not planning changes to the account 
structure.
    Question. How were performance measures chosen? How did the agency 
balance the cost of data collection and verification with the need for 
reliable and valid performance data? Does your plan include performance 
measures for which reliable data are not likely to be available in time 
for your first performance report in March 2000?
    Answer. Measures were chosen based on an analysis of OBPA's mission 
and role, the products and services it provides, and the resources 
necessary to maintain high performance. Cost considerations, balanced 
with OBPA's role, led to a determination that quantifying the utility 
of its products and services would add little to no value at a high 
cost. Data will be available in time for the first report.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results? For each key annual goal, indicate whether 
you consider it to be an output measure or an outcome measure. State 
the long-term (fiscal year 2003) general goal and objective from the 
agency Strategic Plan to which the annual goal is linked.
    Answer. All of OBPA's performance goals under its three strategic 
goals are of equal value in tracking program results. They represent 
outcomes that validate and confirm the outputs OBPA produces are 
useful, valuable, and consistent with Departmental policy--these 
outcome goals are further supported by performance indicators which 
predominantly represent outputs. OBPA's quantified performance goal 
under its management initiative to ``maintain or increase the percent 
of all employees who receive training or other professional 
development'' is worthy of tracking. While the actual percentage is an 
output, it contributes to the outcome that OBPA maintains a highly-
skilled staff. This relates to OBPA's general long-term Management 
Initiative to ``Build a more productive and diverse workforce.''
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. Realizing that it is difficult to measure the performance 
of a staff agency such as OBPA, performance goals were developed that 
would capture the utility of products and services through informal 
feedback and consultation with key stakeholders.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Yes, OBPA has a staff of highly-skilled managers and 
support analysts with backgrounds and on-the-job experiences that equip 
them with the necessary skills and knowledge to assess the efficiency 
and effectiveness of the agencies and programs they oversee.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. While OBPA does not directly measure customer satisfaction, 
the performance goals do seek feedback from its internal customers--the 
Office of the Secretary and other senior level policy officials--and 
external customers--OMB and Congress--as to the utility of its 
products.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 Budget? 
If a proposed budget number is changed, up or down, by this committee, 
will you be able to indicate to us the likely impact the change would 
have on the level of program performance and the achievement of various 
goals?
    Answer. To ensure that OBPA's goals would be met, OBPA assessed its 
resource and staffing needs. It determined that the desired level of 
program performance is becoming increasingly difficult to maintain as 
staff resources have decreased and program and budget complexity has 
increased. To meet these needs, OBPA requests an increase for pay costs 
to maintain staff levels and be in a position to use base funding to 
provide staff training and professional development. Without this 
increase, staff resources will be strained and the absorption of pay 
costs will make it difficult to maintain a high level of performance or 
to provide for employee development. If a proposed number is changed up 
or down, OBPA would be able to indicate the likely impact on 
performance.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results? If so, who has access to the information--senior management 
only, or mid- and lower-level program managers, too? Are you able to 
gain access easily to various performance-related data located 
throughout your various information systems?
    Answer. Yes, senior as well as program managers have easy access to 
the performance data OBPA maintains on its information systems.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty? 
Would the linkages be clearer if your budget account structure were 
modified? If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure? How would such 
modification strengthen accountability for program performance in the 
use of budgeted dollars?
    Answer. As a staff office, OBPA only has one program activity and 
does not believe its budget structure represents a significant 
challenge or that it should be modified.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Because OBPA is a small staff office, it relies on the 
Office of the Chief Financial Officer (OCFO) for budget and accounting 
services and expertise. Based on OCFO guidance and additional direction 
provided by OMB, OBPA links GPRA to the budget process.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial Cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as ``Activity-Based Costing,'' whereby the full cost is 
calculated for each of the activities of an agency. What is the status 
of your agency's implementation of the Managerial Cost Accounting 
Requirement, and are you using Activity-Based Costing? Will you be able 
in the future to show this committee the full and accurate cost of each 
activity of each program, including in those calculations such items as 
administration, employee benefits, and depreciation? By doing so, would 
we then be able to see more precisely the relationship between the 
dollars spent on a program, the true costs of the activities conducted 
by the program, and the results of these activities? Will you be able 
to show us the per-unit cost of each activity and result? To what 
extent do the dollars associated with any particular performance goal 
reflect the full cost of all activities performed in support of that 
goal? For example, are overhead costs fully allocated to goals?
    Answer. This issue will be further dealt with as USDA moves to a 
Department-level approach. At the present time, OBPA does allocate the 
full cost of activities to its goals.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. OBPA does not issue program regulations and therefore has 
not put in place any such measures.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement? If so, what steps have you identified 
to prepare, anticipate and plan for such influences? What impact might 
external factors have on your resource estimates?
    Answer. External factors OBPA attempts to prepare for include 
changing policy priorities and funding levels. While the 2000 
performance plan does not specifically mention these as external 
factors with identified response strategies, OBPA does have the 
processes in place to respond to such challenges. By monitoring policy 
trends and critical issues in the agricultural sector, OBPA tries to 
anticipate changing priorities and shift staff resources as 
appropriate.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication? If so, 
does the Performance Plan identify overlap or duplication?
    Answer. No, OBPA has clear lines of responsibilities divided among 
its budget, program analysis, and legislative, regulatory, and 
automated systems divisions.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Certainly, in a decentralized agency such as USDA, this is 
a key issue. GPRA planning efforts should address these challenges in 
the means and strategies sections of agency performance plans as well 
as through management initiatives.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making? Will this use increase in the future and if so 
in what ways?
    Answer. As mentioned previously, it has been difficult for staff 
offices like OBPA to use GPRA as an effective guide. Many of the 
activities OBPA has described in its plans have always been critical 
components of its performance. The office has long valued good 
management practices and effective coordination. As USDA moves to a new 
strategic planning approach, staff offices will then be able to focus 
more on how they contribute to overall departmental success.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or targeted performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses? Are there any factors, such as 
inexperience in making estimates for certain activities or lack of 
data, that might affect the accuracy of resource estimates?
    Answer. Keeping in mind the difficulties associated with measuring 
the performance of a staff office such as OBPA, the performance 
measures are adequate.
    Question. Are you requesting any waivers on non-statutory 
administrative requirements? Specifically, are you requesting any 
relaxation of transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. No.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. OBPA's 2000 Performance Plan contained changes from 
previous plans by eliminating indicators that did not contribute to the 
measurement of program performance, but there is no need for 
substantive change.
                                 ______
                                 

                     OFFICE OF THE GENERAL COUNSEL

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. OGC's annual performance plan defines our performance goals 
and measures that are used to assess progress over the coming years. 
OGC's mission and strategic goal is centered around providing effective 
legal services in a responsive manner that is consistent with the 
priorities of the Secretary. In order to respond effectively to those 
priorities, we have established in our budget activity a request to 
increase legal services provided to the Department, as well as a goal 
to improve computer technology and communication tools in order to 
improve the productivity of employees of the agency
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. OGC only has one strategic goal and one budget activity. As 
previously stated, the goal centers around making OGC more responsive 
by ensuring that demands for legal services are prioritized in a manner 
consistent with the priorities of the Secretary. Our budget is 
consistent with that goal and those priorities.
    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. Because the budget activity for OGC is requested via a 
single line item in the budget, we did not encounter any difficulties.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Answer. The performance plan for OGC does link performance measures 
to its budget.
    Question. Does each account have performance measures?
    Answer. Performance measures exist for OGC's account for legal 
services
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. OGC's performance planning structure does not differ from 
the account and activity structure in the budget justification.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. OGC does not plan to propose ant changes to the account 
structure for fiscal year 2001.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. We do not anticipate any need to change or modify the 
program activities under the account structure.
    Question. How were performance measures chosen?
    Answer. The performance measures were based on the fact that OGC is 
a staff agency which responds primarily to the needs of the USDA agency 
clients. Thus, interviews of Under and Assistant Secretaries, as well 
as other officials, were conducted to determine what aspects of OGC's 
performance were of most importance.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. Interviews and surveys of agency heads were chosen as the 
most effective and cost-efficient way to measure performance.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. Data from the performance surveys are not likely to be 
available for the first performance report in March 2000.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results? For each key annual goal, indicate whether 
you consider it to be an output measure (``how much'') or an outcome 
measure (``how well''). State the long-term (fiscal year 2003) general 
goal and objective from the agency Strategic Plan to which the annual 
goal is linked.
    Answer. The mission of OGC is to provide legal services necessary 
to support activities of the USDA. OGC provides legal services 
primarily to the Secretary of Agriculture and officials at all levels 
of USDA as well as members of Congress concerning the programs and 
activities carried out by USDA. All legal services are centralized 
within OGC and the General Counsel reports directly to the Secretary. 
The Office of the General Counsel will provide legal services in a 
responsive manner to USDA officials, executive branch officials and 
members of Congress. OGC has 6 objectives that support its mission and 
strategic goal. They are: (1) OGC will provide effective legal services 
in a responsive manner to support USDA activities, consistent with the 
priorities established by the Secretary of Agriculture, (2) OGC will 
review for legal sufficiency, draft regulations submitted by USDA 
agencies and advise the appropriate USDA officials of the results of 
the review, (3) OGC will draft and conduct a legal review of documents 
as requested by USDA and Executive Branch officials, (4) OGC will 
conduct litigation on behalf of USDA officials and will provide 
litigation support services to the Department of Justice in cases 
arising out of USDA programs and activities, (5) OGC will draft 
legislation and review for legal sufficiency legislative reports and 
testimony as requested by USDA officials, (6) OGC will provide 
counseling to USDA officials concerning issues arising out of USDA 
programs and activities. Each of these objectives is measured by a 
combination of customer satisfaction measures (outcome) and output 
measures of OGC's workload.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. The efforts to ensure that the goals in the plan included a 
significant number of outcome measures were both external and internal. 
Externally, OGC's interviews of Under and Assistant Secretaries focused 
on the responsiveness of OGC both quantitatively and qualitatively. The 
surveys of agencies will also include both measures. Internally, OGC is 
requiring quarterly workload assessments from its managers. These 
workload assessments measure both the objective quantifiable number of 
OGC cases and the complexity and difficulty of the cases. Managers are 
asked to critically report, in various forums, on the outcome of 
significant legal efforts throughout OGC.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. The managers clearly understand the difference between 
workload and effectiveness. The range of OGC legal work, from routine 
and quantity-driven paper filings to complex class actions, requires 
that the managers assess both output and effectiveness.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please indicate examples of both internal and 
external customers.
    Answer. OGC will be using surveys of agency clients and management 
reports which reflect anecdotal evidence regarding customer 
satisfaction.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. In order to develop the fiscal year 2001 budget, OGC 
conducted reviews of our fiscal year 2000 Annual Performance Plan. That 
review included surveys of agency officials concerning OGC's 
performance--effective, responsive legal services especially with 
respect to priority matters--as it relates to the performance 
indicators in the plan. Throughout these surveys, it became clear that 
agency officials wanted legal reviews to be provided in a more 
responsive and effective manner, taking into account established 
priorities. Therefore, OGC's fiscal year 2001 budget focused on 
ensuring that resources would be made available to meet the foremost 
legal service needs of the Department.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. Should funding be provided at a level that is greater or 
less than requested, OGC would be able to indicate the impact the 
change would have on the level of program performance and the 
achievement of various goals.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. The Office of the General Counsel has a Work Tracking 
System, (WTS) which utilizes Paradox software and which has the 
capability to track OGC performance indicators on a regular basis.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. The information provided by the WTS is available and easily 
accessible to all of managers.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. Performance-related data is easily accessable.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. OGC's present budget structure does not make it difficult 
to link dollars to results in a clear and meaningful way.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. No.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. N/A.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. N/A.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Although the Department has some personnel with cost 
accounting expertise, the Department's Chief Financial Officer has 
recognized the need for a Department-wide effort to enhance cost 
accounting expertise and $240,000 is included in the fiscal year 2001 
President's Budget request to provide such leadership. Currently, we 
are linking budget program activities to the goals in our annual 
performance plan. Ultimately, with additional fiscal year 2001 
resources and a better trained workforce, the Department will continue 
to implement improvements in this area.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standard Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial cost Accounting. What is the status of your 
agency's implementation of the Managerial Cost Accounting requirement, 
and are you using Activity-Based Costing.
    Answer. USDA is in compliance with FASAB's cost accounting 
standards. The Department has identified responsibility segments, for 
which financial statement reporting is provided, employing full cost 
techniques that include unfunded pension and accrued annual leave, 
Federal Employment Compensation Act accrued expenses, GSA rent, 
depreciation, and other expense items that are appropriate. Currently, 
the Department uses several costing techniques, including Activity-
Based Costing, that permit us to determine the cost of our strategic 
goals and selected output activities.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation.
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all USDA agencies in 
order to provide standardized accounting methodologies and improve data 
integrity for management and reporting purposes for salaries and 
expenses and administrative operations. As the Department improves its 
basic accounting and reporting processes, it will be able to better 
identify activities and outputs for unit costing and will evaluate the 
various accounting methodologies available and incorporate the 
appropriate methodology for the activity being costed.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the programs, and the results of these 
activities?
    Answer. Yes, we strongly believe that effective implementation of 
costing systems will vastly improve Federal planning, evaluation, and 
reporting at all levels of the organization.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. As the Department implements activity based costing, it 
will be able to provide unit costs for activities and results.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. None.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement? If so, what steps have you identified 
to prepare, anticipate and plan for such influences? What impact might 
external factors have on your resource estimates?
    Answer. External factors that could influence goal achievement are 
increased litigation at all levels, but particularly in the civil 
rights and environmental sectors. Substantial increases in litigation 
have a substantial impact on OGC's resources, particularly staffing 
requirements.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication? If so, 
does the Performance Plan identify the overlap or duplication?
    Answer. There are no overlapping functions or program duplication 
within OGC.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. N/A.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making? Will this use increase in the future and if so 
in what ways?
    Answer. GPRA has been used to assist both managers in OGC and 
throughout USDA in planning for how legal resources will be used and 
prioritized. If the leadership shares a common set of priorities, OGC 
resources can be used more effectively to meet program goals. Also, a 
management seminar for OGC managers is planned for late spring which 
will incorporate the GPRA.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses? Are there any factors, such as 
inexperience in making estimates for certain activities or lack of 
data, that might affect the accuracy of resource estimates?
    Answer. Since the implementation of the WTS we have continued to 
refine the system to assure its accuracy in meeting management's 
desires objectives.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements? Specifically, are you requesting any 
relaxation of transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. OGC is not requesting any waivers of non-statutory 
administrative requirements.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. More emphasis should be placed on the substantial rise of 
litigation throughout OGC, particularly in the civil rights and forest 
service sectors, and the resources needed to adequately address the 
increased workload.
                                 ______
                                 

                  OFFICE OF THE CHIEF FINANCIAL OFFICER

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. The mission of the Office of the Chief Financial Officer--
OCFO--is to shape an environment in which USDA officials have and use 
high quality financial and performance information to make and 
implement effective policy, management, stewardship, and program 
decisions. The OCFO has established three strategic goals to support 
this mission, identified strategic objectives under each goal, and 
developed key performance goals to accomplish the objectives.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. The performance goals in the Annual Performance Plan are 
clearly linked to OCFO's strategic goals. These goals link to OCFO's 
single appropriation account--program activity--and to the Working 
Capital Fund. The major share of appropriated funds, approximately 85 
percent of the total in fiscal year 2000 and fiscal year 2001, support 
Strategic Goal 1: Promote sound financial management through 
leadership, policy, and oversight. The remainder supports Strategic 
Goal 2: Create an infrastructure to carry out financial management 
policies. In addition, OCFO has reimbursable funds, which support Goal 
1 only. Working Capital Funds, provided through client payments for 
goods and services, support Goal 2 and Goal 3: Operate a financial 
center that produces timely and reliable information and services. The 
allocation of funds and FTEs for fiscal year 2000 and fiscal year 2001 
are shown in the following table.
    [The information follows:]

                                                       OCFO RESOURCES BY GOAL AND SOURCE OF FUNDS
                                                             [Funds in thousands of dollars]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                 Fiscal Year 2000                           Fiscal Year 2001
                              Funding                               ------------------------------------------------------------------------------------
                                                                      Goal 1    Goal 2     Goal 3   All goals   Goal 1     Goal 2     Goal 3   All goals
--------------------------------------------------------------------------------------------------------------------------------------------------------
Appropriated.......................................................    $4,191      $769  .........     $4,960    $5,462     $1,003  .........     $6,465
    FTEs...........................................................        58        11  .........         69        58         11  .........         69
Reimbursable.......................................................    $2,130  ........  .........     $2,130    $2,252  .........  .........     $2,252
    FTEs...........................................................        19  ........  .........         19        19  .........  .........         19
Working Capital Fund...............................................  ........   $19,531   $172,773   $192,304  ........    $25,160   $176,016   $201,176
    FTEs...........................................................  ........        44      1,626      1,670  ........         44      1,626      1,670
Total..............................................................    $6,321   $20,300   $172,773   $199,394    $7,714    $26,163   $176,016   $209,893
    FTEs...........................................................        77        55      1,626      1,758        77         55      1,626      1,758
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. Our organizational structure did not reflect the strategic 
plan. We have taken the necessary steps to restructure the organization 
so the staff resources will be better positioned to meet the strategic 
plan's goals.
    Question. Does the Agency's Performance Plan link performance 
measures to its budget?
    Answer. Yes, it does. Resource increases to accomplish the budget 
year performance targets are discussed in the Annual Performance Plan 
with respect to means and strategies for accomplishing the performance 
goals. Total resource requirements in the plan tie directly to the 
budget request.
    Question. Does each account have performance measures?
    Answer. Our Plan has performance measures for both our single 
appropriation account and the Departmental Working Capital Fund. The 
performance measures for the direct appropriation are primarily linked 
to Goal 1. Those for the Departmental Working Capital Fund are 
primarily linked to Goals 2 and 3.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. Currently, performance planning occurs along organization 
lines, mainly within each Division, and resources are allocated along 
organizational lines. Because the budget also is developed along 
organizational lines, plans and resources feed directly into the budget 
activity structure.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. At this time, we do not anticipate any.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. No, not at this time.
    Question. How were performance measures chosen?
    Answer. After careful review of the OCFO's primary business lines, 
we identified those business outcomes that would best illustrate USDA's 
progress in financial management.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. Our performance goals are based primarily on information we 
already have available or expect to have available for performance 
reports. As we improve our plan and report, we must achieve greater 
specificity in our plan, emphasize quality in financial management 
data, and move toward outcome-oriented performance measures. We expect 
these changes to be reflected in our revised Strategic Plan and 
subsequent Annual Performance Plans.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. No, it does not. Our current measures can be quantified.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    Answer. We recommend that you track performance goals related to 
achieving an unqualified audit opinion on the USDA consolidated 
financial statements, thus improving the quality of USDA financial 
information; reducing the ratio of collectable delinquencies; 
implementing the Foundation Financial Information System; and 
increasing the number of clients currently using the NFC payroll 
facilities.
    Question. For each key annual goal, indicate whether you consider 
it to be an output measure (``how much'') or an outcome measure (``how 
well'').
    Answer. All four annual goals include elements of both measures. 
For example, if OCFO issues a policy, that policy reflects and output. 
The Department achieves an outcome if this policy results in better 
decision-making that reduces costs or improves services.
    Question. State the long-term--fiscal year 2003--general goal and 
objective from the agency Strategic Plan to which the annual goal is 
linked?
    Answer. This information has been incorporated into the following 
table.
    [The information follows:]

------------------------------------------------------------------------
                                       Strategic        Key performance
         Strategic goal                objective             goal
------------------------------------------------------------------------
1. Promote sound financial        1.1. Achieve an     Unqualified audit
 management through leadership,    unqualified audit   opinion on the
 policy, and oversight.            opinion on USDA's   USDA consolidated
                                   consolidated        financial
                                   financial           statements for
                                   statements..        the prior fiscal
                                                       year.
                                  1.3. Reduce         Improve the ratio
                                   outstanding         of collectable
                                   delinquent debts    delinquencies to
                                   to USDA and limit   total
                                   the increase in     receivables.
                                   number of new
                                   delinquencies,
                                   and increase use
                                   of Electronic
                                   Funds Transfer
                                   (EFT) for payment.
2. Create an infrastructure to    2.1. Implement an   Implement the
 carry out financial management    integrated          Foundation
 policies.                         financial           Financial
                                   management          Information
                                   information         System (FFIS)
                                   system for USDA.
3. Operate a financial center     3.2. Expand the     Increase in number
 that produces timely and          NFC customer base   of newly
 reliable information, and         to increase         implemented
 services..                        volume and reduce   payroll accounts
                                   unit cost..         (number of new
                                                       employees)
------------------------------------------------------------------------

    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. The OCFO Annual Performance Plan is realistic and reflects 
current priorities, given the financial management challenges facing 
the Department. As OCFO gains experience with GPRA and strategic 
planning, and, as an integrated financial management system is 
established throughout USDA, we expect we will shift to even more 
outcome oriented measures, so we can better establish how well we are 
performing. A better financial infrastructure, complete with compliant 
systems and sound business practices, will lead to more outcome-
oriented measures.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Our managers do understand differences between outputs and 
outcomes. OCFO managers have had GPRA training and we have facilitated 
discussions on strategic planning and GPRA.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. Measures of customer satisfaction have not yet been 
established for OCFO, but we are developing several measurements, 
particularly with respect to the National Finance Center and the 
multiple administrative services we provide there.
    Question. How were the measured goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. The fiscal year 2000 Plan describes what can be 
accomplished with current resources. Using that information, we 
established our priorities, the desired goals and requisite performance 
level needed for fiscal year 2001, and identified the additional 
resources required to achieve desired performance. Many of the 
initiatives were proposed in response to deficiencies brought to our 
attention by the General Accounting Office, the Inspector General, and 
central guidance agencies. The need for an additional $1.5 million is 
justified in the Explanatory Notes for fiscal year 2001.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and 
achievement of various goals?
    Answer. Yes, we will. The performance improvements identified for 
fiscal year 2001 above the fiscal year 2000 level shown in Goal 1 are 
clearly quantified, and we would be able to explain the impact of any 
significant change to the request.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. Based on our current measures, we have the technological 
capability; however, we are discovering that there is a need to make 
refinements in the level of detail reported and how it is reported.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. Currently, information is available to management at 
varying levels of the organization depending on the measure. We are 
reviewing our internal planning and reporting processes with a view 
toward making them more inclusive, available to all management levels, 
and used in the every-day planning and decision making process.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. Based on our current measures, we are able to compile the 
necessary data from several systems. This does, however, require 
cooperation from our client organizations, particularly with respect to 
our debt performance measures.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. No, we have not. Our budget structure is relatively 
straight forward, which makes the necessary linkages easy to 
accomplish.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. No, our budget structure is adequate.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. We do not believe that a modification is necessary.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. We believe that the current structure provides sufficient 
accountability for program performance.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions: and (2) how to allocate agency resources to 
perform theses functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. The number of personnel currently assigned to cost 
accounting and their respective levels of expertise vary widely from 
one agency to another. However, we are making progress. Several 
agencies have implemented cost accounting techniques, including 
Activity-Based Costing--ABC, in their financial management activities. 
The Animal and Plant Health Inspection Service, the Food Safety 
Inspection Service, Agricultural Research Service, Office of Inspector 
General, and the Farm Service Agency each have implemented ABC in their 
operations and currently use it for performance measurement and 
reporting, as appropriate. In addition, the Office of Chief Financial 
Officer has begun implementing ABC at the National Finance Center and 
plans to use it for performance measurements in selected situations.
    OCFO recognizes the need to lead a Department-wide effort to 
enhance its cost accounting expertise and has included $240,000 in its 
fiscal year 2001 President's Budget request to provide such leadership. 
In addition, the OCFO's on-going Professional Development Program 
requires its candidates to complete two courses on cost accounting, 
along with several other financial management courses. This 
professional development program and the specific cost accounting 
training will contribute considerably to enhancing USDA's reporting 
capabilities under GPRA. Currently, all USDA agencies have linked 
budget program activities to strategic goals, with some linked down to 
performance goals. Ultimately, with the additional fiscal year 2001 
resources and a better trained workforce, USDA will continue to 
implement improvements in cost accounting.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standard Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as ``Activity-Based Costing,'' whereby the full cost is 
calculated for each one of the activities of an agency. What is the 
status of your agency's implementation of the Managerial Cost 
Accounting requirement, and are you using Activity-Based Costing.
    Answer. USDA still needs to make progress to fully implement 
FASAB's cost accounting standards. To advance this initiative we 
identified responsibility segments, for which we provide financial 
statement reporting, employing full cost techniques that include 
allocation of unfunded pension and accrued annual leave, Federal 
Employment Compensation Act accrued expenses, GSA rent, depreciation, 
and other expense items that are appropriate to allocate. Currently 
USDA uses several costing techniques, including Activity-Based Costing, 
that permit us to determine the cost of our strategic goals and 
selected output activities.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation.
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all of our agencies 
in order to provide standardized accounting methodologies and improve 
data integrity for management and reporting purposes for salaries and 
expenses and administrative operations. We are moving with a very 
aggressive schedule to implement the remaining agencies by fiscal year 
2003. As we improve our basic accounting and reporting processes, we 
will be able to better identify activities and outputs for unit 
costing. At that time, we will evaluate the various accounting 
methodologies available and incorporate the appropriate methodology for 
the activity being costed.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the programs, and the results of these 
activities?
    Answer. Yes, we strongly believe that effective implementation of 
costing systems will vastly improve Federal planning, evaluation, and 
reporting at all levels of the organization.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. As we implement activity based costing, we will be able to 
provide unit costs for activities and results.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. Our approach will be to capture the full cost of doing 
business, capturing overhead and all other applicable costs associate 
with performance measures and goals.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. There are no regulatory reform measures involved in OCFO's 
Annual Performance Plan.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievements?
    Answer. With respect to the direct appropriations, we believe that 
the performance targets set in our Plan are realistic and achievable as 
long as OCFO receives the resources requested for fiscal year 2001. 
With respect to the Departmental Working Capital Fund, our Revised 
fiscal year 2000 and fiscal year 2001 Annual Performance Plan contains 
a brief discussion of the need for continued customer support of the 
systems and services provided by the National Finance Center--NFC. NFC 
provides a variety of services to USDA and non-USDA customers. To 
remain competitive, NFC must continually improve the quality and the 
cost-effectiveness of services to those customers. NFC's success 
depends on its ability to retain current customers and the need to 
attract new ones. Consequently, NFC is currently re-engineering its 
business processes to improve its operations and is aggressively 
pursuing new customers. Because customer satisfaction and an increased 
customer base are so critical to the continued viability of NFC, OCFO 
has developed performance goals addressing these two areas.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. OCFO has identified the following actions to mitigate the 
impact of external factors: (1) The Secretary directed the Chief 
Financial Officer, in conjunction with the Chief Information Officer 
and the Assistant Secretary for Administration, to upgrade and 
modernize USDA's administrative systems in a corporate environment to 
meet the customers' needs. This process will assure the quality and 
integrity of information in USDA's Foundation Financial Information 
System, as well as mixed systems in USDA, provide the corporate 
reporting required to better manage USDA, and improve corporate 
decision making. (2) The National Finance Center--NFC--is conducting a 
survey to assess the level of customer satisfaction with the services 
it provides to its USDA and non-USDA customers. This survey will 
provide important information on customer perceptions about the quality 
of NFC's existing services, desired services not currently performed, 
and current services that might potentially be discontinued. This 
information will improve our ability to assign priorities and target 
resources to meet customer needs. (3) NFC plans to improve its 
operations through implementation of the Capability Maturity Model--
CMM--Level II throughout NFC by fiscal year 2003. CMM is part of a 
discipline for increasing product quality and team productivity, or 
reducing development time that helps an organization improve its 
software development and management activities. CMM serves as a 
standard for software engineering and management practices and is 
essential to support the increasing maturity of NFC's software 
engineering capabilities. (4) NFC will apply the principles of 
``Activity Based Costing'' to its operations to improve its cost 
estimating techniques and to identify operating efficiencies.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. Improved business processes can make NFC operations more 
efficient, which will reduce the unit cost of providing services. 
Although savings to customers may be difficult to quantify, low costs 
makes these services more attractive to current and potential 
customers.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. Our mission is well-defined, and we do not believe there is 
duplication or overlapping functions. Interestingly enough, we did find 
structural problems in our performance objectives that gave the 
appearance of overlap and duplication. We have modified and streamlined 
the strategic objectives that appear in the Revised fiscal year 2000 
Annual Performance Plan to eliminate possible confusion.
    Question. If so, does the Performance Plan identify the overlap or 
duplication.
    Answer. Our Plan contains no overlapping functions or program 
duplication.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. As the lead for implementation of GPRA in USDA, we believe 
that it is essential that these issues are addressed in agency Annual 
Performance Plans. Whether these issues are addressed in the general 
discussion of annual performance goals, in the means and strategies for 
accomplishing performance goals, or as external factors will depend on 
the agency and its circumstances. We are in the process of developing a 
Department-wide Strategic Planning process for USDA, and this is one of 
the issues that will be addressed as part of that process.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. GPRA has made us aware that we need to utilize the 
principles of strategic planning more effectively in our daily 
operations and our decision making processes. As we begin development 
of the new strategic plan and the fiscal year 2002 Annual Performance 
Plan, we will take steps to integrate GPRA more fully into our program 
management. We intend to establish a working group to institutionalize 
strategic planning within OCFO. This group will concentrate on ensuring 
the proper linkages are made between resources, performance, and 
outcomes. They will ensure that lessons learned in working with our 
customers and stakeholders are incorporated into our management 
processes.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. We expect that GPRA will become standard practice within 
OCFO in the future. We will be reviewing our planning processes in the 
very near future and will be better able to describe how we will apply 
GPRA at the conclusion of that review.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. The performance measures in the fiscal year 2000 Annual 
Performance Plan include elements of output and outcome measures.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. There is a learning curve associated with GPRA 
implementation, but we are making progress. We are trying to ensure 
that staff at all levels are properly trained and that the proper tools 
are available to our managers to link costs to performance. We also are 
attempting to ensure that GPRA principles are applied in our daily 
operations.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Answer. No, we are not requesting waivers of non-statutory 
administrative requirements.
    Question. Specifically, are you requesting any relaxation of 
transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. We are not requesting relaxation of transfer or 
reprogramming controls.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997.
    Answer. We have gained substantial insight into GPRA implementation 
since the initial strategic plan was issued and expect that there will 
be substantive revisions in our strategic plan and qualitative 
improvements in our Annual Performance Plans and Reports.
                                 ______
                                 

                          FARM SERVICE AGENCY

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. The annual performance goals measure incremental 
achievement of the agency's strategic goals and, ultimately, the 
agency's mission. Annual performance goals were developed for, and are 
directly linked to, the objectives for each strategic goal. 
Furthermore, the Annual Performance Plan reflects the program 
activities in the agency's budget request, summarized on a GPRA basis, 
including FTEs and funding, associated with achievement of annual 
performance goals.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. As part of the budget process, an fiscal year 2001 Annual 
Performance Plan was developed and submitted which contained 
performance goals relating to the agency's strategic plan. The Annual 
Performance Plan includes all program activities in the agency's 
budget, and reflects the program activities associated with identified 
performance goals. Both the Annual Performance Plan and the fiscal year 
2001 budget relate the need for resources to achievement of program 
performance goals. This linkage also enables decision-makers to assess 
the FTEs and funding requirements of the strategic plan goal 
encompassing the program activities to the achievement of annual 
performance goals.
    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. Difficulties associated with establishing this linkage 
included developing outcome measures for each of the major program 
activities included in the budget, while maintaining an Annual 
Performance Plan that is informative and concise; and, establishing 
quantitative performance goals for program activities to show a 
definite cause and effect relationship between the funding requested 
for program activities and the expected outcome.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Answer. Yes. Performance measures were incorporated in budget 
material to indicate the performance level needed to achieve the goals 
outlined in the 5-year strategic plan and annualized in the performance 
plan.
    Question. Does each account have performance measures?
    Answer. Performance measures were developed for each major FSA 
budget account. Performance measures were developed for the strategic 
goals and annual performance goals and then linked to budget accounts. 
Budget accounts were aggregated to tie in with strategic goals.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. The performance planning structure was aligned with the 
structure reflected in the Strategic Plan. As such, annual performance 
goals, measures, indicators, and baselines were developed for each of 
the agency's strategic goals and management initiatives. The budget 
account structure, however, differs from the performance planning 
structure. The performance planning structure encompasses both program 
and salaries and expenses funding requirements, whereas the budget 
account structure is based on individual program funds, broken out by 
major activity, with a separate administrative expense account that 
consolidates all administrative resources needed to carry out every 
agency program and activity.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. Presently, there are no plans to change the FSA account 
structure for fiscal year 2001, since there is linkage between the 
account and activity structure in the budget and GPRA program 
activities.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. We do not plan to propose any changes to the program 
activities under the account structure.
    Question. How were performance measures chosen?
    Answer. Agency representatives within their respective areas of 
responsibilities developed performance measures. The FSA Strategic 
Management and Corporate Operations Staff worked closely with agency 
representatives to ensure performance measures captured significant, 
vital operations. This ongoing interaction continues as the agency 
strives to develop a greater number of outcome measures reflecting 
results, or impact, of agency programs.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance?
    Answer. In many instances, data collection systems and verification 
methods were already established prior to the development of 
performance measures. As such, managers were able to utilize existing 
technology, processes, and resources to collect and evaluate data. 
Instances in which data collection systems and/or verification methods 
were not available required consideration of several factors to 
evaluate the cost versus benefit of data collection and verification 
methods. Factors considered included actual/anticipated changes within 
program and administrative operations, available technology and 
funding, internal and external risk factors, and the degree to which 
FSA operations are capable of influencing performance results.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. As reflected in the Annual Performance Plan, there are a 
limited number of performance measures for which data are not available 
for inclusion in the fiscal year 1999 Annual Performance Report, which 
is due in March 2000. Instances in which data are not available are 
identified in the Annual Performance Report, accompanied by an 
explanation supporting the reason data is unavailable and anticipated 
timeframes to obtain the data. In lieu of final numbers, the report 
contains preliminary data.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
  --For each key annual goal, indicate whether or not you consider it 
        to be an output measure (``how much'') or an outcome measure 
        (``how well'').
  --State the long-term (fiscal year 2003) general goal and objective 
        from the agency Strategic Plan to which the annual goal is 
        linked.
    Answer. The agency was diligent in ensuring that the most critical 
performance goals were included in the annual performance plan. We 
recommend that the subcommittee track all of the annual performance 
goals in the fiscal year 2000 Annual Performance Plan. We feel that the 
set of performance goals/measures established for Farm Loan programs 
are particularly helpful for tracking program performance (see the 
following table).

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
            Strategic foal                                     Objectives                                               Performance goals                                     Type
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Assist eligible individuals and        Improve the economic viability of farmers and ranchers....  5. Reduce direct loan delinquencies.......................  Intermediateoutcomes.
 families in becoming successful                                                                   6. Reduce first year delinquency rate on new loans and
 farmers and ranchers.                                                                              restructured loans.
                                                                                                   7. Increase the percentage of guaranteed loans made to
                                                                                                    direct borrowers.
                                       Reduce losses in loan programs............................  8. Reduce losses on direct loans..........................  Intermediateoutcomes.
                                                                                                   9. Maintain the guaranteed loan loss rate at or below 2
                                                                                                    percent.
                                       Respond to loan making and servicing requests in a timely   10. Reduce direct and guaranteed loan processing times....  Intermediateoutcomes.
                                        manner.                                                    11. Process primary loan servicing requests within 60 days
                                       Maximize financial and technical assistance to under        12. Increase the number of loans to socially disadvantaged  Intermediateoutcome.
                                        served groups to aid them in establishing and maintaining   farmers/ranchers.
                                        profitable farming operations.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. During the development of the fiscal year 2000 Annual 
Performance Plan, agency managers were reminded of the distinction 
between output and outcome measures and were encouraged, to the extent 
possible, to develop outcome measures in their area of responsibility. 
Currently, the majority of the performance measures in the Annual 
Performance Plan are outputs rather than outcomes. Furthermore, output 
measures are often most appropriate for evaluating achievement of 
annual performance goals, because it often takes multiple years for 
outcomes to be achieved and evaluated. The Strategic Management and 
Corporate Operations Staff, however, will continue working with program 
managers to develop outcome measures, where applicable.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Agency program managers well understand the distinction 
between output and outcome measures. However, developing outcome 
measures is often not feasible for interim timeframes, such as the 
short-term timeframes encompassed in Annual Performance Plans. In 
fiscal year 2000, FSA will be revising its strategic plan, emphasizing 
the identification and development of outcome (including intermediate 
outcome) measures for objectives and strategic goals.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please use examples of both internal and 
external customers.
    Answer. As indicated above, one of the agency priorities in fiscal 
year 2000 is the development of improved performance measures, 
particularly the use of intermediate outcomes to show how our programs 
are impacting our customers. FSA conducted an extensive customer 
satisfaction survey, in conjunction with our USDA service center 
partner agencies, in fiscal year 1999. The revised strategic plan and 
subsequent annual performance plans will contain measures of overall 
customer satisfaction, satisfaction with program delivery timeliness, 
and effectiveness of program delivery efforts. The fiscal year 1999 
survey results will be used to develop our performance baselines. 
Additionally, each of these measures can be disaggregated by major 
program as well as by minority and non-minority customers.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. The measurable goals in the fiscal year 2000 Annual 
Performance Plan served as a basis for establishing performance goals 
for fiscal year 2001. However, the achievement or non-achievement of 
specific performance goals during fiscal year 2000 was not the primary 
factor in determining the level of funding requested in the fiscal year 
2001 budget. Funding proposals relative to the fiscal year 2001 budget 
were primarily based on agency funding priorities associated with 
carrying our the agency's mission, and were greatly influenced by the 
current economic crisis in production agriculture.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. The ability to assess the impact of proposed budget changes 
on targeted performance will vary among program areas depending on the 
extent and nature of proposed funding changes. For instance, the 
ability to effectively administer farm loan programs is dependent on 
adequate administrative funding levels, and the ability to improve the 
economic viability of farmers is dependent on appropriated loan levels. 
Farm loan program personnel can immediately assess the impact on 
performance and the achievement of various goals if proposed budget 
numbers are changed, up or down.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. In most instances, FSA will be able to measure and evaluate 
program performance throughout the year. However, data will not be 
available for all measures included in the fiscal year 2000 Annual 
Performance Plan until new software and/or systems are in place.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. Performance data is available to all levels of management 
in the agency.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. Yes, we are able to gain access easily to various 
performance-related data.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget.
    Many agencies have indicated that their present budget account 
structure makes it difficult to link dollars to results in a clear and 
meaningful way. Have you faced such difficulty?
    Answer. No, we have not experienced that difficulty. The program 
activities in the Annual Performance Plan are linked to the budget. As 
a result, performance goals have been developed for each program 
activity in the Annual Performance Plan that define the level of 
expected performance.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. Since there is linkage between the budget and the 
activities in the Annual Performance Plan, we believe, at this time, 
there is no need to modify the agency's budget account structure.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. We do not propose to modify the budget structure because 
linkage exists between the Annual Performance Plan and the budget.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. At the present time, we do not think the modification of 
this agency's budget account structure would necessarily strengthen 
accountability for program performance.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. The FSA implemented an activity-based costing pilot project 
in 1997 to capture the full cost of administrative services by using 
the ``Activity-Based Costing'' process. During the pilot stage of the 
project, FSA used the support of a private contractor. Presently, the 
agency has three people with one year's experience in cost accounting. 
This year FSA will add two additional staff who have limited 
experience.
    With respect to linkage, the program activities in the agency's 
fiscal year 2001 budget request are summarized on a GPRA basis, 
including FTE staffing and funding associated with achievement of 
annual performance goals. FSA funding and staff year estimates for the 
Salaries and Expenses Account support the four GPRA program goals in 
the FSA Annual Performance Plan. The funding and staff year estimates 
reflect a cost allocation of agency resources based on reviews of 
county office workday estimates and functional responsibilities 
identified to FSA organizations which are then prorated by Program Goal 
to derive Federal funding and FTE's. However, the Farm Loan program 
goal estimates are taken directly from the Agricultural Credit 
Insurance Fund budget estimates. Within each Program Goal, funding for 
implementing Management Initiatives is included, except for State 
Mediation Grants, which is separately appropriated.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all Federal agencies are required to 
have a system of Managerial Cost Accounting.
    The clearly preferred methodology for such a system, as stated in 
that standard, is the one known as ``Activity-Based Costing,'' whereby 
the full cost is calculated for each of the activities of an agency.
    Question. What is the status of your agency's implementation of the 
Managerial Cost Accounting requirement, and are you using Activity-
Based Costing?
    Answer. The FSA has been using the ``Activity-Based Costing'' (ABC) 
process to capture the full cost of administrative services since 1997. 
FSA has continued this process each year since the inception of the 
pilot. FSA has successfully used the ABC methodology to substantiate 
reimbursable agreements with its customers and to determine the 
administrative costs to support the Farm Service Agency (FSA) and 
Commodity Credit Corporation (CCC). FSA/CCC's future plans include an 
activity-based costing pilot project within a major program area and to 
expand the project to other FSA/CCC programs in upcoming years. FSA/CCC 
has identified responsibility segments for financial statement 
reporting.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. We are presently determining the full cost of our 
responsible segments which includes multiple programs. In the future we 
plan on capturing the full cost of each program and for certain 
programs the full cost of each activity. The level to which we will 
drill down into the activities will be determined by the measurements 
required to evaluate the performance against the annual performance 
plan and management's need for information to control cost, allocate 
resources and measure performance against goals.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. If the full cost of each activity for a program is 
captured, you will know the cost of administering the program by 
activity plus the program expenses paid to the farmers. It will also 
provide information on activities which consume the most cost, 
resources and unit cost and volume.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. Based on ABC results for administrative services, per unit 
costs and results were reflected for critical activities. Although the 
ABC process has not yet been implemented agency-wide, we anticipate 
that this type data will be available for other areas of agency 
operations.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. Performance goals in the agency's budgets are not 
reflective of the full costs of all associated activities performed in 
support of that goal. However, performance goals and program activities 
in the budget are linked to the four agency goals in the annual 
performance plan, which are presented on a full cost basis. For 
example, Goal 1, Farm Programs, includes the salaries and expenses 
needed to support that goal. Agency performance goals for specific 
program activities in the annual performance plan are not reflective of 
the full costs. A basis for determining full cost at this level has not 
been developed.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. We have not put any significant regulatory reform measures 
in place in conjunction with the development of the agency's 
performance plan.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement? If so, what steps have you identified 
to prepare, anticipate, and plan for such influences?
    Answer. The discussion of external factors is primarily reflected 
in FSA's Strategic Plan. The measures in the Annual Performance Plan 
are linked to the goals, objectives, and measures in the Strategic 
Plan. Therefore, the same external factors identified in the Strategic 
Plan will influence achievement of annual performance goals. However, 
there are instances where the performance plan does specifically 
address external factors and FSA's efforts to mitigate their impact.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. External factors, such as unexpected changes in the 
agricultural economy, make it difficult to use past performance goals 
as reliable indicators of the level of resources needed in future years 
to achieve the agency's mission. External factors, such as policy 
debates, also make it extremely difficult to adequately request the 
level of resources needed to address critical agency priorities.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication? If so, 
does the Performance Plan identify the overlap or duplication?
    Answer. The agency did not identify overlapping functions or 
program duplication, within the agency, as a result of the performance 
planning process. However, the discussion of partnerships and 
coordination in the FSA Strategic Plan reflects government and private 
entities with which FSA administers complementary program functions. 
The same partnerships and coordination also apply to the program 
activities included in the Annual Performance Plan.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Agencies should address the most significant management 
challenges in GPRA plans. However, where possible, the challenges 
should be included within the context of improving program performance. 
Differing viewpoints among reviewers and users of GPRA plans as to 
which ``management challenges'' should be included in plans make it 
difficult to address these issues in the plans.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. To date, strategic plan usage by agency senior management 
has been limited.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. We believe that as the planning process becomes more 
ingrained in the agency culture, and as the quality of the planning 
documents improve, their usefulness for high level decision making will 
increase.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or targeted performance. Given 
that, to what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. The agency has established measures enabling FSA to compare 
targeted to actual performance. However, the planning process is 
constantly evolving. The agency is continuing efforts to develop better 
measures of program performance. As newer, improved performance 
measures are developed and implemented, sufficient time will be 
required to facilitate a comparison between targeted and actual 
performance, and for establishment of trend data.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. The primary reason for requesting funding is to achieve 
expected or targeted performance, given certain assumptions. However, 
the uncertainty relative to expected changes in the agricultural 
economy, which can not be easily quantified, has an impact on what can 
be achieved with available as well as requested resources. Given this 
reality, future funding requests will continue to reflect agency 
funding priorities with consideration given to performance in the prior 
year relative to expected or targeted performance. Although data 
available from actual performance will be a factor in deciding on 
resources estimates in future years, it is and will continue to be only 
one of many factors considered in determining appropriate funding 
levels, because much of the agency's workload is imposed by external 
sources; i.e., the volatile farm economy and resulting mandatory 
producer assistance legislation enacted in response to downturns.
    Question. Are you requesting any waivers on non-statutory 
administrative requirements: Specifically, are you requesting any 
relaxation of transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. We are not requesting any waivers on non-statutory 
administrative requirements.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. FSA's strategic plan will be revised in fiscal year 2000 to 
reflect additional programs implemented, revisions to existing 
programs, and to improve on the overall content of the fiscal year 1997 
plan. One of the ways FSA intends to improve the plan is by reducing 
the overall number of strategic goals, objectives, and the volume of 
performance measures so that only the most important items are 
represented in the agency-wide strategic plan. Secondly, we plan to 
incorporate, where feasible, the existing ``Management Initiatives'' 
into the major program goals. Currently, major activities, such as 
outreach, are shown separately from the program goals to which they are 
intricately linked. Another area we intend to incorporate into the 
program goals is information technology initiatives, better explaining 
the relationship between IT investments, program results, and improved 
customer satisfaction. Finally, we believe that a more concise plan 
will be a more useful tool for managers to guide the agency.
                                 ______
                                 

                         RISK MANAGEMENT AGENCY

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. RMA's performance goals were derived directly from the 
Agency's objectives contained in its strategic plan. RMA documented its 
business processes (life cycles) in line with its strategic planning 
efforts. These business processes contain the activities that support 
the achievement of RMA's performance goals. RMA is currently working to 
establish the capability to more directly link program activities, 
performance goals, and resource requirements with the strategic plan 
components.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. The activities described in the budget justification 
support the one general goal ``To strengthen the safety net for 
agricultural producers through sound risk management programs and 
education. The budget justification links the program activities with 
funding for the desired results for program delivery. Performance goals 
and indicators in the Agency's Annual Performance plan gauge progress 
toward achieving the long-term general goal and objectives found in its 
strategic plan.
    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. RMA's major difficulty at the moment is instituting better 
cost accounting.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Answer. Yes, and we are improving in this regard. The performance 
measures specifically link resources to goals, as many of the goals are 
financial. The Agency also uses the approach of establishing annual 
performance goals and indicators that gauge progress toward achieving 
the long-term general goal and objectives found in its strategic plan. 
As a result, all resources directly support the general goal of the 
Agency, ``To strengthen the safety net for agricultural producers 
through sound risk management programs and education.''
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. RMA's performance planning structure and the account and 
activity structure in its budget do differ significantly in format and 
structure. However, RMA's budget estimates and justifications do 
include linkage to the performance goals and indicators found in the 
Annual Performance Plan as well as goals and objectives found in the 
agency strategic plan. This linkage can be found throughout the 
agency's fiscal year 2001 Explanatory Notes package and 2000 and 2001 
Annual Performance Plan. In addition, it is important to note that 
RMA's performance plan is consistent with the Agency strategic plan and 
fiscal year 2001 budget request, as required. The following is a 
description of both the performance planning structure and program 
activities found in RMA's budget request:
  --The performance planning structure in the annual plan outlines the 
        performance goals and indicators that RMA would like to 
        accomplish in the given fiscal year. This structure is very 
        similar to that found in RMA's 5-year strategic plan which 
        focuses on the mission, goal and objective of the agency.
  --RMA's budget account and activity structure currently includes two 
        accounts, the mandatory Federal Crop Insurance Corporation Fund 
        (FCIC) and the discretionary Administrative and Operating 
        Expense Account. The FCIC Fund is further broken out by the 
        following program activities: premium subsidy; delivery 
        expenses; research and development reform costs; and 
        apportionment for excess losses. For fiscal year 2001, the A&O 
        account includes only one program activity, salaries and 
        expenses.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. At the present time, RMA does not propose any changes to 
the budget account structure for fiscal year 2001. However, changes may 
be necessary if legislation is enacted to reform the Crop Insurance 
Program.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. Not at this time.
    Question. How were performance measures chosen?
    Answer. RMA documented the life cycles for its core business 
processes. These life cycles contained the activities as well as 
specific inputs and outputs to our process steps. Out of this process, 
RMA selected measures that we felt would best allow RMA management to 
determine agency results in line with the components defined in the 
strategic plan.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. RMA's current measures are primarily based on activity, not 
on results. RMA continues to have an interest in collecting performance 
measures that are based on results (outcomes). But, to do so would 
require considerable resources and additional funding.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. Yes. We had difficulty in gauging farmers' use and 
knowledge of risk management tools. The collection procedures need to 
be improved to assess information regarding the number of producers 
attending risk management education courses (RME) and the number of RME 
sessions being coordinated or facilitated. We are reviewing steps 
necessary to improve the collection process for reporting.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    Answer. RMA recommends that its performance measures that are 
outcome based be used to determine applicable program results. RMA's 
output based measures are intended to help support or determine 
additional specifics regarding the outcome measures. RMA intends to 
conduct quarterly reviews of its available measures and determine their 
appropriateness as management tools. RMA fully expects adjustments to 
be made to its performance measures as experience is gained in being a 
results-based Agency, and new measures are developed.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. RMA's strategic plan includes outcome measures for each 
objective and management initiative in support of our strategic goal. 
The intent was to include at least one outcome measure for each 
objective and management initiative. RMA recognizes that work needs to 
be done to establish or refine these measures. RMA experience with 
these measures should increase the maturity and potential benefits that 
can be derived for the Agency.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. These measures (i.e., output and outcomes) were explained 
and briefed to the Agency's senior management. Discussions and comments 
were used to clarify and/or adjust both kinds of measures. RMA intends 
to ensure program manager understanding of all GPRA concepts as 
implementation progresses.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. RMA has created two projects that will institutionalize the 
development and administration of surveys to internal and external 
customers. RMA is currently in the definition stage working to 
determine: what data elements are needed; what specific questions 
should be asked; who should be asked; where are they; what vehicle/
instrument should be used; what should be the frequency of data 
collection; and, at what cost. Examples of internal customers include: 
employees, unions and other agencies. Examples of external customers 
include: private reinsured companies and agricultural producers.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. Actually, the fiscal year 2001 budget process began prior 
to the developmental stage of RMA's Annual Performance Plan. However, 
throughout the budget preparation process, RMA was able to incorporate 
portions of its annual plan throughout the fiscal year 2001 Explanatory 
Notes. For example, justifications in the budget request link to the 
annual and strategic plans and support the goals within those plans. 
The Purpose Statement and Status of Programs sections of the 
justification outline the contents of the annual plan and reflect the 
resources required to accomplish those goals and measures. RMA feels 
that together, these two tools will provide clear direction to manage 
RMA's activities for fiscal year 2001. In addition, the annual plan and 
budget documents clearly define the Agency's commitment to meet it's 
goals.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. If a budget number is changed RMA can determine the likely 
impact the change would have on program performance and goals. For 
example, in fiscal year 2000, the FCIC Insurance Fund was apportioned 
approximately $953.8 million less than was needed to cover estimated 
program expenses because FCIC's unexpended appropriations carried 
forward from prior fiscal years had increased. This increase was due to 
excellent insurance experience during those prior fiscal years. This 
did substantially decrease the FCIC Insurance Fund reserve that would 
have been available to cover losses when FCIC experiences loss ratios 
which are higher than budgeted loss ratios.
    In the future if FCIC's Insurance Fund is apportioned insufficient 
funds to cover estimated expenses and the FCIC experienced severe 
losses, the FCIC would have to rely on Treasury to immediately provide 
funds which the FCIC can use to cover these losses or the FCIC would 
not have the funds to reimburse the reinsured companies (ultimately 
producers) for losses. The FCIC Act does provide for FCIC to receive 
such sums as necessary to cover the mandatory expenses of the FCIC. In 
addition, shortages in funding would impact the FCIC's ability to 
timely reimburse the reinsured companies for administrative and 
operating subsidy per the Standard Reinsurance Agreement.
    If appropriations to the Administrative and Operating Fund (A&O 
Fund) were cut, RMA would not have sufficient funding to meet all of 
the program goals. For example, program expansion and pilot programs 
may not be initiated and producers may not be made aware of various 
risk management alternatives through educational seminars. In addition, 
program oversight would be reduced. One of the more difficult items to 
budget for in the A&O Fund is the computer costs which cover costs to 
edit data which is transmitted by the reinsured companies and 
additional computer costs due to program changes made during the 
current fiscal year. Also, the volume of data could increase 
substantially and one cannot budget two years in advance to cover these 
type of costs. It would be very advantageous if computer costs could be 
paid for with mandatory rather than discretionary funding. If RMA's 
computer funding is cut, RMA would not be able to edit and validate 
data being submitted in order to reimburse companies for losses and 
expenses.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. Yes, but it is limited. Budget limitations have hindered 
efforts to make access to data more readily available. Budget 
constraints have also impacted RMA's ability to move forward on Pattern 
Recognition efforts. Pattern recognition systems will be initiated 
(fiscal year 2001) to facilitate trend analysis studies, enabling the 
Agency to timely identify performance strengths and deficiencies and 
seize opportunities for improvement. RMA is working to identify the 
technological elements necessary to review, analyze, and make 
adjustments in priorities or process steps to ensure achievement of our 
performance goals.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. Information generated from systems are available to lower-
level program managers as well as senior management. For example, the 
Summary of Business Report which contains detailed crop insurance data 
is available to all RMA personnel and is maintained on RMA's web-site.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. Yes, for some aspects. For example, our Research and 
Development Office utilizes two integrated data processing systems to 
receive and validate data transmitted by reinsured companies. Data 
validated by RMA's Data Acceptance System (DAS) and Reinsurance 
Accounting System (RAS) are used to generate all accounting reports. 
Together they provide RMA with a mechanism to ensure that data received 
is accurate and reliable to make management decisions.
    The Government Performance and Results Act requires that your 
agency's Annual Performance Plan establish performance goals to define 
the level of performance to be achieved by each program activity set 
forth in your budget.
    Many agencies have indicated that their present budget account 
structure makes it difficult to link dollars to results in a clear and 
meaningful way.
    Question. Have you faced such difficulty?
    Answer. Yes. RMA has faced difficulties in linking dollars to 
results under the current budget structure, especially in the mandatory 
FCIC Fund. For example, it was very difficult to produce quantifiable 
and measurable performance goals for program activities such as 
delivery expenses paid to reinsured companies. RMA will continue to 
make improvements in establishing performance measures to capture the 
performance of services provided.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. RMA, to date, has not thoroughly analyzed the impacts or 
potential results of changing the budget account structure for either 
the discretionary A&O account or the mandatory FCIC Fund.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. To effectively link dollars to results, RMA will need to 
modify its present budget account structure. RMA will continue to work 
with the Office of Management and Budget to improve its cost accounting 
system.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. RMA has not yet conducted any analyses to determine an 
appropriate account structure. Therefore, it is unclear how any 
modifications would strengthen accountability.
    Spending significant resources on performance measurement systems 
appears to be a wasteful exercise if this information is not linked to: 
(1) real data about what it costs to perform various government 
functions; and (2) how to allocate agency resources to perform these 
functions.
    Question. Could you comment on your agency's cost accounting 
expertise and plans to link GPRA to the budget process?
    Answer. Although the Department has some personnel with cost 
accounting expertise, the Department's Chief Financial Officer has 
recognized the need for a Department-wide effort to enhance cost 
accounting expertise and $240,000 is included in the fiscal year 2001 
President's Budget request to provide such leadership. Currently, we 
are linking budget program activities to the goals in our annual 
performance plan. Ultimately, with additional fiscal year 2001 
resources and a better trained workforce, the Department will continue 
to implement improvements in this area.
    Under one of the new accounting standards recommended by the 
Federal Accounting Standards Advisory Board (FASAB) and issued by OMB, 
this year for the first time all federal agencies are required to have 
a system of Managerial Cost Accounting.
    The clearly preferred methodology for a system, as stated in that 
standard, is the one known as ``Activity-Based Costing,'' whereby the 
full cost is calculated for each of the activities of an agency.
    Question. What is the status of your agency's implementation of the 
Management Cost Accounting requirements, and are you using Activity-
Based Costing?
    Answer. USDA is in compliance with FASAB's cost accounting 
standards. The Department has identified responsibility segments, for 
which financial statement reporting is provided, employing full cost 
techniques that include unfunded pension and accrued annual leave, 
Federal Employment Compensation Act accrued expenses, GSA rent, 
depreciation, and other expense items that are appropriate. Currently, 
the Department uses several costing techniques, including Activity-
Based Costing, that permits us to determine the cost of our strategic 
goals and selected output activities.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all USDA agencies in 
order to provide standardized accounting methodologies and improve data 
integrity for management and reporting purposes for salaries and 
expenses and administrative operations. As the Department improves its 
basic accounting and reporting processes, it will be able to better 
identify activities and outputs for unit costing and will evaluate the 
various accounting methodologies available and incorporate the 
appropriate methodology for the activity being costed.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. Yes, we strongly believe that effective implementation of 
costing systems will vastly improve Federal planning, evaluation, and 
reporting at all levels of the organization.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. As the Department implements activity based costing, it 
will be able to provide unit costs for activities and results.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. Not yet, our overhead is funded from discretionary dollars, 
not the mandatory account as is the FCIC fund. Thus, we tend to view 
them separately. We maintain program cost data by cost centers and 
object class, not by crops or counties. The costs are then allocated to 
the performance goals.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. There have not been any regulatory reform measures put into 
place specifically for RMA Compliance during the past year.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. In our strategic plan, RMA identified several key external 
factors that could significantly affect progress in our efforts to 
achieve our goal.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. RMA conducted Business Process Reengineering (BPR) that 
allowed for the opportunity to address some of these factors. The 
reengineering plan focused on targeted oversight reviews, shared 
program integrity roles, and better communications.
    Question. What impact might external factors have on your resources 
estimates?
    Answer. External factors can have a significant impact on RMA 
resource estimates. For example, the level and degree of private sector 
involvement in risk management activities will require RMA to adjust 
its current expenditures to meet variations in costs.
    More importantly, Senate and House conferees are now considering 
major crop insurance reform legislation. RMA management has requested 
that Congress provide full funding for the implementation of this law, 
if it is passed. Substantial changes are planned for the development of 
crop insurance policies for specialty crops and under served products, 
geographic areas, and producers. Other extensive changes would include 
the training of FSA ``fact finding'' case workers, the creation of a 
new project to reconcile FSA and RMA data, and the expansion of IT 
capabilities to support the new structure.
    In the event the proposed legislation is not enacted, current RMA 
funds will be insufficient to support its current and approved 
programs. RMA recently imposed a moratorium on product expansion and 
development because of a shortage of funds: In the past 3 years, its 
programs have tripled, while its funding has not appreciably changed. 
RMA needs to finance new crop program development, maintain the current 
program, expand IT capabilities that will make it possible for farmers 
to interact electronically with the agency and insurance companies, and 
expand the agency's compliance division for the improved maintenance of 
program integrity.
    For overall Agency function, the enhancement of RMA's ability to 
enter into contract agreements for the development of new insurance 
products to accommodate specialty crops, and for the expansion of the 
Compliance Division's error rate and data mining capabilities, is an 
absolute necessity. If not done, the payment of fees to other agencies 
that act on RMA's behalf in contracting matters will require the use of 
extensive capital originally intended for more useful purposes.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. The performance planning process did not identify any 
significant duplicative functional or process steps.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. The Annual Performance Plans should include appropriate 
discussion of management challenges. Agencies should coordinate 
crosscutting programs so that duplication does not occur in the plans.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. In January of last year, the Risk Management Agency 
initiated a series of quarterly executive meetings for the purpose of 
discussing and improving Agency performance. At the first meeting, six 
macro performance measures were identified: (1) loss ratio, (2) market 
information, (3) financial audit, (4) public awareness, (5) program 
integrity, and (6) administrative costs. These measures were developed 
in consultation with the private insurance sector. At the second 
meeting, these macro-level indicators were merged into our operational 
strategy to ensure effective and efficient progress in achieving 
performance targets.
    Question. Will this increase in the future and if so in what ways?
    Answer. Yes, RMA will continue to integrate GPRA in the managerial 
decision making process. We will continue to examine our strengths and 
weaknesses through program evaluations, audits, and conducting 
quarterly executive meetings. Congress can encourage this by holding 
hearings and providing oversight not on plans, but on the actual 
management of the agencies and Departments.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that to what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. RMA's measures are still being tested to ensure they are 
the right measures allowing for proper results and management of the 
Agency. Through time and empirical evidence, RMA will refine its 
measures and become more confident in its ability to manage actual 
performance with targeted performance.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. Many of RMA's traditional measures are activity based. 
While we are still in the process of accessing our outcome measures, we 
expect time and experience will improve the degree to which our 
resource estimates are accurate.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Answer. No.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. RMA's fiscal year 2000 performance plan was directly 
derived from our strategic plan. RMA expects that changes to the 1977 
issued strategic plan will result in adjustments due to program changes 
and the legislation on crop insurance reform.
                                 ______
                                 

                        OFFICE OF COMMUNICATIONS

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. As a support entity, the Office of Communications--OC--has 
only one program activity, public affairs. OC's budget structure is a 
single line item that fully supports its one performance goal.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. Since OC has only one goal, which is supported by its 
entire budget, the link between the budget activities and the goal is 
established by this relationship.
    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. In assessing its performance goal, OC was confronted with 
the problem that it is a support agency, and as such, an evaluation of 
its performance does not rely on the quantifying of communications 
products, but rather, on how well the communication products created/
coordinated by OC support the Secretary and agencies, who are the prime 
initiators of communications products. It is not logical for a support 
entity such as OC to propose that it will produce more press releases 
each year or more video products because the needs to the Department 
and its agencies to disseminate information to the public are ever 
changing and dependent on such unpredictable variables as weather, 
plant and animal disease, and health and safety issues. Regardless of 
the circumstances, it is OC's responsibility to be able to provide the 
maximum support possible to the Department whether that means being 
able to produce 100 press releases or 1,000 press releases. This means 
that an evaluation of a support agency such as OC cannot be focused on 
a quantitative analysis of what has been produced, but must concentrate 
on an assessment of their capacity to provide the services required by 
those entities it serves.
    Question. Does the Agency's Performance Plan link performance 
measures to its budget?
    Answer. OC's budget structure is a single line item that fully 
supports its one performance goal and the measures used to meet that 
goal.
    Question. Does each account have performance measures?
    Answer. There is essentially only one ``account'' and as noted 
above, it is related to the performance measures.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. OC's budget structure is a single line item that fully 
supports its one performance goal.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. No changes will be proposed because no change is necessary 
to improve the linkage between the performance planning structure and 
the account structure.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. Again, no changes will be proposed because no change is 
necessary.
    Question. How were performance measures chosen?
    Answer. Through a series of meetings and the process of developing 
the OC Strategic Plan, OC's key managers chose the ``outcome'' measures 
that most accurately describe how well OC provides support to the 
Department and its agencies.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. Discussions were held with the National Agricultural 
Statistics Service to determine the general costs associated with 
developing and administering surveys. This data, along with data 
derived from OC's past use of surveys, was used to determine a general 
cost for surveys. Because OC's budget has limited operational funds, it 
was obvious that OC's efforts to conduct surveys could not be expanded 
without additional funds being provided.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. OC's fiscal year 2000 budget included a request for 
additional funding to expand or enhance the evaluation mechanisms used 
for GPRA purposes. Since funding was not provided, OC revised its plan 
and will rely on existing feedback and evaluation techniques which 
provide measures in time for the first report.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    Answer. There is one key performance goal for OC. We will ensure 
the use of all available communications products, technology and 
techniques to reach employees and all segments of the American public 
to strengthen public knowledge and understanding of USDA's effective 
customer services and efficient program delivery to all citizens.
    Question. For each key annual goal, indicate whether you consider 
it to be an output measure (``how much'') or an outcome measure (``how 
well'').
    Answer. Our measure is an outcome measure.
    Question. State the long-term (fiscal year 2003) general goal and 
objective from the agency Strategic Plan to which the annual goal is 
linked?
    Answer. To support the Department in creating a greater awareness 
among the American Public about USDA's major initiatives and services.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. OC managers and the key personnel involved in identifying 
the agency's measures engaged in extensive consultations with the staff 
of the Chief Financial Officer to ensure that the plan contained the 
appropriate outcome measures.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Yes, because our work requires that we be responsive to our 
customers' communication needs, we are sensitive to the differences 
between a workload measure, such as how many copies of a particular 
brochure they may need, versus an effectiveness measure, such as 
whether that brochure is distributed or designed properly to achieve a 
desired outcome of awareness, action, or education.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. There are two primary means that OC will use to measure 
customer satisfaction. First, comments received by our staff from USDA 
agencies (our internal customers) or the public (our external 
customers) are conveyed to management during the daily and weekly OC 
planning and coordination meetings. Second, results of random and 
periodic surveys that will be conducted of our internal and external 
customers, as funds permit, will be used. Such measures will help gauge 
whether the intended populations are receiving the information and 
whether the information was useful.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. The Office of Communications' determined that it needed to 
develop a budget request to obtain the resources critical to 
accomplishing the goal in its GPRA plan. The increases proposed in the 
fiscal year 2001 budget will be used to add technological enhancements 
that allow measurement of communications performance--e.g., Internet 
counters or feedback on use of radio and TV products; train OC staff in 
the use of the latest technologies; effectively and efficiently provide 
information to under served client populations; and to obtain a limited 
amount of consulting assistance to gain specialized skills not 
currently available on OC staff. Our requested funding for fiscal year 
2001 is directly related to our annual performance plan.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and 
achievement of various goals?
    Answer. The impact of such a change would be difficult to quantify, 
although it would be possible, in general, to identify the expansion or 
limitation in OC's capacity to provide support to the Department and 
its agencies communications efforts that would result from an up or 
down decision.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. Automated systems are not essential to the measuring of 
OC's performance. OC uses a constant stream of feedback from the media 
and the public to evaluate our performance. Positive or negative 
performance indicators are used in evaluating individual performance. 
Work accountability is measured by weekly activity and management 
reports. Remedies and additional actions are established if performance 
falls below the plan.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. All levels of managers participate in the weekly meetings 
and have access to the necessary information.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. We utilize a system that allows work tracking and cost 
measurement for many of our work processes. We also rely on National 
Finance Center--NFC--systems to provide financial and administrative 
data in support of our performance measures.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure make it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. OC's budget structure is a single line item that fully 
supports one performance goal, therefore we have not faced this 
problem.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. No modification is necessary.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. No modification is necessary.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. No modification is necessary.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions: and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Although the Department has some personnel with cost 
accounting expertise, the Department's Chief Financial Officer has 
recognized the need for a Department-wide effort to enhance cost 
accounting expertise and $240,000 is included in the fiscal year 2001 
President's Budget request to provide such leadership. Currently, we 
are linking budget program activities to the goals in our annual 
performance plan. Ultimately, with additional fiscal year 2001 
resources and a better trained workforce, the Department will continue 
to implement improvements in this area.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standard Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as ``Activity-Based Costing,'' whereby the full cost is 
calculated for each of the activities of an agency. What is the status 
of your agency's implementation of the Managerial Cost Accounting 
requirement, and are you using Activity-Based Costing?
    Answer. USDA is in compliance with FASAB's cost accounting 
standards. The Department has identified responsibility segments, for 
which financial statement reporting is provided, employing full cost 
techniques that include unfunded pension and accrued annual leave, 
Federal Employment Compensation Act accrued expenses, GSA rent, 
depreciation, and other expense items that are appropriate. Currently, 
the Department uses several costing techniques, including Activity-
Based Costing, that permit us to determine the cost of our strategic 
goals and selected output activities.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all USDA agencies in 
order to provide standardized accounting methodologies and improve data 
integrity for management and reporting purposes for salaries and 
expenses and administrative operations. As the Department improves its 
basic accounting and reporting processes, it will be able to better 
identify activities and outputs for unit costing and will evaluate the 
various accounting methodologies available and incorporate the 
appropriate methodology for the activity being costed.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the programs, and the results of these 
activities?
    Answer. Yes, we strongly believe that effective implementation of 
costing systems will vastly improve Federal planning, evaluation, and 
reporting at all levels of the organization.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. Since OC has only one performance goal, all of its funding 
resources are devoted to this one goal.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. Since OC has only one performance goal, all of its funding 
resources, including overhead costs are devoted to this one goal.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. OC does not require the implementation of any significant 
regulatory reform measures.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievements?
    Answer. The plan identifies a change in the public need for 
information and funding as the two most significant external factors 
that could influence goal achievements.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. There are weekly and often daily consultations with the 
Department's agencies to anticipate the public's information needs. 
Based on these consultations, OC's efforts are continually refined to 
meet the needs of the public. The fiscal year 2001 budget request 
includes a request for additional funding to expand or enhance the 
evaluation mechanisms used by the Office of Communications. If the 
requested funding is not provided, OC will rely on existing feedback 
and evaluation techniques, and modify them to the degree practical, if 
it is apparent that a problem exists in monitoring a specific aspect of 
OC's performance.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. Significant changes in either the public's requirements or 
the technology required to meet those requirements may require 
additional funds to meet those needs.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. No duplications were identified during development of the 
Performance Plan.
    Question. If so, does the Performance Plan identify the overlap or 
duplication.
    Answer. Not applicable.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Agencies should address the challenges by linking the 
management challenges to their impact on the agency's ability to meet 
its performance goals, as well as, their impact on the resources needed 
to meet those goals. Obviously, duplication should be eliminated where 
feasible. These can be addressed through management initiatives.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. Successful accomplishment of OC's mission has always been 
the basis for executive decision making in OC. GPRA has been useful in 
emphasizing the focus on performance, but OC's role as a support entity 
combined with a lack of funding to refine the tools necessary to 
measure performance place some limits on the extent to which GPRA 
directly influences executive decision making.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. It is likely that GPRA and the development of performance 
reports and plans will be much more integrated in the OC budget 
development process as time passes and OC's GPRA efforts build a 
baseline of information for use by managers.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. Much of the work OC does in support of the Secretary's or 
Department's primary goals is very visible and is an integral part of 
program and mission successes, and in one sense, OC is very mature in 
evaluating its performance on actual achievements. We can count number 
of products produced and cost to produce them. However, as a support 
entity is it very difficult to establish measures that assess OC's 
efforts as stand-alone entities rather than as part of the agencies' 
programs. OC can be left powerless to provide support if funding is not 
appropriated directly or provided from other program sources.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. OC faces three significant challenges: first, the lack of 
funds necessary to acquire better and more extensive data related to 
internal and external customer satisfaction; second, lack of funds to 
upgrade and add new communication technologies offering greater public 
access electronically; and third, the difficulty associated with 
attempting to independently measure the performance of a support 
entity. The lack of funds for survey instruments makes it difficult to 
build and maintain a repository of information on OC's performance. The 
lack of funding for capital investment for new communications 
technologies will soon take its toll in a decreased productivity and 
response by OC in supporting Departmental goals. OC's dramatic staffing 
reduction over the past 5 years and the aging of computer and 
broadcasting technologies will continue to reduce actual performance 
unless technology additions bolster or replace staff reductions. Also, 
changes in communication technology are so dramatic that communications 
products will become less marketable or acceptable causing a decline in 
actual performance.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements? Specifically, are you requesting any 
relaxation of transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. OC is not requesting any relaxation of transfer or 
reprogramming controls.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997.
    Answer. As operations continued during the past year, it became 
apparent that the original objectives identified in the 1997 strategic 
plan were not representative of the full scope of OC's support of 
USDA's goals. After reviewing the plans of other departments and 
guidance from OMB, it was determined that a more refined objective and 
set of means and strategies would be required. As a result, the 
original objectives and means and strategies were replaced by those 
given in the fiscal year 1999 performance plan.
                                 ______
                                 

                    OFFICE OF THE INSPECTOR GENERAL

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. OIG's annual performance goals are linked to the agency's 
mission, strategic goals, and program activities by providing an 
implementation methodology that in each year moves the agency closer to 
achieving the strategic goals. The performance indicators used in the 
Annual Performance Plan provide a target and basis for measurement that 
provide an assessment of how well OIG has progressed toward achieving 
the performance goals.
    OIG has three strategic goals that support its mission to conduct 
and supervise audits and investigations to prevent or detect fraud and 
to improve the effectiveness of USDA programs by recommending changes 
that will increase efficiency and reduce wasteful and fraudulent 
activities.
    The first is to ``Promote economy, efficiency, and effectiveness in 
the administration of USDA programs and operations.'' Two performance 
goals are directly linked to this strategic goal: (1) audit and 
investigate the most significant programs or areas identified in OIG's 
planning process and (2) promote economy, efficiency, and effectiveness 
of USDA programs by recovering inappropriately spent costs, putting 
funds to better use, and avoiding costs.
    The second strategic goal is to ``Promote USDA's conformity with 
the applicable principles, standards, and related requirements by 
fostering improvements in financial systems and financial reporting, 
which will enhance the Department's fulfillment of its fiduciary 
responsibilities.'' Two performance goals are also directly linked to 
this strategic goal: (1) foster improvements in financial systems and 
financial reporting by timely issuing financial statement audits and 
(2) reduce noncompliance with the applicable principles, standards, and 
related requirements in the Department's financial systems and 
financial reporting.
    The third strategic goal is to ``Promote program integrity by 
detecting criminal activity involving USDA programs and personnel.'' 
Two performance goals are directly linked to this strategic goal: (1) 
investigation of fraud within USDA programs and (2) investigation of 
allegations involving the integrity of USDA employees.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. OIG has only one budget activity, ``OIG salaries and 
expenses.'' All performance goals are directly related to this budget 
activity.
    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. OIG has not encountered any difficulties in linking its 
performance goals to its budget activity. With only one budget 
activity, all performance goals directly support this activity.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Answer. Yes. Each strategic goal includes a planned proportion of 
the budget for each fiscal year. Within that structure, the performance 
measures provide a means of assessing how well OIG has succeeded in 
achieving its annual performance goals under each strategic goal.
    Question. Does each account have performance measures?
    Answer. There is only one account: ``OIG salaries and expenses.''
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. There is no difference between the performance planning 
structure and the account and activity structure in the budget 
justification.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. No changes are planned.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. No changes in program activities are planned. OIG is unlike 
a typical programmatic agency in that our activities, audits, and 
investigations, while subject to improvements in methodology and 
application of improved technology, are required to meet prescribed 
standards and, therefore, are not subject to changes in the same manner 
as other programmatic agencies.
    Question. How were performance measures chosen?
    Answer. The performance measures employed by OIG were carefully 
chosen to provide a clear means of assessing our annual progress toward 
achieving our performance goals. In selecting our performance measures, 
we reviewed the measures used by other benchmarking agencies, attended 
training seminars provided by outside vendors, consulted with the 
Congress, and held focus group sessions with a diversity of members of 
other USDA agencies and our own OIG employees. Based on these 
activities, we made a determination as to the strategic and performance 
goals, objectives, and performance measures that we would apply.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. The cost of data collection was considered in the process 
of developing performance measures. We considered several measures and 
determined which measures were most appropriate to provide clear and 
supportable evidence of our success in achieving our performance goals. 
We then assessed the cost of collecting the supporting data for the 
measures and selected those that provided reliable information at the 
most efficient cost. We already had a data collection system in place 
termed ``Consolidated Assignments, Personnel Tracking, and 
Administrative Information Network'' (CAPTAIN). We were able to utilize 
existing OIG expertise to make modifications to the CAPTAIN reports 
that provided the data we required for most of our measures. 
Nevertheless, the data for some measures, such as the number of 
recommendations made to strengthen financial controls and foster 
compliance with laws and regulations, were most efficiently collected 
by manual means.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. No. All the performance measurement data in the OIG 
performance report is in final form.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
  --For each key annual goal, indicate whether you consider it to be an 
        output measure (``how much'') or an outcome measure (``how 
        well'').
  --State the long-term (fiscal year 2003) general goal and objective 
        from the agency Strategic Plan to which the annual goal is 
        linked.
    Answer. General Goal--``Promote economy, efficiency, and 
effectiveness in the administration of USDA programs and operations.'' 
Objectives: (1) identify the most significant programs or areas for 
audit and investigation and allocate resources accordingly and (2) 
devote audit and investigative resources in the areas identified.
    Annual performance goals linked to the general goal.
    ``Audit and investigate the most significant programs or areas 
identified in OIG's planning process.'' This goal is assessed by an 
output measure that shows how well OIG was able to anticipate those 
audits and investigations of most importance to the Department, the 
Congress, and the public and how much of the planned work was carried 
out.
    ``Promote economy, efficiency, and effectiveness of USDA programs 
by recovering costs, putting funds to better use, and avoiding costs.'' 
This goal is assessed by an outcome measure in that it reflects the 
financial recovery that results from OIG's activities.
    General Goal--``Promote USDA's conformity with the applicable 
principles, standards, and related requirements in financial systems 
and financial reporting, which will enhance the Department's 
fulfillment of its fiduciary responsibilities.'' Objectives: (1) 
identify the system, control, or compliance weaknesses, which preclude 
the safeguarding and accountability over funds, property, and assets.
    Performance goals linked to the general goal.
    ``Foster improvements in financial systems and financial reporting 
by timely issuing financial statements audits.'' This goal is assessed 
by an output measure as it relates to the completion of an activity by 
a set date.
    ``Reduce the noncompliance with the applicable principles, 
standards, and related requirements in the Department's financial 
systems and financial reporting.'' This goal is assessed by an outcome 
measure as it reflects improvements in the Department's financial 
systems and reporting as a result of OIG's audit activity.
    General Goal--``Promote program integrity by detecting criminal 
activity involving USDA programs and personnel.'' Objectives: (1) 
identify potential criminal violations impacting the Department, (2) 
identify potential misuse of USDA funds, and (3) identify instances of 
serious USDA employee misconduct.
    Performance goals linked to the general goal.
    ``Investigation of fraud within USDA programs.'' This goal is 
assessed by an output measure as it relates to the number of fraud 
investigation reports completed. The percentages of fraud 
investigations resulting in (1) criminal prosecutions and (2) fines, 
penalties, recoveries, restitutions, cost avoidances, and other 
payments are outcome measures that reflect and assess how well we have 
performed investigative work.
    ``Investigation of allegations involving the integrity of USDA 
employees.'' This goal is assessed by an output measure as it measures 
the number of employee misconduct investigation reports issued. The 
percentage of total reported employee misconduct investigations 
resulting in corrective or disciplinary actions is an outcome measure 
that reflects and assesses performance of investigative work.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. In selecting the goals in the Annual Performance Plan, we 
made sure that, among the potential measures that could be used to 
assess progress in achieving the goals, at least one outcome measure 
was included for each goal. While we consider output measures to be 
significant, outcome measures provide a means of assessing how well OIG 
is performing its mission and, thus, carry a greater significance.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Yes. Our program managers were involved in the process of 
developing the goals and measures and, therefore, are aware of the 
difference between output and outcome measures.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. We assess external customer satisfaction by providing a 
survey request to our auditees upon completion of each audit and 
compiling the results. This measure is not included in the Annual 
Performance Plan because we use it as an analytical tool in our 
detailed audit planning to identify specific areas where our attention 
can be applied to improve customer service. We have found that the 
overall measure of success remains high and is relatively consistent 
from year to year, and, in our case, we do not believe the general 
overall result of this survey would be a particularly useful measure. 
In addition, as we develop our OIG Annual Plan each year, we request 
input from USDA agency managers, State-level agencies, and members of 
congressional committees as to the areas in which they believe OIG 
should perform work. We also solicit information from our internal 
staff on ways in which our work can be improved.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. The results of our fiscal year 1999 measurable goals were 
used to revise targets for fiscal year 2001, as the fiscal year 2000 
results will not be known until after September 30, 2000. The targets 
were revised proportionately with the level of increase in the 
projected budget activity and in consideration of the results achieved 
in fiscal year 1999.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. Yes. Projected outputs would be adjusted in conformity with 
the level of percentage of change in the final appropriated budget.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. We have such capability with some of the performance 
measures through our CAPTAIN system, which provides current data on 
audit activity; however, certain of the performance measures are 
dependent on the completion of activities and cannot be assessed until 
that time. For example, the timely issuance of financial statement 
audit reports and related results cannot be assessed until the audit 
reports are issued but can be monitored through the use of the audit 
plan.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. The information can be obtained from the CAPTAIN system by 
mid-level and above personnel based on password-protected access.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. Yes. We have an extensive tracking system that is used to 
manage resources, as well as the progress, status, and results of our 
audit and investigative efforts.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget.
    Answer. Many agencies have indicated that their present budget 
account structure makes it difficult to link dollars to results in a 
clear and meaningful way.
    Question. Have you faced such difficulty?
    Answer. We did not encounter such difficulty since our only budget 
account is ``OIG Salaries and Expenses.''
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. There is no need to modify our budget account structure.
    Question. If so, would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. Modification is not necessary.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. Modification is not necessary as we have full 
accountability for program performance in the use of budgeted dollars 
with the current structure.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions.
    Could you comment on your agency's cost accounting expertise and 
plans to link GPRA to the budget process?
    Answer. Our agency has a professional level of cost accounting 
expertise, and GPRA performance goals are already linked to our budget 
process--from the initial strategic planning stage through execution of 
operations.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial Cost Accounting.
    Answer. The clearly preferred methodology for such a system, as 
stated in that standard, is the one known as ``Activity-Based 
Costing,'' whereby the full cost is calculated for each of the 
activities of an agency.
    Question. What is the status of your agency's implementation of the 
Managerial Cost Accounting requirement, and are you using Activity-
Based Costing?
    Answer. OIG is using activity-based costing to manage its 
resources.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. Yes. OIG can provide full activity costs for internal 
appropriated funds and, in coordination with Department efforts, can 
identify overall costs, including indirect costs.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. Providing the full direct and indirect costs associated 
with each program should provide a more complete picture of the 
benefits of the program versus its overall costs.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. OIG can provide costs of each activity, which can then be 
related to specific program performance goals and results.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. Dollars allocated to the agency's performance goals are 
direct appropriated funds only and include all internal OIG overhead 
costs. However, they do not include indirect related costs such as 
retirement paid by the Office of Personnel Management or depreciation.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. No regulatory reform measures have been put into place in 
conjunction with the development of OIG's performance plan.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. No. External factors were not identified in the performance 
plan. However, external factors were identified in the strategic plan. 
OIG, as a part of its mission, must be prepared to respond rapidly to 
unforeseen events that could have a significant impact on OIG 
resources, which could affect workload and goal achievement.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. We prepare our OIG Annual Plan to ensure that all 
assignments are prioritized and that all OIG resources are fully and 
efficiently utilized during the following fiscal year. We also 
anticipate that there will be unforeseen external demands on OIG's 
resources, and, by prioritizing our workload, we ensure that the most 
significant and important work is addressed first.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. Unforeseeable external demands, such as responding to 
emergency requests for OIG assistance, can deplete a portion of 
resources necessary to complete our workload. Therefore, unforeseen 
external factors that consume these resources reduce the amount of 
planned assignments that OIG can complete in each fiscal year.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    If so, does the Performance Plan identify the overlap or 
duplication?
    Answer. No overlapping functions or program duplication have been 
identified.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Yes. This issue should be addressed within individual 
agency plans, as well as between plans of other agencies, to ensure 
that Federal funds are used in the most efficient and effective manner 
to accomplish programmatic goals. By structuring strategic goals and 
objectives and performance goals and measures to focus on the key 
elements of an agency's mission, it should be possible to identify 
instances where differing elements of an agency or Department are 
performing similar functions and to note which element can perform that 
function most effectively. This is not an easy task, but as performance 
plans and reports are developed over a number of years, it should be 
possible to determine which changes can be made to various processes to 
improve efficiency and effectiveness and which have peaked. Based on 
this accumulated data, it should be possible to address management 
challenges and selectively eliminate duplication and overlapping 
functions.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision-making?
    Will this use increase in the future and if so in what ways?
    Answer. GPRA has been used to guide decision-making. GPRA is used 
in planning ensuing years' assignments and in assessing satisfaction of 
those programs impacted by current activity. In the future, as 
performance plans and reports continue to be developed and a foundation 
of data and experience is developed, the impact of GPRA on decision-
making will likely increase.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that:
    To what extent are your performance measures sufficiently mature to 
allow for these kinds of uses?
    Answer. Our performance measures are sufficiently developed to 
allow for these kinds of uses.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data that might affect the 
accuracy of resource estimates?
    Answer. Such factors definitely have an impact, but the extent of 
the impact is dependent on the types of performance measures applied. 
For OIG, the resources consumed to conduct individual audits and 
investigations, for example, may vary and exceed estimates; but over 
the course of a year and the conduct of many audits and investigations, 
the variations should cancel out, and, therefore, allow for reasonably 
accurate estimates. We believe that we have sufficient experience to 
capably estimate our resource needs for the activities depicted in our 
performance plan.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Specifically, are you requesting any relaxation of transfer or 
reprogramming controls in return for specific accountability 
commitments?
    Answer. No, OIG is not requesting any waivers or relaxation of 
administrative requirements.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. We do not see any need for substantive revisions to the 
strategic plan at this time. We routinely review the plan to determine 
if revisions need to be made.
                                 ______
                                 

                       FOOD AND NUTRITION SERVICE

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. All fiscal year 2001 performance goals are linked to the 
mission and the strategic goals and objectives in the FNS Strategic 
Plan 2000-2005 to which they contribute, as well to the Department-wide 
goals, objectives, and management initiatives listed in the USDA 
Strategic Plan Overview.
    FNS resources (financial and staff-year) are linked to the 
performance goals in two ways:
  --First, total resources required to accomplish the performance goals 
        under each strategic objective are listed under that objective 
        in the performance plan. Over 99 percent of fiscal year 2001 
        resources requested for FNS are linked to the performance goals 
        in this way.
  --Second, portions of requested fiscal year 2001 resources in each 
        FNS program account that contribute to each strategic goal are 
        identified in the plan. This latter division by strategic goal 
        includes the activities in support of each performance goal 
        under those strategic goals, as well the small remainder of 
        additional resources that contribute more generally to each 
        strategic goal.
    Question. Could you describe the process used to link performance 
measures to your budget activities? What difficulties, if any, did you 
encounter, and what lessons did you learn?
    Answer. FNS developed direct measures for the majority of its goals 
and objectives. These performance measures were constructed in 
collaboration with FNS staff and were shared with our stakeholders and 
cooperators. Because performance goals are linked directly to the 
agency's budget activities, their measures are, by definition, linked 
to the budget activities as well. Among the most difficult problems the 
agency encountered were developing valid measures for which data could 
be obtained with reasonable cost and effort. FNS learned that, in 
developing performance measures, it is necessary to specify measures 
that both assess goal achievement and communicate results clearly.
    Question. Does the agency's Performance Plan link performance 
measures to its budget? Does each account have performance measures?
    Answer. FNS's performance plan links its performance measures and 
goals directly to its budget. Each account has performance measures.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. FNS's performance planning structure is different from our 
budget structure. This is because our appropriation request focuses on 
programs, while our performance planning is structured around outcomes.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. We do not plan to propose any changes at this time.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. We will not propose any changes at this time.
    Question. How were performance measures chosen?
    Answer. FNS developed direct measures of programs' performance. A 
work group, composed of staff representing all FNS divisions was 
responsible for developing, revising, and finalizing the performance 
measures. The measures were reviewed by cognizant program staff to 
ascertain their appropriateness to performance goals.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. Where possible, FNS used extant data sources to minimize 
data collection and verification costs.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. FNS's 1999 performance plan contains a significant number 
of performance measures for which data will not be available for the 
March 2000 Annual Report. Most of these data will be available later in 
2000. This is because FNS relies substantially on the agency's existing 
data collection schedules, which have due dates after March 2000.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results? For each annual goal, indicate whether you 
consider it to be an output measure (``how much'') or an outcome 
measure (``how well''); state the long-term (fiscal year 2003) goal or 
objective from the Strategic Plan to which the annual goal is linked.
    Answer. FNS recommends that, for tracking program results over 
time, the subcommittee focus on the performance goals in the fiscal 
year 2001 Annual Performance Plan, which is based on the FNS Strategic 
Plan 2000-2005, a major revision of the agency's 1997-2002 strategic 
plan. The new plan is designed to be simpler and more comprehensive, 
consolidating the old plan's six program-focused goals and 20 
objectives into two cross-cutting goals with five related objectives. 
It better reflects the ways that Federal nutrition assistance programs 
work together to achieve the agency's mission, and permits a more 
complete allocation of the budget across the plan.
    While some of the measures in this plan are clearly more important 
than others, we do not consider the plan to be at a sufficient level of 
refinement to make selection of a subset of these measures an 
appropriate or useful overall performance assessment tool. FNS intends 
to continue refining and improving these measures over time, in order 
to achieve the ``critical few'' performance plan measures that focus 
clearly on key program performance outputs and outcomes.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. To the extent possible, FNS attempted to develop outcome 
measures for the performance goals in its Annual Performance Plan. For 
other goals, we developed output measures, to enable the agency to 
track its progress in achieving its targets. These output measures 
allow us to provide annual data on the program performance metrics used 
by managers in making administrative decisions.
    OMB guidance with regard to annual performance planning states 
that, while ``[a]n annual plan should include outcome goals when their 
achievement is scheduled for the fiscal year covered by the 
plan...[m]easures of output can be the predominant goals and indicators 
in an annual plan for several reasons:
  --Outcome goals, other than those being accomplished at a continuing, 
        sustained level, may not be scheduled for achievement in the 
        fiscal year covered by the annual plan;
  --An agency is likely to have more output goals than outcome goals; 
        and
  --As the frequency and nature of performance data for outputs allows 
        for periodic assessment and intervention, managers often manage 
        to outputs.'' (OMB Circular A-11 (1999), Section 220.9, p. 
        493.)
    To this list of reasons we would add a fourth: critical outcome 
measures, including many of those in the new FNS strategic plan, are 
meaningful only when assessed over a multi-year period, so that even 
when annual data is available, it frequently does not provide a useful 
explanation of program performance.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. FNS believes that our program managers understand the 
difference between output and outcome measures. FNS conducted briefings 
of all agency staff on GPRA requirements, including the difference 
between output and outcome measures.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. Customer satisfaction measures have not been incorporated 
as key performance indicators in the Annual Performance Plan. However, 
FNS has participated in the American Customer Satisfaction Index (ACSI) 
survey being conducted under the auspices of NPR. Data was collected 
and the index calculated for the WIC Program in 1999 (the program 
scored 83 out of 100 overall). FNS plans to expand its involvement to 
include the Food Stamp Program and the National School Lunch Program in 
2000.
    Examples of external questions used in the Government-wide Customer 
Satisfaction Survey for the WIC Program are given below:
    Q. Before you entered the WIC Program, you probably knew something 
about it. Now think back and remember your expectations for the overall 
quality of the WIC Program. Please give me a rating on a 10-point scale 
on which ``1'' means your expectations were ``not very high'' and 
``10'' means they were ``very high.'' (The program scored 8.8 on this 
question.)
    Q. Was it difficult or easy to get into the WIC Program to get its 
food benefit and support? Using a 10-point scale on which ``1'' means 
``very difficult'' and ``10'' means ``very easy'' how difficult was it 
for you to get into the WIC Program? (The program scored 8.7 on this 
question.)
    Question. How were the measurable goals of your 2000 Annual 
Performance Plan used to develop your fiscal year 2001 budget?
    Answer. The vast majority of the resources included in FNS's budget 
request are allocated for benefit dollars and State administrative 
expenses and are driven by statutory requirements. The measures of 
program participation used to develop those requests were not included 
in the fiscal year 2000 Annual Performance Plan. For this and other 
reasons, the fiscal year 2001 Performance Plan was extensively revised 
from the fiscal year 2000 Performance Plan. The new plan, based on 
FNS's revised strategic plan, does include these measures.
    Measures of other activities, such as delivery of nutrition 
education, link to specific allocations of resources in the fiscal year 
2000 Performance Plan; FNS assessed the measures of performance 
included in that plan in developing its fiscal year 2001 Performance 
Plan, as well as the budget request to support it.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. In general, FNS would be able to estimate the impacts of 
changes in the budget, but the precision of these estimates would 
depend on the nature of the changes. In addition, some of the 
performance measures in the plan (those related to benefit accuracy, 
for example) are influenced significantly by the efforts of our program 
partners and other external factors. Nonetheless, FNS intends the Plan 
to serve as a useful framework to identify the impact of different 
funding levels on key program performance issues.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. Program data related to participation, benefit levels, and 
certain aspects of benefit delivery are collected and reported on a 
monthly basis. These data are collected primarily in support of FNS's 
responsibility to disburse, and oversee the use of, program funding, 
rather than performance measurement. Therefore, not all areas of 
performance are covered in this collection; for some measures, 
information is developed on an annual or ad hoc basis.
    FNS is constrained in its capability to collect the data required 
for measuring and reporting program performance throughout the year by 
two major factors. First, the Agency no longer has the ability to set 
an operational and performance-focused studies and evaluation agenda; 
funds for this purpose were transferred to another USDA agency, which 
has to date focused on other areas of inquiry. Second, because the 
programs operate primarily through partnerships with State and local 
agencies, FNS depends on those agencies to collect and deliver 
performance data in many areas. The agency is heavily constrained in 
adding to State and local reporting burdens, beyond basic requirements 
needed to ensure effective controls over Federal funding.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. Our program data are available to all program managers and 
staff.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. Program data is generally consolidated and reported, 
verified, and consolidated in the National Data Bank, which is used to 
prepare a single monthly report that is widely distributed in the 
agency, and which is also available for individual queries by program 
analysts and managers.
    Question. Agencies have indicated that their present budget account 
structure makes it difficult to link dollars to results in a clear and 
meaningful way. Have you faced such difficulty?
    Answer. In our fiscal year 2001 Annual Performance Plan (APP), each 
individual objective under the respective strategic plan goal is 
associated with estimated dollar resources and associated staff years. 
Although the FNS budget structure remains unchanged, the FNS Strategic 
Plan was significantly changed (from six goals to two goals) to better 
align with our current budget structure. The improved alignment 
significantly improved our abilities to match budgeted resources with 
the strategic plan objectives identified in the APP.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. Since FNS only recently modified the FNS Strategic Plan to 
better align with our budget structure, we would like the opportunity 
to assess the results of the change relative to our current structure 
before addressing the issue of a budget structure change.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. We do not see a need to modify the present structure at 
this time.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. We do not see a need to modify the present structure at 
this time.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. FNS demonstrated our cost accounting expertise through the 
planning and development of a Managerial Cost Accounting model which 
was implemented and subsequently approved by the USDA Office of 
Inspector General. Our model was designed to provide reliable and 
timely information relative to the full cost of our programs.
    With regard to linking GPRA to the budget process, the FNS annual 
performance plans (for fiscal years 1999, 2000, and 2001) are linked to 
the FNS President's Budget for each respective fiscal year by means of 
a crosswalk which aligns program and sub-program dollars and staff 
years to the respective strategic plan goals. The crosswalk linking the 
budget with the strategic plan goals is developed off-line--that is, 
the crosswalk is not generated using the agency's official budget and 
accounting systems.
    Question. What is the status of your agency's implementation of the 
Managerial Cost Accounting requirement, and are you using Activity-
Based Costing?
    Answer. FNS implemented a cost accounting design in fiscal year 
1998 using a model which follows the five standards as described in the 
Managerial Cost Accounting Concepts and Standards for the Federal 
Government, Statement of Federal Financial Accounting Standards, Number 
4: (1) accumulating and reporting costs, (2) establishing 
responsibility segments, (3) determining full costs, (4) recognizing 
the costs of goods and services received from other entities, and (5) 
using appropriate costing methodologies. FNS is not currently using 
activity-based costing and has no plans to do so.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. FNS has the capability to show full cost (including 
administration, employee benefits, and depreciation) at the sub-program 
activity level, which we define in our model as ``level 1'' under each 
responsibility segment. This means that within our accounting code 
structure, FNS can report full cost at the ``school breakfast'' level 
under Child Nutrition.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. The FNS Managerial Cost Accounting model shows a clear 
relationship between the dollars spent and the activities accomplished, 
as summarized at the ``level 1'' sub-program level. Alternatively, the 
level at which we have implemented Managerial Cost Accounting would not 
provide a meaningful relationship to the costs or results of activities 
accomplished at any level below ``level 1''.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. For each GPRA activity and related results, the associated 
per unit cost will have to be developed off-line; that is, outside of 
the formal budget and accounting systems. This is principally because 
the FNS annual performance plan goals generally would not have a one-
for-one relationship with any defined ``level 1'' sub-program.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. Because we have implemented a Managerial Cost Accounting 
model which is supported by our current accounting code structure and 
since our goals are not directly aligned with our accounting code 
structure, dollar costs associated with any particular performance goal 
will be generated off-line (outside the formal budget and accounting 
systems).
    Overhead costs would not be assigned or allocated to a particular 
annual performance plan goal. As indicated above, in our model, 
indirect cost allocations are made at a level which is no lower than 
the sub-program level (i.e., school breakfast program under Child 
Nutrition). Since any annual performance plan goal would be a level 
below sub-program (level 1), the ``full cost'' of that plan goal would, 
if necessary, have to be done off-line and would be done on an 
estimated basis.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. There are no such regulatory reform measures.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. Yes, some external factors are identified. The fiscal year 
2000 Performance Plan refers to the FNS Strategic Plan 1997-2002, which 
identifies a wide range of external factors that could influence goal 
achievement.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. The most significant external factors on the performance of 
the nutrition assistance programs administered by FNS include the 
overall status of the economy and the efforts of our State partners. 
With regard to the former, the programs are structured to respond to 
economic changes; our budget request projects program participation and 
expenditures based on economic forecasts used by the government at 
large. For the Food Stamp Program, benefit reserves are included in the 
request to ensure that the program can respond rapidly to unanticipated 
changes.
    With regard to the efforts of State partners in, for example, 
improving benefit accuracy, the Performance Plan and budget request 
include earmarking of resources to support and provide incentives to 
States to improve performance.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. FNS will require additional resources to cope with external 
factors, such as those identified above, that are likely to impede the 
agency' achievement of its goals.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. FNS has identified no significant overlapping functions and 
duplication. While FNS programs are designed to work together to 
provide both a basic level of nutrition assistance, and targeted 
supplemental benefits for those with special needs, these are not 
duplicative functions.
    Question. If so, does the Performance Plan identify the overlap or 
duplication?
    Answer. The Performance Plan does not identify any significant 
overlap or duplication. Should agencies address management challenges 
and potential duplication and overlapping functions in their GPRA 
plans, and if so, how?
    Agencies should address potential duplications and overlapping 
functions in their GPRA plans. The overlapping and duplication must be 
carefully analyzed to determine the reasons for their existence and 
whether elimination would result in savings and improved program 
efficiency and effectiveness.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. FNS is using its Strategic and Annual Performance Plans as 
an integral part of its Leadership 2000 Initiative, which is designed 
to improve agency management, operations, and effectiveness.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. Yes. As agency management and staff get more experience 
with GPRA, they will be able to integrate it even more into the 
agency's day-to-day operations.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. FNS believes that additional time may be needed for some of 
the performance measures to mature. For those measures for which data 
are available, we believe that they are sufficiently mature to 
influence budget decisions.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might effect the 
accuracy of resource estimates?
    Answer. In a number of areas, FNS hopes to extensively refine its 
performance measures, particularly with regard to measures of 
performance regarding benefit accuracy, fraud reduction, and 
administrative efficiency. More extensive analysis of the factors that 
contribute to good performance in these areas could allow the agency to 
develop better measures and more reliable estimates of resources needed 
for specific performance levels. Notably, FNS is hampered in this area 
by a lack of study and evaluation funding that could permit the agency 
to conduct such analyses.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements? Specifically, are you requesting any 
relaxation of transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. At this time we are not requesting any waivers.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued September 30, 1997?
    Answer. In 1999, FNS identified the need for a major revision of 
the agency's 1997-2002 strategic plan. A revised plan, FNS Strategic 
Plan 2000-2005, was released in January, 2000. The new plan is designed 
to be simpler and more comprehensive, consolidating the old plan's six 
program-focused goals and 20 objectives into two cross-cutting goals 
with five related objectives. It better reflects the ways that Federal 
nutrition assistance programs work together to achieve the agency's 
mission, and permits a more complete allocation of the budget across 
the plan.
    FNS engaged in an extensive stakeholder input process in revising 
the plan, including regional and National stakeholder meetings, 
discussions with FNS employees, and a website offering information on 
the proposed revision and soliciting comments. FNS received a large 
volume of input; most was supportive of the revised plan structure, 
though some changes were suggested and made. The agency intends to use 
the revised plan, and related performance plans, to work with our 
program partners toward shared goals.
                                 ______
                                 

                       RURAL DEVELOPMENT SERVICE

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals and program activities in its 
budget request?
    Answer. Rural Development established one strategic plan which 
supports the three agencies constituting the mission area. The Rural 
Development Strategic Plan contains a mission statement which 
encompasses the role of the entire mission area. This statement is 
cited in the Purpose Statement of the budget request. The strategic 
plan also contains three Goals, one for each agency, and four broad 
Management Initiatives which support the entire mission area. By having 
a Goal for each agency, alignment with the existing budget structure, 
which is agency and program based, is achieved.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. For loan and grant programs the performance goals and 
indicators in the Annual Performance Plan are tied directly to the 
level of funding requested for each program.
    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. The primary problem we have encountered is establishing 
performance measures for new programs when we have no historical data 
on which to base future performance. Also, new programs may require 
several years to become fully functional, which results in unused 
funding. Since the performance target was based upon full usage of 
funding, the target performance cannot be met regardless of our best 
efforts.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Answer. The performance goals in the mission area Annual 
Performance Plan, which align with the objectives in the strategic 
plan, are supported by one or more quantified performance indicators to 
be achieved during the fiscal year. The performance goals are linked to 
the President's budget request at the agency level and for each major 
category of programs. For example, funding requested for the Rural 
Business-Cooperative Service is linked at the total agency level and 
then linked again for business and industry programs and cooperative 
development programs. The business and industry programs consist of 
several accounts and the plan does not provide separate performance 
measures for each account. However the contribution of the account to 
the larger goal is often indicated.
    Question. Does each account have performance measures?
    Answer. We do not have performance measures for each account. With 
over 50 accounts in the Rural Development budget, a plan with 
performance measures for each account would cause the plan to be too 
large and too segmented to be useful.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. The performance planning structure is based upon the eight 
basic programs of the mission area. These are business and industry 
programs; cooperative programs; single family housing; rural rental 
housing; community development programs; water and waste programs; 
telecommunication programs; and electric program, rather than the 
account and activity structure of the budget.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. No, we do not plan to propose changes for fiscal year 2001.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. No, we will not propose changes to the program activities 
described under that account structure.
    Question. How were performance measures chosen?
    Answer. The performance goals and indicators were selected by the 
agency administrators in consultation with their program managers.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. Since we have limited funds for systems development, the 
decision was made to rely on existing data sources, or those under 
development for other purposes, when developing performance goals. The 
data comes from a variety of sources. Much of it comes from the various 
loan accounting systems which contain edit checks and are audited 
annually. The data from these systems are considered reliable and 
valid. Other data is provided by the field staff and, while its 
validity cannot be verified, it is considered adequate for the purposes 
it is being used.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. All of the data included in the performance report is 
considered final. The performance plan does includes a few performance 
indicators, primarily in support of the rural rental housing program, 
which are under development and were not available for the first 
report. The indicators under development primarily relate to rent 
overburden of the tenants living in the rural rental housing projects.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results? For each key annual goal, indicate whether 
you consider it to be an output measure (``how much'') or an outcome 
measure (``how well). State the long-term (fiscal year 2003), general 
goal and objective from the agency strategic Plan to which the annual 
goal is linked.
    Answer. We recommend the subcommittee track all of the key 
performance goals from the Annual Performance Plan. These are:

------------------------------------------------------------------------
                                                       Long-term general
                                                          goal in the
      Key performance goal         Output or Outcome    strategic plan
                                                      supporting the key
                                                       performance goal
------------------------------------------------------------------------
Rural Business-Cooperative
 Service:
    Create or save jobs in rural  Outcome...........  The following
     areas.                                            general goal
                                                       supports all of
                                                       the key
                                                       performance
                                                       goals:
    Assist marketing networks     Outcome...........  Rural Development
     and cooperative                                   will improve the
     partnerships in the                               quality of life
     expansion of business                             in rural America
     outlets.                                          by encouraging
                                                       the establishment
                                                       and growth of
                                                       rural businesses
                                                       and cooperatives.
    Direct program resources to   Outcome...........  ..................
     those rural communities and
     customers with the greatest
     need.
    Manage the B&I portfolio      Outcome...........
     effectively to minimize the
     delinquency rate.
Rural Housing Service:
    Improve the quality of life   Outcome...........  The following
     of residents of rural                             general goal
     communities by providing                          supports all of
     access to credit for                              the key
     decent, safe, and sanitary                        performance
     housing.                                          goals:
    Improve the quality of life   Outcome...........  Rural Development
     for the residents of rural                        will improve the
     communities by providing                          quality of life
     access to decent, safe,                           of rural
     sanitary, and affordable                          residents by
     rental housing.                                   providing access
                                                       to technical
                                                       assistance,
                                                       capital, and
                                                       credit for
                                                       quality housing
                                                       and modern,
                                                       essential
                                                       community
                                                       facilities.
    Improve the quality of life   Outcome...........
     for rural residents by
     providing new or improved
     essential community
     facilities.
    Maximize the leveraging of    Outcome...........
     loan funds to increase the
     number of rural residents
     assisted by Rural
     Development programs.
    Direct resources to those     Outcome...........
     communities and customers
     with the greatest need.
    Provide effective             Outcome...........
     supervision to minimize
     delinquencies and future
     losses.
Rural Utilities Service:
    Provide rural residents with  Outcome...........  The following
     modern, affordable water                          general goal
     and waste services.                               supports all of
                                                       the key
                                                       performance
                                                       goals:
    Provide modern, affordable    Outcome...........  Rural Development
     telecommunications services                       will improve the
     to rural communities.                             quality of life
                                                       of rural
                                                       residents by
                                                       promoting and
                                                       providing access
                                                       to capital and
                                                       credit for the
                                                       development and
                                                       delivery of
                                                       modern affordable
                                                       utility services.
    Provide distance learning     Outcome...........
     and telemedicine services,
     utilizing
     telecommunications
     technologies, to rural
     communities.
    Provide modern, affordable    Outcome...........
     electric service to rural
     residents and communities.
    Direct program resources to   Outcome...........
     those communities with the
     greatest need.
    Maximize the leveraging of    Outcome...........
     loan funds to increase the
     number of rural residents
     assisted.
------------------------------------------------------------------------

    While all of the goals are considered to be outcomes, most of them 
are measured with a variety of performance indicators, many of which 
are outputs.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. Throughout the process of implementing GPRA, we have 
encourage staff to think about the impact of the programs and how that 
impact, or outcome, could be quantified. Information on the impact of 
our loan and grant programs on the families, communities and businesses 
recipients is not available and would be costly to obtain. As an 
alternative we have elected to establish unquantified performance 
goals, which are written from an outcome perspective, and measured with 
several quantified performance indicators, most of which are output 
oriented.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Yes, program managers understand the difference.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. Our customer service activities in the Performance Plan are 
focused on conducting customer satisfaction surveys for most of the 
major program areas. We have no indicators related to internal 
customers. Limited staff and financial resources have impaired our 
ability to meet our targets in these areas. The Cooperative Development 
program has conducted annual surveys of its customers for a number of 
years and it has a target for the customer's rating of the quality of 
the technical assistance provided. The Service Center Modernization 
Initiative (SCMI) includes RHS' single family housing borrowers in its 
surveying activities. The SCMI annual performance plan includes targets 
related to customer satisfaction by those customers using the field 
service centers. In addition, RHS is interested in determining if its 
customers were attaining favorable outcomes through their participation 
in the agency's programs. RHS contracted with USDA's Economic Research 
Service (ERS) to survey the Section 502 direct loan borrowers and the 
Section 515 multi-family housing tenants to determine whether their 
participation in these programs had improved their quality of life. ERS 
released its report on Section 502 borrowers last December under the 
title ``Meeting the Housing Needs of Rural Residents: Results of the 
1998 Survey of USDA's Single Family Direct Loan Housing Program.'' This 
report is available electronically at http://www.econ.ag.gov/Prodsrvs/
rept-rur.htm.
    The report shows that 90 percent of the borrowers surveyed said the 
quality of their current home was better than that of their previous 
home; 77 percent rate their new neighborhood as 8, 9, or 10 on a scale 
of 1 to 10, with 10 being the best; and 75 percent rate the schools in 
their neighborhood as good or very good. These results indicate that 
participation in the Section 502 direct loan program has helped 
borrowers change their lives for the better.
    Once we obtain the results of the Multi-Family Housing survey, we 
will share them with you. As you know, reports such as these take years 
to develop and are expensive. However, as resources are available, we 
will continue to pursue research on how well RHS programs accomplish 
our central mission of improving the quality of life of rural 
Americans.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. Funding requests for Rural Development programs are based 
on many factors, especially our customer's needs. The fiscal year 2000 
Annual Performance Plan did not have a major impact on the development 
of the fiscal year 2001 budget request.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. Since most of the performance measures are directly related 
to the amount of funds available, the impact on a performance measure 
can be determined if the committee is considering a change in a budget 
number.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. Data utilized by Rural Development comes from a variety of 
sources. Much of it comes from the program loan accounting systems and 
this information is basically available on a regular basis with routine 
reports printed on a monthly or quarterly basis. Some of the data comes 
from the Rural Communities Facilities Tracking System (RCFTS). This 
system is updated by the field offices and, while it is always 
available, it is not always current. Some of the data comes from 
surveys of field offices and this information is only available once a 
year.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. This information is available is available to all levels of 
program managers.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. Trained program staff is able to query most of the systems 
to develop ad-hoc reports. In order to make access easier, and to make 
more information available, Rural Development is developing a data 
warehouse which will include not only program data but also data from 
outside sources, such as the Bureau of Census.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. By linking performance goals and indicators at the agency 
and broadest program level only, we have avoided this difficulty. If we 
attempted to develop performance measures for each of our over 50 
program accounts, the task would be monumental and the plan too large 
to be useful.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. No. We believe the linkage, as we presently present it, is 
appropriate and easy for someone unfamiliar with Rural Development's 
programs to understand.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. We propose no modification. .
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. We do not believe any modification would strengthen 
accountability.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions, and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Rural Development's accounting systems do not currently 
support cost accounting. Enhancing the systems to support cost 
accounting will require the investment of substantial resources.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies, are required to 
have a system of Managerial Cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as ``Activity-Based Costing,'' whereby the full cost is 
calculated for each of the activities of an agency. What is the status 
of your agency's implementation of the Managerial Cost Accounting 
requirement, and are you using Activity-Based Costing?
    Answer. Rural Development will not implement a cost accounting 
system in the near future. Resources available to enhance the 
accounting systems are either being directed to improving their ability 
to account for program funds or to the implementation of the 
Department's Foundation Financial Information System (FFIS). Rural 
Development is scheduled to implement FFIS effective October 1, 2000. 
After FFIS is implemented, Rural Development will work with Department 
representatives in the development of a plan for obtaining and 
integrating the data needed for an activity-based cost accounting 
system.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. It is unclear at this time what costs will be included in 
the cost accounting system.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. The dollars spent on a program and the cost of activities 
related to a program would be apparent with a cost accounting system. 
The results of those activities would then be related to this data.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. It is unclear at this time how the cost of activities could 
be displayed and how those costs would be tied to results.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. The Annual Performance Plan contains salary and expense 
costs at the mission area level. Costs are not allocated to the 
individual goals. The costs in the Plan do include all overhead costs.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. Several regulatory changes have occurred to make the 
programs easier for our customers to use, to encourage leveraging, to 
make it easier for the neediest customers and communities to access our 
programs, and to strengthen oversight of the programs with the goal of 
diminishing future delinquencies and losses. Over the past several 
years, we sought to reduce the regulatory burden while also 
implementing handbooks that enable us to more rapidly react to changes, 
make it easier for staff to deliver the programs to the customers, and 
provide the guidance needed to operate and manage the programs. In 
conjunction with this process, we have implemented a number of improved 
automated systems to help staff accomplish their work more effectively 
and efficiently. Work on these improvements continues.
    The Intermediary Relending Program regulation were revised in 
August 1998. Some of the significant changes to these regulations 
included:
  --State Offices are authorized to accept and process applications 
        without the application having to go through the National 
        Office.
  --The contents of a complete application and work plan are revised to 
        eliminate some unnecessary items; provide more detail on what 
        should be covered regarding re-lending plans; add 
        certifications regarding debarment, Federal debt collection 
        policies, and lobbying; provide goals, strategies, and 
        anticipated outcomes; provide information on technical 
        assistance available to ultimate recipients; and provide for 
        streamlined applications for subsequent loans.
  --The priority scoring system is revised by reducing the number of 
        points for other funds, adjusting the threshold for points 
        based on service area income compared to the poverty line, 
        adding a category of points based on service area income 
        compared to statewide income levels, adding a category of 
        points for service to under-represented groups, and providing 
        additional guidance regarding justification for Administrative 
        points.
    The loan origination and servicing systems, which support the 
Single Family Housing direct programs, have been automated which 
increases the agency's ability to process and service loans. Through 
changes in the manner in which payment assistance is provided, the cost 
of providing families with opportunities for homeownership provided a 
40 percent savings to the taxpayer and reduced paper work by over 75 
percent.
    We have implemented a series of Congressionally mandated reforms to 
the Section 515 program. We continued the task of reinventing the 
Section 515 and the Section 514/516 Farm Labor Housing programs. 
Through these changes, we eliminated the occupancy surcharge and are 
making equity loans available for all pre-1989 housing complexes. New 
processes have been developed for prioritizing funding assistance to 
the neediest communities, as defined by ruralness, incidence of 
substandard housing, and incidence of rent overburden. We implemented 
provisions to ensure that developers receive no more than a reasonable 
profit and that transfers of property are in the best interest of the 
government. In addition, we provided for penalizing property managers 
for equity skimming. Our streamlining efforts have reduced regulatory 
burden, simplified agency management and servicing responsibilities, 
and streamlined procedures for origination and prepayment of loans.
    Oversight and management of the Multi Family Housing program has 
been an on-going concern. We have reinvented the approach to overseeing 
management and compliance for the Multi Family Housing programs. To 
address management inefficiencies and to combat fraud, waste, and 
abuse, we have undertaken a continuing process of regulatory reforms. 
As a result of these reforms, debarment activity in the Section 515 
program has significantly increased as we replace borrowers and 
management companies unable to meet their responsibilities. We have 
developed a loan classification system to quickly identify problem 
loans at a very early stage before there are serious loan losses or 
health and safety concerns for the tenants. The classification system 
identifies maintenance deficiencies, financial deficiencies, high 
operating costs and deficient reserve accounts, as well as other 
management indicators.
    During fiscal year 1999, the regulations governing the Distance 
Learning and Telemedicine loan and grant programs were completely 
rewritten. These revisions are now in effect and more clearly delineate 
the application requirements for the loan, grant, and combination loan 
and grant programs. A new combination loan and grant program was 
introduced which pairs up loans with grants on a 10 to 1 ration. That 
is, for every $10 in loan applications, the applicant would receive an 
additional $1 in grant funds. The purposes for which loan funds can be 
utilized was also broadened and a new expedited application review 
process was implemented.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. The Annual Performance Plan identifies two key external 
factors that can influence goal achievement--macroeconomic influences 
and reductions in funding.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. Should the economy start to weaken, we will need to 
increase loan servicing activities to help those borrowers who are 
impacted and to limit future losses to the Government. The availability 
of adequately trained staff to provide the servicing will be critical 
to our success.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. Higher interest rates and higher unemployment will limit 
our ability to assist the weakest applicants and is likely to increase 
delinquencies within our portfolio. Higher interest rates will also 
reduce our ability to leverage loans, putting greater pressure on 
program funds. The impact will be a higher subsidy cost for the direct 
programs.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. We have not identified significant overlapping functions or 
program duplication through the strategic planning process. Most 
programs which may appear to be duplicates of another program are 
actually designed for a different clientele. There is always the need 
for agencies to coordinate on related activities.
    Question. If so, does the Performance Plan identify the overlap or 
duplication?
    Answer. The Plan identifies those Federal agencies which mission 
area staff work closely with in the delivery of our programs.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Agencies should address management challenges and potential 
duplication and overlapping functions, to the extent they are within 
the agency's control, if they impact achievement of the performance 
goal. These items can be addressed in the means and strategies portion 
of the annual plan.
    Question. To what extent, has GPRA been used by agency leadership 
to guide decision making?
    Answer. During the strategic planning phase of the implementation 
of GPRA, senior management determined, with support from our 
stakeholders, that targeting of financial resources to the neediest 
individuals and communities and leveraging of our resources with other 
sources of technical assistance or credit would be priorities. These 
priorities are reflected in the objectives in the strategic plan and in 
the performance goals and indicators in the Annual Performance Plan for 
all of the programs. To ensure achievement of these priorities the 
Agency Administrators have established performance goals for each Rural 
Development State Office which are tied to the State Director's 
performance standards.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. As long as the strategic plan reflects the priorities of 
senior management, GPRA will help agency leadership make the decisions 
needed to guide the agency. The extent to which a manager uses the 
strategic planning in their management process varies widely depending 
upon the style of the manager.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. Most of the performance measures are sufficiently mature 
for use in determining program performance. However, there are 
difficulties with some databases and systems that impact the quality of 
the data. For example:
  --We are having problems with the reconciliation of data in the Rural 
        Communities Facilities Tracking System (RCFTS) with the same 
        data in the Guaranteed Loan Accounting System (GLAS) and the 
        Program Loan Accounting System (PLAS). There is no automated 
        single point-of-entry of duplicate data into GLAS/PLAS and 
        RCFTS. Duplicate data has to be manually input into each 
        systems by the field staff. This does not always happen and the 
        result is inaccurate data. We are, through a GSA FEDSIM 
        contract, attempting to develop a reconciliation process that 
        identifies discrepancies in like-data between the systems.
    For some of our direct loan programs we recently replaced our old 
servicing system with a new modern system. However, some of the 
historical information typically needed to track loan history was never 
centralized in the old system. We are presently building histories in 
the new system that will serve as useful comparison measures for trends 
in the future but accumulating the historical data needed will take 
several years.
    In addition, there are other factors to consider in using these 
measures to compare actual performance with targeted performance. For 
example, the number of housing units we can finance is based on the 
average cost of each unit. Factors such as whether the unit is newly 
constructed or whether the house is in a remote or difficult-to-build 
area could influence the average loan amount since both of these 
situations generally increase the cost of construction. Additionally, 
the cyclical nature of the housing market can influence performance. An 
example is that rising interest rates or rising home prices may have a 
negative influence on the ability of low- and moderate-income families 
achieving homeownership.
    For our Community Facilities programs, it is difficult to 
accurately predict the number and type of projects financed because of 
the vast number of different uses for this program. Projects can range 
from building a multi-million dollar hospital to purchasing a $30,000 
fire truck.
    Another factor that has a great deal of influence on our 
performance level is leveraging. As we work with more and more lenders, 
we are gaining experience with leveraging so that hopefully we can make 
better estimates of leveraging activity expected n the future, however 
this activity may also be sensitive to interest rates.
    Question. Are there any factors such as inexperience in making 
estimates for certain activities or lack of data that might affect the 
accuracy of resource estimates?
    Answer. Data used in the performance measures come from a variety 
of sources. The number of jobs created or saved is based upon 
information from the borrower for the business programs and through the 
use of job multipliers for many of the other programs. Estimating the 
number of jobs created through the Intermediate Relending Program (IRP) 
has been especially difficult. Impacts of IRP over the life of the loan 
(30 years) with regard to job retention/creation has been an estimate 
based on a study conducted several years ago by a private consultant. 
Currently, Agency accounting and management systems do not track actual 
job retention/creation as a result of re-lending to ultimate recipients 
under the program. The Agency has entered into a Cooperative Agreement 
with the Virginia Institute of Technology to develop a pilot database 
that tracks actual performance of ultimate recipient loans including 
job retention/creation.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Answer. No, we are not requesting any waivers.
    Question. Specifically, are you requesting any relaxation of 
transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. No, we are not.
    Question. Based an your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. The strategic plan currently reflects the priority of 
senior management and substantive revisions are not needed. The 
strategic plan could be updated to be more reflective of current 
initiatives within the Department.
                                 ______
                                 

                 NATURAL RESOURCES CONSERVATION SERVICE

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. Our strategic plan provides a statement of the fundamental 
mission of the agency and lays out long-term goals for achieving that 
mission, including strategies to reach identified multi-year 
performance targets. It serves as a blueprint for agency budget 
formulation, and serves as a foundation for resource allocation, 
performance planning, business planning, and performance measurement.
    Performance planning provides the link between the agency mission 
and strategic plan goals and the tasks performed by agency personnel on 
a day-to-day basis. The process converts the multiyear strategic plan 
goals into measurable annual goals and priorities. The annual 
Performance Plan contains specific performance measures to be monitored 
through the year that either directly, or as surrogates, represent each 
of the strategic objectives. The specific linkages between the annual 
goals and the Strategic Plan targets are explained in the Annual 
Performance Plan.
    The performance plan also guides the allocation of staff time and 
resources. The agency budget request is based on measurable output and 
outcome goals defined in the agency performance plan. The establishment 
of measurable performance goals is the first step in the annual budget 
formulation process. The performance plan directly links the goals to 
the programs through which the agency receives funds. This information 
is contained in tables in the Performance Plan. The annual performance 
plan also describes how the funds the agency receives are used to 
achieve the strategic goals.
    Question. Could you describe the process used to link your 
performance goals to your budget activities? What difficulties, if any, 
did you encounter, and what lessons did you learn?
    Answer. The process drew on the technical and program experience of 
a team of headquarters and regional staff. This team drew on a wider 
circle of state and field level employees and national program 
managers. The team studied each of the performance goals for 2002 that 
are established in the strategic plan and identified program activities 
that contribute to meeting the long-term goal. The team determined 
which activities were most clearly outcome-related and recommended 
those to be used as performance measures. The main problem that we 
encountered was data availability to establish baselines for some 
natural resources conditions. For some natural resource objectives, 
such as water quality, there are not currently reliable annual data 
sources to support an annual performance goal stated in terms of 
resource condition, that is, it is not possible to set an annual goal 
for number of stream miles improved and then reliably report annual 
performance.
    Question. Does the agency's Performance Plan link performance 
measures to its budget? Does each account have performance measures?
    Answer. The agency's Performance Plan includes several tables that 
map the linkage between the performance measures and the budget. Tables 
2 through 5 of the document show the relationships between the 
objectives in the strategic plan and the long-term and annual 
performance measures. Tables 6a and 7 then show the relationship 
between programs and strategic objectives. Tables 9 and 10 present 
information, for fiscal year 2000 and fiscal year 2001, on the amount 
of funds from each budget activity that support each objective.
    The performance plan includes measures that can be used as measures 
for each program. The measures, however, are designed to fit our larger 
programs. Some, but not all activities of smaller programs are covered 
by the current set of measures. For example, activities of the RC&D 
program that directly relate to resource conservation are covered by 
performance measures in the plan. RC&D activities that relates to 
community development are not.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. Our budget provides funds through a structure of 12 
accounts and activities. The authorizing legislation of each account 
defines the resource concerns that the program is intended to address. 
Some programs have a very narrow focus and address a limited range of 
resource concerns. Others are broader. The programs are delivered 
through a single workforce to customers who may participate in several 
programs. We are using the performance planning process as a means to 
integrate management of our program activities. Our performance 
planning structure, therefore, is natural-resource driven and very 
closely follows the structure of the outcome-related objectives in our 
strategic plan. All of the objectives in the strategic plan are 
supported by multiple programs. We have very few single-program 
performance measures in our performance plan.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. No, we do not anticipate proposing changes to our account 
structure for fiscal year 2001.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. At present, we are not proposing changes to the program 
activities. We are evaluating a possible redefinition of the 
Conservation Technical Assistance account to focus on reporting the 
outcomes of program actions. This redefinition should enable us to 
improve the linkage to program results as well as improve allocation of 
costs to the outcomes. It will not involve any fundamental change in 
the nature of the program.
    Question. How were performance measures chosen?
    Answer. A team that included representation of all regions 
identified possible measures and recommended those that most closely 
related to the long-term goals established in the strategic plan. We 
selected predominantly measures for which we are able to collect data 
or for which data was already being collected through existing efforts.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. In fiscal year 1999, we implemented a new performance 
reporting system designed to minimize field staff time required for 
reporting and to provide the essential data needed by agency leadership 
to make management decisions and respond to questions from the 
Administration and Congress in a timely fashion. The Performance and 
Results Measurement System provides a method for every office to report 
progress on mission-critical goals using a nationally consistent set of 
defined measures. The system is Web-based and user-friendly; it reduces 
the time staff must spend entering data and includes automated quality 
checks to improve the accuracy and consistency of the data. Tests 
conducted in the early stages of implementation indicated that the 
system will reduce the staff time required to enter data into the 
system by 195 staff years annually. These reductions result from the 
use of improved information technology and from focusing performance 
reporting on a set of clearly defined measures linked to agency 
outcomes and will allow our staff to use this time providing additional 
services instead of reporting past activities.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. Our performance report for fiscal year 1999 includes data 
for all measures. For most measures, the reported performance will be 
based on expansion of data from a sample of offices. The sample was 
selected to provide a reliable picture of agency performance at the 
national level. We do, however, intend to continue refining measures 
over the next several years. We are currently looking very closely at 
our annual performance measures as we update our strategic plan. As we 
revise the strategic plan to address the changing needs of our 
customers and new guidance from the Administration, changes will also 
be needed in the annual performance measures that track progress toward 
strategic goals. This means that there likely will be one or more 
measures in the plan for any given year for which we may not have 
reliable baseline data or consistent current-year data.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    Answer. The annual performance indicators that support our 
strategic goal for a healthy land are key measures that the committee 
can use to track the effectiveness of our combined programs. These 
indicators include acres of cropland and grazing land managed 
sustainably (``resource management systems''), acres of cropland 
protected against excessive erosion, acres of land managed to minimize 
offsite delivery of nutrients and pesticides, number of waste 
management systems installed to minimize risk of problems associated 
with animal wastes; acres of wetlands restored or enhanced, and acres 
on land where practices have been applied to enhance habitat for 
wildlife. In addition, the indicator for number of minority customers 
served is a useful indicator of the agency's commitment to providing 
services on a non-discriminatory basis to all customers.
    Question. For each key annual goal, indicate whether you consider 
it to be an output measure (``how much'') or an outcome measure(``how 
well'').
    Answer. Measures supporting the goal of a healthy land are all 
outcome-related measures. They measure ``conservation on the land'' as 
a result of action and investment of time and money by the target 
audience--private land managers--rather than internal processes and 
tasks completed by agency personnel. These intermediate outcome 
measures provide a more reliable picture of annual performance than 
would end outcome measures based on the impacts that the systems and 
practices have on the land. In many cases, the benefits of applying 
conservation cannot be documented in the environment until several 
years after the action is completed. In other cases, changes related to 
weather or market conditions can mask or intensify the impacts of 
conservation progress. The indicator for number of minority customers 
served is an output measure of a key dimension of the quality of 
services provided. The measures for information products, such as 
number of surveys digitized, are outputs.
    Question. State the long-term (fiscal year 2003) general goal and 
objective from the agency Strategic Plan to which the annual goal is 
linked.
    Answer. All outcome-related goals for resource condition and health 
support our Goal 1: A healthy and productive land that sustains food 
and fiber production, sustains functioning watersheds and natural 
systems, enhances the environment, and improves urban and rural 
landscapes. The objectives for this general goal are:
  --Healthy and productive cropland sustaining U.S. agriculture and the 
        environment.
  --Healthy and productive grazing land sustaining U.S. agriculture and 
        the environment.
  --Healthy watersheds providing clean and abundant water supplies for 
        people and the environment.
  --Healthy and productive wetlands sustaining watersheds and wildlife.
  --High quality habitat on private land supporting the Nation's 
        wildlife heritage.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. We identified outcome goals and objectives in our strategic 
plan and supported them with quantified outcome-related targets. The 
criterion for establishment of a performance goal was that the goal 
must be stated in terms of an outcome-related measure. The annual 
performance measures for resource condition, therefore, are all at 
least intermediate outcomes that measure improvements in natural 
resource management implemented by resources managers with NRCS 
assistance. We included few measures of internal processes in our 
performance plan, and those few apply to civil rights in program 
delivery or to support functions, such as resources inventory, for 
which output measures are more meaningful than end outcomes.
    Question. Do your believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcomes)?
    Answer. Yes, most NRCS managers at all levels have a general 
understanding of the difference between outputs and outcomes. We are a 
field agency in which most of our employees are front line staff 
providing services directly to the public. Most managers have first-
hand knowledge of the results our customers want and can distinguish 
between the activities that employees perform and the changes on the 
land that result from that assistance to land users.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. The Natural Resources Conservation Service is conducting 
several activities in customer satisfaction measurement for fiscal year 
2000 and fiscal year 2001. In 1998 and 1999, NRCS participated in the 
development of the USDA Service Center Customer Card. This card was 
piloted in six states and the results of the pilot are presently being 
evaluated.
    In September of 1999, NRCS established a Chief's Feedback System to 
receive feedback from both internal and external customers. The system 
is user-friendly and Web-based. Incoming messages and responses are 
posted in question and answer format. Other customer feedback 
activities include the Conservation Summit and various Conservation 
forums that have taken place in 1999 and 2000 to solicit feedback from 
our external customers throughout the country.
    NRCS is designing a plan to establish a national customer 
satisfaction measurement system. Due to funding shortages, the design 
and implementation of this system will not be fully accomplished in 
fiscal year 2000. The goal of the system is to establish a series of 
on-going customer satisfaction measures that, through internal and 
external customer feedback, will be used to guide NRCS programs and 
activities.
    Question. How were the measurable goals of your fiscal year 2000 
annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. In 1998, state conservationists provided estimates of the 
level of performance that could be expected for a set of performance 
measures, assuming level buying power over the following years. In 
early calendar 1999, state conservationists developed revised 
projections of performance for these outcome-related measures for 
several budget scenarios. They also conducted a field-level workload 
analysis to better define the level of outputs that could be produced 
by the current workforce. Agency leadership identified actions, 
including program strategies, and the funding required to support the 
strategies, to achieve alternative goals developed in response to input 
from stakeholders.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. If the committee changes a proposed number, we will be able 
to tell you the eventual impact on the level of program performance in 
terms of program-specific outputs and the outcome goal most closely 
related to the program purpose. We could, for example, estimate with 
considerable accuracy the change in extent of acreage that could be 
placed under easement in the Wetlands Reserve Program (WRP) 
corresponding to a change in the WRP budget. Acreage enrolled in the 
program, however, is not the annual performance measure in our 
performance plan; acreage on which practices have actually been applied 
is the measure. The change in funding would likely have a lesser effect 
on the acres of wetlands created or restored in fiscal year 2001 than 
on the acreage in the following 2 or 3 years. This is because securing 
easements and applying restoration practices is generally a multi-year 
process. We do not yet have all of the information needed to precisely 
project the change that a funding change would have on such a outcome-
related measure in the initial year. Nor are we yet able to trace all 
of the effects that a change in funding aimed at one goal would have on 
related goals.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. The new Performance and Results Measurement System that we 
implemented in fiscal year 1999 gives us the capability to monitor 
progress on a daily basis. Performance information from the field is 
entered in the Performance and Results Measurement System when the 
system or measure is completed. The standard reports available on the 
system website are updated daily at 2:00 am EST. Therefore, raw data is 
available on a real-time basis.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. A number of standard reports are available on the PRMS 
homepage, which is http://www.nrcs.usda.gov/prms. These reports 
currently provide data at the national, state, or county level. The 
standard reports are accessible to all NRCS employees and to the 
general public. They include both measures in the agency performance 
plan and additional reporting items needed by agency managers. A 
standard report now under development will provide a snapshot of 
current status of activities on all measures in the agency performance 
plan.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. We are developing an integrated accountability system that 
will provide a single point of access to performance-related 
information. The home page, which will be unveiled in the next few 
weeks, will allow access to the performance information in PRMS, 
estimates of the resource needs and associated workload in each county 
as projected by the National Partnership Workload Analysis, and 
information on the resource concerns and conservation partnership 
available to address those concerns. In addition, selected program 
management data will be automatically loaded into the integrated site 
on a quarterly basis. A security system has been designed to enable 
managers at all levels to have access to the data they need to manage 
their responsibilities, permit the general public access to appropriate 
levels of information, protect the integrity of the database, and 
ensure restricted access to confidential data.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. The difficulty we face in linking dollars to results in a 
meaningful way stems more from the nature of the results we seek to 
achieve than from our budget structure. Because natural resources are 
parts of an interrelated system, program activities that are undertaken 
primarily to achieve a specific goal will have effects on other 
components of the system. In our performance plan, we have attempted to 
show the linkage between programs and the primary performance goal(s) 
the funds support. However, the goal for any resource objective is 
based on the assumption that the funds requested to meet other 
objectives will also be available.
    Question. Would the linkages be clearer if your budget account 
structure were modified? If so, how would you propose to modify it and 
why do you believe such modification would be more useful both to your 
agency and to this committee than the present structure?
    Answer. We have not identified changes in our budget structure that 
would make the linkages clearer. In the Performance and Results 
Measurement System, accomplishments on the performance measures is 
linked to the program or programs involved. In the time and attendance 
reporting system, time is reported by program and major activity. We 
are analyzing the initial year data from these systems to identify 
modifications in the reporting systems that would enable us to tie 
activities to dollars more precisely. As part of the strategic planning 
process, we are considering alternatives for stating strategic goals 
and objectives in an effort to design a framework that permits closer 
linkages between costs, outputs, and outcomes.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. Our new time and attendance reporting system makes 
available improved data on how employees spend their time. We believe 
that this data will provide the basis for accountability for program 
performance without requiring modification of the budget structure.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Cost accounting within NRCS is not a new concept. As early 
as the 1970s the agency had a manual process in place that required 
employees to record time by program supported. Due to the staff time 
required for manual recording, however, the agency went to the cost 
offset type of process currently in use. The TCAS system of time and 
attendance reporting, implemented in 1998, will provide the information 
to ensure that the offset process supports fund accountability. 
Although NRCS accounting resources are very limited, there is an 
overall understanding of FASAB standard 4, Managerial Cost Accounting 
and its mandate to determine the full cost of programs and activities.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial Cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as ``Activity-Based Costing,'' whereby the full cost is 
calculated for each of the activities of an agency. What is the status 
of your agency's implementation of the Managerial Cost Accounting 
requirement, and are you using Activity-Based Costing?
    Answer. Since 1998, NRCS has been implementing cost accounting in 
the agency. The process requires a cultural change in recording time 
and allocating costs to activities and programs. The process began with 
the implementation of the Total Cost Accounting System (TCAS). TCAS 
replaced the old methodology by which employees recorded only the time 
worked with a system that permits reporting amount of time by activity 
and by the program the activity supports. The second part of the 
process is to allocate the remaining costs of the agency to programs 
and activities using reasonable allocable bases. This process requires 
links to the future USDA financial information system called Foundation 
Financial Information System (FFIS) and to the NRCS Integrated 
Accountability System (IAS) to relate costs to performance data.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. Eventually, this will be possible. Once the TCAS system is 
linked to the FFIS and the IAS, NRCS will be able to determine the full 
costs of activities and programs and calculate administrative costs, 
employee benefits and depreciation.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. Yes, the agency would be able to document more precisely 
the dollars spent on programs, the costs of activities within the 
programs.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. The ultimate achievement of the per-unit cost will be 
possible once the previously mentioned systems are linked.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. The agency performance plan includes tables that estimate 
the amount of funds of each program that support each strategic 
objective. These tables show estimates based on available information. 
In the current plan for fiscal year 2000 and fiscal year 2001, the 
estimates for an objective include overhead; all funds of all programs 
are distributed among the objectives. There are, however, significant 
limitations in the data on which the estimates are based. Efforts to 
improve the data are ongoing. We have concentrated first on developing 
a system to account for field-level activities in terms of outputs. We 
developed a national workload analysis that defines the great variety 
of field office activities as a set of well-defined, mutually-exclusive 
work processes and identifies the steps that compose each process. 
Local teams estimated the time required to complete these activities on 
a typical operation in each of the more than 200 time team areas that 
make up the nation. We are using this data to project the field time 
needed to achieve certain types of goals and the possible shifting of 
personnel that might be involved. We intend to expand the workload 
system to include other agency activities above the field level. In 
many cases, the linkages of the outputs in the workload analysis to the 
program accounts and to resource outcomes are weak at present.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. This agency does not have any regulatory authority or role.
    Question. Does your fiscal year 2001 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. Our strategic plan briefly describes key external factors 
that might influence the ability of the agency to achieve the goals in 
the plan. Our current performance plan also includes brief descriptions 
of key external factors that might affect certain groups of performance 
goals.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. We are strengthening our capability to analyze resource and 
other data to identify emerging trends in production patterns and 
resource use to help anticipate changes that might intensify pressures 
on the resource base. We are also moving to a system of more annual 
resource inventories for key indicators so that we can identify where 
change is occurring and revise strategies before severe problems can 
develop. In addition we are strengthening our working relationships 
with other natural resources agencies in order to draw on their data 
and expertise.
    Question. What impact might external forces have on your resource 
estimates?
    Answer. The transition to market-driven agriculture could result in 
changes in land use and cropping patterns that affect the conservation 
needs on agricultural land, impacting the level of assistance producers 
need from USDA. Enactment of new requirements for resource protection, 
at either the national level or by a significant number of states, 
could greatly affect the level and kind of resources NRCS would need to 
help landusers meet their responsibilities. Changes in domestic or 
international economic conditions could substantially alter 
agricultural commodity prices, farm incomes, and the ability of private 
individuals to maintain or enhance their investments in conservation of 
natural resources. Such changes could also affect the ability of state 
and local members of the conservation partnership to increase their 
contributions to joint conservation initiatives. Also, dramatic changes 
in weather patterns, such as those experienced with El Nino, could have 
significant impacts on resources needed for protecting natural 
resources and the environment.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication? If so, 
does the Performance Plan identify the overlap or duplication?
    Answer. There is some overlap in the sense that several of our 
programs are authorized to address a wide range of resource goals. 
Rather than causing duplication, this overlap creates flexibility that 
permits us to tailor assistance to meet the wide range of conditions 
and needs in local areas across the country. In the performance plan, 
the programs that can be used to address goals are shown in the tables 
that map programs to resource objectives. In addition, there are areas 
of cooperation on outcomes for which other USDA agencies and agencies 
of other departments have a role. In these situations, our role as 
provider of technical assistance supports the efforts of other federal 
entities whose authorities and role are different from ours.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in the GPRA plans, and 
if so, how?
    Answer. Agencies that have been identified as high risk may find it 
appropriate to include in their performance plans measures to track 
progress toward eliminating the risk. We do not, however, think that 
management challenges should become a primary focus of the GPRA process 
or that routine operational concerns should be reflected in most 
agencies' plans. GPRA focuses on the outcomes of agency activities. 
There is a danger that requiring a major emphasis on internal 
management issues in GPRA plans will seriously dilute the focus on 
outcomes.
    Because GPRA plans focus on outcomes, and most true outcomes are 
achieved as a result of actions by multiple agencies, GPRA plans are an 
appropriate avenue for analyzing the interaction of agencies' programs 
to ensure coordinated action rather than duplication of effort.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making? Will this use increase in the future and, if so, 
in what ways?
    Answer. Agency leadership has used performance information and 
workload information to formulate and evaluate alternative goals and 
strategies and to consult with partners on mutual activities. Use of 
GPRA information will increase in the future as the components of the 
system are fully implemented and as managers become more familiar with 
the data and its uses.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that:
    To what extent are your performance measures sufficiently mature to 
allow for these kinds of uses?
    Are there any factors, such as inexperience in making estimates for 
certain activities or lack of data, that might affect the accuracy of 
resource estimates?
    Answer. Some additional development and evaluation of our new 
accountability system must be conducted before we consider the system 
fully mature. For many measures, we do not yet have reliable baselines 
against which to measure future performance. Fiscal year 2000 is the 
first year of full implementation for the new performance reporting 
system. Not all quality control processes for the performance reporting 
system were in place at the beginning of the year. Also, mangers need 
some time to become familiar with the new system and ensure that 
performance information is being entered accurately and consistently in 
all offices. At present, there is inexperience with making estimates 
for some activities. The workload analysis has been conducted three 
times, resulting in a good quality product that field-level employees 
understand. However, more experience is needed to develop the linkages 
between outputs and outcomes so that reliable projections of 
performance can made. Additional training to increase the understanding 
of the several components of the system will be provided to field-level 
employees later this year.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements? Specifically, are you requesting any 
relaxation of transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. No, we are not requesting any waivers.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. As NRCS revises its strategic plan for the next GPRA cycle, 
we anticipate changes in strategic goals and objectives as a result of 
new data and information available from the accountability system. We 
expect that accountability data will allow the agency to better 
evaluate alternative ways of framing goals and performance targets that 
take advantage of the ability to better evaluate the costs of achieving 
targets. We also expect to consider including sub-goals for regional 
concerns of national significance that can now be tracked through both 
performance and time expenditure systems, in addition to generalized 
national goals. The data available from the new system will enable us 
to make needed adjustments to previously established goals, objectives, 
and performance targets where analyses indicate they are needed. It 
will also enable us to refine performance measures to align them more 
directly with performance monitoring systems. Conversely, the 
flexibility of the integrated accountability system will now allow 
rapid changes in data collection to accommodate changes in performance 
measures on both a strategic and annual basis. We are also now able to 
establish more discrete performance targets for specific strategic 
objectives and use performance-related data to make adjustments to 
future year performance estimates from emerging initiatives and events 
based on real-time data linking performance, time expenditures, 
resource concerns, and workload.
    In addition, during this GPRA cycle we have new data and analyses 
from the National Resource Inventory (NRI) that will help in evaluating 
progress. The combination of these data and information may lead to the 
development of strategic goals, objectives, or performance targets that 
are considerably more useful for measuring agency success than those of 
the first plan.
                                 ______
                                 

                NATIONAL AGRICULTURAL STATISTICS SERVICE

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. The Annual Performance Plan covering fiscal years 2000 and 
2001 is a blueprint of the program objectives and performance goals for 
NASS. The performance plan is closely linked to not only the Agency's 
mission statement, but to the NASS and the Research, Education, and 
Economics (REE) Strategic Plans as well, and is framed by the REE 
general outcomes outlined in those strategic plans. The NASS Annual 
Performance Plan links the budget and performance goals by showing the 
Agency's funding and Full Time Equivalents (FTE's) allocated by the REE 
mission area general goals. The last page of the NASS Annual 
Performance Plan includes Resource Tables showing the three NASS 
program activities divided according to the REE goals.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. Budget activities and initiatives, since they are mission 
and strategic goal oriented, align well with overall NASS performance 
goals.
    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. The only difficulty arises when budget activities relate to 
multiple goals and must be allocated across them.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Answer. Yes. The NASS Revised fiscal year 2000 and fiscal year 2001 
Performance Plan links funding and FTE's with performance goals and 
associated measures; funding and FTE levels are shown by goal as well 
as by individual budget activity.
    Question. Does each account have performance measures?
    Answer. Each appropriations account by program activity has 
associated performance measures for each goal. NASS program activities 
are agricultural estimates, statistical research and service, and the 
census of agriculture.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. Accounts by activity structure are cross-walked against 
strategic and performance goals. Program activities are designed to 
contribute to goals from performance planning.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. No changes are planned at this time.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. No, program activities will remain unchanged.
    Question. How were performance measures chosen?
    Answer. NASS's senior executive decision making body, the Program 
Planning Committee, reviews the specific performance measures in 
semiannual meetings and requests more information from individual 
units, as needed. The responsibility for reporting the needed data for 
the performance measures resides within the individual NASS work units. 
In addition to the Agency GPRA Strategic Plan, NASS developed an 
internal NASS Action Plan, a major tool which provides employees with a 
more detailed blueprint for achievement of the NASS goals and 
objectives. This document contains internal performance targets, 
strategies, and measures which were developed at the grassroots level 
by NASS employees. The NASS Action Plan also includes the specific 
performance measures reported in the Agency's Annual Performance Plan.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. Most of the tabulated data and information was part of 
evaluation monitoring readily available within the NASS work units. 
NASS absorbed the resources and costs associated with these activities.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. Yes. The NASS plan includes performance measures for which 
reliable data were not available for the fiscal year 1999 Annual 
Program Performance Report. However, they are footnoted or fully 
explained in the plan.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    Answer. NASS recommends tracking the performance goal listed under 
general goal 1, since this represents the largest part of NASS's 
agricultural statistics program. The other key performance goal for 
NASS is listed under goal 5, which contains the measures for the census 
of agriculture.
    NASS Performance Goal 1: Provide timely and impartial agricultural 
statistics for use by all market participants which promote an 
economically viable and competitive agricultural production system. 
Performance measures listed under Goal 1 include: Percent of NASS 
reports that are complete, meet scheduled release dates, and contain no 
data errors; percent of total national agricultural production included 
in the NASS annual statistics program; percent of data users who rate 
NASS data as important or essential to the orderly marketing of 
agricultural products; and the NASS annual report release calendar is 
published and distributed prior to the start of each year.
    NASS Performance Goal 5: Provide detailed data from the census of 
agriculture at specified intervals to facilitate locality based policy 
and business decisions benefitting farmers, ranchers, and rural 
residents, and provide necessary and sufficient economic data on 
prices, labor, cost of production, farm numbers, and farm income to 
enable informed policy decisions to benefit farmers, ranchers, and 
rural residents. Performance measures listed under Goal 5 include: 
Number of months earlier than previous agricultural censuses for 
release of U.S. census data, and percent completeness improvement for 
coverage of minority operated farms compared to the previous 
agricultural census.
    Question. For each key annual goal, indicate whether you consider 
it to be an output measure (``how much'') or an outcome measure (``how 
well'').
    Answer. Performance measures for the NASS Goal 1 are outcome 
measures on how well the Agency performed against standards, including 
data user ratings of NASS data as important or essential to the orderly 
marketing of agricultural products. Performance measures for the NASS 
Goal 5 are measures of how well the census of agriculture was conducted 
relative to previous censuses.
    Question. State the long-term (fiscal year 2003) general goal and 
objective from the agency Strategic Plan to which the annual goal is 
linked.
    Answer. The five General Goals in the NASS Strategic Plan can be 
viewed in both the long-term or short-term. The fiscal year 2000-2001 
Annual Performance Plans contain the same organizing matrix (General 
Goals, Objectives, Strategies, and Performance Goals) as does the NASS 
Strategic Plan. The fiscal year 2001 budget request is linked by the 
crosswalks to the General Goals of the Strategic Plan. The Annual 
Performance Plans transmitted to Congress contain indicators for the 
fiscal year 2000-2001 that can be achieved with base funding. The 
fiscal year 2001 plan also identifies activities that will be initiated 
or expanded with the new funds requested in the President's budget.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. Material was gathered from the internal and external 
interviews, as well as results from a NASS organizational climate 
survey, middle manager committee meetings, data users meetings and 
other NASS employee and customer feedback efforts, which contributed to 
the deliberations of the Agency's Program Planning Committee. 
Understanding the needs, goals, and concerns of both data suppliers and 
customers concerning NASS products and services is crucial to continued 
success. Similar attention is necessary for the internal constituency, 
the staff and management of NASS. NASS has taken the approach of 
formulating meaningful outcome measures which assess NASS's ability to 
provide accurate, unbiased, meaningful, useful data on time with no 
errors.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Yes. Program managers understand these differences. NASS 
program managers have participated in the Agency's strategic planning 
efforts including the development of measures for the annual 
performance plans and the annual program performance report.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. NASS is working in partnership with the Federal Consulting 
Group, Department of Treasury, to conduct a survey of a sample of 
external customers representing all data users at the national level. 
Internal customers are measured with NASS's Biannual Organizational 
Climate Survey.. The instrument to be used is the American Customer 
Satisfaction Index which delivers customer satisfaction information 
that is actionable, linked to outcomes, and is comparable across other 
agencies governmentwide. The resulting measures will also establish a 
baseline and provide needed trend data.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. NASS evaluated the level of support for each of the REE 
general goals and corresponding Agency performance goals and measures 
in making the decisions related to the development of the fiscal year 
2001 budget, particularly with regard to the new program initiatives.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. Yes. NASS is a service agency whose customers are affected 
by the extent and frequency with which NASS can provide needed 
agricultural statistics. Significant budget changes have a direct 
bearing on the level of program performance such as statistical 
coverage, accuracy, and timeliness.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. Yes. NASS has the ability to communicate electronically to 
every employee in NASS and is able to distribute program performance 
information throughout the year on a regular basis. Work units can 
disseminate information on the electronic NASS Bulletin Boards as well 
as the internal NASSNet Intranet system, both of which are easily 
accessed by all employees.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. Program performance information is accessible to all 
employees when it is posted on the information systems in NASS.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. Yes. While there are no reporting systems that have been 
specifically designed and developed for the GPRA performance measures, 
the NASS GPRA performance reports are readily accessible to all 
employees from the NASS Bulletin Boards as well as the NASSNet Intranet 
system. Performance-related data reported in the fiscal year 1999 
Annual Program Performance Report and annual performance plans were 
developed by the individual work units.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Answer. Many agencies have indicated that 
their present budget account structure makes it difficult to link 
dollars to results in a clear and meaningful way. Have you faced such 
difficulty?
    Answer. No. NASS's present budget accounting structure aligns with 
core program activities to allow for the development of meaningful 
performance indicators and resource allocations. The only weakness in 
this design may be that the REE general goals which each agency in the 
REE mission area adhere to are quite general, sometimes making it 
difficult to directly link the impact of specific budget decisions on 
performance goals and measures.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. No. Changing the NASS budget accounting structure is 
unlikely to help the current planning process.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. Not applicable.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. Not applicable.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Although the Department has some personnel with cost 
accounting expertise, the Department's Chief Financial Officer has 
recognized the need for a Department-wide effort to enhance cost 
accounting expertise and $240,000 is included in the fiscal year 2001 
President's Budget request to provide such leadership. Currently, we 
are linking budget program activities to the goals in our annual 
performance plan. Ultimately, with additional fiscal year 2001 
resources and a better trained workforce, the Department will continue 
to implement improvements in this area.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all Federal agencies are required to 
have a system of Managerial Cost Accounting.
    The clearly preferred methodology for such a system, as stated in 
that standard, is the one known as ``Activity-Based Costing,'' whereby 
the full cost is calculated for each of the activities of an agency.
    What is the status of your agency's implementation of the 
Managerial Cost Accounting requirement, and are you using Activity-
Based Costing?
    Answer. USDA is in compliance with FASAB's cost accounting 
standards. The Department has identified responsibility segments, for 
which financial statement reporting is provided, employing full cost 
techniques that include unfunded pension and accrued annual leave, 
Federal Employment Compensation Act accrued expenses, GSA rent, 
depreciation, and other expense items that are appropriate. Currently, 
the Department uses several costing techniques, including Activity-
Based Costing, that permit us to determine the cost of our strategic 
goals and selected output activities.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all USDA agencies in 
order to provide standardized accounting methodologies and improve data 
integrity for management and reporting purposes for salaries and 
expenses and administrative operations. As the Department improves its 
basic accounting and reporting processes, it will be able to better 
identify activities and outputs for unit costing and will evaluate the 
various accounting methodologies available and incorporate the 
appropriate methodology for the activity being costed.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. Yes, we strongly believe that effective implementation of 
costing systems will vastly improve Federal planning, evaluation, and 
reporting at all levels of the organization.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. Yes, as the Department implements activity-based costing, 
it will be able to provide unit costs for activities and results.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. Baseline budgets cross-cut through all of the goals with 
supporting cost data provided for the programs by goal. Overhead costs 
are fully allocated.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. Since NASS is not a regulatory agency, no regulatory reform 
measures are included in the performance plan.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. No. The NASS performance plan only provides a framework to 
evaluate NASS's key external factors which have important implications 
for the NASS program. The factors most important for the next decade 
are explicitly listed in the Agency's strategic plan. For example, one 
key external factor influencing NASS is the increasing demand among 
data users for new kinds of information provided in alternative forms. 
These pressing data user needs and requests always require an 
assessment of NASS resources and priorities. Rapid changes, continued 
concentration and more vertical integration in the agricultural 
industry has required NASS to modify procedures for collecting and 
publishing information for certain sectors of the industry. The need to 
sustain, and even increase, NASS's high standards for accuracy, 
timeliness, and relevancy in order to meet rising public expectations 
requires constant technological upgrades, training, and improved survey 
methodology. Changes in customer priorities and the addition of new 
program initiatives can result in shifts in resource allocations, all 
of which must be balanced against the reporting burden on individual 
producers.
    Question. If so, what steps have you identified to prepare, 
anticipate, and plan for such influences?
    Answer. NASS developed a 1998 Action Plan which is an internal 
document for use by employees that updates and complements the NASS 
Strategic Plan. The action plan presents immediate, tactical goals that 
must be met for NASS to realize its vision and accomplish its mission 
is a manner consistent with the objectives of the official strategic 
plan. For each tactical goal the plan lists concrete objectives and the 
actions to be taken to attain them. The action plan serves as a ``road 
map'' to guide NASS employees to the goals and objectives of the 
strategic plan.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. The impact of these factors and the continued increase in 
information demands will most likely create a growing need for more 
appropriated resources for the collection of agricultural information, 
analysis, and publishing of NASS reports in a timely manner.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. No. NASS is the primary USDA agricultural statistical 
agency whose agricultural statistics mission does not overlap or 
duplicate that of any other agency within or outside of USDA.
    Question. If so, does the Performance Plan identify the overlap or 
duplication?
    Answer. Not applicable.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Yes. Each Agency has unique challenges for management 
depending on the culture of the organization, function, and mission. 
Each agency should address these organizational management challenges 
internally and externally with their customers, and work with the 
appropriate agencies regarding the specific areas of concern. 
Duplicative and overlapping functions should be justified and handled 
in the budget and appropriations processes. In addition, the annual 
performance plans should include a full discussion of goals and 
indications for these areas.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. The original strategic planning activity was initiated in 
NASS in 1993 and a final plan was accepted by the Administrator in 
1994. The 1998 Action Plan builds upon the work embodied in earlier 
plans. The current GPRA strategic plan for NASS emulates the Agency's 
continued strategic planning efforts. For example, the NASS strategic 
plan and strong NASS leadership provided a solid foundation for the 
successful transfer of the Census of Agriculture from the Department of 
Commerce in fiscal year 1997. The ongoing expansion of the 
environmental statistics program is another growing area that is 
reflected in the GPRA plans.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. Senior management will continue to use strategic planning 
as a tool for program planning which has been very successfully 
integrated into the Agency's leadership and management process. The 
high level of NASS strategic planning efforts will continue into the 
future.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. Established performance goals for NASS are in response to 
customer requests, most often expressed through the budgetary process. 
Most performance measures associated with each of the goals are 
relatively immature and would not provide a complete ``picture'' by 
themselves for make funding decisions. Responding to the data needs of 
those dependent upon and concerned with the Nation's agriculture is the 
most meaningful performance measurement.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. Yes, the most significant difficulty is measuring Agency 
performance against the rapidly increasing demand for more and better 
agricultural statistics with which to make increasingly complex and 
critical decisions.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Answer. No waivers have been requested.
    Question. Specifically, are you requesting any relaxation of 
transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. No requests have been made.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. No. No major revisions were reflected in the fiscal year 
2000 performance plan that required NASS to substantially revise the 
1997 GPRA strategic plan.
                                 ______
                                 

                    ECONOMIC RESEARCH SERVICE (ERS)

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. ERS's annual performance goals all aim to increase 
understanding of a variety of economic issues. They flow directly from 
ERS's mission, which is to provide economic analysis on efficiency, 
efficacy, and equity issues related to agriculture, food, natural 
resources, and rural development to improve public and private decision 
making. The annual performance goals parallel ERS's strategic goals. 
ERS program activities--research planning and conduct, and 
dissemination of research results and economic information--directly 
support the strategic and annual performance plan goals.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    What difficulties, if any, did you encounter, and what lessons did 
you learn?
    Answer. Increasingly, since the strategic plan was developed, the 
strategic and performance goals have become organizing principles for 
the ERS program and planning for future activities. This is a fairly 
straightforward process since ERS has five strategic goals and five 
performance goals. ERS has determined the number of staff years 
allocated to each goal and uses that as a basis for linking the 
performance goals to the budget. There were no significant 
difficulties.
    Question. Does the agency Performance Plan link performance 
measures to its budget?
    Does each account have performance measures?
    Answer. ERS's budget has one appropriation item, economic analysis 
and research. The Performance Plan's five goals are linked and 
dependent on funding levels allocated within the agency.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Do you plan to propose any changes to your account structure for 
fiscal year 2001?
    Will you propose any changes to the program activities described 
under that account structure?
    Answer. ERS's performance planning structure does not differ from 
its account and activity structure. ERS does not propose any changes to 
its account structure for fiscal year 2001.
    Question. How were performance measures chosen?
    How did the agency balance the cost of data collection and 
verification with the need for reliable and valid performance data?
    Does your plan include performance measures for which reliable data 
are not likely to be available in time for your first performance 
report in March 2000?
    Answer. ERS has always been concerned with its performance and has 
maintained information on its analytical outputs, their use, and their 
impacts on decisions about U.S. agriculture, food, natural resources, 
and rural development. ERS began a review of its planning and 
performance measurement systems in fiscal year 1995 when it provided 
all managers training on the Government Performance and Results Act 
(GPRA) and results-oriented management approaches. At that time, a 
group of middle managers reviewed and redrafted ERS performance 
measures. Subsequent mission area-wide activities in 1996-97 provided 
senior and middle ERS managers additional opportunities to test and 
refine ERS's performance measures including exchanges with staff at 
other government research agencies that were engaged in pilot GPRA 
projects and staff at private research companies. The performance 
plans' external reviews included meetings convened by the National 
Agricultural Research, Extension, Education, and Economics Advisory 
Board and included individuals from agri-business, public interest 
groups, and universities. The measures have also been critiqued 
extensively within USDA. Lessons reinforced were: do not make 
performance measurement so difficult that no one has time to work on 
achieving goals; good planning is an ongoing process and assessments 
will lead to further refinements; staff will perform to indicators--
make sure measures lead to correct outcomes; and research agencies face 
special difficulties in tying research results to broader outcomes. 
Good measures for a research program are difficult to develop, and ERS 
is process of re-thinking the measures currently in place.
    ERS will be able to produce and verify the data needed to underpin 
measures specified in its performance plan with very little additional 
cost. ERS would like to get more feedback from users outside the 
Federal Government, but is carefully considering the costs of doing so. 
The agency is in the process of developing a customer management 
program for its research monographs and periodicals that is expected to 
provide for a feedback loop.
    ERS had reliable data for completing its fiscal year 1999 
Performance Report.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    For each key annual goal, indicate whether you consider it to be an 
output measure (``how much'') or an outcome measure (``how well'').
    State the long-term (fiscal year 2003) general goal and objective 
from the agency Strategic Plan to which the annual goal is linked.
    Answer. The ERS Annual Performance Plan has one performance goal 
for each strategic goal. Each goal has two measures--one a quality 
measure and the other a timeliness measure. Each measure provides 
useful information on ERS's success in enhancing understanding by 
policy makers of key economic issues. The measures, though useful, do 
not fully describe ERS's success in meeting its goals. It is extremely 
difficult to measure the effectiveness and impact of research. 
Quantitatively and definitively establishing a link between economic 
analysis provided to decision makers and the outcome of the decision 
making process is rarely, if ever, possible. As a result, ERS used 
narratives in its fiscal year 1999 Performance Report to demonstrate 
that the agency ensured that high quality, objective, relevant, timely, 
and accessible analyses were made available to policy makers 
regulators, program managers, and organizations shaping public debate.
    All of ERS's performance goals and objectives are outcome oriented. 
The measures are closer to being output oriented, which is why the 
agency felt it necessary to supplement the performance report with 
narratives in its fiscal year 1999 Performance Report. Future plans and 
reports are expected to be in an alternative format.
    The long-term goals and objectives from the strategic plan are 
linked to the annual performance goals as follows (taken directly from 
the fiscal year 2000-01 Annual Performance Plan):
    Goal 1: The agricultural production system is highly competitive in 
the global economy.
    Objective 1.1: Enhanced understanding by policy makers, regulators, 
program managers, and those shaping public debate of economic issues 
involved in ensuring that the U.S. food and agriculture sector 
effectively adapts to changing market structure, domestic policy 
reforms, and post-GATT and post-NAFTA trade conditions.
    Performance Goal 1: Provide policy makers, regulators, program 
managers, and organizations shaping public debate with timely and high 
quality analyses of the economic issues affecting the U.S. food and 
agriculture sector's competitiveness including factors related to 
performance, structure, risk and uncertainty, marketing, and market and 
non-market trade barriers.
    Goal 2: The food production system is safe and secure.
    Objective 2.1: Enhanced understanding by policy makers, regulators, 
program managers, and those shaping public debate of economic issues 
involved in improving the efficiency, efficacy, and equity of public 
policies and programs designed to protect consumers from unsafe food.
    Performance Goal: Provide policy makers, regulators, program 
managers, and organizations shaping public debate with timely and high 
quality analyses of economic issues affecting the safety of the U.S. 
food supply including the efficacy, efficiency, and equity of 
alternative policies and programs designed to protect consumers from 
unsafe food.
    Goal 3: The nation's population is healthy and well-nourished.
    Objective: Enhanced understanding by policy makers, regulators, 
program managers, and organizations shaping public debate of the 
factors affecting food prices and of the efficiency and effectiveness 
of alternative public policies and programs aimed at ensuring consumers 
equitable access to wide varieties of high quality food at affordable 
prices.
    Performance Goal: Provide policy makers, regulators, program 
managers, and organizations shaping public debate with timely and high 
quality analyses of economic issues affecting the nutrition and health 
of the U.S. population including factors related to food choices, 
consumption patterns at and away from home, food prices, food 
assistance programs, nutrition education, and food industry structure.
    Goal 4: Agriculture and the environment are in harmony.
    Objective: Enhanced understanding by policy makers, regulators, 
program managers, and those shaping public debate of the economic 
issues involved in balancing long term sustainability goals with 
improved agricultural competitiveness and economic growth and of the 
effects of Federal farm, natural resource, and rural policies and 
programs on that balance.
    Performance Goal: Provide policy makers, regulators, program 
managers, and organizations shaping public debate with analyses of 
economic issues affecting agriculture's interface with the environment 
including those related to integrated pest management, sustainability, 
biodiversity, global change, and environmental accounting.
    Goal 5: Enhanced economic opportunity and quality of life for rural 
Americans.
    Objective: Enhanced understanding by policy makers, regulators, 
program managers, and organizations shaping public debate of economic 
issues affecting rural development and performance of all sizes of 
American farms.
    Performance Goal: Provide policy makers, regulators, program 
managers, and those shaping public debate with timely and high quality 
economic analyses that identify (1) how investments in rural people, 
businesses, and communities affect rural economies' capacity to survive 
and prosper in the global marketplace and (2) what policies and 
programs keep American farms of all sizes viable.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. Interpreting outcome measurements is not a straightforward 
process for research organizations. The cause and effect relationship 
between research outputs and eventual outcomes is complex. The 
challenges facing those interpreting performance measures for a public 
information and analytical organization such as ERS are even greater. 
Public information can be freely used without attribution. Its 
widespread use and effects may be difficult to fully measure. Delays 
between when research results are presented and when their effects are 
fully assimilated are variable and can be long. Specific outcomes are 
influenced by factors besides quality research results. If ERS analysis 
is objective, analysis on the efficacy, efficiency, and equity impacts 
of specific policies, programs, and regulations will at any one time 
support some customers' proposals but not others. Rigorous adherence to 
standards of disciplinary excellence contributes greatly to the quality 
and objectivity of ERS analyses and their defensibility. The narratives 
included in ERS performance reports are key to showing how ERS analysis 
enhanced understanding of key economic issues by policy makers, 
regulators, program managers, and others.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Yes, and they are particularly aware of the difficulty in 
measuring outcomes of research and analysis. ERS has a head start in 
making sure that program managers understand the difference between 
workload and effectiveness measures. Most ERS employees are economists 
with substantial interest, training, and experience in understanding 
efficacy, efficiency, and equity concepts. In addition, ERS augmented 
program managers' training specific to GPRA requirements beginning in 
fiscal year 1995, providing managers with training on GPRA and results 
oriented management approaches.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. ERS is looking at a variety of qualitative indicators to 
help measure customer satisfaction and to understand how ERS research 
results are used by decision makers and thus affect outcomes. Some of 
these indicators are likely to become part of ERS's alternative 
measurements. ERS internal customers include the Office of the 
Secretary, the Chief Economist and other USDA agencies. External 
customers include Congress, other Federal agencies, industry groups, 
and other researchers, both in universities and in private 
organizations. Possible indicators are: (1) call backs for follow up 
information/analysis from policy makers; (2) requests for ERS staff as 
primary speakers at important meetings/conferences; (3) articles in 
major public media that correctly and effectively use ERS analysis and 
data; and (4) relevance of ERS output to stated Administration or 
congressional priorities. To ensure that the outputs present data and 
analyses that are high quality, comprehensive, objective, relevant and 
accessible, ERS routinely provides its customers many opportunities for 
feedback, conducts rigorous peer reviews before analysis is released, 
and uses a wide variety of proven and innovative dissemination systems.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    If a proposed budget number is changed, up or down, by this 
committee, will you be able to indicate to us the likely impact the 
change would have on the level of program performance and the 
achievement of various goals?
    Answer. The fiscal year 2001 budget reflects the ERS fiscal year 
2000 Performance Plan and performance goals. Changes in the level of 
funding affect ERS ability to produce and disseminate its research and 
analysis. ERS would be able to provide information on the impact of 
funding changes on performance goals.
    Question. Do you have technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so the agency can be properly managed to achieve the desired results?
    If so, who has access to the information--senior management only, 
or mid- and lower-level program managers, too?
    Are you able to gain access easily to various performance-related 
data located throughout your various information systems?
    Answer. ERS could prepare program performance reports at any time 
during the year. However, the nature of research outcomes including the 
often long evolution between provision of economic analysis and any 
particular public and private decisions, means that frequent detailed 
measurement and reporting may not be cost effective or meaningful for 
understanding overall progress on meeting goals and objectives. ERS is 
in the process of developing a system that brings together performance 
information from a variety of current tracking systems. That will make 
it simpler for managers and supervisors at all levels to track progress 
on certain specific activities over the course of the year.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear meaningful way.
    Have you faced that difficulty?  Would the linkages be clearer if 
your budget account structure were modified?
    If so, how would you propose to modify it and why do you believe 
such modification would be more useful both to your agency and to this 
committee than the present structure?
    How would such modification strengthen accountability for program 
performance in the use of budgeted dollars?
    Answer. Because ERS's budget has one appropriation item--economic 
analysis and research--ERS does not face difficulties in linking 
performance across various accounting and reporting structures and 
presenting its budget by performance goals.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions.
    Could you comment on your agency's cost accounting expertise and 
plans to link GPRA to the budget process?
    Answer. Although the Department has some personnel with cost 
accounting expertise, the Department's Chief Financial Officer has 
recognized the need for a Department-wide effort to enhance cost 
accounting expertise and $240,000 is included in the fiscal year 2001 
President's Budget request to provide such leadership. Currently, we 
are linking budget program activities to the goals in our annual 
performance plans. With additional fiscal year 2001 resources and a 
better trained workforce, the Department will continue to implement 
improvements in this area.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issue by 
OMB, this year for the first time, all Federal agencies are required to 
have a system of Managerial Cost Accounting.
    The clearly preferred methodology for such a system, as stated in 
that standard, is the one know as ``Activity-Based Costing,'' whereby 
the full cost is calculated for each of the activities of an agency.
    Question. What is the status of your agency's implementation of the 
managerial cost accounting requirement, and are you using Activity-
Based Costing?
    Answer. USDA is in compliance with FASAB's cost accounting 
standards. The Department has identified responsibility segments, for 
which financial statement reporting is provided, employing full cost 
techniques that include unfunded pension and accrued annual leave, 
Federal Employment Compensation Act accrued expenses, GSA rent, 
depreciation, and other expense items that are appropriate. Currently, 
the Department uses several costing techniques, including Activity-
Based Costing, that permit us to determine the cost of our strategic 
goals, and selected output activities.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all USDA agencies in 
order to provide standardized accounting methodologies and improve data 
integrity for management and reporting purposes for salaries and 
expenses and administrative operations. As the Department improves its 
basic accounting and reporting processes, it will be able to better 
identify activities and outputs for unit costing and will evaluate the 
various accounting methodologies available and incorporate the 
appropriate methodology for the activity being costed.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. Yes, the Department strongly believes that effective 
implementation of costing systems will vastly improve Federal planning, 
evaluation, and reporting at all levels of the organization.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. As the Department implements activity-based costing, it 
will be able to provide unit costs for activities and results.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. None. ERS does not perform regulatory functions.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?  If so, what steps have you 
identified to prepare, anticipate and plan for such influences?  What 
impacts might external factors have on resource estimates?
    Answer. Implicit in ERS's fiscal year 2000 performance plan and 
explicit in the strategic plan are external factors that could affect 
achievement of ERS goals. Changes in the larger policy context in which 
ERS operates will influence the content and orientation of ERS research 
and analysis. These changes can be in Government policy, changes in 
markets, or new technology; all influence the direction of the ERS 
program. In addition, the changing needs of users of ERS information 
influence ERS's program.
    Steps taken to prepare for changing demands include continuous 
communication with major customers and constant monitoring of trends in 
markets and policy development. Anticipation of changes is a critical 
part of ERS's research planning. Readiness to respond to unforeseen 
changes is also built into the ERS decision making and budgeting 
process. One means of providing flexibility is the quarterly allocation 
of funds by the Administrator. Another is the agency's commitment to 
seek reimbursements for research or analysis requested by customers.
    ERS is committed to anticipating changes in external demands 
because such demands can make it difficult to sustain core research, 
which is the essential base on which the agency operates. Also, over 
the longer run, those changes may need to become part of the core 
research.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication? If so 
does the Performance Plan identify the overlap or duplication?
    Answer. Development of the performance plan did not reveal 
significant overlaps or duplication within the agency. Externally, 
because ERS's economic analyses cover all aspects of USDA's mission, 
the crosscuts between ERS research and the missions and goals of other 
USDA agencies are extensive and complicated. However, even before GPRA 
was implemented, ERS was cognizant that its unique contribution is 
provision of external economic analysis and ensured that it did not 
duplicate or overlap with program functions in other agencies.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Significant management challenges, including efforts to 
deal with overlapping functions can and should be addressed through 
management initiatives.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Will this use increase in the future and, if so, in what ways?
    Answer. GPRA is and will continue to be a significant factor in 
agency decision making. The five strategic goals and the five 
performance goals are central to research planning in ERS. Division and 
branch annual plans are organized around the goals. A major overhaul of 
the ERS website is underway, also organized around the goals. A new 
agency information system currently under development will assist in 
tracking activities, accomplishments, and, if possible, outcomes for 
the purposes of GPRA and for other management needs.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that:
    To what extent are your performance measures sufficiently mature to 
allow for these kinds of uses?
    Are there any factors, such as inexperience in making estimates for 
certain activities or lack of data, that might affect the accuracy of 
resource estimates?
    Answer. ERS performance measures, supplemented by narrative 
information provided in the Annual Performance Report are sufficiently 
mature to allow funding decisions to consider actual performance 
compared to targets. However, the caveats raised in earlier responses 
about the complexity of measuring performance for a public research 
organization remain. ERS is in the process of seeking an alternative 
approach that better serves to measure performance. Quantitative 
measures alone are not likely to completely fulfill this purpose. 
Increasingly, agency management sees evaluation of agency programs and 
program impacts as a central function.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Specifically, are you requesting any relaxation of transfer or 
reprogramming controls in return for specific accountability 
commitments?
    Answer. No
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. ERS will review and consider revisions to its strategic 
plan during fiscal year 2000. Major revisions are not expected.
                                 ______
                                 

        GRAIN INSPECTION, PACKERS AND STOCKYARDS ADMINISTRATION

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. There is a direct correlation between the Agency's mission, 
strategic goals, performance goals, and budget activities. Each of the 
Agency's budget activities--the Packers and Stockyards Program and the 
Grain Inspection Program--is directly linked to a strategic goal and 
supporting performance measures. The Packers and Stockyards Program is 
represented in Goal 1 of the Agency's strategic plan, and the Grain 
Inspection Program is represented in Goal 2. Both goals support the 
Agency's mission and have supporting performance measures.
    Question. Could you describe the process used to link your 
performance goals to your budget activities? What difficulties, if any, 
did you encounter, and what lessons did you learn?
    Answer. In the drafting process, we ultimately designed the 
Agency's strategic plan with the Agency's budget activities in mind. 
The end result is that there is a one-to-one correlation between budget 
activities and strategic goals and supporting performance goals.
    Question. Does the agency's Performance Plan link performance 
measures to its budget? Does each account have performance measures?
    Answer. Yes, each budget account is aligned with a strategic goal 
and supporting performance measures.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. There are no differences.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. The Agency does not plan to propose any changes at this 
time.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. The Agency does not currently plan to propose any changes 
to the program activities described under our account structure.
    Question. How were performance measures chosen?
    Answer. GIPSA focuses on what customers have indicated they want 
measured--cost efficiency, timeliness of service, and accuracy of 
results. To date, the Agency has developed measures of timeliness 
(e.g., percentage of violations corrected within 1 year of 
investigation's starting date) and cost efficiency (e.g., cost of the 
official grain inspection and weighing service per metric ton using 
constant 1992 dollars indexed on the Gross Domestic Product). The 
Agency will be developing measurements of accuracy during fiscal year 
2000.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. For some of the Agency's performance measures, such as cost 
per metric ton, the data was already available and resulted in no extra 
cost to the Agency. In other instances, the Agency is still struggling 
with developing meaningful outcome measures and identifying the 
necessary data sources.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. The Agency has performance measures for which reliable data 
was available in time for the first performance report.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    Answer. GIPSA's performance goals align with the Agency's budget 
line items and, as a result, it would be difficult to assign greater 
importance to any one goal. As given in the revised fiscal year 2000 
and fiscal year 2001 Annual Performance Plans, the Agency's performance 
goals and affiliated budget line items are: (1) Ensure a fair, open, 
and competitive marketing environment for livestock, meat, and poultry; 
(2) Increase the efficiency of grain inspection and weighing processes; 
(3) Provide a standardized framework for the U.S. grain trade; (4) 
Provide cost effective and responsive official grain inspection and 
weighing services; (5) Protect the integrity of U.S. grain marketing 
for the U.S. grain trade; (6) Implementation of workforce plan action 
items (percent); and (7) Number of deficiencies and/or nonconformance.
    Question. For each key annual goal, indicate whether you consider 
it to be an output measure (``how much'') or an outcome measure (``how 
well'').
    Answer. Of these performance goals, numbers 6 and 7 are output 
measures. Numbers 1 through 5 are outcome measures.
    Question. State the long-term (fiscal year 2003) general goal and 
objective from the agency Strategic Plan to which the annual goal is 
linked.
    Answer. The current Agency Strategic Plan extends to fiscal year 
2002. To date, long-term fiscal year 2003 general goals and objectives, 
have not been developed to which the annual goal can be linked. Of the 
Agency's present performance goals listed above, the first one is 
linked to our Strategic Goal 1. Performance Goals 2 through 5 support 
Strategic Goal 2; and Performance Goals 6 and 7 support both Strategic 
Goals 1 and 2.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. The Agency is well aware of the importance and the 
difficulty in developing meaningful outcome measures. GIPSA anticipates 
refining some of its current performance goals and measures and intends 
to develop new measures, accordingly.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Although managers understand the difference, GIPSA 
continues to have some difficulty in identifying meaningful outcome 
goals. For example, standardization of grain quality and quantity 
measurement improves market efficiency. Likewise, the use of grades and 
standards improves market efficiency if the grades and standards 
communicate the quality characteristics relevant to the market. GIPSA 
directly controls the standardization of the official inspection system 
and influences the standardization of the commercial market. Measuring 
the use of grades and standards by the commercial market is 
impractical, since nearly all those buying or selling grain use the 
grades and standards to one degree or another. As a result, GIPSA is 
attempting to develop surrogate measures that track the efficiency of 
the official inspection system and the adequacy of grades and 
standards.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. GIPSA has conducted a survey of external customers of the 
official inspection and weighing system. Results from the survey have 
allowed the official system to quantitatively assess customer 
satisfaction in terms of the factors that have been identified by 
customers as being critical to the official system's success: 
timeliness, accuracy and consistency, cost-effectiveness, 
responsiveness, and professionalism. Results from the survey will also 
serve as benchmarks against which further progress will be measured. 
GIPSA has conducted surveys of employees of the grain program. The 
Agency's managers and employees use survey results to identify the 
Agency's strengths and weakness and to take actions to improve upon 
both. The Agency plans to conduct another customer survey in fiscal 
year 2000.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. We aligned the Agency's strategic goals and supporting 
performance goals and measures with the Agency's two budget accounts, 
the Packers and Stockyards Program and the Grain Program.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. If appropriated funding is increased or decreased, it would 
have an impact on the Agency's target levels of performance and the 
fiscal year 2001 Performance Plan would be revised accordingly.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. Yes. With the exception of one measure, GIPSA will rely on 
internal agency procedures to track performance. In the future, this 
will allow GIPSA to have the capability of regularly assessing program 
progress. At the national level, the average cost of the inspection and 
weighing program per metric ton (unadjusted) is included in the monthly 
financial reports prepared by the Animal and Plant Health Inspection 
Service's Washington Financial Service Branch. GIPSA's success in 
tracking the cost of the program is directly dependent on the 
timeliness and quality of service it receives.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. Currently, access to the information is available mainly to 
senior and mid-level management. We are, however, planning to extend 
future access to lower-level managers.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. While we would not consider it an easy process to gain 
access to various performance-related data located throughout the 
Agency's various information systems, we do expect access to become 
easier as we continue to develop our various information systems.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. Since GIPSA's program activities set forth in the budget 
and the Agency's strategic and performance goals are aligned, the 
Agency has not encountered such difficulty.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. No, the linkages are currently clear.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. Modification is not necessary at this time.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. Modification is not necessary at this time.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions: Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. GIPSA understands the importance of identifying real costs 
to perform various government functions, as well as the importance of 
allocating valuable, and sometimes limited, resources to perform these 
functions. Although the Agency has limited cost accounting expertise, 
it plans to use all available accounting resources at its disposal to 
link GPRA to the budget process, and to identify real costs and 
allocate Agency resources.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial Cost Accounting.
    The clearly preferred methodology for such a system, as stated in 
that standard, is the one known as ``Activity-Based Costing,'' whereby 
the full cost is calculated for each of the activities in the agency. 
What is the status of your agency's implementation of the Managerial 
Cost Accounting requirement, and are you using Activity-Based Costing?
    Answer. We are just in the early stages of the Activity-Based 
Costing process. The Agency has had meetings on the subject of 
``Activity-Based Costing'' and is exploring possible training 
opportunities to develop the necessary skills to carry out this 
process.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. It is the Agency's intent to be able to show the Committee 
the full and accurate cost of each activity for each program, including 
costs for such items as administration, employee benefits, and 
depreciation.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. The Committee will be able to receive a much more accurate 
accounting of the dollars spent on a program, the true costs of the 
activities conducted by the program, and the subsequent results of 
these activities.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. It is our intent to identify and track costs down to the 
lowest practical levels within each activity, and thus be able to 
report per-unit costs and results.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. As near as possible, we hope to be able to identify the 
full cost of all associated activities performed in support of a 
particular performance goal, including associated overhead costs.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. The Agency has not identified, nor put in place, any 
significant regulatory reform measures in conjunction with the 
development of the Agency's performance plan.
    Question. Does your fiscal year 2000 Performance Plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. Yes, the fiscal year 2000 Performance Plan does identify 
external factors.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. GIPSA must effectively respond to the fluid and dynamic 
business environments in which the grain and livestock industries 
operate. Like many segments of American agriculture, these industries 
are experiencing rapid changes such as mergers, acquisitions, vertical 
integration, and increasingly automated operations. The changes are 
shaping how GIPSA operates. For example, GIPSA has developed a field 
office consolidation plan, which will allow more resources to be 
located in regions where beef, pork, and poultry production and 
processing are concentrated. Furthermore, the field offices will be 
strengthened with additional expertise in economic, statistical, and 
legal issues to more effectively conduct investigations of alleged 
anticompetitive practices and financial and trade practice violations. 
In the grain program, GIPSA has been working closely with official 
agencies to enhance customer service. The end result has been ground 
breaking. With the guidance of GIPSA, three official agencies have 
formed a limited liability partnership that will enable them to better 
serve a common customer, a large Midwestern grain cooperative. Even 
more important, the cooperative will now be able to load unit trains 
more quickly, with fewer problems, and for much less cost.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. Changing external factors may require the Agency's Packers 
and Stockyards program to shift from one area of focus to another. In 
the grain arena, increases or decreases in U.S. grain exports will 
affect the cost per metric ton of the grain inspection and weighing 
service provided.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication? If so, 
does the Performance Plan identify the overlap or duplication?
    Answer. GIPSA has not identified any overlapping functions or 
program duplication. GIPSA does, however, coordinate its program 
activities with a number of government entities. Within USDA, GIPSA 
works with the Animal and Plant Health Inspection Service and the 
Agricultural Marketing Service on marketing issues; the Foreign 
Agricultural Service on international trade issues and programs; the 
Agricultural Research Service and the Economic Research Service for 
research support; and the Office of the Inspector General on 
investigative matters. Further, GIPSA cooperates with various non-USDA 
entities, including the Food and Drug Administration on food safety 
issues; the Environmental Protection Agency on pesticide residue 
programs; and the Department of Justice and the Commodity Futures 
Trading Commission on investigative matters. GIPSA's strategic plan, 
rather than its performance plan, addresses the coordination of 
efforts.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. GIPSA sees no need for agencies to address management 
challenges and potential duplication and overlapping functions in their 
GPRA plans. Hopefully, in developing their plans, agencies have already 
identified and eliminated overlapping functions or program duplication.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. GIPSA has developed an investigation and case tracking 
system, which will allow the Agency to track regional and industry-wide 
investigations, thus increasing efficiencies for the Agency and 
customers alike.
    GIPSA has implemented an enhanced quality assurance and quality 
control program to ensure the quality and accuracy of inspection 
results nationwide. The new program includes a balance of national and 
localized monitoring. A greater emphasis is being placed on proactive 
actions to prevent problems from occurring rather than reacting to 
problems once they have occurred.
    Question. Will this use increase in the future and if so, in what 
ways.
    Answer. Yes, GPRA will increasingly be used to make decisions, 
particularly with efforts to decrease costs and increase productivity. 
Managers will continue to be reminded of the importance of GPRA and its 
increasing impact on budgetary decisions.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses? Are there any factors, such as 
inexperience in making estimates for certain activities or lack of 
data, that might affect the accuracy of resource estimates?
    Answer. Given that the Agency's current performance goals and 
measures are relatively immature, the Agency is in the process of 
reviewing and refining its current goals and measures and developing 
some new measures in time for the beginning of the fiscal year 2002 
budgeting cycle.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements? Specifically, are you requesting any 
relaxation of transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. GIPSA is not currently requesting any waivers of non-
statutory administrative requirements, nor is the Agency requesting any 
relaxation of transfer or reprogramming controls in return for specific 
accountability commitments.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issues on September 30, 1997?
    Answer. GIPSA does not foresee any need for any substantive 
revisions in the Agency's strategic plan at this time.
                                 ______
                                 

                       NATIONAL APPEALS DIVISION

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. NAD has a single performance goal to conduct hearings and 
issue determinations within applicable time frames and the entire 
appropriation is used to support the achievement of that goal.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. NAD has a single performance goal that is linked to its 
single budget activity.
    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. No difficulties were encountered.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Answer. Yes, NAD's performance plan links its performance measures 
to its budget.
    Question. Does each account have performance measures?
    Answer. NAD has one account and four corresponding performance 
measures.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. NAD's performance planning structure does not differ from 
the activity structure.
    Question. Do you plan to propose any changes to your account 
structure for 2001?
    Answer. NAD does not plan to propose any changes to the account 
structure for 2001.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. No changes to the program activity described under that 
account structure are proposed for 2001.
    Question. How were performance measures chosen?
    Answer. NAD based its performance measures on statutory and 
regulatory requirements.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. NAD considered the cost of data collection and verification 
with respect to its existing information systems and additional 
programs, and examined its quality and sufficiency with respect to the 
need for reliable and valid performance data.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. No, our plan does not include performance measures for 
which reliable data are not likely to be available in time for our 
first performance report in March 2000.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    Answer. NAD has one performance goal to conduct hearings and issue 
determinations within applicable time frames.
    Question. For each key annual goal, indicate whether you consider 
it to be an output measure (``how much'') or an outcome measure (``how 
well'').
    Answer. NAD has four indicators for its one performance goal. The 
indicators are based on outcome measures.
    Question. State the long-term (fiscal year 2003) general goal and 
objective from the agency Strategic Plan to which the annual goal is 
linked.
    Answer. NAD's long-term general goal and objective is to conduct 
hearings and issue determinations within applicable time frames.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. NAD undertook efforts to ensure that not only would 
compiled data indicate compliance within time frames, but that both the 
quality of customer service and the quality of the determinations would 
be measured.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Yes, we are confident that our program managers understand 
the difference between goals that measure workload--output--and goals 
that measure effectiveness--outcome.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please use examples of both internal and 
external customers.
    Answer. NAD uses the same customer satisfaction measures for 
internal and external customers. These measures include identifying 
levels of satisfaction with: treatment--courtesy and respect; The 
customers' rights to present their case and tell their side of the 
story; the level of fairness and impartiality; the degree of 
responsiveness in answering questions; and the level of comprehension 
in reading and understanding NAD information.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. The fiscal year 2001 budget was based upon a review of the 
performance goal and measures.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. Yes, we would be able to indicate the likely impact.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. NAD maintains a management information system (NADTrack) 
that tracks cases and provides data which enables NAD to properly 
manage program performance.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. NADTrack information is provided and maintained by mid- and 
lower-level program managers. The information is used by senior 
management to consider in making decisions and to compile statistical 
reports. Both managers and program managers, at all levels, have access 
to the information.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. The information system was designed for easy accessibility.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget? Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. NAD has not faced any difficulties in linking dollars in a 
clear and meaningful way to results.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. Modification to NAD's budget account structure is not 
necessary.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. NAD does not propose to modify the budget account 
structure.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. No such modification is necessary.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Although the Department has some personnel with cost 
accounting expertise, the Department's Chief Financial Officer has 
recognized the need for a Department-wide effort to enhance cost 
accounting expertise and $240,000 is included in the fiscal year 2001 
President's Budget request to provide such leadership. Currently, we 
are linking budget program activities to the goals in our annual 
performance plan. Ultimately, with additional fiscal year 2001 
resources and a better trained workforce, the Department will continue 
to implement improvements in this area.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial Cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as Activity-Based Costing, whereby the full cost is calculated 
for each of the set activities of an agency. What is the status of your 
agency's implementation of the Managerial Cost Accounting requirement, 
and are you using Activity-Based Costing?
    Answer. USDA is in compliance with FASAB's cost accounting 
standards. The Department has identified responsibility segments, for 
which financial statement reporting is provided, employing full cost 
techniques that include unfunded pension and accrued annual leave, 
Federal Employment Compensation Act accrued expenses, GSA rent, 
depreciation, and other expense items that are appropriate. Currently, 
the Department uses several costing techniques, including Activity-
Based Costing, that permit us to determine the cost of our strategic 
goals and selected output activities.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all USDA agencies in 
order to provide standardized accounting methodologies and improve data 
integrity for management and reporting purposes for salaries and 
expenses and administrative operations. As the Department improves its 
basic accounting and reporting processes, it will be able to better 
identify activities and outputs for unit costing and will evaluate the 
various accounting methodologies available and incorporate the 
appropriate methodology for the activity being costed.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. Yes, we strongly believe that effective implementation of 
costing systems will vastly improve Federal planning, evaluation, and 
reporting at all levels of the organization.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. As the Department implements activity based costing, it 
will be able to provide unit costs for activities and results.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. All costs, direct and indirect, are allocated to support 
the achievement of NAD's single performance goal.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. NAD has not put any regulatory reform measures in place.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. NAD's fiscal year 2000 performance plan does not identify 
any external factors that could influence goal achievement.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. NAD's fiscal year 2000 performance plan does not identify 
any significant external factors that could influence goal achievement, 
therefore, no steps have been identified to prepare, anticipate and 
plan for such influences.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. NAD does not have any significant external factors.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. NAD has not identified any overlapping functions or program 
duplication.
    Question. If so, does the Performance Plan identify the overlap or 
duplication?
    Answer. NAD has not identified any overlapping functions or program 
duplication.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. NAD has not identified any overlapping functions or program 
duplication.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. GPRA requirements have had a growing impact on agency 
leaders' decision making. Customer service consideration and budget/
goal correlation are two areas considered in NAD's decision making.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. NAD is moving from attribute data to continuous data in 
measuring customer service. NAD is also finding better methods of 
tailoring training programs based on quantitative data gathered at all 
levels of the organization.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. Our performance measures are sufficiently mature.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. No, there are no such factors.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Answer. NAD is not requesting any waivers of non-statutory 
administrative requirements at this time.
    Question. Specifically, are you requesting any relaxation of 
transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. NAD is not requesting any relaxation of transfer or 
reprogramming controls in return for specific accountability 
commitments.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. When the strategic plan was prepared, NAD had been in 
existence less than four years and did not have the breadth of 
experience needed to establish mature management-related goals and 
indicators. NAD now has sufficient experience with which to establish 
more realistic and meaningful management goals. NAD's 2000 Strategic 
Plan will be modified to reflect more realistic and meaningful goals. 
NAD's mission-related performance goal is expected to continue without 
revision.
                                 ______
                                 

                     AGRICULTURAL MARKETING SERVICE

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. AMS' annual performance goals are directly linked to its 
mission and strategic goals. The agency's program activities are 
grouped according to the agency's two strategic goals; the performance 
goals are listed by program activity. The table below shows the linkage 
between each activity and strategic goal.
    [The information follows:]

         SUMMARY OF AMS STRATEGIC GOAL LINKAGES--FISCAL YEAR 2000
                          [Dollars in thousands]
------------------------------------------------------------------------
                                                      Goal 1     Goal 2
------------------------------------------------------------------------
Marketing Services, Appropriated:
    Market News...................................          X
    Standardization...............................          X
    Shell Egg Surveillance........................                     X
    Federal Seed Act Program......................                     X
    Pesticide Recordkeeping Program...............                     X
    Pesticide Data Program........................          X
    Wholesale Market Development..................          X
    Transportation Services.......................          X
Section 32, Appropriated:
    Commodity Purchase Services...................          X
    Marketing Agreements and Orders...............                     X
User Funded:
    Grading & Certification.......................          X
    Plant Variety Protection Act Program..........                     X
    Commodity Research and Promotion Acts.........          X
    Perishable Agricultural Commodities Act                            X
     Program......................................
------------------------------------------------------------------------

    Question. Could you describe the process used to link your 
performance goals to your budget activities? What difficulties, if any, 
did you encounter, and what lessons did you learn?
    Answer. We used the budget activities as the framework for our 
performance goals and did not encounter any difficulties.
    Question. Does the agency's Performance Plan link performance 
measures to its budget? Does each account have performance measures?
    Answer. Yes, the agency's performance plan links performance 
measures to budget activities. AMS budget accounts include multiple 
activities; each ongoing AMS activity has a performance measure.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification? Do you plan to propose any changes to your account 
structure for fiscal year 2001? Will you propose any changes to the 
program activities described under that account structure?
    Answer. AMS' performance planning structure does not differ from 
the budget structure. The activities in the annual performance plan are 
the same as the activities in the budget justification. The budget 
justification lists AMS activities by account, whereas the performance 
planning structure lists the activities by goal. We do not plan to 
propose any change to our account structure or program activities in 
fiscal year 2001.
    Question. How were performance measures chosen? How did the agency 
balance the cost of data collection and verification with the need for 
reliable and valid performance data? Does your plan include performance 
measures for which reliable data are not likely to be available in time 
for your first performance report in March 2000?
    Answer. Performance measures were developed through a consensus of 
program personnel and agency managers. As part of its strategic plan 
development, AMS established committees of agency program personnel for 
each activity. These committees were responsible for developing 
performance measures for their activities based on the strategic plan. 
AMS also formed a Strategic Planning Action Team at the Associate 
Deputy Administrator level. This team monitors the performance goals in 
the annual plan, gathers actual performance data semiannually, and 
prepares a report to the Administrator. Data collection and 
verification is an integral part of the programs that we carry out and 
the collection of data was not a material obstacle. In the few cases 
where performance data was found to be unavailable, AMS has revised the 
performance goal.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results? For each key annual goal, indicate whether 
you consider it to be an output measure (``how much'') or an outcome 
measure (``how well''). State the long-term (fiscal year 2003) general 
goal and objective from the agency Strategic Plan to which the annual 
goal is linked.
    Answer. Since the AMS performance goals track the budget 
activities, we believe that the Subcommittee would be interested in all 
of them. Most of AMS' performance goals are outcome measures; wherever 
data is available. Output measures closely aligned with the goals were 
used where outcome measures were not available.
    Question. In developing you Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. We attempted, where possible, to provide outcome measures 
for each program area. AMS formed a committee of program managers who 
worked together to determine what measures best met the requirements of 
GPRA and the needs of the managers for program operation.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Yes, we believe AMS program managers understand the 
differences. The problem, in some instances, was that measuring outcome 
was not possible and we had to use output measures instead. For 
example, our transportation services program helps to ensure that the 
transportation system serves the needs of U.S. agriculture by providing 
technical assistance to shippers and carriers, providing economic 
analyses and recommending improvements to domestic and international 
agricultural transportation. The best measure of program performance 
currently available is the number of projects completed--an output 
measure.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. Some examples of customer satisfaction measures for 
external customers include the performance goal for market news 
services that is based on timeliness and the percentage of formal and 
informal rulemaking completed within time frame goals.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget? 
If a proposed budget number is changed, up or down, by this committee, 
will you be able to indicate to us the likely impact the change would 
have on the level of program performance and the achievement of various 
goals?
    Answer. We developed the budget based on the agency's mission and 
strategic plan then adjusted the performance goals as needed. We 
changed the goal estimates based on the budget proposals. If the 
proposed budget number is changed, AMS program personnel can estimate 
the likely impact of the change on program performance. The performance 
goals and indicators reflect the requested budget levels.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results? If so, who has access to the information--senior management 
only, or mid- and lower-level program managers, too? Are you able to 
gain access easily to various performance-related data located 
throughout your various information systems?
    Answer. AMS has systems in place to measure and report program 
performance throughout the year on a regular basis for management use. 
Senior management has access to performance-related data on a 
semiannual basis.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way.
    Have you faced such difficulty?
    Would the linkages be clearer if your budget account structure were 
modified?
    If so, how would you propose to modify it and why do you believe 
such modification would be more useful both to your agency and to this 
committee than the present structure?
    How would such modification strengthen accountability for program 
performance in the use of budgeted dollars?
    Answer. We have not faced any difficulty in linking dollars and 
results since we are using the samples under both the annual 
performance plan and the budget structure. Therefore, there is no need 
to change the budget account structure for AMS to improve the linkages.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. The AMS operated its own GAO approved cost accounting 
system prior to merging the accounting function with NFC's accounting 
system. This experience plus the voluntary user fee nature of nearly 
three-quarters of the agency's funding provides us with a good 
understanding of the costs to carry out our programs. Currently, we are 
linking budget program activities to the goals in our annual 
performance plan.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial Cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as ``Activity-Based Costing,'' whereby the full cost is 
calculated for each of the activities of an agency.
    What is the status of your agency's implementation of the 
Managerial Cost Accounting requirement, and are you using Activity-
Based Costing?
    Will you be able in the future to show to this committee the full 
and accurate cost of each activity of each program, including in those 
calculations such items as administration, employee benefits, and 
depreciation?
    By doing so, would we then be able to see more precisely the 
relationship between the dollars spent on a program, the true costs of 
the activities conducted by the program, and the results of these 
activities?
    Will you be able to show us the per-unit cost of each activity and 
result?
    To what extent do the dollars associated with any particular 
performance goal reflect the full cost of all associated activities 
performed in support of that goal? For example, are overhead costs 
fully allocated to goals?
    Answer. The NFC's central accounting system does not currently have 
a full cost accounting option, however, when AMS begins utilizing the 
new Financial Foundation Information System in fiscal year 2002, this 
function will be available. Despite the current data limitation, AMS 
has structured its central accounting system general ledger so that we 
can obtain account information by individual programs. Due to the 
voluntary user fee nature of AMS' programs, we have allocated the 
administrative and supervisory costs enabling us to determine the true 
cost of activities carried out by the agency. All administrative and 
overhead costs are fully allocated to the various budget activities.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. No regulatory reform measures have been put in place in AMS 
in conjunction with the development of our performance plan.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    If so, what steps have you identified to prepare, anticipate, and 
plan for such influences?
    What impact might external factors have on your resource estimates?
    Answer. We included a discussion of external factors in the 
strategic plan. The discussion of performance goals in the performance 
plan briefly mentions external factors that could influence goal 
achievement for some of the agency's activities. AMS programs try to 
anticipate and prepare for uncontrollable external factors such as 
weather, economics, production levels, and consumer preference by 
closely monitoring the agricultural industry and its environment.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication? If so, 
does the Performance Plan identify the overlap or duplication?
    Answer. No, rather the plan process has helped us to understand the 
complementary nature of our activities with others within and outside 
the Department.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. These issues are addressed in the ``Means and Strategies'' 
and ``Management Initiative'' sections of the performance plan.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making? Will this use increase in the future and if so, 
in what ways?
    Answer. Since most of AMS' programs are user fee based, management 
has traditionally used the ``bottom line'' to determine if fees covered 
costs and if customer requirements are being met. The performance 
measure data has helped to increase the managers' understanding of 
performance issues and the impact of agency activities on our 
customers.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that:
    To what extent are your performance measures sufficiently mature to 
allow for these kinds of uses?
    Are there any factors, such as inexperience in making estimates for 
certain activities or lack of data that might affect the accuracy of 
resource estimates?
    Answer. As in the past, future funding decisions will be based on 
both program performance and changing marketing structure. We believe 
our performance measures are the best that are currently available to 
reflect the accomplishment of our mission. We plan to periodically 
reassess our performance measures to assure that they effectively 
measure AMS performance and revise them when necessary.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements? Specifically, are you requesting any 
relaxation of transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. No we are not requesting any waivers of non-statutory 
administrative requirements.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. The agency's strategic plan is currently being reviewed for 
possible revision.
                                 ______
                                 

                     OFFICE OF THE CHIEF ECONOMIST

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. The annual performance goals of the Office of the Chief 
Economist (OCE) are directly linked to the agency's mission, strategic 
goals, and program activities. OCE goals are compatible with the 
program activity structure contained in the President's Budget. These 
three strategic goals correspond to the three components of OCE's 
mission which is to advise the Secretary of Agriculture on the economic 
prospects in agricultural markets and the economic implications of 
policies, programs and economic events affecting U.S. agriculture and 
rural communities; to ensure the public has consistent, objective and 
reliable agricultural forecasts; and to promote effective and efficient 
rules governing Departmental programs. These goals are funded through a 
single budget account.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. The process of linking OCE performance goals to its budget 
activities was accomplished by establishing performance goals that were 
developed to ensure OCE's ability to accomplish its delegated 
responsibilities under the authority of the Federal Crop Insurance 
Reform and Department of Agriculture Reorganization Act of 1994, Public 
Law 103-354. Funding levels were established to achieve these 
performance goals, considering existing, as well as, new 
responsibilities assigned to OCE by the Secretary, such as assuming 
management and operation of the Office of Energy Policy and New Uses--
OEPNU--in fiscal year 1999.
    Question. What difficulties, if any did you encounter, and what 
lessons did you learn?
    Answer. OCE is largely affected by events and external factors 
beyond its control, such as the degree of analytical support provided 
by other agencies and special, unforeseen projects as requested by the 
Secretary and other policy officials within the Department and the 
Executive Branch. The primary lesson learned is that OCE must develop 
performance goals and targets that reflect these external factors and 
develop strategies to ensure that OCE achieves its goals despite this 
uncertainty.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Answer. Yes, OCE's Performance Plan links performance measures to 
its budget. OCE's Performance Plan estimates funding and FTE levels for 
each goal.
    Question. Does each account have performance measures?
    Answer. Yes, OCE has a single budget account that funds all of its 
goals and performance measures.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. OCE's performance planning structure does not differ from 
the account and activity structure in its budget justification.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. No, OCE does not plan to propose any changes to the account 
structure for fiscal year 2001.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. Yes, the program activities described under the current 
account structure are increased in three general areas: biomass and 
bioenergy research, risk analysis, and data management.
    Question. How were performance measures chosen?
    Answer. Performance measures were chosen to enable OCE managers and 
outside observers to track progress in accomplishing OCE's mission and 
strategic goals, including new goals associated with expanded biomass 
and bioenergy activities.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. OCE balanced the cost of data collections and verification 
with the need for reliable and valid performance data by using low cost 
data collection methods. Recorded performance data largely reflects 
feedback from the Secretary, Deputy Secretary, and other OCE clients 
and customers, including surveys taken at the annual USDA Agricultural 
Outlook Forum and public feedback at data users' meetings operated 
jointly with the National Agricultural Statistics Service and the 
Economic Research Service--ERS.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. No, our plan does not include performance measures for 
which reliable data are not likely to be available in time for our 
first performance report in March 2000.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    Answer. We have three key strategic goals that the subcommittee 
should use to track results through the annual performance goals and 
measures provided for each.
    Question. For each key annual goal, indicate whether you consider 
it to be an output measure (``how much'') or an outcome measure (``how 
well'').
    Answer. All three of OCE's strategic goals are supported by outcome 
measures. However, goals 2 and 3, which relate to products of the World 
Agricultural Outlook Board--WAOB--and Office of Risk Assessment and 
Cost Benefit Analysis--ORACBA--respectively, are measured by a mix of 
output measures and outcome measures.
    Question. State the long-term (fiscal year 2003) general goal and 
objective from the agency Strategic Plan to which the annual goal is 
linked.
    Answer. The long-term general goals that appear in the Strategic 
Plan are identical to the goals that appear in the annual performance 
plans.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. OCE undertook efforts to develop outcome measures that 
provided a description of the intended result, effect, or consequence 
that would occur from accomplishing the activity. Indicators were 
developed to measure output and outcome in order to provide a 
comprehensive view to managers and outside observers.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. The Chief Economist has addressed the distinction between 
the concept of workload--output--from that of goals which measure 
effectiveness--outcome--when providing direction to managers during the 
development of the annual performance plans. Managers were aware of 
this distinction when goals and indicators were developed for each 
element of OCE. Even so, because OCE delivers information to decision 
makers, it is very difficult and often impossible to link the outcome 
of a policy or program decision or a private sector decision back to 
information delivered to OCE.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. Among the measures developed for determining satisfaction, 
OCE developed measures of the Secretary's satisfaction with economic 
information produced by OCE for incorporation into the Secretary's 
decisions, communications, and interactions with other government 
officials and the public because of its relevance, accuracy, 
objectivity, and timeliness. OCE measures external customer 
satisfaction by surveying attendees at USDA's outlook forum.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. Planned activities, funding requests, and performance goals 
for the fiscal year 2001 budget were based on OCE's best estimate of 
progress in the remainder of fiscal year 1999 and the goals for fiscal 
year 2000.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. Yes, OCE would be able to estimate the impact of changes in 
levels of funding for its performance goals. Because OCE's budget was 
frozen in fiscal year 2000, little flexibility remains in resource 
reallocation. Further freezes or cuts will directly affect OCE's 
ability to attain its goals.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. Feedback regarding OCE performance is a continuous 
activity. OCE has the capability of measuring and reporting performance 
throughout the year on a regular basis so that the agency can be 
properly managed to achieve desired results. The Chief Economist meets 
weekly with key managers and quarterly with the Senior Executive 
Service staff to review program operation and performance.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. OCE managers share their observations regarding OCE 
performance among themselves and with staff on a continuous basis.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. In most cases, OCE managers can gain access easily to 
various performance-related data. Feedback comes from frequent contact 
with its principal customers: the Secretary, Deputy Secretary, and 
other senior officials, and from public users of OCE information.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. Budget structure has not caused OCE difficulty in linking 
dollars in a clear and meaningful way.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. No, we think linkages are clear enough to assess funding 
changes and results.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. OCE does not propose to modify the budget account 
structure.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. OCE does not propose any modification at this time.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Although the Department has some personnel with cost 
accounting expertise, the Department's Chief Financial Officer has 
recognized the need for a Department-wide effort to enhance cost 
accounting expertise and $240,000 is included in the fiscal year 2001 
President's Budget request to provide such leadership. Currently, we 
are linking budget program activities to the goals in our annual 
performance plan. Ultimately, with additional fiscal year 2001 
resources and a better trained workforce, the Department will continue 
to implement improvements in this area.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial Cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as Activity-Based Costing, whereby the full cost is calculated 
for each of the set activities of an agency. What is the status of your 
agency's implementation of the Managerial Cost Accounting requirement, 
and are you using Activity-Based Costing?
    Answer. USDA is in compliance with FASAB's cost accounting 
standards. The Department has identified responsibility segments, for 
which financial statement reporting is provided, employing full cost 
techniques that include unfunded pension and accrued annual leave, 
Federal Employment Compensation Act accrued expenses, GSA rent, 
depreciation, and other expense items that are appropriate. Currently, 
the Department uses several costing techniques, including Activity-
Based Costing, that permit us to determine the cost of our strategic 
goals and selected output activities.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all USDA agencies in 
order to provide standardized accounting methodologies and improve data 
integrity for management and reporting purposes for salaries and 
expenses and administrative operations. As the Department improves its 
basic accounting and reporting processes, it will be able to better 
identify activities and outputs for unit costing and will evaluate the 
various accounting methodologies available and incorporate the 
appropriate methodology for the activity being costed.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spend on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. Yes, we strongly believe that effective implementation of 
costing systems will vastly improve Federal planning, evaluation, and 
reporting at all levels of the organization.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. As the Department implements activity based costing, it 
will be able to provide unit costs for activities and results.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. All OCE costs, including overhead, are associated with the 
performance goals.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. OCE has not put any regulatory reform measures in place.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. Achievement of annual performance goals is contingent on a 
number of external factors and our performance plan reflects this. 
First, achievement is based on anticipated budget. If appropriations 
differ substantially from these projections, achievement of the plan 
would be affected. Second, OCE activity involves coordinating 
information and analyses from a variety of other agencies. OCE staff 
chair many interagency committees to achieve goals. To the extent that 
other agencies alter their resource commitments to these activities, 
plan achievement would be affected. Third, OCE workload depends 
partially on legislative and government-wide regulatory activity over 
which OCE has no control. Fluctuations in activity in these areas would 
alter the distribution of resources across plan objectives. For 
example, during fiscal year 2000, OCE has expended unexpected resources 
on rule making activities related to organic agriculture and animal 
product imports. Fourth, allocation of OCE resources and achievement of 
the plan will also depend on developments in agricultural markets.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. To prepare, anticipate, and plan for such influences, OCE 
has acquired and maintained a highly experienced staff to manage 
activities, plan and initiate response actions, and work closely with 
the other agencies on which OCE is dependent for support so that OCE 
has early warning of possible cutbacks in their support. However, if 
the support provided by other agencies changed, OCE would have to 
reallocate resources to continue to provide essential services. OCE has 
no control over that portion of its responsibilities that are required 
by legislative and government-wide regulatory activity. OCE's 
capability to anticipate some market developments enables managers to 
exercise some internal flexibility in shifting organizational resources 
and in making the Secretary aware of the likelihood of these 
developments.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. As indicated above, the impact on resource estimates 
depends on which external factor is affected.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. OCE has not identified any overlapping functions or program 
duplication.
    Question. If so, does the Performance Plan identify the overlap or 
duplication?
    Answer. OCE's has not identified any overlapping functions or 
program duplication.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Duplication and overlapping functions, if they exist, 
should be addressed in GPRA plans by eliminating them or clarifying 
their purposes.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. The Chief Economist and managers developed an agency 
strategic plan that facilitated setting long-term goals, prioritizing 
accomplishments, and scheduling goal implementation. To facilitate 
decision making, general goals and objectives were developed in the 
strategic and performance plans which allowed assessment to be made 
throughout the year on whether the goals were being achieved.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. GPRA is increasingly being used as a planning tool by all 
OCE managers. Strategic and performance plans have reinforced the 
importance of paying particular attention to the service provided to 
all customers and the need to correlate budget, goals, and results. As 
managers' skills improve in refining strategic and performance plans to 
reflect their priorities, goals, and progress, they will likely utilize 
these planning tools.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. Current OCE performance measures are sufficiently mature to 
serve as a means for checking accountability on how efficiently funding 
has been used and outcomes achieved. With the development of each 
annual performance plan, OCE managers have added to their skills in 
developing new measures and refining current indicators. OCE believes 
that established measures are highly reliable given the process through 
which they have been developed. This process has been highly iterative 
in that performance goals and indicators have been examined and re-
examined through a series of reviews by OCE staff, managers, USDA's 
Office of the Chief Financial Officer, other Department organizations, 
OMB, and the Congress.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. As OCE is assigned new responsibilities, some degree of 
inexperience is a factor that must be considered. For example, OCE 
faced an unexpected level of responsibility for coordinating three 
activities in fiscal year 1999. OCE assumed management of the OEPNU 
previously located in ERS. OCE has major outreach and internal 
responsibilities in operating the Global Change Program Office. OCE had 
responsibility for advancing USDA's policies and principles relating to 
small farms. This latter assignment followed from the Secretary's 
decision to combine the tasks of OCE's Director of Sustainable 
Development with small farms activities. Nonetheless, OCE managers met 
the performance goals that were set for all three of these expanded OCE 
areas of responsibility.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Answer. OCE is not requesting any waivers of non-statutory 
administrative requirements at this time.
    Question. Specifically, are you requesting any relaxation of 
transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. OCE is not requesting any relaxation of transfer or 
reprogramming controls in return for specific accountability 
commitments.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. The primary revision OCE is making in its strategic plan 
issued on September 30, 1997 is to incorporate OEPNU.
                                 ______
                                 

               ANIMAL AND PLANT HEALTH INSPECTION SERVICE

    Question. How are the Agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. They are directly linked. The five functional components of 
the Agency's budget structure (Pest and Disease Exclusion, Plant and 
Animal Health Monitoring, Pest and Disease Management, Animal Care, and 
Scientific and Technical Services) correspond to the five general goals 
of the APHIS Strategic Plan. In its annual performance plan, APHIS has 
developed a set of annual performance targets for each goal of its 
strategic plan. The objectives listed under each goal in the annual 
performance plan correspond directly to funded pest and disease 
programs under each functional component of the budget.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. APHIS organized its strategic plan using the structure of 
our budget as a pattern. The five functional components of the Agency's 
budget structure (Pest and Disease Exclusion, Plant and Animal Health 
Monitoring, Pest and Disease Management, Animal Care, and Scientific 
and Technical Services) correspond to the five general goals of the 
APHIS Strategic Plan. In its annual performance plan, APHIS has 
developed a set of annual performance targets for each goal of its 
strategic plan.
    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. The design of our strategic plan along budget lines 
eliminated any difficulties in linking performance goals to budget 
activities.
    Question. Does the Agency's Performance Plan link performance 
measures to its budget?
    Answer. Yes. The performance measures are organized by objectives 
which correspond directly to funded pest and disease programs under 
each functional component of the budget.
    Question. Does each account have performance measures?
    Answer. Yes, each account has performance measures. Treasury 
accounts such as those associated with hazardous waste or buildings and 
facilities are represented with performance measures for the pest and 
disease programs, as the funds from those accounts are used to support 
those programs.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. Our performance planning structure was patterned after the 
structure of the budget. It does not differ from the account and 
activity structure.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001? Answer. APHIS does not plan to propose 
any changes to its account structure for fiscal year 2001. We do not 
believe that changes to the account structure would significantly 
improve linkage between resource amounts and performance goals.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. APHIS does not plan to propose any changes to the program 
activities under its current account structure.
    Question. How were performance measures chosen?
    Answer. Criteria used to choose useful performance measures 
included how effectively the measure represented APHIS' degree of 
success in achieving our goals and accomplishing our mission, the level 
of reliability of the data reported for the measure, how completely we 
could document the accuracy of the data, and whether the benefits of 
the data collected outweighed the cost of collection.
    Question. How did the Agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. For each proposed performance measure, APHIS determined the 
cost of collecting the data required. We then compared this cost with 
the benefits the measure offered towards illustrating our degree of 
success in achieving our goals and data reliability and validity. In 
some cases, the most valid and reliable method to measure program 
performance was too costly, given the level of funding for the program. 
In those cases, APHIS developed reasonable alternatives that were more 
acceptable given the amount of resources available.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. Data was not available in time for a few of the measures 
included in our fiscal year 1999 Annual Performance Report. When data 
was not available, it was noted in the report.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results? For each key annual goal, indicate whether 
you consider it to be an output measure (``how much'') or an outcome 
measure (``how well''). State the long term (fiscal year 2003) general 
goal and objective from the Agency Strategic Plan to which the annual 
goal is linked.
    Answer. APHIS managers included, in their Annual Performance Plans 
and in their first Annual Performance Report, all of the key 
performance goals that could prove useful to the subcommittee in 
tracking the program results of our diverse agency. However, if it is 
useful to narrow down our priorities further, we could make reference 
to those key measures which APHIS selected for inclusion in USDA's 
Annual Financial Statement, a document which summarizes the mission of 
USDA and provides those key measures that the Secretary intends to use 
to demonstrate effective and efficient program delivery in support of 
USDA's strategic goals.
    The performance goals from the USDA fiscal year 1999 Annual 
Financial Statements are: (1) under APHIS' Strategic Goal to: 
``Safeguard U.S. plant and animal resources against introductions of 
foreign pests and diseases, while meeting international trade 
obligations:'' (a) to minimize the number of fruit fly outbreaks in the 
U.S. (outcome oriented) and (b) to increase the number and value of 
agriculture products exported from the U.S. (a measure which is a 
combination of output, since ``Number of sanitary/phytosanitary (SPS) 
issues resolved'' is a target, and outcome, since the significance and 
value to the U.S. of SPS issues resolved will also be discussed in an 
accompanying report issued by APHIS; (2) Under APHIS' Strategic Goal to 
``Effectively manage plant and animal pests and diseases and wildlife 
damage which pose risks to agriculture, natural resources, or public 
health:'' (a) to increase passenger safety by reducing the risk of 
aircraft striking wildlife (an outcome oriented goal that will report 
on the risk reduced at our nation's airports), (b) to eradicate 
brucellosis (outcome oriented goal), and (c) to minimize the 
introduction and establishment of foreign weeds in the U.S. (an outcome 
oriented goal); and (3) under APHIS' Strategic Goal to ``Facilitate the 
development of safe and effective veterinary biologics, biotechnology-
derived products, and other scientific methods for the benefit of 
agricultural producers and consumers and to protect the health of 
American agriculture,'' to ``Develop useful, appropriate methods'' (an 
output oriented goal).
    In addition to those measures in the Financial Statements, a few 
others from the APHIS Revised fiscal year 2000 and fiscal year 2001 
Annual Performance Plans will prove useful in tracking APHIS' progress 
in achieving its strategic goals 1 and 4, including: (1) under APHIS' 
Strategic Goal to ``Safeguard U.S. Plant and animal resources against 
introductions of foreign pests and diseases, while meeting 
international trade obligations,'' ``To minimize the risk of exotic 
pests and diseases introduced to the U.S.'' (an outcome oriented goal); 
(2) under APHIS' Strategic Goal to ``Effectively manage plant and 
animal pests and diseases and wildlife damage which pose risks to 
agriculture, natural resources, or public health:'' (a) to eradicate 
tuberculosis (outcome oriented) and (b) to eradicate pseudorabies 
(outcome oriented); and (3) under APHIS' Strategic Goal to ``Ensure the 
humane care and treatment of animals covered under the Animal Welfare 
Act and the Horse Protection Act,'' ``To increase the percentage of 
facilities in compliance'' (outcome oriented).
    Question. In developing your Annual Performance Plan, what efforts 
did your Agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. APHIS' planning and evaluation specialists, and APHIS' 
budget analysts worked together to provide developmental and 
consultative assistance to managers of all APHIS programs to assist 
them in defining outcome oriented goals and measures.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. APHIS' budget and policy offices have worked hard to 
provide guidance to program managers that describes the differences and 
to develop formats for budget submissions and measurement development 
that reinforce and encourage both types of measures. APHIS believes 
that the traditional focus on ``outputs'' can continue to be relevant 
and useful in decision making only insofar as various levels of outputs 
are tracked and communicated in the context of the eventual outcomes 
and results which are being achieved.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. The Plant Protection and Quarantine Program tracks customer 
satisfaction within the Agricultural Quarantine Inspection program. The 
program measures the satisfaction level of international air travelers 
and international travelers on land borders. APHIS' National Animal 
Health Monitoring System, (NAHMS), includes a reporting process on the 
health status of U.S. Livestock and poultry. Producers who participate 
in these studies and/or receive the results of these studies have 
traditionally been asked to evaluate whether the information being 
provided is helpful to them in managing their operations, and this 
practice will continue, since APHIS has a performance goal to report on 
the ``percentage of surveyed producers using information from NAHMS.'' 
APHIS' Animal Care program plans to survey animal welfare organizations 
this year to assess customer satisfaction with the program. APHIS' 
Wildlife Services program commissioned the National Agricultural 
Statistical Service, (NASS), to conduct a survey which could give them 
a very complete picture of the satisfaction levels of livestock 
producers who receive direct assistance from the program.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. Program performance as measured by the goals in APHIS' 
Annual Performance Plan was a key factor in the development of the 
fiscal year 2001 budget. For example, the success of the Brucellosis 
Program as measured by the reduction in the number of infected herds 
resulted in the decision to request a reduction in funding for that 
line item in fiscal year 2001.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. APHIS will be able to report the effect of funding level 
changes on program performance and our ability to achieve our goals.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the Agency can be properly managed to achieve the desired 
results?
    Answer. Being able to measure and report program performance on a 
regular basis is a goal for all APHIS programs, but there are varying 
degrees to which each program has been able to accomplish this goal 
thus far. Two good examples for the rest of the agency reside in APHIS' 
Plant Protection and Quarantine, (PPQ), and in APHIS' Animal Care 
programs.
    APHIS' PPQ program measures and reports program performance for 
their AQI program throughout the year. The AQI Monitoring System 
measures the amount of pest threat to U.S. agriculture by collecting 
information on the efforts to monitor various pathways and the 
commodities entering through them into the U.S. The information is then 
used to explain and explore the characteristics of the various pathways 
to assist in managing the risk they present to U.S. agriculture. These 
data allow a more accurate estimation of approach rates for prohibited 
agricultural items and cargo pests arriving at U.S. ports of entry and 
compliance rates of international travelers, transportation companies, 
and cargo customers. Approach rate refers to the ratio of quarantine 
material approaching U.S. borders to the number of international 
travelers or vehicles approaching U.S. borders.
    Animal Care field employees have been creating inspection reports 
at the conclusion of each inspection of a facility, and data from the 
reports has been entered into the automated Licensing and Registration 
Information System, (LARIS). LARIS has recently undergone a complete 
redesign and upgrade, and now data for fiscal year 2000 will be entered 
by field employees directly into the electronic database via laptops 
and modems. Reports are being designed to enable program managers to 
run summary reports quickly and easily. Reports will even be provided 
to inspected facilities so that inspectors and regulated entities can 
catch errors and correct them.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. APHIS seeks to provide access to performance information to 
all levels of management. There are varying degrees to which each 
program has been able to accomplish this goal thus far. APHIS' PPQ and 
Animal Care programs illustrate the progress APHIS has made.
    All levels of the agency have access to and use the data and 
information generated from the AQI monitoring system. Local work 
locations use the results to verify the risk of various entry pathways 
and to shift resources to activities that are most effective in 
managing risks. State and regional offices use the results to assess 
the relative risks of various entry pathways and locations. At a 
national level, the information is used to assess risk, redesign 
regulations and operations, and justify budget requests. In the near 
future, Animal Care's LARIS information will be available to lower, 
mid, and upper level managers.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. APHIS is in the process of improving access to the various 
sources of performance information used throughout the Agency. APHIS' 
PPQ and Animal Care programs illustrate the progress the Agency has 
made. Program personnel gain access easily to the data housed in the 
AQI system. Soon, information from Animal Care's LARIS system will also 
be easily accessible.
    Question. The Government Performance and Results Act requires that 
your Agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. APHIS has not faced any difficulties in linking dollars to 
results in a clear and meaningful way. Our goals and objectives are 
structured to mirror the organization of our budget.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. We do not believe that changes to the budget account and 
activity structure would significantly improve the linkage between 
resource amounts and the results of our performance.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your Agency and 
to this committee than the present structure?
    Answer. We do not believe that it is necessary to modify the budget 
account structure.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. We do not believe that it is necessary to modify the budget 
account structure.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate Agency resources to 
perform these functions. Could you comment on your Agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Although the Department has some personnel with cost 
accounting expertise, the Department's Chief Financial Officer has 
recognized the need for a Department-wide effort to enhance cost 
accounting expertise and $240,000 is included in the fiscal year 2001 
President's Budget request to provide such leadership. Currently, we 
are linking budget program activities to the goals in our annual 
performance plan. Ultimately, with additional fiscal year 2001 
resources and a better trained workforce, the Department will continue 
to implement improvements in this area.
    Question. Under one of the new accounting methods standards 
recommended by the Federal Accounting Standards Advisory Board (FASAB) 
and issued by OMB, this year for the first time all Federal agencies 
are required to have a system of Managerial Cost Accounting. The 
clearly preferred methodology for such a system, as stated in that 
standard, is the one known as ``Activity-Based Costing'', whereby the 
full cost is calculated for each of the activities of an Agency. What 
is the status of your Agency's implementation of the Managerial Cost 
Accounting requirement, and are you using Activity-Based costing?
    Answer. USDA is in compliance with FASAB's cost accounting 
standards. The Department has identified responsibility segments, for 
which financial statement reporting is provided, employing full cost 
techniques that include unfunded pension and accrued leave, Federal 
Employment Compensation Act accrued expenses, GSA rent, depreciation, 
and other expense items that are appropriate. Currently, the Department 
uses several costing techniques, including Activity-Based Costing, that 
permit us to determine the cost of our strategic goals and selected 
output activities.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all USDA agencies in 
order to provide standardized accounting methodologies and improve data 
integrity for management and reporting purposes for salaries and 
expenses and administrative operations. As the Department improves its 
basic accounting and reporting processes, it will be able to better 
identify activities and outputs for unit costing and will evaluate the 
various accounting methodologies available and incorporate the 
appropriate methodology for the activity being costed.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. Yes, we strongly believe that effective implementation of 
costing systems will vastly improve Federal planning, evaluation, and 
reporting at all levels of the organization.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. As the Department implements activity based costing, it 
will be able to provide unit costs for activities and results.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. The dollars associated with specific Agency performance 
goals are limited by total available funding which consists of 
appropriated funds and projected funding from other sources. In the 
current budget era, APHIS has had to turn more frequently to its 
partners either at other levels of government, in other agencies, or in 
private industry to help support its goals. Increases in cooperative 
agreements, user fees, and other ``fee for service'' opportunities have 
helped narrow the gap between diminishing federal funds and true costs 
to run agency programs, but there are times when the gap still exists.
    Opportunity costs are often incurred by the agricultural community 
as well, and they are not necessarily captured in the dollar amounts 
reported by APHIS for each performance goal.
    APHIS does not have a separate line item for overhead costs. The 
dollars associated with specific performance goals include overhead 
costs.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your Agency in conjunction with 
the development of the Agency's performance plan.
    Answer. There have been no significant regulatory reform measures 
put in place by APHIS in conjunction with the development of the 
Agency's performance plan.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. Based on GAO feedback that it was important to identify 
external factors that might influence program results, APHIS identified 
relevant external factors in many of its performance goal discussions 
in the Annual Performance Plan, particularly under the ``Means and 
Strategies'' sections of the plan.
    Question. If so, what steps have you identified to prepare, 
anticipate, and plan for such influences?
    Answer. Where additional resources could potentially be necessary 
to mitigate particular external factors, this was also mentioned in the 
plan.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. External factors can have a large influence on resource 
estimates. For example, in many areas APHIS works toward achieving its 
goals cooperatively with local, State, and foreign governments. The 
extent to which these entities participate and contribute funding 
towards successfully reaching our joint goals has a great deal of 
influence on APHIS' resource estimates.
    Question. Through the development of the Performance Plan, has the 
Agency identified overlapping functions or program duplication?
    Answer. APHIS has not identified overlapping functions or program 
duplication through the development of the Annual Performance Plan.
    Question. If so, does the plan identify the overlap or duplication?
    Answer. APHIS has not identified overlapping functions or program 
duplication through the development of the Annual Performance Plan.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Management challenges are addressed in the Management 
Initiatives section of APHIS' Annual Performance Plan. We do not 
address potential duplication and overlapping functions as none were 
identified in the process of developing the plan.
    Question. To what extent has GPRA been used by Agency leadership to 
guide decision making?
    Answer. In meeting the requirements of the GPRA to conduct 
strategic planning, performance planning, and to report on results, 
APHIS managers throughout the Agency have been devoting an 
unprecedented amount of attention and effort toward defining goals and 
determining the best ways to measure and report on true program 
outcomes. Agency leaders find themselves with a greater platform of 
measurement information that they can use for decisionmaking purposes. 
The Administrator has been able to better support decisions to invest 
in one area over another based on program results that are desired or 
program needs to enhance information systems and other infrastructure 
support that is essential to achieve important goals.
    Question. Will this use increase in the future and, if so, in what 
ways?
    Answer. In the near future, the revision of APHIS' strategic plan 
will give all agency leaders the opportunity to update agency-level 
priorities and to engage agency employees in helping to identify 
information needs that will assist them in making more informed program 
decisions.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. For the past few years, APHIS' performance measures have 
steadily improved as we travel along the learning curve for the GPRA 
process. We believe that our measures are useful for decision making. 
As time passes and we gain experience, we look forward to improving 
their utility.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. Several factors affect the accuracy of resource estimates. 
They include the level of funding available for developing and 
improving data measurement systems and the fact that GPRA is relatively 
new and we are still on the learning curve. For new initiatives and 
activities within our programs there is always a period of analysis to 
determine the best way to measure performance and the most effective 
and cost efficient data gathering method. It also takes time to set 
realistic baselines. In the early stages of performance measure 
development for a new initiative, resource estimates may be less 
accurate.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Answer. APHIS is not requesting any waivers of non-statutory 
administrative requirements.
    Question. Specifically, are you requesting any relaxation of 
transfer or reprogramming controls in return for specific 
accountability requirements?
    Answer. APHIS is not requesting any relaxation of transfer or 
reprogramming controls in return for specific accountability 
requirements.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. APHIS intends to revise its strategic plan. The need for 
revisions is based partly on new issues which are reflected in APHIS' 
fiscal year 2000/2001 performance plan, and partly on the need to allow 
newly appointed leaders of various APHIS programs to contribute their 
thoughts and expertise to the revision of the strategic direction of 
the agency. Given that the performance plan is organized by objective 
and program line items, the strategic plan can re-articulate trends and 
issues in a more macro/global sense, tying together the past, present, 
and future in a different format that discusses current cross cutting 
themes and describes progress the Agency has made since the last 
strategic plan.
                                 ______
                                 

                     AGRICULTURAL RESEARCH SERVICE

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. The ARS Annual Performance Plan parallels the structure of 
the ARS Strategic Plan, which was developed to meet the requirements of 
the Government Performance and Results Act of 1993. In the Annual 
Performance Plan, the Goals, Objectives, Strategies, and Performance 
Goals are linked to specific accomplishments that the Agency expects to 
achieve in fiscal year 2001 with the funds requested. All the 
activities identified in the Strategic and Performance Plans link 
directly to the Mission Statement which, in turn, directly reflects the 
statutory authorities that underpin the Agency's work. A crosswalk is 
shown for each of the five Goals and for Initiative 2 linking program 
activities to the budget request. The Annual Performance Report has a 
parallel structure and highlights significant accomplishments for 
fiscal year 1999.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. ARS carries out its research through over 1,100 Current 
Research Information System (CRIS) research projects which are aligned 
with the 6 Budget objectives, 23 National Programs and the 5 Goals of 
the Strategic and Performance Plans. The CRIS research projects are the 
primary level of funding and accountability and provide the linkage 
essential to crosswalk this information.
    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. GPRA requires us to anticipate the longer-term outcomes and 
impacts of our work, which is more difficult in a research environment 
than it is in many other areas. Several years ago we developed a 
performance plan based on numerical metrics. We counted the number of 
scientific papers published in journals, licenses granted, CRADAs, and 
patent applications. This approach, while fully complying with the 
letter of GPRA, did not begin to meet the spirit of the law. In fact, 
providing this numerical data conveyed little meaningful information to 
Congress or our customers and stakeholders on the significant work of 
the Agency. In January 1998, ARS requested a waiver from OMB to allow 
us to use the narrative alternative approach provided for in GPRA. In 
the last several years, we have structured the Annual Performance Plan 
around narrative indicators that describe anticipated accomplishments 
which will, if achieved, demonstrate progress towards the Strategic 
Plan's goals and objectives.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Answer. Yes, the funding resources are identified at the level of 
the 5 Agency Goals and Initiative 2, which relates to the work of the 
National Agricultural Library.
    Question. Does each account have performance measures?
    Answer. No. The budget is presented to Congress in the traditional 
accounting structure that has been used for many years. The ARS 
Strategic Plan 1997-2003, the Annual Performance Plan, and the Annual 
Performance Report are all structured around the five REE-wide General 
Goals. The Performance Goals are contained in the Strategic Plan and 
progress is reported in the Annual Performance Report. There is a 
crosswalk at the General Goal level which is the only linkage between 
the budget accounts and the performance measures.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. There are substantial differences between the ARS Strategic 
and Performance planning structure, our National Programs and the 
Program Activity structure contained in the Budget. The budget activity 
structure is presented on the following areas: Soil, Water, and Air 
Sciences; Plant Sciences; Animal Sciences; Commodity Conversion and 
Delivery; Human Nutrition; the Integration of Agricultural Systems, and 
Agricultural Information and Library Services. The Strategic Plan is 
outcome oriented and includes the following 5 broad societal Outcomes: 
An agricultural production system that is highly competitive in the 
global economy; A safe and secure food and fiber system; A healthy, 
well nourished population; An agricultural system which protects 
natural resources and the environment; Enhanced economic opportunity 
and quality of life for Americans. In addition, three management 
initiatives, which includes the National Agricultural Library, are 
identified in the Strategic Annual Performance Plans.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. No, the Agency will continue to present its budget through 
the Program Activity Structure. This accounting system tracks each 
project to ensure compliance with appropriations measures and 
Congressional reports. The CRIS project system provides a linkage to 
the major planning and financial systems utilized by the Agency.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. No, we have no current plans to change the accounting 
structure.
    Question. How were performance measures chosen?
    Answer. The Performance Goals used in the Annual Performance Plans 
and Report are taken directly from the ARS Strategic Plan. The 
Indicators of Progress for each Performance Goal in the Annual 
Performance Plans and Report, that accompany the fiscal year 2001 
budget, were developed by the National Program Staff. Input was 
obtained from each of the National Program Leaders who, in consultation 
with the key Research Leaders and Lead Scientists, identified the 
performance indicators.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. ARS has various mechanisms in place to retrieve financial 
and programmatic data on all aspects of its research program. Two years 
ago we substantially revised the annual CRIS project reporting 
requirements in part to better support the data needs of GPRA and the 
National Programs. At the present time, a committee is reviewing the 
revised format and process to see if it needs further refinement. We do 
not anticipate that the cost of data collection needed to validate 
future performance will be much greater than current costs.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. Across the five programmatic goals we have identified 
scores of indicators, that can be tracked and reported by the National 
Program Staff. Accomplishing these performance indicators will clearly 
demonstrate progress towards achieving the Goals and Objectives 
identified in the ARS Strategic Plan. In fact, ARS submitted an Annual 
Performance Report for fiscal year 1998 in March of 1999, a full year 
ahead of the statutory requirement. We are still developing some of the 
performance measures under Initiative 3, Creative Leadership, but we 
expect to have most of these indicators in place to meet the March 2000 
reporting date.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    Answer. Measuring performance in research provides some unique 
challenges that may not exist in other programs. The approach used in 
the fiscal year 2000 ARS Annual Performance Plans is to identify, under 
each Performance Goal, intermediate outcomes (indicators) that are 
tangible and measurable. If ARS achieves all or most of these 
indicators, it will be a clear demonstration of progress towards 
meeting the longer-term Strategies, Objectives, and Goals in the 
Strategic Plan 1997-2002. We would recommend that the subcommittee 
track the performance goals under the 5 programmatic Goals: Goal I: 
Through Research and Education, Empower the Agricultural System with 
Knowledge that Will Improve Competitiveness in Domestic Production, 
Processing, and Marketing. Goal II: To Ensure an Adequate Food Supply 
and Improved Detection, Surveillance, Prevention, and Educational 
Programs for the American Public's Health, Safety and Well-Being. Goal 
III: A Healthy and Well-Nourished Population Who Have Knowledge, 
Desire, and Means to Make Health Promoting Choices. Goal IV: To Enhance 
the Quality of the Environment through Better Understanding of and 
Building on Agriculture's and Forestry's Complex Links with Soil, 
Water, Air, and Biotic Resources. Goal V: Empower People and 
Communities, Through Research-based Information and Education, to 
Address the Economic and Social Challenges of Our Youth, Families, and 
Communities.
    Question. For each key annual goal, indicate whether you consider 
it to be an output measure (``how much'') or an outcome measure (``how 
well'').
    Answer. Several years ago ARS developed its Annual Performance Plan 
around ``output'' measures such as the number of scientific papers 
published in peer review journals, the number of patent applications 
pending, and so forth. Based in large part on the consensus that this 
use of numeric metrics told the reader very little about the substance 
of the Agency's research accomplishments, OMB granted a waiver and 
allowed ARS to use the alternative narrative approach provided in the 
statute. Except for a few Performance Goals in the areas of technology 
transfer and creative management, all of the other General Goals, 
Objectives, Strategies, and Performance Goals measure outcomes. These 
outcomes are tangible accomplishments that demonstrate progress to 
achieving the General Goals and Objectives.
    Question. State the long-term (fiscal year 2003) general goal and 
objective from the agency Strategic Plan to which the annual goal is 
linked.
    Answer. The five General Goals in the ARS Strategic Plan can be 
viewed in both the long-term or short-term. In addition, ARS 
incorporated the ``Purposes of Agricultural Research, Extension, and 
Education'' from section 801 of the Federal Agriculture Improvement and 
Reform Act of 1996 into its Strategic Plan as Objectives. Below the 
Objectives are a number of Strategies and Performance Goals. The fiscal 
year 2000-2001 Annual Performance Plans contain the same organizing 
matrix (General Goals, Objectives, Strategies, and Performance Goals) 
as does the ARS Strategic Plan. The fiscal year 2001 budget request is 
linked by crosswalks to the General Goals of the Strategic Plan. The 
Annual Performance Plans, that will soon be transmitted to Congress, 
contain indicators (anticipated accomplishments) for fiscal year 2000-
2001 that can be achieved with base funding. The fiscal year 2001 plan 
also identifies activities that will be initiated or expanded with the 
new funds requested in the President's budget.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. Because of the unique nature of research, ARS uses the 
narrative approach provided under a waiver in GPRA to measure and 
report the outcomes of its work. One or more narrative indicators of 
progress is developed for each performance goal. Successfully achieving 
these indicators demonstrates progress towards achieving each goal. 
Specifically, ARS identified approximately 240 performance indicators 
for fiscal year 2000 and 275 performance indicators for fiscal year 
2001 in the Annual Performance Plans. In the fiscal year 1999 Annual 
Performance Report, ARS reported progress against approximately 200 
performance indicators under 75 performance goals. As we have gained 
experience in implementing the GPRA performance and reporting 
processes, we have become better able to identify meaningful 
performance goals and indicators that reflect the special needs of a 
research agency.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. Yes, the Agency's senior managers are fully aware of the 
difference in output and outcome. This information has been delivered 
through a number of meetings, briefings, and written instructions. The 
message that the Agency's focus is on tangible outcomes and 
accomplishments that have a real benefit to our customers and 
stakeholders is repeated at all appropriate forums.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. ARS has a long history of positive interaction with its 
customers and stakeholders but a formal process of more systematically 
measuring customer satisfaction is still evolving. Some components, 
such as the National Agricultural Library and the National Arboretum, 
periodically survey their users and visitors to measure and improve the 
quality of their services and general satisfaction. The Administrative 
and Financial Management units regularly measure customer satisfaction 
from the agencies and components they support. The National Programs 
Staff surveys the participants of National Program planning workshops 
in order to measure the effectiveness of that process in gaining input 
from our customers and stakeholders.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. The fiscal year 2000-2001 Annual Performance Plans and the 
fiscal year 2001 budget were developed on parallel tracks with 
crosswalks showing the linkages.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. Yes. The version of the fiscal year 2000-2001 Annual 
Performance Plans currently before the subcommittee reflects the 
President's budget proposal for fiscal year 2001. Once the 
appropriations process is completed, ARS will revise the Annual 
Performance Plans to show the level of program performance that can be 
expected with the actual level of resources that are appropriated.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. ARS, in part in response to GPRA, revised the type and 
amount of data which it requests from each research unit. This enhanced 
data collection has helped the National Program Staff and the Area 
Offices to better monitor and manage the research program. We are 
currently reviewing the reporting process. To avoid an undue burden on 
the research leaders, we plan to collect most of the data on an annual 
basis, rather than at multiple times during the year.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. Almost all of the reporting information from the ARS 
research programs is collected electronically on an annual basis by the 
Agency's Research Management Information System. That information is 
widely available at all levels in ARS. The material is reviewed and 
summarized by the National Program Staff for inclusion in the Annual 
Performance Plans and Reports, the National Program Annual Reports, the 
Explanatory Notes, and for other purposes as needed. Much of this 
information is also available to the general public on the ARS homepage 
(www.ars.usda.gov).
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. Yes, but data collection for GPRA reporting using the 
alternative narrative approach is more difficult than it would be if we 
were using numerical metrics. As we have gained experience with GPRA 
and revised the CRIS project reporting format and process we have made 
the task easier.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. This Agency will not have any difficulty linking dollars to 
results. As stated, ARS CRIS research projects underpin budget and 
program activities and the goals/outcomes as established under GPRA. 
The over 1,100 research projects are the bases for allocating and 
accounting for the Agency's research funds. This is the principal level 
of fiscal accountability in this Agency and this information can be 
cross-walked or translated into the other systems of programmatic 
management and accountability.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. No. The existing budget account structure does not need to 
be modified.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. The Agency's CRIS projects are the accountability unit and 
aggregate and crosswalk to the major program, budget, management and 
review systems.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. There is no need to modify the existing accountability 
systems for budget activities.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Although the Department has some personnel with cost 
accounting expertise, the Department's Chief Financial Officer has 
recognized the need for a Department-wide effort to enhance cost 
accounting expertise and $240,000 is included in the fiscal year 2001 
President's Budget request to provide such leadership. Currently, we 
are linking budget program activities to the goals in our annual 
performance plan. Ultimately, with additional fiscal year 2001 
resources and a better trained workforce, the Department will continue 
to implement improvements in this area.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial Cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as ``Activity-Based Costing,'' whereby the full cost is 
calculated for each of the activities of an agency. What is the status 
of your agency's implementation of the Managerial Cost Accounting 
requirement, and are you using Activity-Based Costing?
    Answer. USDA is in compliance with FASAB's cost accounting 
standards. The Department has identified responsibility segments, for 
which financial statement reporting is provided, employing full cost 
techniques that include unfunded pension and accrued annual leave, 
Federal Employment Compensation Act accrued expenses, GSA rent, 
depreciation, and other expense items that are appropriate. Currently, 
the Department uses several costing techniques, including Activity-
Based Costing, that permit us to determine the cost of our strategic 
goals and selected output activities.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation.
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all USDA agencies in 
order to provide standardized accounting methodologies and improve data 
integrity for management and reporting purposes for salaries and 
expenses and administrative operations. As the Department improves its 
basic accounting and reporting processes, it will be able to better 
identify activities and outputs for unit costing and will evaluate the 
various accounting methodologies available and incorporate the 
appropriate methodology for the activity being costed.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the programs, and the results of these 
activities?
    Answer. Yes, we strongly believe that effective implementation of 
costing systems will vastly improve Federal planning, evaluation, and 
reporting at all levels of the organization.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. As the Department implements activity based costing, it 
will be able to provide unit costs for activities and results.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. A basic tenet of ARS' financial management and budget 
execution process is that the specific research project or activity 
capture both direct and indirect costs attributable to the research. 
Indirect costs, such as utilities, security, facility maintenance, 
administrative, etc., are allocated to the various projects based on 
approved cost accounting standards. The summary costs for ARS' goals 
and objectives therefore include a share of the distributed indirect 
costs.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. ARS research may be used as the basis for regulations 
issued by other agencies but the Agency does not issue regulations.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. The Annual Performance Plan does not refer to external 
factors but the working version of the ARS Strategic Plan 1997-2002, 
which is available as a publication and on the ARS Homepage 
(ars.usda.gov), contains the following discussion of the external 
factors that impact on ARS:
    Consumer, Socio-Economic, and Policy Trends.--The abundance and 
affordability of the American food supply is greatly due to U.S. 
agricultural research. The Nation's ability to sustain this plentiful 
and inexpensive food supply continues to be paramount. But in recent 
years, consumer and producer attention has expanded somewhat to other 
areas of concern such as food safety and quality, the relationship of 
agriculture and the environment, the profitability of the agricultural 
enterprise, and the impact of government regulations, land use 
restrictions, and economic options that diminish the supply of farm and 
grazing land. The long-term sustainability of the Nation's food and 
fiber production systems will be determined not only by the continued 
profitability of farming and ranching, but also by how these production 
systems affect the environment. The capacity of U.S. agriculture to 
adapt to environmental changes is also a concern, as are the 
availability and quality of natural resources. Another key 
environmental issue is how human activities affect weather patterns, 
atmospheric composition, and soil and water quality and productivity. 
Global population increases, demographic changes, and economic growth 
will substantially increase the demand for agricultural products and 
lead to the development of new markets. At the same time, increased 
agricultural efficiency in other countries will force U.S. agriculture 
to be more competitive.
    Funding.--The ability of ARS to respond to the many and diverse 
needs of producers and consumers is determined by annual 
appropriations.
    1996 Farm Bill and the Pending Revision of the Research Title.--The 
1996 Farm Bill, the Federal Agriculture Improvement and Reform Act, set 
a new direction for American agriculture by beginning the process of 
phasing out farm subsidy payments based on production levels and 
introducing free market disciplines. The effect of this legislation 
will be to heighten the importance of agricultural research as one form 
of a safety net beneath producers. Research to maintain and improve 
productivity; to detect, control, and eradicate diseases and pests 
(insects, weeds, etc.); and to promptly address nontariff trade 
barriers, especially sanitary and phytosanitary conditions will take on 
even greater importance in a global market. The 1996 Farm Bill also 
updated and expanded the ``Purposes of Agricultural Research'' which 
were first enacted in 1990. As described elsewhere in these responses, 
ARS incorporated the Purposes into this strategic plan adopting them as 
the agency's objectives. Congressional reauthorization of the Research 
Title will have an impact on ARS, but we are still too early in the 
legislative process to anticipate what that impact will be.
    Competition.--The Department of Labor projects an increase of 19 
percent in the size of the general workforce in the next decade, which 
is slightly lower than the rate of growth for the preceding decade. The 
labor market during this period is also expected to be highly 
competitive for many occupations that require an advanced education, 
including scientists, engineers, economists, and computer specialists. 
The high earning potential of professions, such as law and medicine, 
will continue to make a career in science less attractive to many young 
men and women who have the creative intelligence needed for 
professional success in agricultural research. Consequently, a major 
emphasis on recruitment, student employment, upward mobility, and 
training programs will be needed to attract and retain a quality 
workforce. The trend toward increasing workforce diversity is also 
expected to continue, and opportunities for encouraging women and 
minorities into careers in science, engineering, and economics will 
need to be given a high priority.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. External factors were not explicitly addressed in the 
fiscal year 2000-2001 ARS Annual Performance Plans. However, an in-
depth examination of the major external factors affecting American 
agriculture was part of the Agency's strategic planning process and the 
process for developing the new National Programs. The five Vision 
Conferences are a specific example of how ARS identified and considered 
external factors in its strategic and programmatic planning processes. 
The visioning process consisted of a pilot conference in January 1995, 
followed by five regional conferences held in June and July of 1995. 
The conferences brought together over 400 participants, representing a 
broad cross section of the Agency's customers, stakeholders, and 
partners, who worked in more than 30 breakout groups to provide input 
that was used to develop the ARS Strategic Plan 1997-2002. ARS is 
continuing to actively engage a wide-range of customers, stakeholders, 
and partners in developing its new National Programs. All 1,100+ CRIS 
projects have been aggregated into 23 National Programs. One or more 
National Program workshops, involving customers, stakeholders and 
partners has been or will be held for each program to ensure the 
relevancy of the research agenda in each National Program.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. The most important and direct external factor identified in 
the ARS Strategic Plan is the level of Congressional support for the 
Agency's research activities. Other key external factors include the 
heightened concern about the impact of agriculture on the environment, 
concerns about food safety, and the impact of global population growth 
and economic changes on American agriculture and the research 
priorities needed to sustain it. All of these concerns have been taken 
into consideration in developing the research agendas for the National 
Programs. In addition, changes in the American workforce may also 
impact ARS' ability to attract and retain the wide range of skilled 
individuals needed to meet the agricultural research needs of the next 
century.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. No. In managing the ARS research program, the National 
Program Staff seeks to avoid unnecessary duplication while ensuring 
coordination between research units and locations. Agricultural 
research must be conducted at different locations to account for 
climatic, regional, and geographic variations as well as different 
combinations of pests, diseases, and agricultural products, each with 
specialized problems calling for unique research approaches and 
solutions. The development and implementation of the new National 
Program structure have further strengthened the multi-disciplinary, 
multi-location focus of ARS research.
    Question. If so, does the Performance Plan identify the overlap or 
duplication?
    Answer. In developing the Annual Performance Plan we did not find 
any areas of program duplication.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. When the Research, Education, and Economics (REE) Agencies 
met with key Congressional Staff members during the consultation 
process we came away with the strong impression that our strategic 
plans should focus primarily on programmatic issues. In the REE mission 
area, ARS' Administrative and Financial Management (AFM) component 
provides support to all four REE Agencies and to the Offices of the 
Under Secretary. AFM has developed its own internal strategic plan, 
established performance measures, and it regularly measures customer 
satisfaction. We are not aware of specific issues of duplication that 
would need to be addressed in the ARS Strategic Plan.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. In response to GPRA, the ARS senior leadership decided to 
make a number of major changes in the way we manage the Agency's 
research program. The over 1,100 CRIS research projects were aggregated 
into 23 National Programs which are focused on solving high priority 
national problems confronting American agriculture. Reflecting the 
influence of GPRA, the National Programs are designed to have a strong 
and on-going interaction with their customers and stakeholders. In 
addition, the National Program structure focuses the research units on 
the ultimate outcomes or impacts of their work. Through the mechanism 
of the Annual Performance Plans and Reports ARS projects future 
accomplishments for the purpose of establishing programmatic 
accountability.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. Yes, as the implementation of the National Programs 
continues, the GPRA principles will become more firmly established 
within the Agency's culture.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. In our working version of our Strategic Plan we discuss the 
difficulty of predicting the ultimate outcome of research and the near 
impossibility of applying numerical measures to research, especially 
basic research. Having said that, we are confident that the use of a 
large number of tangible intermediate outcomes (indicators) will enable 
the subcommittee to determine whether ARS is making reasonable progress 
towards reaching the goals and objectives identified in the Strategic 
and Performance Plans.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. The great unpredictability of research, particularly its 
unanticipated benefits, makes it extremely difficult for scientists to 
formally offer predictions for fear they will engender unrealistic 
expectations. Predicting what problems will need to be addressed, how 
to reasonably measure on-going research, how best to express ``future'' 
research accomplishments, and how to accurately align resources to 
produce out year research results are all areas where we lack 
experience. As we work our way through several planning and reporting 
cycles, we will gain the experience we need to more meaningfully adapt 
GPRA to the ARS research environment.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Answer. No, we have no plans to ask for such waivers at this time.
    Question. Specifically, are you requesting any relaxation of 
transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. No, we have no current plans to do so.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. We did not identify issues in developing the Annual 
Performance Plans for fiscal year 2000-2001 that would require 
substantive revisions in the Agency's Strategic Plan. GPRA, however, 
requires a review and revision of the Strategic Plan this year. Since 
the Strategic Plan 1997-2002 was developed, ARS has substantially 
revised the way we manage our research program. ARS, in reviewing its 
Strategic Plan, is planning to reflect its new National Program 
structure in the revised plan and will also consider any revisions in 
the REE mission area 5-year strategic plan.
                                 ______
                                 

                      DEPARTMENTAL ADMINISTRATION

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. The Departmental Administration (DA) performance goals 
directly reflect the agency mission and strategic goals and objectives. 
Budget requests are developed and reviewed in the same structure as the 
goals and objectives and each activity justified in the Budget is 
identified with a specific performance goal.
    Question. Could you describe the process used to link your 
performance goals to your budget activities? What difficulties, if any, 
did you encounter, and what lessons did you learn?
    Answer. During the budget formulation process, DA managers are 
asked to identify how their budget proposals would contribute to the 
accomplishment of performance objectives in each area. The budget 
justifications published for the Congress identify specifically what 
goal and objective is supported by each budget request. Because the 
organization, performance goals and the budget material are aligned, we 
did not encounter any difficulty in tying our budget request to our 
performance goals.
    We have tried to identify key performance indicators in each of the 
major functional areas and link them to the resources used. Although 
``outcomes'' such as percent yearly increase in contract set-asides for 
small and disadvantaged business can easily be seen as related to the 
level of program effort in the small business program, other measures 
such as the reduction in utility use is harder to relate to specific 
program activities.
    Question. Does the agency's Performance Plan link performance 
measures to its budget? Does each account have performance measures?
    Answer. DA Staff Offices carry out many varied activities, 
therefore the appropriations each have several performance measures. 
The Performance Plan shows resources being applied to achieve goals and 
measures related to each account.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification? Do you plan to propose any changes to your account 
structure for fiscal year 2001? Will you propose any changes to the 
program activities described under that account structure?
    Answer. The DA performance planning structure is the same as the 
organizational and budget justification structure. For fiscal year 
2001, we have proposed no major changes either to the performance 
planning or major activity structure. We have made some minor 
organizational changes to enhance operational performance in a few 
areas.
    Question. How were performance measures chosen? How did the agency 
balance the cost of data collection and verification with the need for 
reliable and valid performance data? Does your plan include performance 
measures for which reliable data are not likely to be available in time 
for your first Performance Report in March 2000?
    Answer. Our performance measures were chosen as the best 
quantifiable measures of the ``outcomes'' in each of our major 
functional areas. Where ``outcome'' data was unavailable or not 
quantifiable, reliable output data was used. We found that reliable 
data were available in time for the first Performance Report. In all 
cases, the collection of accomplishment data was achieved well within 
the normal cost of managing the programs.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results? For each key annual goal, indicate whether 
you consider it to be an output measure (``how much'') or an outcome 
measure (``how well''). State the long-term (fiscal year 2003) general 
goal and objective from the agency Strategic Plan to which the annual 
goal is linked.
    Answer. Because DA is composed of so many varied responsibilities, 
it would be difficult to select a few performance measures to track the 
overall program result. In the most basic terms, our success depends 
upon our being able to provide the USDA headquarters and the program 
agencies with adequate work space and services for them to carry out 
their program responsibilities.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. Measures of ``outcome'' were used in our performance 
indicators wherever possible. However, one of the most important goals, 
that all USDA employees and customers are treated fairly and equitably 
with dignity and respect, cannot be measured empirically. In cases 
where outcome measures are not possible, the measures of output such as 
``backlog of complaints'' and ``employees trained'' are still very 
valuable. We have used the best measures we can to ensure that the 
goals and objectives are vigorously pursued and that the managers are 
held accountable.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. During the strategic planning process, the nature of 
``outcome'' and ``output'' measures was rigorously examined. I believe 
it is well understood by managers and key personnel at all levels of 
the organization.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers?
    Answer. At the present time, the only measure related to customer 
satisfaction used in our performance planning process is the number of 
buildings and facility complaints. Customer surveys, for both internal 
and external customers, are being considered in certain areas as a 
program management tool.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget? 
If a proposed budget number is changed, up or down, by this committee, 
will you be able to indicate to us the likely impact the change would 
have on the level of program performance and the achievement of various 
goals?
    Answer. Consideration of the performance goals was an important 
part of the budget formulation process. Budget proposals such as 
Alternative Dispute Resolution were a direct result of our seeking ways 
to meet our objectives in the civil rights program to reduce formal 
complaints and decrease the time to settle complaints. Many of the 
performance goals respond directly to changes in the Budget. For 
example, objectives like reducing customer building customer 
complaints, reduced use of utilities and rental office space depend 
solely on our ability to obtain funding for the Agricultural South 
Building Renovation. However, making specific quantifiable projections 
of performance indicators would be a challenge.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results? If so, who has access to the information--senior management 
only, or mid- and lower-level program managers, too? Are you able to 
gain access easily to various performance-related data located 
throughout your various information systems?
    Answer. Data on most DA performance indicators is available on an 
on-going basis with little technical difficulty in capturing the data. 
Managers at all levels have access to the information. The data is 
valuable for program management except in cases where the data does not 
present a regular trend. For example, where the performance measure is 
the number of personnel trained, the schedule of training classes may 
not be scheduled evenly throughout the period.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Have you faced such difficulty? Would the 
linkages be clearer if your budget account structure were modified? If 
so, how would you propose to modify it and why do you believe such 
modification would be more useful both to your agency and to this 
committee than the present structure? How would such modification 
strengthen accountability for program performance in the use of 
budgeted dollars?
    Answer. The performance objectives and indicators fit well within 
the organizational and budget structure of DA. No major changes are 
needed at this time.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Because DA includes so many varied activities, cost 
comparisons between programs may not be very meaningful. For example, 
reducing the average time for the resolution of a civil rights case by 
one month might cost $1,000. It is difficult to compare the value of 
this accomplishment with the installation of a communication capability 
to provide security information which might cost the same amount.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all Federal agencies are required to 
have a system of Managerial Cost Accounting. What is the status of your 
agency's implementation of the Managerial Cost Accounting requirement, 
and are you using Activity-Based Costing?
    Answer. USDA is in compliance with FASAB's cost accounting 
standards. The Department has identified responsibility segments, for 
which financial statement reporting is provided, employing full cost 
techniques that include unfunded pension and accrued annual leave, 
Federal Employment Compensation Act accrued expenses, GSA rent, 
depreciation, and other expense items that are appropriate. Currently, 
the Department uses several costing techniques, including Activity-
based Costing, that permit us to determine the cost of our strategic 
goals and selected output activities.
    Question. Will you be able in the future to show to this Committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all USDA agencies in 
order to provide standardized accounting methodologies and improved 
data for management and reporting purposes for salaries and expenses 
and administrative operations. As the Department improves its basic 
accounting and reporting processes, it will be able to better identify 
activities and outputs for unit costing including overhead costs.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. DA expenses would be more accurately associated with the 
overhead costs of the program agencies.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. Yes, subject to the limitations explained above.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. Under the current system, the cost of office space is not 
distributed to each performance goal in the Annual Performance Plan. 
Similarly, There are certain accrued leave costs which are not 
identified to each organization separately. The Chief Financial Officer 
conducts an analysis each year to address some of these costs.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's Performance Plan.
    Answer. The means and strategies for accomplishment of DA's 
performance goals did not involve any major regulatory reforms.
    Question. Does your fiscal year 2000 Performance Plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. Virtually all the performance goals in DA require adequate 
resources for achievement. This is particularly true of the objectives 
in space utilization, safety and renovation of the headquarters work 
space. The 10-year Agriculture South Building renovation project was 
approved by Congress in 1995. Yet, funding for the project has been 
inconsistent and the work may be suspended later this year.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. We have taken every opportunity to explain the relationship 
between the continued renovation of the Agriculture and our goals and 
objectives for safety and economy and the relationship to a productive 
USDA workforce. Funds to get the project back on track are included in 
the President's budget. We are hopeful that the project will be 
continued to completion.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. As the renovation project is delayed, inflation in the 
construction industry can be expected to increase the eventual cost. 
Also, the requirement to absorb the mandatory pay cost increases erodes 
the organization's capability to fully complete the performance 
objectives.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. We have not identified any overlapping functions, but many 
of our Staff Offices have responsibilities under the same Strategic 
Goals. For example, the Office of Civil Rights and the Conflict 
Prevention and Resolution Center have joint responsibility for the 
Alternative Dispute Resolution Program.
    Question. If so, does the Performance Plan identify the overlap or 
duplication?
    Answer. This has not been a problem in DA.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Duplication and overlap should be addressed before an 
Annual Performance Plan is put into effect. In DA, we have made some 
minor organizational changes and transferred personnel to avoid such 
situations. The GPRA plans should help overcome management challenges 
by clearly delineating responsibilities and identifying resources 
available to achieve goals and objectives in each area.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. To be valuable in managing agency responsibilities, the key 
elements of the organizations Strategic Plan and the Annual Performance 
Plan must be a factor in operating decisions made every day. Shortly 
after being appointed to this post, I held a workshop with my senior 
managers and key personnel and addressed this operating philosophy. To 
ensure that the performance objectives are meaningful in terms of the 
decisions managers face every day, I am reviewing the DA Strategic 
Plan. I expect to establish goals and objectives which will clearly 
guide my managers in making their operational decisions.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. Based on my philosophy concerning the role of performance 
goals and objectives in day to day management of operations, I feel 
certain that the use GPRA will increase in the future.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses? Are there any factors, such as 
inexperience in making estimates for certain activities or lack of 
data, that might affect the accuracy of resource estimates?
    Answer. A blanket statement is very hard to make in this case. My 
experience has been that low performance against a program goal 
sometimes means more resources are needed in that area and in other 
cases it means that the activity needs to be de-emphasized.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements? Specifically, are you requesting any 
relaxation of transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. We are seeking no such changes at this time.
    Question. Based on your fiscal year 2000 Performance Plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. As discussed above, I am in the process of examining the DA 
Strategic Plan. I am factoring in the experience my managers have had 
in operating under GPRA for a few years. I am looking at the goals, 
objectives, and performance factors which are measurable and will be 
useful and in guiding day-to-day operations.
                                 ______
                                 

                OFFICE OF THE CHIEF INFORMATION OFFICER

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. The performance goals for the Office of the Chief 
Information Officer (OCIO) measures the progress of activities that 
directly support the mission, strategic goals and program activities as 
described in the Agency budget request.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. The Program Managers developed their budget requests as 
well as the performance measures to support the performance goals. 
Program Managers utilize the following procedure to link performance 
goals to budget activities: prepare action plan, identify major 
milestones, determine strategy to meet milestones, identify performance 
measures, determine budget requirements necessary to meet milestones 
and performance measure, compare planned versus actual performance to 
validate budget request and adjust action plan and budget based on 
outcome of previous step.
    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. The difficulty arises when funds have not been appropriated 
for programs that are identified in the agency Strategic Plan. In 
addition, acquiring and maintaining staff expertise in the areas needed 
to perform program activities is become an ongoing issue.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Answer. During the fiscal year 2001 budget development process, 
OCIO staff made certain that all increases were aligned with the 
Strategic Plan and the Annual Performance Plan.
    Question. Does each account have performance measures?
    Answer. OCIO has only one account and the performance measures 
support this account.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. The OCIO planning structure does not differ from the 
account and activity structure.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. There are no plans to propose any changes to this 
structure.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. There are no plans to propose any changes to the program 
activities under the account structure.
    Question. How were performance measures chosen?
    Answer. The performance measures were developed to identify the key 
component for determining if the program was successfully meeting the 
goal. For example, the need for validating and verifying data for the 
Y2K effort and measuring the progress of Service Center Initiatives 
(SCI) and implementation of the capital planning and investment control 
process were all deemed essential to USDA mission areas.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. The agency determined that the mission critical nature of 
both the Y2K initiative and SCI justified any costs associated with 
performing reliable and meaningful independent validation and 
verifications for these programs.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. The performance data was verified through the independent 
validation and verification of the SCI and Y2K programs. Several of the 
performance measures from the fiscal year 1999 Annual Performance 
Report were modified for fiscal year 2000 in order to more accurately 
describe the activity. The performance measures for the new cyber-
security initiative were modified and will be updated again as the 
Cyber-Security Program grows.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    Answer. OCIO has established several performance goals based on 
three strategic goals. The key performance goals OCIO recommends this 
subcommittee track based on the fiscal year 2000 Annual Performance 
plan are: Establish USDA policy on IT management using the Capital 
Planning and Investment Control Methodology; Develop and Implement USDA 
architecture; Infuse government and electronic data interchange 
technologies into business processes where applicable; Ensure that the 
Service Center technology improvements are driven by business needs and 
support re-engineered business processes; Establish a Central Cyber 
Security Office; Establish a department-level Risk Management Program 
and develop a USDA Enterprise Network. Each of these goals will be 
measured to track program results and will be available to the 
committee for review.
    Question. For each key annual goal, indicate whether you consider 
it to be an output measure (``how much'') or an outcome measure (``how 
well'').
    Answer. OCIO has identified three goals: Ensure decisions regarding 
the selection and deployment of information technology are based on 
USDA needs (outcome measure); Develop Department-wide information and 
technical infrastructures that will improve service delivery through 
more effective information systems and data management (outcome 
measure) and; Be a leading innovative information technology services 
organization, experienced in providing quality and cost-effective 
services for centralized and distributed computing, and applications 
support (output measure).
    Question. State the long-term (fiscal year 2003) general goal and 
objective from the agency Strategic Plan to which the annual goal is 
linked.
    Answer. The following describes the key performance goals and their 
linkage to the agency general goals. (1) Establish USDA policy on IT 
management using the Capital Planning and Investment Control 
Methodology; Develop and Implement USDA architecture--Goal 1; (2) 
Infuse government and electronic data interchange technologies into 
business processes where applicable--Goal 1; (3) Ensure that the 
Service Center technology improvements are driven by business needs and 
support re-engineered business processes--Goal 1; (4) Establish a 
Central Cyber Security Office--Goal 2; (5) Establish a department-level 
Risk Management Program--Goal 2 and: (6) Develop a USDA Enterprise 
Network--Goal 2.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. OCIO made a conscious effort to develop a minimum number of 
solid performance measures that effectively measure program outcomes. 
This minimized data collection costs when verifying the results. OCIO 
senior management reviewed these goals to ensure the plan includes a 
significant number of outcome measures.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. OCIO program managers do have an understanding of the 
differences between goals that measure output and those that measure 
outcome.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. Customer satisfaction is measured differently for the 
Working Capital Fund OCIO cost centers the National Information 
Technology Center (NITC) and the Telecommunications Services Office 
(TSO) and the OCIO appropriated programs. Both NITC and TSO meet 
regularly with the customers to review performance. There are also 
service level agreements between these Working Capital Fund (WCF) 
activities and customers to define an acceptable level of service. The 
appropriated activities also meet regularly with their customers to 
discuss how the programs should be implemented. As far as internal 
customers, OCIO does measure the satisfaction of its employees directly 
in its plans and reports by gauging their level of morale and 
monitoring complaints.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. OCIO goals and performance measures were used as part of 
the basis for planning the fiscal year 2001 budget. The performance 
measures were reviewed to make sure that we are applying the most 
effective measure for monitoring performance. The cost of these 
measures was also reviewed. As the fiscal year 2001 budget was 
developed, program managers were required to verify that their 
performance measures aligned with the Strategic Plan.
    Question. If a proposed budget number is changed. up or down. by 
this committee will you be able to indicate to us the likely impact the 
change would have on the level of program performance and the 
achievement of various goals?
    Answer. Yes, we would be able to inform you of the impact of such 
changes on program performance in meeting our goals.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis so 
that the agency can be properly managed to achieve the desired results?
    Answer. OCIO does have the technological capability to measure and 
report program performance throughout the year.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. Information concerning performance is available to all 
managers.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. The USDA information technology capital planning and 
investment control(CPIC) process continues to expand utilization of the 
Information Technology Investment Portfolio System (ITIPS) a web-based 
tool that facilities the data collection and analysis necessary track 
USDA IT projects throughout the selection, control, and evaluation 
phases of the CPIC process. Information from this application is 
readily available.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. No, we have not faced any such difficulty. OCIO maintains 
only one account for appropriated activity. The WCF accounts are 
closely monitored by the Working Capital Fund Executive Board to assure 
performance meets the expected outcome.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. There is currently no need to modify the budget account 
structure for either the appropriated or WCF accounts.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. There is currently no need to modify the budget account 
structure for either the appropriated or WCF accounts.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. There is currently no need to modify the budget account 
structure for either the appropriated or WCF accounts.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. Although the Department has some personnel with cost 
accounting expertise, the Department's Chief Financial Officer has 
recognized the need for a Department-wide effort to enhance cost 
accounting expertise and $240,000 is included in the fiscal year 2001 
President's Budget request to provide such leadership. Currently, we 
are linking budget program activities to the goals in our annual 
performance plan. Ultimately, the additional fiscal year 2001 resources 
and a better-trained workforce, the Department will continue to 
implement improvements in this area.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial Cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as `` Activity-Based Costing,'' whereby the full cost is 
calculated for each of the activities of an agency. What is the status 
of your agency's implementation of the Managerial Cost Accounting 
requirement, and are you using Activity-Based Costing?
    Answer. USDA is in compliance with FASAB's cost accounting 
standards. The Department has identified responsibility segments, for 
which financial statement reporting is provided, employing full cost 
techniques that include unfounded pension and accrued annual leave, 
Federal Employment Compensation Act accrued expenses, GSA rent, 
depreciation, and other expense items that are appropriate. Currently, 
the Department uses several costing techniques, including Activity-
Based Costing, that permit us to determine the cost of our strategic 
goals and selected out activities. OCIO is scheduled to start using the 
USDA Foundation Financial Information System (FFIS) on October 1, 2001. 
At that time, OCIO should meet all requirements for Managerial Cost 
Accounting.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. The Department's current goal is to implement the 
Foundation Financial Information System throughout all USDA agencies in 
order to provide standardized accounting methodologies and improve data 
integrity for management and reporting purposes for salaries and 
expenses and administrative operations. As the Department improves its 
basic accounting and reporting processes, it will be able to better 
identify activities and outputs for unit costing and will evaluate the 
various accounting methodologies available and incorporate the 
appropriate methodology for the activity being costed. OCIO is 
scheduled to start using the USDA Foundation Financial Information 
System (FFIS) on October 1, 2001. At that time, OCIO should meet all 
requirements for Managerial Cost Accounting. Our WCF accounts already 
show depreciation. Appropriated accounts do not generally depreciate 
capital equipment.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. Yes, we strongly believe that effective implementation of 
costing systems will vastly improve Federal planning, evaluation, and 
reporting at all levels of the organization. OCIO is scheduled to start 
using the USDA Foundation Financial Information System (FFIS) on 
October 1, 2001. At that time, OCIO should meet all requirements for 
Managerial Cost Accounting.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. As the Department implements activity based costing, it 
will be able to provide unit costs for activities and results.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. OCIO already allocates overhead costs to its goals in its 
Annual Performance Plans.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. There are no regulatory reform measures that have been put 
in place in conjunction with the development of the OCIO performance 
plan.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. External factors were not identified in either the OCIO 
Annual Performance Plan or the Strategic Plan as having an impact on 
achieving the goals.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. External factors were not identified in either the OCIO 
Annual Performance Plan or the Strategic Plan as having an impact on 
achieving the goals.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. External factors were not identified in either the OCIO 
Annual Performance Plan or the Strategic Plan as having an impact on 
achieving the goals.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. No overlapping or duplicated functions have been identified 
as a result of the development of the OCIO Annual Performance Plan.
    Question. If so, does the Performance Plan identify the overlap or 
duplication?
    Answer. No overlapping or duplicated functions have been identified 
as a result of the development of the OCIO Annual Performance Plan.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Agencies can indeed use GPRA plans to identify such issues, 
particularly through management initiatives. OCIO has two management 
initiatives related to professional development of its employees. 
However, currently OCIO deals with issues of duplication and 
overlapping functions through other channels.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. OCIO leadership is committed to the principles of GPRA. 
OCIO has sponsored several workshops to discuss strategic planning. 
These sessions have also been used to review the status of our goals 
and if necessary, revise our strategy for accomplishing these goals.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. OCIO managers have been full participants in the 
development of our goals and performance measures, and they will carry 
their understanding of these principles forward as we begin the process 
of developing the 2002 appropriated budget.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. Our performance measure are in their adolescence, as we 
gain more experience with each planning and reporting cycle they will 
mature and become more reliable.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. The highest priorities in OCIO are based on a rapidly 
changing technology. Therefore, OCIO must maintain a position of 
flexibility in order to meet these highly technical challenges. The 
difficulty in transferring this flexibility to performance measures is 
demonstrated in the OCIO Annual Performance Plan for the past few 
years. As cyber security vulnerabilities have increased with the growth 
of the Internet, performance measures must be continuously revised to 
accurately identify outcomes for this program.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Answer. OCIO will not be requesting any waivers of non-statutory 
administrative requirements.
    Question. Specifically, are you requesting any relaxation of 
transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. OCIO will not be requesting any relaxation of transfer or 
reprogramming controls in return for specific accountability 
commitments.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. Yes, the OCIO Strategic Plan needs to be revised to reflect 
changes in technology and changes in the priorities within the 
organization. OCIO is now in the process of making these adjustments.
                                 ______
                                 

                 HAZARDOUS MATERIALS MANAGEMENT PROGRAM

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. Annual performance goals and program activities are linked 
to the Hazardous Materials Management Program (HMMP) mission and 
strategic goals by assigning targets to measure the progress of 
activities conducted pursuant to the requirements of the Comprehensive 
Environmental Response, Compensation, and Liability Act (CERCLA) and 
the Resource Conservation and Recovery Act (RCRA). It is the statutory 
requirements within these and other acts that form the basis for the 
HMMP mission.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. The Hazardous Waste Management Appropriation (HWMA) was 
established in 1988 to provide targeted funding for priority hazardous 
materials cleanup projects. In the fiscal year 2001 appropriations 
language, the account name will change to the Hazardous Materials 
Management Appropriation to more accurately reflect its purpose and 
scope. The Hazardous Materials Management Group (HMMG) recommends 
policies regarding management and cleanup, provides technical 
assistance and oversight, and prepares consolidated HMMA budget 
requests, annual performance plans, accomplishments reports, and annual 
program performance reports, using data submitted by USDA agencies.
    Annually, USDA agencies prepare prioritized funding requests for 
planning-year HMMP activities, revise their proposed programs of work 
at the start of the current fiscal year based on factors that include 
the availability of appropriated funds, and report HMMP accomplishments 
using a spreadsheet-based system developed by HMMG. Key reporting 
parameters include specific project activities requiring funding, 
performance targets for work to be undertaken, project priority, 
status, and cost data. All activities must be identified as supporting 
one of the allowable program activities shown in the table of codes for 
project activities provided.
    [The information follows:]

                                                CODES FOR PROJECT ACTIVITIES, BY INDICATOR TYPE AND GROUP
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                       P, M,
              Indicator               Indicator    Activity Code        Program       OBPA Crosscut Category   GPRA     or I     Activity Description/
                                        Group                                                                  Goal     \1\             Summary
--------------------------------------------------------------------------------------------------------------------------------------------------------
Site Identification, Investigation,          1   ................  ................  .......................  ......  .......  .........................
 and Cleanup Planning.
                                             1   3016............  RCRC............  Compliance.............       1       P   RCRA section 3016
                                                                                                                                inventory.
                                             1   STID............  SFND............  Other..................       1       P   CERCLA site
                                                                                                                                identification--40 CFR
                                                                                                                                300.405.
                                             1   PA..............  SFND............  Compliance.............       1       P   CERCLA Preliminary
                                                                                                                                Assessment (by NCP--40
                                                                                                                                CFR 300.410(b) for
                                                                                                                                removal PA or 40 CFR
                                                                                                                                300.420.420(b) for
                                                                                                                                remedial PA, and EPA
                                                                                                                                guidance).
                                             1   SI..............  SFND............  Compliance.............       1       P   CERCLA Site Inspection
                                                                                                                                (all types, by NCP--40
                                                                                                                                CFR 300.410(d) for
                                                                                                                                removal SI or 40 CFR
                                                                                                                                300.420.420(c) for
                                                                                                                                remedial SI and EPA
                                                                                                                                guidance).
                                             1   PASI............  SFND............  Compliance.............       1       P   Combined category that
                                                                                                                                includes both PA and SI.
                                             1   EECA............  SFND............  Cleanup................       1       P   Engineering evaluation/
                                                                                                                                cost analysis (i.e., for
                                                                                                                                non-time-critical
                                                                                                                                removal)--40 CFR
                                                                                                                                300.415(b)(4)--may
                                                                                                                                include National Argonne
                                                                                                                                Lab's Expedited Site
                                                                                                                                Characterization when
                                                                                                                                done IAW NCP.
                                             1   RIFS............  SFND............  Cleanup................       1       P   Remedial investigation/
                                                                                                                                feasibility study--40
                                                                                                                                CFR 300.430.
                                             1   RMVD............  SFND............  Cleanup................       1       P   Removal design--40 CFR
                                                                                                                                300.415.
                                             1   REMD............  SFND............  Cleanup................       1       P   Remedial design--40 CFR
                                                                                                                                300.435.
                                             1   CESA............  SFND............  Other..................       1       P   CERCLA Section 120(h)
                                                                                                                                Property Assessment,
                                                                                                                                ``due diligence''.
                                             1   BRWP............  SFND............  Other..................       1       P   Brownfields redevelopment
                                                                                                                                investigation/planning.
                                             1   RPLN............  RCRD............  Cleanup................       1       P   RCRA subtitle C or D
                                                                                                                                planning (e.g., closure
                                                                                                                                plan, corrective action
                                                                                                                                plan).
                                             1   RISK............  PGMT............  Compliance.............       1       P   Risk assessment
                                                                                                                                (ecological or human
                                                                                                                                health) for CERCLA or
                                                                                                                                RCRA compliance.
                                             1   UPLN............  RCRI............  Cleanup................       1       P   RCRA subtitle I planning
                                                                                                                                (e.g., plans for UST
                                                                                                                                removal, UST cleanups).
                                             1   CHAR............  SFND............  Other..................       1       P   Other site
                                                                                                                                characterization/
                                                                                                                                investigation (i.e., not
                                                                                                                                PA, SI, ESA, or by NCP)--
                                                                                                                                may include Argonne
                                                                                                                                National Lab's Expedited
                                                                                                                                Site Characterization.
                                     ===================================================================================================================
Cleanup (Including UST).............         2   ................  ................  .......................  ......  .......  .........................
                                             2   USTC............  RCRI............  Cleanup................       1       I   UST removals and cleanup
                                                                                                                                of contamination from
                                                                                                                                releases--40 CFR 280.
                                             2   RMVA............  SFND............  Cleanup................       1       I   CERCLA removal action--40
                                                                                                                                CFR 300.415, 300.820.
                                             2   REMA............  SFND............  Cleanup................       1       I   CERCLA remedial action--
                                                                                                                                40 CFR 300.435, 300.815.
                                             2   O&M.............  SFND............  Cleanup................       1       I   Operations and
                                                                                                                                maintenance after CERCLA
                                                                                                                                response action--40 CFR
                                                                                                                                300.435(f).
                                             2   PCLN............  SFND............  Cleanup................       1       I   CERCLA 120(h) Property
                                                                                                                                Cleanup.
                                             2   OPLM............  SFND............  Compliance.............       1       I   CERCLA environmental
                                                                                                                                monitoring (after CERCLA
                                                                                                                                response action).
                                             2   BRWN............  SFND............  Cleanup................       1       I   Brownfields cleanup/
                                                                                                                                redevelopment.
                                             2   CORA............  RCRC............  Compliance.............       1       I   RCRA corrective action--
                                                                                                                                40 CFR 264.100-101.
                                             2   CLOS............  RCRC............  Compliance.............       1       I   RCRA (clean) closure--40
                                                                                                                                CFR 264, Subpart G.
                                             2   DISP............  RCRC............  Compliance.............       2       I   RCRA subtitle C hazardous
                                                                                                                                waste disposal (may not
                                                                                                                                qualify for HMMP funds).
                                             2   SWCL............  RCRD............  Cleanup................       1       I   RCRA subtitle D--cleanup/
                                                                                                                                close solid waste
                                                                                                                                management units--40 CFR
                                                                                                                                257 or 258.
                                             2   RCRD............  RCRD............  Cleanup................       1       I   Other RCRA subtitle D
                                                                                                                                compliance (may not
                                                                                                                                qualify for HMMP funds).
                                             2   GWMI............  RCRC............  Compliance.............       1       I   RCRA environmental
                                                                                                                                monitoring (after
                                                                                                                                closure or corrective
                                                                                                                                action).
                                             2   MXDW............  RCRC............  Cleanup................       1       I   Radioactive mixed wastes
                                                                                                                                only (if other codes do
                                                                                                                                not apply).
                                             2   ORPH............  SFND............  Cleanup................       1       I   Orphan share of CERCLA
                                                                                                                                cleanups not included
                                                                                                                                elsewhere.
                                     ===================================================================================================================
Natural resource damage.............         3   ................  ................  .......................  ......  .......  .........................
                                             3   PAS.............  SFND............  Other..................       1       P   Preassessment screening.
                                             3   NRDA............  SFND............  Other..................       1       P   Natural resource damage
                                                                                                                                assessment.
                                             3   NRRP............  SFND............  Other..................       1       P   Natural resource
                                                                                                                                restoration planning.
                                             3   NRRE............  SFND............  Cleanup................       1       I   Natural resource damage
                                                                                                                                restoration.
                                     ===================================================================================================================
Enforcement support and cost                 4   ................  ................  .......................  ......  .......  .........................
 recovery.
                                             4   ENFS............  SFND............  Other..................       1       P   Enforcement support
                                                                                                                                (e.g., PRP search,
                                                                                                                                viability det., case
                                                                                                                                development).
                                             4   PRPW............  SFND............  Cleanup................       1       I   Value of response and
                                                                                                                                restoration work
                                                                                                                                performed/funded by
                                                                                                                                PRP's.
                                             4   RCVY............  SFND............  Other..................       1       I   Response and/or
                                                                                                                                restoration costs
                                                                                                                                recovered.
                                     ===================================================================================================================
Pollution prevention and                     7   ................  ................  .......................  ......  .......  .........................
 environmental audit.
                                             7   PPEO............  PRVN............  Other..................       2       P   Pollution prevention (P2)
                                                                                                                                planning.
                                             7   POLP............  PRVN............  Other..................       2       I   P2 implementation.
                                             7   AUDT............  PGMT............  Other..................       2       M   Management system audit
                                                                                                                                supporting CEMP, P2/SR
                                                                                                                                implementation.
                                     ===================================================================================================================
Case assistance (OGC only)..........         8   CASE............  SFND............  Cleanup................       1       M   .........................
                                     ===================================================================================================================
Management..........................         9   ................  ................  .......................  ......  .......  .........................
                                             9   PGMT............  PGMT............  Other..................       1       M   General program
                                                                                                                                management.
                                             9   OVRS............  SFND............  Cleanup................       1       I   Oversight of work by
                                                                                                                                PRP's or other non-
                                                                                                                                agency entity.
                                             9   PJMT............  PGMT............  Other..................       1       I   Individual project
                                                                                                                                management not covered
                                                                                                                                elsewhere.
                                             9   FUND............  PGMT............  Other..................       2       M   Transfer, deobligation,
                                                                                                                                and other administrative
                                                                                                                                actions with funds.
                                             9   TRNG............  PGMT............  Other..................       2       M   All allowable training.
                                             9   OTHR............  PGMT............  Other..................       2       M   All allowable other.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ P--Planning, I--Implementation, M--Management.

                                                                         ACRONYMS

APHIS--Animal and Plant Health Inspection Service      ARS--Agricultural Research Service      CMPA--Compliance agreement (FEDPLAN code)      ESDF--
  Established standard, compliance date in future (FEDPLAN code)      ESDL--Established standard, demonstrate leadership (FEDPLAN code)      ESDP--
  Established standard, compliance date passed (FEDPLAN code)      ESRE--Established standard, replacement due to expansion (FEDPLAN code)      ESRO--
  Established standard, replacement due to obsolescence (FEDPLAN code)      F--Finished, or projected to be finished, in indicated fiscal year      FF--
  Finished in the previous fiscal year (enter code only once)      FS--Forest Service      FSA/CCC--Farm Service Agency, Commodity Credit Corporation
    FSA/FLP--Farm Service Agency, Farmer Loan Programs      FSIS--Food Safety and Inspection Service      H--High (FEDPLAN priority)       HMMG--
  Hazardous Materials Management Group      I--Implementation, action (Sub-Program)      INOV--Notice of violation (FEDPLAN code)      L--Low (FEDPLAN
  priority)      M--Medium (FEDPLAN priority), or management (Sub-Program)      N--New project/activity this fiscal year      O--Ongoing project/
  activity from previous fiscal year      OGC--Office of General Counsel      OTHR--Other reasons/needs (FEDPLAN code)      OVRS--Oversight of work by
  others      P--Planning (Sub-Program)      PDEF--Program definition (FEDPLAN code)      PGMT--Program management (FEDPLAN code)      PPAC--Pollution
  prevention to achieve compliance (FEDPLAN code)      PRVN--Pollution prevention      PSDF--Pending standard, compliance date in future (FEDPLAN code)
      RCRC--RCRA Subtitle C, Hazardous Waste      RCRD--RCRA Subtitle D, Solid Waste      RCRI--RCRA Subtitle I, UST      RD--Rural Development
  SFND--Superfund, CERCLA.

    Each allowable activity is explicitly linked to a specific 
performance goal. Regulatory references are provided to further ensure 
that budget requests support HMM's performance goals. By requiring that 
all reported data be linked to a standard list of program activities 
defined in applicable regulations (e.g., the National Contingency Plan 
for CERCLA preliminary assessments, site inspections, and response 
actions), correlation is high between budget activities and performance 
goals.
    Question. What difficulties, if any, did you encounter, and what 
lessons did you learn?
    Answer. The current spreadsheet-based system used to monitor 
program activities was implemented at the end of fiscal year 1997 to 
improve data consistency and accessibility to management. It has also 
made it easier to link budget activities to performance targets. 
Difficulties encountered in implementing the new system were largely 
the result of affected agencies using different information system 
platforms and software and the variability in system users' 
proficiency. Use of commercially available software has helped ease the 
problem of quality data acquisition and processing. An unresolved 
difficulty is that of linking specific project activities to budget 
object data on a project-by-project basis. A work group was recently 
formed to address this issue.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Answer. Yes, the HMMP budget is built up from prioritized 
activities that are explicitly linked to specific performance goals and 
measures.
    Question. Does each account have performance measures?
    Answer. Yes, HMMP appropriated funds are allocated and distributed 
to several USDA agencies who draw from the same list of performance 
measures in requesting funds and reporting accomplishments.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. The performance planning structure is based upon compliance 
with two statutes, CERCLA and RCRA, whereas the account and activity 
structure in the budget justification is a single line item. Two 
performance goals are associated with the single line item for the 
HMMA. About 90-95 percent of the HMMP budget supports investigation and 
cleanup under CERCLA of past contamination on lands and facilities 
under USDA jurisdiction, custody, and control, plus leaking underground 
storage tank cleanup under RCRA. The remaining 5-10 percent of the 
budget is for other RCRA compliance.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. HMMG does not plan to propose any changes to the account 
structure for fiscal year 2001.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. No changes are proposed.
    Question. How were performance measures chosen?
    Answer. Performance measures were selected to provide the 
accomplishment information the House Agriculture Appropriations 
Committee requested in relation to compliance with CERCLA and RCRA.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. The spreadsheet-based reporting system was developed to 
meet data needs at minimal cost. It has been designed to improve data 
reliability as well as program management. The performance data needed 
is a measure of progress toward meeting the goals of USDA's cleanup 
program, namely completing 150 cleanups by 2002 and the entire cleanup 
program by 2045.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. The plan does not include performance measures for which 
reliable data will not be available in time for the first performance 
report in March 2000.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results?
    Answer. The performance measures recommended for tracking program 
results are those appearing under Goal 1 in HMMP's Annual Performance 
Plan for fiscal year 2001. Specifically, these are:
  --number of sites assessed/characterized on need for cleanup,
  --number of cleanup plans completed,
  --number of cleanups completed,
  --number of inactive and abandoned mine cleanups completed,
  --number of agreements reached with potentially responsible parties 
        (PRPs), and
  --estimated value of cleanup/restoration work performed by PRPs 
        ($millions).
    Question. For each key annual goal, indicate whether you consider 
it to be an output measure (``how much'') or an outcome measure (``how 
well'').
    Answer. All are output measures in support of the larger desired 
outcome of restored facilities, lands, and watersheds. Cleaning up 
contamination is necessary for attaining the larger outcome, which is 
best addressed in the performance measures of the individual agencies 
receiving HMMP funds. For example, the cleanup of inactive and 
abandoned mines in the HMMP is an integral part of Forest Service 
activities under USDA Goal 3 and the Clean Water Action Plan.
    Question. State the long-term (fiscal year 2003) general goal and 
objective from the agency Strategic Plan to which the annual goal is 
linked.
    Answer. Goal #1: Improve the quality of the work environment for 
all employees, improve regulatory compliance and environmental 
awareness, and improve and restore facilities and lands under USDA 
stewardship, seeking compensation from those responsible for the 
contamination. Objective #1-1: Restoration of lands and facilities 
contaminated by hazardous substances, seeking compensation from those 
who caused the contamination.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. HMMP performance measures are intentionally established as 
output measures which contribute to the desired outcome. The desired 
outcome of the HMMP is completing the entire cleanup program. In 1995, 
USDA set the goal of achieving this outcome by 2045.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. The HMMP program managers fully understand the difference.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. While HMMP does not have specific measures for customer 
satisfaction in its GPRA plans, a primary measure of customer 
satisfaction is the minimal number of environmental enforcement actions 
and lawsuits by private parties brought to date against USDA agencies. 
Such activity is closely monitored by USDA through both the HMMP and 
the Office of the General Counsel.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. Planned HMMP activities, the prioritized funding request, 
and performance goals for the fiscal year 2001 budget were based on the 
agencies' best estimate of progress in the remainder of fiscal year 
1999 and the goals in the program of work for fiscal year 2000. Each 
year's specific goals are somewhat independent, because there is 
considerable variability in the costs and course of environmental 
investigations and cleanups. Each year's goals build upon the actual 
and planned work of all preceding years.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of the various goals?
    Answer. The likely impact of a change in a proposed budget number 
can be indicated. Detailed project lists are provided with each budget 
request, and the agency's priority for each project is shown. To 
determine the program impact, the lower priority projects would be 
deferred to reach the proposed budget number, with the understanding 
that regulatory and other requirements may not allow some activities to 
be deferred.
    If the budget number is changed upward, work planned for a later 
year would be advanced into the earlier year. Priorities are not 
currently assigned to outyear projects, but the effect on program goals 
could be generally estimated.
    In practice, environmental cleanups require flexibility in project 
implementation and funding. Within USDA, plans for some unfunded 
priority projects are typically prepared along with the funded projects 
to allow for adjustment in the program if a funded project is delayed 
or additional funding becomes available. This proactive approach 
provides maximum efficiency and cost effectiveness in conducting 
investigations and cleanups.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. Yes, the spreadsheet reporting system and other records 
provide this capability. Currently, program performance is assessed at 
the Department level at the beginning of the fourth quarter and at the 
close of the fiscal year. Aggregated program performance, in the form 
of National Finance Center reports, is monitored monthly. Agencies 
submit reports and are encouraged to monitor their HMMP activities on a 
regular basis.
    Question. If so, who has access to the information--senior 
management only, or mid- and lower-level program managers, too?
    Answer. All levels of management have access to program status 
reports.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. Yes, a single spreadsheet-based system is used to maintain 
HMMP data at the USDA level.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. HMMP has not faced difficulties as a result of the budget 
account structure.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. Linkages would not necessarily be clearer if the budget 
account structure was modified.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. This question is not applicable.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. This question is not applicable.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. The HMMP relies on systems and expertise of the National 
Finance Center and the individual financial offices of the affected 
agencies for accounting services.
    There is already a linkage, even before planned improvements are 
implemented. The prioritized project list submitted with the HMMP 
budget package includes information on the funding needed for each 
activity, the relationship of the planned activities to the GPRA 
performance goals and indicators, the specific desired output, and the 
governing statutory or regulatory authorities. Information is also 
presented on the location of each proposed activity, its current 
status, the goal for the end of the year, and other planning 
information.
    At the end of each fiscal year, agencies report on their activity-
specific obligations and carryover, which activities were completed 
that year, and other financial and performance data. The data is in 
spreadsheet format, so it can be readily summarized and analyzed by 
management. Attainment of performance goals is evaluated, as are such 
indicators of program performance as obligation rates, the balance of 
``old'' versus ``new'' work being undertaken, and the balance of 
investigative versus cleanup work.
    Work is ongoing to improve the linkage of budgets and results. 
Training of system users is ongoing to increase efficiency and improve 
data quality. Agency management will be asked to attest to the quality 
of HMMP data they submit throughout the budget cycle as well as their 
contribution to the GPRA performance goals of the HMMP. Development, 
testing, and implementation of a network-based system that could be 
used for real-time project management as well as reporting is being 
considered. The feasibility of tracking obligations and expenditures by 
budget object as well as by activity is being evaluated.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all federal agencies are required to 
have a system of Managerial Cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as ``Activity-Based Costing,'' whereby the full cost is 
calculated for each of the activities of an agency. What is the status 
of your agency's implementation of the Managerial Cost Accounting 
requirement, and are you using Activity-Based Costing?
    Answer. Currently, we rely on the individual agencies and the 
National Finance Center for cost accounting of HMMP expenditures.
    As noted in an earlier response, a USDA work group will try to 
identify feasible alternatives for improving HMMP accounting and 
accountability systems, but the solution is expected to be dependent on 
USDA-wide changes in current systems.
    Question. Will you be able in the future to show this committee the 
full and accurate cost of each activity in the program, including in 
those calculations such items as administration, employee benefits, and 
depreciation?
    Answer. After a USDA-wide system is implemented, we will be able to 
show the committee the full and accurate cost of each activity in the 
HMMP.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. The goals and activities of the HMMP are confined to CERCLA 
and RCRA compliance activities. Current systems already provide a 
substantially complete picture of the funds spent on the HMMP and the 
results obtained.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. The spreadsheet activity-based budgeting and reporting 
system used by the HMMP is already able to provide substantially 
complete unit costs, although a small portion of total actual costs may 
not be reflected in all cases, because the individual agencies may or 
may not be using full-cost accounting methods.
    To illustrate, a table summarizing fiscal year 1999 HMMP 
accomplishments by project status and performance indicator is 
provided.
    The fact that the average cost of the 21 federally funded cleanups 
that were finished was about $13,500 suggests that these were 
relatively small and simple cleanups. The average obligation on ongoing 
cleanups was nearly ten times as much, and work greater than the entire 
HMMA budget was performed by potentially responsible parties or cost 
recovered on two larger cleanups.
    [The information follows:]

                                        SUMMARY OF FISCAL YEAR 1999 ACCOMPLISHMENTS, USDA HAZARDOUS MATERIALS MANAGEMENT PROGRAM, BY STATUS AND PRIORITY
                                                                                     [Dollars in thousands]
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                  Indicator group
                                                                                  --------------------------------------------------------------------------------------------------------------
                                                                                                                                                  Pollution                 Program
  Project status when fiscal           Year-end fiscal year 1999 data type                                      Natural                           prevention              management,
        year 1999 ended                                                            Investigations   Cleanups   resource  Enforcement     UST         and         Legal     including     Grand
                                                                                                                damage     support    cleanups  environmental   support       PRP        total
                                                                                                                                                   auditing                oversight
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                      Finished Sum of HMMA Obligated Amount                          $1,385.7        $148.1  ........      $10.2      $104.9  .............  .........  ...........   $1,648.8
                               Count of HMMA Obligated Amount                             9            12    ........        1           3    .............  .........  ...........       25
                               Sum of Non-HMMA Obligated Amount                         $68.4        $135.5  ........  ...........    $221.0      $476.0     .........  ...........     $900.9
                               Count of Non-HMMA Obligated Amount                         5             9    ........  ...........       1           4       .........  ...........       19
                               Sum of Cost Recovery                              ..............  ..........  ........  ...........  ........  .............  .........  ...........  .........
                               Count of Cost Recovery                            ..............  ..........  ........  ...........  ........  .............  .........  ...........  .........
                               Sum of Estimated Value of PRP Work                ..............      $500.0  ........  ...........  ........  .............  .........      $250.0      $750.0
                               Count of Estimated Value of PRP Work              ..............         1    ........  ...........  ........  .............  .........         1           2
    Finished in Earlier Fiscal Sum of HMMA Obligated Amount                      ..............  ..........  ........  ...........  ........  .............  .........  ...........  .........
                          Year
                               Count of HMMA Obligated Amount                    ..............  ..........  ........  ...........  ........  .............  .........  ...........  .........
                               Sum of Non-HMMA Obligated Amount                  ..............  ..........  ........  ...........  ........  .............  .........  ...........  .........
                               Count of Non-HMMA Obligated Amount                ..............  ..........  ........  ...........  ........  .............  .........  ...........  .........
                               Sum of Cost Recovery                              ..............       $12.0  ........  ...........  ........  .............  .........  ...........      $12.0
                               Count of Cost Recovery                            ..............         1    ........  ...........  ........  .............  .........  ...........        1
                               Sum of Estimated Value of PRP Work                ..............  ..........  ........  ...........  ........  .............  .........  ...........  .........
                               Count of Estimated Value of PRP Work              ..............  ..........  ........  ...........  ........  .............  .........  ...........  .........
                       Ongoing Sum of HMMA Obligated Amount                          $6,456.4      $3,028.0     $66.7     $276.4      $554.4      $207.0      $1,060.0    $2,834.3   $14,483.2
                               Count of HMMA Obligated Amount                            58            37         3         14          16           2             1          34         165
                               Sum of Non-HMMA Obligated Amount                      $1,824.0      $5,878.7     $16.0     $179.6      $397.0      $103.5     .........    $3,046.6   $11,445.5
                               Count of Non-HMMA Obligated Amount                        25            33         1          3           7           2       .........        13          84
                               Sum of Cost Recovery                                  $4,710.5     $18,842.4  ........  ...........  ........        $4.8     .........      $378.0   $23,935.7
                               Count of Cost Recovery                                     1             2    ........  ...........  ........         1       .........         1           5
                               Sum of Estimated Value of PRP Work                    $2,550.0    ..........  ........  ...........  ........  .............  .........    $6,783.8    $9,333.8
                               Count of Estimated Value of PRP Work                       6      ..........  ........  ...........  ........  .............  .........        11          17
                                                                                ----------------------------------------------------------------------------------------------------------------
                                     Total Sum of HMMA Obligated Amount              $7,842.0      $3,176.1     $66.7     $286.6      $659.3      $207.0      $1,060.0    $2,834.3   $16,132.0
                                     Total Count of HMMA Obligated Amount                67            49         3         15          19           2             1          34         190
                                     Total Sum of Non-HMMA Obligated Amount          $1,892.4      $6,014.3     $16.0     $179.6      $618.0      $579.5     .........    $3,046.6   $12,346.4
                                     Total Count of Non-HMMA Obligated Amount            30            42         1          3           8           6       .........        13         103
                                     Total Sum of Cost Recovery                      $4,710.5     $18,854.4  ........  ...........  ........        $4.8     .........      $378.0   $23,947.7
                                     Total Count of Cost Recovery                         1             3    ........  ...........  ........         1       .........         1           6
                                     Total Sum of Estimated Value of PRP Work        $2,550.0        $500.0  ........  ...........  ........  .............  .........    $7,033.8   $10,083.8
                                     Total Count of Estimated Value of PRP Work           6             1    ........  ...........  ........  .............  .........        12          19
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. The HMMP is funded with HMMA and agency funds. HMMA funds 
are allocated and distributed to a number of agencies. Some do full 
cost accounting, and others do not. In general, the dollars associated 
with an activity approach the full costs. This issue may also be 
addressed by the recently created working group.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. The HMMP is governed by CERCLA, RCRA, and their 
implementing regulations. No regulatory reform measures related to the 
cleanup program were implemented by USDA.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. The primary external factors that affect goal achievement 
are availability of sufficient funds, the time it takes to negotiate 
complex agreements with regulatory agencies and responsible parties, 
and the many unexpected developments in environmental investigations 
and cleanups.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. The steps found to be most effective in minimizing the 
impact of external influences is to maintain a highly experienced staff 
to manage HMMP activities; to closely coordinate and plan response 
actions; and to work closely with other Federal agencies, state 
agencies, and stakeholders.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. If viable responsible parties cannot be identified at sites 
where environmental problems are the result of non-USDA activities, the 
costs of cleanup must be borne by USDA, even if USDA activities did not 
cause or contribute to the problem. Most of the biggest and most 
expensive contaminated sites on lands and facilities under USDA 
jurisdiction, custody, and control resulted from the activities of 
others.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication?
    Answer. No overlapping functions or program duplication were 
identified.
    Question. If so, does the Performance Plan identify the overlap or 
duplication?
    Answer. This does not apply, because no overlapping functions or 
program duplication were identified.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Annual performance plans should focus on defining and 
pursuing desired outputs and outcomes; other mechanisms should be 
employed to assess and report the extent to which management systems 
are supporting, facilitating, or impeding the work of the organization 
and to redesign organizational structure and processes to improve 
effectiveness and efficiency in producing results.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. GPRA considerations are increasingly a factor in HMMP 
decision making. Taken together with the potential liabilities 
associated with environmental contamination, GPRA has helped focus 
management attention on the short- and long-term goals and resource 
needs of the HMMP.
    Question. Will this use increase in the future and if so in what 
ways?
    Answer. To some degree, but regulatory requirements and public 
interest are expected to continue to be the primary program drivers. To 
the extent possible, changes in these forces will be addressed through 
GPRA planning.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: To what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. There is a one-to-one correlation between the HMMP 
performance measures and the statutory or regulatory requirements they 
address. Completed investigations and cleanups are the mission of the 
HMMP, but these activities only contribute to the larger desired 
outcomes of restored lands and watersheds on lands under USDA 
jurisdiction, custody, and control. Recognizing this limited role of 
the HMMP in USDA's management of lands and facilities, the performance 
measures are important, but we are still early in the implementation of 
this new approach.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. The difficulties of accurately estimating the cost and 
course of projects involving environmental contamination are well 
known. There may be more or less contamination than expected from the 
limited investigative work that was done at the start of the project. 
What appeared to be a routine project may become complicated in other 
ways as well. Regulatory agencies, potentially responsible parties, and 
stakeholders all play a vital role in cleanup decisions on lands under 
USDA jurisdiction, custody, and control, and this role will only 
increase as the larger cleanups are taken up. Environmental cleanups 
will always require substantial flexibility in project implementation 
and funding.
    At current HMMP funding levels, it is difficult to maintain the 
experienced staff needed to improve program efficiency and 
effectiveness. This is particularly evident in the Forest Service, 
where retirements and staffing cuts have been greatest. The inventory 
of cleanups that are ready to go is being depleted as we struggle to 
maintain the pace of actual cleanups in the face of these staffing 
reductions and ``flat-lined'' HMMA funding for the past six years.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Answer. No waivers of non-statutory administrative requirements are 
being requested.
    Question. Specifically, are you requesting any relaxation of 
transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. No relaxation of transfer or reprogramming controls are 
being requested.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. Modifications to performance measures will reflect our 
experience under GPRA, but at this point there have not been 
substantial revisions to the strategic plan.
                                 ______
                                 

                   FOOD SAFETY AND INSPECTION SERVICE

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. The mission of FSIS is to ensure that meat, poultry, and 
egg products moving in interstate commerce, imported from other 
countries, or exported to other countries are safe, wholesome, and 
accurately labeled. In 1996, FSIS issued the HACCP final rule, which 
serves as a blueprint for changes in meat, poultry, and egg products' 
inspection for the future.
    All FSIS programs and priorities lead to one goal: enhancing the 
public health by minimizing foodborne illness from meat, poultry, and 
egg products. The Strategic Plan reflects this one goal and the 
strategies FSIS is currently using to reach this goal. Unlike agencies 
with many, perhaps conflicting, priorities, FSIS can concentrate on 
developing the best strategies to reach this one overriding goal. The 
Agency created its Strategic Plan with a mission statement, goal, 
objectives, and measures. In order to link the Strategic Plan with the 
Annual Performance Plan (APP), FSIS converted its strategic objectives 
into annual performance goals for the APP. The Agency's program 
activities and corresponding budget requests support the Agency's 
mission and the performance goals.
    Question. Could you describe the process used to link your 
performance goals to your budget activities?
    Answer. The Agency recognizes the importance of linking performance 
goals and budget activities through the Agency mission. The goals 
represent our mission objectives, while the budget activities represent 
our mission activities. To accomplish this, FSIS management guides the 
budget and planning staffs as they work together in the preparation of 
budget initiatives and the APP to ensure that budget requests reflect 
the performance goals contained in the Agency's APP and support program 
activities derived from the Agency's mission.
    Question. What difficulties, if any, did you encounter and what 
lessons did you learn?
    Answer. FSIS has faced the challenge of developing performance 
measures for which reliable data is available. Agency staffs researched 
data availability and compared options for performance measures, 
choosing performance measures for which data which could be more 
readily obtained, verified, and validated.
    Question. Does the agency's Performance Plan link performance 
measures to its budget?
    Answer. FSIS uses both its Strategic Plan and budget plan to design 
the APP. The performance goals are specific to achieving a reduction in 
foodborne illness, and the measures in the APP indicate progress in 
achieving these goals. FSIS provides a new performance measure for each 
requested budget increase. For example, in the 2001 budget, FSIS 
requests additional funding for visiting more establishments during 
foreign reviews to ensure that equivalency standards are being met. To 
link performance measures to the budget, the 2001 APP includes a 
performance measure to illustrate that reviews are projected to 
increase in 2001 if the Agency receives its budgetary request.
    Question. Does each account have performance measures?
    Answer. Most of FSIS' budget is in one appropriated salaries and 
expenses account for which the Agency designed performance measures. 
Many of the performance measures do not apply to the Agency's small 
Trust Fund account because the HACCP final rule does not cover 
voluntary inspection. The Agency has not designed separate performance 
measures for the Trust Fund account.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. The FSIS performance planning structure is built around 
specific steps that must be carried out to achieve the strategic goal 
of minimizing foodborne illness associated with meat, poultry, and egg 
products. The account and activity structure used in the budget 
submission is organized along program activity lines that capture the 
range of infrastructure and support activities necessary to carry out a 
total food safety program.
    Question. Do you plan to propose any changes to your account and/or 
program activity structure for fiscal year 2001?
    Answer. FSIS has added an activity for Codex Alimentarius in the 
2001 budget. Codex Alimentarius was formerly included under the Import/
Export Inspection activity.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. The addition of Codex Alimentarius as a budget activity is 
the only change identified to date. FSIS does not anticipate proposing 
any further changes to our program activities described under this 
account structure.
    Question. How were performance measures chosen?
    Answer. The FSIS Strategic Plan contains one goal and six 
objectives with associated performance measurements. The same 
objectives and measures detailed in the Strategic Plan are used in the 
APP. The six objectives, written as performance goals in the APP, have 
been slightly modified to help Agency managers focus on the need to 
collect and track data for the fiscal years listed in the APP. The 
annual goals are written in measurable, performance-oriented terms so 
that annual program evaluations can more easily gauge progress for each 
performance goal. Maintaining a common set of objectives and 
performance goals provides a strong linkage between the long-range 
Strategic Plan objectives and the more output-oriented performance 
goals in the Annual Performance Plan. Performance measures are derived 
from performance goals based on measurable activities directed toward 
achieving goals. In addition to measures of ongoing program activity, 
FSIS also provides performance measures for each requested budget 
initiative. This is done to illustrate how additional funding would be 
used if the Agency receives its budget request.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. In designing performance indicators, FSIS has relied on 
information that is readily available within the Agency. Therefore, the 
data collected for activities contained in the Strategic Plan will be 
consistent and comparable with other activity data collected over time, 
ensuring a stream of reliable and valid performance data for the Plan's 
goals and objectives. Data quality should continue to be high since the 
Agency will rely on the same data sources it has used in the past, 
e.g., in-plant records.
    There should be little increased cost specifically related to the 
collection of data for meeting GPRA requirements. FSIS will continue to 
improve the Agency's information management systems, which will 
primarily benefit the food safety program, but also improve the quality 
of GPRA data.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. FSIS has submitted its first performance report and 
believes that all data incorporated are reliable. Consistent with the 
2000 report, performance measures for 2001 are based on both available 
and reliable information sources.
    Question. What are the key performance goals from your fiscal year 
2000 Annual Performance Plan that you recommend this subcommittee use 
to track program results? For each key annual goal, indicate whether 
you consider it to be an output measure (``how much'') or an outcome 
measure (``how well'').
    Answer. FSIS uses a mix of outcome and output measures to assess 
progress made in achieving its goal, and recommends that the 
subcommittee use performance goals one, two, three, and four to track 
FSIS program results. They are as follows:
  --Reduce pathogens on raw products by continuing the implementation 
        of the Pathogen Reduction/HACCP rule.
  --Establish effective working relationships with other public health 
        agencies and stakeholders to support the President's National 
        Food Safety Initiative.
  --Promote food safety from farm-to-table.
  --Complete the necessary cultural change to support HACCP and food 
        safety.
    The Agency believes that HACCP, along with microbiological testing, 
will improve the safety of inspected products and reduce foodborne 
illness. Measurable declines in pathogen contamination of federally 
inspected product, which correlate with HACCP implementation, validate 
HACCP as a model system for production and inspection. This has 
increased the Agency's effectiveness in completing its own HACCP-
related cultural change and working with other public health agencies 
and stakeholders to promote food safety and support the President's 
Food Safety Initiative.
    Question. State the long-term (fiscal year 2003) general goal and 
objective from the agency strategic plan to which the annual goal is 
linked.
    Answer. The current FSIS strategic goal is to enhance the public 
health by minimizing foodborne illness from meat, poultry, and egg 
products. The outcome of achieving this goal is a 25 percent reduction 
in the number of foodborne illnesses associated with meat, poultry, and 
egg products by the year 2000. The 2000/2001 APP is the last to be 
submitted under the current 1997-2001 Strategic Plan. FSIS is currently 
working with the President's Council on Food Safety to design a new 
Strategic Plan for the Agency, which will set a new long term general 
goal and performance objectives for fiscal year 2002 through 2006.
    Question. In developing your APP, what efforts did your agency 
undertake to ensure that the goals in the plan include a significant 
number of outcome measures?
    Answer. FSIS managers provided guidance on developing performance 
indicators that would provide significant measures of progress toward 
achieving performance goals and the overall strategic goal based on 
sources of available data. For example, reducing pathogens on raw 
products through the HACCP-based inspection system is a major focus of 
FSIS initiatives, which could be measured and has produced impressive 
results. The APP has incorporated outcome measures for this and other 
performance goals by using data available through FSIS information 
sources.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. The Agency has provided training for its managers over the 
last several years to meet the requirements of GPRA. Agency managers 
are actively involved in the formulation of the APP and in budgetary 
discussions. While substantial progress has been made, continued 
training is needed as GPRA concepts and requirements are integrated 
into ongoing program operations.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. Customer satisfaction measures are based, in part, on 
feedback from stakeholders, including our own employee groups, 
representatives from the regulated industry, consumer groups, academia, 
State and local governments, and foreign governments. A primary vehicle 
for obtaining this feedback was the FSIS Customer Satisfaction 
Initiative conducted last year as part of the National Performance 
Review's customer survey initiative. Stakeholders participated in the 
development of the HACCP rule and implementation of the HACCP final 
rule through numerous public meetings that FSIS has conducted over the 
past several years. Achievement of a 25 percent reduction in foodborne 
illnesses associated with meat, poultry, and egg products in 2000, the 
outcome for the Agency's strategic goal, is a powerful measure that 
relates to customer satisfaction with the federal food safety program.
    Question. How were the measurable goals of your fiscal year 2000 
APP used to develop your fiscal year 2001 budget?
    Answer. FSIS is currently in the process of transitioning into a 
post Pathogen Reduction/HACCP phase and is working to develop a new 
Strategic Plan in coordination with the President's Council on Food 
Safety. The Council is looking at the classic risk analysis model which 
includes risk assessment, risk management, and risk communication as 
the basis for developing a Strategic Plan vision statement, and 
drafting food safety goals that create the framework for its food 
safety Strategic Plan. The Agency used the concepts from these draft 
goals and vision statement as major tools in developing the FSIS fiscal 
year 2001 program initiatives, APP, and corresponding budget proposals.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and 
achievement of various goals?
    Answer. FSIS would be able to indicate a likely general impact from 
a budget change on the level of program performance and achievement of 
various goals. The degree of precision would depend on the proposed 
budgetary change.
    Question. Do you have the technological capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. As previously stated, Agency management data is used in 
designing performance measures. FSIS reports program performance 
internally throughout the year in managing to achieve desired results. 
However, FSIS does need to improve its corporate databases to improve 
the quality of data gathered and disseminated, including its 
accessibility, accuracy, timeliness, type, and complexity. These data 
improvements would also improve program measurements.
    Question. If so, who has access to the information-senior 
management only, or mid- and lower-level program managers, too?
    Answer. Relevant program performance data is shared throughout FSIS 
among senior, mid-level and lower-level managers to achieve desired 
results. Performance data guides the Agency's work at all levels of 
food safety program management.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. As indicated previously, improvements in Agency data 
systems are needed. Data and information management needs will be 
addressed in the new FSIS draft Strategic Plan.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way. Have you faced such difficulty?
    Answer. FSIS has one strategic goal, which encompasses all 
activities in the present budget account structure. The Means and 
Strategies sections in the APP highlight budget proposals in the same 
manner as the Explanatory Notes justifications, and enable the Agency 
to link the budget activities with the performance goals and measures 
in a clear and meaningful way. The activities included in the budget 
account structure are sufficiently broad to cover the use of budgetary 
resources and are also specific enough to account for the Agency's use 
of particular resources, such as Grants-to-States, the Field Automation 
and Information Management (FAIM) initiative, and Codex Alimentarius.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. FSIS has not found the need to modify the account structure 
significantly. As indicated previously, Codex Alimentarius is proposed 
as a new budget activity in the 2001 budget, and will provide a 
stronger linkage with the results of that activity.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. No modification is needed at this time.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. No modification is needed at this time.
    Question. Spending significant resources on performance measurement 
systems appears to be a wasteful exercise if this information is not 
linked to: (1) real data about what it costs to perform various 
government functions; and (2) how to allocate agency resources to 
perform these functions. Could you comment on your agency's cost 
accounting expertise and plans to link GPRA to the budget process?
    Answer. FSIS' cost accounting structure reflects both direct and 
indirect costs of the budget activities under which funding is 
appropriated to the Agency. The current FSIS strategic plan has a 
single goal: ``Enhance public health by minimizing foodborne illness 
from meat, poultry, and egg products.'' All Agency costs are directed 
toward achievement of this single goal.
    fiscal year 2001 will be a transition year for FSIS after 
completing the third and final phase of HACCP implementation. FSIS will 
proceed to the next steps of its plans for HACCP through a new 
strategic plan that involves coordination with the President's Council 
on Food Safety. Under a new strategic plan, FSIS expects to maintain 
the capability to link the costs by budget activity with the costs of 
achieving one or more GPRA goals. FSIS will allocate the costs 
associated with GPRA goals either manually, or on an automated basis 
through new purchases of software to complement the accounting system. 
New software packages for a ``Managerial Cost Accounting'' system and 
an ``Activity-Based Costing'' system will also meet GPRA requirements 
for reporting costs by both performance measure and activity. However, 
implementation of new software will require an increase over the 
Agency's baseline funding level for software and staffing.
    Question. Under one of the new accounting standards recommended by 
the Federal Accounting Standards Advisory Board (FASAB) and issued by 
OMB, this year for the first time all Federal agencies are required to 
have a system of Managerial Cost Accounting. The clearly preferred 
methodology for such a system, as stated in that standard, is the one 
known as ``Activity-Based Costing,'' whereby the full cost is 
calculated for each of the activities of an agency. What is the status 
of your agency's implementation of the Managerial Cost Accounting 
requirement, and are you using Activity-Based Costing?
    Answer. FSIS implemented the new USDA Foundation Financial 
Information System (FFIS) accounting system October 1, 1999. FFIS is 
configured to report costs by budget activity, which can accommodate 
the ``full cost'' requirement to report on the Agency's mission 
activities. FFIS does not use an ``Activity-Based Costing'' system and 
would require additional resources to incorporate it into its overall 
financial management system.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. FSIS is currently able to report the ``full and accurate 
cost'' of each Agency budget activity, including administration, 
employee benefits, and depreciation using the automated FFIS accounting 
system.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true costs 
of the activities conducted by the program, and the results of these 
activities?
    Answer. FSIS currently reports the true costs of the budget 
activities conducted by the food safety program. The Agency is also 
making an ongoing effort to link the information contained in both the 
Explanatory Notes budget activity presentation and the performance 
information in the Annual Performance Plan. The President's Council on 
Food Safety is in the process of developing a 5-year comprehensive 
strategic plan and a coordinated food safety budget for the Federal 
food safety agencies. The 5-year strategic plan, its derivative annual 
performance plans and reports, and coordinated food safety budget will 
present the costs and results of food safety activities government-
wide.
    Question. Will you be able to show us the per-unit cost of each 
activity and result?
    Answer. In most instances, data that is not resident in the 
accounting system must be combined manually with cost information to 
obtain activity unit costs. An example is the numbers and locations of 
enforcement actions, data that is not part of the accounting system. 
Assuming the future addition of new software packages for a 
``Managerial Cost Accounting'' system and an ``Activity-Based Costing'' 
system, these systems will be designed to show the per-unit cost of 
each activity and result.
    Question. To what extent do the dollars associated with any 
particular performance goal reflect the full cost of all associated 
activities performed in support of that goal? For example, are overhead 
costs fully allocated to goals?
    Answer. FSIS currently calculates the full cost of its performance 
measures manually in relation to the current automated ``Activity'' 
reporting method. These cost figures include the applicable overhead 
costs. Additional software to automate this process would incorporate 
the same methodology used in manual calculations.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan.
    Answer. The major FSIS strategy for reaching the goal of reducing 
foodborne illness is requiring plants to develop and implement HACCP-
based production systems. HACCP has proven to be an effective system 
for preventing microbiological and other hazards from getting into 
meat, poultry, and egg products. FSIS believes that it is far better, 
and much more effective, to prevent hazards than to try to remove 
hazards after they occur. Publication of the HACCP final rule in 1996 
and the resulting regulatory reform efforts have guided the development 
of the Strategic Plan and the succeeding Annual Performance Plans and 
Reports. FSIS has undergone a major cultural change in moving the 
inspection program from a command-and-control orientation to a system 
of performance standards. FSIS has begun a major training and education 
effort to prepare the workforce to monitor plants for prevention of 
hazards rather than dealing with the negative results of hazardous 
conditions in plant operations. At the same time, FSIS is reemphasizing 
that plants are responsible for producing safe products by using HACCP 
systems to prevent hazards.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. Where appropriate, a brief explanation of external factors 
that could influence goal achievement is included by performance goal 
at the end of the section titled ``Discussion of Performance Goal.''
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. As an example of external factors, international trade 
issues have increased the importance of U.S. participation in the Codex 
Alimentarius Commission to ensure that Codex standards are based on 
science-based factors to promote U.S. food safety standards and trade 
interests in the international arena. In many arenas, increasing 
awareness of external influences and strengthening working 
relationships with stakeholders has enabled FSIS to prepare, 
anticipate, and plan for such influences in a proactive manner with 
positive outcomes for food safety efforts.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. Several external factors have had an impact on FSIS 
resource requirements, including the following examples. Regarding 
international trade issues, FSIS became convinced that a significant 
increase in resources for U.S. Codex Alimentarius is required to 
persuade international Codex delegates of the need for science-based 
standards and to promote U.S. interests at home and abroad. Legislation 
introduced in the Senate to permit the interstate shipment of State 
inspected product requires a comprehensive review of all State meat and 
poultry programs by October 1, 2001. To prepare for passage of this 
legislation, the 2001 budget requests an increase for State program 
reviews. As these examples illustrate, external factors often highlight 
the need for additional resources.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping function or program duplication? If so, 
does the Performance Plan identify the overlap or duplication?
    Answer. The Agency has not identified internal nor external 
overlapping functions or program duplication through the APP. There are 
areas where there are mutual responsibilities. As a result, FSIS has 
identified areas where enhanced cooperation among agencies would be 
beneficial to improved food safety. For the past couple of years, the 
Agency has been working closely with the Food and Drug Administration 
(FDA) and State government agencies to address food safety gaps in the 
transportation and retail areas. Through the President's Council on 
Food Safety, FSIS is working with other food safety agencies to 
identify common goals, objectives, and cross cutting issues. The 
President's Council on Food Safety is currently developing a food 
safety Strategic Plan, which will further enhance the future 
collaboration among food safety agencies.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how?
    Answer. Yes, within the strategic planning framework of the 
President's Council on Food Safety, plans developed by FSIS are being 
coordinated with those of other Federal food safety and public health 
agencies, namely FDA and the Centers for Disease Control and 
Prevention.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. During the development of the current Strategic Plan, FSIS 
leadership recognized the importance of linking human health outcomes 
to HACCP implementation, which was a revolutionary change in the manner 
in which the Agency conducted meat, poultry and egg product inspection. 
Consequently, the Agency Strategic Plan and corresponding APPs 
reflected Agency senior management decisions to establish performance 
measures that were related to human health outcomes. In the past, the 
Agency measured its progress in terms of outputs, such as number of 
plants inspected or number of pounds of inspected product, rather than 
the true societal outcomes of reduced foodborne illnesses. The Agency 
is now working more closely with CDC and others to utilize measures 
with a public health focus. FSIS budget submissions and APPs reflect 
top management decisions based on GPRA-related performance goals. This 
process is being continued and enhanced in the current development of a 
new Agency Strategic Plan.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that: to what extent are your performance measures sufficiently mature 
to allow for these kinds of uses?
    Answer. FSIS has established performance measures that demonstrate 
progress toward the achievement of each performance goal. That is, the 
measures used correlate directly to the targeted performance. The 
targets reflect both trend data and baseline data. For instance, FSIS 
and CDC use trend data on foodborne illness. FSIS also uses baseline 
data on the occurrence of microbiological hazards in meat, poultry, and 
egg products. Performance targets have been developed using baseline 
data and assumptions about the extent to which HACCP systems can reduce 
microbiological and other hazards that result in foodborne illness. 
These measures are based on the best available sources of data and 
should be viewed as indicators of the impact of the overall food safety 
program, which covers a broad range of activities.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. While recent data indicate, for example, that plants are 
overwhelmingly meeting targets, attention to the interpretation of 
performance data is needed regarding funding decisions to cover the 
full range of food safety activities. Resource estimates are based on 
more than current performance data, especially for proposed initiatives 
that are still in the concept stage. The Agency's experience with 
related activities often serves as a guide for resource estimates. 
Recent budget history indicates that resource estimates are sufficient 
to support proposed activities.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements? Specially, are you requesting any 
relaxation of transfer or reprogramming controls in return for specific 
accountability commitments?
    Answer. No, the Agency is not requesting any such waivers.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in the strategic plan you 
issued on September 30, 1997? If so, what revisions are needed and when 
do you plan to make them?
    Answer. The Agency is currently drafting a new Strategic Plan for 
fiscal year 2002 through 2007, which will be completed by September 30, 
2000 and which will tie to the Food Safety Strategic Plan being 
developed by the President's Council on Food Safety.
                                 ______
                                 

                      FOREIGN AGRICULTURAL SERVICE

    Question. How are the agency's annual performance goals linked to 
the agency's mission, strategic goals, and program activities in its 
budget request?
    Answer. FAS' program activities are restated as unique strategic 
objectives with key operating strategies and performance goals. Each 
FAS objective, in turn, is directly associated with FAS' strategic 
goals and mission. FAS' strategic goals are directly linked to the 
Department's objectives and goals.
    Question. Could you describe the process used to link your 
performance goals to your budget activities? What difficulties, if any, 
did you encounter, and what lessons did you learn?
    Answer. Prior to the 1998 budget, FAS had developed its long-term 
Agricultural Trade Strategy (LATS) report which identified five (5) key 
drivers of long-term success. In the 1998 budget submission, FAS 
revised its program activities to correspond to these key drivers. As 
FAS began developing and refining its Strategic and Annual Performance 
plans, and following consultations with Senate Agriculture Committee 
staff on its initial draft strategic plan, FAS identified that it had 
two goals: (1) expand export opportunities for U.S. agricultural, fish, 
and forest products; and (2) promote world food security. FAS 
recognized that with a few modifications, its five program activities 
were actually objectives that support the achievement of FAS' two 
goals. The first four program activities (market access, market 
development etc., market intelligence, and financial assistance) all 
support FAS' goal to expand export opportunities. The last program 
activity (long term market and infrastructure development) supports 
FAS' goal to promote world food security. With the fiscal year 1999 and 
fiscal year 2000 performance planning process FAS further understood 
that the five objectives are actually a set of market expansion tools 
that support one another within markets. As a result of this 
progression towards better operational focus, the next strategic plan 
and annual performance plans will have objectives reflecting U.S. 
export goals for five regional markets and the program activities will 
have focused performance goals for each region. This will support the 
management of program activities as a set of tools to affect an outcome 
within a region.
    Like other agencies across the Federal Government, FAS learned that 
in order to implement GPRA, planning needs to drive the budget. The 
five program activities in the fiscal year 1999 budget submission 
reflected slight modifications in the five program activities in the 
fiscal year 1998 budget. These modifications are a result of FAS' 
realization that it needed to realign its budget activities to its 
goals and objectives. As FAS learns more about institutionalizing 
performance-based management processes, it anticipates that there will 
be further changes to the budget structure to accommodate changes in 
legislation, the annual performance plan, international trade, and 
technology. For the fiscal year 2002 plan, the regional objectives 
approach will require the budget to be further subdivided by program 
activity along regional lines.
    Question. Does the agency's Performance Plan link performance 
measures to its budget? Does each account have performance measures?
    Answer. Performance measures contained in the agency's Performance 
Plan are linked to budgeted program activities. Additionally, each 
account has performance measures which are displayed in FAS' Annual 
Performance Plan.
    Question. To what extent does your performance planning structure 
differ from the account and activity structure in your budget 
justification?
    Answer. FAS' performance planning structure is an adaptation of the 
performance-based management structure commonly used in the private 
sector. The account and activity structure is just beginning to change 
from the traditional approach of associating costs to either: (1) a 
broad category of personnel, travel, training, and operating costs at 
the budget's identified activity categories; or (2) funding tied 
specifically to legislated programs, such as the GSM program, Market 
Access Program, and the Dairy Export Incentive Program. Following 
pending guidance from the department, a cost-accounting system that 
provides direct one-to-one linkages of specific performance measures 
for each budgeted account will have to be adopted to align the two 
structures.
    Question. Do you plan to propose any changes to your account 
structure for fiscal year 2001?
    Answer. No changes are planned at the present time. However, as FAS 
institutionalizes its performance-based management processes and as 
Federal Government agencies transition to a cost accounting system, FAS 
may propose changes in its account structure to facilitate aligning 
performance goals with all operating costs and appropriated/non-
appropriated program activities.
    Question. Will you propose any changes to the program activities 
described under that account structure?
    Answer. No, however, the fiscal year 2002 Performance Plan 
currently under development will approach the performance goals, and 
hence the current budget accounts, subdivided by five geographic, 
regional markets (Africa, Asia, Europe, NIS, and Western Hemisphere). 
This is intended to provide focus and better management to agency goals 
and expenditures.
    Question. How were performance measures chosen?
    Answer. FAS believes that leadership starts at the top but 
performance comes from the front line. Following this principle, FAS' 
senior management created a draft strategic plan with objectives and 
the Strategic Operations Staff of the Office of the Administrator 
facilitated a series of one-day workshops for nearly every division in 
the agency. The purpose of these workshops was threefold: (1) to begin 
the education process of all employees and supervisors on GPRA and 
performance management; (2) to validate and improve the draft strategic 
plan prepared by senior management; and (3) to assist the divisions in 
preparing division-level performance plans which identified performance 
measures that are aligned to the agency's strategic goals and 
objectives. Following these workshops, FAS senior management 
participated in the validation of the revised draft strategic plan and 
the performance measures identified by the divisions prior to their 
submission to OMB and Congress.
    Question. How did the agency balance the cost of data collection 
and verification with the need for reliable and valid performance data?
    Answer. The process of making GPRA a reality in FAS is more than 
two years in the making and still ongoing. Current performance measures 
were selected and balanced on the basis of (1) how the measures 
reflected the program activity's performance as an output or outcome; 
(2) as a management tool for operations and budgeting, or an 
illustration of end product (outcome) for a higher audience--not the 
same at all in real life operations; and (3) whether the data can be 
collected and verified at a reasonable cost. Since FAS's budget has 
been falling in real terms for several years, easy data availability 
took precedence over ideal performance measures in many cases. The 
struggle over an annual performance plan that is inward looking (a 
management tool) versus an outward looking tool (for high-level 
overview), is still in the balancing stages.
    Question. Does your plan include performance measures for which 
reliable data are not likely to be available in time for your first 
performance report in March 2000?
    Answer. Some performance measures will not have reliable data be 
available in time for your first performance report in March 2000. More 
than 90 percent of FAS' performance measures will have reliable data on 
performance results. Those few exceptions are due to the character of 
data and we are in the process of defining data collection procedures, 
such as the customer surveys and obtaining OMB approval. FAS conducted 
GPRA workshops from April through June 1999 with every division 
(approximately 23) that has direct responsibility for developing and 
tracking the performance data necessary to meet the March 2000 
performance reporting requirement. The primary purpose of these 
workshops was to ensure that FAS has meaningful performance measures 
and procedures in place to verify and validate that it is capturing the 
right performance data.
    Question. What are the key performance goals from your fiscal year 
1999 Annual Performance Plan that you recommend this subcommittee use 
to track program results? For each key annual goal, indicate whether 
you consider it to be an output measure (``how much'') or an outcome 
(``how well''). State the long-term (fiscal year 2003) general goal and 
objective from the agency Strategic Plan to which the annual goal is 
linked.
    Answer. FAS suggests that the subcommittee focus on FAS' two agency 
general goals for which we have identified measurable outcomes. These 
are (1) Expanding export market opportunities for U.S. agricultural 
products (FAS has set a goal of U.S. exports returning to 22 percent of 
total foreign imports by the year 2010); and (2) Promoting world food 
security (FAS' goal is a reduction in the number of undernourished 
people by one-half of the 1998 FAO population estimate). Each of these 
two general goals have important annual performance measures (with 
annual goal) for our major program activities. These include legislated 
and agency-funded activities to enhance market access, market 
development, market finance, intelligence gathering, and long-term 
market enhancing and food aid programs. If these are successful, our 
overall goals may be successful as well.
    Question. In developing your Annual Performance Plan, what efforts 
did your agency undertake to ensure that the goals in the plan include 
a significant number of outcome measures?
    Answer. Using independent analysis from the Economic Research 
Service, FAS was able to calculate the impact (i.e., outcome) of the 
exports supported by its program on rural communities and the national 
economy as a whole. Calculating impact of market development relies on 
procedures established and approved by the Trade Promotion Coordinating 
Committee (TPCC) and used in preparation of the annual National Export 
Strategy submitted to the Congress. This includes calculating the 
impact of FAS market development programs on exports. Estimating 
national and rural economic impacts involves combining the export 
impacts with trade multipliers associated with direct and indirect 
effects of agricultural exports.
    Question. Do you believe your program managers understand the 
difference between goals that measure workload (output) and goals that 
measure effectiveness (outcome)?
    Answer. They are beginning to develop a greater understanding of 
the difference. In order to institutionalize strategic planning at 
every level of the organization, strategic planning workshops were held 
over the spring and summer of 1997 for every division in the agency. 
FAS conducted workshops again in 1998 and 1999. These workshops 
continued the process of teaching managers and their staffs that all 
activities support the organization-wide goals, and that data 
collection, verification, and validation, is a vital part of GPRA. This 
process of education is an ongoing requirement for FAS due to the high 
proportion of rotating foreign service officers (FSO) into Washington 
headquarters management positions. Typical FSOs have been overseas for 
5 to 8 years and are unfamiliar with GPRA management concepts. FAS has 
instituted a critical performance standard for all FAS managers for 
GPRA and EEO planning and reporting. GPRA and EEO progress is monitored 
through quarterly reports, using computer technology. FAS' overseas 
personnel will be fully incorporated into this GPRA reporting 
technology by fiscal year 2002.
    Question. What are some examples of customer satisfaction measures 
that you intend to use? Please include examples of both internal and 
external customers.
    Answer. For internal customers, FAS will perform two separate types 
of surveys. The first is the Peer Evaluations of FAS' headquarters and 
overseas offices' performance and customer satisfaction. The second 
survey will be a Work-life survey in which the employees and managers 
will be asked to identify trends in the work place which inhibit or 
promote productivity and employee development.
    For external customers, FAS has numerous listening sessions with 
various customer groups to identify areas of improvement. For instance, 
FAS works in partnership with the Private Voluntary Organization (PVO) 
community in implementing the Food for Progress program. FAS has a 
yearly listening session where ideas are shared and new initiatives 
announced. These listening sessions have helped both groups (FAS and 
the PVOs) to focus on reducing red tape and improving the focus of 
specific projects. Also, FAS has listening sessions with U.S. banks 
participating in the GSM Export Credit Guarantee program. Again, these 
sessions have identified areas of improvement and cooperation. Finally, 
as a measure of customer satisfaction with FAS' market intelligence 
activities and publically distributed materials, two separate surveys 
for internal government users and private sector users are planned for 
fiscal year 2000. FAS managers are currently working with NASS/USDA 
professional statisticians to develop a survey tool.
    Question. How were the measurable goals of your fiscal year 2000 
Annual Performance Plan used to develop your fiscal year 2001 budget?
    Answer. The budget is a major factor in reaching our goal of 
regaining a 22 percent market share of foreign imports by the year 2010 
(the measurable target for General Goal 1: Expand market access for 
U.S. agriculture . . .). Without competitive resources, it will be very 
difficult to compete with our foreign competitors. U.S. market 
promotion and development assistance is a pale second to support 
provided by our major foreign competitors. At a minimum, the U.S. must 
assure that trade agreements are fulfilled through U.S. monitoring and 
enforcement. While FAS may fulfill it's annual performance goals, our 
foreign competitors continue to take a larger proportion of new, 
expanding market opportunities than the U.S. does, thereby eroding the 
U.S.'s market share. We're winning our battles but losing the war. The 
fiscal year 2001 FAS budget request asked for a marginal addition for 
trade agreement monitoring and enforcement and market promotion and 
development monies. However, since foreign government competitors 
continue to out spend the U.S. by 3-to-1 in export promotion funding, 
the U.S. share of total foreign imports, even through long-term foreign 
imports are climbing, will likely decline even further.
    Question. If a proposed budget number is changed, up or down, by 
this committee, will you be able to indicate to us the likely impact 
the change would have on the level of program performance and the 
achievement of various goals?
    Answer. Yes, for the most part, depending upon the size of the 
increase/decrease, FAS would be able to estimate changes in the 
associated performance goals and indicators. However, given current 
systems and the lack of a cost-accounting system in USDA, most 
responses will be estimates based upon knowledge of the business 
instead of a detailed one-to-one relationship between the funding and 
the specific output and/or outcome indicators.
    Question. Do you have the technical capability of measuring and 
reporting program performance throughout the year on a regular basis, 
so that the agency can be properly managed to achieve the desired 
results?
    Answer. Yes, FAS has built a GPRA tracking, evaluation, and 
reporting system that has proven to be an acceptable reporting tool, 
but for stateside operations only. Every supervisor's critical job 
performance standard requires GPRA planning, goal setting, and activity 
evaluation for improvement, guided by the Strategic Operations staff. 
The Administrator receives a quarterly agency-level GPRA report and 
summary from the Strategic Operations staff, which is then followed by 
a senior-level managers meeting to review progress.
    Question. Who has access to the information--senior management 
only, or mid- and lower-level program managers, too?
    Answer. All managers, information and correspondence personnel, the 
legislative affairs staff, and the EEO staff have access passwords. In 
addition, while only managers have the ability to ``write'' reports, by 
the end of fiscal year 2000, all FAS employees will have access to 
searching, viewing and printing GPRA reports by topic.
    Question. Are you able to gain access easily to various 
performance-related data located throughout your various information 
systems?
    Answer. Some, high-level outcome results are derived from public 
data resources, such as the resulting U.S. agricultural exports or the 
reduction in the number of undernourished people, through Economic 
Research Service annual studies. However, data on most performance 
results are collected by the contributing divisions within the agency 
and reported by them in the GPRA reporting system as a cumulative 
success towards the agency-level annual targets. Each GPRA report 
identifies the division manager to contact for data details.
    Question. The Government Performance and Results Act requires that 
your agency's Annual Performance Plan establish performance goals to 
define the level of performance to be achieved by each program activity 
set forth in your budget. Many agencies have indicated that their 
present budget account structure makes it difficult to link dollars to 
results in a clear and meaningful way.
    Question. Have you faced such difficulty?
    Answer. Because of the lack of a cost-accounting system to track 
expenditures against the budget, it is difficult to show a direct one-
to-one relationship between expenditures and specific performance 
measure results.
    Question. Would the linkages be clearer if your budget account 
structure were modified?
    Answer. Yes it would and some changes can be made now, before a 
cost-accounting system is in place, that would provide a better match.
    Question. If so, how would you propose to modify it and why do you 
believe such modification would be more useful both to your agency and 
to this committee than the present structure?
    Answer. Currently FAS' general program activities and budget relate 
directly to our mission and legislated mandates. However, if additional 
resources were available our current budget account structure could be 
modified so that most expenditures are related to an appropriate GPRA 
performance objective, and to performance goals for major program 
activities within objectives. This would include expenses such as 
travel and training, in addition to salaries and appropriated/non-
appropriated program expenditures. Such a modification would improve 
managerial accountability by assessing the relative costs and benefits 
of various program activities and performance goals,. This would 
provide FAS better information to make future resource allocation 
decisions.
    Question. How would such modification strengthen accountability for 
program performance in the use of budgeted dollars?
    Answer. The adoption of a true cost accounting structure that 
allows for the establishment of direct links between operating expenses 
and program dollars in the budget and performance measures in the 
performance plan would permit both the agency and the committee to 
account for the actual costs and benefits of the various program 
activities, and assist in setting spending priorities in future years.
    Question. Spending significant resources on performance systems 
appears to be a wasteful exercise if this information is not linked to: 
(1) real data about what it costs to perform various government 
functions; (2) how to allocate agency resources to perform these 
functions. Could you comment on your agency's cost accounting expertise 
and plans to link GPRA to the budget process?
    Answer. All financial accounting and reporting support is provided 
to FAS by the Farm Service Agency (FSA) on a reimbursable basis. As 
such, FAS has no internal cost accounting expertise. With respect to 
the linkage of GPRA and the budget process, FAS budget formulation has 
been following the underlying GPRA tenets of strategic planning and 
performance measurement/reporting since fiscal year 1998.
    Question. What is the status of your agency's implementation of the 
Managerial Cost Accounting Requirement, and are you using Activity-
Based Costing.
    Answer. The Farm Service Agency has been exploring Activity-Based-
Costing for certain administrative services proved to FAS. However, 
departmental standards for uniform development of Managerial Cost 
Accounting systems have yet to be issued. Further work in this area is 
dependent on issuance of unified departmental standards and the 
significant budgetary resources that will be needed to develop and 
implement these systems.
    Question. Will you be able in the future to show to this committee 
the full and accurate cost of each activity of each program, including 
in those calculations such items as administration, employee benefits, 
and depreciation?
    Answer. In the absence of uniform standards, it is difficult to say 
what the reporting capabilities may be.
    Question. By doing so, would we then be able to see more precisely 
the relationship between the dollars spent on a program, the true cost 
of the activities conducted by the program, and the results of these 
activities?
    Answer. Again, in the absence of uniform standards, it is difficult 
to say what the reporting capabilities may be.
    Question. To what extent do the dollars associated with any 
particular goal reflect the full cost of all associated activities 
performed in support of that goal? For example, are overhead costs 
fully allocated to goals?
    Answer. Total, true cost accounting and specific performance goal 
alignment are not in place.
    Question. Please identify any significant regulatory reform 
measures that have been put in place by your agency in conjunction with 
the development of the agency's performance plan?
    Answer. FAS' Market Access Program (MAP) and Foreign Market 
Development (FMD) program application process has changed significantly 
over the last 3 years to align with the concepts and legislative 
directions within the Results Act. These changes were made to improve 
the operation of the program and coordinate program administration. 
This effort, and the MAP/FMD programs, will be more fully integrated 
with GPRA with the release of the fiscal year 2002 performance plan 
that will have regional U.S. export share goals as its objectives--and 
focused performance goals within regions for FAS programs, such as MAP/
FMD, that support the objective.
    Question. Does your fiscal year 2000 performance plan--briefly or 
by reference to your strategic plan--identify any external factors that 
could influence goal achievement?
    Answer. Yes, both FAS' strategic plan and annual performance plan 
cite several external factors. These include overcoming foreign 
competitors' continued use of export subsidies, direct credits and 
credit guarantee programs, non-price export promotion, monopolistic 
marketing boards, and various technical assistance programs. Additional 
external factors outside FAS' span of control include variability in 
crop production due to weather conditions, both at home and abroad; 
effect of foreign exchange fluctuations on the price of U.S. products 
abroad; political instability that may undermine demand in key 
importing countries; and reductions in resources of other USDA and 
Federal agencies with whom FAS works in partnership to fulfill its 
mission and goals.
    Question. If so, what steps have you identified to prepare, 
anticipate and plan for such influences?
    Answer. FAS, in its GPRA fiscal year 1999 Report and in 
Congressional testimony, took the unusual step of placing our 
performance goals and successes in perspective with our overall mission 
of expanding U.S. agricultural export opportunities. While our annual 
program activity goals were, in fact, successfully accomplished--and 
will be in the future, the U.S. share of total foreign imports has been 
falling since 1981. The current funding levels of U.S. agricultural 
export promotion activities will cushion the continued decline in U.S. 
market share. These efforts will be supported by FAS continuing to 
effectively use the GSM program to inject liquidity into developing 
country markets suffering short-term liquidity crunches similar to the 
successful program activities in Asian countries during the fiscal year 
1998 financial crisis. Additionally, FAS will use the Dairy Export 
Incentive Program, Foreign Market Development and Market Access 
Programs, and other activities.
    Question. What impact might external factors have on your resource 
estimates?
    Answer. The impact will vary based on FAS' span of control over the 
external factors.
    Question. Through the development of the Performance Plan, has the 
agency identified overlapping functions or program duplication? If so, 
does the Performance plan identify the overlap or duplication?
    Answer. Yes, in conjunction with other USDA agencies within the 
Department dealing with SPS issues, FAS has, as a result of a General 
Accounting Office review of USDA's approach to resolving SPS issues, 
recently been tasked with the responsibility to support the Special 
Assistant to the Secretary on International Affairs. The objective is 
to coordinate USDA wide goals and objectives and facilitate the 
integration of USDA-wide processes to improve USDA's efficiency and 
effectiveness in prioritizing SPS issues and bringing them to 
resolution. Since this initiative is currently ongoing, FAS/USDA is 
actively determining how all of the USDA agencies will jointly plan and 
coordinate this effort.
    Question. Should agencies address management challenges and 
potential duplication and overlapping functions in their GPRA plans, 
and if so, how.
    Answer. A mixed approach is necessary. Goals to address management 
challenges are appropriate within agency plans to address their unique 
issues and improvement plans. Overlapping issues and goals are 
impossible for a single agency to resolve unilaterally and ought to be 
lead and addressed at a level of authority over both or all the 
particular agencies involved. Only department level authority can 
effectively address and direct the distribution of work and program 
breath by individual agencies or seek legislative changes as needed to 
reduce overlap.
    Question. To what extent has GPRA been used by agency leadership to 
guide decision making?
    Answer. For FAS the performance plan has been particularly useful 
in addressing reductions in budget levels over the past 3 years, 
especially for fiscal year 2000. Annual performance goals were reviewed 
and activity areas were listed for possible resource reductions in 
order to maintain sufficient staff levels to operate critical 
activities. Operating resources for travel, training, and FAS's foreign 
market store promotion activities, which had an fiscal year 1999 ``in-
store'' performance success rate of $22.5 of U.S. export sales per $1 
of promotion activity, had to be cut by 50 percent. In addition, the 
fiscal year 2001 budget testimony was enhanced with information 
provided by the fiscal year 1999 strategic plan report. The report 
brought into focus a number of agency general goal comparisons, 
including the declining U.S. world market share of foreign imports and 
highly funded, and very successful, export promotion support by other 
governments that take ``first advantage'' of newly opened market 
opportunities. The current strategic plan also exposed the current lack 
of focus on horizontal (across-agency) planning and performance 
results. The new fiscal year 2001 annual performance plan will be a 
significant improvement over fiscal year 2000, focusing on market 
access, development, and financial planning according to markets and 
opportunities. It will illustrate how all FAS programs work in concert 
to fulfill market share objectives for four geographic regions, by 
helping U.S. firms take greater advantage of market access 
opportunities.
    Question. Future funding decisions will take into consideration 
actual performance compared to expected or target performance. Given 
that:
    To what extent are your performance measures sufficiently mature to 
allow for these kinds of uses?
    Answer. The initial performance measures identified in FAS' fiscal 
year 1999 Annual Performance Plan were focused primarily on outputs, 
and were not sufficiently mature to allow use in measuring program 
effectiveness. As the intent of GPRA is to learn and change behavior, 
FAS leaders continued to work with all FAS managers to address the 
immaturity of the fiscal year 1999 plan. By the second quarter, 
managers had reviewed the fiscal year 1999 plan and combined 
overlapping and duplicate measures, dropped measures that had little 
management use, or identified a number of new, and better, outcome 
goals--all in time to collect and report data on successes for fiscal 
year 1999. Managers actually reduced the number of measures by 40 
percent while focusing on real and important outcomes for programs and 
activities. At the same time, managers were learning to use the newly 
developed computer-based GPRA performance reporting system. The current 
GPRA annual performance plan, as intended in the Results Act, is 
maturing and changing and will be of greater use in the future.
    Question. Are there any factors, such as inexperience in making 
estimates for certain activities or lack of data, that might affect the 
accuracy of resource estimates?
    Answer. Yes, a major factor is the lack of a true cost-accounting 
system which would provide accurate data on costs related to each 
budgeted program activity.
    Question. Are you requesting any waivers of non-statutory 
administrative requirements?
    Answer. No, we are not.
    Question. Based on your fiscal year 2000 performance plan, do you 
see any need for any substantive revisions in your strategic plan 
issued on September 30, 1997?
    Answer. No, however, the new fiscal year 2001-2006 strategic plan 
will be significantly improved.


AGRICULTURE, RURAL DEVELOPMENT, AND RELATED AGENCIES APPROPRIATIONS FOR 
                            FISCAL YEAR 2001

                              ----------                              

                                       U.S. Senate,
           Subcommittee of the Committee on Appropriations,
                                                    Washington, DC.

                       NONDEPARTMENTAL WITNESSES

    [The following testimonies were received by the 
Subcommittee on Agriculture, Rural Development, and Related 
Agencies for inclusion in the record. The submitted materials 
relate to the fiscal year 2001 budget request for programs 
within the subcommittee's jurisdiction.]

               Prepared Statement of the Ad Hoc Coalition

    Mr. Chairman, Members of the Subcommittee, this statement is 
respectfully submitted for the hearing record on behalf of the ad hoc 
coalition \1\ supporting sustained funding for title I of Public Law 
480 at a baseline level which will preserve the program as a long-term 
market development initiative for American agriculture.
---------------------------------------------------------------------------
    \1\ The ad hoc coalition is composed of the U.S.A. Rice Federation, 
the National Association of Wheat Growers and the Wheat Export Trade 
Education Committee, the National Corn Growers Association, the 
National Council of Farmer Cooperatives, the American Soybean 
Association, the National Sunflower Association, the U.S. Canola 
Association, the American Maritime Congress, the Maritime Institute for 
Research and Industrial Development, the Transportation Institute, TECO 
Transport Corporation, and Liberty Maritime Corporation.
---------------------------------------------------------------------------
    In addition to its request for sustained title I funding, the 
coalition strongly supports the administration's request for $837 
million for title II donations. Under the Food for Progress program, 
the administration estimates that $118 million in CCC funds will be 
used to support Food for Progress donations in fiscal year 2001, 
including $88 million for the purchase of commodities and $30 million 
for transportation and other non-commodity costs. The coalition 
welcomes this continued commitment of CCC funding for Food for 
Progress.
    Unfortunately, the administration again this year recommends no 
funding for Public Law 480's title III program. While up to 15 percent 
of funds available for title I and/or title II can be used to support 
donations to least developed countries under title III, the coalition 
believes the Administrator of the Agency for International Development 
(``AID'') should aggressively carry out his duties under title III to 
``negotiate and execute agreements with least developed countries to 
provide commodities to such countries on a grant basis'' (7 U.S.C. 
Sec. 1727(b)), and should have a sustained baseline level of funding 
for this purpose.
    From fiscal year 1991 through fiscal year 1997, the commodity value 
of all title III grant assistance was $977.9 million, according to U.S. 
AID's annual reports. This represents an average of $139.7 million per 
year under the title III program, on a commodity value basis. In the 
coalition's view, Congress should establish a baseline level of funding 
for title III, and direct the Administrator to fulfill his statutory 
mandate.
    The principal focus of this testimony, as noted above, is to 
request that title I funding for fiscal year 2001 be restored to a 
sustainable level for market development for American agricultural 
products. The direct loan level for fiscal year 2000 covered by new 
budget authority for title I, after a 0.38 percent adjustment, is only 
$145.3 million. The administration proposes to increase this amount to 
nearly $160 million for fiscal year 2001. At the very least, Congress 
should accept the administration's recommendation for increased 
funding, and should evaluate carefully the need to increase 
significantly the title I program level in each succeeding year.
  large section 416(b) donations have depressed title i program levels
    The actual experience under title I during fiscal years 1999 and 
2000 has been distorted by events which were unanticipated when 
Congress appropriated funding for the program. Under the President's 
Food Aid Initiative, approximately $648 million was transferred from 
CCC to title I for humanitarian assistance to the Russian Federation. 
In addition to this increased title I programming, section 416(b) 
donations in fiscal year 1999 reached a record 5.5 million metric tons, 
including more than 5 million metric tons of wheat and wheat products. 
According to the White House press release of February 10, 2000, 
overall food donations reached nearly 9 million metric tons in fiscal 
year 1999, and food donations planned for fiscal year 2000 will total 
about the same tonnage.
    Because of record-level donations under section 416(b) authority, 
the demand for title I program shipments (other than to Russia) 
declined significantly in fiscal year 1999. According to USDA sources, 
the unobligated balances carried over from fiscal year 1999 to fiscal 
year 2000 included more than $98.6 million for title I subsidy and $8.2 
million for title I ocean freight differential. The carryover for the 
title II program was in excess of $71 million. These large carryover 
balances were the result of extraordinary events, and should not be 
considered indicative of a systemic decline in demand for either a 
long-term concessional sales program or traditional food aid funding.
    For reasons which are not apparent, the administration chose to 
transfer $648 million from the CCC to fund the title I component of the 
Russian food aid initiative, rather than use unobligated balances in 
the title I account until such balances were exhausted. From the 
perspective of the Congress, title I should retain its vitality and 
significance, as the extraordinary Russian commitment to the program 
demonstrates.
       the title i program promotes long-term market development
    Mr. Chairman, the 1996 Farm Bill directs the Secretary of 
Agriculture to give priority in negotiating agreements under title I to 
developing countries that have the demonstrated potential to become 
commercial markets for competitively priced U.S. agricultural 
commodities. With the availability of section 416(b) donations, title 
II donations, and Food for Progress arrangements, the primary purpose 
of the title I program has become market development for American 
farmers. The concessional sales market of today will become the 
commercial market of tomorrow. In an intensely competitive world 
agricultural marketplace, the United States must use its concessional 
sales program to gain access, establish a foothold and build 
relationships upon which future commercial trade in agricultural 
commodities can depend.
    Under the Public Law 480 title I program, the United States has 
made concessional sales of commodities with a total value of about $31 
billion since 1955. Along with other export enhancement programs, title 
I has proved to be a catalyst for strong, long-term growth in U.S. 
agricultural exports. Over the life of the title I program, from 1955 
through 1999, the total commodity value of U.S. agricultural exports 
has been more than $1.1 trillion. With the benefit of sustained market-
development initiatives, the value of U.S. farm exports rose to an all-
time high of nearly $60 billion in 1996. Unfortunately, commodity 
exports have declined since then, due to economic upheavals in Asia and 
other factors. This year the value of U.S. agricultural exports will 
not exceed $49 billion, about the same as last year's level.
    The United States must intensify its efforts to develop new 
overseas markets for U.S. farm commodities. With world food stocks at 
high levels, deeply depressed farm prices, and strong competition from 
a host of producing countries, the need for enhanced market development 
funding has seldom been greater. Congress should sharply increase its 
market development program funding, including funding for the title I 
program--a program that has proved its worth over decades of 
experience.
                  the sharp decline in title i funding
    Mr. Chairman, the Public Law 480 title I concessional sales program 
has had an illustrious history of Congressional support and success in 
the marketplace. As shown on Chart I (attached), title I shipments 
reached their peak commodity value of $1.3 billion in 1965. From 1957 
through 1990, in fact, the commodity value of title I shipments fell 
below $600 million in only a single year. The parallel between 
sustained title I funding and growth in agricultural exports cannot be 
ignored or dismissed. The linkage between title I market development 
and subsequent commercial trade is apparent and unbroken over the 
decades.
    Throughout the 1980s, Congress maintained high funding levels for 
the title I program. From 1980 to 1990, in every year except one, the 
commodity value of title I shipments exceeded $700 million. See Chart 
II. Unfortunately, title I program levels experienced a sharp drop at 
the beginning of the last decade--from $725.3 million in 1990 to $395.3 
million in 1991. The value of commodities shipped dropped below $200 
million for the first time in 1995, and (except for extraordinary CCC-
funded Russian shipments in 1999) has remained near this historically 
low level since then. See Chart III.
    Mr. Chairman, the title I funding requested for fiscal year 2001 
represents little more than 12 percent of the 1965 program level, when 
the title I concessional sales record was established. In inflation-
adjusted dollars, the title I program has lost about 97 percent of its 
value to American farmers since the record-setting year of 1965. The 
coalition believes that it is important now to stabilize title I 
funding, stop the persistent downward trend, and begin to increase 
resources devoted to this critical and proven program. With this in 
mind, we recommend an increase in funding for fiscal year 2001 as part 
of a long-term commitment to market development.
  a renewed commitment to market development for american agriculture
    Mr. Chairman, Congress has maintained a strong bipartisan 
commitment to market development for U.S. agricultural commodities 
since World War II. Until recent years, this commitment included high 
funding levels for the Food for Peace title I concessional sales 
program. Until the mid-1960s, title I shipments accounted for about 20 
percent of the annual value of all U.S. agricultural exports. As 
recently as fiscal year 1990, as shown on the attached Charts, title I 
export values regularly exceeded $700 million on an annual basis.
    The title I concessional sales program was a principal catalyst for 
market development through the 1970s, when the total value of U.S. 
agricultural exports increased nearly six-fold--from about $7 billion 
in 1970 to $40.5 billion in 1980. The program was funded at high levels 
during periods of war and peace, even during periods of large Federal 
budget deficits. Throughout the Cold War period, America's commitment 
to title I never wavered, due principally to the demonstrated value of 
the program as a pathfinder to commercial trade relationships with a 
host of developing countries.
    The time has come, Mr. Chairman, to reemphasize the importance of 
concessional sales and to revitalize the title I program. The time has 
come for a renewed commitment to this historic initiative, a program 
that has blazed a trail for billions of dollars in commercial shipments 
of American agricultural products. However, in making this renewed 
commitment, both Congress and the administration should seek to improve 
the program's effectiveness in the economy of the Twenty-First Century.
    Under current criteria, a developing country is considered eligible 
for Public Law 480 title I if it has a shortage of foreign exchange 
earnings and has difficulty meeting all of its food needs through 
commercial channels. The program managers at FAS should review country 
eligibility standards, ensuring that all eligible countries are 
actively engaged. There must surely be a substantial market for title I 
concessional sales--during 1999 and 2000, donations of food, according 
to the administration's announcements, will approach 18 million metric 
tons. Many countries currently receiving section 416(b) donations 
should graduate to title I concessional sales arrangements in short 
order. The shift from section 416(b) donations to title I participation 
could be rapid, and both FAS and Congress should prepare for this 
eventuality.
    There has been legitimate concern that many eligible countries are 
reluctant to sign title I agreements following allocation at the 
beginning of a fiscal year. Perhaps FAS should establish a reasonable 
deadline for participation under concessional sales terms. The 
allocations for countries choosing not to participate could be shifted 
to other countries, well in advance of the close of the fiscal year. 
This reform could reduce the carryover of unobligated balances, and 
help ensure that program benefits are extended to eligible countries 
that want to participate under reasonable terms and conditions.
    As Congress turns to farm legislation next year, the need for more 
program flexibility should be addressed. The current cap of 500,000 
metric tons of shipments under Food for Progress seems to make little 
sense. If this cap were lifted, title I funding in greater amounts 
could be allocated to Food for Progress, either on long-term credit or 
grant terms. This and other reforms could strengthen the title I 
concessional sales program, along with its companion program, Food for 
Progress.
                               conclusion
    Mr. Chairman, the United States has shipped food assistance in 
record amounts over the past 18 months, and large shipments are 
expected to continue throughout the remainder of this year. Congress 
and the administration deserve great credit for this humanitarian 
effort. But extraordinary food aid shipments will not last forever. 
American farmers require strong commercial markets to maintain their 
share of world trade in agricultural commodities.
    In 1996, U.S. agricultural exports accounted for nearly 23 percent 
of total world agricultural trade by commodity value. As noted above, 
the value of U.S. agricultural exports has declined by more than 18 
percent since the record was set in 1996. Farm prices are down. 
Overseas competitors have enjoyed record crops. Traditional markets 
have been destabilized by economic upheavals. The response must include 
a renewed commitment to proven market development strategies--
particularly title I of Public Law 480.
    Mr. Chairman, the coalition urges this Subcommittee to begin 
restoring the historical commitment to Food for Peace. Our future 
markets and sustained prosperity for American agriculture will depend 
upon this initiative, along with others designed to increase farm 
income over the long term.
                                 ______
                                 

    PREPARED STATEMENT OF THE ALACHUA COUNTY BOARD OF COMMISSIONERS

    Mr. Chairman: Thank you for allowing the Alachua County Board of 
Commissioners to submit written testimony before your Subcommittee 
regarding a major initiative for which the County seeks your support.
    Alachua County has embarked on a local land conservation program, 
which the County Commission has selected as one of its highest program 
priorities for 2000. A separate citizen-initiated referendum called 
Alachua County Forever is anticipated to raise $17 million from ad 
valorem property taxes to match Federal and State land acquisition 
funds. The County's Land Conservation Advisory Committee (appointed in 
November, 1999) is finalizing a system to prioritize which local lands 
should be conserved, and is creating the tools to accomplish these 
goals. Eastern Alachua County has been included in the St. John's River 
American Heritage River designation, with three suggested projects. A 
number of eco-tourism and recreational opportunities are being pursued 
to capitalize on the County's protection of its natural areas. The 
County, in cooperation with the City of Gainesville, is actively 
seeking Federal and State partnerships to achieve its land conservation 
goal of an emerald necklace comprising gems of conserved natural areas 
throughout this part of ``the Real Florida.''
    Land acquisition priorities.--Alachua County has five large-scale 
projects (5,000+ acres) on Florida's Conservation and Recreation Lands 
(CARL) acquisition list. These include:
  --Paynes Prairie additions (a large freshwater wetland and watershed, 
        operated as a State preserve)
  --San Felasco Hammock additions (a mature hammock and sandhill 
        forest, with ravines)
  --Watermelon Pond (an upland sandhill and scrub forest with important 
        ephemeral wetlands)
  --Newnans Lake (a diverse flatwoods forest surrounding a lake with 
        declining water quality)
  --Lochloosa Forest (a flatwoods forest, largely in commercial 
        production surrounding two large lakes)
    Each of these CARL projects has outstanding land acquisition needs, 
with State matching money available from Florida Forever (formerly 
Preservation 2000). The lack of a local source of matching funds has 
hurt the ability of Alachua County's projects to compete favorably with 
other local governments which have local land conservation programs, so 
Federal matching funds (either grants or loans) would greatly assist in 
finishing the acquisition of these lands before development further 
fragment them. If the Alachua County Forever referendum passes in 
November 2000, the County will have a source of matching funds. Federal 
agencies could help by ``challenging'' the County with the promise of 
matching funds for projects of national significance, such as Paynes 
Prairie.
    For this initiative, the City of Gainesville and Alachua County 
have identified three project areas. The first is Newnans Lake, a large 
lake in a semi-wild setting with mysteriously increasing 
eutrophication, yet spectacular recreational and scenic resources. 
Specific projects requiring funding assistance include: investigations 
into water quality issues, remedying muck build-up (possibly through a 
draw-down or mechanical removal), land acquisition (including less-
than-fee opportunities with large forestry companies), a multi-user 
trail system circling the lake and connecting two existing rail-trails, 
and the designation and enhancement of an informal, but exceptional 
canoe trail connecting Newnans and Orange Lake down Prairie Creek and 
the River Styx. The St. Johns River Water Management District is a 
willing partner, having made substantial commitments in the past and 
with expressed interest in continuing to conserve the lands and waters 
of this area, while enhancing public access.
    The second project is to clean-up and mitigate Sweetwater Branch, 
and its impacts on Paynes Prairie (a National Natural Landmark) as well 
as the Floridan Aquifer. As one of the major watersheds flowing through 
eastern Gainesville, this creek has all the problems of urban 
stormwater and wastewater outfall into natural areas. While substantial 
funds have been received from Federal sources for the Depot Stormwater 
Park, the cost of cleaning up this brownfield area is considerably more 
than the local governments can handle.
    The third project is to clean-up and mitigate impacts to Hogtown 
Creek, the major watershed in western Gainesville. The City and State 
have acquired over $3 million of property comprising the Hogtown Creek 
Greenway, however funds are needed for development of recreational 
trails, and for sedimentation control. We are seeking an $10 million in 
Federal support.
    We hope that the Subcommittee will find this critically important 
project worthy of your support.
    Thank you for your consideration.
                                 ______
                                 

          PREPARED STATEMENT OF THE AMERICAN CHEMICAL SOCIETY

    The American Chemical Society (ACS) would like to thank Chairman 
Thad Cochran and Senator Herb Kohl for the opportunity to submit 
testimony for the record on the Agriculture, Rural Development, Food 
and Drug Administration, and Related Agencies Appropriations bill for 
fiscal year 2001.
    As you may know, ACS is a non-profit scientific and educational 
organization, chartered by Congress, representing 161,000 individual 
chemical scientists and engineers. The world's largest scientific 
society, ACS advances the chemical enterprise, increases public 
understanding of chemistry, and brings its expertise to bear on state 
and national matters. ACS firmly believes that no investment the 
government makes generates a higher rate of return for the economy than 
research and development (R&D). In fact, economic experts maintain that 
today's unprecedented economic growth would not have been realized but 
for the substantial research investments by the public and private 
sectors over the past few decades. Looking ahead, ACS is concerned that 
constant dollar declines in federal support for basic research over the 
past decade, particularly in the physical sciences, have weakened the 
roots of innovation in all fields and put future economic growth at 
risk. In order to sustain our technological leadership and living 
standards, increased funding for basic research should be a top 
priority for use of the non-Social Security budget surpluses. As a 
framework for increasing R&D funding, ACS supports doubling federal 
spending on research within a decade, as well as balanced funding among 
different areas of science.
         u.s. department of agriculture budget recommendations
    The United States Department of Agriculture (USDA) plays a key role 
in the nation's R&D enterprise. The research supported by the 
Department through its in-house laboratories and extramural grants is 
critical to the biological and physical sciences and provides the 
scientific foundation for a vast array of advances being made in 
agriculture and related industries. At a time when greater investments 
in agricultural research are necessary to improve environmental 
quality, food safety, agricultural productivity, and renewable chemical 
and energy resources, ACS is concerned that USDA's research budget has 
decreased 9 percent in constant dollars over the last 5 years. To 
reverse this decline, ACS recommends that research supported by USDA's 
Agricultural Research Service (ARS) and the Cooperative State Research, 
Education, and Extension Service (CSREES) increase by 7 percent or 
greater in fiscal year 2001.

                     AGRICULTURAL RESEARCH SERVICE

    The Society strongly supports the request for an increase of $64 
million for ARS for fiscal year 2001, a 7.7-percent increase over last 
year. Strengthening USDA's main in-house research is important for 
developing the scientific knowledge that provides the foundation for 
new technologies produced by the private sector. ARS scientists conduct 
fundamental and advanced research to address some of the most pressing 
problems in food quality and safety, pest and disease resistance, and 
human nutrition.
    Increased funding would help ARS continue solving problems for 
agriculture producers and consumers, while meeting the food and fiber 
requirements of our nation in a better, safer, and more nutritious way. 
ARS research can accelerate environmentally sound production practices, 
increase our understanding of global climate change's impacts on food 
production, and improve air quality. ACS also supports ARS's key role 
in funding research on bioenergy and biobased products. This research 
would benefit the environment by advancing cleaner energy sources that 
reduce our dependency on imported oil and lower greenhouse gas 
emissions. Moreover, the development of such fuels and other biobased 
materials and commercial products--including chemicals, adhesives, 
lubricants, and building materials--can potentially increase farm 
income and productivity growth by advancing non-food uses for 
agricultural technology.
      cooperative state research, education and extension service
    ACS believes it is extremely important for USDA to expand its 
support for competitive, peer-reviewed extramural research at colleges 
and universities. CSREES provides leadership for and develops research 
and education partnerships with states, land-grant universities, and 
other research and education institutions. These partnerships are 
focused on national and regional priorities.
    ACS particularly supports the administration's request for a 26-
percent increase ($150 million) for the National Research Initiative 
(NRI), USDA's hallmark competitive research grants program. The NRI 
supports highly meritorious fundamental and mission-oriented research 
in critical areas such as genetics, biobased products, food safety, and 
pest and disease management. This program has enormous potential to 
contribute to major breakthroughs in agricultural production but has 
been hampered by underfunding. Expanding resources for NRI are needed 
to increase grant size and duration and to encourage outstanding 
agricultural and other researchers to submit proposals.

                               CONCLUSION

    Overall, USDA research provides a greater understanding of the 
risks associated with our food sources and helps in the formation of 
scientifically sound policies that reduce our exposure to harmful 
substances while enhancing technological advances in food production 
and distribution. Investing in USDA R&D programs can ensure that U.S. 
agriculture will remain competitive in international markets, an 
important factor in ensuring a strong U.S. economy. Growth in USDA R&D 
funding will help ensure a safe food supply, improve the environmental 
performance of the sector, and help the food, fiber, and chemical 
sectors compete internationally.
                                 ______
                                 

       PREPARED STATEMENT OF THE AMERICAN FARM BUREAU FEDERATION

    The American Farm Bureau Federation has identified three USDA 
program areas for which adequate fiscal year 2000 funding is essential. 
They are:
  --programs key to the proper implementation of the Food Quality 
        Protection Act (FQPA);
  --programs to expand foreign markets for agriculture; and,
  --funding for research to keep American agriculture competitive.
    These priorities are highlighted in the first portion of this 
statement. The second portion contains a list of additional programs 
supported by Farm Bureau.
                      food quality protection act
    Farm Bureau supports the administration's request for $107.3 
million to fund USDA's Food Quality Protection Act (FQPA) 
implementation activities. Proper implementation of this law based on 
sound science is critical to assure the availability of vital crop 
protection products.
    Agriculture Research Service (ARS).--A total of $27.131 million is 
needed for FQPA activities under the ARS as follows: $6 million for 
area wide Integrated Pest Management (IPM) research, $2 million for 
minor use clearance (IR-4), $16.5 million for alternatives to methyl 
bromide, and $2.58 million for Office of Pest Management Policy.
    Cooperative State Research and Extension Service (CSREES).--A total 
of $55.3 million is needed for FQPA activities under CSREES as follows: 
$2.73 million for IPM research grant, $12.27 million for IPM 
application, $4.2 million for pest management alternatives, $260,000 
for expert IPM decision support system, $10.7 million for minor crop 
pest management (IR-4), $3 million for crops at risk from FQPA 
implementation, $10 million for FQPA risk avoidance and mitigation 
program for major food crop systems, $5 million for methyl bromide 
transition program, $1 million for regional crop information and policy 
centers, $4.64 million for Pesticide Impact Assessment Program (PIAP), 
and $1.5 million for pesticide applicator training.
    Economic Research Service (ERS).--A total of $2.5 million is needed 
for FQPA activities under ERS as follows: $500,000 for IPM research, 
$1.7 million for pesticide use analysis, and $300,000 for National Ag 
Pesticide Impact Assessment Program (NAPIAP).
    Other.--Additional funding for FQPA implementation activities is 
needed as follows: $7.3 million for National Ag Statistics Service 
(NASS) pesticide use surveys, $754,000 for Food Safety Inspection 
Service (FSIS) increased residue sampling and analysis, $14.28 million 
for Agriculture Marketing Service (AMS) and the Pesticide Data Program 
(PDP).

                            EXPORT PROGRAMS

    Creating new overseas markets and expanding those that we have is 
essential for a healthy agricultural economy. Continued funding of 
export development programs is fundamental to improving farm income, 
both in the short and long term. We recommend maximum funding of all 
export development programs consistent with our commitments under the 
World Trade Organization (WTO) trade rules.
    Public Law 480.--We support increased funding for Public Law 480 
programs, the primary means by which the United States provides foreign 
food assistance. Public Law 480 should be supported at no less than the 
$1.1078 billion recommended by the Administration. Enormous opportunity 
exists for humanitarian and public relations benefits, in addition to 
an opportunity to impact market prices. The Public Law 480 program 
should not only be used to help move product to traditional customers, 
but also be increased to include customers who may not currently 
qualify for General Sales Manager (GSM) credit.
    GSM Credits.--The USDA budget includes funding for GSM credits at a 
program level of $3.792 billion. However, recent spending has been much 
less. Farm Bureau supports full use of funds available for GSM credits 
during fiscal year 2001.
    Market Access Program (MAP) and Foreign Market Development Program 
(FMD).--Congress should fully fund the MAP at $90 million and provide 
necessary funding for FMD. These programs need the expertise of a fully 
supported Foreign Agricultural Service (FAS) that is expanded to cover 
all existing and potential market posts.
    Export Enhancement Program (EEP).--The FAIR Act provided $1.5 
billion over seven years for the EEP, but the administration has used 
little of those funds. The fiscal year 2001 budget figure for EEP is 
$478 million. The Administration should use EEP to its maximum to 
maintain foreign markets for U.S. farmers.
    Dairy Export Incentive Program (DEIP).--DEIP allows U.S. dairy 
producers to compete with foreign nations that subsidize their 
commodity exports. Farm Bureau supports the $66 million for DEIP as 
recommended by the administration.
    Inspections.--Food safety programs, including inspections of 
foreign commodities, should be funded at the highest levels possible. 
Funding should be at least the current budget level of $771 million.
    Sanitary/Phytosanitary Management.--We support the Administrations 
request of $9.5 million for Sanitary and Phytosanitary Management 
within APHIS-International Services to strengthen international foreign 
animal disease surveillance and intelligence gathering for risk 
analysis for threats to the U.S. industries.
    Codex Alimentarius Commission.--We support a minimum of $2 million 
for Food Safety and Inspection Service (FSIS) to increase U.S. 
leadership in the Codex Alimentarius Commission. Codex develops the 
international food safety standards for the World Trade Organization. 
Funding is needed to ensure full U.S. participation in Codex functions.

                         AGRICULTURAL RESEARCH

    Agricultural research and the distribution of that research to 
producers is critical to the future of our industry. One of the areas 
of agreement when the 1996 farm bill was enacted was that funding for 
agricultural research would be increased to allow U.S. producers to 
maintain their competitive position in world markets.
    National Research Initiative (NRI).--Farm Bureau supports the 
administration's request of $150 million for the National Research 
Initiative Competitive Grants Program to the Cooperative State 
Research, Education, and Extension Service (CSREES). This research 
provides the keys to the long-term prosperity as farmers and ranchers 
strive for greater involvement in more stages of the food supply chain 
and effective use of new technology.
    Animal Genomics.--We support the administration's request of $1.5 
million for animal genomic research in the Agricultural Research 
Service (ARS.) This will allow ARS to focus on developing genomic 
approaches for improving economical traits of importance in livestock 
and poultry that affect animal health and reproductive efficiency.
    National Antimicrobial Resistance Monitoring.--We support the 
administration's request of $6.3 million to the Food and Drug 
Administration Center for Veterinary Medicine (CVM) for the Food Safety 
Initiative. Within this initiative is increased funding for the 
National Antimicrobial Resistance Monitoring System (NARMS). NARMS is 
the data collection method that is being used to monitor the level of 
antimicrobial resistance that will be used to implement science-based 
standards.
    Aquaculture.--The annual value of aquaculture production in 1998 
was just under $1 billion. To stimulate the technology development and 
enhance domestic production, aquaculture research is vital. The four 
regional CSREES aquaculture centers should be funded at $7 million as 
authorized by Congress. USDA Agricultural Research Service (ARS) 
funding for aquaculture research should continue at $19.3 million so 
that projects begun last year can be completed.
    National Animal Health Emergency Management System.--The National 
Animal Health Emergency Management System was developed in cooperation 
with the states, industry and the veterinary profession. We support the 
administration's request of $5.9 million to APHIS for this program. 
This will enhance APHIS's emergency preparedness and response 
capabilities to address emergency animal disease issues that threaten 
the U.S. food supply.
    Emerging Diseases and Exotic Pests Research.--We support the 
administration's request of $3.8 million for Agricultural Research 
Service (ARS) funding for emerging diseases and exotic pests research. 
The research funding request is urgently needed to develop rapid 
diagnostics, vaccines, and products necessary to protect our U.S. 
commodities. Animal Health Monitoring and Surveillance: We support for 
the administration's request of $69.5 million to the Animal and Plant 
Health Inspection Service (APHIS) for the Animal Health Monitoring and 
Surveillance program line item. There should be specific disease line 
items for aquaculture, brucellosis, pseudorabies, scrapie and 
tuberculosis. We support $17.7 million for veterinary diagnostics and 
operation of the APHIS National Veterinary Services Laboratory in Ames, 
Iowa.
    ARS & APHIS Laboratory Facilities.--We support the administration's 
request of $9 million for the Joint NADC-NVSL-CVB Modernization Plan at 
Ames, Iowa. This proposal for a joint APHIS and ARS research facility 
is important to meet national needs for research, diagnosis and product 
testing for animal health. Secondly, we support the Administration's 
request of $7 million for the general maintenance and continued 
modernization of the ARS foreign animal disease laboratory at Plum 
Island, New York, and to provide $3.2 million for the APHIS funding 
portion of the ARS Plum Island facility. The unique biocontainment 
facility at Plum Island allows scientists to work safely with foreign 
and emerging disease agents.
    Binational Agricultural Research and Development (BARD).--BARD 
should be funded at the administration's recommended level of $2 
million.

                              OTHER ISSUES

    Conservation Operations.--We are concerned about adequate Natural 
Resources Conservation Service (NRCS) conservation operation funding. 
Conservation program delivery and technical assistance should be a 
priority for NRCS funding. No new initiatives should be funded in the 
conservation operations budget. Emphasis should be placed on 
traditional technical assistance and the development of reliable 
resource data for assisting producers to deal with nutrient management. 
We support funding for technical assistance under the Grazing Lands 
Conservation Initiative.
    Environmental Quality Incentive Program (EQIP).--With regard to 
conservation programs under the Commodity Credit Corporation Program 
(CCC), we believe that emphasis should be placed on EQIP. EQIP is an 
important program for assisting producers dealing with increased water 
quality regulation. We support EQIP funding as proposed by the 
administration to bring spending to $325 million.
    Forestry Incentive Program (FIP).--We oppose the Administration's 
zero funding for the Forestry Incentive Program and suggest funding of 
$5 million.
    Farmland Protection Program.--We support the proposed new funding 
of $65 million for the farmland protection program.
    Ag in the Classroom.--Most students no longer have firsthand farm 
experience and, therefore, lack a basic understanding of our food and 
fiber system. The Agriculture in the Classroom program provides real 
world examples that teach about agriculture production food safety, 
nutrition and healthy lifestyles, and career opportunities. CSREES 
funding for this program has been locked at $208,000 for more than 7 
years. Farm Bureau supports an increase to $1,000,000 for Ag in the 
Classroom.
    Mandatory Price Reporting.--Farm Bureau supports $5.9 million as 
proposed by the administration to continue mandatory price reporting 
for livestock. Increased market news reporting is needed to ensure that 
all participants have the same access to accurate market information.
    Grain Inspection, Packers and Stockyards Administration (GIPSA).--
Farm Bureau supports the administration's proposed $1.2 million 
increase in funding for efforts to determine anti-competitive behavior 
and $1.3 million increase to investigate time-sensitive financial, 
trade and anti-competitive behavior issues.
    Wildlife Services.--Wildlife Services should be funded at $12.6 
million for methods development, and $31.9 million for operations.
    Aerial Application Technology Program.--Farm Bureau supports $1.3 
million for the ARS Aerial Application Technology Program. This funding 
is needed because of the significant and necessary role aerial 
application provides to our nation's farmers and because of the need to 
increase the environmental safety of aerial applications.
    Farm Labor Housing Program.--Providing housing for migrant farm 
workers continues to be a difficult challenge for farm employers and 
community groups alike. We support the administration's budget proposal 
to increase the Farm Labor Housing loan programs (Section 514) by $5 
million to $30 million and the Farm Labor Housing grant program by $1 
million to $15 million.
    Nutrition Assistance Program for Puerto Rico.--Farm Bureau supports 
efforts to implement an electronic benefits transfer (EBT) distribution 
system for the Nutrition Assistance Program (NAP) in Puerto Rico, but 
is concerned about the potential misuse of federal funds intended for 
nutritional purposes that are currently being distributed in Puerto 
Rico. We support report language to direct a minimum of 75 percent of 
NAP funds to be spent on food at businesses that sell food items.
    Rural Cooperative Grants.--We support an increase in funding for 
grants for rural cooperatives from the $7 million to $11.5 million. 
Cooperatives are one way that farmers and ranchers can increase income 
by retaining ownership of raw agricultural products and turning them 
into value added products.
                                 ______
                                 

 PREPARED STATEMENT OF THE AMERICAN FEDERATION OF GOVERNMENT EMPLOYEES


    Mr. Chairman and members of the Subcommittee, thank you for 
allowing me the opportunity to provide testimony for the record in 
connection with the fiscal year 2001 budget hearings. My name is Steven 
M. Hollis. I am the President of AFGE Local 3354 at the United States 
Department of Agriculture, Rural Development and Farm Service Agency 
(FSA). I hope my comments are helpful to your subcommittee.
                rural america should get its fair share!
    Family farmers, the ill-housed rural poor, and small rural 
communities must receive a share of the budget surplus because they are 
not sharing in the overall growth of the economy! We urge you to do 
whatever you can to make sure the budget allocations for agriculture 
and rural development are sufficient to enable the appropriations 
requested below.
    That must be our first request to the Members of this Subcommittee. 
In addition, we ask Members of Congress to ensure that our tax dollars 
get to the majority of low-income rural Americans who need help and 
opportunity. Too much of the recent disaster funding has gone to 
wealthy landowners, and too little has gone to rural citizens who may 
no longer be able to farm. The Rural Development mission area--its 
programs and staff--is just as critical to rural economic recovery as 
are the Farm Service Agency programs and staff.

              RURAL DEVELOPMENT SHOULD GET ITS FAIR SHARE!

Increased Salaries & Expenses funding for the Department of 
        Agriculture's Rural Development mission area is AFGE's No. 1 
        priority for the Subcommittee's Appropriations for Agriculture, 
        Rural Development, and Related Agencies! Congress should at 
        least, appropriate the $581 million for Rural Development 
        salaries and expenses in 2001, which was requested in the 
        President's Budget. This is an increase of $47 million, from 
        almost $534 million in 2000.
    WE CAN'T DELIVER ANY MORE PROGRAMS WITHOUT MORE SALARIES & EXPENSE 
FUNDING.
    Both the House fiscal year 2000 Supplemental Appropriation bill, 
and the President's fiscal year 2001 budget, include much-needed 
increases in program funding for Water and Waste Grants, Community 
Facility Grants, Section 515 Multi-Family Housing Loans, the Rental 
Assistance Program, Section 502 Single Family Housing Loans, Section 
504 Very Low Income Repair Loans, Mutual and Self-Help Housing Grants, 
Rural Housing Assistance Grants, Migrant and Seasonal Farmworker 
Grants, and Rural Electrification Loans. These Rural Development (RD) 
loan and grant programs are just as important, even more so in terms of 
number of people reached, as the various programs delivered by FSA. 
Please don't forget--RD needs staff to deliver these programs, just 
like FSA needs staff to deliver its programs!
    Since 1995, the Congress has increased Rural Development programs 
by 69 percent overall; yet, our staffing levels have been cut by 28 
percent.
    Our servicing areas in the Field, and our workload in the National 
and Finance Offices, has doubled or tripled. With decreased staffing, 
customer service suffers. Almost no funds have been allocated to 
training for the past three years!
    The situation has deteriorated to the point where State Directors 
have had to stop all overtime work. Use of privately owned vehicles for 
official travel has been prohibited, and use of government-owned 
vehicles has been limited to 1200 miles per month. In most states, 
these restrictions on travel and overtime make it next to impossible 
for our employees to do our jobs! Timely inspections are not completed. 
Interviews of potential borrowers have to be conducted by phone. Night 
meetings of housing developers, water districts, and community 
development committees cannot be attended.
    It is laborers and white and blue-collar workers that are the 
infrastructure of our rural communities, in addition to our farmers. If 
we can't provide housing, utilities, and jobs to enable them to be 
productive taxpaying citizens, how can we say the cost outweighs the 
benefits? Low-income rural Americans need public servants, with 
sufficient expense funds to support travel, overtime, training and 
information technology, to deliver these housing, community, and 
business development programs.
    ``If we're going to have meaningful programs supporting family 
farmers and rural communities, we need to maintain USDA's 
infrastructure of county offices, with sufficient staff, that is 
responsible and accountable to deliver these programs.'' Bill 
Christison, President, National Family Farm Coalition
Increases requested in the President's Budget for rural housing, 
        community development, and farm loan and grant programs should 
        be appropriated, with minor adjustments.
    AFGE urges Members of Congress to appropriate funds to support the 
following program requests in the President's fiscal year 2001 Budget:

            $1.3 billion in direct loans and $3.7 billion in guaranteed 
                    loans for single family housing.

    For the first time since 1993, this is a much-needed increase above 
the previous year program levels of $1.1 billion in direct loans and 
$3.2 billion in guaranteed loans. It is still way below even the 1994 
levels, however, as shown in the enclosed chart.
    For many low income rural families the only opportunity they have 
to improve their housing conditions is through housing assistance 
offered by the USDA's rural housing programs. The average borrower 
income for the 502 SFH program is $15,000. In fiscal year 1997, 44 
percent of the loans under this program went to female-headed 
households and one-third went to minority households. Under the self-
help housing program, incomes are about 10-20 percent lower and two-
thirds of the families participating in self-help housing are 
minorities and one-third are female-headed households.
    Since its inception in 1950, the Section 502 direct program has 
produced over 1.9 million units of safe, decent, sanitary housing and 
supported a variety of innovative housing development opportunities 
such as the mutual self-help housing program. Over the past ten years, 
however, the program's production capacity has declined 41 percent, 
from 26,203 units in 1988 to only 15,561 in 1998. It is even more 
startling to compare the paltry 1998 production to the over 132,000 
units produced in 1976.
    The budget authority necessary to support the higher program levels 
increases from about $118 million in 2000 to about $216 million in 
2001, due to an increase in interest rates and net of a proposal to 
raise the fee on guaranteed loans from 1 percent to 2 percent. AFGE 
would prefer not to see this guaranteed loan fee increased. The 
guaranteed rural housing loan program attempts to aid families with 
good jobs and decent credit but with very little to no cash to become 
homeowners and contributing taxpayers in their communities. Pushing a 
closing cost total to as much as 6 percent ($3,000 to $4,000) could 
take the program out of reach for many younger families, or older 
families on fixed income. It is our understanding that the current 1.0 
percent fee has been more than adequate to offset any loss claims we 
have experienced to date in this program.

            $120 million for direct loans and $200 million in 
                    guaranteed loans for multi-family housing, plus 
                    $680 million for rural rental assistance payments.

    The Section 515 Multifamily Housing Loan Program would be funded at 
$120 million in 2001, which compares to about $114 million available 
for 2000. This program provides direct loans to construct and maintain 
multifamily rental projects that serve low and very low-income 
families. Projects receive payment assistance to make rents affordable. 
The average annual income of a Section 515 tenant is $7,300. The 2001 
budget provides for the construction of 1,400 new units and the 
rehabilitation of over 4,100 existing units.
    The Section 538 Multifamily Housing Loan Guarantee Program 
guarantees loans that are made by private lenders. It differs from the 
Section 515 Direct Loan Program in that the projects it finances serve 
tenants with incomes up to 115 percent of the area median, rather than 
those below 80 percent of the area median. The 2001 request of $200 
million would provide for the construction of over 6,400 units.
    The 2001 budget provides $680 million for the Rental Assistance 
Program, an increase of $40 million over the 2000 level. Rental 
assistance is provided to project owners to make up the difference 
between the 30 percent of income the low-income tenant pays and the 
rent required for the project owner to meet debt servicing 
requirements. The 2001 budget provides funding for the renewal of over 
42,000 units, support for new section 515 and farm labor housing 
projects, and limited funding for servicing existing projects.
    It costs money to house the poorest of the poor, both construction 
and rental assistance. We subsidize homeownership some $98 billion per 
year in the form of interest deductions. Rebuilding the 515 program 
costs less than homelessness or nursing homes.

            A total of $50 million is proposed for Farm Labor Housing 
                    Programs, with $30 million for direct loans, $15 
                    million for grants, and $5 million for emergency 
                    assistance to migrant farmworkers.

    This is an increase of almost $3 million from the $30 million in 
loans and $17 million in grants provided in 2000, which included $3 
million in grants and $5 million in loans in emergency funding. The $50 
million level will improve the availability and quality of housing for 
one of the most poorly housed groups in the country.

            $507 million in grants, $1.03 billion in direct loans, and 
                    $75 million in guaranteed loans for water and waste 
                    disposal projects.

            $5 million for the Rural Cooperative Development Grants 
                    (RCDG) program

            $10 million for Outreach and Technical Assistance Program 
                    for Minority Farmers

    The Outreach and Technical Assistance program is the most effective 
tool developed to carry out the mission of USDA as the technical 
provider for small farmers. For a very small investment, the program 
has significant multiplier effects in poor communities where there 
exist few other possibilities for sustainable economic development.

            $700 million for direct farm operating loans and $2.5 
                    billion for farm operating loan guarantees.

    Since the loan limits have been raised to $717,000, and since the 
farm economy continues in depression mode, this funding level may not 
be sufficient.
    Our major concern regarding farm operating loans is the years of 
eligibility restriction placed on direct operating loans in the current 
Farm Bill. As Congress begins to write new farm policy legislation, we 
urge the Agriculture Committees to remove the restrictions on years of 
eligibility for direct farm operating loans, at least for limited 
resource farmers. Many small farmers may not be able to continue in 
business from year to year without the option of direct operating 
loans.

            $128 million for direct farm ownership loans

    Funding for direct farm ownership loans would decrease from $178 
million in 2000 to $128 million in 2001. The magnitude of this 
reduction reflects the fact that there was some unused carryover in 
2000. We have the following concerns regarding the unused funds from 
2000, and the funding level of the direct farm ownership loans:
    In many states, as much as 70 percent of the farm land will change 
ownership over the next fifteen years. Unless the direct farm ownership 
loan program is significantly enhance, most of that farm land will go 
to the existing large farms, and the benefits and productivity of 
family farming will continue to be wiped out.
    On the other hand, under current farm policy (which determines 
commodity prices as shown by USDA data on the last 25 year trends), 
100-year low commodity prices make it next to impossible for socially 
disadvantaged or beginning farmers to purchase land. What many smaller 
existing farmers need, but can't get through guaranteed private sector 
loans, is the ability to use their real estate to refinance existing 
debt. The 1996 Farm Bill eliminated the option of using direct farm 
ownership loans to refinance existing debt. As Congress begins to write 
new farm policy legislation, we urge the Agriculture Committees to 
remove the restriction on use of direct farm ownership loans to 
refinance existing debt, where that makes the most sense.

AFGE supports the National Association of County Office Employees 
        (NASCOE) request to add $77 million above the President's 
        request to the Farm Service Agency's Salaries & Expenses, 
        provided the Congress increases the President's budget request 
        for Rural Development Salaries & Expenses by a similar 
        percentage.

    However,
            FSA should be required to allocate more staff resources to 
                    the Farm Loan Programs.

    The farm loan functions have been understaffed by about 1600 
employees since they were transferred to FSA in 1995. The program 
management standard for excellence in our direct farm loan programs is 
that each responsible loan officer should never have a caseload of more 
than 56 borrowers. Today, our farm loan officers in many states have an 
average caseload of 150 to 200 borrowers. This makes it impossible to 
adequately perform the supervised credit functions, which ensure the 
success of the program. The Appropriations Subcommittees should 
allocate at least 30 percent (cf. USDA County-Based Agency Study) of 
FSA's Salaries & Expenses to support of the Farm Loan Program. The 
Agricultural Credit Insurance Fund could be used for this purpose by 
changing the legal language and increasing the appropriation for S&E 
from this account.

            AFGE is also asking the Government Affairs/Reform 
                    Committees to reject legislation the Department 
                    intends to submit to convert County Office 
                    employees to the Federal civil service--unless the 
                    language is changed to meet our concerns.

    We believe that all FSA employees should come under the Federal 
Civil Service employment system, so that all FSA employees will have 
the same rights, including the right to collective bargaining, the 
right to seniority protections in RIF situations, whistle blower 
protections and other Merit Systems rights and protections. Through the 
Federal Performance Management system, the Secretary will have the 
direct authority to hold all employees accountable to the program 
performance goals of the Department, including Civil Rights goals.
    The conversion of the County Office Committee employees to Federal 
Civil Service status must be accomplished in a manner that is fair to 
the civil service employees of the former Farmers Home Administration 
(both FSA and Rural Development) who are represented by the American 
Federation of Government Employees (AFL-CIO). The problem with past 
(and current USDA) proposals is that they would allow CO employees to 
assume responsibilities for aspects of the Farm Loan Program regardless 
of the employee's experience, training, or qualifications to perform 
that work. Proposals to ``deem'' County Executive Directors qualified 
to supervise FLP activities, without proper training or resolution of 
conflict of interest concerns, will be opposed by AFGE. So will 
proposals which would allow former CO employees to use special civil 
service seniority rights based on years of service in the COC system 
administering commodity programs to bump current FSA or Rural 
Development federal employees out of their jobs in a RIF.
    Let us be clear: AFGE opposes any further staffing reductions in 
FSA. We believe the 1996 ``Freedom to Farm'' bill has failed, and needs 
to be replaced by a new comprehensive farm and food policy. At the same 
time, we will continue to fight against any effort to bump any 
employees we represent out of their jobs in order to save jobs for 
former CO employees whose programs have been eliminated or cut back.

AFGE believes the No. 1 management improvement needed to achieve a 
        Common Computing Environment, or otherwise more effectively 
        deliver USDA programs to the people we serve, is to reduce the 
        waste of funds for poor quality work that results from current 
        USDA contracting out practices. Until this problem is 
        addressed, we cannot support other Administration proposals to 
        improve management of the Information Technology and 
        administrative support functions!

    An increasing amount of work, which could be performed more 
effectively by USDA employees, has been contracted out without even 
performing a cost comparison, in the name of ``reducing government''. 
As the Chairman and other Members of this Subcommittee have noted, the 
too many front-line USDA employees have been cut! We can no longer 
adequately deliver programs to rural America! And we're not really any 
closer to a Common Computing Environment than we were with InfoShare in 
1990! The Service Center Implementation and Modernization Initiatives 
have been over-relying on private contractors. These contractors have 
no business interest in accomplishing a Common Computing Environment 
for USDA front-line employees--then they would be out of a job!
    Before USDA takes any other steps to ``improve management of 
Information Technology or administrative support,'' the 11,000-plus 
service contracts should also be put on the table for review. We hope 
to work with the Chairman and Members of this Subcommittee to place 
language in the Agriculture Appropriations bill that will require USDA 
to perform cost comparisons on all major service contracting decisions, 
and to bring the work back in-house wherever that would be more cost 
effective.
    Appendix I documents these concerns relative to the information 
technology support functions for the Rural Development, NRCS, and Farm 
Service agencies.
    Additional examples of problems with contracting out which have 
been provided to our Union through extensive interviews and surveys of 
Field Office employees include the following:
    ``It takes a month to receive an appraisal and it can mean a 
difference between us funding a loan or running out of money. 
Appraisals can be done quicker by the employees. . . .''
    ``FP year-end analysis, chattel checks, and 1951-S servicing help--
very poor quality in most cases--These functions should always be 
performed by an in-house government employee. . . . We are supposed to 
be a servicing agency. How can we contract out to analyze the farmer's 
next year's production and expenses, and help the borrowers. If we are 
going to be farmer friendly, we need to do our own work.''
    ``Loan making/loan servicing contractor--$20,000-$25,000 per year. 
Appraisal contracting--approx. $22,700 per year. The administrative 
cost of contracting was not included in above. Am sure this cost would 
be staggering, considering the process we go through. I have shown the 
District Director the savings in performing the work ourselves rather 
than contracting out. Over 2 million dollars a year could be saved each 
year in the state of Montana alone. A GS-7 Asst. Co. Supervisor could 
be hired for each of the 24 county offices in Montana at an annual 
salary of $23,000 plus benefits of approximately $5,000, and provide 
each assistant with a $10,000/year training budget for less cost than 
contracting. The end result would be better quality work performed in a 
timely manner at less cost to the taxpayer. To me, this satisfies the 
criteria desired by this administration. Better service at less cost!''
    Appendix II contains the language that AFGE proposes be added to 
the Agriculture Appropriations bill. It is based on language from H.R. 
3766, which already has over 100 co-sponsors, including Ms. Kaptur and 
other Members of the Agriculture Appropriations Subcommittee in the 
House. AFGE can only support the appropriation of the $75 million 
requested by the USDA Chief Information Officer if such funding will 
not reduce the funding available to any of our priorities, identified 
above, and only if USDA works with labor, instead of working against 
labor, to stop contracting out when Federal employees can do it better.

  APPENDIX I--USDA OVER-RELIANCE ON COMMERCIAL SUPPORT CONTRACTS FOR 
                         INFORMATION TECHNOLOGY

    The real point about balancing the budget should be taxpayer 
dollars, not Federal employee jobs. We need to ensure that 
Administrative Convergence (in any form) does not just lead to 
replacing Federal employees with more expensive contractors who can't 
do as good a job. AFGE is very concerned about this, because in DOD and 
other agencies, the Administration has consolidated administrative 
functions--and then tried to contract them out. The following numbers 
come from the Agencies' A-11 submissions to OMB, reporting on 
``Obligations for Information Systems''.


                        [In thousands of dollars]
------------------------------------------------------------------------
                                        Commercial
                                     Support Services      Personnel
------------------------------------------------------------------------
Fiscal year 1993:
    ASCS..........................             39,029             27,657
    FAS...........................              4,366              3,033
    OICD..........................                183                245
    FCIC..........................              8,572              3,627
    FmHA/RDA......................             40,627             36,181
    REA...........................                618              1,506
    SCS...........................             17,419             38,131
Fiscal year 1998:
    FSA...........................             90,894             44,898
    FAS...........................              7,252  .................
    RMA...........................              8,597              4,206
    RD............................             26,148             15,048
    NRCS..........................             23,223             25,516
Percent Change (1993-1998):
    FSA/FAS/RMA \1\...............                +51                +30
    RD............................                -36                -60
    NRCS..........................                +25                -33
------------------------------------------------------------------------
\1\ Some amount of the Rural Development decrease, and the FSA increase,
  from fiscal year 1993 to fiscal year 1998, consisted of the transfer
  of Farm Credit functions from FmHA/RD to FSA.

    During 1998, an Information Technology Functional Team, consisting 
of labor and management from the IT organizations of Rural Development, 
NRCS, and FSA, developed ``Information Technology Contracting 
Recommendations''. This official agency document recommends that 
Federal staffing for IT support be increased, through reductions in 
more expensive contractor personnel, as the ``least cost solution'' 
when considering total cost to the government of contracting out. The 
reason for this conclusion was simple: the cost of the average Federal 
Information Technology staff year is $69,250 whereas the total cost per 
contract staff year support of ``average complexity and skill'' is 
$119,733. It costs $50,000 per FTE less, on average, to utilize Federal 
employees, rather than contractors, to provide Information Technology 
support to the USDA county-based agencies!

 APPENDIX II--PROPOSED LANGUAGE ON CONTRACTING OUT FOR THE FISCAL YEAR 
                  2001 AGRICULTURE APPROPRIATIONS BILL

    Sec. ____. None of the funds appropriated or otherwise made 
available by this Act or any other Act shall be available to privatize, 
outsource, contract or contract out, including the exercise of options, 
extensions, and renewals of any contracts, except in accordance with 
the following procedures:
          (a) In General.--After the date of the enactment of this Act, 
        any decision by the Secretary or any Agency of the Department 
        of Agriculture to privatize, outsource, contract or contract 
        out, including the exercise of options, extensions, and 
        renewals of any contracting efforts, for the performance of a 
        function shall be based on the results of a public-private 
        competition process that--
                  (1) formally compares the costs of Federal employee 
                performance of the function with the costs of the 
                performance by a contractor;
                  (2) employs the most efficient organization process 
                described in OMB Circular A-76; and
                  (3) is conducted in consultation or through 
                bargaining with the exclusive representative of the 
                Federal employees performing the function, if 
                applicable. This subsection applies only to contracting 
                efforts undertaken on or after the date of the 
                enactment of this Act.
    (d) Determination of Costs.--The Secretary or any Agency of the 
Department shall commence or continue the performance of a function by 
Federal employees if, under a cost comparison performed pursuant to a 
public-private competition process described in subsection (a), the 
Secretary or the Agency determines that at least a 10-percent cost 
savings would not be achieved by performance of the function by a 
contractor.
    (e) Inapplicability of Certain Limitations.--Notwithstanding any 
limitation on the number of Federal employees established by law, 
regulation, or policy, the Secretary or an Agency of the Department may 
continue to employ, or may hire, such Federal employees as are 
necessary to perform work acquired through public-private competition 
required by this section.
    (f) Waiver.--(1) The provisions of this section shall only apply to 
service contracts above the $25,000 formal contract threshold. In no 
case may a function be modified, reorganized, divided or in anyway 
changed for the purpose of exempting from the requirements of section 
(a) the change of all or any part of such function to performance by a 
private contractor.
    (2) Any component of the Department may submit to the Deputy 
Secretary a request for a waiver of this section with regard to a 
particular function. Such a waiver request shall
          (A) identify the facilities, units, or activities affected;
          (B) specify the reason a waiver is needed;
          (C) identify the duration sought; and
          (D) explain the justification for the waiver.
    (3) The Deputy Secretary may grant a waiver with regard to a 
particular function if the Deputy Secretary determines that a waiver--
          (A) is necessary to obtain support services to combat natural 
        disasters, such as forest fires, insect infestations, plant and 
        animal diseases, which require immediate attention, exceed the 
        capacity of in-house resources, and will last for less than one 
        year;
          (B) is critical to obtain particular expertise not available 
        within the Department, or unbiased judgements as in 
        environmental impact studies, and will last for less than one 
        year; or
          (C) is required to avoid a violation of laws which encourage 
        the use of minority owned businesses.
    (4) The Deputy Secretary may not grant a waiver under this section 
until--
          (A) the Agency has consulted with the employees in the 
        affected unit regarding the waiver;
          (B) the waiver request has been concurred in by the exclusive 
        representative of the Federal employees in the affected unit, 
        where applicable; and
          (C) the Deputy Secretary has published the request for the 
        waiver in the Federal Register.
                                 ______
                                 

  PREPARED STATEMENT OF THE AMERICAN HONEY PRODUCERS ASSOCIATION, INC.

    My name is Richard Adee. I am President of the American Honey 
Producers Association, Inc. and I am submitting this statement in its 
behalf. The American Honey Producers Association, Inc. is a national 
organization of commercial beekeepers with activities in most of the 
States in this country.
    First, the Association wishes to thank you for the support the 
Subcommittee has provided in the past for agricultural research 
activities in behalf of the beekeeping industry. It has enabled the 
Agricultural Research Service to staff its bee laboratories at the 
minimum level necessary to meet with critical needs of the industry. To 
continue this research, the Association supports approval of the 
President's budget proposal for an additional appropriation of $300,000 
in fiscal year 2001 for bee research at the ARS facility at Weslaco, 
Texas. The Association also recommends an increase of $300,000 in the 
level of funding for the ARS honey bee breeding, genetics, and 
physiology laboratory at Baton Rouge, Louisiana.
    Background.--Honey bees pollinate over 90 cultivated crops whose 
estimated value exceeds $14.6 billion and produce an average of 200 
million pounds of honey annually. Since 1984, the survival of the honey 
bee has been threatened by continuing infestations of mites and pests 
for which appropriate controls have not yet been developed and research 
must provide the answers. Unfortunately, there is no simple solution to 
these problems. The honey bee industry is too small to support the cost 
of the needed research, particularly with the current depressed state 
of the industry. As you know, there are no longer any federal subsidies 
on honey. Further, there are no funds, facilities, or personnel 
elsewhere available in the private sector for this purpose. 
Accordingly, the beekeeping industry is dependent on research from 
public sources for the scientific answers. The key to the survival of 
the honey industry lies with the honey bee research program conducted 
by the Agricultural Research Service.
    Research at the ARS Weslaco, Texas, Laboratory.--Parasitic mites, 
primarily the varroa mite, are causing a crisis for the U.S. beekeeping 
and pollination industry. Tens of thousands of domestic honey bee 
colonies are being lost annually to varroa mites. Wild bee colonies 
have been decimated. The only chemical which has received a general 
registration for varroa mite control, fluvalinate, is being rendered 
ineffective by the development of resistant mite populations. The USDA 
honey bee lab at Weslaco, Texas, has been working hard trying to find 
alternative chemicals to control the varroa mite. It appears that they 
have found a chemical, coumaphos, which has the potential of being 
equally effective as fluvalinate. This is a real break through for the 
bee industry, but as of today we have only been able to obtain a 
section 18 emergency registration. Much work still remains to be done 
before a section 3 general registration is granted by EPA.
    A new pest, the small hive beetle, found in Florida has caused 
severe bee colony losses. Apparently, it originated in South Africa. 
Estimates put the losses in just one season at over 30,000 colonies. 
There is evidence that the beetles are spreading to other areas in the 
East coast. As the beetles spread, they will just devastate the bee 
industry. In order to contain the beetle, several states have 
quarantined bees from Florida, North Carolina, South Carolina, and 
Georgia or are actively considering such quarantines. If the beetle 
should be found in California, it will spread rapidly and be difficult 
to control because of similarity of soil conditions with those in 
Florida. It seems that coumaphos may help control this insect as well 
as the varroa mite, but as previously stated it has not received a 
section 3 registration and it is unclear when such a registration will 
be granted by EPA.
    The USDA-ARS honey bee research scientists at the Weslaco 
laboratory have been working overtime to find chemicals, techniques, 
pheromones, or other methods of controlling the beetle. Time is of the 
essence, as a control must be found immediately as all the bee colonies 
in the Western Hemisphere are at risk.
    Additionally, the Weslaco lab is responsible for finding new and 
improved methods for control of other parasitic mites, such as the 
tracheal mite, as well as solving beekeeping problems that interfere 
with honey production and effective crop pollination, and determining 
the impact and spread of Africanized honey bees.
    The additional appropriation recommended by the Administration 
would help in finding a chemical solution to our most pressing 
problems.
    Research at the ARS Baton Rouge, Louisiana, Laboratory.--The 
Association also recommends an increase of $300,000 in the 
appropriation for the ARS laboratory at Baton Rouge, Louisiana. The 
Baton Rouge lab is the only laboratory world-wide focusing on the 
development of long-term, genetics-based solutions to the varroa mite. 
Their research programs have taken them to the far corners of the world 
looking for mite resistant bees. In eastern Russia, they found bees 
that have co-existed for decades with the mites and survived. The bees 
were brought to the United States and are in the process of being 
evaluated to assure that the resistance holds up under a wide range of 
environmental and beekeeping conditions. Attributes such as vigor, 
pollination, and honey production are being tested. There is an 
immediate need to propagate the resistant queen bees in large numbers 
for wide scale distribution to beekeepers so that this evaluation can 
be accomplished. The work is slow and tedious. It is also costly. The 
requested appropriation will accelerate the research, development, and 
transfer of queen bee stock resistant to varroa mites by providing for 
the employment of another research scientist and supporting staff.
    Summary.--In conclusion, we wish to thank you again for your 
support of honey bee research in the past. We would appreciate your 
continued support by approving the additional funding of $300,000 that 
the Administration would add to the fiscal year 2001 appropriation for 
the Weslaco, Texas, lab, by adding another $300,000 to the 
appropriation for the Baton Rouge bee facility, and by otherwise 
supporting the Administration's request for bee research. Only through 
research can we achieve and maintain profitability in the U.S. 
beekeeping industry and continue to provide stable and affordable 
supplies of bee pollinated crops which make up fully one-third of the 
U.S. diet.
    I would be pleased to respond to any questions that you may have.
                                 ______
                                 

 PREPARED STATEMENT OF THE AMERICAN INDIAN HIGHER EDUCATION CONSORTIUM

                              INTRODUCTION

    Mr. Chairman and Members of the Subcommittee, on behalf of the 
American Indian Higher Education Consortium (AIHEC) and the 30 Tribal 
Colleges that comprise the 1994 Land-Grant Institutions, we thank you 
for this opportunity to share our funding requests for fiscal year 
2001.
    We respectfully recommend the following funding levels for fiscal 
year 2001 for our 1994 programs. Specifically, we request: $5 million 
for our extension grants program; $7.1 million for the Native American 
endowment fund, and report language that will give the Tribal Colleges 
the flexibility to use this funding to address the critical 
infrastructure needs at the 1994 Institutions; $3 million for our 
equity grants; $3 million for our 1994 research program; and $1.7 
million for institution capacity building grants. These requested 
funding levels are fully supported by the National Association of State 
Universities and Land Grant Colleges (NASULGC) and are included in 
their fiscal year 2001 budget recommendations.
    This statement will cover two areas: First, it provides a brief 
background on the Tribal Colleges and our long-awaited inclusion in 
this nation's land-grant system; and second, it lays out the 1994 
Institutions' ambitious plan through our authorized land-grant programs 
to fulfill the agricultural potential of American Indian communities 
and to ensure that American Indians have the skills needed to maximize 
the economic development potential of our resources.

                     BACKGROUND ON TRIBAL COLLEGES

    Today, almost 140 years after enactment of the first land-grant 
legislation, Tribal Colleges, more than any other institutions, truly 
exemplify the original intent of the land-grant legislation. The first 
Morrill Act was enacted in 1862 specifically to bring education to the 
people and to serve their fundamental needs. This is the definition and 
mission of the Tribal Colleges. We truly are institutions by, of, and 
for our people.
    The dismal statistics concerning the American Indian experience in 
education brought tribal leaders to the realization that only through 
local, culturally-based education could many American Indians succeed 
in higher education and help bring desperately needed economic 
development to the reservations. In the late 1960s and early 1970s, the 
first Tribal Colleges were chartered by their respective tribal 
governments, to be governed by boards comprised of local tribal people. 
These first colleges were started, with little money and a lot of 
determination, in abandoned and even condemned government buildings and 
old trailers, often using three-legged desks, wood crates for shelves 
and typewriters with missing keys. In 1972, six tribally-controlled 
institutions came together to form the American Indian Higher Education 
Consortium. Today, AIHEC is a cooperatively sponsored effort and 
integral support network for 33 member institutions in the United 
States and Canada, 30 of which are 1994 Land-Grant Institutions.
    Located in 12 states, Tribal Colleges and Universities now serve 
more than 25,000 students from over 250 federally recognized tribes. 
Tribal Colleges offer primarily two-year degrees, with some colleges 
offering four-year and graduate degrees. All of the Tribal Colleges, 
with the exception of four institutions that are accreditation 
candidates, are fully accredited by mainstream regional accreditation 
associations.
    Tribal Colleges serve as community centers, providing libraries, 
tribal archives, career centers, economic development and business 
centers, public meeting places, and child care centers. Despite our 
many obligations, functions, and notable achievements, Tribal Colleges 
remain the most poorly funded institutions of higher education in this 
country. Most of the 1994 Institutions are located on federal trust 
territory; states have no obligation and in most cases, do not fund the 
Tribal Colleges. In fact, most states do not even fund the institutions 
for the non-Indian students who attend our colleges despite the fact 
that non-Indian enrollment at the Tribal Colleges averages 20 percent.

     1994 LAND-GRANT PROGRAMS--AMBITIOUS EFFORTS TO REACH ECONOMIC 
                         DEVELOPMENT POTENTIAL

    Current land-grant programs at the Tribal Colleges are modest, yet, 
our 1994 authorizing legislation is vitally important to us because of 
the nature of our land base. Of the 54.5 million acres that comprise 
American Indian reservations, 75 percent are agricultural lands and 15 
percent are forestry holdings.
    Tragically, due to lack of expertise and training, millions of 
acres lie fallow, under-used, or have been developed through methods 
that render the resources non-renewable. The Educational Equity in 
Land-Grant Status Act of 1994 is our hope for turning this situation 
around. It is essential that American Indians learn more about new and 
evolving technologies for managing our lands. We are committed to 
becoming, as we were when your forefathers came to this land centuries 
ago, productive contributors to this nation's--and the world's--
agricultural base.
    Extension Program.--Recent years show impressive efforts to address 
economic development through land use, as 1994 Land-Grants enter into 
partnerships with 1862 Institutions through extension projects. Our 
extension program represents an ideal combination of federal resources 
and Tribal College-state institution expertise, with the overall impact 
being far greater than the sum of its parts. Some examples of the 
innovative programs that are funded through competitively awarded 
extension grants include:
  --United Tribes Technical College and North Dakota State University 
        Extension Service are collaborating to provide diabetes 
        prevention education to Native Americans through the creation 
        of an Inter-Tribal Diabetes Education Center. Diabetes has 
        spread epidemically in Indian Country. Through nutrition, 
        health and wellness education programs, which are culturally 
        appropriate and community supported, participants will have a 
        greater understanding of how to control and even prevent this 
        disease. The first phase of this vital project is now underway 
        through a survey to determine the health habits and diet intake 
        of Tribal College students statewide. This nutrition study will 
        provide baseline data to share with tribal stakeholders and 
        will assist in developing relevant health and wellness 
        educational programs.
  --The Native American Pastoral Textile Project at the Institute of 
        American Indian Arts in Santa Fe, New Mexico provides 
        educational outreach through workshops and seminars to utilize 
        traditional methods of weaving natural fibers into products 
        that can be widely marketed generating revenue that will help 
        families and their communities achieve economic self-
        sufficiency.
    Additional funding to support such efforts is needed because 
extension services provided by the states on our reservations are 
woefully inadequate, and the Tribal Colleges need to fill the gap. It 
is important to note that this program is not duplicative of ongoing 
extension activities, as it is specifically designed to complement and 
build upon the Indian Reservation Extension Agent program.
    In fiscal year 2000, the 1994 institutions were awarded $3,060,000 
for extension grants. We request that Congress build on the $3.5 
million proposed in the President's fiscal year 2001 budget, and raise 
funding for this vital program to $5 million, the authorized level.
    Native American Endowment Fund.--The endowment installments paid to 
the 1994 Institutions, remains with the U.S. Treasury, only the 
interest is distributed to our colleges. It is important to note that 
these funds are not scored as current budget outlay or authority. The 
fiscal year 1999 interest payment distributed among the thirty 1994 
Land Grant Institutions totaled $980,913.
    Just as other land-grant institutions historically received large 
grants of land or endowments in lieu of land, this sum assists the 1994 
Institutions in establishing and strengthening our academic programs in 
such areas as curricula development, faculty preparation, and 
instruction delivery. As earlier stated, Tribal Colleges often serve as 
primary community centers. Although conditions at some have improved 
substantially, many of the colleges still operate in trailers, cast-off 
buildings, and facilities with crumbling foundations, substandard and 
exposed wiring and leaking roofs. In order for the 1994 Institutions to 
become full partners in this nation's great land-grant system we need 
and deserve the facilities and infrastructure necessary to engage in 
education and research programs vital to the future health and well-
being of our reservation communities. We respectfully request Congress 
to build this much needed endowment by increasing the endowment fund 
payment to $7.1 million for fiscal year 2001, and further support this 
program with report language giving the 1994 Institutions the 
flexibility to use the interest income from this fund to address the 
critical infrastructure issues so prevalent at the Tribal Colleges.
    1994 Institutions' Educational Equity Grant Program.--Closely 
linked with the endowment fund, this program has for the last two years 
provided almost $52,000 per 1994 Institution to assist in academic 
programs. Given that current authority for this program is $50,000 per 
Institution, this level of funding reflects recognition by Congress 
that the current authorization is simply insufficient. The fiscal year 
2001 budgets of the USDA and the Administration also, acknowledge that 
the 1994 Equity Grant program has outgrown its current authority by 
requesting funds above the authorized level. We respectfully request 
that the Subcommittee expand on this program and fund it at $3 million 
to allow the colleges to build upon the courses and activities that the 
initial funding launched. Through the appropriations made available 
since fiscal year 1996, the Tribal Colleges have been able to begin to 
support vital courses and planning activities specifically targeted to 
meet the unique needs of our respective reservations. Some examples of 
this include:
  --Fort Peck Community College in Poplar, Montana has designed a 
        program to strengthen the college's instructional delivery 
        system by providing telecommunication courses and workshops 
        from Montana State University (MSU) Bozeman, MSU Northern and 
        Rocky Mountain College, in business and Agribusiness. The 
        program has also allowed Fort Peck to hire an administrative 
        assistant for community outreach services, and offer programs 
        that promote home economics through Native customs, values and 
        traditions.
  --Northwest Indian College (NWIC) has used its Equity Grant funds to 
        develop and implement a Bachelor of Technology degree program 
        in Natural Resources Management, with options in (1) Fisheries 
        and Shellfish Management (to include Aquaculture and 
        Processing); (2) Water Quality Management; (3) Environmental 
        Technology; and (4) Forest and Land Use Management. NWIC has 
        chosen to combine its share of the interest income from the 
        Land-Grant Institutions Endowment Fund with the Equity fund to 
        achieve the goals of this project.
    Other Tribal Colleges have started courses and programs in natural 
resource management; environmental sciences; horticulture; forestry; as 
well as in dietetic programs and buffalo production and management, 
which are helping to address the chronic problem of diabetes among 
American Indian people.
    1994 Research Program.--We are requesting increased funding for our 
research program, which was authorized in the Agriculture Research, 
Extension, and Education Reform Act of 1998, at ``such sums as 
necessary''. The program was initially funded in fiscal year 2000 at 
$500,000. We recognize the budget constraints that Congress is working 
under yet, with 30 institutions competing for these research dollars, 
we feel the President's suggested level of $1 million is simply not 
adequate. Therefore, we respectfully request an appropriation of $3 
million with the intention of building this funding over time to a 
level adequate to address the pressing agricultural and nutritional 
research needs of the communities we serve.
    This research program is vital to ensuring that Tribal Colleges 
finally become full partners in this nation's land-grant system. Many 
of our institutions are currently conducting applied agriculture-based 
research projects, yet they struggle to find the resources to conduct 
this research and meet their communities' needs. Some of the projects 
in progress include soil and water quality projects; amphibian 
propagation; pesticide and wildlife research; range cattle species 
enhancement; and native plant preservation for medicinal and economic 
purposes. We urge the subcommittee to fund this program at $3 million 
allow our institutions to develop and strengthen their research 
potential.
    1.7 million Institutional Capacity Building Grant Program.--This 
competitive grant program, which requires a non-federal match, would 
provide the 1994 Institutions with the investment necessary to allow us 
to strengthen and more fully develop our educational infrastructure. 
Facilities maintenance and improvement are urgently needed at Tribal 
Colleges, many of which are still operating in donated, abandoned and 
even condemned buildings. As discussed earlier, many of our colleges 
are in serious disrepair with leaking roofs, asbestos insulation, 
exposed wiring, and crumbling foundations, being the norm rather than 
the exception. The results of a recent needs assessment suggest that a 
minimum of $120 million is needed just to address the critical safety 
issues at the nation's Tribal Colleges. These improvements are needed 
to provide American Indian students with the education necessary to 
fully compete in the modern agricultural world.

                               CONCLUSION

    The 1994 Institutions have proven to be efficient and effective 
tools for bringing education to American Indians and bringing 
opportunity and hope for self-sufficiency to some of this nation's 
poorest regions. The modest federal investment in the Tribal Colleges 
has already paid great dividends in terms of employment, education, and 
economic development, and continuation of this investment makes sound 
moral and fiscal sense. American Indian reservation communities are 
second to none in their need for land-grant programs and no 
institutions better exemplify the original intent of land-grant concept 
than the 1994 Institutions.
    We appreciate your long-standing support of the Tribal Colleges and 
are grateful for your commitment to making our communities self-
sufficient. We look forward to continuing our partnership with you, the 
U.S. Department of Agriculture, and the other members of the nation's 
land-grant system--a partnership that will bring equal educational, 
agricultural, and economic opportunities to Indian Country.
    Thank you.
                                 ______
                                 

                 PREPARED STATEMENT OF AMERICAN RIVERS

    Mr. Chairman and Members of the Subcommittee on Agriculture, Rural 
Development, and Related Agencies, on behalf of more than 450 
conservation and recreation organizations, community groups, religious 
affiliations, companies, and other groups across the country, American 
Rivers would like to thank you for the opportunity to testify before 
you today.
    We urge you to support increased funding for Natural Resources 
Conservation Service soil and water conservation programs, including 
$400 million for the Environmental Quality Incentives Program (EQIP) 
and $25 million for the Wildlife Habitat Incentives Program (WHIP).
                environmental quality incentives program
    We urge you to appropriate $400 million for EQIP, a voluntary 
program designed to help farmers and ranchers facing threats to soil, 
water, and other natural resources develop successful resource 
conservation practices. The program provides financial, technical, and 
educational assistance to help landowners implement conservation plans 
that address issues such as nutrient management, manure management, 
integrated pest management, irrigation and water management, and 
wildlife habitat management. Participants join in five- to ten-year 
contracts that provide financial incentives and cost sharing to 
implement these conservation practices.
    Appropriating $400 million for EQIP will permit the Natural 
Resources Conservation Service (NRCS) to meet demand for assistance, 
increase conservation opportunities for low-income farmers, and more 
effectively target watersheds and subwatersheds that are significant 
contributors of nutrients.

                  WILDLIFE HABITAT INCENTIVES PROGRAM

    We urge you to appropriate $25 million for WHIP, which provides 
financial incentives to landowners to voluntarily develop and implement 
practices that will protect and preserve important wildlife habitat. By 
helping improve wildlife and fish habitat, WHIP can help improve the 
quality of life for participants and have a positive impact on local 
economies. According to the Fish and Wildlife Service, wildlife 
watchers spent $29.2 billion on trips, equipment, and other related 
expenditures in 1996 alone.
    WHIP is a valuable tool for restoring aquatic habitat, adjacent 
streambanks, and uplands, benefiting many species of wildlife and fish. 
In Maine, WHIP has restored habitat for Atlantic salmon and brook trout 
and critical habitat for other important fish and wildlife species. In 
Illinois, seventy-five counties secured a total of 333 WHIP contracts 
through fiscal year 1999, covering 7448 acres.
    We urge you to increase funds for NRCS programs that conserve our 
soil and water resources, including $400 million for the Environmental 
Quality Incentives Program and $25 million for the Wildlife Habitat 
Incentives Program.
    Thank you for your consideration of our requests. We strongly 
believe that these funding levels will be excellent investments in the 
long-term health of our nation's watersheds, the urban and rural 
communities they serve and the economies they sustain.
                                 ______
                                 

       PREPARED STATEMENT OF THE AMERICAN SEED TRADE ASSOCIATION

    Mr. Chairman and members of the Subcommittee, we appreciate this 
opportunity to provide you with our views on the fiscal year 2000 
agricultural appropriations bill. The American Seed Trade Association 
(ASTA) strongly urges you to provide a $20 million increase for the 
USDA National Plant Germplasm System for fiscal year 2001.
    The ASTA, founded in 1883, is one of the oldest trade associations 
in the United States. With over 900 members, the ASTA is the premiere 
advocate for the seed industry and related interests. Our diverse 
membership consists of the leading companies that are developing, 
providing, supporting, and promoting new varieties that hold tremendous 
promise and opportunity for farmers and consumers everywhere.
    Our request for a $20 million increase for the NPGS is the number 
one appropriations issue and the number one legislative issue for ASTA. 
This increase will allow seed companies to meet the diverse challenges 
facing our customers. Support for significant increases to the NPGS 
goes well beyond industry; we, also, have the support of our customers 
and the scientific community since they recognize that this will pay 
huge dividends. In addition to ASTA, the following organizations 
support a $20 million increase for the NPGS:
  --American Farm Bureau Federation
  --American Society of Agronomy
  --American Soybean Association
  --Association of Seed Certifying Agencies
  --Crop Science Society of America
  --National Association of Wheat Growers
  --National Barley Growers Association
  --National Corn Growers Association
  --Society of American Florists.
    This past year, the Department of Agriculture, also, recognized the 
need for a significant increase for the NPGS when it requested an 
increase of $19.4 million for the NPGS in its fiscal year 2001 budget 
submission to the OMB. Unfortunately, the OMB reduced the increase to 
the $5.6 million level included in the Administration's budget request. 
While we appreciate the increase, it is simply not sufficient to 
maintain the NPGS.
    The NPGS germplasm collections underpin crop-breeding efforts 
throughout the U.S. Preservation of and filling gaps in the base 
collections is a unique Federal responsibility. The NPGS:
  --acquires germplasm;
  --develops and documents information on the germplasm;
  --preserves and distributes germplasm; and
  --maintains quarantine facilities for testing imported germplasm for 
        pests and pathogens before introduction in the U.S.
    Many of the challenges confronting the U.S. can be met through the 
application of plant-based technologies. Continued use of and access to 
a broad diversity of germplasm is necessary, if we are to develop 
varieties to meet new and changing circumstances and if we are to 
sustain agricultural productivity. The improvement of plants is based 
on the utilization of genetic diversity. Unless we have a wide 
diversity of genetic resources, there will be nothing available, 
eventually, to improve plants or to prevent plants from becoming 
genetically susceptible to plant pathogens.
    With sufficient genetic resources, we will have an abundant, safe, 
nutritious, and affordable supply of food and fiber that is produced in 
an environmentally friendly manner and that ensures a reasonable return 
for our farmers and livestock producers. In addition to food and fiber, 
American agriculture can provide continually renewable resources for a 
wide range of consumer products if diverse genetic resources are 
available and accessible to U.S. scientists and plant breeders.
    Narrow genetic bases can result in widespread crop losses. For 
example, in 1970, Southern corn leaf blight cost farmers 15 percent of 
the corn crop; in the 1950s and early 1960s, about 70 percent of the 
wheat crop in the Pacific Northwest was wiped out by stripe rust; and 
the Irish potato famine of the 1840s was the result of the reliance on 
only a single variety of the potato. Breeders must have open access to 
extensive, well-maintained, and well-documented genetic resources.
    Preserving the genetic diversity of plants is essential to the 
future of agriculture as the genes to add new traits, such as tolerance 
to diseases and resistance to insects, are often present in wild 
relatives of the major crops. Wild ancestors and relatives of 
cultivated plants give us the sustained ability to develop new 
varieties. Most of the U.S. crops raised and used for food, fiber, 
ornamentals, and industrial feedstocks originated from outside of the 
U.S. Consequently, the plant breeding community is highly dependent 
upon germplasm from other countries, some of which is endangered. Once 
lost, the germplasm cannot be fully reconstructed.
    To ensure that these genetic resources are accessible and that they 
remain available, the NPGS must obtain a significant increase in 
funding. In 1991, the NPGS reported that an annual budget of $40 
million would be required to remedy shortfalls in secure storage, 
backup, evaluation, and development of core germplasm collections. 
Funding for the NPGS has not come close to approaching the $40 million 
considered as necessary in 1991. We recognize the tight budget 
constraints under which the Subcommittee must operate; however, the 
following list outlines the precarious situation of the NPGS:
  --Funding for the NPGS has declined by more than 14 percent, in 
        constant dollars, since 1992, jeopardizing vital germplasm;
  --Lack of funding has resulted in decreased supplies of germplasm 
        that limits distribution and impedes the progress of research 
        and breeding programs;
  --93 percent of all clonally-propagated samples and 19 percent of all 
        seed samples are not duplicated and are at high risk of 
        catastrophic loss, which could result in lost opportunities for 
        biodiversity and, perhaps, a wonder drug;
  --No backup has been made for citrus and nearly all tropical fruit 
        crops in the NPGS collections, due to lack of funds to develop 
        effective storage methods;
  --Long-term backup methods do not exist for many clonal crops and 
        will not be developed without a significant infusion of funds;
  --Without a significant infusion of funds, many of the clonally-
        propagated crops in the collection will remain at risk of 
        catastrophic loss;
  --NPGS cannot assume that duplicates of ``lost'' germplasm can be 
        obtained elsewhere;
  --Internationally, destruction of natural habitats, limited gene bank 
        capacity, inadequate management, and lack of consistent funding 
        has left much of the world's germplasm at high risk of loss;
  --Acquisition of endangered germplasm will slow or stop completely 
        without an increase in funding;
  --Due to funding constraints, the Plant Germplasm Quarantine Office 
        has found it necessary to establish quotas for importing 
        germplasm thereby restricting the amount of materials available 
        to U.S. scientists and plant breeders;
  --Funding is insufficient for the Quarantine Office to take full 
        advantage of molecular diagnostic techniques;
  --99.9 percent of the germplasm accessions at Griffin, GA, and 68 
        percent of the accessions at Pullman, WA, have not been tested 
        for viability within the past 10 years due to lack of funding;
  --At least 30 percent of all NPGS accessions need to be regenerated 
        during the next couple of years and with current funding it 
        will take at least 9 years;
  --18 percent of NPGS accessions are unavailable for distribution 
        primarily due to lack of funding; and
  --Without an increase in funding, many NPGS sites will be unable to 
        pay for utilities, general operations, and facility repairs.
    To fulfill its mission to provide access to diverse genetic 
resources, the NPGS must have a balanced program that includes (1) 
acquisition of germplasm to fill gaps in the collections and to 
preserve endangered germplasm; (2) maintenance and preservation of 
germplasm with secure backups to prevent loss; (3) adequate 
documentation and characterization of the germplasm; (4) sufficient 
supplies of viable seeds to allow for distribution; and (5) quarantine 
facilities that make germplasm available in a timely manner. The steady 
decline in available funding has had an extremely negative impact on 
the ability of the NPGS to have a balanced program.
    The above problems are just a few of the many that are plaguing the 
NPGS due to the lack of adequate funding. However, they are 
jeopardizing the security of the U.S. food and fiber system. As some 
plant breeders have stated, genetic diversity is the engine that drives 
plant breeding. Without new sources of genetic variation, plant 
breeders cannot make improvements. Without improvements, we will be 
unable to ensure the continued economic viability and security of our 
food and fiber system.
    The NPGS is a fundamental, strategic resource that we cannot afford 
to jeopardize. Without a significant infusion of funds, the NPGS will 
not be able to ensure the preservation of important germplasm. Our very 
existence and posterity hinges on our ability to provide breeders with 
the blueprints and genetic codes necessary to ensure new, plentiful 
foods, fibers, consumer products, and drugs. If the NPGS is not funded 
at a sufficient level, we will have lost opportunities for biodiversity 
and, perhaps, lost the germplasm for a possible wonder drug or the cure 
for some dreaded disease. The consequences of not funding the NPGS 
adequately are severe. The NPGS is a good investment for taxpayers and 
for the American consumer.
    We strongly, urge you to provide an increase of $20 million for the 
NPGS for fiscal year 2001. We recognize that this will be difficult and 
that there are many competing priorities for limited resources; 
however, we cannot afford to be complacent about the fundamental 
resources that underpin our entire future.
    Thank you for the opportunity to present ASTA's views on the 
importance of the National Plant Germplasm System. We look forward to 
working with you to ensure that the NPGS is able to provide the 
germplasm necessary for U.S. agriculture to meet the demands and 
challenges of the 21st Century.
                                 ______
                                 

    PREPARED STATEMENT OF THE ASTA CORN AND SORGHUM BASIC RESEARCH 
                               COMMITTEE

                                SUMMARY

    We are requesting $500,000 be appropriated annually for enhancing 
corn germplasm.
  --Corn is a key resource providing food, industrial uses, livestock 
        feed, and export.
  --Corn production in the U.S. is based on less than 5 percent of corn 
        germplasm available in the world. Broadening the germplasm base 
        would provide genes to improve yields and protect against new 
        disease, insect and environmental stresses. Exotic germplasm 
        would also be a source for changes in grain quality being 
        demanded by export markets, industrial processors, and other 
        end users.
  --Most exotic germplasm is unadapted to growing conditions in the 
        U.S. This proposal is a joint USDA/ARS, university, and 
        industry effort to adapt this material, so that it can be used 
        by commercial breeders in the development of new hybrids to 
        meet the demands of the American consumer and our foreign 
        markets.
  --We greatly appreciate the $500,000 previously appropriated for this 
        research, beginning with the 1995 Federal budget. This funding 
        is supporting the two main USDA/ARS locations involved in this 
        research (Iowa and North Carolina), as well as USDA/ARS and 
        university locations in Delaware, Illinois, Iowa, Missouri, 
        Ohio, New York, Tennessee, Texas and Wisconsin. Industry is 
        providing $450,000 in-kind support annually for this effort.
  --The additional appropriation of $500,000 annually would enable the 
        Iowa and North Carolina locations to purchase equipment and add 
        staff necessary for carrying out this research. It would also 
        provide funding for the increased germplasm evaluation and 
        breeding necessary to test and enhance the exotic materials 
        available.

                               BACKGROUND

    Corn is the major crop on the cultivated land of the U.S.A. where 
approximately 75 million acres are planted each year. U.S. corn 
production, accounting for about half of the world's annual production, 
adds over $16 billion of value to the American economy as a raw 
material. About 20 percent ($3.2 billion) of this production is 
exported each year, thereby providing a positive contribution to the 
nation's trade balance. Approximately 17 percent of the yearly corn 
crop is industrially refined. A portion of the refined products is 
exported resulting in an additional $1.4 billion in export. Through 
feeding livestock, the rest of the crop is processed into meat and 
dairy products that affect everyone in our society. Corn is a key 
resource within our country.

                                CONCERNS

    All of this production is based on using less than 5 percent of the 
corn germplasm available in the world. Less than 1 percent of our 
commercial corn is of exotic (foreign) origin, and tropical exotic 
germplasm is only a fraction of that. This situation exists because 
private sector corn breeders have generally concentrated on genetically 
narrow based, or elite by elite, sources for their breeding efforts, 
since their use results in getting hybrids to the marketplace faster.
    Traditionally, corn has been treated as a commodity. In recent 
years corn grain users and processors have become more interested in 
the quality characteristics of the grain itself and how this affects 
their business. Since much of the exotic germplasm has undergone 
selection for many indigenous uses (foods, beverages, etc.) by various 
cultures, it seems likely that new grain quality characteristics will 
be found in exotic germplasm rather than the narrow-based germplasm now 
used. A small increase in value to the grain, such as 10 cents per 
bushel, would increase its annual value by $800 million for an eight 
billion bushel harvest.\1\
---------------------------------------------------------------------------
    \1\ Salhuana, Pollak, Tiffany 1994. Public/Private Collaboration 
Proposed to Strengthen Quality and Production of U.S. Corn through 
Maize Germplasm Enhancement, Diversity Vol. 9, no. 4, 1993/Vol. 10, no. 
1, 1994.
---------------------------------------------------------------------------
    Breeders must still be concerned with breeding for higher yields so 
that U.S. corn farmers can remain competitive. Tapping into the broader 
germplasm pool could provide new sources of genes for higher yield and 
other performance traits, such as disease and insect tolerance or 
improved stalk and root strength.
    A further concern with a narrow genetic base is the potential for 
widespread disease or insect damage due to new diseases or insect 
species spreading into U.S. corn growing areas. It is more likely that 
resistance to these dangers would be found in genetically diverse 
exotic germplasm sources than in our breeding material. One major 
benefit would be reduced pesticide use. In addition to protection 
against diseases and insects, these exotic materials provide insurance 
for unforeseen climatic or environmental problems.

                              LAMP PROJECT

    What would be the source of this exotic germplasm? Over the years, 
collections of corn have been made from farmers' fields and other 
sources all over the world, and are stored in various germplasm banks. 
In 1987, the Latin American Maize Project (LAMP) was initiated to 
evaluate these corn collections (accessions). It was a cooperative 
effort among 12 countries to identify accessions that might provide 
valuable source material for further improvement in hybrid and open-
pollinated cultivars in the U.S.A. and other areas. Pioneer Hi-Bred 
International gave USDA/ARS $1.5 million to fund the LAMP research.
    Nearly 12,000 maize (corn) germplasm accessions were evaluated. In 
successive stages, the project identified the top 268 accessions. The 
environmental areas of adaptation for these 268 ``elite'' populations 
range from temperate to tropical, and are prime candidates for 
enhancing the U.S.A. corn germplasm base.

                         GERMPLASM ENHANCEMENT

    Most of this germplasm is unadapted to growing conditions in the 
U.S. and requires genetic enhancement to make it adapted, or able to 
grow and mature in our environmental conditions. Enhancement basically 
means that these exotic materials will be bred with U.S. adapted 
materials and breeders will select progeny that carry the desired 
exotic traits and are also adapted to U.S. growing conditions. This 
will require a concerted long-term breeding approach by corn breeders 
at numerous locations (environments) throughout the U.S. Only after 
this process of enhancement will these exotic materials be ready to 
enter commercial corn breeding channels and be effectively utilized by 
a broad cross-section of the industry in the development of new hybrids 
for farmers and corn users.
    The total process of enhancement is too large and long-term for 
public institutions and/or seed companies to accomplish individually. 
An ambitious task of this nature can only be completed through a 
coordinated and cooperative effort between the USDA/ARS, land-grant 
universities, and industry.
    The Corn and Sorghum Basic Research Committee of the American Seed 
Trade Association has been concerned that enhancement of this exotic 
germplasm would proceed. The Committee consists of representatives from 
about 30 companies actively involved in the corn and sorghum seed 
industry, and at the committee's request, Dr. Linda Pollak, Research 
Geneticist, USDA/ARS, et al, developed a proposal for enhancing exotic 
germplasm starting with materials which will include the elite LAMP 
accessions as noted above. This proposal has developed into the U.S. 
GEM (Germplasm Enhancement of Maize) Project.

                        U.S. GEM PROJECT OUTLINE

    Since this project serves a national need, the primary effort and 
direction has come from the USDA/ARS. Two permanent USDA/ARS locations 
are being used as primary sites for enhancement breeding and 
coordination. One is in Ames, Iowa, where the USDA/ARS currently 
conducts corn evaluation and enhancement efforts. Dr. Linda Pollak, 
Research Geneticist, is located there. Dr. Pollak was the Principal 
Investigator of the U.S.A. for LAMP, and is the lead scientist for this 
project.
    The other permanent site is the USDA/ARS location in North 
Carolina. This site has responsibility for initial evaluation and 
conversion of the tropical materials. Tropical corn populations 
normally will not reach maturity in the Corn Belt, but will produce 
seed in North Carolina. After initial enhancement of the tropical 
materials in the South, they will be sent to Ames for further 
enhancement and testing in Corn Belt conditions. Dr. Marty Carson is in 
charge of this program.
    A number of corn researchers at various land-grant universities and 
other ARS locations are also taking part in the enhancement and 
evaluation of this exotic germplasm. This cooperative effort is very 
important and serves not only as a source of improved germplasm but 
also provides excellent training for future plant scientists.
    Industry is also involved. Due to the success of the GEM program, 
an initial group of 19 companies has increased to a total of 27 
companies that have pledged research nursery and yield trial plots to 
be used in this breeding effort. This in-kind support is valued at 
$450,000 per year.
    An important component of the project is an annual meeting of all 
cooperators to evaluate progress and plan strategies. An information 
network has been established to keep everyone up-to-date. A U.S. GEM 
Technical Steering Group consisting of members from USDA/ARS, 
University, and Industry has been formed for guidance and 
administration of this cooperative effort.
    This germplasm enhancement project is public and is open to all 
public sector institutions as well as private seed companies. 
Information will be freely available and publicly developed materials 
will remain in the public domain, accessible to all.

                      ACCOMPLISHMENTS IN 1996-1999

    Following is a description of accomplishments and research 
conducted at various locations using 1996-1999 funding.
    Ames, Iowa.--Priorities for the corn enhancement work at this 
location are overall project coordination, data analysis and 
management, management and release of enhanced germplasm, analysis of 
materials for value-added traits, and as one of the many breeding 
sites. To date, 186 hybrids from crosses with GEM breeding lines have 
beaten the average of commercial check hybrids in trials analyzed in 
Ames.
    The laboratory is continuing to evaluate oil, starch, and protein 
in the exotic accessions and in the breeding populations made up of 
exotic materials crossed to proprietary corn belt inbreds. In results 
from 1996, a line from one breeding cross measured total protein of 16 
percent (corn belt germplasm has 10 percent) and total oil level of 6 
percent (corn belt is 4 percent). It is extremely unique to find 
increased levels for both of these traits in the same line, and it is 
potentially very useful for food and feed applications. In 1997, lines 
were identified with unique starch characteristics, which may be 
beneficial for human food products. In 1998, three lines were 
identified with high percent retrogradation, which may have 
applications as a new source of dietary fiber or as a dry lubricant. 
Other lines were found to exhibit certain potentially useful traits, 
such as low protein (5.1 percent), high protein (15.4 percent) and high 
starch content (73.6 percent). In 1999 five lines were found with 
improved starch quality (three for improved gelatinization and two for 
Peak Height Index) and several lines were identified with enhanced 
fatty acid content.
    GEM's World Wide Web site opened on July 15, 1996. From this site 
cooperators can obtain the latest data from yield tests, disease and 
insect screening, and value-added trait research, as well as news and 
upcoming events.
    Raleigh, North Carolina.--The focus of this location is twofold. 
One priority is to develop enhanced material adapted to the Southern 
U.S. corn growing conditions. The second is to be a stepping stone for 
adapting tropical material to Midwest conditions.
    Breeding populations were tested for resistance to various leaf 
diseases and stalk rots. Selections were made for improved material 
with resistance to these diseases as well as for improved yield, 
standability, and adaptation to southern U.S. conditions. For example, 
in 1997 significant resistance to Fusarium ear rot was found in four 
GEM breeding populations. Resistance to Aspergillus ear rot was also 
found in two of these same four populations. Hybrids of about 55 
advanced breeding lines developed from tropical by elite breeding 
populations yielded equal to or outyielded the mean of commercial check 
hybrids over two years. These lines are now candidates for release.
    Other public cooperators conducted evaluations and are finding many 
positive results in 1999 as follows: Grain quality in Delaware and 
Ohio. Yield data accumulation in Georgia, North Carolina, Maryland, 
Tennessee, Kentucky, Missouri, Texas and Delaware. Starch quality and 
disease resistance in Illinois. Fusarium ear rot resistance in Iowa. 
Wet milling properties, starch functionality, and other value added 
grain traits in Iowa. Aflatoxin resistance, corn earworm tolerance and 
grain quality in Texas. Resistance to corn rootworm in Missouri. 
Resistance to anthracnose stalk rot in New York. Breeding in Tennessee. 
Evaluation of silage quality in Wisconsin.
    Demonstration nurseries were planted at Iowa and North Carolina for 
viewing by cooperators. Fall field days were held at Iowa and North 
Carolina.
    In 1999, private cooperators continued the breeding and adaptation 
of about 15 accessions following the protocol developed by the GEM 
Technical Steering Group. Companies increased their nursery and yield 
trial in-kind support by approximately 25 percent in 1996. In 1999, six 
additional private cooperators joined GEM and are providing in-kind 
support.

                            RESEARCH IN 2000

    Research will continue at the various USDA/ARS, university, and 
company locations similar to 1999.

             EFFECTS OF INCREASED FUNDING BEGINNING IN 2001

    Appropriation of the additional $500,000 annually would provide 
funds to increase research in the following ways:
    Ames, Iowa.--The increase in the integrated field and laboratory 
experiments and breeding projects requires the addition of a field 
technician (GS-7). Continuation of the postdoctoral position for value 
added trait research (after a one year hiatus) would provide for the 
study of food technology aspects of the unique traits being discovered. 
A graduate research assistant would study the inheritance of these 
value added traits, developing invaluable information for the breeding 
effort. A database management system has been purchased, which needs 
additional programming to meet GEM needs. By nearly tripling the amount 
for public cooperators, it would greatly enhance the data gathering and 
adaptation breeding of these materials in the various States where 
these cooperators are located.
    Raleigh, North Carolina.--This location has a number of equipment 
needs, such as a seed storage unit, because current facilities are 
filled to capacity and a minivan for transportation. A technician would 
be added to handle the expanded field work. Current resources restrict 
testing and development work to relatively few breeding populations. 
With the increased funding, the number of breeding crosses could be 
increased, greatly speeding up the introduction of adapted GEM material 
into private and public breeding programs. Additional funding would 
provide for yield trial testing at more locations and more extensive 
disease and insect resistance screening, greatly increasing the 
precision in selecting materials that are high yielding and have high 
levels of pest resistance.
    Other Public Cooperators.--The increase in funding for public 
cooperators (to $266,250 per year in the third fiscal year) would allow 
for full evaluation and development of new breeding materials improved 
for productivity as well as disease and insect resistance and value-
added traits. Most public cooperators are willing to participate, but 
cannot unless they have at least partial funding. There are 
approximately 30 public cooperators now in many States, and as the 
project develops we are likely to have more.

                               CONCLUSION

    Corn hybrids in the U.S. have a very narrow genetic base, utilizing 
only a small percentage of all available corn germplasm. This greatly 
increases vulnerability to unforeseen pest problems, and may lead to an 
eventual yield cap. Exotic corn germplasm could provide genes for 
resistance to pest problems and for increased yields. These exotic 
materials may also contain quality traits to meet new market demands. 
This will help ensure the U.S. maintains its world leadership in 
providing the best raw materials to meet the demand for the production 
of meat, eggs, milk, and many other food and industrial uses.
    The LAMP project identified the top 268 corn accessions from among 
12,000 populations evaluated. The present proposal represents a joint 
USDA/ARS, land-grant university, and industry effort to enhance these 
and other exotic accessions so that they can enter commercial corn 
breeding programs. The result of this cooperation will be an increase 
in the productivity, quality, and marketability of hybrid corn in the 
U.S. and for export, benefiting the farmer, the feed and processing 
industries, and the consumer.
    Therefore, the ASTA Corn and Sorghum Basic Research Committee 
hereby requests the 106th Congress of the United States to add funding 
of $500,000 (in addition to the $500,000 appropriated initially in 
1995, for a total of $1,000,000) annually for this corn germplasm 
enhancement project beginning with the 2001 Federal budget.

                             BUDGET SUMMARY

    This is a summary of the operational and capital budgets for 2000, 
2001, and 2002. The budget is divided into the Corn Belt Location and 
corresponds to Ames, Iowa (USDA-ARS) and the cooperators in the Corn 
Belt area. The Southern Location corresponds with Raleigh, North 
Carolina (USDA-ARS) and the cooperators in the States in the South. For 
a complete copy of the budget, please contact Dr. David Harper, 
Holden's Foundation Seeds LLC, Box 839, Williamsburg, IA 52361 or 319-
668-1100.

------------------------------------------------------------------------
              Items                    2000         2001         2002
------------------------------------------------------------------------
Corn Belt Location:
    Board Reductions.............      $20,200      $20,900      $21,500
    Personnel....................      142,100      248,700      271,270
    Office/Field.................       52,800       68,700       70,980
    Capital Equipment............       24,900       80,450       55,000
    Specific Agreements for             60,000      181,250      181,250
     Public Cooperators \1\......
                                  --------------------------------------
      Total for Corn Belt              300,000      600,000      600,000
       Location..................
                                  ======================================
Southern Location:
    Personnel....................       68,600      113,000      115,400
    Indirect Costs...............       16,213       13,363       13,363
    Office/Field.................       30,187       43,637       45,237
    Capital Equipment............        5,000       65,000       41,000
    Specific Agreements for             30,000       65,000       85,000
     Public Cooperators \1\......
                                  --------------------------------------
      Total for Southern Location      150,000      300,000      300,000
                                  ======================================
Summary:
    Corn Belt Location...........      300,000      600,000      600,000
    Southern Location............      150,000      300,000      300,000
    USDA/ARS Overhead............       50,000      100,000      100,000
                                  --------------------------------------
      Grand Total................      500,000    1,000,000    1,000,000
------------------------------------------------------------------------
\1\ Specific Agreements for Public Cooperators: Agreements for public
  cooperation can be made with universities and ARS scientists in many
  locations which could include the following States: Delaware, Ohio,
  Pennsylvania, Indiana, Illinois, Wisconsin, Kentucky, Missouri, New
  York, Iowa, Michigan, Minnesota, North Dakota, South Dakota, Nebraska,
  North Carolina, Mississippi, Georgia, Louisiana, Texas and Tennessee.
  Research at these locations would include selection for disease and
  insect resistance, evaluation for value added traits, and yield
  trials.

                                 ______
                                 

  PREPARED STATEMENT OF THE AMERICAN SOCIETY FOR NUTRITIONAL SCIENCES

    The American Society for Nutritional Sciences (ASNS) is the 
principal professional organization of nutrition research scientists in 
the United States representing 3,000 members whose purpose is to 
develop and extend the knowledge and application of nutrition science. 
ASNS members include scientists involved in human as well as animal 
nutrition research. Our members hold positions in virtually every land 
grant and private institution engaged in nutrition-related research in 
the United States as well as industrial enterprises conducting 
nutrition and food related research.
    ASNS wants to express gratitude for the work that this committee 
did last year, on both sides of the aisle, to help maintain 
competitively awarded agricultural research in the National Research 
Initiative Competitive Grants Program (NRICGP) against many other 
worthy competing programs. However, significant growth in fiscal year 
2001 for the NRICGP is needed to help set the course for increased 
emphasis in the critically emerging areas such as genomics and 
genetics. While genomics is being studied under NIH and NSF funded 
grants, they have not addressed the areas of the genetic influence on 
nutrient requirements of individuals, nutrient gene interactions, and 
nutrient metabolism on the genetic basis of diseases in their 
intramural grants programs. These areas easily fit into the purview the 
of USDA's NRI mission. ASNS supports these and other key elements that 
will enhance cross-cutting areas of nutrition research having broad 
health outcomes.
    The President's Budget for fiscal year 2001 calls for a net 
increase of $31 million above fiscal year 2000 funding for the NRI. We 
strongly endorse this substantially needed investment, plus an 
additional $73 million that would provide the NRICGP with $203 million 
in fiscal year 2001.
    We know there would be concerns from this Committee and the 
Congress about how the competitive grants program might absorb such a 
substantial increase and effectively manage any new competitive 
initiatives. At this time we offer some suggestions as to how USDA's 
CSREES may incorporate such an increase so that the funds are 
effectively managed for the best possible health research outcomes. 
ASNS encourages Congress to urge department officials to consider 
administering all ongoing and new initiatives through a centralized 
office. This allows new grant administrators to take advantage of the 
investment and experience of an established program. Our Society 
stresses that the NRICGP use the model of other federal agencies that 
have more than one review cycle per year. Two or three cycles per year 
would allow for timely resubmission and encourage institutions to 
provide bridging funds for quality programs. However, despite the 
potential for further advancement, the USDA research budget has 
actually decreased in constant dollars by nine percent in the last five 
years. Currently only 25 percent of qualified grants receive funding. 
Consequently, inadequate funding limits the productivity of researchers 
that the NRICGP is able to fund and deters researchers from spending 
valuable time writing additional grant proposals. Furthermore, NRICGP 
awards are small, averaging $133,210 in fiscal year 1999, and short, 
averaging 2.3 years for a total average support of about $60,000 each 
year. Though, according to a the Federation of American Societies for 
Experimental Biology (FASEB) Federal Funding Consensus Report for 
fiscal year 2001, it is important to note that the number of 
applications received in fiscal year 1999 increased by 157 over fiscal 
year 1998 following an increased appropriation to the program's 
budget.\1\
---------------------------------------------------------------------------
    \1\ Federal Funding for Biomedical and Related Life Sciences 
Research Fiscal Year 2001, Federation of American Societies for 
Experimental Biology, 2000, p.15.
---------------------------------------------------------------------------
    A recent report from the National Association State Universities 
and Land Grant Colleges (NASULGC) stated that research and development 
funding for space exploration, the environment, basic science research, 
and health research has increased in constant dollars from 23 to 58 
percent over the last ten years. But during this same time period, the 
funding for agricultural research and extension programs, the lifeblood 
of our food supply system, has shrunk by eight percent in constant 
dollars. Base funds have eroded by 16 percent. These funds support the 
scientists and extension educators who can respond quickly and 
effectively to unexpected problems that arise for producers and 
consumers. The benefit is a food system that enables the consumer 
dollar and the welfare family's food stamps to purchase inexpensive, 
safe, and nutritious food. A food system that creates jobs, competes 
worldwide, and conserves its natural resources base.\2\
---------------------------------------------------------------------------
    \2\ Investments that Make a Difference, National Association of 
State Universities and Land-Grant Colleges, Fiscal Year 2000 Budget 
Proposal.
---------------------------------------------------------------------------

                RESEARCH FUNDING MECHANISMS AND ISSUES:

Competitive Grants

    A competitive system for allocating Government research funds is 
the most effective and efficient mechanism for focusing efforts on 
cutting edge research aimed at improving the health of the American 
people. Competitive grants provide the most effective, efficient and 
economic return to the public. ASNS strongly supports the competitive 
grants process as reflected in the National Research Initiative and 
believes that an open, merit and peer review process, applied as 
extensively as possible throughout the research system, is the best way 
to distribute research funds among qualified scientists.
Initiative for Future Agriculture and Food Systems (IFAFS)
    IFAFS calls for priority mission areas to be addressed: food 
genome; food safety; food technology and human nutrition; new and 
alternative uses and production of agricultural commodities and 
products; agricultural biotechnology; and natural resource management. 
The Initiative also includes provisions that allow merit/peer review 
and lets those who benefit from agricultural research provide input 
about the priority setting process. ASNS supports this Initiative and 
urges members of this sub-committee make it a funding priority in 
fiscal year 2001.

National Needs Fellowship Grants Program

    Another important area where funding has remained stagnant is the 
National Needs Fellowship of the Graduate Fellowship Program at the 
Higher Education Office of the USDA. This program is fills an important 
need to help train the next generation of agricultural researchers. 
Despite its importance, funding for the program has seen a dramatic 
decline in recent years after peaking in 1996 at $5 million. ASNS 
endorses $5 million for the National Needs Program so that it may be 
restored to its previous funding levels. We also support the review and 
subsequent reorganization of USDA-sponsored graduate training.

Special Grants

    ASNS strongly believes that the best research results come from 
research that is peer reviewed. That is why researchers funded by 
federal agencies, such as the NIH and the NSF, that award grants on 
merit have made such great progress. There is a potential danger that 
special grants and earmarked research funds from USDA may be awarded on 
the basis of politics rather than merit, priority or research need. 
Therefore, the perception might be that the integrity of the research 
system and agricultural science is undermined. Last year special grants 
were appropriated at nearly $74 million even though the 
Administration's request for this year was less than half of that 
figure. We recognize that there is pressure to maintain these special 
grants. While special grants have their place to address emergency 
needs of national priority such as food safety, they may also be used 
to address research that is not deemed of the highest priority or 
merit. Thus, the proportion of special grants in comparison to the 
total research budget at USDA should be decreased.

                THE NEED FOR NUTRITION-RELATED RESEARCH

    The need for nutrition science and research is critical within the 
USDA. Nutrition and agricultural research are areas that impact the 
constituents of every congressional district in the nation. New 
technologies are demanded to reduce the likelihood of pathogen 
transmission by food, to improve the quality of processed foods, and to 
deliver greater nutritional value in foods. Additionally the economic 
impact on society in healthcare costs produced by advances in nutrition 
research is significant in the number of dollars saved by the American 
taxpayer. As health costs continue to rise, it is imperative that our 
medical practices take a preventive approach. This requires a thorough 
understanding of the role of nutrients in foods in preventing chronic 
illnesses such as heart disease, cancer and diabetes.
    The USDA has a unique role in the area of nutrition research, 
particularly as it applies to human nutrition. For example, although 
there is a serious and obvious commitment to the funding of disease-
related research within the National Institutes of Health, issues 
important to the basic mechanisms of nutrient function and the safety 
of the food supply have traditionally been the purview of USDA funded 
research. Most of the recent work on nutrient content and availability 
in various foods has come from USDA-NRI supported research. From a 
consumer perspective, it is this type of information that is often the 
most useful.

                      FOOD SECURITY AND BEHAVIORS

    A 1994 Institute of Medicine Report stated that reducing foodborne 
illness will require research in all aspects of the food system, from 
production to consumption.\3\ For example, identifying the foods most 
involved in foodborne illnesses, characterizing new foodborne 
pathogens, and developing new monitoring protocols are some ways to 
detect pathogens or toxicants responsible for outbreaks and minimize 
their impacts. Studies are also needed to identify food behaviors and 
nutritional effects in relation to more vulnerable populations such as 
infants and the elderly. Also, knowing more about health protectants 
will enable individuals to maximize the nutrition and ``healthfulness'' 
of their food choices relative to the prevention of disease. The need 
also exists to better understand the biology and behavior of food 
choices. Here we also need to study consumption related to risk 
analysis which demands better data on food consumption.
---------------------------------------------------------------------------
    \3\ Opportunities in the Nutrition and Food Sciences, Institute of 
Medicine, 1994, p. 111.
---------------------------------------------------------------------------

                      BIOTECHNOLOGY AND NUTRITION

    Increased interest in enhancing the nutritional quality of the food 
supply has sparked ways to design foods not just for disease prevention 
but also for health promotion. For example, opportunities exist to 
influence food habits and food choices, by using technology to enhance 
healthful foods.
    Ultimately we will want to know what compositional changes in crop 
plants have the best nutritional value. There are many basic questions 
left unanswered on the role of diet in health and disease when it comes 
to phytonutrients in plants.
    USDA is encouraged to collaborate with other federal agencies in 
the area of nutrition whenever possible. This objective naturally spans 
research done in both the USDA and NIH.

                         GENETICS AND NUTRITION

    Studying genetic interactions will allow us to address several 
issues at once. For example, what intakes of nutrients are needed to 
achieve optimal health and minimal risk of various diseases associated 
with diet? Do requirements differ depending on genetics? How do 
genetics influence efficiency of metabolism and does this affect 
nutrient requirements? What are metabolic and health consequences of 
inadequate nutritional status, as affected by genetics? Many research 
opportunities exist in this area.

                         GENOMICS AND NUTRITION

    ASNS supports a recent report from the Federation of American 
Societies for Experimental Biology that states, increased funding 
should bring an emphasis on all aspects of genomics. Such an initiative 
would significantly enhance existing programs within the NRI. One 
example might be functional genomics. ASNS has provided detailed 
scientific background about this kind of research to USDA program 
directors at a recent stakeholders meeting.
    Research and resources devoted to unraveling the genomes of a few 
selected organisms have been expanding dramatically in recent years. 
While the administration of large-scale programs has been placed in 
agencies other than USDA, the power and long-term impact of a large-
scale genome initiative directed toward agriculturally important 
organisms--including animals, plants, and microbes (plant, animal and 
human pathogens)--represents a major opportunity and fulfills an 
important need in agriculture.
    USDA's NRICGP is well positioned to use genomic data to address 
programs in agriculturally important organisms. However, given its 
present budget--and even with the most optimistic incremental 
increases--the NRICGP currently lacks the resource depth to meet this 
challenge. Portions of our proposed increase would be wisely used in 
the critically important area of genomics.

                           ANIMAL WELFARE ACT

    Research using animals has been crucial to virtually every advance 
in medicine in the past century. Agents for control of high blood 
pressure and the management of diabetes, vaccines for the control of 
poliomyelitis and mumps, development of artificial joints and heart-
lung machines, and many more medical advances have depended on animal 
research.
    USDA's Animal and Plant Health Inspection Service (APHIS) is 
charged by Congress to enforce the Animal Welfare Act (AWA). Under the 
AWA, USDA licenses dealers to buy and sell random-source animals to 
research facilities that are unable to obtain them from municipal 
pounds and shelters. This provides access to a critical supply of 
animals since animals bred specifically for research often lack 
characteristics needed by researchers studying health-related problems. 
Much of their work relies on older, larger, and genetically diverse 
animals.
    ASNS recommends that Congress provide APHIS with adequate funding 
for enforcement of the Animal Welfare Act in fiscal year 2000 so that 
it can continue to ensure compliance with the AWA.

                               CONCLUSION

    Agriculture is and will continue to be important to human health in 
terms of food that provides proper nutrition for healthier people. As 
the future challenges us with more complicated diseases, research must 
expand outside the traditional disciplines and approaches, such as the 
work that is being done is plant and animal genomics. New approaches 
must be implemented to address new societal concerns. For example, 
despite our hard efforts to plan healthy diets for school children much 
of this food is being wasted. Nutritionists are constantly challenged 
to develop nutrient-balanced meals that will encourage our children to 
choose more healthful foods. New demands to fit busy lifestyles is 
another example. Issues such as product convenience, uniformity of 
products, ease of preparation, ``automatic'' nutrient balancing, and 
packaging are all areas scientists must address. Research in areas of 
how our food is produced, pesticide usage, animal care and food 
handling issues also present demands to our scientists. These demands 
and opportunities must be answered in a way that sustains or enhances 
our quality of life. Although greater challenges lie ahead, 
agricultural research funding continues to have slow growth despite 
significant increases at other research agencies such as the NIH and 
NSF.
    It is for these reasons that ASNS reiterates the following 
recommendations to the sub-committee:
  --Increase funding for USDA's NRICGP from $119 million to $203 
        million, of which a portion should be allotted for a genomics 
        initiative.
  --ASNS recommends $120 million for the Initiative for Future 
        Agriculture and Food Systems in which human nutrition research 
        remains a research priority.
  --Provide an increase of $5 million to the National Needs Fellowship 
        Grants Program so that it may be restored to its previous 
        funding levels.
                                 ______
                                 

      PREPARED STATEMENT OF THE AMERICAN SOCIETY FOR MICROBIOLOGY

                      FOOD AND DRUG ADMINISTRATION

    The Food and Drug Administration (FDA) plays an essential role in 
protecting the nation's health. The Agency enters the 21st century with 
rapidly expanding responsibilities and an urgent need for more 
resources. The American Society for Microbiology (ASM), which 
represents over 42,000 members, believes the Administration's proposed 
FDA budget for fiscal year 2001 is a good first step toward providing 
increased support for the critical public health activities of the FDA. 
The nearly $1.4 billion budget requested for FDA by the Administration 
represents an increase of 13 percent, or $176 million over the fiscal 
year 2000 enacted level.
    Providing an adequate budget for the FDA is essential because the 
nation's burgeoning medical and food research efforts will result in 
steadily increased numbers of products before the FDA for review. This 
review must be based on solid, state-of-the-art science, which requires 
financial resources and trained personnel. The fiscal year 2001 budget 
request recognizes the importance of FDA's traditional dual roles: that 
of ensuring the highest level of safety for already marketed products, 
and that of ensuring in a timely fashion the release of new products 
that benefit the American public.
    FDA research should be recognized as an important component of the 
nation's overall biomedical research program and should receive 
increased attention and funding. Every FDA decision which influences 
public health must be based on current, highest quality research.
    With its focus on the microbiological sciences, the ASM fully 
appreciates the complexity and critical nature of the FDA's efforts to 
manage health risks to humans and animals, to develop new scientific 
research within the Agency itself, and to interact effectively with the 
public, industry and academia alike. Several specific areas of the FDA 
mission are of particular interest to the ASM membership and 
demonstrate the need for additional resources: FDA research in the 
Center for Biologics Evaluation and Research (CBER) which enables FDA 
to respond to scientific and technological advances, vaccine safety, 
blood safety, gene therapy safety and diagnostics related to infectious 
diseases; FDA capacity to respond to food safety involving foodborne 
pathogens and antibiotic resistance acquired by pathogenic 
microorganisms and to reduce the number of deaths from medical errors; 
and FDA participation in U.S. bioterrorism preparedness to ensure an 
adequate program in this country.

                              FDA RESEARCH

    The ASM strongly supports budgetary increases to improve FDA's 
science base. The FDA must be given the resources to keep pace with 
accelerating technology and to take advantage of scientific 
opportunities to best serve the American public.
    Basic research by the FDA's Center for Biologics Evaluation and 
Research contributes to the Agency's ability to respond to escalating 
product market in a timely and knowledgeable manner. The ASM recommends 
adoption of the Adminstration's fiscal year 2001 budget request for 
increased support of CBER and its research efforts, at a time when the 
demands on the FDA's expertise are growing rapidly.
    To ensure the fruits of the nation's biomedical research successes, 
the FDA will face complex, often unexpected, demands in this new 
century, as both science and public needs change and change again over 
time. We can predict challenges, such as continued safety of our blood 
supply and enlarging stockpiles of vaccines to counter potential 
bioterrorism. Others, such as still unknown microbial pathogens and 
expanding antibiotic resistance, can only be anticipated. Not only must 
the FDA have at hand the latest in known technology, it must 
consistently develop innovative ways to eliminate future threats to 
public health and remain able to adapt rapidly to ever new challenges.
    In the past 20 years, expenditures in drug research have increased 
seven-fold, resulting in more and more potential products in need of 
science-based evaluation by the FDA. Although the FDA is not a basic 
research agency, it must be able to respond to constant changes in both 
its consumer constituency and the challenges it faces daily. Thus 
research is an important component of its broad based mission. In the 
face of a rapidly shifting research environment, the FDA, like all 
research agencies, must stay at the forefront of scientific knowledge, 
through both the efforts of its own scientists and the communication 
with others involved in safeguarding public safety. It must be able to 
recruit and retain high quality personnel capable of adapting to 
consumers' concerns, changes in the marketplace, the varied threats to 
public health, and new processing practices by the growing numbers of 
product producers. This enormous task mandates strong fiscal support 
from the Congress, sustained over time and into the future.

                 FOOD SAFETY AND ANTIBIOTIC RESISTANCE

    The ASM commends the Congress' and the Administration's support in 
recent years of the national Food Safety Initiative, a collaborative 
program of the FDA, the Centers for Disease Control and Prevention, and 
the U.S. Department of Agriculture. The $30 million requested by the 
Administration for this important initiative in fiscal year 2001 will 
support program goals already underway, including expansion of domestic 
food inspection, development of nationwide standards for on-farm and 
in-plant preventive controls, further research on molecular methods to 
rapidly identify foodborne pathogens, and completion of the National 
Antimicrobial Resistance Monitoring System.
    The Food Safety Initiative is just one example of science-based 
success in the past year. In addition to the National Antimicrobial 
Resistance Monitoring System, two other national systems to assure food 
safety are now in place: FoodNet, a foodborne disease tracking system, 
and PulseNet, a computerized database of bacterial DNA subtypes to help 
determine whether scattered disease outbreaks are due to a common food 
source. The FDA recently developed a method to detect as many as 13 
foodborne pathogens in one suspected food sample. Several outbreaks of 
foodborne illness were shortened in the past year, in part through the 
efforts of the FDA and its partners in food safety.
    Food production and consumption patterns have changed considerably 
in recent decades. New foodborne pathogens, more meals prepared and 
eaten away from the home, more complicated food processing methods 
multiply the possibilities of contamination. Some foodborne pathogens 
have become far more deadly in recent years, such as pathogenic E. coli 
and antibiotic resistant Salmonella. The local food market is now part 
of a global grocery store, a system of imported and exported foods that 
must be regulated by the FDA. And the populations most vulnerable to 
foodborne diseases, such as children and the elderly, have increased to 
account for as much as 25 percent of the U.S. population further 
complicating the FDA's mission as protector of public health.

                             MEDICAL ERRORS

    As the nation's population ages and becomes more diverse, the 
health care system becomes more stressed, more susceptible to human and 
technological errors. This has been and continues to be a major area of 
concern to the FDA, as the Federal agency charged with product safety. 
A recent study by the Institute of Medicine estimated that nearly 
100,000 Americans may be dying each year as a result of preventable 
medical errors. Part of this disturbing situation can be attributed to 
human error, part to an exploding array of drugs, medical devices, 
blood and other biological products used in health care settings.
    The $12.8 million requested to respond to preventable medical 
mistakes will help assure the safety of vaccines, therapeutic agents, 
blood products, medical devices and other tools used by the U.S. health 
care industry--an important step toward minimizing the number of 
deaths.

                              BIOTERRORISM

    Unfortunately, the threat of a biological attack against American 
citizens must be taken seriously, and U.S. preparedness for an 
emergency response is essential. There is need to ensure expeditious 
development and licensure of new vaccines for smallpox, anthrax and 
other biological agents that might be weaponized. The ASM recommends 
that Congress provide the requested $11.5 million to FDA to help 
counter bioterrorism and work, in collaboration with NIH, CDC, DOD, 
academia and private industry, to ensure the development of vaccines, 
diagnostics and therapeutics to be used in response to selected 
biological and chemical agents. The FDA needs resources to 
expeditiously review and approve new drugs, therapeutics, vaccines and 
anti-toxins against biological warfare agents in the interest of 
national security and public health.

                               CONCLUSION

    Through its many and diverse responsibilities, the FDA provides the 
United States with not only an improved national health but a 
collective peace of mind. Much of its work is never recognized, as the 
FDA often works behind the scenes to benefit the American public. The 
Agency provides tangible results such as prevention of foodborne 
disease through systematic monitoring of production facilities and 
screening of the blood supply. FDA approval of the Hemophilus 
influenzae type B vaccine will save the United States an estimated $150 
to $400 million annually in health care costs. The FDA is also 
targeting as a principal concern medical errors, which are estimated to 
cost as much as $80 billion a year. FDA researchers contribute as well 
to the scientific knowledge base, thus enhancing new product 
development by industry and public research organizations, and helping 
the United States remain a world leader in new product development.
    The ASM thanks the subcommittee for the opportunity to submit 
testimony and would be pleased to respond to any questions.
                                 ______
                                 

      PREPARED STATEMENT OF THE AMERICAN SOCIETY FOR MICROBIOLOGY

                    RESEARCH AND EDUCATION PROGRAMS

    The U.S. agricultural system is one of the most productive and 
efficient in the world, due in part to past technological innovations. 
Agricultural research plays a crucial role in promoting the nation's 
economic growth, improving environmental quality, and assuring 
innovative scientific research. Federal support for agricultural 
research is essential, in order to build the broad knowledge base 
needed to commercialize new and improved agricultural products and 
tools.
    U.S. agriculture, however, continues to face an array of 
challenges, including the threats of new and emerging diseases, public 
concern about food safety and the agriculture industry's impact on the 
environment, not to mention an increasing global population. It is 
critical to increase the investment in research to respond to these 
challenges. We encourage Congress to build on the renewed focus on 
agricultural research in recent years, which will benefit not only U.S. 
agriculture but also the health and well being of every American 
citizen.
      cooperative state research, education and extension service
    The ASM strongly supports competitive peer reviewed research that 
is open to all the nation's scientists. The ASM urges the Subcommittee 
to support the President's request of $150 million for the National 
Research Initiative Competitive Grants Program (NRI) within the 
Cooperative State Research, Education and Extension Service (CSREES), 
an increase of $31 million over the fiscal year 2000 appropriation. The 
proposed increase will address important research areas in agriculture 
including food safety, plant and animal genetics, and pest and disease 
management.
    The ASM is pleased to see the President's continued support for the 
Initiative for Future Agriculture and Food Systems (IFAFS). This 
competitive grants program differs from the NRI in that it provides 
$120 million in fully offset mandatory funding for research and 
extension projects that are multi-disciplinary and applied in scope and 
target critical and emerging agriculture issues. ASM encourages the 
Congress to support this needed infusion of research money.

                     AGRICULTURAL RESEARCH SERVICE

    The ASM supports the President's request to increase funding for 
the Agricultural Research Service (ARS) by 7.7 percent or $64 million 
in fiscal year 2001. This increase will enable the ARS to support both 
ongoing and new initiatives in such areas as emerging and exotic 
diseases, invasive species, plant and animal genetics research, food 
safety, technologies for production and conversion of crops into 
biobased products and bioenergy, and research initiatives on soil, 
water and air quality.
    U.S. agriculture is experiencing severe problems caused by new and 
reemerging infectious diseases in plants and animals, a threat which 
requires immediate attention. Changes in agricultural practices, 
population growth, climate, microbial evolution, animal migration, and 
international trade and travel are all factors in the threat of 
introducing new plant and animal diseases into the U.S. agriculture 
system. The lack of knowledge to effectively manage and control new and 
reemerging infectious disease often leads to serious consequences such 
as reduced crop yield and unacceptable quality. Billions of dollars are 
lost through trade embargoes, quarantines, and the destruction of 
agricultural fields to control the spread of disease. The President's 
budget requests $23.2 million for ARS to address major threats to U.S. 
agriculture from exotic diseases, pests and invasive species. This 
increase includes $10 million for expanding the diagnostic capabilities 
to prevent acts of chemical and biological terrorism against U.S. 
agricultural and food security systems. The increase will also provide 
additional funds to prevent and control emerging infectious and 
zoonotic diseases afflicting livestock and aquaculture. The ASM urges 
the Congress to provide the President's request for these activities.

                           BIOBASED PRODUCTS

    The ASM supports the requested increase of $14 million for research 
to accelerate the conversion of agricultural materials and feedstocks 
into biofuels, and enhance the advancement of valuable biobased 
products. Such scientific advancements in biobased product research 
allow for enhanced farm income, strengthened U.S. energy security, and 
environmental protection.

                      USDA FOOD SAFETY INITIATIVE

    The ASM recommends that Congress provide additional funding to USDA 
of at least the $5.7 million increase to expand food safety research in 
support of the President's Food Safety Initiative. New funding is 
essential for research on antibiotic resistant bacteria in poultry, 
swine and cattle; to control bacteria and pathogens carried by animals 
and transmitted to humans and to develop intervention strategies used 
in HACCP to reduce the risk of pathogen infestation in meat and 
poultry, as well as implementation of the Shell Egg Action Plan.

                  USDA'S NATIONAL FOOD GENOME STRATEGY

    The ASM is disappointed that no request has been made for genetic 
resources for microorganisms. Microbes are involved in all aspects of 
agriculture--from beneficial uses of microbes in food (i.e. yogurt, 
cheese, bread, beer and wine) to pest controls to the spread of disease 
in plants and animals and the contamination of the food supply. 
Studying the genomes of agricultural microbes could lead to the 
development of new technologies to provide improved foods and better 
pest control to protect the nation's crops, to reduce the incidence of 
plant and animal disease, and to ensure a safer food supply.

            USDA ANIMAL AND PLANT HEALTH INSPECTION SERVICE

    The ASM urges the Congress to provide the requested $16 million, an 
increase of $5 million, for the fiscal year 2001 appropriation for the 
Animal Care Unit within the Animal and Plant Health Inspection Service 
(APHIS), which is the regulatory body mandated to enforce laboratory 
animal care. This increase would maintain current activities, while 
allowing for increased inspections and improved follow-up to verify 
corrections of prospective violators. Additionally, APHIS would expand 
outreach efforts to the general public and AWA regulated facilities by 
increasing the amount of educational resources available, encourage 
participation at industry meetings, and allow the development of 
industry specific training for animal care and welfare.
    Thank you for the opportunity to provide testimony on USDA 
programs. We would be pleased to respond to any questions.
                                 ______
                                 

   PREPARED STATEMENT OF THE ASSOCIATION OF AMERICAN MEDICAL COLLEGES

    The Association of American Medical Colleges (AAMC) is pleased to 
submit its views on the fiscal year 2001 appropriation for the Food and 
Drug Administration (FDA). The AAMC represents the nation's 125 
accredited medical schools, some 400 major teaching hospitals and 
health systems, and 91 academic and professional societies representing 
over 75,000 faculty members. Our members and institutions educate and 
prepare physicians to meet evolving health needs, conduct research 
leading to the discovery of medical knowledge and the development of 
innovative treatments and therapies, and provide basic and specialized 
health care services. We believe that the FDA should be recognized as 
an important component of the nation's overall commitment to biomedical 
research and should receive similar attention and funding. The AAMC 
supports the administration's $1.4 billion budget request for fiscal 
year 2001 as a good first step toward providing increased support for 
the agency's critical public health activities.
    As the FDA enters the 21st century, the agency faces rapidly 
expanding responsibilities and an urgent need for more resources. The 
presence in the FDA of a vigorous, high-quality intramural research 
program provides the essential foundation for sound regulatory policy, 
and ensures that the FDA is, and will continue to be, well positioned 
to carry out its statutory responsibilities to protect, promote and 
enhance the health of the American people. Providing an adequate budget 
for the FDA is essential because the nation's burgeoning medical 
research efforts will result in steadily increased numbers of products 
for the FDA to review.
    In the past 20 years, expenditures in drug research have increased 
seven-fold, resulting in more potential products in need of scientific-
based evaluation. In the next several years, the FDA expects a 
continued increase in both the number and complexity of applications. 
To address properly the challenges of facilitating the development and 
use of traditional and novel pharmaceutical products, FDA research 
programs will be directed toward solving the scientific problems that 
impact regulation. FDA research is needed to address issues where there 
may be a significant lack of the information required for scientific 
decision-making. This includes data necessary for risk assessments, 
validation of methods, and standardization of products.
    A strong FDA science capability is equally critical in 
understanding and managing risks associated with products that are 
already on the market. These reviews must be based on solid, state-of-
the-art science, which requires financial resources and trained 
personnel. A strong and well-managed intramural research program 
provides the foundation for creating a climate of scientific 
communication and discovery within the FDA that enhances the ability of 
the agency to recruit and retain high-quality personnel. Internal 
research expertise enhances the agency's ability to seek out and 
critically evaluate external scientific input, and creates a platform 
from which agency staff can productively interact with external 
scientific expertise from academia, industry and other Federal agencies 
as respected and knowledgeable colleagues.
    In the face of a rapidly changing research environment, the FDA, 
like all research agencies, must stay at the forefront of scientific 
knowledge. Given the extraordinarily rapid pace of achievements in 
fundamental scientific disciplines, the intimate proximity and 
interaction of cutting-edge scientific research with review and 
regulatory activities is more important today than ever before. If the 
FDA is not in a state of scientific readiness when applications are 
received, then the agency must either delay regulatory decisions on 
important new products until we have adequate knowledge, or make very 
conservative decisions in order to err on the side of caution.
    Through its many and diverse responsibilities, the FDA provides the 
nation with not only an improved national health but a collective peace 
of mind. Much of its work is never recognized, as the FDA often works 
behind the scenes to benefit the American public. The FDA's role in 
evaluating existing and novel drugs and devices must not be overlooked 
in the national efforts to increase funding for biomedical research. To 
keep pace with the increasing quantity and complexity of scientific 
progress, the FDA needs additional financial and human resources.
    The fiscal year 2001 budget request recognizes the importance of 
research in FDA's traditional dual roles of premarket review and 
postmarket surveillance, which ensure the highest possible levels of 
safety for current products, and timely review and release of new 
products to benefit the American public. Once again, we ask you to 
consider carefully the Administration's $1.4 billion fiscal year 2001 
budget request for the FDA as critical first step toward providing 
increased support for the agency's public health activities. The AAMC 
thanks the subcommittee for this opportunity to comment on funding for 
the FDA's research efforts.
                                 ______
                                 

  PREPARED STATEMENT OF THE ASSOCIATION OF RESEARCH DIRECTORS OF THE 
            HISTORICALLY BLACK 1890 LAND-GRANT UNIVERSITIES

    Senator Thad Cochran, Chairman, and other distinguished members of 
the Committee, my name is Samuel L. Donald, Regional Research Director 
for the Association of Research Directors of the Historically Black 
1890 Land-Grant Universities, including Tuskegee University (hereafter 
referred to as the 1890s). Mr. Chairman, I submit, on behalf of the 
1890 community, this written testimony in support of the fiscal year 
2001 Budget recommendations for the 1890s.

                          GENERAL INFORMATION

    Mr. Chairman, today, the rich legacy of the land-grant tradition 
remains prominent on the campuses of the 1890s. These institutions are 
increasingly serving as economic instruments of the State and the 
nation. They have their extraordinary influence on the lives of all 
citizens including African Americans and other minority groups. While 
enduring inequities in State and Federal funding, the 1890s serve as 
exemplary role models; provide educational access to those who may 
otherwise be denied the opportunity to pursue a college education; and 
foster an unyielding commitment to academic excellence, social equality 
and the assurance of a decent future for all students including those 
from the lowest economic strata of the nation. These universities have 
been in the forefront of educating youth-at-risk, producing research 
vital to the quality of life and the environment, and addressing the 
social and economic needs of urban and rural communities. Teaching, 
research and extension remain prominent on the campuses of the 1890s.

                      ACCOMPLISHMENTS AND IMPACTS

    Historically Public Black Colleges and Universities (HPBCUs) 
constitute some of the largest and most prestigious institutions of 
higher education in the nation. Among them, two of the largest are 1890 
HPBCUs. Several of the 1890s offer doctoral degrees and/or professional 
degrees in engineering, food science, toxicology, environmental 
science, and other areas of national need. Three of the top five HPBCUs 
in the nation contributing to the production of African American 
doctorates are 1890s. Annually, six HPBCUs produce nearly 20 percent of 
all African American bachelor degree recipients in engineering and the 
1890s graduate over 80 percent of all Black recipients of bachelor 
degrees in agricultural sciences. Tuskegee University alone has trained 
more than 80 percent of the nation's Black veterinarians.
    The 1890s depend heavily on Federal support for sustaining their 
academic, research, and extension programs. These institutions 
contributions to science and other accomplishments are reasons for 
maintaining and expanding the Federal partnership. For the purposes of 
improved food quality and food safety, improved and sustained 
agriculture production, improved quality of life for rural people, 
etc., some of the more recent accomplishments of the 1890s are:
  --Provided small farm clients with management and production 
        techniques that led to new business opportunities.
  --Responded to the changing demands in food and agricultural systems 
        by listening and developing new approaches that meet clientele 
        needs.
  --Developed new invitro systems for enhancing root system development 
        of pine and hardwood trees.
  --Found that increased production of rapeseed will provide an 
        efficient domestic source of erucic acid oil, reduce expensive 
        imports of rapeseed oil, help control environmental pollution 
        resulting from use of inorganic pesticides, and assist in the 
        development of sustainable crop production.
  --Found that N-methyl aspartate enhanced growth and reduced fat in 
        swine and chickens.
  --Encouraged (and assisted) small farmers to take advantage of niche 
        markets to generate additional farm income.
  --Provided educational resources to assist small farmers and limited 
        resource families acquire jobs and better manage what they 
        earn.
  --Determined that lambs and kids produced on cowpeas are lean and low 
        in fat and are preferred by consumers.
  --Through research and outreach, provide small farmers with 
        information about alternative enterprises that are 
        environmental friendly.
  --Developed a new vegetable-legume cropping system for small-scale 
        farmers in the Southeast.
  --Provide sound science as the basis for improving food quality.
  --Determine that dietary omega-3 polyunsaturated fats have beneficial 
        properties to change physical and biochemical processes to 
        control blood pressure.
  --Developed technology to improve goat meat and fiber production.
  --Developed intensified ``Farm Planning Program'' for farmers to 
        improve profitability from crops, livestock, and alternative 
        farm enterprises.
  --Conducted senior citizens conferences on consumer fraud, security, 
        energy conservation, and modification of dwellings for 
        handicapped use and access.
    The above accomplishments had major impacts on improving (a) the 
quality of lives of people served and (b) the entrepreneurial skills 
and farming operations of farmers served. The bottom line is, due 
primarily to Federal appropriated dollars to the 1890s, many under-
served clientele, customers and stakeholders have a ``brighter'' 
tomorrow.

                         BUDGET RECOMMENDATIONS

    The 1890s support the fiscal year 2001 budget recommendations of 
the National Association of State Universities and Land-Grant Colleges 
(NASULGC) which emphasizes modest increased funding for the research, 
extension, and academic programs. Mr. Chairman, the 1890s urge the 
Committee to strongly support the NASULGC recommendations which 
includes the following for the 1890s:
    Evans-Allen Research Program ($36.197 Million).--The 1890s request 
a marginal increase in base funds for research. These funds will 
enhance the capacity of these institutions to become more competitive 
in the private sector and in domestic and international research 
endeavors designed to undergird the vitality of the nation's 
agricultural enterprise. This support will enhance the ability of the 
1890s to compete for grants and contracts in a wider variety of 
programs in the U.S. Department of Agriculture, other Federal agencies, 
and the private sector.
    Capacity Building Grants Program ($15 Million).--The Capacity 
Building Grants Program is making a major difference in the quality and 
quantity of teaching and research programs in food and agricultural 
sciences and technology on the campuses of the 1890s. Since the 
creation of this enormously important program, the 1890 leadership has 
strongly advocated a substantial and sustained increase in funding at 
more than $25 million annually. This level of funding would allow these 
institutions to significantly improve the range and level of academic 
programs offered, enhance the performance and productivity of faculty 
in the sciences, and increase research opportunities for undergraduate 
and graduate students. However, consistent with NASULGC's 
recommendation, the 1890s support the request of $15 million.
    1890 Facilities Grants Program ($15 Million).--The 1890s 
unequivocally support the $15 million facilities funding request in the 
NASULGC budget for renovation, maintenance and overall improvement of 
the infrastructure on our campuses. The 1890s face nearly 
insurmountable barriers in attracting public and private support for 
enhancement of facilities. Although this level of funding will not 
fully address the critical facility needs of our institutions, it will 
complement existing efforts to make major improvements.
    Extension Program ($31.674 Million).--The 1890s support a modest 
increase in base funding requested by NASULGC for extension activities. 
This marginal increase will allow our institutions to sustain program 
activity at current levels and respond more efficiently to the growing 
demand for services in severely depressed and under-served communities.
    Mr. Chairman, in addition to the NASULGC budget recommendations for 
the 1890s, support is sought for the following:
    1890 Agricultural Biotechnology Research/Graduate Program Grants 
($8 Million).--A new initiative that is not in the NASULGC budget 
recommendations for the 1890s is a Research/Graduate Program, 
emphasizing biotechnology. Biotechnology is one of the major areas in 
which the 1890s are recognizing the importance of strengthening their 
role as a national resource in conducting research in biotechnology, 
biosafety and food security. The 1890s seek support to conduct basic 
and applied research in biotechnology and to engage in partnerships 
with national laboratories and biotech industries. Funds would be used 
to develop graduate programs that build and strengthen areas of 
specialization in food and agricultural sciences, biotechnology and 
related disciplines, to provide fellowships and assistantships for 
graduate students, summer research and professional development 
fellowships for graduate students, and research and professional 
development assistance for faculty. The budget request is a permanent 
line item of $8,000,000 to be appropriated to the Agricultural Research 
Service of USDA, exclusively for 1890s.

                            CLOSING COMMENTS

    Mr. Chairman, based on past accomplishments and visionary approach, 
the 1890s are positioning themselves to enter the 21st Century with a 
renewed commitment and capacity to implement their land-grant mission 
of teaching, research and extension. Full appropriations of the fiscal 
year 2001 budget recommendations as stated above will facilitate this 
and is vital to the 1890 Land-Grant Universities.
                                 ______
                                 

     PREPARED STATEMENT OF THE BIOTECHNOLOGY INDUSTRY ORGANIZATION

    The following is the statement of the Biotechnology Industry 
Organization (BIO) in support of increased funds for the U.S. Food and 
Drug Administration (FDA) in the fiscal year 2001 budget. BIO 
represents more than 900 biotechnology companies, academic institutions 
and State biotechnology centers in 47 States and 26 nations. BIO 
members are engaged in biotechnology research on medicines, 
diagnostics, agriculture, pollution control and industrial 
applications.
    Our industry's goal is to develop products that will cure disease, 
improve the quality and quantity of the world's food supply, and clean 
up the environment. Our success in achieving those objectives is 
dependent upon an expert and productive FDA.
    BIO supports increased funding for the FDA. In addition to our own 
advocacy efforts, we have joined together with organizations 
representing some of the other FDA-regulated industries to urge 
Congress to provide increased funds for fiscal year 2001 for the 
agency. Specifically, our coalition has called for an increase of at 
least 13 percent over last year. This is the amount included in the 
President's budget request absent the imposition of additional user 
fees. The text of our coalition's letter to the Chairman and Ranking 
Member of this subcommittee is attached.
    Funding for the FDA will have a direct impact on the lives of 
millions of Americans. Important new biopharmaceuticals are being 
developed for a variety of diseases including cancers, Alzheimer's 
Disease, and diabetes. In 1992, industry and the FDA negotiated an 
innovative collaboration pursuant to which industry funds a portion of 
the FDA review program through user fees on prescription drugs and 
biologics.
    However, the Federal appropriation for the FDA has remained 
relatively flat over the past several years. The result is that despite 
the revenues generated by user fees paid by our industry, the true 
operating budget of the agency has shrunk after inflation and 
federally-mandated pay raises for staff have been calculated.
    In constant dollars, the agency has less money now than it had in 
1993 for its activities not funded by user fees or earmarked programs 
such as tobacco and food safety. Therefore, while the agency has 
received a $450 million increase in current dollars since 1993, only 
$91 million has been available for non-user fee, non-earmarked 
programs.
    When the FDA Modernization Act (FDAMA) was enacted in 1997, both 
industry and the FDA agreed to implement programs that would accelerate 
the drug development process. In fact, FDAMA expressly recognizes that 
FDA should not only serve as a regulator, but also as an agency that 
provides assistance to biotechnology companies that are developing 
drugs and biologics.
    Many of these new responsibilities are resource intensive and are 
not fully financed by user fees. For example, if FDA places a 
``clinical hold'' on a research trial, it must respond in writing 
within 30 days of receipt of a written request to remove the hold and 
specify the reasons for its decision. In addition, the law requires FDA 
to meet with companies in an effort to reach agreement on the design 
and size of clinical trials on a drug or biological product.
    The Congressional Budget Office has estimated that FDAMA 
implementation will cost $41 million each year. Without sufficient 
funding, FDA reform cannot succeed. This will lead to development 
delays for important and cost effective new drugs, compromising an 
already stressed health care system. Moreover, review of some biologic 
products fall outside the user fee program. These applications will 
suffer serious delays without additional resources for the agency.
    Our nation makes a huge investment in biomedical research. For 
example, a few years ago, Congress began the process of doubling the 
budget for the National Institutes of Health over a five year period. 
BIO supports these increases. However, for Americans to benefit from 
this investment, the FDA must be capable of reviewing and regulating 
the products that are ultimately developed from this research. 
Otherwise, potentially life saving drugs and other products will never 
reach the patients that need them. A recent survey of biotechnology, 
pharmaceutical and medical device firms confirms that the lack of 
highly skilled reviewers unduly delays product approval.
    Over the past several years, the Clinton Administration and some in 
Congress seem to have adopted a strategy that assumes additional user 
fees will be enacted and paid by other regulated industries. 
Accordingly, the appropriations for the agency have been less than 
adequate. This occurred again in the President's fiscal year 2001 
budget request that includes unauthorized user fees. BIO agrees that it 
is appropriate for industries to pay user fees. However, this issue 
should be debated independent of the appropriations process.
    In addition to its existing commitments, the agency needs to have 
the resources to respond to new situations. For example, since the 
tragic death of Jesse Gelsinger, the FDA is considering new actions to 
increase oversight of gene therapy clinical trials. Some initiatives 
have already been announced and others are still being developed.
    There are two reasons why it is critical that the FDA have the 
monies to perform these functions. First, we support FDA's initiatives 
because FDA oversight is critical to maintain public confidence in the 
safety of this new and promising research. Moreover, when the agency 
takes action to respond to pressing issues such as these, extra 
resources are needed so that other critical, longstanding agency 
priorities are not slowed.
    An adequately funded FDA is also necessary for capital formation 
for our industry. Our investors need to know that products from 
biotechnology companies will get a timely and high-quality review from 
the agency. Increased funds are necessary to achieve this goal. In 
addition, when the overall appropriation for the agency is low or 
remains flat, critical infrastructure needs such as personnel, 
facilities, and equipment are left unmet. This hurts the overall 
performance of the agency.
    The FDA plays a critical role for our nation. By providing science-
based regulation, it helps speed the delivery of new, life saving 
products to the public, while ensuring that these products are safe. An 
investment in the FDA today will clearly pay large dividends in the 
future.
    For more information about BIO's views on this issue, please call 
Michael Werner, Esq., Director of Federal Government Relations and 
Bioethics Counsel at (202)-857-0244 or [email protected].
    Thank you for your attention to this important matter.
                                 ______
                                 

 PREPARED STATEMENT OF THE CALIFORNIA INDUSTRY AND GOVERNMENT CENTRAL 
                    CALIFORNIA OZONE STUDY COALITION

    Members of the Subcommittee: On behalf of the California Industry 
and Government Central California Ozone Study Coalition we are pleased 
to submit this statement for the record in support of our fiscal year 
2001 funding request of $250,000 from CSREES for the Central California 
Ozone Study (CCOS).
    Ozone and particulate matter standards in most of central 
California are frequently exceeded. In 2003, the U.S. Environmental 
Protection Agency (U.S. EPA) will require that California submit SIPs 
to for the recently promulgated, national, 8-hour ozone standard. It is 
expected that such SIPs will be required for the San Francisco Bay 
Area, the Sacramento Valley, the San Joaquin Valley, and the Mountain 
Counties Air Basins. Photochemical air quality modeling will be 
necessary to prepare SIPs that are acceptable to the U.S. EPA.
    Central California Ozone Study (CCOS) is designed to enable central 
California to meet Clean Air Act requirements for ozone State 
Implementation Plans (SIPs) as well as advance fundamental science for 
use nationwide. The CCOS field measurement program will be conducted in 
the summer of 2000 in conjunction with the California Regional PM10/
PM2.5 Air Quality Study (CRPAQS), a major study of the origin, nature 
and extent of excessive levels of fine particles in central California. 
CCOS includes an ozone field study, a deposition study, data analysis, 
modeling performance evaluations, and a retrospective look at previous 
SIP modeling. The CCOS study area extends over central and most of 
northern California. The goal of the CCOS is to better understand the 
nature of the ozone problem across the region, providing a strong 
scientific foundation for preparing the next round of State and Federal 
attainment plans. The study includes six main components:
  --Developing the design of the field study (task already underway)
  --Conducting an intensive field monitoring study, scheduled for June 
        1 to September 30, 2000
  --Developing an emission inventory to support modeling
  --Developing and evaluating a photochemical model for the region
  --Designing and conducting a deposition field study
  --Evaluating emission control strategies for the next ozone 
        attainment plans
    CCOS is directed by Policy and Technical Committees consisting of 
representatives from Federal, State and local governments, as well as 
private industry. These committees, which managed the San Joaquin 
Valley Ozone Study and are currently managing the California Regional 
Particulate Air Quality Study, are landmark examples of collaborative 
environmental management. The proven methods and established teamwork 
provide a solid foundation for CCOS. The sponsors of CCOS, representing 
state, local government and industry, have contributed approximately 
$8.6 million for the field study. In addition, CCOS sponsors will 
provide $4 million of in-kind support. The Policy Committee is 
continuing to seek additional funding ($9.0 million) for a future 
deposition study, data analysis, and modeling. California is an ideal 
natural laboratory for studies that address federal, agriculture-
related issues, given the scale and diversity of the various ground 
surfaces in the region (crops, woodlands, forests, urban and suburban 
areas).
    For fiscal year 2001, our Coalition is seeking funding of $250,000 
through the U.S. Department of Agriculture (USDA) Cooperative State 
Research, Education, and Extension Service (CSREES). Domestic 
agriculture is facing increasing international competition. Costs of 
production and processing are becoming increasingly more critical. The 
identification of cost-effective options for addressing environmental 
options affecting agricultural costs will contribute significantly to 
the long-term health and economic stability of local agriculture. A 
CSREES grant is needed to address the issue of biomass burning and 
alternatives to open burning. Biomass burning is managed in order to 
minimize smoke impacts and avoid violations of ambient air quality 
standards. The air quality impacts of using biomass as a fuel source 
and as an alternative to open burning need to be addressed. CCOS will 
improve the ability to assess the impacts of biomass power plants.
    There is a national need to address national data gaps and 
California should not bear the entire cost of the addressing these 
gaps. National data gaps include issues relating to the integration of 
particulate matter and ozone control strategies. The CCOS field study 
will take place concurrently with the California Regional Particulate 
Matter Study--previously jointly funded through Federal, State, local 
and private sector funds. Thus, CCOS is timed to enable leveraging of 
the efforts for the particulate matter study. Some equipment and 
personnel can serve dual functions so that CCOS is very cost-effective. 
From a technical standpoint, carrying out both studies concurrently is 
a unique opportunity to address the integration of particulate matter 
and ozone control efforts. CCOS will also be cost-effective since it 
builds on other successful efforts including the 1990 San Joaquin 
Valley Ozone Study. To effectively address these issues requires 
federal assistance and CCOS provides a mechanism by which California 
pays half the cost of work that the Federal Government should pursue.
    Scientists at the University of Nevada, Desert Research Institute 
(DRI) are the principal investigators for CCOS. To expedite research 
studies related to biomass burning and smoke management for CCOS, it is 
requested that funds provided by CSREES be allocated directly to DRI.
    We appreciate the Subcommittee's consideration of our request. 
Thank you very much.
                                 ______
                                 

         PREPARED STATEMENT OF THE CITY OF GAINESVILLE, FLORIDA

    Mr. Chairman: On behalf of the City of Gainesville, Florida, I 
appreciate the opportunity to present this written testimony to you 
today. The City of Gainesville is seeking federal funds in the fiscal 
year 2001 Agriculture, Rural Development, FDA and Related Agencies 
Appropriations bill to assist our efforts to protect the Florida 
Aquifer from stormwater runoff which starts out in Gainesville's 
Sweetwater Branch Basin.
Sweetwater Branch Project
    The City of Gainesville is seeking $1.5 million in funding 
assistance for a $2 million stormwater management project intended to 
remove 90 percent or more of the sediment and debris from the 
Sweetwater Branch creek flow preventing those undesirable materials 
from entering the Paynes Prairie Preserve, thereby helping to insure 
and protect the Florida Aquifer as the major source of drinking water 
for the State of Florida.
    The Sweetwater Branch basin contains approximately 1,710 acres, and 
is located mainly in the southeast central portion of the City of 
Gainesville. The outfall from this basin discharges into Paynes 
Prairie, a State-owned preserve and park system, where the creek flow 
is directed into the Alachua Sink. The Alachua Sink is a natural 
sinkhole that drains directly into the Florida aquifer.
    The Florida Aquifer provides the majority of drinking water to 
Florida's residents and has a direct impact on the Florida Everglades. 
In addition, many domestic water wells are used to obtain water from 
surficial and intermediate aquifers in the Gainesville area.
    The Sweetwater Branch drainage basin contains urban, commercial, 
industrial, and residential area stormwater runoff. Because the 
Sweetwater Branch runs through some of the oldest portions of 
Gainesville, most stormwater runoff is directly discharged into the 
Branch with very little flooding attenuation or pollution loading 
reduction. In addition, there is insufficient undeveloped land 
available to accommodate stormwater management facilities except for 
the area very near the Paynes Prairie outfall.
    Pollution reduction of the Sweetwater Branch surface waters before 
entering the Paynes Prairie Preserve will assist in the re-
establishment of the Preserve's natural aesthetics and re-establishment 
of the natural ecological systems of the Preserve, in addition to 
providing protection for a major source of drinking water. The runoff 
also has the potential to negatively impact threatened and endangered 
wildlife such as the American Bald Eagle, the Woodstork, the Florida 
Sandhill Crane and the Southeastern American Kestral. In summary, the 
situation has created a concern amongst environmentalists, business 
leaders, and concerned citizens throughout the region that Paynes 
Prairie and the Florida Aquifer are being compromised.
    With this in mind, the City of Gainesville, Alachua County, the 
Florida Department of Environmental Protection, the St. Johns River 
Water Management District, and local citizens are all seeking a 
comprehensive ecosystem management solution to the problem of 
stormwater runoff from downtown entering Sweetwater Branch, Paynes 
Prairie and the Alachua Sink.
    The project devised by these groups would reduce or eliminate the 
sediment, debris, nutrients and general pollutants currently being 
discharged into Paynes Prairie and eventually the Florida aquifer from 
the Sweetwater Branch Creek.
    Current projections are that the project would consist of the 
following three components:
  --the purchase of undeveloped property in the vicinity of State Road 
        331 and Sweetwater Branch;
  --the construction of maintainable sediment and debris removal 
        systems; and
  --the construction of maintainable nutrient removal systems.
    Removing all pollutants at the discharge end of Sweetwater Branch 
would cost at least $14-$20 million. Smaller projects upstream of the 
Prairie have been initiated at the local level. Expenditures of about 
$2 million are identified for three such smaller projects: (1) the Duck 
Pond, (2) the Baffle Box, and (3) the Downtown (a Brownfield Area) 
Stormwater Facility. These smaller projects are designed to deal with 
specific subbasins and water quality issues. The current projects now 
planned utilizing local resources will only clean up parts of the 
basin. Considerable flow and accompanying pollution still will go 
through to the Prairie. An additional facility is needed to clean up 
the rest of the flow.
    An in-depth engineering analysis of the creek system, property 
topography, associated wetlands, and other pertinent factors would be 
accomplished to determine the optimum and appropriate scope of property 
purchase and facilities construction. The City is prepared to pay some 
of the cost for this analysis, and has received a $500,000 grant from 
the U.S. Environmental Protection Agency, but we are simply unable to 
bear the entire burden. As a result, we request that the Subcommittee 
appropriate $1.5 million to assist our efforts.
    The requested federal funds, if awarded, will be used by the City 
to secure the necessary property rights and to construct the facility. 
Once the project construction is complete, Gainesville's Stormwater 
Management Utility, a public utility, would provide the required annual 
operating and maintenance funding, and no further federal maintenance 
funds would be needed.
    In closing, federal support is critical for this initiative. As a 
result, we respectfully request that the Subcommittee will give funding 
assistance for our project every consideration throughout the fiscal 
year 2001 appropriations process.
                                 ______
                                 

   PREPARED STATEMENT OF THE COALITION TO PROMOTE U.S. AGRICULTURAL 
                                EXPORTS

    As members of the Coalition to Promote U.S. Agricultural Exports, 
we commend the Chairman and members of the Subcommittee for their 
interest and support of U.S. agriculture and express our appreciation 
for this opportunity to share our views.
    The Coalition to Promote U.S. Agricultural Exports is an ad hoc 
coalition of over 80 organizations, representing farmers and ranchers, 
cooperatives, small businesses, regional trade organizations, and the 
State Departments of Agriculture (see attached). We believe the U.S. 
must continue to have in place policies and programs that help maintain 
the ability of American agriculture to compete effectively in a global 
marketplace still characterized by subsidized foreign competition.
    Farm income and agriculture's economic well-being depend heavily on 
exports, which account for one-third or more of domestic production, 
provide jobs for millions of Americans, and make a positive 
contribution to our nation's overall trade balance. Without aggressive 
action, however, U.S. agriculture exports are projected to remain below 
$50 billion this year due to a combination of factors, including 
continued subsidized foreign competition and related artificial trade 
barriers. U.S. agriculture's trade surplus is also expected to remain 
around $11.5 billion, down nearly 50 percent from 1996, with continued 
low commodity prices also forecast.
    Also troubling is the erosion in the U.S. market share of global 
agricultural trade. In fact, this could culminate in the United States 
losing out to the European Union (EU) as the world's top agricultural 
exporter sometime this year. We believe that a major reason for this 
decline in market share lies in the more aggressive promotion 
expenditures of our foreign competitors.
    According to a recent USDA study, the EU and other foreign 
competitors are outspending the U.S. by a factor of 20 to 1 with regard 
to the use of export subsidies and other expenditures for export 
promotion. In 1997, in addition to spending over $7.2 billion in export 
subsidies, our leading foreign competitors spent a combined $924 
million on various activities to promote their exports of agricultural, 
forestry, and fishery products, including some $365 million by the EU.
    According to the most recent information by USDA, spending by these 
competitor countries on market promotion has increased by 35 percent, 
or nearly $1 billion, in the past three years, while U.S. spending 
remained flat. Almost all of this increase has been directed to the 
high-value and consumer-ready product trade.
    Information compiled by USDA also shows that such countries are 
spending over $100 million just to promote sales of their products in 
the United States. In other words, they are spending more to promote 
their agricultural exports to the United States, than the U.S. is 
currently spending ($90 million) to promote American-grown and produced 
commodities worldwide! And according to the most recent USDA numbers, 
for the first time ever, during fiscal year 1999 we imported almost $1 
billion more in agricultural products from the EU than we exported to 
them.
    The USDA study noted above goes on to say that ``because market 
promotion is a permitted ``green box'' activity under World Trade 
Organization (WTO) rules, with no limit on public or producer funding, 
it is increasingly seen as a centerpiece of a winning strategy in the 
future trade battleground. Many competitor countries have announced 
ambitious trade goals and are shaping export programs to target 
promising growth markets and bring new companies into the export 
arena.'' European countries are expanding their promotional activities 
in Asia, Latin America, and Eastern Europe. Canada, Australia and New 
Zealand have also sharply bolstered their export promotion expenditures 
in recent years.
    Clearly, as the EU and our other foreign competitors made clear in 
Seattle, they intend to continue to be aggressive in their export 
efforts. For this reason, we believe the Administration and Congress 
should immediately strengthen funding for MAP and other export 
programs, and ensure that such programs are fully and aggressively 
utilized. Since MAP was originally authorized, funding has been 
gradually reduced from a high of $200 million to its current level of 
$90 million--a reduction of more than 50 percent. Again, given what our 
foreign trade competitors are doing, we believe it's time to restore 
funding for this vitally important program up to its original level. 
American agriculture is the most competitive industry in the world, but 
it can not and should not be expected to compete alone against the 
treasuries of foreign governments.
    In order to reverse the decline in funding over the past decade for 
a number of our agricultural export programs, the Coalition is strongly 
supporting legislation (S. 1983) introduced by Senators Murray (D-WA) 
and Craig (R-ID), et al. that would authorize no less than $90 million 
and up to $200 million per year for MAP. The bill would also provide a 
minimum of $35 million for the Foreign Market Development (FMD) 
Cooperator Program for cost-share assistance to help boost U.S. 
agriculture exports. Further, it would allow up to 50 percent of 
available funds under the Export Enhancement Program (EEP) to be used 
for related market development and promotion activities.
    Both MAP and FMD are administered on a cost-share basis with 
farmers and other participants required to contribute up to 50 percent 
of their own resources. These programs are one of the few tools 
specifically allowed under the Uruguay Round Agreement to help American 
agriculture and American workers remain competitive in a global 
marketplace still characterized by subsidized foreign competition. By 
any measure, they have been tremendously successful and extremely cost-
effective in helping maintain and expand U.S. agricultural exports, 
protect American jobs, and strengthen farm income. In addition to 
helping achieve these objectives, enactment of S. 1983 would provide 
needed flexibility to respond to changing market conditions and 
capitalize on potential new market opportunities. It would also send a 
powerful message to our foreign competitors and strengthen the U.S. 
negotiating position in future trade talks.
    For all these reasons, we want to emphasize again the need to help 
strengthen the ability of U.S. agriculture to compete effectively in 
the global marketplace. As a nation, we can work to export our 
products, or we can export our jobs. USDA's export programs, such as 
MAP and FMD, are a key part of an overall trade strategy that is pro-
growth, pro-trade and pro-job.
    Again, as members of the Coalition to Promote U.S. Agricultural 
Exports, we appreciate very much this opportunity to share our views 
and we ask that this statement be included in the official hearing 
record.
                                 ______
                                 

 PREPARED STATEMENT OF THE COLORADO RIVER BASIN SALINITY CONTROL FORUM

    The Congress concluded that the Colorado River Basin Salinity 
Control Program should be implemented in the most cost-effective way 
and realizing that agricultural on-farm strategies were some of the 
most cost-effective strategies authorized a program for the Department 
of Agriculture. With the enactment of the Federal Agriculture 
Improvement and Reform Act of 1996 (FAIRA), the Congress concluded that 
the Salinity Control Program could be most effectively implemented as 
one of the components of the Environmental Quality Incentives Program. 
Since the enactment of FAIRA, the Salinity Control Program has not been 
funded at a level adequate to ensure that water quality standards in 
the Colorado River, with respect to total dissolved solids (salinity), 
will be honored, nor is the funding sufficient to prevent salt loading 
from irrigated farms from impacting the quality of water delivered to 
Mexico under a minute of the International Boundary and Water 
Commission, United States and Mexico.
    The Salinity Control Program has been subsumed into the EQIP 
program without the Secretary of Agriculture giving adequate 
recognition to the requirement in Section 202(c) in the Colorado River 
Basin Salinity Control Act to carry out salinity control measures. 
Water users hundreds of miles downstream are the beneficiaries of this 
water quality improvement program. Agriculturalists in the Upper Basin, 
however, see local benefits as well as downstream benefits and have 
submitted cost-effective proposals to the State Conservationists in 
Utah, Wyoming and Colorado. Priority Area proposals for EQIP funding 
are ranked in each state under the direction of the NRCS State 
Conservationist. Existing ranking criteria, however, does not consider 
downstream benefits (particularly out of state benefits) when proposals 
are being evaluated.
    After longstanding urgings from the states and directives from the 
Congress, the Department has concluded that this program is different 
than small watershed enhancement efforts common to the EQIP program. In 
this case, the watershed to be considered stretches more than 1200 
miles from the river's headwater in the Rocky Mountains to the river's 
terminus in the Gulf of California in Mexico. The Department has now 
determined that this effort should receive a special fund designation 
and is moving to appoint a coordinator for this multi-state effort.
    The Basin states were led to believe by Congressional staff that 
when the EQIP program was created, the $200,000,000 annual Commodity 
Credit Corporation (CCC) borrowing authority given to the Secretary 
would ensure that through the year 2002 at least this amount of funding 
would be expended for the EQIP program. The Forum is very dismayed as 
this committee acted to reduce the funding for the current fiscal year 
to $174,000,000. This level of funding is not adequate for this most 
important nationwide program and the Administration does not believe 
that it provides sufficient funds to implement National Priority Areas 
as allowed by Congress under FAIRA. The Forum urges that the funding 
for EQIP for fiscal year 2001 total $325,000,000.
    This last year, the Natural Resources Conservation Service (NRCS) 
earmarked funds to use in areas of special interest in the amount of 
about $5.3 million. The states added about $2 million in up-front cost-
sharing and local farms, we estimate, contributed about another $2.3 
million. The plan for water quality control of the river prepared by 
the Forum, adopted by the states, and approved by EPA requires that the 
USDA portion of the effort to be funded at $12 million. Hence, there is 
a shortfall from the federal side of $6.7 million this last year. State 
and local cost-sharing is triggered by the federal appropriation. 
Hence, the entire effort is only at about 44 percent of what is needed. 
The USDA indicated that a more adequately funded EQIP program would 
result in more funds being allocated to the salinity control program. 
The Basin states have cost sharing dollars available to participate in 
on-farm salinity control efforts in the cost-sharing fashion provided 
by the Congress. The agricultural producers in the Upper Basin are 
waiting for their applications to be considered so that they might also 
cost share in the program.
    The Forum urges that this committee support the funding of 
$325,000,000k from the CCC in fiscal year 2001 for EQIP. The Forum also 
requests that this Committee advise the Administration that $12,000,000 
of these funds be designated for the Colorado River Basin Salinity 
Control Program.

                                OVERVIEW

    The Colorado River Basin Salinity Control Program was authorized by 
Congress in 1974. The Title I portion of the Colorado River Basin 
Salinity Control Act responded to commitments that the United States 
made, through a minute of the International Boundary and Water 
Commission, to Mexico with respect to the quality of water being 
delivered to Mexico below Imperial Dam. Title II of the Act established 
a program to respond to salinity control needs of Colorado River water 
users in the United States and to comply with the mandates of the then 
newly legislated Clean Water Act. Initially, the Secretary of the 
Interior and the Bureau of Reclamation were given the lead federal role 
by the Congress. This testimony is in support of funding for the Title 
II program.
    After a decade of investigative and implementation efforts, the 
Basin states concluded that the Salinity Control Act needed to be 
amended. Congress revised the Act in 1984. That revision, while keeping 
the Department of the Interior as lead coordinator for Colorado River 
Basin salinity control efforts, also gave new salinity control 
responsibilities to the Department of Agriculture, and to a sister 
agency of the Bureau of Reclamation--the Bureau of Land Management. 
Congress has charged the Administration with implementing the most 
cost-effective program practicable (measured in dollars per ton of salt 
removed). It has been determined that the agricultural efforts are some 
of the most cost-effective opportunities.
    Since Congressional mandates of nearly two decades ago, much has 
been learned about the impact of salts in the Colorado River system. 
The Bureau of Reclamation is now completing studies on the economic 
impact of these salts. Reclamation recognizes that the damages to 
United States' water users alone are hundreds of millions of dollars 
per year.
    The Colorado River Basin Salinity Control Forum (Forum) is composed 
of Gubernatorial appointees from Arizona, California, Colorado, Nevada, 
New Mexico, Utah and Wyoming. The Forum has become the seven-state 
coordinating body for interfacing with federal agencies and Congress to 
support the implementation of a program necessary to control the 
salinity of the river system. In close cooperation with the 
Environmental Protection Agency (EPA) and under requirements of the 
Clean Water Act, every three years the Forum prepares a formal report 
analyzing the salinity of the Colorado River, anticipated future 
salinity, and the program necessary to keep the salinities at or below 
the levels measured in the river system in 1972.
    In setting water quality standards for the Colorado River system, 
the salinity concentrations measured at Imperial, and below Parker, and 
Hoover Dams in 1972 have been identified as the numeric criteria. The 
plan necessary for controlling salinity has been captioned the ``plan 
of implementation.'' The 1999 Review, Water Quality Standards for 
Salinity, Colorado River System, includes an updated plan of 
implementation. In order to eliminate the shortfall in salinity control 
resulting from inadequate federal funding for the last seven years for 
USDA, the Forum has determined that implementation of the salinity 
control program needs to be accelerated. The level of appropriation 
requested in this testimony is in keeping with the agreed to plan. If 
adequate funds are not appropriated, state and federal agencies 
involved are in agreement that the numeric criteria will be exceeded 
and damage from the high salt levels in the water will be widespread 
and very significant in the United States and Mexico.
              state cost-sharing and technical assistance
    The authorized cost sharing by the Basin states, as provided by 
FAIRA, was at first difficult to implement as attorneys for USDA 
concluded that the Basin states were authorized by FAIRA to cost share 
in the effort, but the Congress had not given USDA authority to receive 
the Basin states' funds. After almost a year of exploring every 
possible solution as to how the cost sharing was to occur, the states, 
in agreement with the Bureau of Reclamation, with state officials in 
Utah, Colorado and Wyoming and with NRCS State Conservationists in 
Utah, Colorado and Wyoming, agreed upon a parallel program wherein the 
states' cost sharing funds will be used. We are now in the fourth year 
of that program and, at this moment in time, this solution to how cost 
sharing can be implemented appears to be satisfactory.
    With respect to the states' cost sharing funds, the Basin states 
felt that it was most essential that a portion of the program be 
associated with technical assistance and education activities in the 
field. Without this necessary support, there is no advanced planning, 
proposals are not well prepared, assertions in the proposals cannot be 
verified, implementation of contracts cannot be observed, and the most 
valuable partnering and education efforts cannot occur. Recognizing 
these values, the ``parallel'' state cost sharing program expends 40 
percent of the funds available on these needed support activities. 
Initially, it was acknowledged that the federal portion of the salinity 
control program funded through EQIP was starved with respect to needed 
technical assistance and education support. The Forum is encouraged 
with the Administration's determination that 19 percent of the EQIP 
funds will be used for technical assistance. The Forum urges this 
Committee to appropriate adequate funds for these support activities 
rather than to direct NRCS to borrow these needed funds from the CCC.
                                 ______
                                 

      PREPARED STATEMENT OF THE COLORADO RIVER BOARD OF CALIFORNIA

    Your support and leadership are needed in securing adequate funding 
for the U.S. Department of Agriculture with respect to it's on-farm 
Colorado River Basin salinity control program for fiscal year 2001. 
This program has been carried out through the Colorado River Basin 
Salinity Control Act, since it was enacted by Congress in 1974. With 
the enactment of the Federal Agricultural Improvement and Reform Act 
(FAIRA) in 1996, specific funding for salinity control projects in the 
Colorado River Basin were eliminated from the Federal budget, and 
aggregated into the newly created Department of Agriculture 
Environmental Quality Incentive Program (EQIP) as one of its program 
components. With that action, Congress concluded that the salinity 
control program could be more effectively implemented as one of the 
components of the EQIP. Prior to FAIRA, the Department of Agriculture 
had specific line item funding for salinity control projects as high as 
$14.7 million, but in recent years the level of appropriations have 
been reduced to between $3.4 and $5.1 million which is inadequate to 
ensure that water quality standards in the Colorado River, with regards 
to salinity can be met. It has been estimated through previous Federal 
studies that Colorado River water users in the Lower Basin States' 
(Arizona, California, and Nevada) were suffering economic damages 
estimated to be in excess of $750 million per year in 1995 due to the 
salts in the River system. Most of that damage is occurring in 
California. The potential impact of failing to move forward with the 
plan of implementation for salinity control would be to permit these 
damages in the Lower Basin to reach an estimated $1.25 billion annually 
by the year 2015.
    The Colorado River Board of California (Colorado River Board) is 
the State agency charged with protecting California's interests and 
rights in the water and power resources of the Colorado River System. 
In this capacity, California along with the other Basin States through 
the Colorado River Basin Salinity Control Forum (Forum), the interstate 
organization responsible for coordinating the Basin States' salinity 
control efforts, established numeric criteria, in June 1975, for 
salinity concentrations in the River. These criteria were established 
to lessen the future damages in the Lower Basin States as well as 
assist the United States in delivering water of adequate quality to 
Mexico in accordance with Minute 242 of the International Boundary and 
Water Commission. The goal of the Colorado River Basin salinity control 
program is to offset the effects of water resource development in the 
Colorado River basin after 1972 rather than to reduce the salinity of 
the River below levels that were caused by natural variations in river 
flows or human activities prior to 1972. To maintain these levels, the 
salinity control program must remove 1.48 million tons of salt loading 
from the River by year 2015. To date, only 721,000 tons of salt load 
reduction have been achieved. In the Forum's last report entitled 1999 
Review, Water Quality Standards for Salinity, Colorado River System 
released in June 1999, the Forum found that additional salinity control 
measures were necessary to meet the implementation plan that had been 
adopted by the seven Colorado River Basin States and approved by the 
Environmental Protection Agency. Since implementation of the EQIP, 
Federal allocations by the Department of Agriculture have not equaled 
the Forum's identified funding needs for the Department of 
Agriculture's portion of the program. The Forum identified a 
``backlog'' of salinity control measures which stands at 384,000 tons. 
This is in addition to future controls designed to lower the River's 
salt loading by 372,000 tons by 2015 in order to meet the established 
salinity standards. The Forum has presented testimony to Congress 
recommending that the salinity control efforts through EQIP be 
accelerated to continue to meet the salinity standards through 2015. It 
has developed a plan that recommends the removal of at least 87,000 
tons per year of salt loading through 2005.
    The President's proposed budget for fiscal year 2001 contains 
funding of $325 million for implementation of EQIP, up $125 million 
from the $200 million Commodity Credit Corporation borrowing authority 
provided the Secretary of Agriculture by FAIRA per year. The Colorado 
River Board is pleased with the Administration's statement that it 
intends to expend $325 million in fiscal year 2001 through EQIP. Of the 
amount to be appropriated for EQIP, the Colorado River Basin Salinity 
Control Forum, at its meeting in San Francisco, California, in October 
1999, recommended a funding level of $12.0 million for on-farm salinity 
control in the Colorado River Basin for fiscal year 2001 to maintain 
water quality consistent with the established standards. These Federal 
dollars, if earmarked, would be augmented by State cost sharing of 30 
percent with an additional 30 percent provided by the agricultural 
producer with whom the Department of Agriculture contracts for 
implementation of salinity control measures. The Colorado River Board 
supports the recommendation of the Forum. The salinity control program 
has proven to be a very cost effective approach to help mitigate the 
impacts of higher salinity. Continued Federal funding of the program is 
essential.
    In addition, the Colorado River Board recognizes that the Federal 
Government has made significant commitments to the Republic of Mexico 
and to the seven Colorado River Basin States with regard to the 
delivery of adequate quality water to Mexico. In order for those 
commitments to be honored, it is essential that in fiscal year 2001 and 
in future fiscal years, the Congress provide funds to the Department of 
Agriculture to allow it to continue providing needed technical support 
to the producers for addressing salinity control in the Basin.
    The Colorado River is, and will continue to be, a major and vital 
water resource to the 17 million residents of southern California as 
well as throughout the Lower Colorado River Basin. As stated earlier, 
preservation of its quality through an effective salinity control 
program will avoid the additional economic damages to users of Colorado 
River water in California, Arizona, and Nevada..
    The Colorado River Board greatly appreciates your support of the 
Federal/State Colorado River Basin Salinity Control Program and again 
asks for your assistance and leadership in securing adequate funding 
for this program.
                                 ______
                                 

            PREPARED STATEMENT OF COLORADO STATE UNIVERSITY

    Mr. Chairman, Members of the Subcommittee, my name is Judson M. 
Harper. I am Vice President for Research and Information Technology at 
Colorado State University, located in Fort Collins, Colorado. I 
appreciate this opportunity to submit my testimony for the record of 
proceedings on the fiscal year 2001 Department of Agriculture Budget. I 
would like to testify in support of the budget request for funds 
related to carbon sequestration mitigation strategies and take this 
opportunity to inform you of the ongoing work in this field being 
conducted by the Consortium on Agricultural Soils Mitigation of 
Greenhouse Gases.
    The Consortium for Agricultural Soils Mitigation of Greenhouse 
Gases (CASMGS) includes Colorado State University, Texas A&M 
University, Iowa State University, the University of Nebraska, Kansas 
State University, Michigan State University, Montana State University, 
The Ohio State University and Battelle-Pacific Northwest National 
Laboratory. These institutions have been working individually and 
collectively for the past few years in the fields of soil carbon 
dynamics, soil-derived greenhouse gases, soil erosion, water quality 
and computer modeling, land resource data analysis, agricultural 
resource economics and integrated assessment.
    The Administration's Budget for the Department of Agriculture 
proposes $12 million for conservation technical assistance programs to 
develop accurate baseline soil carbon data and to determine the impacts 
of federal programs on soil carbon stocks across the country. An 
additional $3 million is proposed to fund demonstration and research 
pilot projects to test various carbon sequestration mitigation 
strategies and monitoring mechanisms. We support these initiatives and 
feel prepared to partner with the federal government in reaching its 
objectives.
    Concern has been mounting about the considerable buildup of carbon 
dioxide (CO2) in the atmosphere. This atmospheric buildup 
has been greatly accelerated by industrialization and the burning of 
fossil fuels (coal, oil and natural gas). Crops and other plants remove 
carbon dioxide from the atmosphere and, following harvest their residue 
and roots remain in the soil for long periods. Carbon accumulation in 
soils can be greatly improved by various forms of conservation 
management, such as no-till and replanting with grasses. This carbon 
sequestration occurs because there is less soil disturbance and more 
carbon is added to the soil. Corollary benefits of carbon sequestration 
are increased soil fertility, reductions in erosion and increases in 
soil quality.
    To help reduce carbon dioxide emissions, a new plan is emerging--
sequester carbon in U.S. agricultural soils, which helps the soil and 
air and benefits the U.S. agricultural economy. It has been estimated 
that 20-40 percent of targeted emission reductions can be met by 
agricultural soil carbon sequestration. Under a private emission 
trading strategy, U.S. farmers, practicing appropriate conservation 
practices, could sell carbon ``credits'' to carbon emitters. 
Alternatively, government policies might be implemented to directly 
support farmers for implementing conservation management practices. 
Either strategy would help mitigate carbon dioxide rise while the 
needed long-term technical solutions are found for producing clean 
energy.
    The goal of CASMGS is to provide the tools and information needed 
to successfully implement soil carbon sequestration programs intended 
to lower the accumulation of greenhouse gases in the atmosphere, while 
improving the soil and providing income and incentives to farmers. 
Specifically, the Consortium will:
  --Produce national inventories of all major greenhouse gas fluxes 
        from soils.
  --Provide measurement and modeling tools for quantifying and 
        verifying soil carbon sequestration rates to support carbon 
        dioxide emission credit or trading schemes.
  --Provide integrated assessment models to evaluate alternative 
        national and global economic and policy strategies for carbon 
        sequestration. These models will provide insights on the 
        impacts of such programs on crop production potential, food 
        security and environmental quality.
  --Provide a standing capability to meet the short-term needs of 
        Federal agencies, Congress and the White House, for 
        information, data and analysis on issues relating to soil 
        carbon sequestration and soil greenhouse gas emissions.
  --Participate in the transfer to and adoption of technology by other 
        countries for quantifying and verifying carbon sequestration 
        rates.
  --Provide information to each of the stakeholder groups: 
        policymakers, agricultural sector, energy and transportation 
        industries, the scientific community and the general public, 
        through annual and special reports, scientific and trade 
        journals, popular publications and an internet website.
    The work of the Consortium will enhance the capacity to sequester 
carbon in agricultural soils and provide time for industry to develop 
and implement clean energy technologies. We are hopeful that this 
Committee will acknowledge the important role that agricultural lands 
play in carbon emissions mitigation, as well as, the unique opportunity 
for farmers to earn monetary rewards for sound agricultural practices 
that not only sequester carbon, but also improve the quality of the 
soil.
                                 ______
                                 

PREPARED STATEMENT OF THE COSMETIC, TOILETRY, AND FRAGRANCE ASSOCIATION

    The Cosmetic, Toiletry, and Fragrance Association (CTFA) \1\ 
appreciates the opportunity to submit testimony regarding the fiscal 
year 2001 budget request for the Food and Drug Administration (FDA) 
and, in particular, to support an increase in funding for the Center 
for Food Safety and Applied Nutrition (CFSAN) and its Office of 
Cosmetics and Colors. The Administration's budget proposal maintains 
the funding for the Office of Cosmetics and Colors at the fiscal year 
2000 level of approximately $5.2 million. We are concerned that this 
continuation of current funding will have the effect of reducing the 
office's resources because inflationary and mandatory salary increases 
are not funded. We believe funding this office sufficiently to cover 
those automatic expenses is essential to preserve the integrity of this 
regulatory program, which ensures consumer confidence in the safety of 
cosmetic products.
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    \1\ CTFA is the national trade association representing the 
cosmetic and personal care product industry. Founded in 1894, CTFA has 
an active membership of almost 300 companies, which manufacture or 
distribute the vast majority of the finished cosmetic and personal care 
products marketed in the U.S. The Association also has approximately 
300 associate members, which provide services, equipment, or supplies, 
such as raw materials and packaging components, to our active members.
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    CTFA member companies provide consumers with a wide array of safe 
cosmetic products, including makeup preparations, shampoos, deodorants, 
toothpastes, mouthwashes, perfumes, shaving creams, and skin lotions. 
These products promote personal hygiene, as well as helping people look 
and feel good. Virtually everyone in the U.S. uses cosmetic products on 
a regular basis. Thanks to the safety programs of the cosmetic 
industry, often with the cooperation and participation of the FDA, and 
the effectiveness of FDA's cosmetic-related activities, everyone can be 
confident that the products they use routinely are safe. The continued 
appropriate funding of the Office of Cosmetics and Colors is essential 
to maintain this level of assurance for this industry and our 
consumers.
    A strong FDA cosmetics regulatory program is critically important 
for the continuing economic success of the $25 billion cosmetic and 
personal care industry. Our industry counts on the FDA compliance 
function to deter the entry into the market of unscrupulous 
organizations, as well as to ensure that questionable products are 
quickly removed from the market. A vital FDA program maintains a level 
playing field for all companies in the marketplace, and for all 
products. An efficient program allows members of our industry to know 
what the regulatory requirements are, how they will apply, and that 
they will be enforced consistently, regardless of whether products are 
produced domestically or imported into the U.S.
    The Office of Cosmetics and Colors has been, and remains, a 
national leader in setting and maintaining standards for the safety of 
cosmetic products and for their proper labeling. This national 
leadership means that consumers throughout the nation can trust that 
their safety is protected, regardless of where they purchase products. 
The effective functioning of the Office is essential so that States are 
encouraged to adopt national standards rather than setting individual, 
differing state requirements. The resulting patchwork of regulatory 
requirements would not only confuse consumers but also create 
impossible difficulties for an industry conducting business in 
interstate commerce.
    The FDA also is recognized internationally as expert in cosmetic 
regulation, largely as a result of the effective functioning of the 
Office of Cosmetics and Colors. FDA's international leadership is 
necessary so that we, along with other industries, can continue to move 
toward the goal of international harmonization. This was identified by 
Congress as a priority for FDA in Section 410 of the FDA Modernization 
Act of 1997.
    Finally, in addition to supporting sufficient and stable funding 
for the office of Cosmetics and Colors, we also wish to take this 
opportunity to express support for two specific initiatives for which 
the Administration has requested additional funding in fiscal year 
2001. First, the Administration requests $5 million for costs 
associated with the move of CFSAN to new headquarters facilities. 
Without these funds, this long anticipated and congressionally 
supported move will not be completed successfully. For years, CFSAN has 
occupied seriously outmoded facilities and coped with extreme 
difficulties in upgrading laboratory, computer, and telecommunications 
capacity. The funds requested in this budget will allow implementation 
of a much improved system, which will greatly benefit both consumers 
and the regulated industry.
    Second, the Administration requests $20 million for new laboratory 
facilities in Los Angeles. The FDA field laboratory in Los Angeles is 
an unsafe workplace, and its equipment and instrumentation are obsolete 
and cannot perform the important product analysis and monitoring 
functions necessary to continue to ensure product safety. This 
laboratory is especially important to FDA's work in preventing the 
importation into the U.S. of unsafe foreign-made products. The Los 
Angeles facility is a principal laboratory for analysis of imported 
cosmetic products, and its effective functioning is critical to our 
industry's goal that every cosmetic and personal care product on the 
U.S. market meet our high standards, whether the product is made in the 
U.S. or imported.
    CTFA thanks you for considering our views as you move forward with 
your deliberations on the fiscal year 2001 budget. If there is any way 
we may be of assistance to you, please call upon us.
                                 ______
                                 

PREPARED STATEMENT OF THE COUNCIL FOR AGRICULTURAL RESEARCH, EXTENSION 
                              AND TEACHING

    Thank you Mr. Chairman, I appreciate the opportunity to provide 
testimony in support of the Land Grant University System.
    My name is Daniel M. Dooley, Chairman of the Council for 
Agricultural Research, Extension and Teaching, commonly called CARET. 
CARET is a national group of lay support persons working on behalf of 
the Land Grant University System. The CARET group was formed a number 
of years ago for the express purpose of enhancing national support and 
understanding of the important role played by the Land Grant Colleges 
in the food and agricultural production system, as well as the role of 
this system in enhancing the quality of life for all citizens of the 
nation.
    I do not intend to take your time discussing all of the 
contributions that the Land Grant System has made to the food and 
agricultural production system. I do want you to know, however, that 
the Land Grant University System has been an essential ingredient to 
the success of American agriculture and the health of the American 
public.
    Suffice it to say, that the Land Grant University System is very 
unique and has been a critical component to the long-term success of 
the agricultural community. It has provided technology and education 
enabling farmers and ranchers and other stewards of natural resources 
in this country to manage their productive resources in a way that is 
efficient and yields the greatest and most nutritious quality and 
quantity of food in the world. The Land Grant Universities' 
contribution to agriculture has had enormous impact upon our economy, 
our balance of trade, the quality of our work force and the health and 
quality of life of American citizens. Unfortunately, this system is 
sometimes taken for granted.
    It is now time to make substantial new efforts to the further 
research and development of the agriculture and food production system. 
This committee must acknowledge the important contributions to be made 
by support for Section 401 of the Agricultural Research, Extension and 
Education Reform Act of 1998 (AREERA). It is imperative that the 
committee find a resolution of the dispute which has emerged among your 
colleagues in the House of Representatives. Unfortunately, the future 
health and well being of the agriculture and food production system and 
the consumers it serves, are at risk because of the internal squabbles 
about implementation of Section 401. I represent to you that, on behalf 
of CARET, resolution of this matter is the highest priority facing you.
    Additionally, this testimony is principally to request support for 
the fiscal year 2001 budget recommendations of the National Association 
of State Universities and Land Grant Colleges (NASULGC) Board on 
Agriculture of $1,095,229,000.00. These increases, in addition to 
support of Section 401 of the AREERA, are critical to advance the 
interests of the agricultural economy in the United States.
    CARET and NASULGC do endorse and are pleased with the President's 
proposed budget increases for the Cooperative State Research, Education 
and Extension Service of the United States Department of Agriculture. 
However, we do feel that it is necessary to reallocate some of the 
proposed increases and to augment increases in other areas.
    The budget recommendations that are being advanced by CARET on 
behalf of the Land Grant Universities are the result of a broad number 
of stakeholder meetings and receipt of substantial input from those 
that benefit from the research and education activities. Specifically, 
I want to address a few funding highlights that are recommended by 
CARET. It is our recommendation that the following programs be 
increased by the amounts noted.
  --Base formula funds for research and extension, $50,000,000.00 
        increase
  --National extension priorities (water quality, food safety, 
        pesticide impact assessment program), $20,000,000.00 increase
  --Native American and Hispanic serving institution funding, 
        $9,000,000.00 increase
  --1890 institution facilities improvements, $3,000,000.00 increase
  --National research initiative, $30,000,000.00 increase
  --Integrated research extension and education, $43,000,000.00 
        increase
  --Extension and research initiatives--(RUPRI, farm safety, grazing 
        lands), $13,000,000.00 increase
  --International Science and Education Grant Program, $8,000,000.00 
        increase
  --Investment in students, $15,000,000.00 increase
    Additionally, the CARET recommendations include a number of cross-
cutting issues for fiscal year 2001. The cross-cutting issues include 
investing in minority serving colleges, supporting partnerships to 
address national issues at the local level, investing in students, and 
globalizing Unites States universities.
    Targeted issues for fiscal year 2001 include investing in farmers 
and ranchers, investing in food safety, investing in nutrition, 
investing in the environment, investing in renewable resources, 
investing in children, youth and families, and investing in new markets 
in quality communities.
    The proposed increases in competitive grants will make the research 
and education system more responsive to emerging issues that are facing 
American agriculture in a rapidly changing and globalizing economic 
environment. The augmentation of the competitive grant program is 
essential to provide a mechanism which enables major research 
institutions to develop technology necessary to compete in this 
environment.
    It is the belief of CARET that these proposed budget 
recommendations will help equip American agriculture for the 21st 
century. It will facilitate the maintenance of our competitive edge 
throughout the broad range of the production, processing, distribution 
and retail system that moves commodities around the world. Further, 
CARET believes that these recommendations will enhance the health and 
welfare of the American consuming public.
    I have attached a copy of the NASULGC Board on Agriculture Budget 
Recommendations to this presentation. Thank you very much for the 
opportunity to present this testimony in support of appropriations for 
the Land Grant University System.
                                 ______
                                 

              PREPARED STATEMENT OF DEFENDERS OF WILDLIFE

    On behalf of our nearly 400,000 members and supporters nationwide, 
Defenders of Wildlife thanks you for the opportunity to submit 
testimony on the fiscal year 2001 Agriculture Appropriations bill. 
Defenders is a national, non-profit organization focused on conserving 
wildlife, their habitats and the ecosystems on which they depend. 
Consequently, we have a very special interest in the U.S. Department of 
Agriculture's natural resource protection programs. These programs 
include the Conservation Reserve Program (CRP), the Conservation 
Reserve Enhancement Program (CREP), the Wetland Reserve Program (WRP), 
the Environmental Quality Incentives Program (EQIP), the Wildlife 
Habitat Improvement Program (WHIP), and the Farmland Protection Program 
(FPP). We also are very interested in the newly proposed Conservation 
Security Program (CSP) and its potential beneficial impacts on wildlife 
habitat and ecosystem quality.
    Although much remains to be done to improve the effectiveness and 
efficiency of existing USDA resource conservation programs, we would 
like to voice our strong support for the Administration's budget 
request of $125 million for the CRP, $65 million for the FPP, $50 
million for the WHIP, and $325 million for the EQIP. We also support 
the enrollment of an additional 210,000 acres in the WRP program. We 
believe that the newly proposed CSP is an exciting opportunity to 
combine natural resource and farm income improvement objectives and 
that the program should receive the full level of the Administration's 
budget request of $600 million.
    A major constraint to improving the effectiveness and efficiency of 
existing USDA conservation programs is the lack of adequate monitoring 
and evaluation of field level projects and their impacts on natural 
resource quality, especially native wildlife and their habitats. We 
believe that $5 million should be allocated to defining and 
implementing a pilot monitoring program(s) over the next two years to 
evaluate conservation program impacts toward achieving improved native 
wildlife habitat, water and air quality, and soil health. Defining and 
implementing a pilot monitoring program(s) would be a cooperative 
effort involving the President's Council on Environmental Quality 
(CEQ), the USDA, the Environmental Protection Agency, the United States 
Fish and Wildlife Service, the National Marine Fisheries Service, and 
the United States Geological Survey, with the CEQ serving as the lead 
agency. The experience from this pilot effort would be used to 
determine a longer term conservation program monitoring and evaluation 
program that would be implemented under new Farm Bill legislation in 
2002.
    Lastly, effective implementation of USDA conservation programs 
requires increased technical assistance at the field level. We 
therefore support the Administration's proposed budget increases for 
field-level technical assistance for the natural resource conservation 
programs that are implemented and administered by the Farm Services 
Agency and the Natural Resources Conservation Agency.
    On behalf of Defenders of Wildlife, I thank you again for this 
opportunity to submit testimony.
                                 ______
                                 
              PREPARED STATEMENT OF DEFENDERS OF WILDLIFE

    On behalf of our nearly 400,000 members and supporters nationwide, 
Defenders of Wildlife thanks you for the opportunity to submit 
testimony on the fiscal year 2001 Agriculture Appropriations bill. 
Defenders is a national, non-profit organization focused on conserving 
wildlife, their habitat and the ecosystems on which they depend. 
Consequently, we have a very special interest in the U.S. Department of 
Agriculture's Wildlife Services (WS) program.
    The WS program, formerly known as Animal Damage Control, was 
created in 1931 at a time when the U.S. sheep industry was at its 
zenith with 52 million head nationwide. Consequently, its primary 
function became protecting sheep from predators--primarily in the West. 
Since that time, the sheep industry--for a number of reasons--has 
experienced a nearly 70-year decline. Sheep production is now less than 
15 percent of its 1930s level, with the total number of sheep today at 
just over 7 million. The 1999 lamb crop of 4.7 million was down 6 
percent from 1998 to a new record low and the number of sheep producers 
as of January 2000 totaled 66,800, down from 3 percent from 1998 and 8 
percent from 1997. Despite the serious decline in the number of sheep 
and sheep producers, a change in sheep population distribution and the 
emergence of other vertebrate pest threats to agriculture, WS continues 
to view the western sheep rancher as its primary ``customer'' and 
continues to allocate the bulk of its resources to livestock 
protection.
    The WS operations budget appears as a single line item in the 
budget with seven main program categories to which federal funds can be 
allocated: livestock protection, human health and safety, forest/range, 
aquaculture, property, crops and natural resources. Figures 1 and 2 
indicate how WS allocated its fiscal year 1998 direct federal 
appropriation by program category in each state. From this information 
it is clear that livestock protection receives a disproportionate share 
(46.3 percent) of the total operations budget while the 6 remaining 
program categories collectively share the remaining 54.7 percent. Of 
the amount spent on livestock protection, 95.1 percent was spent within 
the 17 western states.
    By continuing to fund the livestock protection program at such 
disproportionate levels, WS ignores those with greater needs, such as 
non-western livestock producers. For example, Iowa ranks 10th in the 
nation for sheep production with 265,000 head, yet only received $2,625 
in federal livestock protection money for fiscal year 1998, resulting 
in a cost per head of just one cent. A much different scenario exists 
in the West. Contrasted with Nevada, which has only one-third the 
number of sheep that Iowa does, this western state receives 7.1 percent 
of the direct federal dollars that WS dedicates to livestock 
protection, resulting in a per head cost of $7.57. And if we assume, as 
studies suggest, that on average only 10 percent of ranchers utilize 
WS, that means 35 ranchers in Nevada receive a government subsidy of 
over $20,000 per year.
    A further example of how WS ignores the needs of others faced with 
animal damage conflicts is evident when one analyzes WS' human health 
and safety program. Although it often touts this to be a major program, 
in fiscal year 1997, WS allocated just $1.9 million of its direct 
federal appropriation to addressing human health and safety needs for 
all of the 50 states. The human health and safety program largely 
addresses the issue of bird-aircraft strikes at airports. According to 
a WS publication, the FAA estimates that birds and animals threaten 
human safety and cause $200 million in damage each year to aircraft in 
the U.S. Indirect costs, such as flight delays, aircraft changes, and 
loss of revenues add immeasurably to direct costs. Contrast these 
figures with the direct federal funds allocated to Idaho and Montana 
for livestock protection: $906,103 and $824,681 respectively, for 
livestock damages that reportedly totaled just $2.5 million. Overall, 
in fiscal year 1997 (the last year for which WS collected information 
pertaining to the reported value of resources damaged) WS spent $9.8 
million in response to the reported $7.7 million in livestock-related 
damages and spent just $9.5 million to address the more than $63 
million in damages reported in the 6 other program categories.
    Figures 1 and 2 also demonstrate how skewed the WS program is in 
terms of funding levels for eastern programs. Despite the fact that the 
31 eastern United States contain 70 percent of the total U.S. 
population and that six of the top ten states in agricultural products 
sales, less than 27.5 percent of WS' direct federal appropriation is 
spent on programs in the East.
    Another area where both WS and the Animal and Plant Animal Health 
Inspection Service have failed to address much more legitimate animal 
damage conflicts is in the control of invasive exotic species. Invasive 
exotic species are one of the gravest threats to American agriculture 
as well as to a variety of natural ecosystems. Based on data on 
agriculture, forestry and public health, it is estimated that invasive 
exotic species now cost the nation more than $122 billion per year 
(Pimentel et al 1999). About 42 percent of the species on the federal 
Threatened or Endangered Species List are considered at risk primarily 
because of competition and predation by exotic species and according to 
a 1998 study, the affect of exotics on imperiled species is second only 
to habitat destruction among major threats to biodiversity. Despite the 
magnitude of the threat that invasive species pose to agriculture, WS 
currently focuses solely on one invasive species, the brown tree snake 
and incredibly, last year when the Administration proposed a $1.8 
million across the board reduction in WS' operations budget, WS 
proposed eliminating funding of this highly critical program in order 
to achieve the reduction. This is even more incredible considering that 
the Department of Defense funds the lion's share of the brown tree 
snake program.
    One exotic species whose control is clearly within the domain of WS 
is the nutria, a rodent native to South American that was introduced in 
the United States in the late 19th century. An initial population of 20 
nutria in Louisiana reached 20 million individuals within 25 years, and 
the rodent now has established populations in the coastal and 
freshwater marshlands of 15 other states. They have damaged 80,000 of 
Louisiana's three million acres of coastal marshlands, resulting in 
more than $2.2 billion per year in lost value. Yet despite the 
tremendous economic losses resulting from nutria damage, WS spends 
virtually nothing on controlling this highly destructive species and 
when recently asked to assist with a pilot project at Blackwater 
National Wildlife Refuge in Maryland aimed at eradicating nutria from 
the area, WS claimed that there were no funds in their budget available 
for such assistance.
    Clearly, forceful congressional direction is needed to ensure that 
WS reassesses how it determines its program priorities in the future. 
In order to provide this direction, we urge the Subcommittee to limit 
funds for livestock protection to no more than $2.5 million, of which 
none can be spent on lethal control, and a redirection of funds toward 
programs that deal with the control of exotic species. Federal funds 
remaining for livestock protection would be sufficient to allow WS 
field personnel to provide technical assistance to ranchers with 
depredation problems.
    The Subcommittee has received testimony submitted by Mr. James G. 
Butler, Chair of the National Wildlife Services Advisory Committee 
dated March 1, 2000. Although Mr. Butler's testimony was purportedly 
submitted on behalf of the advisory committee, it was neither reviewed 
nor approved by the advisory committee, on which a Defenders' employee 
resides. Thus, Mr. Butler's testimony speaks only for him, and Congress 
should be aware that not only was his testimony on behalf of the 
advisory committee ill-advised, but it also potentially violates 
federal law. As Mr. Butler is a sheep rancher residing within Texas, 
his views of the WS program are markedly different from those of 
Defenders and therefore should not be construed to represent Defenders' 
opinion. We will be pursuing this matter with WS administrators in the 
very near future.
    Lastly, we would like to voice our strong support for the 
Administration's request for $125 million for the Conservation Reserve 
Program, $65 million for the Farmland Protection Program, $50 million 
for the Wildlife Habitat Incentives Program, $325 million for the 
Environmental Quality Incentives Program and $600 million for a new 
Conservation Security Program. We also support the enrollment of an 
additional 210,000 acres in the Wetlands Reserve Program.
    On behalf of Defenders of Wildlife, I thank you again for this 
opportunity to submit testimony.
                                 ______
                                 

                   PREPARED STATEMENT OF EASTER SEALS

    Easter Seals appreciates the opportunity to report on the notable 
accomplishments of the USDA Cooperative State Research, Education, and 
Extension Service (CSREES) AgrAbility Program and recommend that 
funding for the AgrAbility Program be increased to $4.6 million in 
fiscal year 2001.
    The AgrAbility Program is an essential, unduplicated, hands-on 
resource for farmers, ranchers, and farmworkers with disabilities. It 
is the only USDA program dedicated exclusively to helping agricultural 
producers with disabilities. It demonstrates the value of public-
private partnership by securing donations of funds, talent, and 
materials to magnify the impact of a modest federal investment. The 
fiscal year 2000 appropriation is $3,055,000 (minus a 15 percent 
decrease in funds as part of efforts to cut discretionary spending) 
which funds 18 state programs.
Disability & Agriculture
    Agricultural production is one of the nation's most hazardous 
occupations. Each year, approximately 200,000 people working in 
agriculture experience injuries that limit their ability to perform 
essential farm tasks. Tens of thousands more become disabled as a 
result of non-farm injuries, illnesses, other health conditions, and 
the aging process. Nationwide, approximately 500,000 agricultural 
workers have physical disabilities that prevent them from performing 
one or more essential farm tasks.
    For many of these individuals, the presence of a disability 
jeopardizes their rural and agricultural futures. Rural isolation, a 
tradition of self-reliance, and gaps in rural service delivery systems 
frequently prevent agricultural workers with disabilities from taking 
advantage of growing expertise in modifying farm operations, adapting 
equipment, promoting farmstead accessibility, and using assistive 
technologies to safely accommodate disability in agricultural and rural 
settings. Yet, with some assistance, the majority of disabled 
agricultural workers can continue to earn their livelihoods in 
agriculture and participate fully in rural community life.
AgrAbility's Role and Record of Success
    Since 1991, thirty-one states have been served by AgrAbility 
projects. AgrAbility currently has:
  --Provided direct on-farm assistance to more than 4,700 farmers, 
        ranchers, and farmworkers with disabilities and their families.
  --Provided information and advice to more than 10,000 persons with 
        disabilities employed in agriculture and related occupations.
  --Educated more than 160,000 agricultural, rehabilitation, and rural 
        health professionals on safely accommodating disability in 
        agriculture.
  --Recruited and trained more than 3,500 volunteers to assist 
        agricultural producers with disabilities and their families.
  --Reached approximately 8.4 million people through 3,800 exhibits, 
        displays, and demonstrations to increase awareness of the 
        challenges affecting and resources available to people with 
        disabilities who work in agriculture.
    The AgrAbility Program was established under the 1990 Farm Bill in 
response to the needs of farmers with disabilities. The Farm Bill 
authorizes the Secretary of Agriculture to make grants to Extension 
Services for conducting collaborative education and assistance programs 
for farmers with disabilities through state demonstration projects and 
related national training, technical assistance, and information 
dissemination. Easter Seals is proud to be a partner with Purdue 
University's Breaking New Ground Program to provide the national 
training and technical assistance portion of AgrAbility. Thousands of 
people in states with and without state AgrAbility projects are aided 
through this initiative.
    AgrAbility combines the know-how of Extension Service and national 
disability organizations to provide people with disabilities working in 
agriculture the specialized services that they need to safely 
accommodate their disabilities in everyday farm operations. AgrAbility 
received strong bipartisan support during the 1998 reauthorization of 
the USDA research and education programs, and was extended through 
fiscal year 2004. The $6 million authorization level for AgrAbility was 
continued.
    Under the statute, state and multi-state AgrAbility projects engage 
Extension Service agents, disability experts, rural professionals, and 
volunteers in offering an array of services, including: identifying and 
referring farmers with disabilities; providing on-the-farm technical 
assistance for agricultural workers on adapting and using farm 
equipment, buildings, and tools; restructuring farm operations: 
providing agriculture-based education to prevent further injury and 
disability; and, upgrading the skills of Extension Service agents and 
other rural professionals to better promote success in agricultural 
production for people disabilities.
    In 2000, USDA received an allocation from Congress of $3,055,000. 
To meet the fiscal 2000 budget agreement of reducing discretionary 
spending by .38 percent, the Department reduced the AgrAbility funding 
by 15 percent. These funds support eighteen state projects in Colorado, 
Delaware, Illinois, Indiana, Iowa, Kentucky, Minnesota, Mississippi, 
Missouri, Nebraska, North Carolina, North Dakota, Pennsylvania, South 
Dakota, Tennessee, Texas, Utah, and Wisconsin.
    AgrAbility provides customized assistance to farmers, ranchers, and 
farmworkers with disabilities and their families. The nature and degree 
of assistance depends on the individual's disability needs and 
agricultural operation. For example:
  --Ron Brown from Edgar, Wisconsin, sought help from AgrAbility 
        because a 1981 injury that limited the use of his arm and 
        arthritis in his knees was making it increasingly difficult to 
        accomplish the chores on his 40 to 50 head dairy farm. 
        AgrAbility staff worked with Ron and enlisted the help of the 
        state Division of Vocational Rehabilitation to create solutions 
        to allow Ron to stay active in farming. AgrAbility staff 
        recommended new types of equipment to minimize the stress on 
        Ron's knees and arm. A John Deere ``Gator'' utility vehicle 
        allows Ron to get around the farm easily, helping him herd 
        cows, fix fences and do other chores. Ron did some of the 
        modification work himself. The added extra steps and handrails 
        he added to his tractors allow him to get on and off more 
        easily and safely. Ron says that the partnership has helped 
        make farming ``a little better, and easier to do.'' Ron now 
        travels the state supporting other farmers with disabilities.
  --Rodney Lane of Harrison Valley, Pennsylvania has operated a farm in 
        the Harrison Valley since 1979. He has a dairy herd and over 
        500 acres of crops. He lost his left arm below the elbow and 
        part of three fingers on his right hand in a corn picker 
        accident. He uses a prosthesis on his left arm when tending his 
        cows. AgrAbility for Pennsylvanians worked with Vocational 
        Rehabilitation to acquire a mixed ration wagon that eliminates 
        the need for multiple trips to and from the grain bin and 
        reduces the need for heavy lifting. Rodney has this to say 
        about his modification, ``Assistive technology has made things 
        easier so that I can farm more self-sufficiently.''
  --Darwin Hoffmeister of Ackley, Iowa, lost four fingers and the use 
        of his left arm in a combine accident five years ago. Although 
        plenty of offers to take over his soybean and livestock 
        operation came in after his accident, Darwin wanted to continue 
        in farming. AgrAbility worked with him to change the ladder on 
        his combine, put guardrails on his grain bin and provide him 
        with adapted tools such as a magnetic hammer that allows for 
        one-handed operation. In his own words, ``farming is all I've 
        ever done, and I wanted to prove that I could still do it.''
  --Louis Jones of Biddle, Kentucky, worked for Clarklands 
        Thouroughbreds, a breeding farm, mowing lawns, grooming horses, 
        and performing maintenance. After a spinal cord injury, he 
        contacted AgrAbility staff who helped him explore the 
        possibilities of starting a lawn care business. With 
        AgrAbility's assistance, Louis found the right equipment and 
        funding to start his new company. AgrAbility staff worked with 
        Louis to modify equipment so he can access and maintain all of 
        it. The horse farm where Louis worked will become one of his 
        new clients.
Impact of Current Funding Levels
    In the 1990 Farm Bill, a funding floor of $150,000 per state was 
set to assure that the state programs were successfully implemented. 
However, because funding has not approached the $6 million authorized 
level, state projects have been funded at only $85,000 per state. In 
the 1998 reauthorization of the USDA research and education programs, 
the Committee reaffirmed a commitment to that $150,000 per state floor. 
Easter Seals strongly supports full funding of state programs to assure 
that they continue to be effective for farmers with disabilities. 
Without a concurrent increase in appropriations, fully funding state 
projects at $150,000 per state would result in a loss of almost half of 
the existing AgrAbility projects. The fiscal 2001 request of $4.6 
million would bring all current states up to the $150,000 level and 
would allow eight currently unserved states to implement AgrAbility 
programs.
    AgrAbility projects are underfunded relative to need and objective. 
At $85,000 per state, only a few staff can be hired to provide state-
wide education and assistance to farmers with disabilities, educate 
rural professionals, recruit volunteers, and work with rural businesses 
on disability-related issues. Rising demand for services and the great 
distances that must be traveled to reach farmers and ranchers severely 
strains even the most dedicated of AgrAbility's outstanding staff. The 
15 percent rescission for fiscal 2000 has added to the stress faced by 
staff. State AgrAbility projects were asked to develop work plans for 
2000 based on the original appropriation of $3,055,000, only to be 
asked to revise and resubmit them to accommodate the 15 percent 
rescission. Easter Seals fears that failure to invest adequately in 
this worthwhile program will ultimately cause it to falter.
    One of the consequences of limited funding is that in every grant 
cycle, some states that have existing AgrAbility programs, and can 
demonstrate a legitimate need for services, are not renewed and forced 
to discontinue services to farmers with disabilities in that state and 
often have difficulty getting the access to the limited state and 
private funding sources that the federal seed money granted them. More 
than a dozen states have sought AgrAbility funding without success. 
Other states, including Louisiana, Michigan, New Hampshire, South 
Carolina, and Vermont, had USDA-funded AgrAbility projects in the past 
and seek to re-establish their programs. Each of these states can 
demonstrate significant unmet needs among farm and ranch families 
affected by disability that AgrAbility could potentially address. In 
the 1998-1999 grant cycle, projects in Ohio, New York, Idaho/Montana, 
and New Jersey ceased to receive federal support. The need for the 
program in these once-funded states is exemplified by the fact that 
last year the technical assistance telephone line operated by 
AgrAbility staff at Breaking New Ground Resource Center at Purdue 
University logged hundreds of calls for assistance from these nine 
states alone. Any loss of programs will greatly affect farmers with 
disabilities in states for whom AgrAbility is the primary resource 
through which they seek information and assistance.
    The need for AgrAbility services has never been greater, and its 
accomplishments to date are remarkable by any standard. Easter Seals is 
proud to contribute to the ongoing success of the USDA-CSREES 
AgrAbility Program. Please support the allocation of at least $4.6 
million for AgrAbility in fiscal year 2001 to ensure that this valuable 
public-private partnership continues to serve rural Americans with 
disabilities and their families. Thank you for considering Easter 
Seals' views and recommendations.
                                 ______
                                 

               PREPARED STATEMENT OF THE FDA-NIH COUNCIL

                              INTRODUCTION

    The FDA-NIH Council appreciates the opportunity to submit testimony 
concerning the importance of a sustainable funding base for the Food 
and Drug Administration (FDA). This year President Clinton has proposed 
an impressive 13 percent increase for the Agency. The Council members 
are grateful for the Committee's support of the FDA and consideration 
of the Administration's proposal.
    The FDA-NIH Council is a coalition of patient advocacy 
organizations, academic scientists, health professionals, and research-
based industry organizations. These partners in the process of medical 
discovery and innovation have come together as a result of the shared 
concern about the complex challenges faced by the FDA in carrying out 
its regulatory responsibilities. The Council members recognize that new 
advances in research, innovations in technology, and additional 
resources for research make demands on the FDA that must be addressed.
    There is no question that we are on the threshold of medical 
breakthroughs that were unthinkable just five years ago. We have built 
a successful discovery process in government, academia, and industry, 
attracted some of the best scientific minds, and initiated ground-
breaking programs that have already yielded critical knowledge, and 
improved patient care and quality of life. The unprecedented increases 
at the National Institutes of Health (NIH) have lead to significantly 
increased activity at the FDA relative to increased product development 
and clinical trials. Without the resources and necessary funding to 
support scientific expertise, we limit our ability to rapidly and cost-
effectively translate that research and development into commercial 
products for health professionals and consumers. The FDA must be in a 
position to respond to the tremendous advances occurring in the public 
and private sectors.
    Over the past five to eights years the FDA's appropriations have 
increased at a steady and minimal rate. However, trends in a wide 
variety of external factors have generated workloads and public 
expectations that are poorly matched with the FDA's capacity to respond 
in a timely and adequate manner. The Agency's growing responsibilities 
include Biotech alliances, direct-to-consumer prescription drug 
advertisement, new drug and biotech patents, food imports to the United 
States, transgenic crops, and Internet pharmacies, not to mention 
dietary supplements and generic drug approvals.
    While an increasing proportion of the FDA's workforce is new 
product review staff, funded by user fees under the Prescription Drug 
User Fee Act (PDUFA), the number of non-user fee funded full-time 
equivalent (FTE) positions has declined by more than 800 over the last 
eight years, which impacts on the Agency's ability to inspect, monitor, 
and address responsibilities outside PDUFA. In addition, FDA's statute 
specifies very precise time frames or frequencies for many review and 
inspection functions. Because most of these activities are very labor 
intensive, and grow over time, the FDA's ability to accomplish this 
work is often less than required by the statute.
    The FDA-NIH Council supports the FDA's request which focuses on 
Assuring Safety through Strengthened Science. In the past twenty years, 
expenditures in drug research have increased seven-fold; the drug 
discovery process is being driven by major breakthroughs in both 
biotechnology and information technology; medical device technology has 
shifted from x-rays and CAT scans to also include robotics, 
miniaturization, and bio-materials; trade and the standards that guide 
it have become increasingly globalized; and consumers' purchasing cues 
have shifted from traditional print and electronic media to the 
Internet. An increase in the Agency's budget is necessary to bring the 
FDA into the 21st century with a strong, focused emphasis on managing 
risk, developing science within the Agency, and pursuing leveraging 
opportunities with industry and academia.
    As a Coalition, we support the accomplishments of the FDA:
    Prescription Drug User Fee Act (PDUFA).--In the premarket arena, as 
a result of PDUFA and the cooperation of the FDA and industry, drugs 
are now being reviewed expeditiously, allowing consumers to benefit 
from new and innovative safe and effective medical products on the 
market more rapidly. The FDA is currently on track to meet or exceed 
all performance commitments associated with PDUFA for fiscal year 2000.
    Streamlining Premarket Activities.--The FDA has completed several 
reinvention efforts to streamline the premarket review process to 
accelerate review times for important new medical devices and animal 
drugs. These efforts have relied on the collaboration with health 
professionals and industry to assure public health and safety before 
and after market entry.
    FDA Modernization Act (FDAMA).--The Agency has successfully been 
implementing FDAMA. The FDAMA Statutory Compliance Plan provides a 
strategic blueprint for the FDA's future direction, and identifies the 
gap between the Agency's current capacity, and the goals of statutory 
requirements and public expectations. Working in collaboration with the 
FDA, stakeholders have articulated the need to strengthen the science 
and analytical base of the Agency, and the need for improved 
communications, including maximizing the availability and clarity of 
information for consumers about new products and for industry about 
review processes.
    The FDA-NIH Council strongly believes that the following items are 
essential for fiscal year 2001:
    The FDA-NIH Council urges the Committee to do all that is possible 
to ensure that the FDA is provided the resources to carry out its 
mandates.--We recommend that the Committee support the Administration's 
request for $1,391 million, and increase of $176 million over the 
fiscal year 2000 enacted level. Program authority at this level would 
include the collection of authorized user fees for prescription drugs 
($149 million) and mammogram quality screening ($15 million). The 
Council, and stakeholders in the research and innovation process--
patients, health providers, researchers, and industry--agree how 
successful the user fee program has been in expediting the progress of 
research to consumer product.
    The FDA-NIH Council recommends the FDA maintain a strong science 
base that keeps pace with accelerating technology.--With an explosion 
of new technologies, it is imperative the FDA maintain a level of 
expertise and remain current in science to fully understand the risks 
associated with new products. New mandates and appropriate prohibitions 
against resource shifting have eroded the funding for the Centers and 
base programs supported by the FDA. The Administration has proposed new 
initiatives and mandates without providing the full funding necessary 
to maintain the integrity of existing programs in the Agency, which has 
the potential to weaken the FDA.
    The FDA-NIH Council strongly opposes the unauthorized user fees 
proposed by the Administration, as we have consistently in the past.--
User fees should be used to speed and enhance the quality of the review 
by the FDA. We oppose the collection of unauthorized user fees for 
deficit reduction. Any user fee program should be authorized prior to 
implementation. The Council believes that the initiatives proposed by 
the Administration should undergo the same Congressional consideration 
that was provided to the Prescription Drug User Fee program.
    The FDA-NIH Council understands the inherent difficulties in terms 
of weighing the available resources and supporting numerous worthy 
federal programs in light of the severe budget constraints which 
presently exist. However, we strongly believe the functions of the FDA 
are too vital to the health and welfare of our citizens and urge your 
support for a strong increased appropriation to the Agency.
    The FDA-NIH Council thanks the Committee for the opportunity to 
submit testimony. We appreciate the support of this Committee.
    The members of the FDA-NIH Council are: the A-T's Children Project; 
Candlelighters Childhood Cancer Foundation; Allergy and Asthma 
Network--Mothers of Asthmatics, Inc.; Alliance for Aging Research; 
Schering-Plough Corporation; Albert B. Sabin Vaccine Foundation; Merck 
& Co., Inc; Pfizer, Inc.; American Veterinary Medical Association; 
Joint Council of Allergy, Asthma and Immunology; American Society of 
Tropical Medicine and Hygiene; American Academy of Pediatrics; National 
Multiple Sclerosis Society; Glaxo Wellcome, Inc.; Cystic Fibrosis 
Foundation; Bristol-Myers Squibb Company; Society of Toxicology; 
Research Society on Alcoholism; Theracom; Parkinson's Action Network; 
Academic Contract Research Organization; American Academy of Allergy, 
Asthma and Immunology; Bermuda Biological Station for Research; and the 
Cancer Research Foundation of America.
                                 ______
                                 

    PREPARED STATEMENT OF THE FEDERATION OF AMERICAN SOCIETIES FOR 
                          EXPERIMENTAL BIOLOGY

    Mr. Chairman, Mr. Kohl, Members of the Subcommittee: The Federation 
of American Societies for Experimental Biology, FASEB, is the largest 
organization of life scientists in the United States. Founded in 1912, 
FASEB is comprised of 20 societies with a combined membership of more 
than 60,000 scientists, including investigators involved in a broad 
spectrum of agricultural research. Our member scientists hold positions 
at nearly every land grant and private institution engaged in 
nutrition-related research in the United States. Many more are pursuing 
agricultural questions through industrial and biotechnology activities. 
Their research projects span human and animal nutrition, plant science, 
animal physiology and reproduction.
    Each year, FASEB brings together representatives of our member 
societies to review the life science research programs at various 
federal agencies. After considerable deliberation and debate, these 
scientists produce funding recommendations for each agency examined. 
This year's proposals are contained in a report released for this 
budget cycle.\1\ It is on behalf of FASEB scientists that testimony to 
this subcommittee is submitted.
---------------------------------------------------------------------------
    \1\ Federation of American Societies for Experimental Biology. 
2000. Federal Funding for Biomedical and Related Life Science Research 
fiscal year 2001. http://www.faseb.org.
---------------------------------------------------------------------------
    University research supported by the U.S. Department of Agriculture 
(USDA) throughout the country is critical to achieving the agricultural 
advances required to feed the world, reduce environmental pollution, 
provide safe foods, improve nutrition and enhance the competitive 
position of U.S. agriculture in the global marketplace. The USDA 
supports basic and applied research through its Research, Education and 
Extension (REE) budget and through its intramural research arm, the 
Agricultural Research Service. Half of the total REE budget supports 
the Cooperative State Research, Education and Extension Service 
(CSREES), which allocates resources for national and regional 
priorities through a variety of funding mechanisms. By providing a 
structure for USDA-university partnerships, CSREES sustains the 
university-based research and education system that is intrinsic to our 
agricultural success. Much of this support is disbursed through 
competitive grants programs, ensuring that funds are invested in the 
highest quality research projects.
    The dramatic rise in the U.S. and world population will 
significantly increase the demand for food; greater investment in 
agricultural research today is essential to meeting this need in the 
future. USDA therefore must be involved in research aimed at creating 
environmentally sustainable development, rural medical delivery systems 
and improved technology for food processing, contributing to more 
effective and cost-efficient health care.\2\ Several programs within 
USDA warrant increased support, in order to capitalize on their ability 
to address these challenges.
---------------------------------------------------------------------------
    \2\ Coalition on Funding Agricultural Research Missions. 1999. 
Invest Now for a New Century Bethesda, MD: Co-FARM.
---------------------------------------------------------------------------
National Research Initiative Competitive Grants Program (NRICGP)
    The National Research Initiative Competitive Grants Program 
(NRICGP) provides important scientific underpinnings to meet the 
pressing need for a safe and nutritious food supply. This competitive 
and highly productive merit-reviewed research program supports projects 
that lead to improved understanding as well as direct applications to 
enhance agricultural productivity, environmental quality and optimal 
human nutrition and food safety. Its vitality is crucial to the future 
of U.S. agriculture.
    Recent NRICGP-sponsored advances include:
  --Improved understanding of the biochemical and genetic basis for 
        plant resistance to cold, drought and salinity, providing the 
        potential for the development of improved varieties of 
        agricultural crops.
  --Improved understanding of virulence mechanisms of plant pathogens.
  --Enhanced understanding of the mechanism of bovine fertilization and 
        early hormonal interactions between mother and fetus will lead 
        to improved reproduction of livestock.
  --Further understanding of the role of soybean lectin gene in plant 
        development, which has direct applications to insect resistance 
        and human nutrition.
  --Improved understanding of the genetic regulation of oil production 
        in plant seeds, which has direct application to the production 
        of oils with improved industrial functionality as well as for 
        production of oils with improved nutritional quality for human 
        and animal consumption.
  --Improved methods for detection of naturally occurring seafood 
        toxins.
  --New strategies for elimination of Salmonella from chickens.
  --New insight into the role of dietary fat in regulating metabolism.
  --New techniques using nonradioactive tracers to assess nutrient 
        requirements based on rates of metabolic processes.
  --Improved understanding of the metabolic basis for nutritional 
        requirements at critical stages of development including 
        pregnancy and infancy.
  --The above examples represent only a subset of the NRICGP research 
        portfolio. One of the strengths of this program is its breadth 
        and consequent ability to maximize research contributions 
        across areas of agricultural need.
    However, despite the potential for further advancement, the USDA 
research budget has actually decreased in constant dollars by nine 
percent in the last five years. In 1998, for example, only 25 percent 
of the qualified grant proposals were funded. As a result, high-quality 
projects were turned down, discouraging the nation's best scientists 
with the most meritorious ideas from competing for USDA funding. And, 
even at this modest funding level, the awarded budgets were reduced by 
an average of 30 percent. Consequently, the research capacity of the 
NRICGP program is underutilized and an effective competitive grants 
program is impeded. In accordance with this position, it is important 
to note that the number of applications received in fiscal year 1999 
increased by 157 over fiscal year 1998 following an increased 
appropriation to the program's budget.\3\
---------------------------------------------------------------------------
    \3\ U.S. Department of Agriculture. National Research Initiative 
Competitive Grants Program Annual Reports, fiscal year 1994 through 
fiscal year 1999 and personal communication, Sally Rockey, Deputy 
Administrator, Competitive Research Grants and Awards Management, 
Cooperative State Research, Education and Extension Service.
---------------------------------------------------------------------------
    Inadequate support limits both the number and the productivity of 
researchers that the NRICGP is able to fund. NRICGP awards are small, 
averaging about $60,000 per year, and have a short duration, averaging 
2.3 years. Researchers must therefore limit the scope of their work or 
spend valuable time writing additional grant proposals. Moreover, a 
congressionally mandated cap on indirect (facilities and 
administrative) costs for NRICGP grants deters many capable 
investigators from even seeking NRI grants. The 19 percent cap on these 
costs does not cover the real expenses associated with the research. 
These factors have led to more than a 20 percent reduction in proposals 
submitted since 1994.\4\
---------------------------------------------------------------------------
    \4\ Ibid.
---------------------------------------------------------------------------
    In addition to relieving the administrative constraints on NRICGP-
sponsored research, support for areas of great opportunity should be 
augmented, including animal, plant and microbial genomes; improving 
human nutrition for optimal health; food safety; plant biochemistry; 
decreasing the environmental impact of animal pollutants; integrated 
agricultural systems; and infrastructure building. Funds now available 
for these areas of critical research are insufficient to allow them to 
reach their full potential.
    Therefore, FASEB recommends:
  --an appropriation of $203 million in fiscal year 2001 for base 
        funding of NRICGP. This would represent a first step toward the 
        goal of attaining the originally authorized $500 million for a 
        program that has been chronically under-funded since its 
        inception. This increase should not come at the expense of 
        other CSREES programs.
  --efforts be made within NRI to fund grants at the lengths and 
        amounts recommended by peer-review panels. FASEB further urges 
        Congress to increase the 19 percent cap on indirect (facilities 
        and administrative) costs for NRI grants.
  --maintaining the NRI process for enhancing the funding of new 
        investigators and encourages the NRI to expand the number of 
        these awards.
  --continuing the policy of using funds from the NRI program to 
        support young investigators for the President's Early Career 
        Award for Scientists and Engineers.
  --USDA and NRI continue their successful collaboration with other 
        federal agencies on issues such as the Plant Genome Project and 
        the Food Safety Institute.
    Finally, FASEB applauds Congress for implementing increased 
accountability of formula-funded research programs and for directing 25 
percent of funding into multi-disciplinary research and 25 percent into 
multi-state projects.
Initiative for Future Agriculture and Food Systems
    A second issue that FASEB recommends Congress pursue is the 
expenditure of funds for the Initiative for Future Agriculture and Food 
Systems (henceforth referred to as `the Initiative'). Two years ago, 
Congress authorized the Initiative to fund competitively awarded 
research grants to support large, multi-disciplinary, multi-center 
programs beyond the scope of the NRI. The program includes merit review 
and priority-setting provisions involving the relevant stakeholder 
groups.
    Within the Initiative, FASEB recommends the creation of a new 
agricultural genomics program. The power and long-term impact of a 
large-scale genome initiative directed toward agriculturally important 
organisms represents a major opportunity and fulfills an important need 
in agriculture. The most efficient means to establish these new genomic 
databases is to integrate bioinformatics with large-scale sequencing 
efforts through the comparative mapping of genes in related organisms. 
NRICGP is well positioned to then support the resulting database 
research and to address problems presented in agriculturally 
significant organisms. FASEB further recommends that this program be 
coordinated with other USDA activities and with those at NSF, DOE, NIH 
and the private sector.
    Similarly, FASEB recommends the initiation of an agricultural 
biotechnology/risk assessment program, within the Initiative, as food 
technology and nutrition and agricultural biotechnology are priority 
mission areas. USDA is the logical agency to provide leadership and 
research support for risk assessment to both consumers and the 
environment relative to genetically modified food products. Areas of 
emphasis should include identifying protective components of foods that 
reduce the risk of chronic diseases, investigating how individuals of 
varying genetic backgrounds respond to different intakes of those food 
components, bio-engineering of foods to provide increased amounts of 
nutrients or other components that are important to health and testing 
the effectiveness and safety of those modifications in animals and 
humans. Additionally, links between various food components and 
diseases such as cancer continue to be uncovered, including over 600 
plant-derived chemicals with chemopreventive properties, such as 
antioxidants. Ultimately, as there are many basic questions left 
unanswered on the role of diet in health and disease, we will want to 
know what compositional changes in plants and animals provide the best 
nutritional value.
  --FASEB endorses the Initiative for Future Agriculture and Food 
        Systems and recommends full funding of $120 million in fiscal 
        year 2001.

Higher Education

    Encouraging and educating the next generation of agricultural 
scientists is a fundamental prerequisite to sustaining our capability 
and success in agricultural research. The National Needs Graduate 
Fellowship Grants Program (NNFG) contributes to the training of 
outstanding researchers who can interact effectively with agricultural 
producers and consumers. Despite its importance, funding for the NNFG 
declined from $5 million in fiscal year 1996 to $3 million in fiscal 
year 1997 where it has remained.
  --FASEB recommends that funding for the National Needs Fellowship 
        Grants be restored to its previous level of $5 million in 
        fiscal year 2001.
    In addition to the NNFG, the USDA supports innovation in teaching 
methods and materials through the Institution Challenge Grants program. 
The critical need to recruit and train the next generation of 
agriculture researchers necessitates that these two programs be 
supported at levels sufficient for them to accomplish their goals 
effectively.
  --FASEB recommends that the Institution Challenge Grants be 
        maintained at $4.35 million in fiscal year 2001.
Use of Animals in Research
    Research using animals has been crucial to most of the major 
medical advances of the past century. Reasonable guidelines concerning 
how animals are used in research provide safeguards and ensure public 
confidence. USDA's Animal and Plant Health Inspection Service (APHIS) 
is charged by Congress with enforcing provisions of the Animal Welfare 
Act, and FASEB commends the USDA for its diligent enforcement efforts.
  --FASEB recommends that Congress provide the Animal and Plant Health 
        Inspection Service with continued support for Animal Welfare 
        Act enforcement in fiscal year 2001.
    In conclusion, agricultural research is crucial to sustaining the 
productivity of our farmers and livestock breeders, as well as to 
maintaining consumer confidence in the safety and nutritional value of 
American foods. As agricultural scientists address the challenges and 
opportunities in this new century, it is important that USDA programs 
have the resource capacity to support their progress. The growth and 
enhancement of the National Research Initiative Competitive Grants 
Program, the Initiative for Future Agriculture and Food Systems and 
increased support for the training of the next generation of 
agricultural scientists is therefore fundamental to ensuring that we 
are able to provide for our future needs.
                                 ______
                                 

             PREPARED STATEMENT OF FLORIDA STATE UNIVERSITY

    Mr. Chairman, I would like to thank you and the Members of the 
Subcommittee for this opportunity to present testimony before this 
Committee. I would like to take a moment to briefly acquaint you with 
Florida State University.
    Florida State University is a comprehensive Research I university 
with a liberal arts base. The University's primary role is to serve as 
a center for advanced graduate and professional studies while 
emphasizing research and providing excellence in undergraduate 
programs. Faculty at FSU have been selected for their commitment to 
excellence in teaching, for their abilities to perform research and 
creative activities, and for their commitment to public service. Among 
the faculty are numerous recipients of national and international 
honors, including four Nobel laureates and eight members of the 
National Academy of Sciences. Our scientists and engineers do excellent 
research, and often they work closely with industry to commercialize 
the results of their research. Florida State ranks third this year 
among all U.S. universities in revenues generated from its patents and 
licenses, trailing only Columbia University and the entire University 
of California system. Having been designated as a Carnegie Research I 
University several years ago, Florida State University currently 
exceeds $100 million per year in research expenditures. With no 
agricultural or medical school, few institutions can match our success.
    Florida State attracts students from every county in Florida, every 
state in the nation, and more than 100 foreign countries. The 
University is committed to high admission standards that ensure quality 
in its student body, which currently includes some 192 National Merit 
and National Achievement scholars, as well as students with superior 
creative talent. We consistently rank in the top 25 among U.S. colleges 
and universities in attracting National Merit Scholars.
    At Florida State University, we are very proud of our successes as 
well as our emerging reputation as one of the nation's top public 
universities.
    Mr. Chairman, let me tell you about a project we are pursuing this 
year involving the development of sustainable marine aquaculture 
systems and sustainable marine aquaculture opportunities through 
distance learning.
    The opportunity for the U.S. marine aquaculture industry to meet 
the increasing demand for seafood has never been greater than it is 
today. The majority of the world's marine aquaculture production takes 
place in coastal ponds or sea cages. In the U.S., aquaculture industry 
development has been inhibited by the high cost and limited 
availability of coastal lands, high production costs, restricted 
growing season and governmental regulations. In order for U.S. marine 
aquaculture production to expand and develop, innovative approaches to 
address the constraints being faced by the emerging aquaculture 
industry must be found.
    Florida State University (FSU) and Harbor Branch Oceanographic 
Institution (HBOI) have formed a collaboration to design and develop 
improved energy and filtration treatment technologies for marine 
aquaculture. Expanding marine aquaculture opportunities to inland sites 
using species that can be adapted to freshwater, designing low-cost 
filtration systems for high density production, and designing low-cost 
energy efficient recirculating systems will provide solutions to 
several of the production and regulatory constraints faced by U.S. 
producers. If progress is made in these areas, there will be an 
increased opportunity for marine aquaculture to develop and expand.
    There is an increasing global awareness of the need for sustainable 
marine aquaculture development. By the year 2025, global population is 
projected to be nearly 8.5 billion people, with a projected demand for 
seafood of 120 million metric tons (MMT). Seafood fisheries reached 
carrying capacity more than ten years ago with a capture of 60 MMT, but 
demand for seafood has shown no signs of abating. The United Nations 
Food and Agriculture Organization (FAO) reported that by 1995, marine 
aquaculture accounted for only 26 percent of the total world harvest of 
food fish. In 1997, U.S. seafood imports increased both in volume and 
value, with shrimp topping the list at 278,600 metric tons valued at 
$2.7 billion. Shrimp imports continue to be the second largest 
contributor to the U.S. trade deficit, and it is expected that finfish 
imports will follow the same scenario. There remains a great need for 
U.S. marine aquaculture production to fill this void and relieve some 
of the harvest pressure on natural stocks.
    Competition for access to the now limited U.S. coastal land 
resources requires innovative approaches to develop and expand marine 
aquaculture into new environments. HBOI has work underway that suggests 
many saltwater species thrive in freshwater systems with the 
appropriate chemical makeup. Another issue is environmental protection 
of coastal waters and biosecurity to protect both wild and farmed 
aquatic resources from disease and exotic introductions, which 
necessitates the development of cost effective recirculating production 
systems. In many locations around the U.S., regulatory constraints 
already require the use of recirculating marine aquaculture systems. 
HBOI has designed an intensive recirculating, production system to 
culture marine finfish species in fresh or brackish water. The first 
component of this effort will involve the teaming of FSU's Department 
of Oceanography, the FSU/FAMU College of Engineering and HBOI to 
conduct parallel experiments to determine the optimal production 
parameters using hard freshwater in Florida. FSU's research on solar 
technologies will be utilized to design low-cost energy efficient 
recirculating systems for this effort as well. All of this work will 
expand U.S. marine aquaculture production of saltwater species into new 
locales, result in better utilization of land resources and reduce the 
demand for imported aquaculture products.
    The second component of this collaborative effort will involve a 
continuation of the program initiated in fiscal year 2000 to facilitate 
cooperative research, education and public outreach programs focused on 
marine aquaculture. Educational materials are being developed for an 
outreach training program in the field of marine aquaculture through 
the use of distance learning technologies with funding provided in 
fiscal year 2000. We are requesting continued funding to develop 
aquaculture education and training programs and expand the program to 
reach new rural communities throughout Florida.
    A number of other marine aquaculture business opportunities exist 
for rural communities throughout Florida, but their implementation 
requires that the training and technical support be provided in the 
home community. Through a combination of distance learning technology 
and satellite education and support hubs, we will provide marine 
aquaculture training, technical support and appropriate economic 
information to rural communities throughout Florida. As materials are 
being developed in the project, FSU and HBOI will work together with 
the local community colleges, economic development officials and 
extension specialists to develop a comprehensive dissemination network 
for this information.
    The two collaborating institutions are seeking an appropriation of 
$1.97 million in fiscal year 2001 to support the development of 
sustainable marine aquaculture systems. This effort includes a request 
of $1.5 million from the USDA Agricultural Research Service to initiate 
the research component of this project, and the balance of $470,000 to 
continue the distance education and training program from the USDA 
Cooperative State Research, Education and Extension Service.
    Mr. Chairman, this is just one of many exciting activities going on 
at Florida State University that will make important contributions 
toward solving problems our nation faces today. Your support would be 
appreciated, and, again, thank you for the opportunity to present these 
views for your consideration.
                                 ______
                                 

PREPARED STATEMENT OF THE FRIENDS OF AGRICULTURAL RESEARCH-BELTSVILLE, 
                                  INC.

    Mr. Chairman, and Members of the Subcommittee, thank you for this 
opportunity to present our statement supporting the Administration's 
funding request for the Department of Agriculture's Agricultural 
Research Service (ARS), and especially for the Agency's flagship 
research facility in Maryland, the Beltsville Agricultural Research 
Center (BARC). Our organization--the Friends of Agricultural Research-
Beltsville--is dedicated to supporting and promoting the Center's 
agricultural research, outreach, and educational missions.
    Mr. Chairman, public investments in agricultural research yield 
astonishing returns to American taxpayers. As the 20th Century dawned, 
an American farm produced only enough food for its residents and a 
handful of others. Yet a new USDA report, without factoring in our huge 
agricultural exports, notes that today American farms with $10,000-plus 
in sales each produce enough food annually for 258 Americans. This 
astonishing success story traces directly to public research and 
outreach programs such as those of the Beltsville Agricultural Research 
Center, the world's most comprehensive agricultural research facility.
    Highly regarded economists W.E. Huffman and R.E. Evenson have 
estimated the annual return on agricultural research to be between 135 
and 170 per cent. Virginia Tech's George W. Norton puts the return on 
research in a long-term perspective. He notes that research may take 
several years to produce economic returns, but then it pays-off for a 
long, long time. Over a 15 to 20 year period, he estimates roughly a $5 
return for each research dollar spent.
    Mr. Chairman, we would like to focus the remainder of our statement 
on three vitally important areas. All urgently need support. Without 
indicating priority order, we will discuss: Invasive Species; the Human 
Nutrition Research Initiative; and Modernization of the Beltsville 
Human Nutrition Research Center, Phase Two.
    Invasive Species.--Invasive weeds--such as purple loosestrife, 
leafy spruge, Canada thistle, salt cedar, water hyacinth, and 
malaleuca--infest over 100 million acres in the United States at an 
estimated annual cost of $36 billion in reduced crops, $2 billion in 
reduced range yields, and $100 million in aquatic weed control. 
Infested acreage is growing by 8 to 20 percent annually. Approximately 
half of our endangered and threatened plants are at risk to invasive 
species.
    Invasive arthropods--insects such as whiteflies and the Russian 
wheat aphid--destroy $14 billion worth of crops annually. The losses of 
mature hardwood and landscape trees to the Asian Longhorn Beetle are 
incalculable. Livestock and poultry producers must also contend with 
the threat of invasive arthropods. Records of introduced species that 
have plagued U.S. livestock include the stable fly, face fly, horn fly, 
sheep bot fly, northern cattle grub, common cattle grub, and sheep ked. 
An enormous number of nonindigenous insects, ticks, and mites that 
affect animals present the potential for becoming introduced and 
established in the United States. Losses to lawn and garden pests 
annually cost Americans another $1.5 billion.
    Beltsville scientists have pioneered applied and fundamental 
research in the detection and identification of invasive plants, 
insects, and pathogens as well chemical and biological control. The 
fiscal year 2001 budget proposes increased funding for invasive species 
research. We applaud this, for much basic and applied work remains to 
be done. Beltsville research in this vital area is underfunded, and at 
risk to losing its critical mass of highly qualified scientific 
expertise.
    Human Nutrition Research Initiative.--Beltsville maintains several 
work areas that are fundamental to the mission of the Agricultural 
Research Service, indeed to the Department of Agriculture. They are, in 
a word, mission-critical. Yet, they are underfunded.
    One area is the National Nutrient Database. This database contains 
vital information on the vitamin, mineral, and other nutrient content 
of U.S. foods. It is the foundation for food consumption tables used 
throughout the world. Closer to home, it supports the food consumption 
survey as well as the evaluation of such programs as Women, Infants, 
and Children (WIC) and school lunches. Moreover, it is the basis for 
most of the food-labeling content done by industry. Over time, the 
database has become outdated, failing to keep up with food processing 
changes, new foods, even new cuts of meat. Adequate funding is needed 
both to bring the database up-to-date and to maintain it. The closely 
related Continuing Survey of Food Intakes by Individuals needs support 
to improve its methodology and validation techniques.
    Another area is the Food Composition Laboratory. This unit develops 
new analytical methods to measure food nutrient content--methods that 
are used widely by industry. These data go into the National Nutrient 
Database. We need better methods for measuring phytonutrients--a large 
complex group of food compounds, such as antioxidants and others--that 
have beneficial health effects. These complex compounds are hard to 
measure, and we urgently need to perfect simple, rapid, and accurate 
methods for accomplishing this.
    A third area is Beltsville's exciting new research emphasis on 
Nutrition and Immunity--the relationship between nutritional status and 
disease immunity. A Beltsville scientist has shown that a person's 
nutritional status can affect whether a virus causes disease in that 
person. Beltsville also needs support to investigate mucosal (lining of 
the digestive tract) immunity. Beltsville plans to create and operate 
the only nationwide research program relating human nutrition to 
mucosal immunity.
    Modernization of the Beltsville Human Nutrition Research Center.--
We could hardly over-emphasize the importance of funding for the second 
phase for modernizing the Beltsville Human Nutrition Research Center. 
Congress appropriated Phase One funds in the fiscal year 2000 budget. 
Planning is on schedule to begin construction, and if everything goes 
as intended, there will be a groundbreaking in the fall. We need to 
keep momentum for this vital work going forward. Thus, Mr. Chairman, we 
strongly recommend approval of Phase Two funding as proposed in the 
Administration's budget.
    Mr. Chairman, that concludes our statement. We again thank you and 
Members of the Subcommittee for your support and for the opportunity to 
present our testimony.
                                 ______
                                 

        PREPARED STATEMENT OF FRIENDS OF THE NATIONAL ARBORETUM

    Chairman Cochran and members of the Subcommittee, thank you for the 
opportunity to submit testimony in support of the U.S. National 
Arboretum on behalf of Friends of U.S. National Arboretum (FONA).
    The President's budget contains a request for an increase of 
$3,330,000 for the U.S. National Arboretum consisting of $2.8 million 
to automate and replace lateral irrigation lines and $530,000 for 
modernization of the existing heating, ventilating and air conditioning 
(HVAC) system in the current administration building. These are 
necessary core maintenance and improvement items, vital to the 
Arboretum and its 446 acres of plantings. The request is certainly 
supported by FONA.
    These necessary maintenance items do not, however, address the need 
to advance the statutory educational function of the Arboretum and make 
it more visitor friendly through implementation of the new Master Plan, 
nor do they address the increased staffing needs of the Arboretum as 
hundreds of new visitors each year discover the wonders of this 
national treasure.
    For fiscal year 2001, FONA respectfully requests $110,000 for 
planning and design of the new Education and Visitors Center at the 
U.S. National Arboretum and $3,000,000 for planning, design and 
construction of a new entrance off Bladensburg Road and the attendant 
widening and storm water control for existing roads at the National 
Arboretum. Both of these requests are consistent with the new Master 
Plan for the U.S. National Arboretum and compatible with funding 
requests by the U.S. National Arboretum.
    Thanks to your Committee, and after some years of preparation, the 
schematic for the new Master Plan is now complete and the U.S. National 
Arboretum is poised to move into the twenty-first century and enhance 
its mission of horticultural education mandated by Congress.
    The new Master Plan proposes, among other things, a new entrance to 
the National Arboretum off Bladensburg Road. The District of Columbia 
is currently preparing to rehabilitate Bladensburg Road with funds 
provided by Congress in TEA-21 and it is critical that the new entrance 
from Bladensburg Road into the Arboretum be coordinated with this 
project. The Department of Public Works of the District of Columbia has 
been very cooperative, and the $3 Million requested coupled with the 
$500,000 provided in fiscal year 2000 for engineering and design, would 
provide the funds the Arboretum estimates as necessary. Creation of the 
new entrance will also require widening of existing roads and provision 
for storm water management.
    The $110,000 request is for initial planning for the new Education 
and Visitors Center which is key to the core area of the Master Plan. 
This enhanced core area is the central feature making the U.S. National 
Arboretum a more attractive facility for visitors and enhancing its 
potential for horticultural education. Significant private funds are 
available to initiate a flowering tree walk which would tie together 
the various collections in the core area. The new Education and 
Visitors Center also presents other significant opportunities for 
private funding.
    The foregoing requests for funds are also consistent with requests 
made by Representatives Bereuter, Goss, Petri, Dooley and Frelinghuysen 
to Secretary Glickman for fiscal year 2001 funding. We urge you to 
include this funding for fiscal year 2001 to enhance the U.S. National 
Arboretum's singular role as a source of horticultural education and as 
a national showcase for advances in horticulture.
    FONA realizes that an enhanced U.S. National Arboretum envisioned 
by the Master Plan will require additional staff support. Already the 
Arboretum is attracting new visitors every year, placing a strain on 
the limited staff in place; there are now close to 7000 visitors for 
every one staff person. FONA is prepared to support additional staffing 
requested by the Arboretum and the Department of Agriculture to meet 
increased usage and visitation.
    In an era when horticulture is the fastest growing segment of the 
agricultural industry, and public interest in horticulture and 
gardening is at an all time high, making the U.S. National Arboretum a 
renowned attraction for horticultural education--a ``horticultural 
Smithsonian''--is well worth the effort and the investment.
    Thank you for your continued support of the national treasure that 
is our U.S. National Arboretum.
                                 ______
                                 

    PREPARED JOINT STATEMENT OF THE GENERIC PHARMACEUTICAL INDUSTRY 
ASSOCIATION, NATIONAL ASSOCIATION OF PHARMACEUTICAL MANUFACTURERS, AND 
                    NATIONAL PHARMACEUTICAL ALLIANCE

    Mr. Chairman and Members of the Subcommittee, the Generic 
Pharmaceutical Industry Association (GPIA), National Association of 
Pharmaceutical Manufacturers (NAPM), and National Pharmaceutical 
Alliance (NPA) are pleased to have the opportunity to present these 
joint comments on the fiscal year 2001 budget request for the Food and 
Drug Administration (FDA). As part of a coalition of FDA-regulated 
industries, we support the Administration's requested 13 percent 
increase in funding for fiscal year 2001. A letter expressing the 
coalition's support, which was sent recently to this Subcommittee, is 
attached to our testimony.
    As we begin the new millennium, it is imperative that this 
Subcommittee ensure that American consumers have continued access to 
safe, effective, and affordable pharmaceutical products. Promoting the 
availability of cost-effective drugs is the top priority for our 
members. GPIA, NAPM, and NPA are the three national trade associations 
representing manufacturers and distributors of finished multi-source 
generic pharmaceuticals, manufacturers and distributors of bulk active 
pharmaceutical chemicals, and suppliers of other goods and services to 
the generic drug industry. The associations' combined membership 
encompasses virtually the entire U.S. generic pharmaceutical industry.
 generic drugs continue to provide significant health care cost savings
    The generic drug industry addresses this Subcommittee with one 
voice to support FDA's Office of Generic Drugs (OGD) and request that 
$1.5 million in additional appropriations be allocated to OGD. This 
appropriation is critical to shore up OGD's work of reviewing and 
approving generic drug applications, called abbreviated new drug 
applications (ANDAs).
    Generic drugs continue to represent one of the most effective means 
of controlling healthcare costs in the U.S. Generic drug competition 
has saved the American consumer, taxpayer, and Federal and state 
governments billions of dollars since passage of the Hatch-Waxman Act 
in 1984. According to a July 1998 Congressional Budget Office study, 
consumers who bought generic drugs at retail pharmacies saved $8-$10 
billion in 1994 alone.\1\ Since the federal health program spends one 
out of every five health care dollars on prescription medicine,\2\ 
lower-priced generic drugs save the U.S. government untold billions as 
well.\3\ These savings are possible because generic drugs typically 
enter the market at 25-30 percent below the brand price and, within two 
years, decline to 60-70 percent of the brand price.\4\ Access to this 
price discount is important for taxpayers and consumers, but is crucial 
for those seniors and the uninsured who have difficulty meeting their 
health care needs.
---------------------------------------------------------------------------
    \1\ CBO Report, ``How Increased Competition from Generic Drugs has 
Affected Prices and Returns in the Pharmaceutical Industry'' (July 
1998), at Summary.
    \2\ Joseph McCafferty, Critical Condition, CFO, The Magazine for 
Senior Financial Executives, Jan. 1999, at 63.
    \3\ FDA recognizes that generic drugs provide ``substantial 
savings'' to the Medicare and Medicaid programs in its Appropriations 
documents. HHS fiscal year 2001 Performance Plan, Fiscal Year 2000 
Final Performance Plan, and Fiscal Year 1999 Performance Report for 
FDA, at 64.
    \4\ CBO Report, ``How Increased Competition from Generic Drugs has 
Affected Prices and Returns in the Pharmaceutical Industry'' (July 
1998), at Summary; ``Economic Impact of GATT Patent Extension on 
Currently Marketed Drugs,'' PRIME Institute, College of Pharmacy, 
University of Minnesota (Mar. 1995), at Executive Summary; SBC Warburg 
Dillon Read Inc., ``Industry Report--Specialty Pharmaceuticals: Generic 
Drugs, May 20, 1998, at 22.
---------------------------------------------------------------------------
    Despite the healthcare cost reductions that generic drugs have 
generated, the savings could be even greater if FDA took final action 
on generic drug applications within the statutorily required six 
months.\5\ Due in large part to the infusion of directed appropriations 
to OGD in 1998 and 1999, the agency has successfully focused on this 
mandate.\6\ Yet, under the present budget, FDA estimates that the 
improvement will stop--OGD's average review times for ANDAs actually 
will increase in 2000 and 2001,\7\ and much of the fiscal year 2000 
appropriations will be consumed by inflationary costs.\8\ At the same 
time, an increase in future generic application submissions is almost 
guaranteed since, over the next five years, brand drugs with annual 
sales of $25.5 billion will come ``off patent,'' clearing the way for 
more generic applications.\9\ Therefore, this Subcommittee must 
continue its support for OGD, to ensure that the agency has adequate 
funding to approve safe and effective generic drugs promptly and 
efficiently.
---------------------------------------------------------------------------
    \5\ Under the law, FDA must take final action on generic drug 
applications within 180 days. 21 U.S.C. Sec.  355(j)(5). In 1999, the 
median time to approval for ANDAs was 17.3 months--almost three times 
the length mandated by statute. HHS Fiscal Year 2001 Performance Plan, 
Fiscal Year 2000 Final Performance Plan, and Fiscal Year 1999 
Performance Report for FDA, at 64.
    \6\ OGD's median approval time for ANDAs has steadily decreased, 
from 19.6 months in 1997, to 18.7 months in 1998, and 17.3 months in 
1999. HHS Fiscal Year 2001 Performance Plan, Fiscal Year 2000 Final 
Performance Plan, and Fiscal Year 1999 Performance Report for FDA, at 
64.
    \7\ HHS fiscal year 2001 FDA Justification of Estimates for 
Appropriations Committees, at 66.
    \8\ FDA Allocates $13.5 Mil. For Inspection Requirements In Fiscal 
Year 2001 Budget, F-D-C Reports, Inc., The Pink Sheet, Mar. 6, 2000, at 
27 (quoting Commission Henney at a Feb. 29, 2000 House Appropriations 
Subcommittee hearing).
    \9\ SBC Warburg Dillon Read LLC data, reported in Generics: Best 
Years to Come, MedAd News, Oct. 1999, at 1 (years 2000-2004).
---------------------------------------------------------------------------

THE GENERIC INDUSTRY REQUESTS DIRECT APPROPRIATIONS FOR FASTER GENERIC 
                               APPROVALS

    GPIA, NAPM and NPA encourage the Subcommittee to continue its 
support for cost-effective pharmaceuticals by providing direct 
appropriations for OGD. These funds would enable OGD to progress 
further toward meeting the six month statutory period for final agency 
action on ANDAs, and address the backlog of ANDAs that remains at OGD. 
Specifically, we recommend that the Subcommittee take the following 
actions:
  --Appropriate $1.5 million directly for the Office of Generic Drugs, 
        in addition to its fiscal year 2000 funding level;
  --Continue to insist that FDA provide detailed and accurate 
        information about agency expenditures specifically for, and by, 
        OGD; and
  --Include language in the fiscal year 2001 Agriculture Appropriations 
        Bill to emphasize the Subcommittee's commitment to ensuring 
        accelerated FDA review and approval times for cost-effective 
        generic drugs.
    These direct appropriations would assist OGD in reducing generic 
drug approval times through staff training and information technology 
upgrades, as described below.

      WITH DIRECT APPROPRIATIONS, OGD CAN TRAIN STAFF AND ENHANCE 
                              EFFICIENCIES

    Among the most pressing needs at OGD is one for appropriately 
trained staff members who can efficiently review generic drug 
applications. The modest increases in OGD's budget over the last three 
years have resulted in the addition of reviewers to the OGD staff. 
While these staff members are essential to handling OGD's ever 
increasing workload, their productivity can be improved. For example, 
75 percent of OGD's microbiology reviewers have less than one year of 
experience at OGD, 50 percent of OGD's project managers are new, and 20 
percent of the chemistry reviewers have less than one year on the 
job.\10\ These new reviewers would reach their potential much faster if 
given the opportunity and overtime pay to participate in the training 
programs that OGD used when funds were available.
---------------------------------------------------------------------------
    \10\ Sporn Leaves OGD With Generic Integrity Rebuilt, Generic Line, 
Jan. 26, 2000, at 1-2 (quoting Doug Sporn, outgoing Director of OGD); 
OGD's Approvals Decrease As Drugs Coming Off Patent Increase, FDA Week, 
Feb. 4, 2000, at 2 (quoting Gary Buehler, incoming Director of OGD).
---------------------------------------------------------------------------

  WITH ADDITIONAL FUNDING, OGD CAN UPGRADE ITS INFORMATION TECHNOLOGY

    Another immediate need in fiscal year 2001 is to augment OGD's 
information technology (IT) capability. An appropriation of $1.5 
million would enable OGD to purchase information technology hardware 
and software to expand and modernize several essential ANDA review 
programs. These IT programs include: (1) the electronic ANDA 
submissions program that is eliminating the need for volumes of 
burdensome paper documents; (2) the computerized tracking system that 
OGD project managers and generic companies rely on to evaluate the 
progress of applications; (3) ANDA review software; and (4) a new 
electronic filing system that is being developed for all offices within 
the Center for Drug Evaluation and Research.

                               CONCLUSION

    In sum, we request that Congress continue to guide FDA's priorities 
by allocating resources directly to OGD. As medical treatment becomes 
even more expensive and reliant on pharmaceuticals, it is important 
that generic drug applications move through the approval process as 
quickly as scientifically-sound reviews permit. Every day that a 
generic drug is delayed from entering the market, Americans pay 
millions of dollars more than necessary for their prescription drug 
products.
    Finally, Mr. Chairman, we urge this Subcommittee to emphasize its 
support for cost-effective pharmaceuticals by including the following 
language in the fiscal year 2001 Agriculture Appropriations Bill:
    ``One of the most effective and immediate means to address the 
rising cost of prescription drugs is to ensure that the American 
consumer has timely access to more affordable generic medicines. In 
recent years, Congress has provided increased appropriations for the 
Office of Generic Drugs to hire more reviewers, reduce the backlog of 
generic drug applications, and accelerate generic drug approvals. 
Still, current approval times for generic drugs are three times the 
statutory limit. In an effort to further reduce approval times, the 
Committee has provided an increase above the amount available to the 
Office of Generic Drugs of $1,500,000 to be used for employing and 
training staff, and for upgrading information technology systems that 
permit the electronic submission and review of generic drug 
applications.''
    Mr. Chairman, the members of GPIA, NAPM, and NPA would like to 
thank you and the Subcommittee for your time and attention concerning 
this critical aspect of FDA's fiscal year 2001 budget request. We look 
forward to continuing our work with you and members of the Subcommittee 
to bring safe, effective, and more affordable pharmaceuticals to the 
American public.
                                 ______
                                 

  PREPARED STATEMENT OF THE HEALTH INDUSTRY MANUFACTURERS ASSOCIATION

    The Health Industry Manufacturers Association (HIMA) and its 
members appreciate this opportunity to provide testimony on funding for 
FDA in fiscal year 2001.
    HIMA represents more than 800 manufacturers developing and selling 
innovative medical technologies that save and improve lives and help 
reduce costs. HIMA member firms provide nearly 90 percent of the $68 
billion of health care technology products purchased annually in the 
United States, and nearly 50 percent of the $159 billion purchased 
annually around the world.
    This year's budget deliberations occur at a time when FDA and 
medical technology companies are entering a new era of rapid and 
dramatic breakthroughs. Fields such as information technology, 
genomics, nanotechnology and tissue engineering promise to produce 
exciting life-saving and life-improving breakthroughs in the coming 
decade.
    FDA Commissioner Jane Henney, M.D., summed up the new era her 
agency faces in recent testimony before this subcommittee. Commenting 
on the dramatic advances in medical technology we will witness in the 
years ahead, Dr. Henney said: ``New products entering the marketplace 
will change the face of health care and will help us lead longer, 
healthier lives. They will also bring enormous economic benefits, both 
in lessening the cost of health care and in returning profits on the 
investments that are being made in research.''
    Medical device and diagnostics manufacturers are investing heavily 
in research and development to bring these breakthroughs to fruition. A 
report scheduled for release later this week by the Lewin Group is 
expected to quantify the significant increases in R&D spending that 
medical technology companies have made over the last five years.
    In making these heavy R&D investments, HIMA members are acutely 
aware of the challenges FDA faces in making these innovations available 
to patients in a timely manner.
    FDA's premarket review responsibilities will become more complex 
and difficult as medical technology advances at an increasingly rapid 
pace. Many of tomorrow's breakthroughs will defy the traditional 
device/drug/biologic regulatory classifications. FDA faces a tremendous 
challenge in adapting to this change in a way that allows it to review 
new technologies and get them to patients in a timely manner.
    Clearly, changes are needed soon in order not only to enable FDA to 
meet its statutory review times but to meet the goal the Administration 
set in its fiscal year 2001 budget request of beginning ``the process 
of preparing FDA for a new age of rapid biomedical and pharmaceutical 
innovation.'' This new age is rapidly approaching, and the time to 
start preparing is now.
fda needs additional premarket resources to prepare for the new age in 

                     MEDICAL TECHNOLOGY INNOVATION

    This new era of biomedical breakthroughs is arriving at a time when 
the agency lacks the resources to meet even its current premarket 
review duties. In December 1998, FDA Senior Associate Commissioner 
Linda Suydam estimated that the agency is $165 million short of what it 
actually needs to do its job. Last year's funding increase of $7 
million for device premarket reviews was an important step forward.
    The inclusion in last year's budget of a specific line-item for 
device premarket review activities also was an important precedent. 
HIMA believes that FDA's device review program will continue to warrant 
specific attention in the budget as the agency prepares for the coming 
explosion in medical technology innovation.
    HIMA believes FDA should have the resources it needs to meet its 
statutory time frames, both now and in the future. This means 
completing final actions for premarket approval applications for 
breakthrough products within 180 days and 510(k)s for incremental 
advances within 90 days.
    The performance goals the Administration outlines for device 
premarket reviews in its fiscal year 2001 budget justification document 
move in the right direction. Yet they also show that FDA is still not 
meeting its statutory device review timeframes.
    Because of the budget shortfall for premarket reviews, HIMA 
wholeheartedly supports the Administration's request for increased 
appropriations for the device program in fiscal year 2001. 
Specifically, the entire $14 mil. sought by the Administration ($7.7 
mil. from appropriations and $5.8 mil. from new user fees) should be 
allocated to FDA's device review program through direct appropriations. 
This funding is urgently needed to help FDA prepare for the coming 
revolution in medical technology.
    While HIMA supports increased FDA funding through appropriations we 
believe that, absent authorizing legislation, the Administration's 
request for $5.8 mil. in new device user fees should not be approved. 
Rather, this funding should be provided to FDA through direct 
appropriations targeted to device premarket reviews. We urge the 
Administration to use additional premarket funds to contract out 
portions of device reviews, especially those for which the agency lacks 
the scientific expertise. This is an important way that FDA can meet 
its goal of bolstering its science base.
    HIMA believes the Subcommittee should consider providing FDA with 
the appropriations levels proposed in the Administration's budget for 
review of premarket applications. The funding needed for timely FDA 
premarket reviews is indeed a small investment in making the life-
saving and life-improving fruits of research, both public and private, 
available to patients. Now is the time to make the necessary 
investments to ensure that patients have access to the latest medical 
innovations.
    Finally, we point out the importance of FDA's biologics center; an 
important yet sometimes overlooked aspect of the agency's device review 
program. FDA's Center for Biologics Evaluation and Research also 
requires additional resources to meet its device review 
responsibilities. As the line between biologics and medical devices 
becomes increasingly blurred, it will become more important to ensure 
that FDA's Center for Biologics Evaluation and Research has adequate 
resources to do its job.
regulatory changes are needed to prepare fda for the new age of medical 

                         TECHNOLOGY INNOVATION

    HIMA further believes, however, that increased FDA funding for 
premarket reviews is only part of the answer to timely patient access 
to medical innovations. FDA also needs new and better ways of doing its 
job. In order to meet the coming biomedical revolution, the agency must 
be as innovative in its regulation of new technologies as researchers 
are in developing them.
    FDA has shown a commitment to finding new approaches to getting its 
job done, and this commitment should be encouraged and expanded on. FDA 
has demonstrated this commitment through successfully implementing some 
key provisions of the FDA Modernization Act, such as exemption of 
additional devices from 510(k) premarket review. It also is reflected 
in the improvement in device review times that FDA has made over the 
past two years.
    HIMA has been encouraged by FDA's recent work towards successful 
implementation of some other crucial FDAMA provisions. The agency's 
cooperative work with medical technology companies to implement the 
law's ``least burdensome'' premarket review provision is one example. 
We hope to work closely with the agency in completing implementation of 
other key provisions of the law such as the 510(k) third-party review 
program and the provision on early meetings with new product sponsors.
    Instead of levying a user fee to increase participation in the 
third-party review program, HIMA believes that FDA can improve the 
program by expanding the types of devices eligible for outside review. 
Currently, the vast majority of the devices eligible for outside review 
are very simple products such as blood pressure cuffs and dental cement 
where FDA already has an excellent review record. It is interesting to 
note that the current third-party review program has been most 
successful for the more complex products such as diagnostic imaging 
systems for which more premarket expertise is required.
    FDA should expand the list of devices eligible for third-party 
review to add more complex devices so that the program is available to 
those product sponsors who could benefit most from it. HIMA is 
encouraged by the agency's recent willingness to expand the third-party 
review program and to consult with industry stakeholders in this 
effort.
    Contracting out premarket review work to independent third parties 
and partnering with medical technology companies are two important ways 
that FDA can meet its goal of expanding its science base.
    As FDA Commissioner Jane Henney stated in her recent testimony, the 
agency ``must be able to anticipate and access the cutting-edge science 
that will be needed to regulate the products of future technology.'' 
HIMA strongly agrees that FDA must remain on the cutting edge of 
science, and believes that one useful way to achieve this goal is for 
FDA to make greater use of the expertise of the researchers who are 
advancing this science and applying it to medical technology 
breakthroughs.
    As the pace of medical technology innovation quickens, it will 
become increasingly important for FDA to look to outside expertise to 
make sure the agency does not become an ever-tighter regulatory 
bottleneck.
    Medical technology innovation comprises many specialized 
disciplines, and new fields of research continue to emerge. In addition 
to the third-party review program for 510(k)s, FDA should also consider 
contracting out for reviews of some high-tech devices to provide 
assistance in regulating dynamic and rapidly advancing medical 
technologies, rather than attempting to acquire internal expertise in 
every discipline.

 FDA MUST MAKE WISE USE OF SCARCE RESOURCES TO PREPARE FOR THE NEW AGE 
                    OF MEDICAL TECHNOLOGY INNOVATION

    As FDA's regulatory responsibilities become more complex in the 
coming years, it will be ever more important for it to spend its 
dollars where they have the greatest impact. This holds true for both 
device premarket reviews and postmarket activities.
    HIMA applauds the steps FDA has taken in its device postmarket 
program to work more efficiently and effectively. Recent innovative and 
collaborative initiatives include pre-announced inspections of device 
facilities, taking steps to create a more open, interactive inspection 
process, and conducting a survey with industry on the inspection 
process. Steps such as these help FDA meet its postmarket 
responsibilities more effectively and efficiently.
Congress Should Consider Voluntary Reporting Methods on Medical Errors
    FDA must be especially prudent in spending its resources in light 
of the broad scope of its regulatory programs, from ensuring food 
safety to helping reduce medical errors. The Institute of Medicine's 
recent report on medical errors, as well as a follow-up report by the 
government's interagency task force, highlight the important work FDA 
conducts in this area.
    As you may know, medical technology manufacturers already have 
mandatory reporting of device-related adverse events, thus helping to 
reduce medical errors. In addition, the FDA is in the process of 
implementing a user facility ``sentinel reporting'' (also known as the 
MedSuN) system.
    HIMA supports the work FDA is doing under its current statutory 
authority to gather adverse event reports from sentinel user 
facilities. This initiative has the potential to generate valuable 
information on medical errors, and to do so in a way that focuses on 
the quality rather than the quantity of information gathered.
    As FDA implements the sentinel reporting program, it is critically 
important to make sure the agency is receiving high quality information 
that is useful to providers and manufacturers in reducing medical 
errors. It is important to make sure FDA is gathering useful 
information under its current program before expanding it to additional 
facilities.
    John Eisenberg, M.D., Director of the Agency for Healthcare 
Research and Quality, stressed the importance of the need for high-
quality data at an FDA Science Forum in mid-February, where he urged 
policy makers and stakeholders ``not just to count [errors] but to make 
it count.''
    The pressing need to reduce medical errors is another important 
reason why timely FDA premarket reviews are so important. Many medical 
device companies are developing technologies that show great promise in 
reducing medical errors. These products, such as drug infusion 
monitoring and control systems need to be approved by FDA and brought 
to bear on the medical errors problem as quickly as possible.
    Finally, as policy makers consider how the government can best help 
reduce medical errors, it is important to keep in mind device 
companies' long-standing focus on working closely with the health care 
community to find ways to reduce errors. A good example of this is in 
area of anesthesia care, where two medical device companies helped 
found the Anesthesia Patient Safety Foundation (APSF).
    In 1984, anesthesiologists, medical equipment manufacturers and 
other health professionals formed the APSF to tackle the problem of 
anesthesia-related deaths and injuries. The group for the first time 
brought together the clinical community, manufacturers, government 
agencies and patients to address the problem.
    The APSF brought about crucial changes in anesthesia practice and 
technology. For example, it encouraged the widespread adoption of 
oximeters and capnographs among anesthesiologists so that patients 
under anesthesia were monitored more effectively. As a result of APSF's 
work, the anesthesia mortality rate has dropped from an estimated two 
deaths in 10,000 cases to one in every 100,000 to 200,000 cases.
    Although the recent focus has been heavily focused on mandatory 
reporting, voluntary partnerships between manufacturers, the clinical 
community, academia, and government agencies like the APSF should form 
a key component of policy makers' overall strategy for reducing medical 
errors.

                               CONCLUSION

    HIMA urges this Subcommittee to help prepare the FDA for the coming 
era of biomedical innovation. To ready FDA for this era and ensure that 
patients enjoy timely access to the coming dramatic breakthrough is 
medicine, we must take several important steps:
  --First, Congress must adequately fund FDA's device and biologics 
        premarket review programs. HIMA supports an increase in 
        appropriations of $14 mil. for FDA device review activities. 
        Additional resources will become even more critical in the 
        coming years as dramatic new medical breakthroughs begin to 
        arrive at FDA for review.
  --Second, FDA needs new and innovative ways to meet its regulatory 
        obligations. Congress should encourage the agency to strengthen 
        and expand on steps the agency has recently taken in this 
        direction. As FDA looks to strengthen its science base, it 
        should find ways to make use of the existing science base 
        outside the agency. Partnering with experts in the clinical, 
        research, and manufacturing fields is one effective way to do 
        this.
    HIMA again thanks the committee for this opportunity to present our 
views and looks forward to working with you in helping prepare FDA for 
the coming revolution in biomedical innovation.
                                 ______
                                 
         Prepared Statement of the Illinois Soybean Association
    Mr. Chairman and distinguished members of the Agriculture, Rural 
Development, and Related Agencies Subcommittee: The Illinois Soybean 
Association, an organization of approximately 4,000 leading soybean 
producers, and the University of Illinois, a major land-grant 
institution, join in requesting that $3.5 million in federal funds be 
authorized to establish a Soybean Disease Biotechnology Center within 
the National Soybean Research Laboratory at the University of Illinois. 
Among other goals for this initiative, we wish to foster well 
coordinated public and private research leading to safe, nutritious, 
healthy, affordable, and convenient soy products for consumers and 
sustainable competitive advantage for the U.S. and Illinois soy 
industries.
    We will ask the Illinois Soybean Checkoff Board to contribute 
$500,000 to help establish the Center. We will also ask them to 
entertain proposals from the Center for program support in the future. 
The University of Illinois will contribute core staff, space, general 
support services and facilities, and utilities and will operate and 
maintain the Center henceforth in support of soybean disease 
biotechnology research.

                           ROLE OF THE CENTER

    The Soybean Disease Biotechnology Center will be the first line of 
defense against major soybean diseases that threaten the U.S. soybean 
industry, especially the soybean cyst nematode (SCN). It will provide 
outstanding research talent and state-of-the-art facilities, equipment, 
and support services for cutting-edge biotechnology research on major 
soybean diseases. The Center will bring the power of the new sciences 
of structural, comparative, and functional genomics and genetic 
transformation to bear on SCN and other current and potential disease 
threats, including major diseases not yet in the U.S., such as soybean 
rust.
    Center researchers will identify and create new and improved 
mechanisms of disease escape, tolerance, and resistance. The aim is to 
protect the soybean crop and increase its profitability throughout the 
industry. Genetic disease control mechanisms in the germplasm and 
genetic stocks of the National Soybean Germplasm Collection, located at 
the University of Illinois, will be a unique, readily accessible 
resource for the Center. In addition, genetic mechanisms of escape, 
resistance, and tolerance in other species will be identified and 
transferred to the soybean. Accordingly, highly effective disease 
control genes can be used for ``stacking'' in soybean varieties. This 
will assure the realization of gains from other genetic improvements, 
such as unique quality traits.
           setting for soybean disease biotechnology research
    Researchers in the Soybean Disease Biotechnology Center will use 
the support services of the University of Illinois' new Keck Center for 
Comparative and Functional Genomics, with its high throughput genetic 
sequencing, unequaled bioinformatics capabilities, and unique, one-of-
a-kind genetic analysis tools. This will greatly facilitate evaluation 
of materials in the National Soybean Germplasm Collection. Researchers 
will also have ready access to the University of Illinois Biotechnology 
Center, which provides recombinant DNA and protein science services, 
immunological resources, flow cytometry, high capacity transgenic plant 
production, and cell and tissue culture, among other valuable support 
services.
    There will be direct access to superb conventional greenhouse and 
controlled environment facilities in adjacent, connected structures. As 
part of this project, a biocontainment greenhouse will be constructed 
specifically to provide the levels of isolation and protection required 
for sophisticated disease biotechnology research. An elaborate system 
of research farms will be available for testing new developments in a 
wide range of soil, climatic, and socio-economic conditions.
    The Center will complement and connect with the new St. Louis-
headquartered Danforth Plant Science Center and participate in the 
Illinois-Missouri Biotechnology Alliance. As part of the program of the 
National Soybean Research Laboratory (NSRL), work at the Center will be 
strategically integrated with other public and private efforts to 
conceive, plan, and implement soybean production and marketing systems 
of the future. This will foster interdisciplinary and cross-functional 
efforts that speed development and adoption of new technology and gain 
competitive advantage for the U.S. soybean industry.
    NSRL is a major interface between the soybean industry, as 
represented by state and national soybean organizations and checkoff 
boards, and university research and education programs. NSRL was 
initiated by a USDA special grant of $5 million. NSRL is directed by a 
Chair Professor of Agricultural Strategy, the only so-named 
professorship in the nation. The Chair position was endowed by the 
soybean industry, which contributes $40 to $80 million annually to 
soybean research.
    NSRL fosters strategic public/private alliances within the soybean 
industry and with other commodity-based industries. It achieves 
extraordinary levels of communication, coordination, and integration of 
publicly and privately financed research and educational programs 
across the nation. As developer of STRATSOY, the most sophisticated and 
useful commodity website, NSRL provided the soybean industry with a 
powerful tool for uniting its far-flung checkoff-funded programs, 
disseminating information, eliminating redundancy, sharpening strategic 
focus, and increasing the return on both public and private investment 
in soy research.
    Its association with the NSRL will assure that research in the 
Soybean Disease Biotechnology Center will fully complement and benefit 
from other soy research programs across the nation and world. It will 
assure that the results of fundamental soybean disease biotechnology 
research are quickly translated into practical technology, useful 
information, and sustainable competitive advantage for the industry. 
The NSRL mission of increasing the volume of profitable, sustainable 
business in the soy industry will become the mission of the Soybean 
Disease Biotechnology Center.
    This is an excellent time to establish the proposed Center because 
the University of Illinois is ramping up its Postgenomic Biotechnology 
Program. A multi-million investment of state funds will provide new 
biotechnology positions in functional genomics, bioinformatics, 
developmental biology, microanalytic systems, and cellular and 
molecular bioengineering. This will enhance the effort to fill new 
positions in plant disease biotechnology with outstanding scientist/
educators who already have established impressive track records. The 
Center will also benefit from the investment of Illinois in an expanded 
University of Illinois business incubator and research park to assure 
rapid commercialization of promising new technologies from the 
University's research program.

                          GOALS OF THE CENTER

    The Soybean Disease Biotechnology Center will:
  --Provide a superb setting for cutting-edge soybean disease 
        biotechnology research.
  --Foster and support the very best soybean disease biotechnology 
        research team in the world.
  --Assure that effective soybean disease escape, resistance, and 
        tolerance genes are available for ``stacking'' in top U.S. 
        soybean varieties.
  --Eliminate the soybean cyst nematode as a major threat to the U.S. 
        soybean industry and prevent harm from introduction of foreign 
        disease organisms.
  --Enable molecular soybean pathology research through which the 
        Illinois and U.S. soybean industries will achieve and maintain 
        preeminence in global and domestic markets for soybeans and 
        soybean products.
  --Enable the U.S. soy industry to capture proprietary benefits from 
        soybean biotechnology research and other research conducted all 
        over the world.
  --Enhance the global and strategic significance of the National 
        Soybean Research Laboratory and empower its scientists, thus 
        maximizing its benefits for the nation.

                                SUMMARY

    We request that $3.5 million be authorized to establish a Soybean 
Disease Biotechnology Center within the National Soybean Research 
Laboratory at the University of Illinois. These funds, complemented by 
state funds and industry contributions, will be used to staff, equip, 
house, and operate the center, and launch and sustain its programs.
                                 ______
                                 

           PREPARED STATEMENT OF IMPERIAL COUNTY, CALIFORNIA

    Mr. Chairman, we appreciate this opportunity to acquaint you with 
the important research and biological control efforts underway by 
Federal, State, regional, County and local entities to combat and 
effectively control, not only the persistent whitefly and pink 
bollworm, but also threats by newly introduced exotic species.
    In the last twelve months, Imperial County and other areas of the 
Southwestern United States have experienced the introduction of four 
new exotic pests; the pink hibiscus mealybug; giant salvinia, an 
aquatic weed; the citrus leafminer; and the red gum lerp psyllid. Also, 
we are on the fringe of an infestation of the glassy-winged 
sharpshooter/Pierce's disease complex. Even though the glassywinged 
sharpshooter has not reached Imperial County, the potential threat to 
our small, but prosperous grape industry is very high.
    The following testimony will focus on funding for the United States 
Department of Agriculture (USDA) Animal and Plant Health Inspection 
Service (APHIS) (specifically, the Methods Development Lab and the 
Plant Protection Centers) and the Agricultural Research Service (ARS) 
for fiscal year 2001.
         funding for silverleaf whitefly (bemisia agentifolii)
    The silverleaf whitefly (SLW) remains a serious national pest 
problem, resulting in conservatively estimated crop losses exceeding 
$500 million a year in the United States. Economic losses from the 
silverleaf whitefly have involved cotton and a wide range of 
ornamentals, melons and vegetable crops.
    The need for an effective SLW biological control program is 
paramount. While chemicals continue to provide a short term solution to 
the problem, the threat of insecticide resistance and the importance of 
an effective management program cannot be overemphasized.
    We are continuing an aggressive pursuit of IPM methodology using 
biological control, natural predators, and plant pathogens coupled with 
intensive weed control and crop sanitation. In addition, we are using 
fewer chemical applications and less toxic pesticides. These IPM 
technologies are designed to comply with the Clinton administration's 
1993 policy statement of utilizing IPM practices on 70 percent of 
United States farmland by the year 2000.
    In the Imperial Valley, the USDA has made numerous augmentative 
releases of exotic parasitoids in the refugia and commercial fields to 
assess their effectiveness against the silverleaf whitefly. Four of 
these exotic species have become established and have been recovered up 
to six miles away from the original release sites. The USDA APHIS PPQ 
Methods Development Unit has also begun an extensive multi-variant 
analysis to assess the effect of the surrounding crops and chemical 
usage on SLW and their parasites and also the effect of the parasites 
on the SLW populations.
    We cannot overemphasize the importance of the five-year Silverleaf 
Whitefly National Research, Action, and Technology Transfer Plan (1997-
2001). This plan defines the continuing need for a highly coordinated 
and cooperative program, including long term goals and objectives, and 
provides technology transfer to the scientific community, legislators, 
regulators, the agricultural industry, and the public. This is the all-
important vehicle by which the agricultural community will directly 
benefit from the significant SLW research which the five-year plan has 
yielded. Long-term economically, socially, and environmentally 
acceptable management systems are being developed from the extensive 
knowledge base developed to provide a more complete understanding of 
whitefly biology, ecology, and host plant interactions. This plan is 
designed to provide a smooth transition of this research into the 
field. We urge you to fund the Technology Transfer, New Research and 
Action Plan at no less than $5.8 million for ARS and $1.85 million for 
APHIS.

     FUNDING FOR PINK HEBISCUS MEALYBUG (MACONEFFICOCCUS HIRSUTUS)

    During the late fall of 1999, the pink hibiscus mealybug (PHM) was 
detected in Imperial County. This was the first detection recorded in 
the continental United States. This mealybug, present in the Caribbean 
since the mid 1990's, was first expected to arrive in Florida. How it 
came to appear in Imperial County is still a mystery. However, there is 
a great potential for this pest to cause serious economic damage to 
agriculture in Imperial County and the southwest.
    There are international quarantines imposed against several types 
of fresh market produce which are reported to harbor this pest. These 
quarantines could have a serious impact on our ability to export fresh 
produce to the Pacific Rim.
    Following the detection of this pest in Imperial County, it was 
found across the border in the Mexicali Valley of Mexico. With the 
rapid assistance of USDA-APHIS, a survey and public outreach program 
was undertaken in a very expeditious manner. I must state my praise for 
APHIS' quick reaction to this pest.
    At the same time, a leading USDA scientist in the Caribbean 
responded rapidly with exotic biological control organisms. These 
parasitic wasps have been very successful in containing PHM in the 
Caribbean. This scientist not only put on workshops, but also released 
several thousand parasites on both sides of the border. Subsequent to 
that, a second shipment of parasites arrived and were released by 
biologists from Imperial County and the California Department of Food 
and Agriculture.
    Imperial County, in conjunction with the California Department of 
Food and Agriculture and the APHIS Methods Development Center, has 
established a rearing facility for these PHM parasites in Imperial 
County. We hope to be able to produce and release enough parasites to 
keep this potentially harmful pest below significant economic levels in 
Imperial County, surrounding regions and Mexico.
    Because of the numerous parties involved, including the USDA-AP1HS 
and ARS, the University of California, the California Department of 
Food and Agriculture (CDFA), and the Imperial County Agricultural 
Commissioner's Office, this project requires a significant amount of 
coordination to avoid overlap and duplication of project activities. We 
are requesting $50,000 to fund a Project Coordinator, which would 
provide a single point of contact to which all involved parties could 
report. The Project Coordinator would also synchronize the efforts of 
all agencies and would provide public outreach and education.

       FUNDING FOR THE CITRUS LEAFMINER (PHYLLOCNISTIS CITRELLA)

    This pest was found but a few weeks ago during a routine inspection 
of a local retail nursery. The citrus leafminer is considered an 
serious pest and is currently found in Florida and Texas. Follow up 
surveys of the surrounding areas verified that the pest was also 
present in a large commercial orchard in the Mexicali-San Luis Valley 
of Mexico and several backyard locations in southern Imperial County.
    The large areas in which this pest was found made it impossible to 
undertake eradication, especially since it has been reported to be 
present in Arizona.
    In cooperation with the nursery owner where the initial find was 
made, the young, heavily infested citrus trees were destroyed. The 
mature trees on the property were stripped of foliage showing signs of 
leafminer infestation and the cuttings destroyed.
    Since this pest spends almost all of its life inside the leaf, 
conventional pesticides are not effective. The most successful method 
of control for this pest are biocontrol agents. There are several 
indigenous parasitic wasps that are effective against this pest. Also, 
there is a very voracious exotic parasite that requires importation 
from Australia. This parasite has been reported to be up to 90 percent 
effective. Again, we are faced with the necessity of having to locally 
rear parasites in sufficient numbers for release to provide adequate 
control and to help reduce the economic impact this pest could have on 
our citrus industry. We are requesting $50,000 to expedite the foreign 
exploration, importation, and evaluation of exotic parasites to combat 
this pest.

             FUNDING FOR GIANT SALVINIA (SALVINIA MOLESTA)

    Giant salvinia is an exotic aquatic weed that was recently 
discovered in an agricultural drain of the Palo Verde Irrigation 
District, the lower portion of the Colorado River (on both the 
California and Arizona sides of the river) and a large portion of the 
Imperial Irrigation District canal system. This plant, if left 
uncontrolled, has the potential to completely clog the waterways 
currently infested, thereby severely restricting the flow of water. The 
potential negative economic impact this could have is manyfold, but the 
primary impact is increased maintenance costs to keep the waterways 
free and flowing.
    This weed is currently under eradication. The involved agencies are 
using two strategies to eradicate this pest. First, an herbicide is 
used to reduce the surface size of giant salvania mats; then, a weed-
eating beetle is used to complete the task.
    Releasing these predacious beetles on salvinia is not only time 
consuming, but could take several years to accomplish. A facility will 
be required to rear these beetles over a large period of time. This 
weed is also found in Texas and Arkansas. We are requesting $50,000 for 
expanded and expedited survey, detection, and eradication activities.
    It seems as though the desert southwest has become the revolving 
door for the introduction of exotic pests. It also appears, 
particularly in light of the recent actions caused by the Food Quality 
Protection Act, that the most logical method by which to combat these 
pests is through the introduction of biocontrol agents. The vast 
majority of these biocontrol agents are small parasites and predators. 
In order for us to rapidly attack and continue to do battle with these 
exotic pests, we must have the ability to take known biological control 
agents which have been released from quarantine and evaluated by either 
the University of California or the APHIS Plant Protection Centers, and 
mass rear them locally for release.
    As a result of the increased biocontrol activity caused by all of 
these exotic pests, we are requesting $100,000 to fund a feasibility 
study which would identify the resources, partners, and personnel 
necessary to establish a mass rearing facility for biological control 
agents, possibly at the Brawley Research Center. The facility would not 
compete with the biocontrol quarantine facility at either the 
University of California (UCR) or other USDA facilities, but rather 
would act cooperatively with them to mass rear parasites which they 
have evaluated and released from quarantine.

 FUNDING FOR RED GUM LERP PSYLLID (GLYCASPIS BRIMBLECOMVEI) AND GLASSY-
             WINGED SHARPSHOOTER (HOMALADISCA COAGULATA)

    There are currently no known biocontrol agents for either red gum 
lerp psyllid or glassy-winged sharpshooter. A world-wide search is 
currently being conducted and if effective parasites or predators are 
found, having a mass rearing facility available would expedite the 
rearing and release of these agents.

          FUNDING FOR PINK BOLLWORM (PECTINOPHORA GOSSYPIELLA)

    Pink bollworm has been an exotic pest of cotton for several years. 
It is singularly responsible for the decline of cotton acreage not only 
in the southwestern United States, but northwestern Mexico. Costs to 
control this pest using conventional methods have risen dramatically 
and that, in combination with declining cotton markets, has made it 
impossible to continue to grow this crop in an economical manner. 
Through the efforts of the USDA APHIS Methods Development Lab, the 
University of California and the California and Arizona Cotton Growers, 
a bi-national strategy was developed which would eventually lead to the 
eradication of the pink bollworm from the cotton growing regions of the 
United States.
    Even though the Arizona cotton growers have temporarily put their 
participation in the project on hold, the cotton growers in the upper 
Rio Grande/Trans-Pecos area and their counterparts on the Mexican side 
of the Rio Grande River have embraced the project with sincere 
enthusiasm.
    Research needs to continue on such soft technologies as the 
autocidal biocontrol agent currently being developed by APHIS Methods 
Development and the University of California at Riverside. This 
particular agent holds great promise by becoming the biocontrol agent 
that could replace transgenic ``Bt'' cotton in the continuing effort to 
eradicate pink bollworm.
    $2.6 million dollars is needed for APHIS-PPQ and Methods 
Development to achieve the important objectives of promoting strategies 
for region-wide eradication of PBW in California, Arizona and northwest 
Mexico, as well as continuing to keep this voracious and economically 
devastating pest out of the prime cotton producing areas of 
California's San Joaquin Valley. This technology would also help cotton 
farmers comply with the reduced use of pesticides as required by the 
Food Quality Protection Act. Ultimately hundreds of thousands of pounds 
of pesticides could be eliminated from the environment if the pink 
bollworm was eradicated from the southwestern United States and 
northwestern Mexico.

                      SUMMARY OF FUNDING REQUESTS

    Continuation of funding for the Silverleaf Whitefly National 
Research, Action and Technology Transfer Plan: $5.8 million for ARS and 
$1.85 million for APHIS.
    Funding for pink hibiscus mealybug joint county-state-federal-
binational coordination: $50,000.
    Funding for citrus leafminer for foreign exploration, importation 
and evaluation of exotic parasites: $50,000.
    Funding for giant salvinia for survey, detection and eradication 
activities in California and Arizona: $50,000.
    Funding for identifying resources, partners and personnel necessary 
to establish mass rearing Biological Control Center for desert 
southwest which is an invasive species corridor for exotic pests: 
$100,000.
    Funding for the APHIS-PPQ Methods Development dealing with pink 
bollworm in California, Arizona and northwest Mexico and prevention in 
San Joaquin Valleys: $2.6 million.
                                 ______
                                 

    PREPARED STATEMENT OF THE INTERNATIONAL ASSOCIATION OF FISH AND 
                           WILDLIFE AGENCIES

              NATURAL RESOURCE CONSERVATION SERVICE (NRCS)

    The Natural Resource Conservation Service has immense 
responsibilities for implementing the conservation provisions of the 
1985 Food Security Act (FSA), the 1990 Food, Agriculture, Conservation 
and Trade (FACT) Act, and the Federal Agricultural Improvement and 
Reform (FAIR) Act of 1996.
    Technical Assistance.--The USDA publication ``Geography of Hope'' 
identifies that the need for general Conservation Technical Assistance 
for America's private landowner will continue to increase to 2002 and 
beyond. An fiscal year 1999 workload analysis indicated the need for an 
additional $300 million for technical assistance. The Association 
applauds and supports the $86.4 million requested increase in 
Conservation Operations as a move in the right direction but recognizes 
a yet unbudgeted shortfall of an additional $250 million. The 
Association enthusiastically supports the increase of 1,843 staff years 
for more field staff to provide technical assistance required for 
existing programs as well as the Administration's proposed new 
initiatives.
    In addition to increasing general (non-programmatic) technical 
assistance, increased technical assistance funds are needed to 
implement increasingly popular provisions of the 1996 FAIR Act. The 
budget for the Wetlands Reserve Program (WRP), Wildlife Habitat 
Incentives Program (WHIP), and the Farmland Protection Program (FPP) 
all include the customary 19 percent to 20 percent for technical 
assistance. The Association strongly supports this level of funding 
provided to ensure that optimum agriculture and natural resource 
benefits will accrue from these programs. Not obvious in the list of 
programs that provided adequate levels of technical assistance is the 
Environmental Quality Incentives Program (EQIP). The proposed fiscal 
year 2001 budget raises EQIP from $174 million to $325 million, which 
the Association applauds. It is not clear, however, that additional 
funds are available to provide the required technical assistance to a 
field level program with such a large increase. Some Programs (CRP, 
WRP, CFO and FPP) have a technical assistance cap set by Section 11 of 
the CCC Charter Act at the 1995 spending level. No such constraint 
exists on EQIP. The Association therefore strongly urges the 
designation of the customary 19 percent for technical assistance on 
EQIP. The Association further recommends raising the Section 11 cap on 
CCC funds to $95 million, which are the funds necessary to provide 
technical assistance for CCC funded programs at the 2001 level.
    Increasingly, state fish and wildlife agencies are contributing 
staff time to help NRCS field offices service landowner participation 
in USDA conservation programs including WHIP, CRP, WRP and EQIP. The 
Association strongly encourages the Administration to consider sharing 
technical assistance funds, allocated for these programs, with state 
agency partners.
    Conservation Security Program (CSP).--This new program initiative 
is intended to support and secure the environmental benefits that all 
Americans enjoy--clean air and water, reduced erosion, improved 
wildlife habitat and sustainable soil. The Association strongly 
supports the concept of the proposed CSP as well as the budget item of 
$510 million for financial assistance to landowners plus $90 million 
for technical support. Especially notable is the mandatory allocation 
of an approximate 17 percent of total funding to technical assistance.
    Wetland Determination.--We believe the need for wetland 
determination, certification, and mapping is great and urge NRCS to 
proceed as soon as possible, under the guidance of the FAIR Act of 
1996. The Association urges expeditious completion of the wetland 
determinations required to implement the Swampbuster provisions of the 
1985 FSA, 1990 FACT Act, and the 1996 FAIR Act as well as the FAIR Act 
directed interagency cooperation whereby NRCS assumed responsibility 
for wetland designation for Section 404 (Clean Water Act) purposes on 
farmland, including tree farms, rangelands, native pasture, and other 
private lands used to produce or support the production of livestock. 
The Association and individual states wish to continue to work with 
NRCS to help achieve these goals.
    Public Law 566.--The Association generally supports the small 
watershed (Public Law 566) projects. That support is based upon 
continued emphasis on updated watershed planning and management. Such 
efforts could utilize and expand upon existing Public Law 566 plans 
examined in light of present day issues of wetland protection, water 
quality enhancement and fish and wildlife habitat. The greatest 
potential for these programs is for land treatment measures that retain 
the water on the land, improve infiltration, improve water quantity and 
quality, and provide fish and wildlife habitat. Structural and non-
structural land treatment activities require state and local matching 
funds to leverage greater conservation benefits for each federal dollar 
spent while promoting valuable partnerships among states, local 
agencies, and other organizations.
    National Buffer Initiative.--NRCS has implemented this initiative 
in cooperation with industry and other partners. The Association is 
pleased to be a sponsor of this innovative approach. The National 
Academy of Sciences has found that buffer strips can reduce off-field 
pollution by 70 percent, thus also contributing to meeting non-point 
source remediation goals under the Clean Water Act. Unfortunately, the 
level of sign-up by producers remains very low. NRCS has committed 
special emphasis and a major effort to use the buffer strip practices 
covered by the continuous CRP sign-up in a more targeted fashion. 
Unlike the large or whole field CRP retirements, buffer strips will 
require extensive outreach plus the much more attractive rental rates 
than now proposed. The Association supports the allocation of the 
additional $125 million specifically for new incentives, increased 
outreach and more attractive rental rates to increase participation in 
the various buffer practices. In addition, a review and evaluation of 
why sign-up is low and how it can be improved is strongly recommended.
    Forest Incentive Program (FIP).--The Forest Incentive Programs 
(FIP) has multiple resource values for fish, forests, wildlife, clean 
water and erosion control. The Association opposes the NRCS proposed 
intention to zero out FIP funding and strongly recommends that the 
fiscal year 1999 level of $16.325 million be restored in the fiscal 
year 2001 budget.
    Capped Programs.--The Wetlands Reserve Program (WRP), Wildlife 
Habitat Incentives Program (WHIP) and Farmland Protection Program (FPP) 
have all reached or are near authorized acreage or appropriation caps. 
In addition, funding levels for the Environmental Quality Incentives 
Program (EQIP) has not been sufficient to meet landowner interest or 
needs. We believe that due to the overwhelming success, customer 
acceptance and public benefits of these programs, they should be 
reauthorized. Therefore, we applaud the Administration's Farm Safety 
Net proposal to provide additional support to farmers through funding 
WRP at $286 million, EQIP at $325 million, WHIP at $50 million and FPP 
at $65 million. The Association also applauds the efforts of the 
Administration to raise the cap on the Conservation Reserve Program 
(CRP) to 40 million acres.

                       FARM SERVICE AGENCY (FSA)

    An adequately funded budget for the FSA is essential to implement 
those conservation related programs and provisions under FSA 
administration and/or in cooperation with NRCS as a result of passage 
of the Federal Agricultural Improvement and Reform (FAIR) Act of 1996. 
The Association strongly advocates that the budget include sufficient 
personnel funding to service a very active program and strongly 
believes that the past erosion of personnel has been inconsistent with 
program needs. The Association applauds the Administration's proposed 
personnel levels but also sees the need for an additional 600 staff 
years of temporary assistance.
    FSA programs have tremendous quantifiable impacts on natural 
resources, and yield substantial public as well as private benefits. 
Building on the provisions of the 1985 FSA, the 1990 FACT Act, and the 
1996 FAIR Act, the Association wants to ensure that each program 
accomplishes the broadest possible range of natural resource 
objectives, and encourages close cooperation between FSA, NRCS and the 
State Technical Committees in implementing the 1996 FAIR Act.
    Conservation Security Program.--This new program initiative is 
intended to support and secure the environmental benefits that all 
American's enjoy--clean air and water, reduced erosion, improved 
wildlife habitat and sustainable soil. The Association strongly 
supports the concept of the proposed CSP as well as the budget item of 
$510 million for financial assistance to landowners plus $90 million 
for technical support. Especially notable is the mandatory allocation 
of an approximate 17 percent of total funding to technical assistance.
    Flood Risk Reduction Program.--We believe this program has great 
potential to mesh with the Army Corp of Engineers Rivers Ecosystem 
Restoration and Flood Hazard Mitigation Project which is a part of the 
President's Clean Water Initiative. In addition, this program has 
excellent potential to secure floodplain restoration through easement 
purchase, to the benefit of the landowner, and as an alternative to 
expensive and recurring repair of frequently flooded land. We urge FSA 
to prepare regulations and budget for implementation and make every 
effort to ensure that language used in its easements and agreements 
provide a streamlined basis for appropriate administration and are 
user-friendly. The Association is disappointed that no budget is 
requested and urges that a start-up budget of $30 million be initiated 
to assist in the President's Clean Water initiative.
    Conservation Reserve Program.--The continued administration of CRP 
under the guidelines of the 1996 FAIR Act is a very significant and 
valuable commitment of USDA and the FSA. The Association applauds FSA 
efforts to fund and extend CRP contracts for the multiple benefits that 
accrue to the public as well as the landowner. The Association is 
especially pleased to note the commitment to raise the authorized 
ceiling to 40 million acres. The Association provides special thanks to 
FSA for the continuous CRP sign-up of high value environmental 
practices and applauds the additional $125 million in new incentives to 
increase landowner participation as well as ensure that practices 
incorporate fish and wildlife needs along with soil and water 
considerations.
    The commitment of FSA to provide high wildlife benefits in CRP 
contracts has been obvious since the advent of the Environmental 
Benefits Index (EBI) in the 15th sign-up. The Association applauds FSA 
in those efforts with their special emphasis on native grasses, 
endangered species and enlightened pine planting. Management/
maintenance strategies are essential to ensure continuation of soil, 
water and wildlife benefits throughout the life of the CRP contract. 
However, the ``up-to-$5/acre'' maintenance payment tends to be viewed 
by many landowners as additional rental payment, whether maintenance 
practices are performed or not. The Association encourages FSA to 
convert the annual maintenance fee to cost-share on an as-needed basis 
to ensure soil, water and wildlife objectives reflected in the EBI are 
realized as well as to ensure wise use of public funding for CRP.

                       WILDLIFE SERVICES (APHIS)

    The President's fiscal year 2001 proposed budget for the APHIS 
Wildlife Services Operations is $28,684,000 and reflects a $2,711,000 
decrease from the fiscal year 2000 level. For Methods Development, the 
proposed budget is $10,525,000, a $168,000 increase from the fiscal 
year 2000 level. For Aquaculture, the proposed budget is $576,000, a 
decrease of $190,000 from the fiscal year 2000 level. The Association 
is seriously concerned about reductions to Wildlife Service's budget.
    Wildlife Services (WS) a unit of APHIS, is the Federal agency 
responsible for controlling wildlife damage to agriculture, 
aquaculture, forest, range and other natural resources; for protecting 
public health and safety through the control of wildlife-borne 
diseases; and wildlife control at airports. Its control activities are 
based on the principles of wildlife management and integrated damage 
management and are carried out cooperatively with State fish and 
wildlife agencies. Most APHIS WS operational work is cost shared 
between the Federal WS program, State and county governments, 
agricultural producers, and other cooperators.
    The cooperation and support of the agricultural community are 
essential to maintaining wildlife populations because much of the 
Nation's wildlife exists on private agricultural lands. A progressive 
wildlife damage management program which reduces the adverse impact of 
wildlife populations is necessary to maintain the support of the 
agrarian community and to counter increasing pressures for indemnity 
due to wildlife damage.
    Since Congress transferred the WS program to USDA in 1986, the 
Association has worked closely with this program on numerous issues 
critical to the State fish and wildlife agencies including those 
related to migratory bird and endangered species. The Association 
commends the WS program for its professionalism and continuing effort 
to be attuned to the changing public values for the Nation's wildlife, 
while remaining responsive to the emerging wildlife problems.
    The Association is concerned with the Administration's proposed 
reduction in both the WS operations program and the aquaculture program 
for fiscal year 2001. The Administration is requesting that cooperating 
entities assume an ever larger share of the costs for WS services at a 
time when cooperators are already paying at least 50 percent of the 
costs if not more. Many wildlife populations such as predators, 
waterfowl, fish-eating birds, deer, and beavers are at all-time highs. 
Wildlife conflicts and requests for assistance are also at record 
numbers, and State wildlife agencies and the public look to WS for 
leadership and professional expertise in dealing with these conflicts.
    The Association requests the WS budget be restored to at least the 
fiscal year 2000 level for the Operations and Aquaculture line items. 
WS can be progressive, responsible and successful only if adequately 
funded and staffed. Of additional concern is the near level funding 
proposal for Methods Development. Although the fiscal year 2001 budget 
contains a $168,000 increase, all but $8,000 of this is for increased 
pay costs. Many of the current control tools such as traps and other 
restraining devices are becoming less acceptable to the public and are 
actually being prohibited in many States because of public referendums. 
The only source of new methods is through research. We commend Congress 
for recognizing the need to relocate the WS research facility from 
Denver to Ft. Collins, Colorado. Hopefully, the research center will be 
completed within the next year. However, increased operating and 
maintenance costs will then exceed $1 million which is not provided for 
in the general appropriation. The Association requests an increase of 
at least $2.3 million to the Methods Development line item to 
adequately continue nonlethal methods research and address the 
increased operating and maintenance costs, with $300,000 being 
dedicated for expansion of commercial trap testing in cooperation with 
the IAFWA and the State Fish and Wildlife Agencies to help meet and 
carry out U.S. international understandings to improve animal welfare 
in state regulated wildlife trapping programs.
    The Association recognizes the importance of aircraft to WS for 
both predator control and the distribution of oral vaccine baits for 
rabies control projects and we commend Congress for providing $1.2 
million in fiscal year 2000 to WS to continue implementing improved 
safety procedures for their aerial operations. However, no increased 
funding was proposed in the fiscal year 2001 budget to continue this 
effort, and the Association recommends that an additional $1.9 million 
be provided to fully implement the safety recommendations contained in 
the aerial safety report.
    The Association is concerned with recent attempts by various 
organizations and individuals in the past several years to 
significantly reduce WS's funding for predator control activities in 
the western United States. The Association opposes any attempts to 
reduce the WS budget through any broad scale or across-the-board 
funding cuts for the program or my efforts to reprogram funds from 
within. As our wildlife continues to flourish the States need a strong 
federal partner in animal damage research and management and it is to 
WS that we look for credible, science-based solutions.
    The Association is pleased with the accomplishments of the Berryman 
Institute at the Utah State University in Logan, Utah. However, we 
would like to see the Institute enhance its capabilities to conduct 
social science research, expand continuing education programs, and 
start a new high quality scientific journal for wildlife damage 
management that would be patterned after other established journals. To 
reach these new goals, the Association supports an increase of the 
funding to the Berryman Institute by an additional $300,000.
    The Association commends Congress for increasing the funding in 
Montana in fiscal year 2000 by $250,000 to deal with the increasing 
wolf-related conflicts. However, wolf conflicts are also increasing in 
Minnesota, Wyoming, and Idaho, and the Association requests an 
additional $300,000 to deal with these problems in those States as 
well.
    The Association recommends that Congress make $750,000 available in 
fiscal year 2001 to allow WS to continue to implement the new 
Management Information Reporting System. The implementation began 2 
years ago and will occur over a 5-year period at a total cost of $6-$8 
million. The new system will allow WS to provide specific information 
on resources protected, damage levels, trend information, and data on 
measurements and outcomes now required by the Government Performance 
and Results Act.

 COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE (CSREES) 
                     U.S. DEPARTMENT OF AGRICULTURE

    The Association recognizes that the research and educational 
programs of the CSREES and its Land Grant Partners effect relevant, 
positive changes in attitudes and implementation of new technologies by 
private landowners, managers, community decision-makers, and the 
public. This results in significant benefits to individuals and to the 
Nation through building and sustaining a more viable and productive 
natural resource base and a competitive and profitable agriculture. 
Since over two-thirds of our lands, approximately 1.35 billion acres, 
are controlled by over 10 million private landowners and managers, it 
is most appropriate that the CSREES-Land Grant System, with its grass 
roots credibility and delivery system, be adequately funded to 
translate and deliver research-based educational programs and new 
technologies to help the Nation's private landowners and managers move 
towards a more sustainable society. However, in the President's fiscal 
year 2001 budget, we see virtually no emphasis on natural resources 
research and education directed toward helping these clientele. In 
fact, the total number of farmers based on recent statistics is just 
slightly over one million, yet the great majority of CSREES' budget is 
devoted to production agriculture with only $3.192 million budgeted for 
the Renewable Resources Extension Act to assist the over ten million 
private landowners and managers who own and manage most of the nation's 
natural resource base. The Association is seriously concerned that this 
amount is infinitesimal and totally inadequate in the CSREES proposed 
fiscal year 2000 budget of $948.01 million.
    IAFWA strongly recommends that the Renewable Resources Extension 
Act be funded at a minimum level of $15 million in fiscal year 2001. 
The RREA funds, which are apportioned to State Extension Services, 
effectively leverage cooperative partnerships at an average of about 
four to one, with a focus on the development and dissemination of 
useful and practical educational programs to private landowners (rural 
and urban) and continuing education of professionals. The increase to 
$15 million would enable the Extension System to accomplish the goals 
and objectives outlined in the 1991-1995 Report to Congress. The need 
for RREA educational programs is greater today than ever because of the 
fragmentation of ownerships, the diversity of landowners needing 
assistance, and the increasing environmental concerns of society about 
land use. It is important to note that RREA has been reauthorized 
through 2002. It was originally authorized at $15 million annually; 
however, even though it has been proven to be effective in leveraging 
cooperative state and local funding, it has never been funded at a 
level beyond $3.4 million. An increase to $15 million would enable the 
Extension Service to expand its capability to assist over 500,000 
private landowners annually to improve decision-making and management 
on an additional 35 million acres while increasing productivity and 
revenue by $200 million.
    The Association strongly endorses the increase of McIntire-Stennis 
Forestry Research funds from $21.93 million to $25 million. The 
Association feels that it is essential to the future of all aspects of 
forest resource management on non-industrial private forestlands. With 
the rapid reduction in timber harvests from public lands, especially in 
the west, small private forest ownerships are being depended on for 
playing an increasing role in providing the nation's overall timber 
supply. This is creating a situation where in many areas of the country 
timber harvest is exceeding growth of timber stock on private lands. 
These forestlands play a critical role in providing watershed 
protection, wildlife habitat, recreational opportunities and 
environmental quality in both rural and urban communities. There is a 
significant need to provide more focus on improved management of small 
forest ownerships since they are the key to substantial forest resource 
management in the future. Currently there are over 10 million private 
landowners, many of whom have yet to realize the need to both manage 
and sustain these forests and related natural resource benefits for 
both their and society's future. Success in this arena of providing 
improved management and sustainability of these forest resources 
depends on enhancing research directed towards these ownerships through 
the McIntire-Stennis Research program.
    The Association notes with satisfaction and support that funding 
for water quality integrated programs was increased in the President's 
2001 budget by $3.2 million. We are concerned, however, that there is 
no line item budget for water quality specific to educational programs 
under Smith-Lever in Extension activities. The Association recommends a 
minimum of $3.5 million in Extension programs to focus on water quality 
education targeted at agricultural producers and other private 
landowners and managers. We believe that such program efforts are 
urgently needed now to help these landowners learn how to prevent and/
or reduce water quality degradation from known sources which are 
seriously affecting fisheries and wildlife resources, human health, and 
environmental quality of rural and urban communities.
    Finally, the Association is further aware of one particular program 
contained within the Cooperative States Research, Education, and 
Extension Service that is of high priority to several states. The U.S. 
Marine Shrimp Farming Program is an integrated multi-state research 
program at work in the states of Mississippi, Hawaii, Massachusetts, 
Texas, Arizona, and South Carolina. The goal of this program is to 
significantly expand the domestic shrimp farming industry, thereby 
reducing pressure on wild shrimp stocks and helping to offset the 
annual $2.5 billion trade deficit. The Association urges the Congress 
to increase the Appropriation in fiscal year 2001 from $3.354 million 
to $5 million for fiscal year 2001.
                                 ______
                                 

        PREPARED STATEMENT OF THE IZAAK WALTON LEAGUE OF AMERICA

    On behalf of the Izaak Walton League of America and our 50,000 
members and supporters nationwide, I am writing to provide testimony 
for the record regarding the fiscal year 2001 Agriculture, Rural 
Development, Food and Drug Administration and Related Agencies 
Appropriations Bill. The League has a 78-year history of supporting 
sustainable agriculture and sound conservation of our nation's natural 
resources. Most of our 335 chapters are located in rural areas and a 
great many of our members farm as a way of life. Accordingly, our 
organization takes a keen interest in the funding levels provided for 
natural resource conservation programs administered by the U.S. 
Department of Agriculture.
    The subcommittee has, as always, a daunting challenge in allocating 
federal dollars among a variety of agencies and many worthwhile 
programs. At the same time, we strongly believe that the federal 
programs highlighted below are especially deserving of increased 
funding levels:
  --Wildlife Habitat Improvement Program (WHIP).--The WHIP program, 
        authorized under the 1996 Farm Bill, provides cost-sharing 
        assistance to producers who voluntarily undertake efforts to 
        restore and maintain habitat for fish and wildlife on their 
        land. Unfortunately, the tremendous potential benefits from 
        this program have been substantially unrealized due to lack of 
        funding. We fully support the administration's requested 
        funding level of $50 million and strongly urge the subcommittee 
        to make this funding available in fiscal year 2001.
  --Environmental Quality Incentives Program (EQIP).--EQIP provides 
        technical, educational and financial assistance to farmers and 
        ranchers seeking to minimize and mitigate adverse ecological 
        impacts associated with their present agricultural practices, 
        such as controlling soil erosion or reducing runoff of animal 
        wastes into streams. Many producers want to be better stewards 
        of the land and simply need sound advice and assistance to 
        implement the necessary changes in their operations. The League 
        supports the requested increase of $151 million over fiscal 
        year 2000 enacted levels and encourages the subcommittee to 
        appropriate $325 million for EQIP.
  --Farmland Protection Program (FFP).--Conversion of agricultural 
        lands into commercial or residential developments is a 
        significant and growing problem throughout the nation. The FPP 
        is designed to arrest this problem by providing matching funds 
        to state, local and tribal governments to permanently protect 
        agricultural lands. We firmly believe that at least $65 million 
        in fiscal year 2001 is needed to help preserve agricultural 
        production capacity, open space, family farms and viable rural 
        communities.
  --Wetlands Reserve Program (WRP).--Wetlands are one of the most 
        important ecosystem types that exist in the U.S., providing 
        essential habitat to an incredibly wide variety of fish and 
        wildlife species. Unfortunately, half of the wetlands in the 
        lower 48 states have been lost, much of it to conversion to 
        cropland. WRP provides payments to landowners that voluntarily 
        retire converted wetlands from production, restore wetland 
        characteristics and protect it through long-term or permanent 
        easements. The League urges the subcommittee to provide at 
        least $286.1 million for WRP in fiscal year 2001 and supports 
        eliminating the current enrollment cap of 975,000 acres in 
        order to allow up to 210,000 additional acres to be enrolled in 
        fiscal year 2001.
  --Conservation Reserve Program (CRP).--The CRP is undoubtedly one of 
        the most successful conservation programs ever conceived. By 
        paying farmers to retire highly erodible or other 
        environmentally sensitive land from production for 10 years, 
        CRP has significantly reduced soil erosion, improved water 
        quality and provided critical wildlife habitat to a variety of 
        game and non-game species. The League fully supports the 
        administration's requested funding level of $126.7 million for 
        CRP and other reimbursements, as well as increasing the current 
        enrollment cap by 3.6 million acres (40 million acres in 
        total).
    The stewardship of our natural resources, protection of 
environmental quality and the preservation of the family farming and 
ranching community within the fabric of American society not only 
provides incalculable benefits for the current generation, but also 
insures for the prosperous future of generations yet to come. We firmly 
believe that these funding levels are not only realistic, but also 
vital to the success of accomplishing these important objectives.
    In closing, I wish to thank you for your thoughtful consideration 
of these views. As the appropriations process moves forward, the League 
looks forward to working with you and your staff to insure conservation 
of the nation's natural resources and preservation of our outdoor 
heritage. If you have any questions or require additional information, 
please contact me at (301) 548-0150, ext. 225.
                                 ______
                                 

            PREPARED STATEMENT OF THE JOSLIN DIABETES CENTER

                              INTRODUCTION

    Mr. Chairman, thank you for this opportunity to submit a statement 
for the public witness hearing record. The subject of this short 
statement is the continued funding in fiscal year 2001 for the Diabetes 
Project in the Extension Service of CREES. We have developed a plan for 
fiscal year 2001 that will require $975,000. This includes costs of 
Federal Administration, participation expenses of the states of 
Washington and Hawaii, and the personnel, equipment and associated 
costs of Joslin Diabetes Center within the total cost of the program.
Fiscal year 2000 background
    I would like to express Joslin Diabetes Center's sincere 
appreciation to you and your colleagues for your leadership in the 
fiscal year 1999 and fiscal year 2000 appropriations process in 
providing $550,000 for each year toward the Diabetes Project. We know 
you faced difficult decisions concerning funding priorities. We feel 
that your allocation of these funds indicates that you share the vision 
of the growing community role and organizational flexibility of the 
Extension Service in the 21st Century.
    Joslin and Extension personnel are implementing the fiscal year 
1999 program. Extension Service officials characterized the concept as 
a ``win-win'' program during the first meeting. Extension Service 
officials continue to embrace the concept of utilizing components of 
Extension's national partnership infrastructure for a pilot program 
with Joslin. The National Diabetes Education Program (NDEP), a joint 
program of the Centers for Disease Control (CDC) and the National 
Institutes of Health (NIH), both part of the Department of Health and 
Human Services, are also involved as components of this project. 
Extension officials recognized that Joslin's non-invasive screening 
proposal, based on components of the Joslin Vision Network (JVN), 
brought an important new facet to the NDEP and services to the rural 
health population. The addition of the Joslin pilot program is of 
particular importance in providing this new technology to minority 
rural residents, who suffer a much higher incidence rate than the 
national average.
    We have signed a Memorandum of Understanding with the Federal 
Extension Service upon which to base the full-scale program. We have 
submitted a plan of action for year two and are incorporating some 
alterations suggested by both States and the Federal Extension 
personnel. When the revised plan is completed and approved by 
Washington Federal Extension, we will deploy the equipment for 
screening for diabetic retinopathy.
Fiscal year 2001 plan
    For fiscal year 2001, the mission and objectives for the state 
pilot program remain the same as for fiscal year 1999 and fiscal year 
2000. We are just now implementing the first year of activities, due to 
the relatively late obligation dates of the USDA/Extension grant 
process. We did not receive fiscal year 1999 funding until October 
1999. We are planning to process fiscal year 2000 funds shortly, and 
accomplish all tasks before October 1, 2000.
    The following will be accomplished by October 1, 2000:
  --Training of Washington and Hawaii Extension personnel in equipment 
        use will have taken place;
  --deployment of the diabetes non-invasive screening portion of the 
        project will be completed;
  --educational materials will have been circulated for the specific 
        target populations of Washington and Hawaii;
  --coordination with the NDEP and local and State health officials to 
        handle referrals will have been established; and
  --preliminary baseline comparisons will have been completed for the 
        first year's operational phase.
    The evaluation of the two-year performance, compared with baseline 
data, will yield the results of the introduction of the advanced 
technology and the advanced medical care and prevention techniques that 
are the subject of this project. When similar testimony is provided to 
the Committee next year, we hope to have preliminary findings to report 
to you on this investment in American rural health and the cooperative 
partnership between the Extension Service and Joslin Diabetes Center.
    Mr. Chairman, this concludes my brief statement. We are submitting 
a detailed budget for the fiscal year 2001 funds of $975,000 we are 
seeking to the Extension Service for their review. If you or the 
Committee have any questions concerning this project, we would be 
pleased to meet and discuss the details.
    Mr. Chairman, thank you again for your efforts in fiscal year 2000. 
The Extension Service and Joslin Diabetes Center appreciate your 
confidence in our capabilities and your focus on the improvement of the 
quality of life in rural America. We respectfully request continued 
funding of $975,000 in fiscal year 2001 to fully demonstrate the 
benefits and potential national returns that can be derived from this 
pilot project.
                                 ______
                                 

   PREPARED STATEMENT OF THE METROPOLITAN WATER DISTRICT OF SOUTHERN 
                               CALIFORNIA

    The Metropolitan Water District of Southern California (MWD) 
appreciates the opportunity to submit testimony regarding the U.S. 
Department of Agriculture's (USDA) fiscal year 2001 budget, for the 
Hearing on Agriculture, Rural Development, Food and Drug Administration 
and Related Agencies Appropriations. MWD is a public agency created in 
1928 to meet supplemental water demands of those people living in what 
is now portions of a six-county region of southern California. Today, 
the region served by MWD includes 16 million people living on the 
coastal plain between Ventura and the international boundary with 
Mexico. It is an area larger than the State of Connecticut and, if it 
were a separate nation, would rank in the top ten economies of the 
world.
    Included in our region are more than 225 cities and unincorporated 
areas in the counties of Los Angeles, Orange, San Diego, Riverside, San 
Bernardino, and Ventura. We provide more than half the water consumed 
in our 5,200-square-mile service area. MWD's water supplies come from 
the Colorado River via the district's Colorado River Aqueduct and from 
northern California via the State Water Project's California Aqueduct.

                              INTRODUCTION

    MWD continues to favor USDA implementation of conservation 
programs, and is especially encouraged by the new actions identified in 
the recently released Clean Water Action Plan. The Clean Water Action 
Plan fosters integration of efforts by USDA, the U.S. Environmental 
Protection Agency, and other federal agencies to improve water quality. 
MWD firmly believes that inter-agency coordination along with 
cooperative conservation programs, that are incentive-based and 
facilitate the development of partnerships are critical to addressing 
natural resources concerns, such as water quality degradation, wetlands 
loss and wildlife habitat destruction. It is vital that Congress 
provide USDA with the funding necessary to successfully carry out its 
commitment to natural resources conservation.
    Our testimony focuses on USDA's conservation programs that are of 
major importance to MWD. In particular, MWD urges your full support for 
funding for USDA's Environmental Quality Incentives Program (EQIP). 
Full funding for this program is essential for achieving Colorado River 
Basin salinity control objectives through the implementation of 
salinity control measures as part of EQIP. In addition, MWD requests 
your full support for the Wildlife Habitat Incentives Program, 
Conservation Reserve Program, and Wetlands Reserve Program. Sufficient 
federal funding for these USDA programs is necessary to achieve 
wildlife habitat restoration and source water quality protection 
objectives in the Colorado River Basin and in California's Sacramento/
San Joaquin Bay-Delta (Bay-Delta) estuary.

                ENVIRONMENTAL QUALITY INCENTIVES PROGRAM

    The Environmental Quality Incentives Program provides cost-sharing 
and incentive payments, technical assistance and educational assistance 
to farmers and ranchers for the implementation of structural practices 
(e.g., animal waste management facilities, filterstrips) and land 
management practices (e.g., nutrient management, grazing management) 
that address the most serious threats to soil, water and related 
natural resources. EQIP is to be carried out in a manner that maximizes 
environmental benefits per dollar expended. This assistance is focused 
in conservation priority areas identified by the Natural Resources 
Conservation Service's State Conservationists, in conjunction with 
state technical committees and Farm Service Agency personnel. MWD does 
have some concern with respect to this aspect of EQIP. Beginning with 
the first full year of EQIP funding in 1997, USDA's participation in 
the Colorado River Salinity Control Program has significantly 
diminished. The mechanism by which funding has been allocated by USDA 
to date inherently overlooks projects for which benefits are interstate 
and international in nature. Clearly, Colorado River salinity control 
has benefits that are not merely local in nature, but continue 
downstream and EQIP as it is currently administered by USDA does not 
adequately fund national priorities. MWD supports the recommendation of 
the Colorado River Basin Salinity Control Forum as a way to remedy this 
situation. In Public Law 104-127, Congress amended the Colorado River 
Basin Salinity Control Act to direct the Secretary of Agriculture to 
carry out salinity control measures in the Colorado River Basin as part 
of EQIP. Sufficient federal funding for implementation of EQIP is 
critical in order to achieve Colorado River Basin salinity control 
objectives as well as source water quality protection and ecosystem 
restoration objectives in the Bay-Delta estuary and watersheds 
tributary to the Bay-Delta.
    The Colorado River is a large component of Southern California's 
regional water supply and its relatively high salinity causes 
significant economic impacts on water customers in MWD's service area, 
as well as throughout the Lower Colorado River Basin. MWD and the 
Bureau of Reclamation completed a Salinity Management Study for 
Southern California in June 1999. The first phase of the study 
(completed in February 1997) concluded that the high salinity from the 
Colorado River causes significant impacts to residential, industrial 
and agricultural water users. Furthermore, high salinity adversely 
affects the region's progressive water recycling programs, and is 
contributing to an adverse salt buildup through infiltration into 
Southern California's irreplaceable groundwater basins. In April 1999, 
Metropolitan's Board of Directors authorized implementation of a 
comprehensive Action Plan to carry out Metropolitan's policy for 
management of salinity. The Action Plan focuses on reducing salinity 
concentrations in Southern California's water supplies through 
collaborative actions with pertinent agencies, recognizing that an 
effective solution requires a regional commitment. Metropolitan, the 
Association of Groundwater Agencies, the Southern California 
Association of Publicly Owned Treatment Works, and the WateReuse 
Association of California have executed a Memorandum of Understanding 
agreeing to the formation of a Salinity Management Coalition. Based on 
a 1988 study, Reclamation estimated that water users in the Lower Basin 
were experiencing in excess of $750 million in annual impacts from 
salinity levels in the river in 1995, and that impacts would 
progressively increase with continued agricultural and urban 
development upstream of California's points of diversion. As part of 
the Salinity Management Study, the economic impacts have been refined 
for MWD's service area and have been submitted to Reclamation for its 
use in updating its Lower Basin estimate. Droughts will cause spikes in 
salinity levels that will be highly disruptive to Southern California 
water management and commerce. The Salinity Control Program has proven 
to be a very cost-effective approach to help to mitigate the impacts of 
higher salinity. Adequate federal funding of the program is essential.
    The Colorado River Basin Salinity Control Forum (Forum), the 
interstate organization responsible for coordinating the Basin states' 
salinity control efforts, issued its 1999 Review, Water Quality 
Standards for Salinity, Colorado River System (1999 Review) in June of 
1999. The 1999 Review found that additional salinity control was 
necessary with normal water supply conditions beginning in 1994 to meet 
the numeric criteria in the water quality standards adopted by the 
seven Colorado River Basin states and the U.S. Environmental Protection 
Agency. For the last seven years (1994-2000), funding for USDA's 
salinity control program has not equaled the Forum-identified funding 
need for the portion of the program the Federal Government has the 
responsibility to implement. It is essential that implementation of 
Colorado River Basin salinity control efforts through EQIP be 
accelerated to permit the numeric criteria to be met again under 
average annual long-term water supply conditions, making up the 
shortfall. The Basin states and farmers stand ready to pay their share 
of the implementation costs of EQIP.
    The President's proposed fiscal year 2001 budget contains program 
funding of $350 million for implementation of EQIP through financing 
provided by the Commodity Credit Corporation. MWD supports this level 
of EQIP funding. The Forum has determined that allocation of $12 
million in EQIP funds in fiscal year 2001 is needed for on-farm 
measures to control Colorado River salinity. This level of funding is 
necessary to meet the salinity control activities schedule to maintain 
the state adopted and federally approved water quality standards.
    MWD also supports the proposed level of funding for Conservation 
Technical Assistance (CTA) included within the Natural Resources 
Conservation Service's (NRCS) Conservation Operations Program. 
Conservation technical assistance provides the foundation for 
implementation of EQIP and other conservation programs. We are pleased 
that the CTA budget includes $87 million in funding to assist Animal 
Feeding Operations (AFO) in reducing their water quality impacts. AFOs 
are a potential source of Cryptosporidium, a pathogen that is only 
partially removed by conventional drinking water treatment technology. 
Minimizing loadings at the source is important to ensure safe and 
healthy drinking water supplies.
    MWD urges you and your Subcommittee to support full funding for 
EQIP and NRCS CTA as requested in the President's fiscal year 2001 
budget for USDA, with the specific designation of EQIP funds to the 
Salinity Control Program. MWD also recommends that the Colorado River 
Basin be designated as a national priority area for salinity control.

                  WILDLIFE HABITAT INCENTIVES PROGRAM

    The Wildlife Habitat Incentives Program (WHIP) is a voluntary 
program, providing technical assistance and cost-sharing, to help 
landowners develop habitat on their properties that will support 
wetland wildlife, upland wildlife, threatened and endangered species, 
fisheries, and other types of wildlife. WHIP offers an opportunity to 
encourage development of improved wildlife habitat on eligible lands by 
providing assistance to landowners who wish to integrate wildlife 
considerations into the overall management of their operations.
    WHIP cost-sharing assistance could be utilized to support ongoing 
interim conservation efforts both in the Bay-Delta estuary and for the 
Lower Colorado River Multi-Species Conservation Program. The CALFED 
Bay-Delta Program is a cooperative effort among state and federal 
agencies and the public to develop a long-term, comprehensive solution 
to ecosystem and water supply problems in the Bay-Delta. One of the 
main objectives of the CALFED Bay-Delta Program is to improve and 
increase aquatic, wetland and riparian habitats so that they can 
support sustainable populations of wildlife species, by implementing a 
system-wide ecosystem restoration approach. WHIP could benefit this 
program by providing cost-share assistance for the development of 
wildlife habitat on private lands in the Bay-Delta watershed.
    The Lower Colorado River Multi-Species Conservation Program (LCR 
MSCP) is a broad-based partnership of state, federal and private 
entities in Arizona, California, and Nevada. Participants include 
water, hydroelectric power and wildlife resource management agencies, 
Tribal governments, and environmental organizations with interests in 
the Lower Colorado River. The LCR MSCP is focusing on the conservation 
of over 70 threatened, endangered and sensitive species and their 
habitats. WHIP would allow the combination of federal cost-sharing 
dollars and voluntary agricultural land-use practices to enhance 
habitat for listed and sensitive species of interest in the Lower 
Colorado River. This could be a valuable vehicle for gaining further 
agricultural support for conservation efforts and the goals of the LCR 
MSCP.
    The President's budget requests $50 million for WHIP for fiscal 
year 2001. MWD recommends that you and your Subcommittee support 
continued funding of WHIP at the level requested in the President's 
fiscal year 2001 budget for USDA.

                      CONSERVATION RESERVE PROGRAM

    Continued support for the Conservation Reserve Program (CRP) is 
necessary in order to build on the past successes of this USDA 
conservation program. Under the CRP, incentive payments are provided to 
producers to remove highly erodible and other environmentally sensitive 
land from production. This program helps protect the quality of 
drinking water supplies and facilitates ecosystem restoration efforts 
by reducing soil erosion, improving water quality, protecting wildlife 
habitats, and achieving other natural resource conservation measures. 
The Conservation Reserve Enhancement Program and National Conservation 
Buffer Initiative will further encourage enrollment of high 
environmental-value acreage. We are pleased that the fiscal year 2001 
budget provides financial incentives of up to $125 million annually for 
producers who enroll in CRP continuous signup programs such as these.
    Enrollment of eligible agricultural lands that are located in the 
Bay-Delta estuary and tributary watersheds in the CRP, could provide 
water quality improvement benefits for this important source of 
drinking water. We note, however, that the method which determines the 
rental rate for CRP enrollments effectively precludes the enrollment of 
much irrigated agricultural land and land with high value crops. As a 
result, states in the arid west do not benefit from the CRP in 
proportion to their contribution to agricultural production. While MWD 
urges you and your Subcommittee to support the President's budget 
request for the CRP of $1.742 billion for fiscal year 2001, we also 
strongly request that you review the method for rental rate 
determination.

                        WETLANDS RESERVE PROGRAM

    The Wetlands Reserve Program (WRP), first authorized in 1990, is a 
voluntary program providing incentives to landowners for the 
restoration and protection of wetlands with long-term or permanent 
easements. Wetlands restoration provides important water quality 
improvement and wildlife habitat restoration benefits that are 
important to the Bay-Delta estuary. MWD urges you and your Subcommittee 
to support appropriation of $286 million for the WRP in fiscal year 
2001, as requested in the President's budget. We further support the 
removal of the acreage cap and the proposal to enroll 250,000 acres 
annually.

                               CONCLUSION

    Thank you for your consideration of our testimony. We believe our 
comments emphasize the importance of continued funding for USDA's 
agricultural conservation programs. The USDA's conservation programs 
are critical for achieving Colorado River Basin salinity control 
objectives, as well as broader wildlife habitat restoration and source 
water quality protection objectives in the Colorado River Basin and the 
Bay-Delta estuary.
                                 ______
                                 

          PREPARED STATEMENT OF THE MINOR CROP FARMER ALLIANCE

    The Minor Crop Farmer Alliance (MCFA) is a coalition of individual 
firms and organizations representing agricultural producers who grow 
and market minor-use agricultural commodities or utilize minor-use 
materials. MCFA was organized in 1991 to address industry concerns 
about pesticide manufacturers' voluntary cancellation of agricultural 
pesticides and the accelerating loss of important crop protection 
tools. MCFA's primary focus today is implementation of the Food Quality 
Protection Act (FQPA). Over 100 organizations representing the majority 
of our nation's fruit and vegetable producers support MCFA's efforts.

                              INTRODUCTION

    The U.S. Environmental Protection Agency's (EPA) implementation of 
FQPA may result in the phase-out of many of the most important 
pesticides used in the minor-use industry. Those industries provide the 
majority of fruits and vegetables consumed in the United States. The 
minor-use industry is gravely concerned that EPA will unnecessarily 
cancel pesticides that are essential for the production of those crops. 
It is imperative that adequate research and pest management programs be 
made available to lessen the potential devastating impact of FQPA 
implementation.
    USDA has a critical role in the implementation of FQPA. It provides 
input to EPA in the development of policies, the conduct of risk 
assessments, and the impact of EPA's decisions on agriculture, 
including the minor-use community. It is vital to the long-term well-
being of this nation's agricultural industry that USDA meet the 
challenges presented by FQPA, and that it fully participate in the FQPA 
implementation program.
    MCFA appreciates the opportunity to comment on the U.S. Department 
of Agriculture's (USDA) appropriations for fiscal year 2001. Our 
testimony focuses on USDA programs that are involved in the FQPA 
implementation process, including, but not limited to, providing 
critical data for fair and reasonable assessment of pesticides and 
conducting important research that is needed to develop alternative 
pest management strategies.

                        SPECIFIC FUNDING REQUEST

    MCFA strongly supports full funding for the following programs 
intended to facilitate fair FQPA implementation, and to offset its 
anticipated negative impact on minor-use industries.
  --$14 million for the Pesticide Data Program (PDP) administered by 
        the Agricultural Marketing Service;
  --$3.2 million for the National Agricultural Statistics Service 
        pesticide-usage surveys;
  --$2.6 million for the Office of Pest Management Policy administered 
        by the Agricultural Research Service;
  --$12.2 million for the Integrated Pest Management Research Grant 
        Program administered by the Cooperative State Research, 
        Extension and Education Service (CSREES); and
  --$18 million for the Pesticide Impact Assessment Program, Crops at 
        Risk and Risk Avoidance and Mitigation Program also 
        administered by CSREES.
    Members of the Minor Crop Farmer Alliance include the following 
organizations and firms:
    A Duda & Sons, Alger Farms, American Dehydrated Onion & Garlic, 
American Farm Bureau Federation, American Mosquito Control Association, 
American Nursery and Landscape Association, American Seed Association, 
Atlantic County Board of Agriculture, Brewster Heights Packing, 
California Ag Issues Forum, California Avocado Commission, California 
Canning Peach Association, California Cherry Advisory Board, California 
Citrus Mutual, California Citrus Quality Council, California Cut Flower 
Commission, California Farm Bureau Federation, California Fig Advisory 
Board, California Grape & Tree Fruit League, California Pistachio 
Commission, California Prune Board, California Seed Association, 
California Strawberry Commission, California Tree Fruit Agreement, 
Cherry Marketing Institute, Consumer Produce Company, Cranberry 
Institute, D'Arrigo Brothers, DeBruyn Produce Company, Del Monte Foods, 
Diamond Produce, Dried Fruit Association of California, Florida Citrus 
Mutual, Florida Citrus Packers, Florida Farm Bureau Federation, Florida 
Nurserymen & Growers Association, Florida Fruit & Vegetable 
Association, Frank Capurra & Sons, Fresh Produce & Floral Council, 
Grower Shipper Vegetable Association of Central California, 
Hillsborough County Farm Bureau (Florida), Holden Wallace, Inc., Idaho 
Potato Commission, Interstate Fruit & Vegetable Company, Lee County 
Mosquito Control District, Major Farms, McManus-Wyatt-Hidalgo Produce 
Marketing Company, Merrill Farms, Michigan Asparagus and Plum Advisory 
Board, Michigan Celery Promotion Cooperative, Inc., Michigan Farm 
Bureau, Michigan Onion Committee, Michigan Vegetable Council, National 
Christmas Tree Association, National Council of Farmer Cooperatives, 
National Food Processors Association, National Onion Association, 
National Potato Council, National Watermelon Association, New York 
State Vegetable Growers Association, North American Strawberry Growers 
Association, North Central Washington Fieldman's Association, Northwest 
Food Processors Association, Northwest Horticultural Council, Ocean 
Mist Farms, Ocean Spray, Ohio Fruit Growers Society, Ohio Vegetable & 
Potato Growers Association, Oregon Raspberry & Blackberry Commission, 
Ostrom Farms, Pacific Coast Canned Pear Service, Pacific Seedmen's 
Association, Processed Tomato Foundation, Pear Advisory Board, Pear 
Bureau Northwest, Produce Marketing Association, R.C. Farms, Rio Grande 
Okra Sales, Inc., Rio Queen, Inc., Robert Ruiz, Inc., Roses Inc., 
Society of American Florists, SoilServ, Inc., South Carolina Tomato 
Growers Association, Starr Produce Company, Tanimura & Antle, Inc., 
Texas Citrus Mutual, Texas Nursery & Landscape Association, Texas 
Produce Association, Texas Vegetable Association, Tree Top, Inc., U.S. 
Apple Association, U.S. Canola Association, U.S. Hop Industry Plant 
Protection Committee, United Fresh Fruit and Vegetable Association. USA 
Dry Pea & Lentil Council, Val Verde Vegetable Company, Valley Fruit & 
Vegetable Company, Virginia Farm Bureau Federation, Washington Hop 
Commission, Washington State Horticultural Association, Washington 
State Potato Commission, Western Growers Association, Western 
Washington Farm Crops, Wiesehan Farms, Inc., Wild Blueberry Commission 
of Maine, Wisconsin Ginseng Growers Association, and Yakima Pomological 
Club.
                                 ______
                                 

           PREPARED STATEMENT OF MISSISSIPPI STATE UNIVERSITY

    Mr. Chairman and Members of the Subcommittee, thank you for the 
opportunity to submit this testimony on behalf of the Coalition of 
EPSCoR States \1\ regarding the U.S. Department of Agriculture 
Experimental Program to Stimulate Competitive Research (USDA EPSCoR). 
USDA EPSCoR is extremely important to agricultural research in the 
state of Mississippi and in our nation. I appreciate the opportunity to 
submit this testimony.
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    \1\ Alabama, Alaska, Arkansas, Idaho, Kansas, Kentucky, Louisiana, 
Maine, Mississippi, Montana, Nebraska, Nevada, North Dakota, Oklahoma, 
Puerto Rico, South Carolina, South Dakota, Vermont, West Virginia, and 
Wyoming.
---------------------------------------------------------------------------
    I would also like to extend my appreciation to you, Mr. Chairman, 
for your strong support of USDA EPSCoR. This important program is 
having a significant impact in Mississippi and in the other USDA EPSCoR 
states. Your support and the support of this Subcommittee have been 
absolutely crucial in establishing and maintaining this important 
program. Mr. Chairman, those of us committed to improving Mississippi's 
research and development capability deeply appreciate your support and 
your effort. Thank you for your fine work representing Mississippi in 
the United States Senate.
    Seven federal agencies have EPSCoR or EPSCoR-like programs, 
including USDA. EPSCoR works to improve our country's science and 
technology capability by funding activities of talented researchers in 
states that have historically not received significant federal R&D 
funding. USDA EPSCoR was established in fiscal year 1992 with a goal of 
increasing the amount of agricultural research at academic institutions 
within states that have received limited competitive funding from USDA.
    The Mississippi EPSCoR program began in 1988 with the naming of the 
state EPSCoR Committee by the Governor. Mississippi EPSCoR obtained its 
first funding in 1989 from USDA EPSCoR's sister program in the National 
Science Foundation. Since that time, EPSCoR has had an enormously 
positive impact within the state and at the four research institutions 
and their affiliates.
    Because of the multi-institutional framework of EPSCoR and of the 
commitment of the state EPSCoR Committee to creating a critical mass of 
scientists and engineers around specific issues as well as a more fully 
developed statewide infrastructure, Mississippi EPSCoR has produced a 
stronger, more competitive research community and closer working 
relationships among the institutions that participate in the federal 
EPSCoR programs: Jackson State University, Mississippi State 
University, the University of Mississippi, the University of Southern 
Mississippi, and the University of Mississippi Medical Center.
    Mr. Chairman, USDA EPSCoR is helping to improve the quality and 
competitiveness of agriculture research in Mississippi. Since the 
program was established in 1992, a number of Mississippi researchers 
have received USDA EPSCoR Strengthening Awards. These investigators 
have been located at Mississippi State University, the University of 
Mississippi Medical Center, and the University of Southern Mississippi.
    Important examples of Mississippi's research include studies in 
such areas as: kenaf processing, which is a potential economic 
opportunity for rural states; rapid detection of E coli, an important 
factor in food safety; and disease mechanisms in channel catfish, which 
impacts a significant cash crop across the southern part of the 
country. These projects and many, many others address issues important 
to rural states and to the rest of the nation. USDA EPSCoR allows 
researchers across our country to contribute to our economy and our 
agricultural research knowledge base.
    USDA EPSCoR states are those whose funding ranks no higher than the 
40th percentile of all states, based on a three year rolling average, 
but excluding strengthening set-aside funds. For fiscal year 2000, the 
following states are eligible: Alaska, Arkansas, Connecticut, Delaware, 
Hawaii, Idaho, Kentucky, Maine, Mississippi, Montana, Nevada, New 
Hampshire, New Mexico, North Dakota, Rhode Island, South Carolina, 
South Dakota, Vermont, West Virginia, Wyoming, and the Commonwealth of 
Puerto Rico. Let me stress that EPSCoR relies on rigorous merit review 
in order to ensure that it funds only high-quality research.
    USDA makes four types of competitive awards through USDA EPSCoR: 
Research Career Enhancement Awards, Equipment Grants, Seed Grants, and 
Strengthening Standard Research Project Awards. Proposals must be 
related to the program priorities of the National Research Initiative 
Competitive Grants Program, which address critical issues facing 
agriculture today.
  --Research Career Enhancement Awards help faculty enhance their 
        research capabilities by funding sabbatical leaves. Applicants 
        may not have received a NRICGP competitive research grant 
        within the past five years.
  --Equipment Grants strengthen the research capacity of institutions 
        in USDA EPSCoR states. The grant cannot exceed 50 percent of 
        the cost of the equipment, or $50,000, whichever is less. The 
        principal investigator for this grant is responsible for 
        securing non-Federal matching funds.
  --Seed Grants enable researchers to collect preliminary data in 
        preparation for applying for a standard research grant. Seed 
        Grant awards are limited to a total cost of $75,000, including 
        indirect costs, for two years and are non-renewable. Applicants 
        must indicate how the research will enhance future 
        competitiveness in applying for standard research grants.
  --Strengthening Standard Research Project Awards fund standard 
        research projects of investigators who have not received a 
        NRICGP grant within the past five years.
    Through USDA EPSCoR, Mississippi and the other USDA EPSCoR States 
contribute more effectively to our nation's science and technology 
capability, and help provide our country with needed, high-quality, 
peer-reviewed research. This program allows all regions of our country 
to contribute to our nation's science and technology capability while 
allowing flexibility to meet regional research needs. USDA EPSCoR is a 
sound investment of taxpayer dollars.
    Mr. Chairman, the Subcommittee has for several years directed USDA 
to set aside 10 percent of USDA NRICGP funds for USDA EPSCoR. Those 
funds have provided significant opportunity and significant success in 
Mississippi and the other EPSCoR states. I request that the 
Subcommittee once again include report language directing USDA to set 
aside 10 percent of its NRI competitive grant funds in fiscal year 2001 
for an EPSCoR program. These funds will allow the EPSCoR states to 
continue providing for the agricultural research needs of rural America 
and of our nation.
    I thank the Subcommittee for the opportunity to submit this 
testimony.
                                 ______
                                 

  PREPARED STATEMENT OF THE NATIONAL AGRICULTURAL AVIATION ASSOCIATION

    The National Agricultural Aviation Association requests that the 
Subcommittee on Agriculture, Rural Development, Food and Drug 
Administration and Related Agencies of the Senate Appropriations 
Committee include a line item of $1.3 million in its fiscal year 2001 
Agricultural Spending Bill for the USDA--Agricultural Research 
Service's (ARS) Aerial Application Technology Program in College 
Station, Texas. This program is of tremendous value to agriculture and 
the environment.
    Aerial application is a vital service for America's farmers 
enabling them to produce a safe, abundant and affordable supply of food 
and fiber for the nation and the world. Aerial application accounts for 
about 25 percent of crop protection spray applications and nearly 100 
percent of forest protection applications. It also is used to protect 
human health from the spread of airborne viruses and disease. 
Furthermore, aerial application permits large areas to be covered 
rapidly, thus ensuring timely and effective applications. When soil 
conditions and crop foliage prohibit the use of ground machines, aerial 
application is the only feasible method of treating crops.
    The Aerial Application Technology Program at College Station Texas 
is nationally recognized for conducting innovative research to make 
aerial application more efficient, effective and precise. Technologies 
have been developed at the facility that significantly mitigates spray 
drift and enables less crop protection product to be used more 
effectively. The continued implementation of environmental safeguards 
in which the agricultural industry must comply, coupled with the 
necessity of aerial application for American agriculture, underscores 
the need to augment the efforts of the USDA--ARS Aerial Application 
Technology Program where research supporting this balance is conducted. 
The $1.3 million line-item in the fiscal year 2001 Agricultural 
Spending Bill will ensure that valuable aerial application technology 
research continue at the ARS College Station, Texas facility.
    Increased research funding for the Aerial Application Technology 
Program is supported by a large and diverse coalition of agricultural 
groups that recognize the important role the Program plays in safely 
and effectively contributing to our nation's agricultural producers. 
These groups include the Agricultural Retailers Association, the 
American Crop Protection Association, the American Farm Bureau 
Federation, the American Sugarbeet Growers Association, the National 
Association of Wheat Growers, the National Corn Growers Association, 
the United Fresh Fruit and Vegetable Association, and the U.S.A. Rice 
Federation.
    We appreciate your consideration of this important issue.
                                 ______
                                 

      PREPARED STATEMENT OF THE NATIONAL ALLIANCE FOR FOOD SAFETY

    Thank you, Chairman Cochran and members of the Agriculture 
Appropriations Subcommittee for the opportunity to share with you 
information about the National Alliance for Food Safety. My name is 
Lonnie King and I am the chairman of the NAFS.
    Food safety issues present us with complex and difficult 
challenges--shifting demographics, growing susceptible populations, 
changing production systems, new emerging pathogens, changes in the 
nature of foods, increasing importation of foods, and shifting dietary 
preferences. All these challenges have combined to inextricably change 
the landscape for both our food system and our food safety system.
    In an effort to address the difficult and complex issues of 
ensuring a safe food supply, different strategies, alliances and 
essentially different ways of working will be needed to produce 
sustainable progress and useful results. Based on this national need, 
the concept of a broad-based, integrated partnership for research and 
education arose in the form of the NAFS.
    The National Alliance for Food Safety--A Partnership for the 
Science of Safe Food--was established for the purpose of creating 
research and education programs that address issues and problems in 
food safety. The activities of the NAFS are oriented toward enhancement 
of public health and prevention of foodborne illness in response to the 
emergence of food safety as a prominent area of concern for the 
American public in recent years.
    Twenty-five universities have joined with the Agricultural Research 
Service to comprise NAFS so that the organization may make the most 
efficient use of available resources. The work of the NAFS pursues this 
mission: to continually improve the safety of our food supply to ensure 
the public's health and to enhance our national and international food 
systems.
    The NAFS represents a collective of over 500 researchers and 
scientists who offer an unprecedented portfolio of products, services, 
and expertise in research and educational programs. The NAFS also 
represents a new operative built on the philosophy of creative 
collaboration. This collaboration is enhanced through the many 
disciplines and areas of expertise of the scientists. In addition, the 
diversity of the Alliance's member institutions is a unique and 
compelling strength. This diversity enables researchers to compare and 
contrast a wide variety of production systems and climatic and 
environmental conditions across the U.S.
    The partnering institutions strongly believe that together we will: 
help formulate and focus on the top research priorities; prevent 
duplication of effort; form synergies through multidisciplinary and 
cross-university food safety teams and centers of expertise; and, align 
our outstanding and substantial resources, facilities, and intellect 
toward a national, integrated research and educational blueprint 
directed at the assurance of a safe food supply. Finally, the NAFS will 
also assure the highest applicability of its activities to resolving 
critical food safety problems of greatest national need and delivering 
products, services, and information of the highest scientific merit
    The NAFS membership stretches from coast to coast. Its member 
universities are Clemson University, Cornell University, Georgetown 
University, Iowa State University, Kansas State University, Michigan 
State University, Mississippi State University, North Carolina State 
University, North Dakota State University, Pennsylvania State 
University, Purdue University, Texas A&M University, University of 
Arkansas, University of California-Davis, University of Florida, 
University of Georgia, University of Idaho, University of Illinois, 
University of Maryland-College Park, University of Maryland-Eastern 
Shore, University of Nebraska, University of Tennessee, University of 
Wisconsin, Virginia Tech University and Washington State University. 
These universities have bound themselves together with the Agricultural 
Research Service around the common goal of ensuring the safest possible 
food supply for the consumer.
    The member universities bring to the NAFS a strong base of 
scientific expertise in food safety with several components. The 
members use their respective components to form the basis for 
collaborations with their counterparts at other universities and at 
ARS. The geographical diversity of the NAFS members provides for a mix 
of climatic conditions, soil and vegetation types and farm and handling 
practices representative of the whole nation.
    The role of the NAFS is to use its capacity to foster strong 
working partnerships to deal with food safety issues. No single 
research and education establishment in the nation has the intellectual 
capacity nor the infrastructure to address the problem in its entirety. 
Working as partners, the members of NAFS can bring sophisticated 
problem-solving research activity to food safety questions unmatched by 
any other entity.
    The NAFS has begun its work with the recent request for proposals 
from its members. The Agricultural Research Service received a fiscal 
year 2000 appropriation increase for cooperative research with NAFS 
member institutions for food safety research on E. coli O157:H7 and 
Listeria monocytogenes. Collaboration among NAFS and ARS scientists was 
a requirement for all successful proposals. Strong encouragement was 
given toward the submission of proposals of collaborations among 
multiple NAFS members and ARS scientists.
    The NAFS looks to the long term for opportunities to use its 
capabilities. Its research strengths center on several commodities: 
muscle foods, minimally processed foods, fruits, vegetables, dairy 
products, cereals and grains, aquaculture, seafood and egg products. 
NAFS members' expertise is in disciplines including epidemiology, 
toxicology, risk assessment, microbiology, virology, medicine, clinical 
research and health outcomes.
    Research priorities for NAFS include isolation and detection 
methodology, surveillance, emerging pathogens, traceback of hazards, 
risk analysis and modeling, rapid methods of pathogen detection, 
antimicrobial resistance, methods of pathogen reduction, intervention 
strategies, mechanisms of pathogenicity and food toxicology.
    The goal of NAFS is to initiate food safety projects assuring the 
highest applicability to food safety problems and being of the highest 
scientific merit. The specific goals and objectives of the NAFS are to:
  --Meet the emerging food safety needs of industry in the areas of 
        food production, processing, transportation, retail and food 
        service;
  --Address global issues in food safety related to the international 
        marketing of U.S. agricultural products and enhance the safety 
        of foods imported into the United States;
  --Develop prevention and intervention strategies that will facilitate 
        the continued production of healthy animals and safe plant-
        derived foodstuffs;
  --Conduct research to enhance the safety of food products in the food 
        service and retail environment, including market distribution;
  --Communicate with the public regarding food safety research and 
        implementation of technology for food products from production 
        through the marketing chain to the consumer;
  --Develop a framework for improving risk assessment and risk 
        management information communication through a combination of 
        resources including health, medical and epidemiological 
        research programs;
  --Increase our understanding of pathogens in the environment and 
        food, including their prevalence, survival and adaptability 
        under various conditions, and emergence of virulent strains;
  --Address issues such as the role of food animals in the development 
        of antibiotic resistant human pathogens.
    NAFS is now functioning with the support of funds made available 
last year through ARS. Collaborators from several NAFS universities and 
ARS are responding to calls for new research initiatives. This support 
from Congress has been a vital first step in the life of NAFS. NAFS 
respectfully requests continued support from Congress so that it may 
expand its work to cover the many areas listed above.
    The National Alliance for Food Safety requests $5 million for 
fiscal year 2001. We strongly urge the Congress to approve this step 
toward the maturity of NAFS as a research organization as NAFS pursues 
its mission.
    The NAFS contains the necessary elements to avoid duplications of 
effort and to encourage well-organized teamwork. The Agricultural 
Research Service, working as a full partner, promises to be a valuable 
asset toward the success of NAFS. The members believe that their 
collaborations will result in a credible response to the congressional 
call for greater cooperation and elimination of redundancy in 
scientific research. The NAFS, with one of the most potent arrays of 
research institutions assembled toward achievement of a common goal, 
pledges continued careful and credible use of food-safety research 
funds allocated to the academic and government agency sectors.
                                 ______
                                 

PREPARED STATEMENT OF THE NATIONAL ASSOCIATION OF STATE UNIVERSITY AND 
                          LAND-GRANT COLLEGES

                              introduction
    From Alaska to Puerto Rico, scientists, educators and extension 
personnel in 106 Land-Grant colleges and universities across America 
have a unique partnership with the Department of Agriculture's 
Cooperative State Research, Education and Extension Service (USDA/
CSREES). This partnership makes it possible to address critical 
national issues at the local level. We are requesting an increase of 
$191 million over fiscal year 2000. Below is a table highlight the 
increased areas.

                        [In millions of dollars]

        Funding highlights
Base formula funds (Research and Extension).......................    50
National Extension Priorities.....................................    20
Native American and Hispanic Serving Institution funding..........     9
1890 Institution Facilities Improvements..........................     3
National Research Initiative......................................    30
Integrated Research, Extension, Education.........................    43
International Science and Education Grant Program.................     8
Extension and Research Initiatives................................    13
Investment in Students............................................    15
                                                                  ______
      Total proposed increases over fiscal year 2000..............   191

    With this investment, Land-Grant Institutions will be given the 
foundation to continue to make great strides in research and deliver 
important information from this research to the public. The following 
is divided into three sections. First, I describe the initiatives the 
Land-Grant System would like to continued from fiscal year 2000 not 
included in the above table. Second, I detail our goals within USDA/
CSREES as reflected in the table. Finally, I explain the issue areas 
that cross across two or more federal agencies that the land-grant 
community needs funding in order to become full partners in ongoing 
projects which are also reflected in the above table.

                              INITIATIVES

Initiative For Future Agriculture And Food Systems

    We envision a dynamic future agricultural science program to grow 
from the seed of this ``New Initiative'' into an exciting new 
``National Institutes of Agricultural Science model.'' This new 
approach will focus the nation's important scientific research, 
education and outreach into a unified architecture, similar to that 
performed by the NIH for the important human medical and other health 
related sciences. Currently, this funding is being used for research, 
extension or education grants to address critical emerging agricultural 
issues related to future food production, environmental protection, 
farm income and for activities carried out under the Alternative 
Agricultural Research and Commercialization Act of 1990. Priority is 
given to projects that are multi-state, multi-institutional, or 
multidisciplinary and to projects that integrate agricultural research, 
extension and education. Funds are awarded competitively to address 
priority mission areas related to food genome, food safety, food 
technology, human nutrition, new alternative uses and production of 
agricultural commodities and products, agricultural biotechnology, and 
natural resource management, including precision agriculture. We 
support continuation of this program in fiscal year 2001 at last year's 
level.

Fund For Rural America

    No one can ignore the economic realities found in rural America 
today. The Fund for Rural America includes a component that provides 
for integrated research, education and extension to address the most 
pressing issues of rural America. The fund unites the many rural 
development efforts of the department into one strategy aimed at 
addressing the most pressing needs in rural America and improving the 
quality of life for these citizens. This research and extension 
component of the program helps communities use science to solve real 
world rural challenges--from conservation to hunger to farm 
profitability. We support continuation of this program in fiscal year 
2001 at last year's level.

                  LAND GRANT ISSUES WITHIN USDA/CSREES

Investing in farmers and ranchers

    As discussed in the earlier section on ``Supporting partnerships to 
address national issues at the local level,'' there is a great need to 
invest in research and extension to assist all farmers and ranchers as 
they struggle through difficult economic times. Small and medium size 
farmers are facing some special challenges. Currently about 92 percent 
of American farms and ranches are classified as small or mid-sized with 
gross annual sales of less than $250,000. These operations account for 
approximately 34 percent of agricultural production. Small and mid-
sized operations support small communities, local businesses, and 
produce innovations for agricultural enterprises. We cannot allow these 
operations to fail. There is a real need for risk management education 
and options as decision-making tools for farmers, ranchers, and their 
families. Annual one-time support payments must be replaced with 
programs to develop longer-term planning and management skills. Efforts 
are underway to strengthen Extension's ability to provide risk 
management education to farmers and ranchers searching for answers 
during this farm crisis. In addition, we propose the Food and 
Agricultural Policy Research Institute (FAPRI) and its consortium of 
related universities, be established as a Policy Research Center as 
envisioned under Section 224 of the Agricultural Research, Extension, 
and Education Reform Act of 1998 and Section 807 of the FAIR Act. FAPRI 
delivers a product, which is used regularly on a national basis and 
provides Congress and other decision makers with high quality, 
carefully reviewed, objective policy analysis.

Investing in Food Safety

    In the U.S., 6.5 million cases of food-borne illness are reported 
each year, but the government estimates that there may be more than 33 
million actual cases. The annual domestic cost of food-borne illness is 
estimated at $23 billion. Safe food depends upon broad-based 
understanding of the causes of food-borne illness, paths to prevention, 
and commitment to preventive practices employed by producers, 
processors, handlers and consumers. Better methods for analyzing 
available data and addressing any uncertainty among the public is 
critically needed. Research examining risk assessment, new emerging 
diseases, safety of food imports, new processing techniques, research 
on the actual causes and prevention of food-borne illnesses as well as 
education on how to handle food will not only save lives, but also save 
money. We support sustained funding to identify the critical points of 
food contamination through targeted research, extension, and education 
programs.

Investing in Nutrition

    Capacity to learn and to contribute to society is traced directly 
to the quality of health and nutrition from prenatal status through 
adulthood. Assuring a healthy, well-nourished population required 
continuing efforts toward development of quality research information 
on nutrient function for maintenance of optimal health, understanding 
the availability and bio-availability of food for all population 
groups, especially those at greater risk for nutrition-related 
diseases, e.g., infants, elderly, new immigrant groups. Using foods to 
treat diseases is a major component of an active and progressive 
nutrition research program. Nutrition education incorporating this 
research is also needed. This education should include knowledge of how 
to secure foods to provide adequate nutrition to families with a 
commitment to dietary guidelines. Therefore, we support sustained 
funding for the Expanded Food and Nutrition Education Program.
Investing in the Environment
    EPA and USDA have recently developed a draft, ``Unified National 
Strategy for Animal Feeding Operations.'' In addition, federal 
legislation such as the Clean Water Act, state legislation and other 
administrative actions have addressed the issue of agricultural waste. 
There is an urgency to develop science-based practices and educational 
programs that address waste management challenges. Funding that allows 
universities to identify alternative technologies and practices for 
pesticide management, address water quality and soil nutrient 
management, and develop models of improved livestock waste management 
is vital and allows the Land-Grant University System, working with USDA 
and EPA, to make significant contributions.

Investing in Renewable Resources

    Between five million and ten million private timberland owners turn 
to the Land-Grant University System as their main source for education 
information. With the loss of cutting rights in the West, private 
forest landowners will be under tremendous pressure to produce forest 
products for houses, furniture, paper, ect. These are products 
Americans use daily and the demand increases steadily. Today, ten 
percent more timber is cut than grown. Education is needed to get 
landowners, particularly private landowners, to replant and protect 
their timber. The number of forest landowners increases each year; 
thus, the need for educational services increases. In order to protect 
our land and timber supply, we support significant increases to the 
Renewable Resources Extension Act.
    Also, research and extension education is needed on grazing and 
pasturelands to fully utilize their renewable resources. Each year we 
rely on over 600 million acres of grazing and pastureland to provide 57 
percent of the feed energy for the nation's single largest agricultural 
economic sector, livestock. Reduced cost of production is imperative 
for this industry to survive and compete. Fragmentation of once 
contiguous tracts of grazing and pasturelands, especially near urban 
and suburban settings, has increased the level of human disturbance; 
thus, amplifying the need for scientific solutions to biological, 
physical, and social issues.

Investing in Children, Youth and Families

    The strength of much of American agriculture depends upon the 
family and associated community life. Major changes in the structure of 
agriculture (including consolidations of concentration) are threatening 
the community systems that support families and make rural life 
attractive. The viability of American agriculture requires investment 
in those systems that sustain quality family life. These systems 
include viable communities, schools, medical services, childcare, 
technology and jobs, to name a few. The Cooperative Extension Service 
programs in Land-Grant Universities deliver community-based programs 
that are designed to help children and their families solve many of 
their own problems. Highly successful programs address parenting 
skills, building family strengths, community leadership development, 
health and nutrition education, workforce education, positive youth 
development and more. Strong continuing support of successful programs 
as well as new innovations are needed.

Investing in New Markets and Quality Communities

    Many Americans in both rural and urban communities continue to be 
significantly poorer, less healthy, and much more likely to suffer from 
the multiple challenges inherent in persistent economic, social, 
institutional, and equity capital in most rural communities and many 
urban centers. CSREES research, education and extension programs seek 
to enhance the quality of life in under-served communities through 
education and training (Quality Knowledge), research and development 
(Quality Information) and extension and outreach (Quality Place-Based 
Solutions to Local Real-World Challenges). Our goal is to build a 
bridge between rural and urban citizens and bring all Americans into 
the economic mainstream. To further the rural mission, the Land-Grant 
System proposes that the Rural Policy Research Institute (RUPRI) be 
funded as the National Rural Policy Research Institute through a new 
CSREES budget line item. This would provide RUPRI with the ongoing 
infrastructure to sustain and expand core operations and rural policy 
research capabilities. In addition, we propose an increase in funding 
to the four Regional Rural Development Centers throughout the country. 
These centers provide much needed research and education to decision 
makers in rural communities. Their services can address the changing 
economic infrastructure in rural America and facilitate leadership 
development programs for community leaders and elected officials that 
will help these public leaders address the difficult issues facing 
rural communities. Similarly, a major new investment is needed to 
address the economic and social infrastructure issues specific to 
impoverished urban and suburban populations to empower them to enter 
the mainstream of American life. Model research and extension programs 
currently addressing these urban problems need enhancement and 
replication across the nation.

                          CROSSCUTTING ISSUES

Investing in the 1890 and 1994 Land-Grant Institutions and other 
        minority serving colleges

    The 1890 and 1994 Land-Grant Universities, together with the 
Hispanic-Serving Institutions, comprise a unique and rich asset. These 
institutions with their multicultural depth enrich the research, 
extension and education programs of the Department. The focus on these 
institutions at this time is crucial. A primary goal of the Department 
is to improve minority access to USDA programs. Strengthening minority 
serving institutions and making them equal partners in the Land-Grant 
System are the key elements to accomplishing this goal. These 
universities need a significant boost in infrastructure investment to 
fully participate and compete for research, extension and education 
funding. Therefore, we are proposing a significant increase in the 
appropriate funding mechanisms relevant to each group of these 
institutions.

Supporting partnerships to address national issues at the local level

    The research, education and outreach that the Land-Grand System 
provides, should be an essential part of our response to the farm 
crisis. Emergency relief can help farmers in the short run, but in the 
long run, the diversity of our farm sector cannot survive without 
strong and unbiased research and development, produced and disseminated 
in a way that is accessible to producers on an unbiased basis. There 
are five areas in which the Land-Grant System can help farmers, 
ranchers and forest land owners succeed globally in the new century. 
These areas are: small farm competitiveness; marketing skills and 
technology; new product development; risk management education; and 
natural resource management. We strongly support increases in base 
funding for the Land-Grant System to continue and expand efforts to 
support farmers and ranchers.

Investing in students

    The changing structure of American agriculture in a global economy, 
the major and rapid advances in genomics and biotechnology, shortages 
of skilled labor, and the growing economic gap between small and mid-
sized farms and large corporate entities require important changes in 
education for those who produce and process food and fiber. Funding 
must be available to enable universities to broaden their curricula; 
promote faculty development; strengthen student research projects; and 
increase the number of new scholars, including minority graduate 
students, recruited in the food and agricultural sciences. Investing in 
higher education allows universities to build the human capacity to 
carry agricultural science in the next century.

Globalizing U.S. university agricultural teaching, research, and 
        extension programs

    Global forces are rapidly transforming U.S. agriculture. Several 
evident forms of this transformation are: (1) regional and world trade 
agreements which broaden access to U.S. food and fiber products to 
emerging and developing markets and which broaden access of 
agricultural products from other nations to U.S. markets; (2) global 
environmental changes which impact directly on production processes in 
the U.S.; (3) multinational investments in agricultural production in 
the U.S. and other nations; (4) the growing U.S. international 
agricultural labor force; and (5) the need to research and insure the 
safety of food, both domestic and imported. U.S. universities must 
teach agribusiness and producers of today and tomorrow to adjust to 
rapidly changing product, financial, and labor markets. They must 
access the best of new technologies and practices whatever their 
origin. This will require continued updating of international 
dimensions of teaching, research and extension programming.
                                 ______
                                 

PREPARED STATEMENT OF THE NATIONAL ASSOCIATION OF UNIVERSITY FISHERIES 
                         AND WILDLIFE PROGRAMS

    The National Association of University Fisheries And Wildlife 
Programs (NAUFWP) provides this statement on the proposed fiscal year 
2001 appropriations for the Cooperative State Research, Education and 
Extension Service (CSREES), U.S. Department of Agriculture.
    Fifty-four universities dealing with natural resources share 
membership in the NAUFWP. They seek to advance the science and practice 
of fisheries and wildlife ecology and management, and enhance public 
understanding and multiple benefits from natural resources.
    The NAUFWP recognizes that the research, education and extension 
programs of CSREES and its Land Grant University partners initiate 
positive changes in attitudes, and stimulate constructive actions to 
implement new technologies and ecologically sound approaches and 
practices by private landowners, resource managers, community decision-
makers, and other members of the public. Accumulated experiences show 
that investments of funds and time yield significant benefits to 
individuals, the States and the nation by building and sustaining a 
more viable and productive natural resource base, and a competitive and 
profitable agriculture.
    The pressing challenge is to have the CSREES/Land Grant System, 
with its credibility and delivery system, reach a larger portion of the 
10 million or more private landowners and managers who control more 
than two-thirds of the U.S. lands, or approximately 1.35 billion acres. 
Regrettably the proposed fiscal year 2001 budget for CSREES is far from 
adequate to help landowners and managers move toward achieving 
sustainable uses of the resource base. Only about 4 percent of the 
proposed fiscal year 2001 budget of $972,395,000 supports research and 
extension activities pertaining to forests, rangelands, fish and 
wildlife. This funding level is inadequate to respond to the public's 
concerns and demands to enhance stewardship and management of natural 
resources. Much greater investments and emphasis on proper uses of 
natural resources are needed to achieve a more sustainable society, 
thereby avoiding costly restoration.
    To strengthen essential efforts of CSREES, the NAUFWP strongly 
recommends that the following three priority adjustments and four 
additional adjustments be made in the proposed fiscal year 2001 budget.
    Priority 1.--That the Renewable Resources Extension Act (RREA) be 
funded at $15.0 million in fiscal year 2001. Demands for outreach 
services exceed currently funded capabilities (about $3.1 million). 
RREA funds, apportioned to the State Extension Services, effectively 
leverage cooperating partnerships at four to one. This proposed 
increase to $15.0 million would permit the Extension System to respond 
to more informational needs of private landowners, and thereby 
accomplish the goals and objectives outlined in its 1991-1995 Report To 
The Congress. Needs for expanded outreach services are greater than 
ever, as landownersbips become increasingly fragmented, as new and 
established landowners request more information, and as the general 
public demands natural resources be managed more carefully. The 
proposed increase to $15.0 million would enable the Extension Service 
to build its capabilities to assist more than 500,000 private 
landowners yearly to improve decision making and management on an 
additional estimated 35 million acres. Among the landowners and 
managers requiring assistance are the more than 10 million private, 
county and tribal landowners holding forestlands. Currently only a 
small percentage have a forest management plan.
    Priority 2.--That Smith-Lever 3 (b) & (c) funding be increased by 5 
percent to a level of $290,000,000, with the increase allocated to 
strengthening the Natural Resources And Environmental Management (NREM) 
base program. NAUFWP appreciates that 3 (b) & (c) base programs provide 
block grant type funds for Land Grant Universities to provide essential 
educational outreach based on local assessments of needs. The proposed 
increase in funds would enable NREM programs to develop a more 
realistic level of expertise at State and local levels to address 
resource and environmental issues directly affecting farmers, as well 
as other landowners, in rural and urban communities nationwide. 
Expressed needs for program expansion include such issues as forest 
management, wetlands maintenance and restoration, responses for 
declining and endangered species, and human/wildlife interactions. 
Likewise, urban and community forestry and other natural resource 
education efforts need strengthening, as called for in the 1990 FACT 
Act, to achieve sustainability of these critical resources. The 
proposed increase, targeted appropriately, would also help producers 
better understand and implement conservation provisions of the Farm 
Acts. It could also help strengthen the limited natural resources staff 
in CSREES, as well as at the Land Grant Universities, including the 
Black and Tribal institutions.
    The Congress should direct the State Cooperative Extension Services 
to partner with the State Fish And Wildlife Agencies, and other 
appropriate State and Federal agencies, conservation organizations and 
relevant private groups to meet demands for services. Extension 4-H 
Youth natural resource programs and projects continue to expand, with 
more than 1,350,000 young people presently enrolled, and needs are 
increasing for additional technical assistance nationwide.
    Priority 3.--That the water quality integrated activity be given at 
least 10 percent more funds than proposed for fiscal year 2001 
($16,204,000) to help correct the numerous and serious water quality 
situations in the U.S. and assist in preventing additional situations 
from developing. Only through the CSREES integrated research and 
extension water quality program can connections between agricultural 
practices and outbreaks of harmful algal blooms be understood and 
managed more effectively. Approaches are required to correct and 
prevent massive fish kills, human health problems and significant 
economic losses to the seafood industry.
    Priority 4.--That the Rangeland Research Grants (RRG) be restored 
to $500,000 in the fiscal year 2001 budget. No funds were provided in 
budgets for fiscal year 1998, 1999, 2000 and 2001. This is a major 
weakness in CSREES's budget. More than one-half of the U.S. land area 
is rangeland. Elimination of the only Federal competitive grants 
program for rangelands has serious implications for wildlife, 
watersheds, and other natural resources. Modest appropriations for RRG 
in the past have supported some of the most important rangeland 
research conducted in the past decade. Continued funding is needed to 
focus on wildlife issues on rangelands. They will be some of the more 
critical rangeland research problems in the next decade. This would 
help increase the interdisciplinary capacity of research and 
educational programs to help landowners accelerate adoption of habitat 
conservation and management recommendations for rangelands and forests. 
Only through such efforts can degraded rangelands and associated 
riparian areas be restored.
    Priority 5.--That an appropriate portion of the total proposed 
increased appropriation for Pest Management be dedicated to educational 
programs to prevent and control vertebrate pests in urban and rural 
communities. Agricultural producers and other private landowners and 
managers in many States have identified their needs to respond to their 
most significant problems, frequently involving vertebrate pests. 
Information and technical assistance are required. Targeting Pest 
Management funds for vertebrate pest research and educational programs 
would effectively advance the knowledge and capability of landowners 
and managers to significantly reduce the losses in these problem 
situations.
    Priority 6.--That Hatch funds be increased 11 percent to 
$200,000,000 and McIntire-Stennis funds be increased 14 percent to 
$25,000,000. Flat funding, as proposed for fiscal year 2001 for both 
Hatch and McIntire-Stennis, will not permit CSREES and the Land Grant 
Universities to provide services to the more than 10 million private 
landowners and managers. This assistance is needed to help them address 
their natural resource issues, which frequently also are concerns 
expressed by the general public. Greater cooperative research and 
extension efforts are required to address the erosion and degradation 
of the nation's natural resource base. The natural resource base and 
all of its functions and services must be conserved if agriculture 
productivity is to be sustained.
    Priority 7.--That the proposed increase in funds for the National 
Research Initiative competitive grants, especially those for natural 
resources and the environment, be granted. As stated above, greater 
efforts are required to address the erosion and degradation of the 
nation's resource base.
    In summary, the NAUFWP recommends that the following actions be 
taken on CSREES's proposed fiscal year 2001 budget:
  --Fund the RREA program at $15.0 million.
  --Increase the Smith-Lever 3 (b) & (c) base funds to $290,000,000.
  --Provide at least a 10 percent increase for the water quality 
        integrated activity.
  --Restore $500,000 for Rangeland Research Grants.
  --Designate an appropriate portion of the increased funds for Pest 
        Management to bolster research and education to address 
        vertebrate pest control and prevention in urban and rural 
        communities.
  --Increase Hatch funds to $200,000,000 and McIntire-Stennis funds to 
        $25,000,000.
  --Provide the proposed increase in funds for the National Research 
        Initiative competitive grants, especially those for natural 
        resources and the environment.
    Please include this statement in the official record on the fiscal 
year 2001 appropriations for CSREES, Department of Agriculture. Your 
positive response will be appreciated.
                                 ______
                                 

    PREPARED STATEMENT OF THE NATIONAL CONGRESS OF AMERICAN INDIANS

                              INTRODUCTION

    Good morning Chairman Cochran, Vice-Chairman Bumpers and 
distinguished members of the Appropriations Subcommittee on 
Agriculture, Rural Development and Related Agencies. Thank you for the 
opportunity to present testimony regarding the President's Budget 
Request for fiscal year 2001 Indian programs and services. My name is 
Susan Masten. I am President of the National Congress of American 
Indians (NCAI) and Chair of the Yurok Tribe of Northern California.
    The member tribal governments of NCAI are encouraged about this 
year's budget process. For the first time in a generation, the 
President has proposed a significant increase in the budget for 
programs that assist Indian people and Indian tribes. If preserved 
through the appropriations process, more than $1.2 billion more will be 
provided to Indian programs. This commitment will better serve Indian 
communities and take a big step toward honoring the Federal 
Government's treaty and trust obligations to Indian nations. The news 
is out in Indian Country: this year the President is committed to 
meeting the acute needs in our communities. We are going to work very 
hard to ensure that Congress shares that commitment.
    The last time the Federal Government enacted an increase of a 
similar scope to the President's fiscal year 2001 proposal, was in the 
mid-1970's, as a part of President Nixon's Tribal Self-Determination 
policy. Self-Determination has been and continues to be the most 
successful Federal policy toward Indian Nations ever in the history of 
the country. Under this policy, tribal governments have local control 
over programs and decision making on their reservations and have been 
able to fulfill needs and solve problems far more quickly and 
efficiently than through ``top-down'' Federal programs. Through 
experience with Self-Determination, a generation of financially astute 
and fiscally responsible tribal government leadership has learned to 
function as better managers and service providers in all manner of 
tribal government functioning and tribal business development.
    NCAI urges Congress to increase the investment in Indian programs 
and tribal government infrastructure. We believe that the President's 
fiscal year 2001 budget request has taken a positive step in that 
direction. The following testimony provides NCAI's viewpoint on 
sections of the budget that are most critical to tribal governments in 
the Department of Agriculture.

                       DEPARTMENT OF AGRICULTURE
 
   Being the most rural of any minority group, American Indians 
residing on reservations are for the most part, geographically 
isolated, resource-limited, and the least likely of any farm group to 
receive loans from the United States. Of the some 55 million acres of 
Indian lands, 47 million acres are used for the production of crops, 
livestock, or both. Those individual operators and farming tribes who 
produce these resources are in need of capital, more efficient 
administration of existing Federal programs, and technical assistance. 
This need extends to every farming tribe, even those who may have an 
abundance of other natural resources.

Programs Assisting Native Americans

    While the President's proposed fiscal year 2001 budget request for 
the Department of Agriculture is decreased overall by eight percent 
from fiscal year 2000, the President's funding request for Native 
American programs is increased by $90 million from fiscal year 2000, 
for a total of $784 million. NCAI greatly supports this request for 
increased funding, as it would: further the success of the numerous 
American Indian tribes engaged in cultivation of agricultural and 
community development; assure economic stability on Indian lands; and, 
facilitate the development of agri-business to help overcome economic, 
infrastructure, resource and geographic challenges, characteristic of 
Indian reservations.
    The commitment of the USDA to adequately fund line item programs 
that apply specifically to tribes and to programs that benefit tribes 
indirectly are both essential in order to enhance economic self-
sufficiency through rural development and rural based economies, and is 
further strengthened and safeguarded by the specific education 
initiatives of tribal colleges.

Native American Specific Programs

            Extension Indian Reservations Program

    Since 1990, the Extension Indian Reservation Program, authorized 
under the Food, Agriculture, Conservation and Trade Act, has been 
providing many services to Indian Country on issues ranging from crop 
and animal production practices to farm business management. It also 
has provided extension agents, employees of the State Cooperative 
Extension System, to work with tribal advisory committees in developing 
educational programs in agriculture or agriculture-related youth 
programs that respond to tribal priorities. Unfortunately, since 
funding began in 1990, the Extension Indian Reservation program has 
remained at $1.7 million, allowing support for about 26 projects in 15 
States. For fiscal year 2001, the President has requested $5 million, 
an increase of $3.3 million from the fiscal year 2000 level. NCAI 
strongly supports this increase for fiscal year 2001 in order for the 
program to hire additional extension agents on Indian reservations and 
to assist tribal governments in promoting productive and efficient land 
use on their reservations.

            Rural Development Native American Programs

    For fiscal year 2001, the President has requested $48.7 million, an 
increase of $36.7 million over the fiscal year 2000 enacted level for 
the Rural Development Native American Programs. Included in this 
request is funding specifically earmarked for: Water and Waste Disposal 
Direct Loans and Grants; Community Facility Loans and Grants; Rural 
Business Enterprise Grants; Rural Business Opportunity Grants; and, 
Intermediary Relending Program Loans.
    NCAI supports the funding request to the Rural Development Native 
American programs as it would provide more loans and grants to tribal 
governments to construct and improve their water and wastewater 
systems, construct community facilities such as health clinics and 
child care centers, and diversify and expand economic opportunities 
within their communities. These funds would also provide an appropriate 
step in advancing tribal economic development and the achievement of 
stable and self-sustaining reservation economies.
    Specifically, NCAI supports the following:
  --Water and Waste Disposal Direct Loans and Grants--the fiscal year 
        2001 budget request is $29.7 million, an increase of $17.7 
        million from fiscal year 2000. These loans and grants will 
        assist tribes in meeting the substantial need to improve the 
        quality of drinking water systems and waste water disposal 
        facilities on their reservations.
  --Community Facility Loans and Grants--for fiscal year 2001, the 
        President has requested $8 million for this new initiative 
        which would provide grants to tribes for infrastructure 
        development.
  --Rural Business Enterprise Grants--for fiscal year 2001, the 
        President has requested $6 million that would provide grants 
        for reservation small business.
  --Rural Business Opportunity Grants--for fiscal year 2001, the 
        President has requested $1 million for Rural Business 
        Enterprise Grants, as seed monies for start-up businesses on 
        reservations.
  --Intermediary Relending Program Loans--for fiscal year 2001, the 
        President has requested $4 million for this new program which 
        will provide loans for small business start up and expansion at 
        considerably lower interest rates than market rate.

            Food Distribution Program on Indian Reservations

    The Food Distribution Program on Indian Reservations (FDPIR) 
greatly benefits many Native Americans who live on and off Indian 
reservations. This program is administered by the Food & Nutrition 
Service (FNS), an agency of the U.S. Department of Agriculture, in 
cooperation with 98 Indian tribal organizations and six State agencies. 
The fiscal year 2001 budget for the FDPIR is $76.5 million, an increase 
of $1.5 million over the fiscal year 2000 enacted level. Although 
insignificant, this increase is crucial in order to provide commodity 
foods to low-income households, including the elderly Native American, 
living on reservations, and to Native American families residing in 
designated areas near reservations. Many Native Americans actually 
participate in the FDPIR, rather than the Food Stamp Program because of 
rural isolation and the lack of easy access to food stores. NCAI 
supports the appropriate funding increases to the FNS budget.

            Proposed Expansion of Empowerment Zones

    The proposed expansion of Empowerment Zones (EZs) will expand the 
wage credits and tax incentives, as well as facilitate a new round of 
urban EZs. These EZs will extend and improve economic growth in the 
thirty-one existing urban and rural EZs that are administered by the 
Department of Housing and Urban Development (HUD) and USDA, and support 
the proposed third round of ten new EZs to be designated in 2001. The 
total cost of these proposals will be $4.4 billion over ten years. NCAI 
supports the much needed expansion of EZs as it will provide 
economically depressed rural areas and communities, such as Indian 
communities, with real opportunities to create jobs, develop and 
enhance their communities, and diversify markets.

                               CONCLUSION

    Mr. Chairman, we urge the Congress to fulfill its fiduciary duty to 
American Indians and Alaska Natives and to uphold the trust 
responsibility, as well as preserve the Government-to-Government 
relationship with tribal governments, which includes the fulfillment of 
health, education and welfare needs of all Indian tribes in the United 
States. This responsibility should never be compromised or diminished 
because of any Congressional agenda or party platform. Tribes 
throughout the nation relinquished their lands as well as their rights 
to liberty and property in exchange for this trust responsibility. The 
President's fiscal year 2001 budget request acknowledges the fiduciary 
duty owed to tribes. We ask that the Congress maintain the Federal 
trust responsibility to Indian Country and continue to aid tribes on 
our journey toward self-sufficiency. Thank you for allowing me to 
present for the record the National Congress of American Indians' 
comments regarding the President's fiscal year 2001 budget request for 
the Department of Agriculture.
                                 ______
                                 

  PREPARED STATEMENT OF THE NATIONAL CONSORTIUM FOR RURAL GEOSPATIAL 
                              INNOVATIONS


    As your subcommittee prepares the fiscal year 2000 Agriculture, 
Rural Development and Related Agencies appropriations, we are 
requesting that you provide $2 million to support the Geographic System 
Information Program (GISP). We appreciate the support your subcommittee 
has provided our Program in the past. This Program has received funding 
from the Research and Education account of USDA's Cooperative State, 
Research, Education, and Extension Service (CSREES).
    The National Consortium for Rural Geospatial Innovations (RGIS) is 
a group of eight university and non-profit sites distributed across the 
U.S. With the support of the Geographic System Information Program, 
RGIS sites assist state, tribal, regional and local governments and 
non-and-for-profit organizations in implementing advanced geospatial 
information technologies. The last decade has seen an explosion of 
computer-based technologies for the creation and management and 
distribution of information about natural resources, property records, 
infrastructure, transportation, and other land use arenas. These 
technologies include geographic information systems (GIS), remote 
sensing image processing, global positioning systems (GPS) and other 
related information technologies. RGIS uses a variety of approaches to 
make these technologies understandable, affordable and useful.
    The mission of RGIS is to eliminate the digital divide facing rural 
America by promoting the transfer of geospatial technologies by:
  --Providing geospatial tools, technologies, and training to empower 
        local governments, organizations, and citizens to understand 
        and participate in decisions that affect their economy, quality 
        of life, and environment;
  --Educating and training a cadre of people to apply geospatial 
        technologies to rural issues;
  --Supporting the development of appropriate local land information 
        systems, as well as linkage to and cooperation with regional, 
        state, and national land information systems.
  --The goal of the program is to improve the quality of life, 
        environmental health, and economic competitiveness in rural 
        communities.
    RGIS members have proved that geospatial technologies are efficient 
and cost-effective tools to improve local decision-making and local 
governmental processes. RGIS members have enabled local communities to 
develop better information, which has allowed local communities to make 
better decisions on a variety of issues including farmland 
preservation, emergency services, watershed management, land records 
modernization, and environmental protection. Continued funding of the 
Program will allow the organization to continue these benefits and 
leverage other resources to improve the quality of life in rural 
America and insure these communities have access to cutting-edge 
technologies.
    This past year two new Chesapeake sites were added and supported by 
the Program. These sites brought the following strengths to the 
Consortium:
  --Wilkes University and Kings College in Pennsylvania brings 
        expertise in how to implement geospatial technologies among 
        rural local governments and engineering mapping skills for 
        comprehensive watershed planning.
  --Pennsylvania State University brings expertise in how to apply 
        geospatial technologies to assess agricultural quality for 
        rural land use planning and management and spatial analytic 
        methods for assessing the environment.
    This past year the other existing six sites contributed the 
following outcomes:
  --University of Wisconsin-Madison continues its extensive set of 
        geospatial outreach training programs, including hands-on land 
        use planning and management program for county and town level 
        planners. Selection by the Federal Geographic Data Committee 
        (FGDC) Community Demonstration Program has provided an 
        opportunity to assist local citizen planners access new land 
        use planning and management tools.
  --University of North Dakota continues to respond to the expanding 
        interest in geospatial technology by local governments. One of 
        the most rewarding developments has been the assistance 
        provided to the City of Grand Forks in the aftermath of the 
        1997 devastating flooding of the Red River.
  --University of Arkansas continues to provide local, state and 
        national leadership. Examples include providing geospatial 
        expertise to the Arkansas Land Records Modernization Board, GIS 
        training camps for local high schools, and assisting the NRCS 
        develop the capacity to transfer soils and orthophotography 
        information over the Web.
  --Central Washington University continues to support the 
        modernization of irrigation records used by water management 
        boards to insure equitable distribution of hydraulic resources 
        and continues to assist tribal and local rural communities 
        assess the role and use of geospatial technologies.
  --South Georgia Regional Development Center continues to assist local 
        governments modernize land record systems such as parcel 
        records for various applications including economic development 
        and infrastructure management.
  --Southwestern Indian Polytechnic Institute (SIPI) in its inaugural 
        Program year started a program to assist tribal communities 
        utilize GIS and GPS technologies for agricultural and local 
        land management applications. Also SIPI hosted a satellite 
        distance education geospatial program for 29 tribal colleges 
        across the U.S. Each RGIS Program Site participated by 
        providing a 15 minute technical segment to the 2 hr. satellite 
        program.
    Thank you for your consideration of this request. If you have any 
questions, please contact us at your convenience.
                                 ______
                                 

  PREPARED STATEMENT OF THE NATIONAL COOPERATIVE BUSINESS ASSOCIATION

               USDA RURAL COOPERATIVE DEVELOPMENT GRANTS

    Mr. Chairman, members of the committee, we appreciate the 
opportunity to present testimony as you prepare to consider 
appropriations for the Department of Agriculture for fiscal year 2001. 
I would like to discuss the Rural Cooperative Development Grants 
program. I urge you to appropriate $10 million for this valuable 
program that is offering real solutions to the daunting challenges 
being faced in rural America.
    The National Cooperative Business Association (NCBA) is proud of 
its role in assisting the creation of a network of rural cooperative 
development centers across the country. We know that Congress is 
equally as proud of its role in fostering a cooperative business 
development support network throughout rural America. Congress and this 
Administration recognize the vital role that cooperatives play in 
providing jobs, increasing incomes and reducing expenses for millions 
of rural Americans. NCBA is now also proud to be a member of 
CooperationWorks, a network of cooperative development centers and 
national partners dedicated to enhancing the capacity of centers and 
promoting co-op solutions to rural America's economic challenges.
    The Grants for Rural Cooperative Development program was originally 
authorized by section 2347 of the 1990 farm bill as a program of Grants 
for Technology Transfer and Cooperative Development. In fiscal year 
1993, this committee began to provide funding for the program, and 
report language over the years has indicated your strong support for 
the concept of using this funding for the purpose of creating a network 
of centers for rural cooperative business development. While the 
centers offer technical assistance, information and other resources for 
cooperative business formation, their network provides a vital support 
system for the centers to continue operating.
    NCBA's members, along with other supporters of cooperatives around 
the nation, joined together as the National Rural Cooperative 
Development Task Force to advocate for support for a national network 
of centers and to develop the linkages among the centers and between 
the centers and local partners to sustain the network's development. 
NCBA is now working with these regional centers that provide vital 
technical assistance and support for the development of cooperative 
enterprises in rural America.
    In 1996, Congress demonstrated its strong commitment to the centers 
approach when it passed the FAIR Act, also known as the 1996 farm bill. 
The program is now called Grants for Rural Cooperative Development in 
section 747(c)(4) of Public Law 104-127. The program focuses on 
supporting ``nonprofit institutions for the purpose of enabling the 
institutions to establish and operate centers for rural cooperative 
development.'' It is authorized to provide funding at $50 million per 
year. The revised statutory language defines the goals of these centers 
as ``facilitat[ing] the creation of jobs in rural areas through the 
development of new rural cooperatives, value added processing, and 
rural businesses.''
    With the support of funding received from the program over the past 
few years, the rural cooperative development centers have demonstrated 
quantifiable results. CooperationWorks centers have established more 
than 50 value-added cooperatives serving in excess of 5,000 members. 
These centers have created or saved 16,500 jobs in the communities they 
serve. They have assisted more than 400 local communities and 
organizations. The centers have raised the quality of technical 
assistance being provided on cooperative development, they have 
developed significant information-sharing capability among their 
network and created the first report of best practices in the field of 
cooperative development.
    This coming year, centers will be involved in replicating successes 
they have achieved and breaking new ground in areas where cooperative 
development is needed. As the farm crisis continues into another year, 
centers are working with farmers to get more of the consumer dollar and 
diversify their sources of revenue. Co-op development centers provide 
the necessary technical assistance to help farmers form value-added 
cooperatives. These cooperatives allow, as USDA Secretary Glickman has 
said, the tomato farmers to own the ketchup plant. Centers are helping 
farmers diversify their sources of revenue by assisting in the 
formation of forestry cooperatives. These co-ops are enabling farmers 
to turn unproductive woodlots on their property into another crop that 
provide income year after year.
    Other cooperative development projects include the formation of new 
consumer-owned energy purchasing cooperatives, child care cooperatives, 
and cooperative housing projects. New energy cooperatives are giving 
consumers the power to negotiate better prices on a broad range of 
energy products and services. Child care cooperatives provide former 
welfare recipients and other low-income people the opportunity to 
reduce the cost of child care and give them control over how their 
child care facilities are operated. Cooperative housing gives seniors 
and others in rural areas the chance to save money on their housing and 
live in safe communities.
    The President's budget includes $6 million for this program. This 
is a significant increase in funding from prior years, demonstrating 
the Administration's acknowledgement of the value of this program. 
USDA's National Commission on Small Farms recently recommended that 
this program be funded at $20 million annually. The Commission's report 
calls the program ``one of the few that supports rural cooperative 
development at the grassroots level.'' The program is authorized to be 
funded at $50 million annually.
    We urge this committee to do what over 130 organizations from 
around the country are urging Congress and the Administration to do: 
increase funding for this valuable program. Mr. Chairman, I ask that 
the letter signed by those organizations be included in the record of 
this hearing along with my testimony.
    NCBA is a national membership association representing 
cooperatives--over 120 million Americans and 47,000 businesses ranging 
in size from small buying clubs to businesses included in the Fortune 
500. NCBA's membership includes cooperatives in the fields of housing, 
health care, finance, insurance, child care, agricultural marketing and 
supply, rural utilities and consumer goods and services. NCBA brings 
its members together to create business opportunities and to develop, 
advance and to protect cooperative enterprise.

       INCREASE FUNDING FOR RURAL COOPERATIVE DEVELOPMENT GRANTS

    We, the undersigned organizations, urge Congress and the 
Administration to increase funding for the Rural Cooperative 
Development Grants program at USDA. The program has helped build 
capacity in a few rural cooperative development centers at its annual 
funding level. This program could be a driving force in federal efforts 
to spark an economic revitalization in rural America, but only if 
further funds are provided to meet the need. The program is authorized 
to be funded at $50 million annually.
    USDA's National Commission on Small Farms recommended that this 
program ``be increased by $10 million annually up to $20 million.'' The 
Commission's report calls the program ``one of the few that supports 
rural cooperative development at the grassroots level.''
    While dramatically changing economic forces are challenging rural 
Americans, this type of program is giving them the tools to shape their 
own future. We ask for your commitment to growing this program to serve 
all of rural America.
    Ag Processing, Inc., Omaha, NE; AgriBank, St. Paul, MN; Agri-
Business Institute at Mississippi State University, Mississippi State, 
MS; Agri-Mark, Inc., Lawrence, MA; Agricultural Council of California; 
Alaska Village Initiatives, Anchorage, AK; Alcorn State University 
Cooperative Extension Program, Alcorn, MS; Amalgamated Bank of New 
York, New York, NY; Antigo Co-op Credit Union, Antigo, WI; Appalbanc, 
Berea, KY; Arkansas Wood Manufacturers Association; Basin Electric 
Power Cooperative, Bismarck, ND; Blooming Prairie Cooperative 
Warehouse, Iowa City, IA; California Association of Cooperatives; Cass 
County Electric Cooperative, Fargo, ND; Cattlemen's Texas Longhorn 
Registry, Animas, NM; Center for Rural Affairs, Walthill, NE; Center 
for Rural Pennsylvania, Harrisburg, PA; Central Appalachian Peoples 
Federal Credit Union, Berea, KY; Chicot County Governor's 
Collaborative, Lake Village, AR; CoBank, Denver, CO; Colorado 
Cooperative Council; Commodity Growers Cooperative, Lexington, KY; 
Consumer Federation of America; Co/op Optical, Detroit, MI; Cooperative 
Council of North Carolina; Cooperative Development Foundation, 
Washington, DC; Cooperative Development Institute, Greenfield, MA; 
Cooperative Development Services, Madison, WI; The Cooperative 
Foundation, St. Paul, MN; Cooperative Resources International, Shawano, 
WI; Co-opportunity, Inc., Hartford, CT; Coordinated Housing Services, 
New York, NY; Coordinating Council of Cooperatives, New York, NY; 
Countrymark Cooperative, Indianapolis, IN; Credit Union National 
Association; Darby Enterprises, Inc., Alexandria, VA; Denver Buffalo 
Company, Denver, CO; East Kentucky Power Cooperative, Winchester, KY; 
Economic Development Center of Henderson State University, Arkadelphia, 
AR; Equity Cooperative, Amery, WI; Farm Credit Council; Farmland 
Industries, Inc., Kansas City, MO; Federation of Ohio River 
Cooperatives, Columbus, OH; Federation of New York Housing 
Cooperatives, New York, NY; Federation of Southern Cooperatives, 
Atlanta, GA; First Rochdale Group, New York, NY; FoodService Purchasing 
Cooperative, Louisville, KY; Freeh Enterprises, St. Paul, MN; Frenkel & 
Company, Inc., New York, NY; Grassroots Citizens Awareness Network, New 
Haven, CT; Group Health Cooperative of Puget Sound, Seattle, WA; 
Hamilton Farm Bureau Cooperative, Hamilton, MI; Homestead Housing 
Center, Inver Grove Heights, MN; Humane Society of the United States; 
Intertribal Agriculture Council, Billings, MT; Iowa Institute for 
Cooperatives; Kansas Cooperative Council; Kansas Farmers Service 
Association, Hutchinson, KS; Keystone Cooperative Development Center 
(Pennsylvania); Land O'Lakes, Arden Hills, MN; Michigan Alliance of 
Cooperatives; Minnesota Association of Cooperatives; Mississippi 
Association of Cooperatives; Mountain View Harvest Cooperative, 
Longmont, CO; MultiPlan, Inc., New York, NY; Mutual Service Insurance, 
St. Paul, MN; National Association of Development Organizations; 
National Association of Federal Credit Unions; National Association of 
Housing Cooperatives; National Catholic Rural Life Conference, Des 
Moines, IA; National Center for Appropriate Technology, Butte, MT and 
Fayetteville, AR; National Congress for Community Economic Development; 
National Cooperative Bank; National Cooperative Business Association; 
National Family Farm Coalition; National Farmers Union; National 
Federation of Community Development Credit Unions; National Grange; 
National Grape Co-operative Association (Welch's), Westfield, NY; 
National Network of Centers for Cooperative Development; National Rural 
Electric Cooperative Association; National Rural Telecommunications 
Cooperative, Herndon, VA; National Rural Utilities Cooperative Finance 
Corporation; National Telephone Cooperative Association; Nationwide 
Insurance Enterprise, Columbus, OH; Nebraska Cooperative Council; New 
Hampshire Electric Cooperative, Plymouth, NH; New Pioneer Cooperative 
Society, Iowa City, IA; North American Bison Cooperative, New Rockford, 
ND; North American Students of Cooperation, Ann Arbor, MI; Northcountry 
Cooperative Development Fund, Minneapolis, MN; North Dakota Association 
of Rural Electric Cooperatives; North Dakota Farm Bureau, Bismarck, ND; 
North Dakota State Department of Agriculture; Northeast Cooperative 
Council, Ithaca, NY; Northeast Cooperatives, Brattleboro, VT; North 
Farm Cooperative, Madison, WI; Northwest Cooperative Federation, 
Seattle, WA; Ocean Beach People's Food Co-op, San Diego, CA; Ohio 
Council of Cooperatives; Oneota Community Co-op, Decorah, IA; Ozark 
Cooperative Warehouse, Fayetteville, AR; Park Forest Cooperative Area 
J, Park Forest, IL; Peer Marketing Associates, Inc., Ramsey, NJ; 
Pennsylvania Association for Sustainable Agriculture; Pennsylvania 
Council of Cooperatives; Pennsylvania Credit Union League; Pennsylvania 
Farmers Union; People's Food Co-op, La Crosse, WI; Public Voice for 
Food and Health Policy; Puget Consumers Cooperative, Seattle, WA; Puget 
Sound Development Foundation, Seattle, WA; QuipNet, Inc., Blue Springs, 
MO; Ranchers Choice Cooperative, Antonitos, CO; Rocky Mountain Farmers 
Union, Aurora, CO; Rural Coalition; Rural Wisconsin Health Cooperative, 
Sauk City, WI; St. Mary's Bank, Manchester, NH; St. Paul Bank for 
Cooperatives, St. Paul, MN; Skagit Valley Food Co-op, Mt. Vernon, WA; 
Sustainable Agriculture Coalition; Texas Agricultural Cooperative 
Council; Tucson Cooperative Warehouse, Tucson, AZ; United Housing 
Foundation, New York, NY; United Methodist Church, General Board of 
Church & Society; University of California Center for Cooperatives, 
Davis, CA; University of Texas Inter-Cooperative Council, Austin, TX; 
University of Wisconsin Center for Cooperatives, Madison, WI; 
Washington State Council of Farmer Cooperatives; Washington State Rural 
Electric Cooperative Association; Washington Electric Cooperative, East 
Montpelier, VT; Wheatsville Food Cooperative, Austin, TX; Whole Foods 
Cooperative Association, Erie, PA; Wildcat Creek Farms, Inc., Payne, 
OH; Williamson Street Grocery Cooperative, Madison, WI; Winrock 
International, Morrilton, AR; Wisconsin Federation of Cooperatives; 
Wisconsin Federation of Farm Credit Services, Appleton, WI and Wit & 
Company, Ltd., Decatur, IL
                                 ______
                                 

      PREPARED STATEMENT OF THE NATIONAL CORN GROWERS ASSOCIATION

    The National Corn Growers Association (NCGA) appreciates the 
opportunity to provide the Subcommittee with our recommendations for 
fiscal year 2001 appropriations for key programs administered by the 
U.S. Department of Agriculture. The NCGA represents 30,000 corn growers 
in 48 states and the association's mission is to create and increase 
opportunities for corn growers in a changing world and to enhance corn 
utilization and profitability.
    The NCGA, strongly, urges the Subcommittee to:
  --Increase the ARS plant, animal, and microbial genomics programs by, 
        at least, the $4.7 million requested in the Administration's 
        budget;
  --Increase funding for the National Plant Germplasm System by $20 
        million; and
  --Provide funding for the Initiative for Future Agriculture and Food 
        Systems.
    While many federal agricultural programs are important to the 
nation's corn growers, NCGA believes that the future of the corn 
industry is written in corn's genetic code and that plant genomics will 
give us the fundamental information necessary to revolutionize American 
agriculture. Plant genomics research advances our understanding of the 
structure, organization and function of plant genomes.
    Since 1996, funding for plant genomics has been the number one 
appropriations issue for the NCGA. The Plant Genome Initiative (PGI), a 
multi-agency program focused on structural and functional genomics, 
will help scientists, geneticists, and plant breeders identify and 
utilize genes (from corn and other plants) that control important 
traits, such as nutritional value, stress tolerance, and resistance to 
pests. In a recently published report, the Interagency Working Group on 
Plant Genomes, estimated that $500 million, over three years (fiscal 
year 2000-2002) was needed for the National PGI. While the NSF will 
provide a significant level of funding for the PGI, USDA must increase 
its plant genomics funding, substantially, if we are to meet the 
minimum level of need. Further, USDA must begin a concerted effort in 
animal and microbial genomics.
    For the fiscal year 2001 agricultural appropriations bill, the NCGA 
supports the Administration's budget request for an increase of $4.7 
million for plant, animal, microbial, and insect genomics at the 
Agricultural Research Service (ARS). We believe, however, that this 
amount should be increased, substantially, to ensure that the ARS has 
sufficient resources to participate fully in the advances in genomics 
research. The NCGA, also, urges the Subcommittee to provide funding for 
the Initiative for Future Agriculture and Food Systems so that a major 
portion of the funds will be used for a comprehensive plant, animal, 
and microbial genomics competitive grants program that is coordinated 
with the ARS, NSF, and DOE.
    To take full advantage of the plant genomics revolution, diverse 
plant germplasm must be available for crop breeders to develop the 
varieties necessary to meet the changing circumstances and needs of the 
future. The USDA National Plant Germplasm System (NPGS)--
  --Acquires germplasm;
  --Develops and documents information on the germplasm;
  --Preserves and distributes germplasm upon request; and
  --Maintains quarantine facilities for testing imported germplasm.
    Funding for the NPGS has declined by more than 14 percent, in 
constant dollars, since 1992, while demands on the system have 
increased. The NSF-funded plant genome research program will increase, 
tremendously, the amount of genetic stocks for the NPGS to manage. For 
example, one maize grant will generate, at least, 50,000 new maize 
genetic stocks, doubling the size of the NPGS maize stock center. 
Comparable situations will exist for several other economically 
important crops as well. Without a significant increase in funding, the 
NPGS will not be able to manage current stocks, much less the increased 
stocks that are being generated through genomics research.
    The NPGS must obtain a significant increase in funding over the 
next few years to ensure that diverse genetic resources are available 
to provide growers with hybrids and varieties that will address the 
challenges of the future. It is critical that these resources be 
maintained at the public level for continued accessibility to all 
scientists and breeders. The NCGA believes that the NPGS is a 
fundamental, strategic resource. The NCGA urges the Subcommittee to 
provide a $20 million increase for the National Plant Germplasm System.
    Advances in basic plant science that result from a vigorous plant 
genomics program and a strong, viable National Plant Germplasm System 
will allow us to create new hybrids and varieties that will--
  --Improve human and animal health;
  --Reduce medical costs due to more nutritious, healthier, food for 
        individuals;
  --Reduce worldwide malnutrition through higher yielding and more 
        nutritious crops;
  --Reduce environmental problems for crop and livestock growers;
  --Expand plant-based renewable resources for chemicals and energy; 
        and
  --Allow growers to get more income from the market and reduce grower 
        reliance on Federal farm programs.
    The National Plant Genome Initiative and the National Plant 
Germplasm System are critical to the long-term viability of U.S. 
agriculture. The NCGA, strongly, urges Congress to provide increased 
funding for plant, animal, and microbial genomics research and to 
provide an increase of $20 million for the National Plant Germplasm 
System to ensure that our growers have the tools to meet the challenges 
and demands of the 21st century.
    Thank you for your consideration of our views.
                                 ______
                                 

   PREPARED STATEMENT OF THE NATIONAL COUNCIL OF FARMER COOPERATIVES

    The National Council of Farmer Cooperatives (NCFC) appreciates this 
opportunity to share its views regarding the fiscal year 2001 
agriculture appropriations bill, and respectfully requests this 
statement be made a part of the official hearing record.

                            OVERVIEW OF NCFC

    NCFC is a national trade association representing nearly 100 
regional marketing, supply and credit cooperatives, and state councils. 
Included among these regional cooperatives are over 3,500 local 
cooperatives whose farmer-owners represent a majority of America's 
nearly 2 million individual farmers. These farmer-owned cooperative 
businesses are engaged in virtually every facet of agriculture. This 
includes handling, processing, marketing and exporting of U.S.-produced 
agricultural commodities and related products; the manufacture, 
distribution and sale of farm supplies; and the providing of credit and 
related financial services, including export financing for and on 
behalf of their farmer owners.

                   IMPORTANCE OF FARMER COOPERATIVES

    For farmers, such cooperative self-help efforts provide the 
opportunity to reduce risks, capitalize on market opportunities and 
earn a greater return on their productivity and investment. Earnings 
derived from such business are returned to the cooperative's farmer 
owners on a patronage basis, which also helps contribute to local and 
regional economic activity as well as the national economy. Another 
important contribution is reflected in the fact these farmer-owned 
cooperative businesses also employ nearly 300,000 people (full and 
part-time) with a combined payroll of approximately $6.8 billion. Many 
of these jobs are in rural areas where employment opportunities are 
sometimes limited.

  NEED FOR PUBLIC POLICIES THAT PROMOTE COOPERATIVE SELF-HELP EFFORTS

    Current economic conditions, together with the rapid changes taking 
place throughout the global economy, underscore the need for policies 
and programs to strengthen the ability of farmers to join together in 
cooperative self-help efforts to: (1) better manage the risks and 
uncertainty inherent in production agriculture; (2) capitalize on new 
market opportunities, including moving more into value-added production 
and processing; and (3) compete more successfully in a global 
marketplace still characterized by subsidized foreign competition. Such 
initiatives would help maintain and create needed jobs in communities 
throughout rural America.

         SUPPORT FOR USDA'S RURAL BUSINESS-COOPERATIVE SERVICE

    We urge that funding and staffing be strengthened for USDA's 
Cooperative Services unit within the Rural Business-Cooperative Service 
(RBS) to ensure that it is fully able to carry out its historical 
mission as mandated by Congress in support of farmer cooperatives. It 
should be noted that funding for such programs is currently included in 
amounts made available for salaries and expenses in the RBS mission 
area. Providing specific funding for programs administered by 
Cooperative Services for research, education and technical assistance 
in support of farmer cooperatives would enhance program continuity and 
promote longer term planning.
    Specifically, we recommend that not less than $5 million be made 
available to RBS's Cooperative Services unit for carrying out such 
programs relating to farmer cooperatives. Funding for cooperative 
research agreements should also be strengthened with the objective of 
further assisting farmers in joining together in cooperative self-help 
efforts. Such action would encourage and promote research, education 
and technical assistance that would benefit farmers and their 
cooperatives.

          COMMODITY PURCHASE PROGRAMS AND FARMER COOPERATIVES

    We also want to express our strong support for maintaining both the 
statutory provisions and report language included in the fiscal year 
2000 agriculture appropriations bill to ensure that farmer cooperatives 
are fully eligible to participate in USDA's commodity purchase 
programs. Such programs serve two important purposes. One, they help 
meet the food and nutrition needs of consumers. Two, they provide an 
important market outlet for farmers, especially during periods of 
surplus production, thereby helping strengthen farm income and 
promoting orderly marketing.
    However, under previous guidelines established by USDA, this 
important market was eliminated for many farmers choosing to 
cooperatively market their products. The provision in the fiscal year 
2000 agriculture appropriations bill addresses this by clearly 
providing that farmer cooperatives are fully eligible to participate in 
such programs for and on behalf of their farmer owners.
    In doing so, it preserves an important market outlet for many 
farmers, promotes orderly marketing, encourages cooperative self-help 
efforts, and helps maintain and strengthen farm income--since proceeds 
from the sale of commodities and related products are returned to the 
cooperatives' farmer owners as patronage income. It also serves to 
increase the potential quantity and quality of commodities and related 
products available for purchase and use under such programs, and 
provides for more competitive bidding among participants. Finally, it 
helps contribute to stronger rural communities where farmer 
cooperatives and their farmer owners are located.

                     CROP INSURANCE/RISK MANAGEMENT

    We continue to urge support for policies and programs that provide 
an expanded role and opportunity for farmers through their cooperatives 
and associations to join together to purchase or obtain crop insurance 
on a more affordable and competitive basis. We believe such action 
would also help encourage program participation, improve the current 
delivery system, strengthen private sector involvement, and further 
encourage cooperative self-help efforts. In support of such action, we 
believe USDA should be encouraged to provide for full and effective 
participation by farmer cooperatives for the benefit of their farmer 
members.

                            EXPORT PROGRAMS

    We strongly urge support for USDA's export programs, including the 
Market Access Program (MAP) and Foreign Market Development (FMD) 
Cooperator Program, and we endorse the recommendations of the Coalition 
to Promote U.S. Agricultural Exports of which NCFC is a member. Such 
programs have been tremendously successful and extremely cost-effective 
in helping maintain and expand U.S. agricultural exports, countering 
subsidized foreign competition, protecting American jobs and 
strengthening farm income.
    Programs such as MAP and FMD have also helped encourage and 
strengthen the ability of farmers to join together in cooperative 
efforts to promote their products in overseas markets and improve their 
income. Administered on a cost-share basis, they remain one of the few 
tools specifically allowed under the Uruguay Round Agreement to help 
American agriculture and American workers remain competitive in a 
global marketplace still characterized by subsidized foreign 
competition.
    According to a USDA study, the European Union (EU) and other 
foreign competitors are now outspending the U.S. by a factor of 20 to 1 
with regard to the use of export subsidies and other expenditures for 
export promotion. The same study shows that such countries are spending 
over $100 million just to promote sales of their products in the United 
States. In other words, they are spending more to promote agricultural 
exports to the United States, than the U.S. is currently spending ($90 
million) to promote American agricultural exports worldwide! Equally 
alarming, USDA now reports that based on 1999 figures, the U.S. for the 
first time has become a net importer of agriculture products with 
regard to the European Union.
    Clearly, aggressive action is needed. We urge support for increased 
funding for MAP and other export programs, and ensuring that such 
programs are fully and aggressively utilized. Since MAP was originally 
authorized, funding has been gradually reduced from a high of $200 
million to its current level of $90 million--a reduction of more than 
50 percent. Again, given what our foreign trade competitors are doing, 
we believe it's time to restore funding for this vitally important 
program up to its original level.
    We also urge continued funding for other related USDA export 
programs, including the Export Enhancement Program (EEP), Dairy Export 
Incentive Program (DEIP), GSM Export Credit Guarantee Program, and 
Public Law 480. All of these programs continue to be essential to help 
encourage U.S. agriculture exports, counter subsidized foreign 
competition, protect American jobs, and strengthen farm income.

                         AGRICULTURAL RESEARCH

    Another important area of emphasis when it comes to enhancing the 
global competitiveness of farmer cooperatives and American agriculture 
is research. It is equally important to help ensure that farmer 
cooperatives and American agriculture can continue to help provide 
consumers at home and abroad with a dependable supply of safe, high 
quality food and fiber at reasonable prices, while meeting important 
environmental and food safety objectives.
    This includes recognition of the need to help farmers, their 
cooperatives, and others engaged in agriculture meet the goals and 
requirements of such statutes as the Food Quality Protection Act 
(FQPA), the Clean Water Act (CWA), the Safe Drinking Water Act (SDWA) 
and the Clean Air Act (CAA), among others. To help meet these 
challenges, we believe every effort should be made to maintain and 
strengthen the highly successful public-private partnership involving 
USDA, the land grant universities and colleges, and the private sector. 
This includes providing needed funding at the federal level through 
USDA and ensuring that such funding helps achieve the important 
objectives outlined above.

                           CONSERVATION/EQIP

    We strongly support continued funding for the Conservation Reserve 
Program (CRP), as well as restoring funding for the Environmental 
Quality Incentives Program (EQIP), as recommended in the 
Administration's budget. Such programs are necessary to help achieve 
and maximize water quality and other environmental benefits.
    The CRP and EQIP programs in particular are critical to empowering 
farmers to continue voluntary efforts to respond to societal 
expectations and demands with regard to water quality and help protect 
our natural resource base.
    Adequate funding for the Natural Resource Conservation Service 
(NRCS) technical assistance capability is critical to farmers and 
cooperatives working to address water quality and other conservation 
and environmental challenges.

                   CROP PROTECTION/PESTICIDE PROGRAMS

    The Administration's budget request includes funds for Integrated 
Pest Management (IPM) programs and IR-4 program to collect and analyze 
data on pesticide residues through the Pesticide Data Program (PDP). We 
endorse the views of: (1) the Food Quality Protection Act-
Implementation Working Group (FQPA-IWG) of which NCFC is a steering 
committee member, and (2) the Minor Crop Farmer Alliance (MCFA) of 
which NCFC is an executive committee member. USDA's role in this 
process is critical if FQPA is to be implemented as intended by 
Congress.
    We believe USDA is uniquely qualified to (a) gather and provide 
data to the EPA regarding pesticide use and dietary consumption 
patterns, and (b) to provide information about crop protection needs 
and efficacious and affordable alternatives. USDA has statutory 
obligations to carry out regarding minor use pesticides pursuant to 
FQPA, including establishment of a minor use office to facilitate 
grower efforts to provide information needed to maintain or develop 
label uses.
    Clearly, USDA has an essential role to play in working with EPA 
regarding implementation of FQPA to ensure that food and agricultural 
policy considerations are taken into account. For these reasons, we 
strongly urge that adequate funding be provided to ensure that it has 
the necessary resources to carry out such responsibilities.

                       MEAT INSPECTION/USER FEES

    We continue to be opposed to user fees relating to Food Safety and 
Inspection Service (FSIS) for meat inspection. Such inspection programs 
provide important public benefits relating to food safety and quality 
and should continue to be publicly funded. The imposition of new user 
fees, to the extent that such fees could not be passed on to consumers, 
would impose an additional cost burden on farmer cooperatives and their 
farmer members, and reduce farm income. Again, in recognition of the 
public benefits of such programs and the need to maintain confidence in 
the safety and quality of such products, the federal government should 
maintain its historic role.

                               CONCLUSION

    Mr. Chairman, on behalf of NCFC and its members, we want to again 
thank you for the opportunity to share our views with regard to the 
fiscal year 2001 agriculture appropriations bill. We also wish to take 
this opportunity to express our appreciation to you and the members of 
the Subcommittee for your interest and support of farmer cooperatives 
and American agriculture.
                                 ______
                                 

PREPARED STATEMENT OF THE NATIONAL COMMODITY SUPPLEMENTAL FOOD PROGRAM 
                              ASSOCIATION

    Mr. Chairman and subcommittee members, I am Barb Packett, President 
of the National Commodity Supplemental Food Program (CSFP) Association. 
Our Association of state and local CSFP operators work diligently with 
the Department of Agriculture Food, Nutrition, and Consumer Service to 
insure a quality supplemental nutrition assistance commodity food 
package program for senior men and women, and mothers, infants, and 
children. The program, which was authorized in 1969, serves 436,000 
individuals every month in 24 states and the District of Columbia.
    This 30 year old CSFP program stands as testimony to the power of 
partnerships between community-based organizations, private industry 
and government agencies. The CSFP offers a unique combination of 
advantages unparalleled by any other food assistance program:
  --The CSFP specifically targets our nation's most vulnerable 
        populations: the very young and the very old.
  --The CSFP provides a monthly selection of foods specifically 
        tailored to the nutritional needs of the population we serve. 
        Each eligible participant in the program is guaranteed [by law] 
        a certain level of nutritional assistance every month.
  --The CSFP purchases foods at wholesale prices, which amounts to one-
        third the cost it would be to provide the same supplemental 
        nutrients at retail voucher cost. The average food package cost 
        for fiscal year 2000 is $15.71 and retail would be at least 
        $55.
  --The CSFP involves the entire community in the problems of hunger 
        and poverty. Thousands of volunteers as well as many private 
        companies donate money, equipment, and most importantly time to 
        deliver food to homebound seniors. These volunteers not only 
        bring food but companionship and other assistance to seniors 
        who might have no other source of support.
  --For these historical reasons I would like to submit the National 
        CSFP Association legislative issues and a report of our 1999 
        survey of monthly volunteer labor hours to support our 
        requests.
    Chairman Cochran, the committee has consistently been helpful with 
funding support for our very prudent way of providing nutritional 
supplements to the seniors and mothers and children. Please help us 
continue.

 COMMODITY SUPPLEMENTAL FOOD PROGRAM (CSFP) LEGISLATIVE ISSUES FISCAL 
                               YEAR 2001

    Position.--The CSFP Association recommends an appropriation of $110 
million for FFY 2001. This would increase the budget figure of $93.3 
million. The increase is necessary for:
  --Additional caseload requests
  --Adjustment for state/local funding
    Justification.--CSFP is a very effective food delivery system. 
According to USDA-FNS the average cost of a food package is $16. The 
average retail value of those foods distributed by grassroots community 
organizations is $50-$60. Our 1999 survey of monthly volunteer labor 
hours shows we have at least $641,312 a month donated to stretch 
support funding for the program.
  --Expansion requests and restoration requests for caseload total 
        37,488 more than fiscal year 2000. This will support existing 
        programs and the five new states of Mississippi, Montana, Ohio, 
        Texas and Vermont.
  --The President's budget includes $7 million in food inventory for 
        program support. The mix of food inventory and funds would 
        effectively reduce state/local support funds by $1.4 million 
        (-7 percent) due to computation on funds not total program 
        assets.
    Position.--With the aging of America, CSFP should be an integral 
part of USDA Senior Nutrition Policy. This is the most cost-effective 
way to provide the nutrient rich foods low-income seniors are lacking.
    Justification.--The advantages of CSFP include:
  --The food package for seniors is nutritionally balanced.
  --Supplemental nutrition is proven to reduce public health care 
        costs.
  --Nutrition education and health referrals are provided.
  --Food is distributed through community and faith based 
        organizations, familiar to many seniors.
  --Seniors resist participation in programs such as food stamps, but 
        readily access commodity programs.
  --CSFP requires a means test that assures participants are truly 
        needy.
  --Actual food is provided to those who need it most.
  --CSFP supports United States farmers.
  --Program operators utilize volunteers and other in-kind donations to 
        reach homebound seniors.
  --The retail value of each food package is approximately $55.00 while 
        the USDA blended cost per food package is $15.71.

                              NATIONAL COMMODITY SUPPLEMENTAL FOOD PROGRAM (CSFP) SURVEY--1999 MONTHLY VOLUNTEER LABOR DATA
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                Fixed                  Mobile                 Volunteer                Volunteer    Dollar      Square
                    State                       Sites   Participants    Sites   Participants    Sites    Participants    Hours      Value       Miles
--------------------------------------------------------------------------------------------------------------------------------------------------------
New Hampshire................................        3         2,084        83         4,586         37           790      4,078    $58,315        9,304
New York.....................................        8        41,066        99         5,594  .........  ............        142      2,031        3,300
Wash. D.C....................................        5         7,089         5           723         17         2,396        739     10,568           63
Kentucky.....................................        1         4,800  ........  ............         16           850        600      8,580          750
North Carolina...............................        1         1,087         8           239  .........  ............         75      1,073          500
Tennessee \1\................................        4        14,324         3         4,400  .........  ............  .........  .........        1,850
Illinois.....................................       13        12,417  ........  ............         75         3,801        940     13,442          956
Michigan \1\.................................       61        45,943       267        49,611        417        12,525     10,160    145,288       58,527
Red Lake, MN \1\.............................        1           325  ........  ............  .........  ............  .........  .........      ( \2\ )
Minnesota \1\................................        2         2,822        83         5,994  .........  ............        504      7,207       84,068
Louisiana....................................       10        10,754        35        25,797        251        37,197      5,352     76,534       27,928
New Mexico...................................        3        10,402        38         5,640         20           845      1,014     14,500       42,181
Colorado.....................................       10        18,022       431         4,872         15           699      9,107    130,230       28,040
Iowa.........................................        1         2,669        44         1,039         79           667        390      5,577        3,590
Kansas.......................................       12         3,474        75         2,225         56           884      1,570     22,451       11,975
Nebraska.....................................       24         8,918        56         2,835         89         2,461      2,079     29,730       74,866
South Dakota.................................        2           470         5           140  .........  ............  .........  .........      ( \2\ )
Arizona......................................       98        17,705         6           800          1            95      3,576     51,137       80,000
California...................................  .......  ............        36        26,341         81         4,980      4,400     62,920        1,007
Oregon.......................................        1           852         3            96  .........  ............        121      1,730          435
                                              ----------------------------------------------------------------------------------------------------------
      TOTALS.................................      260       205,223     1,277       140,932      1,154        68,190     44,847    641,312      429,340

--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Figures are approximate; taken from Spring/Summer 1999, in a survey conducted by the National CSFP Association. (figures are from 1998).
\2\ Reservation.

FIXED SITE: Foods are warehoused and participants travel to the site and take food packages back to their homes. Distributed to participants by paid
  staff.
MOBILE SITE: Distribution where foods are transported to a facility (not warehoused) and distributed to participants by paid staff.
VOLUNTEER SITE: Location where distribution of prepacked foods is performed by volunteer groups or individuals.

                                 ______
                                 

         PREPARED STATEMENT OF THE NATIONAL FISHERIES INSTITUTE

    As the subcommittee begins it consideration of the Administration's 
budget submission and fiscal year 2001 appropriations, the National 
Fisheries Institute (NFI) would like to take this opportunity to share 
with you our priorities and concerns regarding the budget proposal for 
the Food and Drug Administration (FDA). The NFI is the nation's leading 
trade association for the fish and seafood industry. Our members 
represent all aspects of the fish and seafood industry: harvesters, 
aquaculturalists, processors, importers, exporters, food service 
operators, and restaurants. The NFI appreciates your consideration of 
these requests.

                      FOOD AND DRUG ADMINISTRATION

Consolidating Seafood Inspections

    The fiscal year 2001 FDA budget proposes for the second year in a 
row that $13 million in user fees be collected by transferring the 
Department of Commerce (USDC) Voluntary Seafood Inspection Program to 
the FDA as a Performance-Based Organization. The NFI opposes this 
transfer. We feel it is inappropriate to combine the voluntary 
marketing and quality assurance program of the USDC with the mandatory 
seafood HACCP program at the FDA. As suggested by the National Academy 
of Sciences, such a combination could create conflicts of interest that 
would under-mine the objectivity and credibility of FDA's seafood HACCP 
program. The NFI is particularly concerned about the proposal to 
``cross-deputize'' voluntary inspectors as HACCP inspectors. If the FDA 
needs FTEs to adequately staff its mandatory inspection program, it 
should seek the funding for them. The NFI pioneered seafood HACCP and 
cannot support any proposal that would weaken this program. We urge you 
to oppose this proposal.

Improving FDA's Infrastructure

    The NFI strongly supports the proposal for $43 million over two 
years (including $20 million in fiscal year 2001) to replace the 
dilapidated Los Angeles regional laboratory facility. Expected benefits 
from construction of the new Los Angeles laboratory include providing a 
much safer location and a vastly improved working environment for FDA 
and partnering state laboratory personnel, having a concentration of 
scientific talent available which will permit better management of the 
analytical workload and will provide significant improvement in 
operational efficiency. Also, better analytical coverage will be 
provided during emergencies. Additional benefits include a more 
efficient use of costly analytical equipment and better-equipped 
laboratories in a state-of-the-art facility, resulting in improved 
turn-around time and sampling efficiency. The existing facility which 
processes 23 percent of the FDA's food analyses each year, has exceeded 
its limitations and is currently unable to provide these services in a 
timely and efficient manner. The NFI urges the subcommittee to full 
fund this budget proposal.
    At the same time, we are concerned about the ongoing degradation of 
services from the FDA's seafood laboratory in Seattle, WA. The FDA must 
have an adequate research capability to provide scientific data and 
information necessary to implement its inspection program based on 
sound science. This lab provides extremely valuable analytical services 
to the fish and seafood industry. Staff and funding cuts have 
undermined the capability of this facility to deliver scientific 
information on emerging food safety questions. We urge the subcommittee 
to direct the FDA to maintain the services of the Seattle seafood 
laboratory.

User Fees

    The NFI strongly opposes the proposal to impose user fees on food 
additive petitions ($8.4 million) and food export certifications ($5.3 
million). With regard to food additive petitions, these petitions are 
required in order to protect public health from potentially dangerous 
or otherwise inappropriate food additives. The primary beneficiary is 
the public. In addition, a perceived conflict of interest could arise 
if consumers thought the industry was paying the FDA to approve food 
additives. With regard to export certificates, our trading partners, 
most notably the European Union, rely on FDA's export certifications as 
an objective and credible verification of the safety of exported food 
products. Imposing a User Fee on this system could undermine their 
confidence in the independence of the certifications, hurting our fish 
and seafood exports that already trail seafood imports by $5 billion 
per year. We urge you to oppose these proposals.

Equivalency Agreements

    More than 60 percent of the more than 4 billion pounds of seafood 
consumed by Americans is imported. Under the current FDA HACCP program, 
importers must demonstrate HACCP compliance by their foreign suppliers. 
NFI member companies strive to acquire verification documentation and 
other assurances that their imports have been processed under HACCP 
systems. The FDA further assures compliance with port-of-entry 
sampling. However, this sampling and testing system is reactive and 
subject to resource limitations. One way to substantially improve our 
confidence in the food safety inspection systems of our foreign 
suppliers is throughout the establishment of agreements between the FDA 
and our major trading partners. The fiscal year 2000 FDA budget 
proposal indicated that the FDA was working to improve the safety and 
sanitation of imported seafood by establishing equivalency agreements 
to ensure that exporting countries have seafood inspection systems 
equivalent to those of the U.S. The FDA's equivalency program is 
consistent with provisions of the General Agreement on Tariffs and 
Trade (GATT) where participating countries agreed to accept products 
made under equivalent systems. In fiscal year 2000, the FDA was to have 
reviewed submissions from numerous countries and the European Union. In 
addition, the FDA was to visit 6 countries, including Australia, 
Canada, Chile, Iceland, New Zealand, and the E.U.
    Despite the rhetorical commitment to equivalency agreements, not a 
single agreement has been signed. We urge the subcommittee to direct 
the FDA the prioritize equivalency agreements.

Compliance Visits

    The FDA conducts HACCP compliance visits to key nations that supply 
fish and seafood to the United States. The visits allow the FDA to 
evaluate the capabilities of government inspection programs and 
individual processing plants to meet U.S. HACCP requirements. These 
visits augment the verification efforts of the U.S. seafood importing 
community and help ensure that overall safety of imported fish and 
seafood products. In addition, the information gathered during these 
visits can be used to improve port of entry inspection by targeting 
risk entries. Despite recent increases in the number of countries 
inspected by the FDA, we feel additional visits are warranted. We urge 
the subcommittee to direct the FDA to continue to increase the number 
of compliance visits it is conducting on an annual basis.

                  USDA--AGRICULTURAL RESEARCH SERVICE

    The NFI is deeply concerned about a proposed $2.5 million cut to 
the aquaculture/fish farming research being conducted at ARS research 
stations in Alabama, Connecticut, Hawaii, Idaho, Mississippi, and West 
Virginia. The proposed cuts are in the areas of fish health management 
(such as vaccine development), registration of drugs and chemicals to 
combat serious diseases, least-cost fish feed formulations, genetic 
fish stock improvements, catfish, and cool and cold water fish 
production technology.
    The ARS has done much to focus research programs over the last 
decade and provide needed research results to the aquaculture 
community. With world population continuing to grow, and wild harvest 
of fish and seafood reaching its maximum potential, aquaculture will 
play an increasingly important role in providing lost-cost, healthful 
protein to all peoples. Without a strong commitment to aquaculture 
research and development, the United States will find other nations 
taking the leadership role in aquaculture development. We urge the 
subcommittee to oppose these cuts. The NFI appreciates the opportunity 
to submit these requests with regard to the fiscal year 2001 FDA 
budget. Thank you for your consideration of these requests.
                                 ______
                                 

     PREPARED STATEMENT OF THE NATIONAL FOOD PROCESSORS ASSOCIATION

    Mr. Chairman, my name is John Cady, Chairman and CEO of the 
National Food Processors Association (NFPA), and today I am submitting 
testimony on behalf of NFPA. NFPA is the nation's largest food trade 
association representing a $460 billion industry that includes an 
estimated 20,000 manufacturing facilities and employees over 1.5 
million Americans. With three laboratory centers, NFPA is the leading 
authority on scientific and public policy issues involving food science 
and safety for the food industry. For more than 90 years, the food 
industry has relied on NFPA for government and regulatory affairs 
representation, scientific research, technical services, education, 
communications, and crisis management.
    NFPA was formed at a time when it was necessary to enhance public 
confidence in food safety, and we are proud of our contributions to 
further enhancing the safety of our nation's food supply. NFPA enjoys 
many partnerships with federal and state food safety regulatory 
authorities, and we are committed to ensuring that these same 
authorities are well equipped to protect public health and instill 
confidence among consumers about the safety of the food products they 
consume.
    NFPA is particularly supportive of providing an adequate level of 
funding for the Food and Drug Administration (FDA) and the Department 
of Agriculture's Food Safety and Inspection Service (FSIS). While 
several federal agencies have responsibility for food safety and 
quality programs, the FDA and FSIS share the primary responsibility for 
food regulation.

                               USER FEES

    The President's fiscal year 2001 Budget proposes new user fees--
more appropriately described as regulatory taxes--which require food 
companies to pay for the privilege of being regulated. The fiscal year 
2001 request proposes nearly $550 million in such user fees--$530 
million for the FSIS and $13 million for the FDA's food regulation 
program. NFPA appreciates that the Committee repeatedly has rejected 
these proposals in past Administration budget requests, and recommends 
again that funding of food safety and regulation programs should be 
borne through appropriated funds.
    Proposed user fees on the food industry are hidden taxes whose 
costs would be borne both by producers and eventually consumers in 
higher food prices. Furthermore, funding regulatory programs through 
taxes raised from the industry would only serve to undermine public 
confidence in the independent judgment of either FDA or the FSIS. We 
urge the Committee to reject these user fee proposals.

                         FOOD SAFETY INITIATIVE

    NFPA appreciates the continued emphasis that Congress has placed on 
food safety through its funding for the Food Safety Initiative for FDA, 
USDA, and the Centers for Disease Control (CDC) in fiscal years fiscal 
year 1998 through 2000. The fiscal year 2001 request represents the 
fourth year of the Initiative, and we endorse most aspects of the 
Initiative's request, particularly those areas that emphasize research, 
risk assessment, education and surveillance. We request, however, that 
the Committee remain vigilant in its oversight to ensure that 
appropriated funds for food safety programs are deployed in a manner 
commensurate with relative food safety risks.

        FOOD AND DRUG ADMINISTRATION'S FOOD REGULATORY PROGRAMS

    NFPA supports the requested level of funding for FDA's food 
regulation activities, but recommends, to the extent funds are provided 
that priority be given to those areas of research, risk assessment, 
education and surveillance. Such priority setting will ensure that 
limited resources will be targeted toward foodborne illness problems 
that pose the greatest risks. In addition, we support FDA's 
infrastructure request for funding to administer the transfer of the 
Center for Food Safety and Applied Nutrition (CFSAN) to College Park, 
Maryland and to construct a new regional laboratory in Los Angeles, 
California.
    We also urge the Committee to protect funding for food science base 
activities at CFSAN. While CFSAN has benefited from funding increases 
in recent years, much of these increases have been absorbed by a 
combination of dedicated funding for regulatory initiatives, and staff 
salary increases and cost-of-living adjustments. This ``crowding out'' 
effect appears to have contributed to a slow, but steady, erosion in 
FDA's ability to preserve its food science base. The continued decline 
of FDA's scientific base can only imperil FDA's long-term capabilities 
to respond rapidly and authoritatively to emerging scientific and 
policy challenges that grow increasingly complex. We urge the Committee 
to explore with FDA opportunities to support the integrity of CFSAN's 
scientific capabilities.

      FURTHER REFORMS NEEDED AT FOOD SAFETY AND INSPECTION SERVICE

    NFPA supports adequate resources for the FSIS, but is concerned 
with reports of personnel management practices that have led to 
inspector shortages and resulting plant slowdowns or work stoppages in 
meat and poultry establishments. We urge the Committee to review this 
problem to ensure the availability of inspection personnel via either 
additional resources or management reforms, including alternative 
inspection procedures.
    NFPA supports the transition to a HACCP-based inspection system, 
but notes that FSIS pledges to remove inspection regulations that are 
inconsistent with HACCP have not been fully realized. We urge the 
Committee to ensure that unnecessary layers of regulation are promptly 
removed to speed HACCP implementation.
    NFPA notes with approval the announced plan of FSIS to move toward 
daily, unscheduled processing inspection in 2001. NFPA agrees that 
daily, unscheduled processing inspection can free up appropriated funds 
to address inspection shortages or other, greater relative food safety 
risks. NFPA believes, however, that without arbitrary requirements for 
frequency of inspection, unscheduled inspection in processing 
establishments could yield even greater benefits. NFPA urges the 
Committee to direct FSIS to explore methods of further maximizing this 
flexible approach.
    NFPA also recognizes the lead role that FSIS plays in overseeing 
the work of the U.S. Manager for Codex Alimentarius. NFPA strongly 
supports the fiscal year 2001 requested increase of $1 million for FSIS 
Codex activities, and requests the Committee to providing an even 
higher level of funding for this important function. Codex remains a 
critically important forum for ensuring United States leadership in 
international food safety activities.

                               CONCLUSION

    In conclusion, NFPA is grateful for the important funding oversight 
that the Committee provides to ensure the integrity of U.S. food safety 
regulation. The food industry endeavors to produce the safest and 
highest quality food products in the world. As a result, NFPA 
understands that adequate funding for our nation's food safety 
regulators through direct appropriations is fundamental to good public 
health, and to maintaining the confidence of consumers in the safety of 
the food supply. NFPA appreciates the opportunity to submit testimony 
on the President's fiscal year 2001 food safety budget request.
                                 ______
                                 

     PREPARED STATEMENT OF THE NATIONAL GRAIN AND FEED ASSOCIATION

    Chairman Cochran, Senator Kohl, and members of the subcommittee, 
the NGFA is grateful for this opportunity to submit testimony on 
Government aid to producers during this time of low commodity prices.
    The National Grain and Feed Association (NGFA) consists of more 
than 1,000 grain, feed, processing and grain-related companies that 
operate 5,000 facilities that store, handle, merchandise, mill, process 
and export more than two-thirds of all U.S. grains and oilseeds. About 
70 percent of NGFA members are small businesses--country elevators and 
feed mills. Also affiliated with the NGFA are 37 State and regional 
agribusiness associations.

       PRICES ARE LOW, BUT NOW IS NOT THE TIME TO MOVE BACKWARDS

    As everyone knows, prices for farm commodities are low, and 
according to recent baseline estimates released by the USDA and others, 
are likely to see only slow increases over the next two years, barring 
significant weather and crop production problems. This situation has 
resulted in calls for a return to the failed policies of the past as a 
way of artificially increasing crop prices. It is our opinion that the 
results of such a decision would be disruptive to the long-term 
prospects of the rural economy. Short-term blips in the market caused 
by recession or depression in large country economies or in major 
sections of the world can cause economic adjustment challenges, but 
should not form the basis for major shifts in policy direction. Instead 
of going backwards, and losing the progress the U.S. has made in 
recapturing its market share, Congress should search for new ways of 
increasing producer competitiveness and security through innovative, 
flexible farm policy.

     AN EXPANDED CONSERVATION RESERVE PROGRAM IS COUNTER-PRODUCTIVE

    On numerous occasions Government officials have told American 
producers that the key to future prosperity was through exports, and 
making inroads into rapidly developing overseas markets. The FAIR Act 
of 1996 was a strong step toward restructuring American agriculture to 
better compete in this new environment. One of the major changes the 
Act wrought was ending annual acreage-reduction programs such as the 
ARP, and shifting the focus of the Conservation Reserve Program (CRP) 
from supply control to conservation and environmental purposes. USDA 
leadership has been outspoken on this point, with Secretary Glickman 
stating on numerous occasions that the CRP would not be used by this 
administration for supply control purposes.
    In its fiscal year 2001 budget request, however, the administration 
has reversed course by supporting an increase in the CRP's statutory 
acreage cap to 40 million acres. In addition, several bills are pending 
before the Agriculture Committees in Congress that would increase the 
cap. Unfortunately, the goal of this activity seems to be to once again 
use the CRP as a supply control tool in response to low commodity 
prices. We believe such a dramatic policy shift will result in longterm 
harm to the rural economy for the following reasons:
  --Acreage idling in the U.S. has consistently failed to raise 
        commodity prices for producers over any appreciable length of 
        time;
  --Acreage idling results in increased foreign production acreage; and
  --Increased foreign production results in reduced market share for 
        U.S. producers at a time when global consumption is increasing.
    Thus, acreage idling tends to both diminish farm income prospects 
earned through commercial markets and increases farmers' dependence on 
Government for more subsidies.

World commodity consumption will continue to grow

    There has been a sharp increase in global consumption of 
commodities over the past twenty years. The following table shows the 
percentage of growth in global grain and oilseed consumption:

Growth in Consumption, 1980-1999

                                                                 Percent
Rice..............................................................   +40
Wheat.............................................................   +32
Feed grains.......................................................   +19
Oilseeds..........................................................   +94

    This trend is expected to continue. Most agricultural forecasts 
call for a steady growth in grain, oilseed and meat consumption. With 
world population expected to near 10 billion people by the year 2050, 
global expansion in food markets over the long term is readily 
predictable. Over the next ten years, global consumption of foodstuffs 
will rise as developing nations in Asia and Latin America experience 
strong economic growth. Improving personal income and affluence will 
result in increasing demands for more and better quality foods, markets 
that American producers can take full advantage of. They can't, 
however, compete for these markets if they are hamstrung by an 
artificial reduction in their production capacity.

Acreage idling fails to increase commodity prices

    The following analysis uses a 5-year average of grains and oilseeds 
acreage in millions of hectares around the 1980 (1978-1992) and the 
1990 (1988-1992) crop years. It was during the time between these crop 
years that the U.S. acreage-idling programs were at their peaks.

----------------------------------------------------------------------------------------------------------------
                                                                                     Non-U.S.
                                                                   U.S. hectares     hectares     World hectares
----------------------------------------------------------------------------------------------------------------
1978-1982.......................................................         106,691         741,011         847,702
1988-1992.......................................................          92,027         757,375         849,202
                                                                 -----------------------------------------------
      Change....................................................         -14,664         +16,364          +1,700
      Percent...................................................           (-14)          (+2.2)  ..............
----------------------------------------------------------------------------------------------------------------

Acreage Idling Price Impact:
    Corn................................................   1980=$3.10 pb
                                                           1990=$2.35 pb
    Wheat...............................................   1980=$4.00 pb
                                                           1990=$3.00 pb
    Soybeans............................................   1980=$7.60 pb
                                                           1990=$5.90 pb

    This is only one example of how the past policy of idling large 
tracts of productive farmland did nothing to increase prices. In fact, 
it cost U.S. farmers valuable revenue as foreign producers easily 
filled the void.

Acreage idling increases foreign production acres

    Overall, world production acreage has increased to take advantage 
of the growth in consumption. Following the ineffective and misguided 
embargo of grain and food trade with the former Soviet Union, the U.S. 
chose a policy regime of high loan rates and heavy reliance on acreage 
idling. From 1980 to 1995, the period of heaviest idling, the U.S. 
shrank its production base while other nations more than replaced the 
acreage that the U.S. unilaterally gave up:

Grains and Oilseeds Acreage Changes, 1980-1995

                         [In millions of acres]

U.S...............................................................   -33
Foreign...........................................................   +49

    Foreign production of grains continued to grow; world consumption 
continued to grow; the only economic factor that shrank was U.S. 
acreage and our ability to compete for growing markets. Consequently, 
U.S. market share of global grains and oilseeds markets declined 
precipitously from nearly 27 percent to less than 21 percent. The U.S. 
gave up tremendous market share during this period of heavy acreage 
idling.
    There is another adverse effect of increasing the CRP: the 
Government essentially becomes another competitor against farm 
operators for productive land. If land in a certain area is rented by 
the Government, the rate that the CRP payments for that land are set at 
become a de facto price floor for rent prices of non-CRP land in the 
area. As one producer from Washington State recently told Secretary 
Glickman, ``Farmers, especially young farmers, cant compete with the 
CRP lease rate. You're forcing young farmers off the land!'' An 
expansive CRP would further tighten already thin farming margins.
    As stated above, one of the most important provisions of the FAIR 
Act was to shift the focus of the CRP toward environmental and 
conservation purposes. A return to expanded use of CRP for supply 
control purposes will have a predictable and disastrous effect on long-
term market growth and farm income prospects.

         CROP INSURANCE, RISK MANAGEMENT, AND GOVERNMENT'S ROLE

    Instead of acreage idling, Congress should continue to examine 
alternative means of aiding producers during times of low prices. One 
alternative is crop insurance, and Congress has been debating this 
issue for over a year. While crop insurance is a vital piece of the 
risk management puzzle, we would urge Government to keep the following 
points in mind:
  --Crop insurance, cash forward contracts, futures/options and 
        agricultural trade options all are useful (or potentially 
        useful) products. But none of these products, standing alone, 
        is a ``complete'' risk-management tool; each should be 
        evaluated by the farmer on its merits and whether it benefits 
        individual operations. To encourage the private sector to make 
        more risk-management tools available to farmers, Government 
        should ensure that policies support all these tools. One policy 
        change that should be pursued quickly is to establish a 
        reasonable regulatory framework for agricultural trade options 
        to permit that tool to come into more common usage.
  --Government should carefully consider what practical limits should 
        be placed on the subsidization of crop insurance. Excessive 
        subsidies for crop insurance can lead to: (1) excessive 
        commodity supplies causing depressed prices (a recent study 
        indicates excess supplies of 3 percent may be created by the 
        current subsidy structure); (2) disincentives for using other, 
        more efficient, tools for risk management; (3) distortions in 
        market signals guiding farmers' production/marketing decisions; 
        and (4) programs favoring certain types of farmers and regions 
        of the country. If properly limited and structured, crop 
        insurance subsidies can lead to prudent use of production and 
        yield risk-management tools that will also further encourage 
        sound marketing and pricing strategies for crops. [See also 
        item #5 of this section.]
  --The Government should exercise extreme caution in subsidizing 
        price-insurance tools particularly price insurance tools that 
        replicate or offer similar features to existing futures-based 
        or cash-based products. There is a substantial risk that 
        Government subsidization of insurance-type products could 
        ``crowd out'' non-subsidized market-based products, resulting 
        in less efficient markets, excessive taxpayer expenses and 
        ultimately rewarding poor management practices. Options traded 
        on futures exchanges, by providing price protection for a fixed 
        premium, function much like insurance and subsidization of 
        competitive products is counter-productive.
  --The Government should consider a more neutral system of incentives 
        for risk management to enhance accessibility of risk-management 
        alternatives to more farmers. There is no single set of risk-
        management tools that are ``right'' for the farmer. In some 
        cases, crop insurance ``works'' for the farmer; in other cases 
        the farmer is better off to self-insure. As for forward 
        contracting, the farmer may be more comfortable using certain 
        forms of contracts over others.
      The role of Government should be to encourage farmers' use of 
        tools that are of greatest value to his/her individual 
        operation. To avoid creating distorted incentives in the 
        marketplace directed at certain categories of risk-management 
        tools, one policy concept would be to permit current crop 
        insurance subsidies to be ``portable.'' For example, if the 
        producer evaluated the subsidized crop insurance product and 
        decided it was not a prudent investment, a portability feature 
        would permit the farmer to take the subsidy embedded in the 
        insurance and apply it to the investment cost of other risk-
        management tools. Such portability could be applied to all or a 
        portion of the embedded subsidy. The ultimate goal would be to 
        enhance accessibility and make more affordable a wide variety 
        of risk-management tools. In this regard, the NGFA is 
        supportive of the concept of ``multi-option'' risk management 
        incorporated in S. 1666.
  --Government policies should be designed to encourage farmers to 
        begin marketing earlier in the production cycle. The longer a 
        producer delays selling or actively pursuing a marketing plan, 
        the fewer days remain in which a favorable pricing opportunity 
        may occur. Producers realistically can market a single crop 
        over a span of two or more years, starting a year or more prior 
        to harvest. Among policies that would encourage earlier 
        marketing are: (1) Purchasing crop insurance that can provide 
        the assurance of minimum yields; and (2) A viable program of 
        agricultural trade options, which would provide an early 
        pricing opportunity while permitting the farmer the option to 
        ``walk-away'' (not deliver) on contract in the event of crop 
        failure or another event. Examples of policies that discourage 
        early marketing are: (1) subsidization of on-farm storage, 
        which tends to lead to a ``wait-and-see'' marketing strategy; 
        (2) extended loan programs, which provide a longer ``tail'' to 
        the marketing period but also may take away from early season 
        strategies because the producer knows he/she has the 
        opportunity to extend the marketing period; and (3) farmer-
        owned reserve programs, which function largely like a long-term 
        extended loan program. Such programs also tend to build overall 
        stock levels that overhang the market and depress farm prices 
        for long periods.
    As the debate continues over how best to support producers during 
stressful economic times, we would urge Congress to craft policies that 
provide improved support without creating marketplace distortion.
                                 ______
                                 

           PREPARED STATEMENT OF THE NATIONAL POTATO COUNCIL

    My name is Todd Michael. I am a potato farmer from Ohio and current 
Vice President, Legislative/Government Affairs for the National Potato 
Council (NPC). On behalf of the NPC, we thank you for your attention to 
the needs of our potato growers.
    The NPC is the only trade association representing commercial 
growers in 50 states. Our growers produce both seed potatoes and 
potatoes for consumption in a variety of forms. Annual production in 
1997 was 465,800,000 cwt with a farm value of $2,402,000,000. Total 
value is substantially increased through processing. The potato crop 
clearly has a positive impact on the U.S. economy.
    The potato is the most popular of all vegetables grown and consumed 
in the United States and one of the most popular in the world. Annual 
per capita consumption was 142.1 pounds in 1997 up from 107 pounds in 
1962 and is increasing due to the advent of new products and heightened 
public awareness of the potato's excellent nutritional value. Potatoes 
are considered a stable consumer commodity and an integral, delicious 
component of the American diet.
    The National Potato Council's fiscal year 2001 appropriations 
priorities are as follows:
Cooperative State Research Education and Extension Service (CSREES)
    Special Grant Program.--The NPC urges that $1.5 million be 
appropriated for the special research grant program. The Congress 
increased the level in fiscal year 2000 by $50,000 to $1.35 million. 
However, that increase was lost due to the across-the-board cuts.
    The NPC also urges that the Congress, once again, include report 
Committee language as follows:

          ``Potato research.--The Committee expects the Department to 
        ensure that funds provided to CSREES for potato research are 
        utilized for varietal development testing. Further, these funds 
        are to be awarded competitively after review by the Potato 
        Industry Working Group.''

Agricultural Research Service (ARS)--Facilities

    Prosser, Washington.--Oppose the Administration's fiscal year 2001 
budget request that $191,000 for potato research be terminated and 
assure that full amount appropriated by the Congress in fiscal year 
2000 is utilized by the ARS at Prosser.
    Orono, Maine.--Oppose the Administration's fiscal year 2001 budget 
request that $230,000 for potato research be terminated and assure that 
the full amount appropriated in fiscal year 2000 is utilized by the ARS 
at Orono. Support the Administration's fiscal year 2001 budget request 
for an increase of $300,000 for Integrated Sciences for Ecological 
Challenges.
    Beltsville, Maryland.--Improving the nutritional value of potatoes 
is a high priority of the NPC. Research should be initiated at the 
Beltsville Vegetable Laboratory that combines traditional breeding and 
plant biotechnology to increase the nutritional value of the potato and 
add value to the crop. Estimated cost would be $300,000 for fiscal year 
2001.
    Albany, California.--Dr. William Belknap in Albany has been funded 
by ARS, with the support of the NPC, to develop genetic constructs for 
potato transformation that will be publicly available without patent 
restrictions on their use. His laboratory should serve as a source of 
reagents for use by ARS scientists and others who work in the public 
sector. Estimated cost of providing this service is an additional 
$100,000 in fiscal year 2001 for Dr. Belknap's base budget.
    Fort Collins, Colorado.--Support the budget request for $300,000 
for the Soil, Plant, Nutrient Research Program to conduct research to 
enhance water and soil quality with precision conservation farming.
    Aberdeen, Idaho.--Appropriate $3 million for the construction of an 
advanced molecular genetics laboratory at the National Small Grains 
Germplasm Research Facility. This facility is needed to assure the 
continuation of advanced molecular genetics research for potatoes and 
small grains.
    Committee Report Language.--The NPC urges that the Congress once 
again add Committee report language urging the ARS to work with the NPC 
on how overall research funds can best be utilized for grower 
priorities.
    Yakima Agricultural Research Laboratory, Wapato, Washington: 
``Potato research at the Yakima Agricultural Research Laboratory. The 
Committee expects the Department to ensure that funds provided to the 
Yakima Agricultural Research Laboratory for potato research are fully 
utilized for potato research equivalent to 2.15 F.T.E. of Research 
Entomologist effort, as directed by the ARS National Program Staff. 
These 2.15 F.T.E. are to be distributed among a maximum of four 
Research Entomologists. Further, this research is to be conducted 
without dependence on, but may be supplemented by, local extramural 
financial support.''

Plant Protection and Quarantine Service (APHIS-USDA)

    The NPC urges that the Congress appropriate $580,000 for the Golden 
Nematode Quarantine Program, which amount is the fiscal year 2001 
budget request. The National Potato Council also supports the 
appropriation of $100 million for the Agriculture Quarantine Inspection 
(AQI) user fee account, and the fiscal year 2001 budget request for AQI 
appropriated funds, for sanitary/phytosanitary (SPS) management and for 
pest surveillance and detection.

FQPA Funding

    Finally, the NPC also supports the Administration's budget request 
for funds to meet the data requirements of the new Food Quality 
Protection Act, (FQPA). The NPC has devoted considerable time and 
resources to the evaluation of pesticides required by the FQPA. 
However, it is essential that the USDA have adequate resources to 
assist in this effort. Otherwise, given the tight time frame for these 
assessments, the EPA will rely on default assumptions in the absence of 
actual data.
                                 ______
                                 

      PREPARED STATEMENT OF THE NATIONAL RURAL TELECOM ASSOCIATION

                     SUMMARY OF TESTIMONY REQUESTS

Project involved

  --Telecommunications lending programs administered by the Rural 
        Utilities Service of the U.S. Department of Agriculture

Actions proposed

  --Supporting loan levels for fiscal year 2001 in the same amounts as 
        those contained in the fiscal year 2000 Agriculture 
        Appropriations Act which are the same levels as those requested 
        in the President's budget for fiscal year 2001 for hardship, 
        cost-of-money, Rural Telephone Bank and guaranteed loan 
        programs and the associated subsidy to fund those programs at 
        the existing level.
  --Supporting funding in the amount of $25 million in loan and grant 
        authority designated for distance learning and telemedicine 
        purposes and the $2 million in direct loans and grants for a 
        pilot program to finance broadband transmission and local dial-
        up Internet service in rural areas as requested in the 
        President's budget.
  --Supporting an extension of the language removing the 7 percent 
        interest rate ceiling on cost-of-money loans.
  --Supporting continuation of the restriction on retirement of Rural 
        Telephone Bank class A stock at the level contained in the 
        fiscal year 2000 Agriculture Appropriations Act and an 
        extension of the prohibition against the transfer of Rural 
        Telephone Bank funds to the general fund.
  --Opposing the proposal contained in the budget to transfer funds 
        from the unobligated balances of the liquidating account of the 
        Rural Telephone Bank for the bank's administrative expenses and 
        loan subsidy costs.
    Mr. Chairman, Members of the Committee: My name is John F. O'Neal. 
I am General Counsel of the National Rural Telecom Association. NRTA is 
comprised primarily of commercial telephone companies which borrow 
their capital needs from the Rural Utilities Service of the U.S. 
Department of Agriculture (RUS) to furnish and improve telephone 
service in rural areas. Approximately 1000, or 71 percent of the 
nation's local telephone systems borrow from RUS. About three-fourths 
of these are commercial telephone companies. RUS borrowers serve almost 
6 million subscribers in 46 states and employ over 22,000 people. In 
accepting loan funds, borrowers assume an obligation under the act to 
serve the widest practical number of rural users within their service 
area.

                           PROGRAM BACKGROUND

    Rural telephone systems have an ongoing need for long-term, fixed 
rate capital at affordable interest rates. Since 1949, that capital has 
been provided through telecommunications lending programs administered 
by the Rural Utilities Service and its predecessor, the Rural 
Electrification Administration (REA).
    RUS loans are made exclusively for capital improvements and loan 
funds are segregated from borrower operating revenues. Loans are not 
made to fund operating revenues or profits of the borrower system. 
There is a proscription in the Act against loans which would duplicate 
existing facilities providing adequate service and state authority to 
regulate telephone service is expressly preserved under the Rural 
Electrification Act.
    Rural telephone systems operate at a severe geographical handicap 
when compared with other telephone companies. While almost 6 million 
rural telephone subscribers receive telephone service from RUS borrower 
systems, they account for only four percent of total U.S. subscribers. 
On the other hand, borrower service territories total 37 percent of the 
land area--nearly 1\1/2\ million squares miles. RUS borrowers average 
about six subscribers per mile of telephone line and have an average of 
more than 1,000 route miles of lines in their systems.
    Because of low-density and the inherent high cost of serving these 
areas, Congress made long-term, fixed rate loans available at 
reasonable rates of interest to assure that rural telephone 
subscribers, the ultimate beneficiaries of these programs, have 
comparable telephone service with their urban counterparts at 
affordable subscriber rates. This principle is especially valid today 
as the United States endeavors to deploy telecommunications 
``information superhighway'' technology and as customers and regulators 
constantly demand improved and enhanced services.
    At the same time, the underlying statutory authority which governs 
the current program has undergone significant change. In 1993, 
telecommunications lending was refocused toward facilities 
modernization. Much of the subsidy cost has been eliminated from the 
program. The subsidy that remains has been targeted to the highest 
cost, lowest density systems. Other loans are made at Treasury's cost-
of-money or greater.
    We are proud to state once again for the record that there has 
never been a default in the RUS/REA telephone program! All loans have 
been repaid in accordance with their terms with interest!

           NEED FOR RUS TELECOMMUNICATIONS LENDING CONTINUES

    The need for rural telecommunications lending is great today, 
possibly even greater than in the past. Technological advances make it 
imperative that rural telephone companies upgrade their systems to keep 
pace with improvements and provide the latest available technology to 
their subscribers.
    These rapid technological changes and federal policies of 
competition and deregulation in the telephone industry, as evidenced by 
passage of the ``Telecommunications Act of 1996'', underscore the 
continuing need for targeted assistance to rural areas. The inherently 
higher costs to serve these areas have not abated. Regulatory trends 
encouraging competition among telephone systems increase pressures to 
shift more costs onto rural ratepayers. Interstate subscriber line 
charges continue to shift substantial costs to local exchange 
customers. Pressures to recover more and more of the higher costs of 
rural service from rural customers to foster urban competitive 
responses will further burden rural consumers.

          1996 TELECOMMUNICATIONS ACT EFFECT ON RURAL AMERICA

    Congress passed the Telecommunications Act of 1996 as the 
culmination of more than a decade of debating national 
telecommunications policy and balancing many diverse needs and 
interests. The 1996 Act responded to a number of rural needs and 
differences with a series of safeguards to ensure that rates, services 
and network development in rural America will be reasonably comparable 
to urban telecommunications opportunities.
    The process of implementing the new law continues to raise 
troubling uncertainties and concerns about whether the FCC and the 
states will honor the balance Congress achieved in its policy, as 
regulators (a) radically revise the mechanisms for preserving and 
advancing ``universal service,'' (b) adjust the cost recovery 
responsibilities and allocations of authority between federal and state 
regulation, (c) effectuate the Act's somewhat different urban and rural 
ground rules for how new companies and incumbent universal service 
providers connect their networks and compensate each other and (d) peel 
back layers of regulation developed over a century. So far, the FCC has 
been overzealous in expanding the Act's market-opening provisions to 
give new entrants a regulatory head start and advantage at the expense 
of the Act's rural development and universal service provisions. The 
FCC is trying to usurp the role of competition by dictating a whole 
new--and wholly inadequate--way to measure the costs of modern, 
nationwide telecommunications access to information. The FCC needs to 
reorder the sequence of its proceedings to ensure that rural Americans 
are not denied the ongoing network development and new services the Act 
requires. Rural telephone systems with universal service obligations 
must not be thwarted in their efforts to upgrade and provide rates and 
services reasonably comparable to urban offerings. The FCC must not 
falter in delivery on these national policies either during or after 
the difficult process of implementing the law. Congress and the courts 
must carefully supervise the FCC's implementation to achieve the rural 
access to information and an evolving modern public network intended by 
Congress, as well as the benefits of deregulation and genuine 
competition.

      EXPANDED CONGRESSIONAL MANDATES FOR RURAL TELECOMMUNICATIONS

    Considerable loan demand is being generated because of additional 
mandates for enhanced rural telecommunications standards contained in 
the authorizing legislation enacted in 1993 by Congress in Public Law 
103-129.
    These mandates coupled with the need for stable financing sources 
to meet the infrastructure demands envisioned for rural areas by the 
1996 telecommunications act amply demonstrate the continuing need for 
this important program at the following levels:

5 percent Hardship Loans................................     $75,000,000
Cost-of-Money Loans.....................................     300,000,000
Guaranteed Loans........................................     120,000,000
Rural Telephone Bank Loans..............................     175,000,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total.............................................     670,000,000

    These are the levels established in the fiscal year 2000 
appropriations act for the hardship, cost-of-money, Rural Telephone 
Bank and guaranteed loan programs and are the same levels as those 
requested in the President's budget. We believe that the needs of this 
program balanced with the minimal cost to the taxpayer argue for its 
continuation at enacted levels given the fact that it provides funding 
for the neediest borrower systems serving the highest cost areas.

                      SPECIFIC ADDITIONAL REQUESTS

Continue the Removal of the 7 percent Cap on Cost-of-Money Loans

    Again this year we are supporting removal of the 7 percent ceiling 
on cost-of-money loans even though long-term Treasury rates are 
currently below this level. This Committee included language in the 
fiscal year 1996 act to permit borrower interest rates on cost-of-money 
loans to exceed the 7 percent per year interest rate ceiling contained 
in the authorizing act. The language has been continued in subsequent 
acts. We support an extension of this provision in the fiscal year 2001 
bill.

Continue the Restriction on Retirement of Class A Government Stock in 
        the Rural Telephone Bank (RTB) and also Continue the 
        Prohibition Against Transfer of RTB Funds to the General Fund 
        and Require the Payment of Interest

    The Committee should continue the restriction on retirement of the 
amount of class A stock by the Rural Telephone Bank in fiscal year 
2001. The Bank is currently in the process of retiring the government's 
stock as required under current law. We believe that this process which 
began in fiscal year 1996 should continue to be an orderly one as 
contemplated by the retirement schedule enacted five years ago and 
continued in last year's bill to retire no more than 5 percent of the 
total class A stock in one year. We also urge the Committee to continue 
the prohibition against the transfer of any unobligated balance in the 
bank's liquidating account which is in excess of current requirements 
to the general fund of the Treasury along with the requirement that the 
bank receive interest on those funds. The private Class B and C 
stockholders of the Rural Telephone Bank have a vested ownership 
interest in the assets of the bank including its funds and their rights 
should be protected. Previous appropriations acts (fiscal year 1997 
through 2000) have recognized the ownership rights of the private class 
B and C stockholders of the bank by prohibiting a similar transfer of 
the bank's excess unobligated balances which otherwise would have been 
required under the federal credit reform act.

Reject Budget Proposal to Transfer Funds from RTB Liquidating Account 
        for Subsidy and Administrative Costs

    In this same vein, we are also opposed to the proposal contained in 
the President's budget again this year that the subsidy cost associated 
with Rural Telephone Bank loans be funded by a transfer from the 
unobligated balances of the bank's liquidating account rather than by a 
traditional appropriation from the general fund of the Treasury which 
has been the funding mechanism utilized for the bank since enactment of 
the federal credit reform act in 1990. Requiring the bank to fund the 
subsidy cost of its loans would dilute the interests of the bank's 
stockholders. By definition, the bank's unobligated balances are not 
exclusively federal funds but are subject to the respective ownership 
interests of all the stockholders of the bank. This cost is more 
properly funded through a regular appropriation from the general fund 
of the Treasury.
    The President's budget also proposes that the bank assume 
responsibility for its administrative costs also by a transfer of funds 
from the unobligated balances of the bank's liquidating account rather 
than through an appropriation from the general fund of the Treasury. 
This recommendation is contrary to the specific language of Sec. 403(b) 
of the RTB enabling act.
    The budget language acknowledges that neither proposal would result 
in budgetary savings. Both proposals were specifically rejected again 
last year by this Committee. No new justification for these 
recommendations is contained in the budget. Both proposals would 
require consideration by the authorizing committees and enactment of 
new authorizing legislation as a prerequisite to an appropriation. As 
of this date, no such legislation has been transmitted by the 
Administration or is under consideration before the authorizing 
committees.

Loans and Grants for Telemedicine, Distance Learning and Internet 
        Access

    The President's budget requests $25 million in loan and grant 
authority for fiscal year 2001 specifically devoted to telemedicine and 
distance learning purposes. Loans are made at the government's cost-of-
money. The purpose is to accelerate deployment of telemedicine and 
distance learning technologies in rural areas through the use of 
telecommunications, computer networks, and related advanced 
technologies by students, teachers, medical professionals, and rural 
residents. We believe this program is particularly important. 
Continuing to target funds in this manner spurs deployment of this 
important new technology which is vital for the survival of rural 
schools, hospitals and the rural communities they serve. At the same 
time, we believe the level proposed strikes a cost effective balance 
for the taxpayer.
    We are also supporting the $2 million requested in the President's 
budget for a pilot program of loans and grants to finance broadband 
transmission and local dial-up access to the Internet in rural areas.

                               CONCLUSION

    Thank you for the opportunity to present the association's views 
concerning this vital program. The telecommunications lending programs 
of RUS continue to work effectively and accomplish the objectives 
established by Congress at a minimal cost to the taxpayer.
                                 ______
                                 

  PREPARED STATEMENT OF THE NATIONAL TELEPHONE COOPERATIVE ASSOCIATION

                                SUMMARY

    The information age continues to evolve at lightening speed, 
permeating every element of our existence. No longer a luxury at all, 
today, access to advanced, affordable, communications infrastructure 
and services, by every American, is an absolute necessity. Indeed, 
federal, state, and local executives, legislators, and regulators, as 
well as the general public, are demanding nothing less.
    The small rural incumbent local exchange carrier (ILEC) segment of 
the communications industry has responded to these demands with 
outstanding vigor, providing perhaps the most exceptional 
telecommunications services of anywhere in the nation. It has done so 
through both a deep commitment to community and by having access to the 
affordable financing that is available via the Rural Utilities Service 
(RUS) Telecommunications Loan Program.
    For over 50 years, NTCA's small rural ILEC members, in partnership 
with the RUS, have fulfilled the joint statutory mission of both 
providing and improving rural telecommunications service, with 
distinction. With the RUS appropriately funded, they will be able to 
continue that mission. Therefore, NTCA recommends full funding for all 
accounts of the RUS Telecommunications Loan Program and its related 
community development program. Additionally, NTCA recommends that 
language be included in the fiscal year 2001 appropriations package 
which will protect the program, and particularly the Rural Telephone 
Bank (RTB), from frivolous or premature actions intended to redirect 
their course.

                               BACKGROUND

    NTCA is a national trade association representing more than 500 
small, rural, cooperative and commercial incumbent local exchange 
carriers (ILECs) located throughout the nation. These locally owned and 
operated ILECs provide local exchange service to more than 5 million 
rural Americans. Through the 50 year history of the RUS 
Telecommunications Loan Program, more than 80 percent of NTCA's member 
systems have been able to utilize the federal program to one degree or 
another.
    NTCA's members, like most of the country's independent ILEC's, 
evolved to serve high cost rural areas of the nation that were 
overlooked by the industry's giants as unprofitable. And there can be 
no doubt regarding the high cost of such markets. Consider that the 
combined service area's of these ILECs constitutes approximately 40 
percent of the nation's geographic area, yet the more than 5 million 
subscribers served in this territory account for little more than 4 
percent of the nation's total access lines. On average, RUS borrowers 
have approximately 6 subscribers per mile of infrastructure line, 
compared with 130 for the larger urban-oriented, non-RUS financed 
systems. This results in an average plant investment per subscriber 
that for RUS borrowers is 38 percent higher than for most other 
systems.
    Congress recognized the unique financing dilemma confronting 
America's small rural ILECs as early as 1949. It was in that year that 
it amended the Rural Electrification Act (RE Act) to create the Rural 
Electrification Administration (REA) Telephone Loan Program, today 
known as the RUS Telecommunications Loan Program. Through the years 
Congress has periodically amended the RE Act to ensure that original 
mission--to furnish and improve rural telephone service--was met. In 
1971, the Rural Telephone Bank (RTB) was created as a supplemental 
source of direct loan financing. In 1973, the RUS was provided with the 
ability to guarantee Federal Financing Bank (FFB) and private lender 
notes. In 1993, Congress established a fourth program lending facet, 
the Treasury Cost of Money account.

                 RUS HELPS MEET INFRASTRUCTURE DEMANDS

    While the RUS has helped the subscribers of NTCA's member systems 
receive service that is comparable or superior to that available 
anywhere in the nation, their work is far from complete. As federal 
policies such as the Telecommunications Act of 1996 continue to evolve, 
the high costs associated with providing modern telecommunications 
services in rural areas will not diminish. Four years into the 
implementation of the1996 Act, the Federal Communications Commission's 
(FCC's) interpretation of the statute, and several court decisions, 
have held little regard for congressional intent particularly with 
respect to universal service which is so vital to small rural ILECs. 
Consequently, the ongoing need for the well defined, understood, time-
tested RUS Telecommunications Loan Program is even greater.
    For example, RUS telecommunications lending has stimulated billions 
of dollars in private capital investment in rural communications 
infrastructure. In recent years, on average, less than $10 million in 
federal subsidy generated $670 million in federal loans and loan 
guarantees. For every $1 in federal funds that were invested in rural 
communications infrastructure, $4.50 in private funds were invested.
    The RUS is also making a difference in our rural schools, 
libraries, and hospitals. Since 1993, the RUS Distance Learning and 
Telemedicine Grant and Loan program has funded approximately 350 
projects throughout the nation for interactive technology in rural 
schools, libraries, hospitals, and health clinics. To date, 
approximately 704 rural schools and education centers have gained 
access to improved educational resources through the information 
superhighway by sharing limited teaching resources and gaining access 
to libraries, training centers, vocational schools and other 
institutions located throughout the country. This program has provided 
unprecedented educational opportunities for rural students and enhanced 
health care for rural residents.
    In addition, two other RUS related programs are making a difference 
in rural America. Formerly under the RUS, and known as the Zero 
Interest Loan and Grant Program, the Rural Economic Development Grants 
Program and the Rural Economic Development Loans Program are now 
managed by the Rural Business Cooperative Service. The two programs 
provide funds for the purpose of promoting rural economic development 
and job creation projects, including funding for project feasibility 
studies, start-up costs, incubator projects and other expenses tied to 
rural development.

                 NTCA'S APPROPRIATIONS RECOMMENDATIONS

    Fully Fund The RUS Telecommunications Loan Program.--Increasing 
demand for expanded telecommunications services and infrastructure 
upgrades indicates a continuing strong need for stable loan levels at 
the authorizations established by the Rural Electrification Loan 
Restructuring Act of 1993. NTCA is supporting loan levels for fiscal 
year 2001 in the same amounts as those contained in the fiscal year 
2000 Agriculture Appropriations Act, which are the same levels as those 
requested in the President's budget for fiscal year 2001.

Hardship Account........................................     $75,000,000
Treasury-rate Account...................................     300,000,000
Guaranteed Account......................................     120,000,000
Rural Telephone Bank Account............................     175,000,000
                    --------------------------------------------------------
                    ____________________________________________________
      Total.............................................     670,000,000

    Extend Removal Of The Interest Rate Cap On Treasury-Rate Loans.--
NTCA is also requesting that Congress again include language removing 
the 7 percent interest rate cap on Treasury-rate loans. This provision 
has been included in recent appropriations measures to prevent the 
potential disruption of the program in the case where interest rates 
exceed 7 percent and insufficient subsidy cannot support authorized 
lending levels.
    Prohibit The Transfer Of Unobligated Balances Of The RTB 
Liquidating Account.--NTCA also recommends that Congress continue the 
prohibition against the transfer of any unobligated balances of the 
Rural Telephone Bank liquidating account to the general fund of the 
Treasury. This language has routinely been included in annual 
appropriations measures since the enactment of the Federal Credit 
Reform Act (FCRA), Public Law 101-508, that allows such sweeping to 
potentially occur. Restatement of this language will again ensure that 
the RTB's private class B & class C stockholder are not stripped of the 
value of their statutorily mandated investment in the Bank.
    Prohibit RTB From Self Funding Subsidy And Administrative Costs.--
The Administration's fiscal year 2001 budget proposal suggests funding 
the RTB's loan subsidies and administrative expenses out of unobligated 
balances in the bank's liquidating account rather than out of the 
general fund of the Treasury as is required by the RE Act. NTCA urges 
Congress to reject this proposal, as it has in the past, for the 
following basic reasons: (1) such action would require amendment of the 
RE Act, (2) the proposal appears to be in conflict with the intent of 
the FCRA, (3) the proposal will not result in federal budgetary 
savings, (4) it is unnecessary to the determination of whether the bank 
could operate independently, and thus would amount to wasting the 
resources of the bank which could be put to better use upon its 
complete privatization.
    Rural Telephone Bank Privatization.--Under the President's fiscal 
year 2001 budget proposal, the RTB is proposed to ``become a 
Performance Based Organization (PBO) to establish its financial and 
operational independence prior to its being privatized within ten 
years.'' At this time, it is difficult to support, or evaluate any 
privatization proposal without first obtaining an answer to the 
critical question of who owns the assets of the bank at any given time 
during the privatization period, which is already underway at a minimal 
statutory pace. Without a definitive and official determination of this 
central issue, it is not possible to formulate an informed position 
regarding privatization of the bank.
    NTCA believes any privatization plan should be well conceived 
before implementation. At the very least, privatization should proceed 
in an orderly fashion with a full accounting of the various financial 
and legal implications involved. Congress, RTB Stockholders, and the 
rural telecommunications industry deserve the benefit of having RTB 
privatization reviewed thoroughly, and not in the vacuum of the 
budgetary process. In addition to having a high concentration of RTB 
stockholders as members, NTCA itself is a RTB stockholder. The RTB's 
portfolio is currently valued at well over $2 billion and consequently 
it continues to play a critical role in the modernization of rural 
telecommunications infrastructure throughout the United States. For 
these reasons, the RTB's future will continue to be closely monitored, 
and protected, by NTCA and its members. Furthermore, NTCA urges 
Congress to refrain from commencing such deliberations without the 
asset question answered, or in an effort to simply respond to the 
administration's budget suggestion.
    Continue RUS Distance Learning and Telemedicine Loan and Grant 
Program.--The RUS Distance Learning and Telemedicine Loan and Grant 
program has proven to be an indispensable tool for rural development. 
In this regard, NTCA urges Congress to provide adequate funding for 
this critical program. NTCA supports the recommendations for this 
program that are contained in the president's budget proposal. NTCA 
also supports the $2 million in direct loans and grants for a pilot 
program to finance broadband transmission and local dial-up Internet 
service in rural areas as requested in the President's budget.
    Preserve RBCS Rural Development Grant and Loan Programs.--Likewise, 
NTCA has witnessed the good these programs have done for rural 
communities. NTCA requests adequate subsidy to support the current $15 
million loan program.
    Deploy NOAA Radio Weather Warning System in unserved or under-
served Rural Areas.--Rural areas traditionally do not have the same 
access to reliable weather radio warning systems as more urban and 
populated cities. Too often, lives are unnecessarily lost due to the 
lack of knowledge and proper warning of an impending hurricane or 
tornado. Therefore, NTCA is requesting adequate subsidy to support a $5 
million loan program to facilitate a partnership between rural 
utilities possessing commercial tower space and the national weather 
service.

                               CONCLUSION

    The RUS Telecommunications Loan Program bears a proud 50-year 
record of commitment, service, and achievement to rural America. Never 
in its entire history has the program lost even a dollar to abuse or 
default--an unparalleled feat for any government-sponsored lending 
program. Clearly such a successful program should remain in place to 
guarantee rural Americans have the opportunity to play a leading role 
in the information age. After all, an operational and advanced rural 
segment of the nation's telecommunications infrastructure is critical 
to truly ensuring that the national objective of universal 
telecommunications service is fulfilled. Please help us accomplish that 
objective.
                                 ______
                                 

      PREPARED STATEMENT OF THE NATIONAL TREASURY EMPLOYEES UNION

    Chairman Cochran, Ranking Member Kohl, and distinguished Members of 
the Subcommittee, my name is Colleen Kelley, and I am the National 
President of the National Treasury Employees Union. The NTEU represents 
more than 155,000 Federal employees, including those who work at the 
Food and Drug Administration. I appreciate this opportunity to present 
testimony to you today on behalf of the men and women who help ensure 
our foods, drugs, cosmetics, medical devices, and thousands of other 
consumer products are safe. The actions of this subcommittee directly 
affect their lives and the livelihoods of every American.
    American consumers rightfully depend on their food to be free of 
bacteria or other food borne diseases. They demand that we find cures 
for terminal cancer and other deadly diseases. And they expect that 
consumer products, such as mouthwash, toothpaste, or any other commonly 
used product imported into the U.S. will not prove to be fatal.
    Day in and day out, FDA's scientists, doctors, veterinarians, and 
support personnel are working to ensure the safety of the American 
people. From the most basic, but very important, task of educating 
children about how to handle meats properly to avoid bacteria, to 
approving new drugs to treat diabetes or depression, FDA employees are 
working to protect and improve the health of the American people.
    Let me share with you a couple of examples of the outstanding work 
of our FDA employees. One of the most important duties of the FDA field 
laboratories is to directly respond to local consumer complaints 
regarding FDA regulated products. Recently a chemist working at the FDA 
laboratory located in Denver, Colorado helped prevent the death of a 
man who had gotten violently ill while drinking a soda. This FDA 
chemist analyzed the soda and found it to be contaminated with barium 
nitrate. This deadly chemical came from a sparkler, which had been put 
into the soda. If this deadly chemical had not been accurately 
identified in a timely manner, the man probably would have died. 
However, thanks to the analysis and accurate identification of the 
poisoning by the FDA chemist in Denver, the patient's doctor was able 
to save the patient by knowing to treat him for barium poisoning.
    At our laboratories in San Francisco, Los Angeles, Baltimore, and 
other laboratories located at or near our nation's ports, FDA 
microbiologists and investigators work with Customs officials to 
quickly test and identify harmful foods which are trying to be 
imported. When the FDA microbiologists determine that the foods pose a 
risk to American consumers the foods are sent back to where they 
originated.
    In Rockville, Maryland, FDA chemists and scientists are quickly 
developing and approving safe and effective drugs to help find cures 
for cancer, AIDS, alzheimer's, and autism. They're working on drugs to 
help ease the pain of heart burn and treat depression.
    On any given day at an FDA laboratory in Missouri or California, 
FDA scientists could be analyzing over-the-counter drugs for cyanide 
contamination, examining baby food products for added glass fragments, 
or analyzing wine for poisonous ethylene glycol contamination.
    These are only a mere sampling of the day-to-day activities being 
performed by the dedicated men and women who work at the FDA. And these 
are only a few examples of why we need to increase the resources for 
this agency.
    I am pleased that the President has requested a 14.5 percent 
increase in funding for the FDA for fiscal year 2001. We cannot expect 
the FDA to continue to carry out its mission and protect the public 
health, without the staffing and resources necessary to do the job. In 
particular, I support FDA's request for increased staffing in a number 
of critical areas, such as the food safety initiative, verifying the 
safety of domestic and imported products, cracking down on illegal 
Internet drug outlets, and improving the efficiency and timeliness of 
the user fee program. These programs, as well as countless others 
within FDA need additional staff to address the demands of protecting 
and improving the health of the American public.
    The FDA needs increased staffing in order to increase surveillance 
and inspections of food: food that originates in this country, and food 
that is imported. And the FDA needs more staff to address the 
increasing demands to shorten the amount of time it takes to test 
drugs, ensure their safety, and make them available to patients.
    I also want to bring to your attention some concerns I have about 
the FDA budget. As you know, the FDA is in the midst of a consolidation 
of its laboratories, which are currently located in key locations 
across the country. I share the agency's views that we need to 
significantly improve the quality of FDA's laboratory infrastructure. 
However, I do not believe that closing certain existing laboratories 
will necessarily improve FDA operations and capabilities. Our nation 
cannot afford to lose the knowledge and experience of these scientists 
who have worked for many years in the FDA field laboratories. However, 
if any laboratories are closed in the future, I would urge this 
subcommittee to work to ensure that the FDA minimizes the impact on the 
current FDA employees who would be affected, and the impact on FDA 
operations in general.
    In addition, I have serious concerns about proposals that have been 
considered both in Congress and internally at the FDA which would 
contract out work currently being performed by FDA employees. There is 
an inherent conflict of interest when a company seeking approval for a 
drug or food product is the same company granting the approval. I do 
not believe the American public is prepared to entrust private 
companies, most of which are driven by profit, to ensure the safety and 
effectiveness of their drugs and food.
    I believe that the FDA fiscal year 2001 budget request is a good 
first step, but I believe that the level of funding requested by the 
FDA should be viewed as a floor, not a ceiling. As the number and 
complexity of drugs, food products and other FDA regulated goods in the 
marketplace continues to increase, it is critical that the Congress 
provide additional funding for staffing at the FDA. While I believe 
that funding should be used to make technological improvements to FDA 
laboratories and equipment, I am sure you will agree with me that 
technology alone cannot possibly address the demands the agency now 
faces.
    I would like to thank the Subcommittee again for the opportunity 
for our Union to present its views on the budget for fiscal year 2001. 
As you continue your subcommittee's deliberations, I hope you will give 
special consideration to FDA's dedicated workforce, a team of public 
servants who have committed themselves to ensuring safe foods, drugs, 
and medical devices for the American people.
                                 ______
                                 

   PREPARED STATEMENT OF THE NATIONAL UTILITY CONTRACTORS ASSOCIATION

    Mr. Chairman and Members of the Subcommittee, my name is Angelo Di 
Paolo. I am President of the National Utility Contractors Association 
(NUCA) and President of Di Paolo Company in Glenview, Illinois. I see 
firsthand everyday the dire water and wastewater infrastructure needs 
our country faces, so I sincerely appreciate your interest in 
preventing public health and environmental disasters in rural 
communities by adequately funding the U.S. Department of Agriculture 
(USDA) Rural Utilities Service (RUS) Water and Waste Disposal 
infrastructure program for fiscal 2001.

                       FISCAL 2001 RECOMMENDATION

    On behalf of NUCA's nearly 2,000 members and the citizens of rural 
America who endure daily life without the basic wastewater 
infrastructure that ensures clean drinking water and appropriate 
disposal of waste, I respectfully request that the Subcommittee 
appropriate a minimum of $700 million in budget authority for the RUS 
Water and Waste Disposal Program. Further, I respectfully ask that 
Congress allow the RUS to determine the most appropriate allocation of 
the budget authority to loans and grants as it is in the best position 
to target the grants toward the very poor while providing loans for the 
relatively more well-healed communities.

         RURAL WATER AND WASTE DISPOSAL NEEDS AND THE RUS CURE

    Imagine waking up, sleepily walking into the bathroom, turning the 
shower faucet, and being greeted by stinky, murky water. Imagine being 
unable to quench your thirst because only unfiltered water comes to 
your house. Comparatively speaking, these are mild pictures of the 
horrible circumstances that almost a million rural residents endure 
daily. These Americans do not have potable water or effective waste 
disposal systems. Moreover, the citizens facing these problems are 
those least able to afford bottled water services. Generally, the 
affected families live below the poverty level, $16,700. So even if 
they aren't drinking contaminated water, they have no choice but to 
wash and cook with it. Ironically, in the town serving as the namesake 
for Deer Park bottled water, the locals were drinking unfiltered water 
from shallow wells until the RUS funded a $1.7 million water system in 
1998. RUS Water and Waste Disposal loan and grant programs provide such 
funds for small communities with 10,000 or fewer residents that cannot 
secure reasonable financing for drinking water and wastewater 
infrastructure improvements. The majority of the residents are low-
income and cannot afford even the smallest ratepayer increases, 
increases that would be certainties with other infrastructure funding 
sources. Currently, there is a $3.8 billion backlog of applications 
from needy communities that simply cannot afford to build their 
infrastructure through other funding sources. At this time last year, 
the backlog was only $3.2 billion. Today, communities must wait an 
average of approximately three years from the start of an application 
process to the time that RUS commits funds. During the three-year wait, 
children and the elderly continue to be exposed to waterborne diseases 
that have life-long or terminal effects on their health. No State is 
immune from this problem. According to the USDA's recent best 
estimates, at least 260,000 American homes still do not have complete 
plumbing. Another 715,000 homes have critical problems with drinking 
water quality, quantity, and availability. At least 1.1 million homes 
have inadequate wastewater disposal systems that threaten human and 
environmental health. The U.S. Environmental Protection Agency (EPA) 
estimated in 1997 that some 15 million households use private wells and 
another 1 million homes rely on untreated water sources that include 
cisterns and water hauled from springs, rivers, and lakes. In 1996, the 
EPA estimated that small communities with 10,000 or fewer residents 
face more than $13.8 billion in capital costs over the next two decades 
for sewage collection and treatment works. That figure does not include 
an estimation of septic system needs. These figures are considered by 
most within EPA to be conservative estimates. Regardless how you look 
at the needs, a $700 million investment would be worth every penny. 
Despite their inability to afford other funding sources, the 
communities historically do not default on RUS loans. Year after year, 
the USDA maintains an unrivaled loan delinquency rate of just over one 
percent and a long-term loss rate of one-tenth of one percent on the 
wastewater loan program.

                               CONCLUSION

    We, the members of NUCA, urge you to fund the RUS Water and Waste 
Disposal loans and grants program at a minimum $700 million for fiscal 
2001. Thank you for considering our recommendation.
                                 ______
                                 

         PREPARED STATEMENT OF THE NATIONAL WATERSHED COALITION

    Mr. Chairman and Members of the Subcommittee: The National 
Watershed Coalition (NWC) is pleased to present this testimony in 
support of some of the most beneficial water resource conservation 
programs ever developed in the United States. The Coalition recognizes 
full well the need to use our tax dollars wisely. That makes the work 
of this Subcommittee very important. It also makes it imperative that 
the federal programs that are continued are those that provide real 
benefit to society, and are not programs that would be nice to have if 
funds were unlimited. We believe that the Small Watershed Program 
(Public Law 83-566) and the Flood Prevention Operations Program (Public 
Law 78-534) are examples of those rare programs that address our 
nation's vital natural resources which are critical to our very 
survival, do so in a way that provide benefits in excess of costs, and 
are programs that serve as models for the way all federal programs 
should work.
    The National Watershed Coalition is an alliance of national, 
regional, state and local organizations that have a common interest in 
advocating the use of the watershed when dealing with natural resource 
issues. We also support the use of total resource management principles 
in planning. We are advocates of both the Small Watershed Program and 
the Flood Prevention Operations Program administered by USDA's Natural 
Resources Conservation Service (NRCS). These resource protection 
programs deserve much higher priority than they have had in the recent 
past. Even in difficult financial times, and we keep hearing we are in 
a period of budget surpluses, their revitalization would pay dividends 
in monetary and other benefits, and jobs! The disastrous 1993 Midwest 
floods and the floods in Texas in the fall of 1998 should have taught 
us something. If one examines the Report of the 1994 Interagency 
Floodplain Management Review Committee that studied the 1993 Midwest 
flood event, we see that flood damages were significantly reduced in 
areas where Public Law 566 projects were installed. The requests for 
disaster assistance were also less.
    The watershed as the logical unit for dealing with natural resource 
problems has long been recognized. Public Law 566 offers a complete 
watershed management approach, and should have a prominent place in our 
current federal policy emphasizing watersheds and total resource 
management based planning. Proper watershed management improves water 
quality. Why should the federal government be involved with these 
watershed programs?
  --They are programs whose objectives are the sustaining of our 
        nation's precious natural resources for generations to come.
  --They are not federal, but federally assisted, locally sponsored and 
        owned. They do not represent the continued growth of the 
        federal government.
  --They are locally initiated and driven. Decisions are made by people 
        affected, and respect private property rights.
  --They share costs between the federal government and local people. 
        Local sponsors pay between 30-40 percent of the total costs of 
        Public Law 566 projects.
  --They produce net benefits to society. The most recent program 
        evaluation demonstrated the actual ratio of benefits to costs 
        was approximately 2.2:1. The actual adjusted economic benefits 
        exceeded the planned benefits by 34 percent. How many other 
        federal programs do so well?
  --They consider and enhance environmental values. Projects are 
        subject to the discipline of being planned following the 
        National Environmental Policy Act (NEPA), and the federal 
        ``Principles and Guidelines'' for land and water projects. That 
        is public scrutiny!
  --They are flexible programs that can adapt to changing needs and 
        priorities. Objectives that can be addressed are flood damage 
        reduction, watershed protection (erosion and sediment control), 
        water quality improvement, rural water supply, water 
        conservation, fish and wildlife habitat improvement, 
        recreation, irrigation and water management, etc. That is 
        flexibility emphasizing multiple use.
  --They are programs that encourage all citizens to participate.
  --They can address the needs of low income and minority communities.
  --And best of all--they are programs the people like!
    The National Watershed Coalition is concerned with the recent 
Congressional lack of support for these watershed programs, with the 
exception of the recent watershed rehabilitation efforts, and we hope 
the outcome of the fiscal year 2001 appropriations process will enable 
this vital work to continue and expand as we seek to preserve, protect 
and better manage our nation's water and land resources. Every State in 
the United States has benefited from the Small Watershed Program.
    In order to continue this high priority work in partnership with 
states and local governments, the Coalition recommends a fiscal year 
2001 funding level of $250 million for Watersheds and Flood Prevention 
Operations, Public Law 83-566 and Public Law 78-534. We recommend that 
$30 million of this amount be for Public Law 78-534 projects. For some 
years now, the federal budget has eliminated the separate line items 
for the Public Law 534 and Public Law 566 watershed projects, and just 
lumped a total figure under Public Law 566 with a note that some amount 
``may be available'' for Public Law 534 projects. This is an entirely 
unsatisfactory way of doing business. Public Law 534 still exists in 
law; it has not been repealed. It should be funded as a separate 
program. The current situation really penalizes both Public Law 534 and 
566, as 534 has no funds at the outset, and in order to provide a 
little something to the Public Law 534 watershed projects, NRCS has to 
take some money from the Public Law 566 accounts which are already very 
underfunded. Please restore funding for Public Law 534 watershed 
projects to $30 million in fiscal year 2001. We also recommend that 
watershed surveys and planning be funded at $25 million, which 
represents the true need.
    We would also suggest that $55 million be used for structural 
rehabilitation and replacement, in accordance with H.R. 728 recently 
introduced in the 106th Congress by Representatives Frank Lucas and Wes 
Watkins of Oklahoma, and S. 1762 introduced in the Senate by Senators 
Paul Coverdell of GA, and Blanche Lincoln of AR, and that another $5 
million be available for a thorough assessment of rehabilitation needs. 
The recognition of watershed rehabilitation as a national priority is 
gaining support throughout the countryside.
    We recognize that Congress may be thinking of lesser amounts for 
these programs, but we believe we are not doing our job of helping you 
recognize the true need if we continually recommend the federal share 
of these needed funds be less. We would hope that everyone understand 
that these funds are only a part of the total that are committed to 
this vital purpose. The local project sponsors in these ``federally 
assisted'' endeavors have a tremendous investment also. We also suggest 
that the Emergency Watershed Program (EWP) be provided with $20 million 
to allow the NRCS to provide rapid response in time of natural 
disaster. Our recommendations are considerably different from those 
proposed by the Administration for the fiscal year 2001 budget. 
Congress increasingly talks of wanting to fund those investments in our 
nation's infrastructure that will sustain us in the future. Yet this 
and past Administration's budgets have regularly cut funding for some 
of the best of these programs. This makes absolutely no sense! We 
continue to read that we are in a period of budget surpluses, almost as 
if the federal coffers were overflowing with cash, yet there is next to 
nothing for watershed protection and improvement. Our Gross Domestic 
Product has risen for over 93 straight months, unemployment is low, the 
stock market has risen to new highs, and we can't seem to invest and 
re-invest in our vital watershed infrastructure. That is simply 
unconscionable. Isn't water quality and watershed management a 
priority?
    The issue of the current condition of those improvements 
constructed over the last fifty years with these watershed programs is 
a matter of great concern. Many of the nearly 10,500 dams that NRCS 
assisted sponsors build throughout the United States no longer meet 
current dam safety standards largely as a result of development, and 
need to be upgraded to current standards. A USDA study published in 
1991 estimated that in the next ten years, $590 million would be needed 
to protect the installed works. Of that amount, $100 million would come 
from local sponsors as their operation and maintenance contributions. 
NRCS also conducted a more recent survey, which indicated the current 
national needs were about $540 million. That is the reason we are 
recommending starting with $60 million ($55 million for rehabilitation 
work and $5 million to start a more precise assessment of needs) for 
the work necessary to protect these installed structures, and commend 
Oklahoma Representatives Lucas and Watkins for their leadership in 
introducing H.R. 728, the Small Watershed Rehabilitation Amendments of 
1999, and Sens. Coverdell and Lincoln for introducing S. 1762, the 
Small Watershed Rehabilitation Act in the Senate. Watershed project 
sponsors throughout the U.S. appreciate their leadership on this vital 
issue. If we don't start to pay attention to our rural infrastructure 
needs, the ultimate cost to society will only increase, and project 
benefits will be lost. This is a serious national issue.
    In addition to offering our thoughts on needed conservation program 
budget levels, we would like to express our great concern with the way 
in which the Administration's budget proposes to change the watershed 
program funding in fiscal year 2001. We will address each ``account'' 
in some detail as to the adverse impacts we see.

               WATERSHED AND FLOOD PREVENTION OPERATIONS

    The Administration proposes $83,423,000, a decrease of $16,010,000 
from the grossly inadequate funding of fiscal year 1999. They talk of 
their concern for the environment, but it is not reflected in their 
budget proposals. This account needs $250 million!
    Of the funds proposed under the Public Law 566 authority, no funds 
are specifically suggested for the Public Law 534 projects, only $8 
million is available from the Public Law 566 account for Public Law 534 
projects, a decrease of $7 million--or 47 percent--from fiscal year 
1999. This is unacceptable.
    No funding is proposed to address the aging watershed 
infrastructure problem which poses great risk to human health, safety 
and quality of life, and which we discussed earlier. We suggest $60 
million is needed in fiscal year 2001. Pass H.R. 728 & S. 1762!
    The Administration's budget mentions that ``up to $4,170,000'' of 
their proposed watershed and flood prevention budget amounts might be 
used for ``the cost of loans for rehabilitation of upstream watershed 
dams.'' This is entirely unsatisfactory! Rehabilitation needs and a way 
to approach them are adequately addressed in the two bills working 
their way through Congress (H.R. 728 and S. 1762). They should be cost-
share programs as the Bills propose, and not loan programs. Watershed 
project sponsors do not need federal loans; they need their federal 
partner to pay their agreed-to share of the work put on the landscape 
by the partnership. The Administrations budget proposal would again 
penalize the ongoing national watershed programs by taking away money 
sorely needed to complete ongoing projects.

                     WATERSHED SURVEYS AND PLANNING

    The Administration proposes $10,368,000 for these vital planning 
activities, and we believe $25 million is a more realistic figure 
considering the need. There are many potential projects and project 
sponsors in every state wanting watershed planning assistance, and that 
assistance is not available. And this at a time when our federal 
government is encouraging the watershed approach and local leadership. 
Here we have the ideal partnership cost-share program that encourages 
local leadership, and the federal share of the funds is not there.

                EMERGENCY WATERSHED PROTECTION PROGRAM.

    The Administration proposes no funds to maintain readiness to deal 
with emergencies caused by natural disasters, or maintain any technical 
staff capacity. This makes no sense! We suggest that $20 million be put 
into this account to provide rapid early response, and then deal with 
total disaster needs for each incident with supplemental appropriations 
as in the past.
    The Administration's budget also uses language that appears a bit 
deceiving. They say that ``$2 million is proposed to provide technical 
assistance to communities for disaster mitigation planning,'' and ``$3 
million is proposed to provide technical and financial assistance to 
communities to implement disaster mitigation plans.'' None of this is 
new and the NRCS has been providing this assistance from their various 
budget accounts for years.
    There are a number of suggestions we would like to make concerning 
this very important legislation, that we will be making to other 
committees and they have budget implications. We believe the objectives 
of this legislation should be expanded to include more non-structural 
water quality practices, allow the law to provide assistance in 
developing rural water supplies (without water there is no rural 
development) and eliminate the current requirement that mandates that 
twenty percent (20 percent) of the total projects benefits be 
``directly related to agriculture'' which can be very subjective and 
has the unintended effect of penalizing poor, small, rural communities, 
many of which are minority communities.
    The Coalition appreciates the opportunity to offer these comments 
regarding fiscal year 2001 funding for the water resource programs 
administered by the Natural Resources Conservation Service. With the 
``downsizing'' the NRCS has experienced, we would be remiss if we did 
not again express some concern as to their ability to provide adequate 
technical support in these watershed program areas. NRCS technical 
staff has been significantly reduced and budget constraints have not 
allowed that expertise to be replaced. Traditional fields of 
engineering and economics are but two examples. We see many states 
where the capability to support their responsibilities in these program 
areas is seriously diminished. This is a disturbing trend that needs to 
be halted. This downsizing has a very serious effect on state and local 
conservation programs. Local Watershed and Conservation Districts and 
the NRCS combine to make a very effective delivery system for providing 
the technical assistance to local people--farmers, ranchers and rural 
communities--in applying needed conservation practices. But that 
delivery system is currently very strained! Many states and local units 
of government also have complementary programs that provide financial 
assistance to land owners and operators for installing measures that 
reduce erosion, improve water quality, and maintain environmental 
quality. The NRCS provides, through agreement with the USDA Secretary 
of Agriculture, ``on the land'' technical assistance for applying these 
measures. The delivery system currently is in place, and by downsizing 
NRCS we are eroding the most effective and efficient coordinated means 
of working with local people to solve environmental problems ever 
developed. Our system and its ability to produce food and fiber is the 
envy of the entire world. In our view, these programs are the most 
important in terms of national priorities.
    We are also disappointed that the subcommittee has a practice of 
not accepting oral testimony from organizations such as the National 
Watershed Coalition. When we were allowed to make an oral presentation 
in the House, we were able to talk to subcommittee members who could 
ask us questions. It was a chance for them to actually talk with people 
doing the work on the land. That personal contact in both houses is now 
missing, and it would be easy to think that our written testimony may 
not be seriously considered. We hope you will reconsider this practice 
in future years, and again allow oral testimony.
    The Coalition pledges its full support to you as you continue your 
most important work. Our Executive Director/Watershed Programs 
Specialist Mr. John W. Peterson, who has over forty years experience in 
natural resource watershed conservation, is located in the Washington, 
DC area, and would be pleased to serve as a resource as needed. John's 
email address is [email protected].
    Thank you for allowing the National Watershed Coalition (NWC) this 
opportunity.
                                 ______
                                 

              PREPARED STATEMENT OF THE NATURE CONSERVANCY

    Mr. Chairman, and members of the Committee, I appreciate the 
opportunity to submit this testimony for the record on fiscal year 2001 
appropriations for the Natural Resources Conservation Service (NRCS) 
and for the Animal and Plant Health Inspection Service (APHIS).
    The Nature Conservancy is an international, non-profit organization 
dedicated to the conservation of biological diversity. Our mission is 
to preserve the plants, animals and natural communities that represent 
the diversity of life on Earth by protecting the lands and waters they 
need to survive. The Conservancy has over a million individual members 
and over 1,500 corporate sponsors. We currently have programs in all 50 
states and in 20 nations. To date our organization has protected more 
than 11 million acres in the 50 states and Canada, and has helped local 
partner organizations preserve millions of acres overseas. The 
Conservancy itself owns more than 1,600 preserves--the largest private 
system of nature sanctuaries in the world. Three concepts have been 
fundamental to our success: sound science; strong partnerships with 
public and private landowners; and tangible results at local places.
    The Conservancy is deeply committed to working with agricultural 
producers to conserve biodiversity on private lands. We currently work 
with local landowners at approximately 75 sites across the country to 
implement conservation on the ground, and plan to increase this number 
to 500 sites within the next decade. Conservation programs administered 
by NRCS are highly popular with producers because they provide 
voluntary tools to manage landscapes and reduce the need for regulatory 
compliance. The programs also serve as an important additional source 
of income for economically distressed producers.

                            RECOMMENDATIONS

    The Conservancy recommends:
  --The appropriations committee to fund the enrollment of a total of 
        150,000 acres in the Wetland Reserve Program (WRP) for fiscal 
        year 2001, should the authorizing committee not approve new 
        acres for enrollment in the program. We also urge the committee 
        not to target WRP to offset other expenditures.
  --EQIP funding of $300 million for fiscal year 2001. We also urge the 
        committee not to target EQIP to offset other expenditures.
  --Full support of the President's budget request for $747 million in 
        appropriations to the conservation operations account for NRCS. 
        This appropriation principally supports the agency's basic 
        conservation program, called conservation technical assistance.
  --Full support of the President's budget request for $10.5 million 
        for APHIS to enhance its capability to fight invasive species 
        as called for by the recently signed Executive Order.

                     WETLAND RESERVE PROGRAM (WRP)

    The agriculture conservation program most important to the 
Conservancy is the WRP. This program makes a sizeable amount of money 
available to producers who enroll in the program after having concluded 
that the best economic return on their land would be from the receipt 
of program dollars rather than from crop or livestock production. 
Because wetlands provide excellent habitat for wildlife, the program 
serves the Conservancy's mission of habitat conservation, and at the 
same time provides farmers who elect to enroll in the WRP with the 
opportunity to generate income by renting WRP acres to hunting groups.
    The Conservancy strongly supports WRP because it is the only 
program administered by the U.S. Department of Agriculture that at 
least in part buys permanent protection for resource values on private 
lands. These values include: (1) conservation of wildlife habitat, (2) 
purification of groundwater runoff and, (3) regulation of the flow of 
water in watershed systems by storing surface and groundwater. 
Permanent protection of environmentally significant resources is the 
best investment of public conservation dollars. In these times of 
economic distress for many producers, making financial options 
available for producers that also results in conservation benefits for 
the general public is good public policy.
    The 1996 Farm Bill authorized the enrollment of 975,000 acres for 
WRP. Only 40,000 of these acres remain to be enrolled in fiscal year 
2001. The Conservancy recommends that the appropriations committee fund 
a WRP enrollment level of 150,000 acres in fiscal year 2001, should the 
authorizing committee not approve new acres for the program. Should the 
authorizing committee approve additional acres, we ask the 
appropriations committee not to use the WRP account to offset other 
expenditures.

             ENVIRONMENTAL QUALITY INCENTIVE PROGRAM (EQIP)

    The Conservancy seeks a $100 million increase in funding for EQIP 
for fiscal year 2001, for a total of $300 million. In addition, we urge 
the committee not to target EQIP to offset other expenditures. The 
agricultural conservation community recognizes the significant 
contribution made by farm runoff to the impairment of our nation's 
watersheds. An important strategy for addressing this problem must be 
voluntary farm runoff abatement measures, such as that provided by the 
EQIP program. The increased funding recommended will begin to help 
animal feeding operators in financial distress deal with regulatory 
pressure to keep water clean.

                   CONSERVATION TECHNICAL ASSISTANCE

    Agricultural production depends on the conservation of the soil and 
water resource base. NRCS and the Conservancy both know that 
conservation will succeed ultimately only to the extent that it also 
serves the need of producers to engage in economically viable farming. 
NRCS has a relationship of trust with private landowners that is 
unusual among federal agencies. It takes a non-regulatory, voluntary 
approach to conservation. The voluntary conservation programs 
administered by NRCS, along and the Conservation Reserve Program 
administered by the Farm Service Agency, provide farmers with highly 
effective tools for conserving soil and water resources.
    NRCS provides conservation technical assistance through their 
district conservationists, who give free advice to producers interested 
in managing the natural resources on their land. In addition, district 
conservationists provide a number of products requested by producers. 
These include conservation management systems for a variety of land 
types, irrigation water management plans, animal waste management 
plans, program eligibility determinations, wetland creation or 
restoration plans, conservation education, and long-term strategic 
resource planning to individuals and communities.
    Congress appropriated $661 million for the agency in fiscal year 
2000. The current demand for these services approximately doubles NRCS' 
ability to provide them. The Conservancy believes that if NRCS is not 
funded at a level sufficient to provide these services, the resource 
base on private lands will be impaired and biodiversity will be put at 
greater risk. In particular, NRCS will have difficulty providing 
technical assistance in support of the Wetland Reserve Program (WRP) 
and the Conservation Reserve Program (CRP) in the absence of full 
funding of the conservation technical assistance account.
    A comprehensive clean water policy at the federal level must 
include funding for the tools that enable producers to implement 
voluntarily conservation practices and regulatory activities. An 
increase in appropriations for conservation technical assistance is 
needed this year in particular because of the increased requirements 
for animal feeding operators to change practices that affect water 
quality. For all of these reasons, we ask the Committee to give full 
support to the President's request of $747 million for NRCS 
conservation operations.

           ANIMAL AND PLANT HEALTH INSPECTION SERVICE (APHIS)

    The President signed an executive order in February 1999 that 
directs the federal government to make a concentrated and coordinated 
effort to fight invasive species. The 2001 budget request for APHIS 
reflects this heightened attention in two accounts which are of 
greatest importance to the Conservancy. First, the President requested 
an increase of $1.7 million for the noxious weed account within the 
area of pest and disease management. This amount would be used by APHIS 
to begin developing a national rapid assessment and response system for 
invasive plants. Rapid detection of new invasions may be the most 
effective means for managing the presence of invasive plants on our 
lands.
    Second, the President requested $8.8 million to fund a new account 
for invasive species. These funds would be used to gain a better 
understanding of the pathways through which invasive plants spread 
through the United States; to collect baseline data on the presence of 
invasive plants, and to further develop eradication and/or management 
programs; and, to conduct public education. These activities are 
critical to successfully fighting the invasive species that are 
destroying the biological and economic value of our natural and grazing 
lands.
    We appreciate the support that you have shown for agriculture 
conservation through the years, and appreciate this opportunity to 
present a written statement to your committee. The Conservancy looks 
forward to working with you on these issues in this and future 
agriculture appropriations bills.
                                 ______
                                 

    PREPARE STATEMENT OF THE NEW MEXICO INTERSTATE STREAM COMMISSION

                                SUMMARY

    This Statement is submitted in support of appropriations for the 
Department of Agriculture's Colorado River Basin salinity control 
program. The salinity control program has not been funded at the level 
necessary to control salinity with respect to water quality standards 
of the basin states. Also, this failure to provide adequate funding 
negatively impacts the quality of water delivered to Mexico pursuant to 
Minute 242 of the International Boundary and Water Commission. Funding 
for the Environmental Quality Incentives Program (EQIP), from which the 
Department of Agriculture funds the salinity program, has been 
insufficient to fund needed salinity control measures. I urge that the 
administration's recommended funding of $325,000,000 be appropriated 
for EQIP, with at least $12,000,000 designated to the Colorado River 
Basin salinity control program.

                               STATEMENT

    The Colorado River Basin salinity control program was authorized by 
Congress in the Colorado River Basin Salinity Control Act of 1974. The 
Act was amended by Congress in 1984 to give new responsibilities to the 
Department of Agriculture. The seven Colorado River Basin states, in 
response to the Clean Water Act of 1972, formed the Colorado River 
Basin Salinity Control Forum. Comprised of gubernatorial appointees 
from the seven Basin states, the Forum was created to provide for 
interstate cooperation in response to the Clean Water Act, and to 
provide the states with information necessary to comply with Sections 
303 (a) and (b) of the Act. The Forum has become the primary means for 
the seven Basin states to coordinate with federal agencies and Congress 
to support the implementation of the salinity control program.
    Many of the most cost-effective projects undertaken by the salinity 
control program have occurred since implementation of Department of 
Agriculture's authorization for the program. The Bureau of Reclamation 
is currently completing studies on the economic impacts of the salinity 
of the Colorado River in the United States. Reclamation's study 
indicates that damages in the United States may soon be approaching $1 
billion per year. It is essential to the cost-effectiveness of the 
salinity control program that Department of Agriculture salinity 
control projects be funded for timely implementation to protect the 
quality of Colorado River Basin water delivered to the Lower Basin 
States and Mexico.
    However, with the enactment of the Federal Agriculture Improvement 
and Reform Act of 1996 (FAIRA), the Congress concluded that the 
salinity control program could be most effectively implemented as one 
of the components of the Environmental Quality Incentives Program. 
Since the enactment of FAIRA, the salinity control program has not been 
funded at a level adequate to ensure that water quality standards in 
the Colorado River, with respect to total dissolved solids (salinity), 
will be honored, nor is the funding sufficient to prevent salt loading 
from irrigated agriculture in the Upper Colorado River Basin from 
impacting the quality of water delivered to Mexico under Minute No. 242 
of the International Boundary and Water Commission, United States and 
Mexico.
    The salinity control program has been subsumed by the EQIP program 
without the Secretary of Agriculture giving adequate recognition to the 
requirement in Section 202 (c) in the Colorado River Basin Salinity 
Control Act to carry out salinity control measures. Water users 
hundreds of miles downstream are the beneficiaries of this water 
quality protection and improvement program. Irrigated agriculture in 
the Upper Basin sees local benefits as well as the downstream benefits 
and have submitted cost-effective proposals to the State 
Conservationists in Utah, Wyoming and Colorado. Priority Area proposals 
for EQIP funding are ranked in each state under the direction of the 
NRCS State Conservationist. Existing ranking criteria, however, does 
not consider downstream benefits (particularly out of state benefits) 
when proposals are being evaluated.
    The Department of Agriculture, following protracted urging by the 
Basin states, has concluded as a result that the salinity control 
program is different than the small watershed approach of the EQIP 
program. The watershed for the salinity control program stretches 
almost 1200 miles, from the headwaters of the river through the salt-
laden soils of the Upper Basin to the river's termination at the Gulf 
of California in Mexico.
    The Basin states were led to believe by Congressional staff that 
when the EQIP program was created, the $200,000,000 annual Commodity 
Credit Corporation (CCC) borrowing authority given to the Secretary 
would ensure that through the year 2002 at least the requested amount 
of funding would be expended for the EQIP program. The Basin states, 
including New Mexico, have been very dismayed that funding for EQIP was 
reduced to $174,000,000 last year. This level of funding is not 
adequate for this most important nationwide program and the 
Administration does not believe that it provides sufficient funds to 
implement National Priority Areas as allowed by Congress under FAIRA. 
The Forum urges that the funding for EQIP for fiscal year 2001 total 
$325,000,000.
    The Natural Resources Conservation Service (NRCS) earmarked funds 
to use in areas of special interest in the amount of about $5.3 million 
last year. The states added about $2 million in up-front cost-sharing 
and local farms contributed about $2.3 million. The plan for salinity 
control of the water quality of the river, prepared and adopted by the 
Basin states, shows that the USDA portion of the effort must be funded 
at $12 million per year in order to comply with water quality standards 
and offset significant salinity damages in the United States.
    State and local cost-sharing is triggered by the federal 
appropriation. The entire effort last year was funded at only about 44 
percent of program needs. The requested funding of $12 million for 
fiscal year 2001 will continue to be needed each year for at least the 
next few fiscal years. The Department of Agriculture indicated that a 
more adequately funded EQIP program would result in more funds being 
allocated to the salinity program. The Basin states have cost sharing 
dollars available to participate in on-farm salinity control efforts in 
the cost-sharing fashion provided by the Congress. The agricultural 
producers in the Upper Basin are waiting for their applications to be 
considered so that they might also cost share in the program. The 
Department of Agriculture projects have proven to be the most cost-
effective component of the salinity control program. However, 
Administration and Congressional funding support has dramatically 
declined despite increasing damages from the salinity of the Colorado 
River.
    I urge the Congress to appropriate $325,000,000 from the CCC in 
fiscal year 2001 for EQIP. Also, I request that Congress advise the 
Administration that $12,000,000 of the appropriation is to be 
designated for the Colorado River Basin salinity control program.
    Finally, I request that adequate funds as requested by the 
Administration be appropriated for technical assistance and education 
activities at the local level, rather than requiring the NRCS to borrow 
funds from CCC for the direly needed support functions.
                                 ______
                                 

    PREPARED STATEMENT OF THE NORTHWEST INDIAN FISHERIES COMMISSION

    Mr. Chairman and Members of the Committee, I am Billy Frank, Jr., 
Chairman of the Northwest Indian Fisheries Commission (NWIFC), and on 
behalf of the twenty-Western Washington member Tribes, I submit this 
request for appropriations to support the research, sanitation and 
marketing of Tribal shellfish products. We request the following:
  --$500,000 to support commercial harvests costs which will assist the 
        tribes in fulfilling the demands for their shellfish products 
        in both domestically and abroad;
  --$1,000,000 to support water and pollution sampling, sampling and 
        research for paralytic shellfish poisoning and coordination of 
        research projects with State agencies; and,
  --1,000,000 to support data gathering at the reservation level for 
        the conduct of shellfish population surveys and estimates.

                        TREATY SHELLFISH RIGHTS

    As with salmon, the tribes' guarantees to harvest shellfish lie 
within a series of treaties signed with representatives of the Federal 
Government in the mid-1850s. In exchange for the peaceful settlement of 
what is today most of Western Washington, the tribes reserved the right 
to continue to harvest finfish and shellfish at their usual and 
accustomed grounds and stations. The tribes were specifically excluded 
from harvesting shellfish from areas ``staked or cultivated'' by non-
Indian citizens. Soon after they were signed, the treaties were 
forgotten or ignored.
    The declining salmon resource in the Pacific Northwest negates the 
legacy Indian people in Western Washington have lived by for thousands 
of years. We were taught to care for the land and take from it only 
what we needed and to use all that we took.
    We depended on the gifts of nature for food, trade, culture and 
survival. We knew when the tide was out, it was time to set the table 
because we live in the land of plenty; a paradise complete. Yet, 
because of the loss of salmon habitat which is attributable to 
overwhelming growth in human population, a major pacific coastal salmon 
recovery effort ensues. Our Shellfish resource is our major remaining 
fishery.
    At least ninety types of shellfish have been traditionally 
harvested by the Tribes in Western Washington and across the continent 
Indian people have called us the fishing Tribes because of our rich 
history of harvesting and caring for finfish and shellfish. Our 
shellfish was abundant and constituted a principal resource of export, 
as well as provided food to the Indians and the settlers which greatly 
reduced the living expenses. Shellfish harvesting subsidized our income 
when we were unable to support our families from the finfish revenues 
only.
    Then came civilization, Tribal beaches were sold by the State to 
non-Indians, and the waters were polluted and contaminated which 
greatly impacted the resource. And today, at a time when efforts are 
underway to restore the Pacific Coastal Salmon, Western Washington 
Tribal fishers are unemployed because there are no salmon. We ask this 
Committee to help us to restore our shellfish harvesting which will 
enable us to participate in the shellfish trade industry once again.

Assist the tribes in fulfilling the demands for their shellfish 
        products, $500,000

    Shellfish harvested by members of Western Washington's Indian 
tribes is highly sought after throughout the United States and the Far 
East. We request $500,000 which will assist Tribes in promoting our 
shellfish products, in both domestic and international markets. We are 
now at a point in time when telecommunicating is both cost effective 
and timely when marketing products. Tribal fishers are not capable of 
supporting such an effort individually, but, could collectively benefit 
if such a network could be developed through the Northwest Indian 
Fisheries Commission and the Northwest Indian College in Bellingham, 
Washington. This institution is capable of providing the technology 
needed to implement such a marketing program for Tribal shellfish 
products.

Water and Pollution Sampling, Sampling and Research for paralytic 
        shellfish poisoning and coordination of research projects with 
        State agencies, $1,000,000

    Shellfish growing areas are routinely surveyed for current or 
potential pollution impacts and are classified based on the results of 
frequent survey information. No shellfish harvest is conducted on 
beaches that have not been certified by the tribes and the Washington 
Department of Health. Growing areas are regularly monitored for water 
quality status and naturally-occurring biotoxins to protect the public 
health.
    However, both Tribal and non-Indian fisheries have been threatened 
due to the lack of understanding about the nature of biotoxins, 
especially in subtidal geoduck clams. Research targeted to better 
understand the nature of biotoxins could prevent unnecessary illness 
and death that may result from consuming toxic shellfish, and could 
prevent unnecessary closure of tribal and non-Indian fisheries.

Data gathering at the reservation level for the conduct of shellfish 
        population surveys and estimates, $1,000,000

    Very little data and technical information exists for many of the 
Tribal fisheries now being jointly managed by State and Tribal 
managers. This is particularly true for many free-swimming and deep-
water species. This lack of information can not only impact fisheries 
and the resource as a whole, but makes it difficult to assess 50/50 
treaty sharing arrangements. Additionally, intertidal assessment 
methodologies differ between State and tribal programs, and can lead to 
conflicts in management planning.
    Existing data systems must be enhanced for catch reporting, 
population assessment and to assist enhancement efforts. Research on 
methodology for population assessment and techniques also is critical 
to effective management.
    Onsite beach surveys are required to identify harvestable 
populations of shellfish. Regular monitoring of beaches also is 
necessary to ensure the beaches remain safe for harvest. Additional and 
more accurate population survey and health certification data is needed 
to maintain these fisheries and open new harvest areas. This 
information will help protect current and future resources and provide 
additional harvest opportunities.

                       TRIBAL SHELLFISH RESOURCE

    Shellfish have been a mainstay of western Washington's Indian 
tribes for thousand of years. Clams, crab, oysters, shrimp, and many 
other species were readily available year 'round. The relative ease 
with which large amount could be harvested, cured, and stored for later 
consumption made shellfish an important source of nutrition--second 
only in importance to salmon.
    Shellfish remain important for subsistence, economic, and 
ceremonial purposes. With the rapid decline of many salmon stocks, due 
to habitat loss from western Washington's unrelenting growth in the 
human population, shellfish harvesting has become a major factor in 
tribal economies.
    The tribes have used shellfish in trade with the non-Indian 
population since the first white settlers came into the region a 
century and a half ago. Newspaper accounts from the earliest days of 
the Washington Territory tell of Indians selling or trading fresh 
shellfish with settlers. Shellfish harvested by members of western 
Washington's Indian tribes is highly sought after throughout the United 
States and the Far East. Tribal representatives have gone on trade 
missions to China and other Pacific Rim nations where Pacific Northwest 
shellfish--particularly geoduck--is in great demand. Trade with the Far 
East is growing in importance as the tribes struggle to achieve 
financial security through a natural resources-based economy.
    As with salmon, the tribes' guarantees to harvest shellfish lie 
within a series of treaties signed with representatives of the Federal 
Government in the mid-1850s. Language pertaining to tribal shellfish 
harvesting included this section:
    ``The right of taking fish at usual and accustomed grounds and 
stations is further secured to said Indians, in common with all 
citizens of the United States; and of erecting temporary houses for the 
purposes of curing; together with the privilege of hunting and 
gathering roots and berries on open and unclaimed lands. Provided, 
however, that they not take shell-fish from any beds staked or 
cultivated by citizens.''

Treaty With the S'Klallam, Jan. 26, 1855

    In exchange for the peaceful settlement of what is today most of 
western Washington, the tribes reserved the right to continue to 
harvest finfish and shellfish at all of their usual and accustomed 
grounds and stations. The tribes were specifically excluded from 
harvesting shellfish from areas ``staked or cultivated'' by non-Indian 
citizens.
    Soon after they were signed, the treaties were forgotten or 
ignored. The influx of non-Indian settlers into western Washington 
continued to grow with each passing year, and the tribes were slowly 
excluded from their traditional shellfish and finfish harvest areas.
    Tribal efforts to have the Federal Government's treaty promises 
kept began in the first years of the 20th Century when the United 
States Supreme Court ruled in U.S. v. Winans that where a treaty 
reserves the right to fish at all usual and accustomed places, a State 
may not preclude tribal access to those places.
    Sixty years later, the tribes were again preparing for battle in 
court. After many years of harassment, beatings and arrests for 
exercising their treaty-reserved rights, western Washington tribes took 
the State of Washington to Federal court to have their rights legally 
re-affirmed. In 1974, U.S. District Court Judge George Boldt ruled that 
the tribes had reserved the right to half of the harvestable salmon and 
steelhead in western Washington.
    The ``Boldt Decision,'' which was upheld by the U.S. Supreme Court, 
also re-established the tribes as co-managers of the salmon and 
steelhead resources in western Washington.
    As a result of this ruling, the tribes became responsible for 
establishing fishing seasons, setting harvest limits, and enforcing 
tribal fishing regulations. Professional biological staffs, enforcement 
officers, and managerial staff were assembled to ensure orderly, 
biologically-sound fisheries.
    Beginning in the late 1970s, tribal and State staff have worked 
together to develop comprehensive fisheries that ensure harvest 
opportunity for Indian and non-Indian like, and also preserve the 
resource for generations to come.
    It was within this new atmosphere of cooperative management that 
the tribes sought to restore their treaty-reserved rights to manage and 
harvest shellfish from all usual and accustomed areas. Talks with their 
State counterparts began in the mid-1980s, but were unsuccessful. The 
tribes filed suit in Federal court in May 1989 to have their shellfish 
harvest rights restored.
    The filing of the lawsuit brought about years of additional 
negotiations between the tribes and the State. Despite many serious 
attempts at reaching a negotiated settlement, the issue went to trial 
in May 1994.
    In 1994, district court Judge Edward Rafeedie upheld the right of 
the treaty tribes to harvest 50 percent of all shellfish species in 
their Usual and Accustomed fishing areas. Judge Rafeedie also ordered a 
shellfish Management Implementation Plan that governs tribal/state co-
management activities.
    After a number of appeals, the U.S. 9th Circuit Court of Appeals 
let stand Rafeedie's ruling in 1998. Finally, June 1999, the U.S. 
Supreme Court denied review of the District court ruling, effectively 
confirming the treaty shellfish harvest right.
    Thank you.
                                 ______
                                 

              PREPARED STATEMENT OF THE OCEANIC INSTITUTE

              ARS AQUACULTURE FEEDS AND NUTRITION PROGRAM

    The overall goal of the program is to advance feeds technologies to 
enhance global competitiveness of U.S. feeds, agricultural ingredients 
used in feeds, and aquaculture products. The program is managed by the 
Oceanic Institute (OI), a world leader in feeds and nutrition 
technology. It technically supports and assists the aquaculture and 
aquafeed manufacturing sector and associated industries, including feed 
ingredient suppliers and exporters. The program conducts basic as well 
as applied research that focuses on developing and disseminating new 
and improved aquatic feeds and associated feeding technologies. These 
strategies are designed to be economically viable and environmentally 
compatible with the sustainable development of the aquaculture sector.
    Aquatic feeds and feeding generally represent the largest single 
operating cost item (typically between 25 to 50 percent) of the total 
running expenses of most intensive and semi-intensive finfish and 
crustacean farming operations. Although the U.S. currently ranks first 
in terms of the global production of industrially manufactured animal 
feeds, its domestic aquaculture sector is still emerging and modest 
compared to the terrestrial livestock production sector, with the total 
compound aquafeed production accounting for about 4 percent of total 
global aquafeed production in 1998. However, the global production of 
aquaculture feeds depends heavily on agricultural exports from the U.S. 
With the aquaculture sector currently representing the fastest growing 
segment of U.S. and global agriculture (surpassing in value most 
domestic fruit, vegetable, and nut crops), the potential for increased 
aquaculture and therefore aquafeed production in the U.S. and globally 
using U.S. agricultural ingredients is considerable.
    The program's recent achievements include the following: (1) 
demonstrating the technical feasibility of using lower cost shrimp 
aquafeeds in advanced biosecure, zero-water exchange culture systems; 
(2) improved processing methods for overall improvement in growth 
rates, feed conversion efficiencies and water quality; (3) development 
of improved shrimp feed formulations which take into account the 
dietary nutrient requirements of the cultured shrimp and that of the 
living microbial community within warmwater aquaculture systems; (4) 
development of improved feed processing techniques, including 
ingredient particle size reduction, mixing, pelleting, and extrusion 
processing, for increasing feed nutrient digestibility and 
availability, with consequent improvements in shrimp growth and reduced 
feed wastage and pollution; (5) development of improved analytical 
techniques for the measurement of nutrients in feed ingredients and 
finished feeds, including the successful publication of an analytical 
procedures manual for aquaculture feeds and feed ingredients for the 
American Feed Industry Association; and (6) increased use of U.S. feed 
ingredient sources (i.e., such as soybean meal, corn gluten meal, 
animal byproduct meals from the animal rendering industry, grains--
wheat, corn) as sources of high grade dietary protein and energy for 
use within aquafeeds, and thereby minimizing imports in the form of 
fishmeal, fish oil, and other nutrient inputs.
    Some of the program's research highlights in the past year have 
included the development of new feed formulations and feeding regimes 
that enabled the production of market size shrimp in only eight weeks 
(as opposed to the normal 12-16 weeks), with average weekly growth 
rates in excess of two grams per week. The program demonstrated the 
particular importance of improved feed and water management and the use 
of optimum dietary feeding regimes to elicit maximum growth and feed 
efficiency.
    The program has recently assumed a critical role in the development 
of a new technology package which offers the U.S. substantial worldwide 
competitive advantage in the domestic farming of marine shrimp. The 
emerging zero-exchange biosecure marine shrimp production systems are 
fully dependent upon new and novel feed formulations, ingredients, and 
feeding methods. The systems will permit the U.S. to compete in the 
world market with systems that provide for protection from disease and 
full compatibility with the natural environment and also are less 
expensive. The aquaculture feeds program has already identified ``key'' 
feed fundamentals which allow the exploitation and integration of 
genetically improved and disease free shrimp stocks, virus free 
production methods, and zero environmental impact. It is clear that 
these advanced production systems are dependent on new feeds technology 
and feeding methods.
    The Oceanic Institute has added world-class scientists to its 
program staff including nutritionists, feed processing technologists, 
microbiologists and computer modelers. Solid science, first class 
facilities and close interactions with genetic and health programs are 
coming together for major technology advances to benefit the United 
States. The OI model has been recently adopted by government agencies 
in parallel fresh water aquaculture efforts. An Industry Liaison 
Committee (composed of experts representing the various sectors of the 
aquatic feed manufacturing and shrimp farming industries, including 
commercial feed producers, feed equipment manufacturers, animal 
nutrition specialists, and commercial shrimp farmers within the U.S.) 
supported by the Agriculture Research Service, has given full 
endorsement to the program in its recent review.
    We ask for your continuing support of this aggressive, highly 
productive and model research and development program.
                                 ______
                                 
     PREPARED STATEMENT OF THE ORGANIZATION FOR THE PROMOTION AND 
           ADVANCEMENT OF SMALL TELECOMMUNICATIONS COMPANIES

                           SUMMARY OF REQUEST

    The Organization for the Promotion and Advancement of Small 
Telecommunications Companies (OPASTCO) seeks the Subcommittee's support 
for fiscal year 2001 loan levels for the telecommunications loans 
program and Rural Telephone Bank (RTB) program administered by the 
Rural Utilities Service (RUS) in the following amounts:

                        [In millions of dollars]

5 percent hardship loans..........................................   $75
Treasury rate loans...............................................   300
guaranteed loans..................................................   120
RTB loans.........................................................   175

    In addition, OPASTCO requests the following action by the 
Subcommittee: (1) removal of the statutory 7 percent cap on Treasury 
rate loans for fiscal year 2001; (2) a prohibition on the transfer of 
unobligated RTB funds to the general fund of the Treasury; (3) 
opposition to the Administration's proposal to fund the RTB's loan 
subsidies and administrative expenses from the bank's liquidating 
account; and (4) funding of the distance learning and telemedicine 
grant and loan program at sufficient levels, including funding for the 
Administration's proposed pilot program to finance broadband 
transmission and local dial-up Internet service.

                                GENERAL

    OPASTCO is a national trade association of more than 500 
independently owned and operated telecommunications carriers serving 
rural areas of the United States. Its members, which include both 
commercial companies and cooperatives, together serve over 2.5 million 
customers in 42 states. Over half of OPASTCO's members are RUS or RTB 
borrowers.
    Perhaps at no time since the inception of the RUS (formerly the 
REA) has the telecommunications program been so vital to the future of 
rural America. The telecommunications industry is at a crossroads, both 
in terms of technology and public policy. Advances in 
telecommunications technology in recent years will deliver on the 
promise of a new ``information age.'' The Federal Communication 
Commission's (FCC) implementation of the landmark Telecommunications 
Act of 1996, as well as modernization resulting from prior statutory 
changes to RUS's lending program, will expedite this transformation. 
However, without continued RUS and RTB support, rural telephone 
companies will be hard pressed to build the infrastructure necessary to 
bring their communities into this new age, creating a bifurcated 
society of information ``haves'' and ``have-nots.''
    Contrary to the belief of some critics, RUS's job is not finished. 
Actually, in a sense, it has just begun. We have entered a time when 
advanced services and technology--such as broadband fiber optics, high-
speed packet and digital switching equipment, and digital subscriber 
line technology--are an expected and needed part of a customer's 
telecommunications service. Unfortunately, the inherently higher costs 
of upgrading rural networks, both for voice and data communications, 
has not abated. Rural telecommunications continues to be more capital 
intensive and involves fewer paying customers than its urban 
counterpart. RUS borrowers average only 6.3 subscribers per route mile 
versus 130 subscribers per route mile for large local exchange 
carriers. In order for rural telephone companies to modernize their 
networks and provide their customers with advanced services at 
reasonable rates, they must have access to reliable low-cost financing.
    The relative isolation of rural areas increases the value of 
telecommunications services for these citizens. Telecommunications 
enables applications such as distance learning, telemedicine, and high-
speed Internet connectivity that can alleviate or eliminate some rural 
disadvantages. Telecommunications can also make rural areas attractive 
for some businesses and result in revitalization of the rural economy. 
For example, businesses such as telemarketing and tourism can thrive in 
rural areas, and telecommuting can become a realistic employment 
option.
    While it has been said many times before, it bears repeating that 
the RUS telecommunications loans and RTB programs are not grant 
programs. The funds loaned by RUS are used to leverage substantial 
private capital, creating public/private partnerships. For a very small 
cost, the government is encouraging tremendous amounts of private 
investment in rural telecommunications infrastructure.
    Most importantly, the programs are tremendously successful. 
Borrowers actually build the infrastructure and the government gets 
paid back with interest. There has never been a default in the history 
of the telecommunications lending programs.

  THE TELECOMMUNICATIONS ACT OF 1996 HAS HEIGHTENED THE NEED FOR THE 
               TELECOMMUNICATIONS LOANS AND RTB PROGRAMS

    The FCC's implementation of the Telecommunications Act of 1996 will 
only increase rural telephone companies' need for RUS assistance in the 
future. The forward-looking Act defines universal service as an 
evolving level of telecommunications services that the FCC must 
establish periodically, taking into account advances in 
telecommunications and information technologies and services. This 
year, the FCC is expected to convene a Federal-State Joint Board to 
revisit the universal service definition, as the Act anticipates. While 
the competitive environment engendered by the 1996 Act may offer the 
means of meeting this evolving definition in urban areas, rural and 
high cost areas have less potential for economically sound competitive 
alternatives. RUS has an essential role to play in the implementation 
of the law, as it will compliment new funding mechanisms established by 
the FCC and enable rural America to move closer to achieving the 
federally mandated goal of rural/urban service and rate comparability.
    At present, considerable regulatory uncertainty exists for rural 
telephone companies as several critical FCC proceedings implementing 
the 1996 Act remain unresolved. These include fundamental changes to 
the universal service and access charge systems and the procedures 
incumbent carriers use to separate their costs between the Federal and 
state jurisdictions. In addition, uncertainty exists as to whether 
rural incumbent carriers will be able to recover the costs of the 
extensive additional regulatory obligations and potential broadband 
deployment demands placed on them. If these outstanding issues are 
resolved in a piecemeal fashion and/or with a strong bias toward new 
entrants, rural incumbent carriers with universal service obligations 
could be hampered in their ability to modernize their networks and 
provide quality, affordable service to all of their customers. Managed 
sequencing and coordination of existing proceedings is necessary if the 
Commission is to preserve Congress's public policy goals of affordable 
rates and access to an evolving telecommunications network for all 
Americans. Equally important is for Congress to monitor the FCC's 
implementation of the Act to ensure that all of its goals--including 
universal service, an even playing field for competition, and 
deregulation--are realized in rural areas.

    A $75 MILLION LOAN LEVEL SHOULD BE MAINTAINED FOR THE 5 PERCENT 
                         HARDSHIP LOAN PROGRAM

    One of the most vital components of RUS's telecommunications loans 
program is the 5 percent hardship loan program. These loans are 
referred to as hardship loans for good reason: They provide below-
Treasury rate financing to telephone companies serving some of the most 
sparsely populated, highest cost areas in the country. The commitment 
these companies have to providing modern telecommunications service to 
everyone in their communities has made our nation's policy of universal 
service a reality and, in many cases, would not have been possible 
without RUS's hardship loan program. Companies applying for hardship 
loans must meet a stringent set of eligibility requirements and the 
projects to be financed are rated on a point system to ensure that the 
loans are targeted to the most needy and deserving. For fiscal year 
2001, the government subsidy needed to support a $75 million loan level 
is under $7.8 million. Given the necessity of this indispensable 
program, it is critical that the loan level be maintained at $75 
million for fiscal year 2001.
removal of the 7 percent cap on treasury rate loans should be continued
    With regard to RUS's Treasury rate loan program, OPASTCO supports 
the removal of the 7 percent ceiling on these loans for fiscal year 
2001. This Subcommittee appropriately supported language in the fiscal 
year 1996 Agriculture Appropriations Act to permit Treasury rate loans 
to exceed the 7 percent per year ceiling contained in the authorizing 
act. The language has been continued in each subsequent year. Were 
long-term interest rates to exceed 7 percent, adequate subsidy would 
not be available to support the Treasury rate loan program at the 
authorized levels. Accordingly, OPASTCO supports the continuation of 
this language in the fiscal year 2001 appropriations bill in order to 
prevent potential disruption to this important program.

 THE PROHIBITION ON THE TRANSFER OF ANY UNOBLIGATED BALANCE OF THE RTB 
   LIQUIDATING ACCOUNT TO THE TREASURY AND REQUIRING THE PAYMENT OF 
              INTEREST ON THESE FUNDS SHOULD BE CONTINUED

    OPASTCO urges the Subcommittee to reinstate the language introduced 
in the fiscal year 1997 Agriculture Appropriations Act, and continued 
in the years following, prohibiting the transfer of any unobligated 
balance of the RTB liquidating account to the Treasury or the Federal 
Financing Bank which is in excess of current requirements and requiring 
the payment of interest on these funds. As a condition of borrowing, 
the statutory language establishing the RTB requires telephone 
companies to purchase Class B stock in the bank. Once all loans are 
completely repaid, a borrower may then convert its Class B stock into 
Class C stock. Thus, all current and former borrowers maintain an 
ownership interest in the RTB. As with stockholders of any concern, 
these owners have rights which may not be abrogated. The Subcommittee's 
inclusion of the aforementioned language into the fiscal year 2001 
appropriations bill will ensure that RTB borrowers are not stripped of 
the value of this required investment.

  THE ADMINISTRATION'S PROPOSAL TO FUND THE RTB'S LOAN SUBSIDIES AND 
 ADMINISTRATIVE EXPENSES FROM THE BANK'S LIQUIDATING ACCOUNT SHOULD BE 
                                REJECTED

    As it's done the past two years, the Subcommittee should once again 
reject the Administration's proposal to fund the RTB's subsidy budget 
authority and administrative expenses through the bank's liquidating 
account balances. The Administration's proposal is inappropriate on 
both legal and policy grounds. Statutorily, the Rural Electrification 
Act provides for the RTB's use of facilities and services of employees 
of the Department of Agriculture, without cost to the RTB, until such 
time as the bank is privatized. The proposal also appears inconsistent 
with the bifurcated structure of the RTB under the Federal Credit 
Reform Act of 1990 which does not permit funds in the liquidating 
account to finance new loans. From a public policy standpoint, 
unobligated balances of the liquidating account have been targeted to 
support the privatization of the RTB and use of these funds for other 
purposes would only serve to dilute the value of the bank for all 
stockholders. Finally, paying for the RTB's administrative expenses and 
subsidy through the liquidating account offers no budgetary savings. 
For these reasons, OPASTCO is opposed to the Administration's proposal 
and urges the Subcommittee to continue to fund the RTB through the 
general fund of the Treasury.

 THE DISTANCE LEARNING AND TELEMEDICINE PROGRAM SHOULD CONTINUE TO BE 
                       FUNDED AT ADEQUATE LEVELS

    In addition to RUS's telecommunications loans and RTB programs, 
OPASTCO supports adequate funding of the distance learning and 
telemedicine grant and loan program. This sensible investment allows 
rural students to gain access to advanced classes which will help them 
prepare for college and jobs of the future. Also, rural residents will 
gain access to quality health care services without traveling great 
distances to urban hospitals. Loans are made at the government's cost-
of-money, which should help to meet demand for the program in the most 
cost effective way. In addition, OPASTCO supports the Administration's 
inclusion of a pilot program to finance installation of broadband 
transmission capacity and to provide local dial-up Internet service to 
rural areas. In light of the Telecommunications Act's requirement that 
schools, health care providers, and libraries have access to advanced 
telecommunications services, and that rural areas have access to 
advanced services that are comparable to those provided in urban areas, 
sufficient targeted funding for these purposes is essential in fiscal 
year 2001.

                               CONCLUSION

    The development of the nationwide telecommunications network into 
an information superhighway, as envisioned by policymakers, will help 
rural America survive and prosper in any market--whether local, 
regional, national, or global. However, without the availability of 
low-cost RUS funds, building the information superhighway in 
communities that are isolated and thinly populated will be untenable. 
By supporting the RUS telecommunications programs at the requested 
levels, the Subcommittee will be making a significant contribution to 
the future of rural America at a negligible cost to the taxpayer.
                                 ______
                                 

PREPARED STATEMENT OF THE PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF 
                                AMERICA

    Mr. Chairman and Members of the Subcommittee: On behalf of the 
Pharmaceutical Research and Manufacturers of America (PhRMA), I present 
recommendations on the fiscal year 2000 budget request submitted by the 
Administration for the Food and Drug Administration, for inclusion in 
the Subcommittee hearing record. PhRMA represents the country's leading 
research-based pharmaceutical and biotechnology companies, which are 
devoted to investing more than $24 billion annually in discovering and 
developing new medicines. PhRMA companies are leading the search for 
new cures and treatments.
    We recognize the difficulties confronting the Subcommittee in 
meeting overall domestic spending caps affecting programs under your 
jurisdiction, under the 1997 budget agreement. We also recognize that 
pressures on appropriators to ensure an appropriate level of U.S. 
defense spending is likely to be even greater in light of the recent 
military activity with NATO. Decisions about which domestic programs to 
maintain or increase thus will be even more difficult. We urge you, 
however, to remember that many of the fruits of biomedical research are 
brought to the bedsides of patients through the research and 
development of new pharmaceuticals and through actions by the FDA to 
bring those safe and effective medicines to patients as soon as 
possible. To achieve this translation of medical research into better 
health for our citizens requires a commitment to appropriate funding 
for FDA.
    That is why PhRMA fully supports the Administration's fiscal year 
2000 request for budget authority specifically for direct federal 
appropriations of $1.016 billion (excluding rental payments of $95 
million) for FDA salaries and expenses. This account is the major and 
essential component of FDA's resources, and the budget request 
represents a $128 million increase over the appropriations enacted by 
Congress for the current fiscal year under Public Law 105-227.
    This level of funding is particularly important under the 
``trigger'' provisions of the 1997 FDA Modernization Act (FDAMA) if the 
pharmaceutical industry is to continue to be required to pay the user 
fees that have enabled FDA to make new life-saving, cost effective 
medicines available to patients much more quickly. The trigger 
provisions require that general fund appropriations for all FDA 
salaries and expenses must equal or exceed the fiscal year 1997 
appropriation level (excluding user fees), as adjusted for inflation or 
changes in discretionary budget authority for overall domestic 
spending, beginning after fiscal year 1997.
    As FDA Commissioner Jane E. Henney, M.D., noted in her recent 
prepared testimony before your Subcommittee, FDA's dedication to the 
health and safety of the American people is well established. It is 
America's most important consumer protection agency. The FDA regulates 
products that account for one-quarter of all consumer spending and that 
comprise about $1 trillion in sales--including foods, medical and 
radiological devices, medicines, animal drugs, and cosmetics. These are 
goods that Americans expect to be safe and reliable.
    However, Congress has imposed increasing responsibilities on FDA's 
staff during the past decade--most recently, under FDAMA and the Animal 
Drug Availability Act. For example, FDAMA requires that FDA inspect 
establishments that make drugs and devices every two years. But between 
1990 and 1998, the number of firms subject to inspections reportedly 
rose from 89,000 to 114,000--a 28 percent increase.
    In addition, the agency has had to respond quickly to an increasing 
variety of new public health issues, such as ensuring the safety of 
food and the nation's blood supply. For these reasons, it is of 
critical importance that FDA be able to retain and recruit highly 
qualified staff.
    The research-based pharmaceutical and biotechnology industries are 
particularly concerned that FDA be able to continue to meet highly 
important performance goals, mutually agreed upon in an historic 
compact between FDA, Congress and industry. The agreement was first 
reached in 1992 in the Prescription Drug User Fee Act (PDUFA) and was 
confirmed in 1997 under FDAMA as PDUFA II. The total FDA ``program'' 
request for salaries and expenses in fiscal year 2000 includes 
authorized appropriations of over $145 million for PDUFA II user fees--
an increase of some $13 million over the current fiscal year, to add 
staff to handle vitally important drug reviews. During fiscal year 
1998-2002, pharmaceutical companies will pay over $550 million in user 
fees under FDAMA, so FDA can continue to reduce both review and overall 
drug development times. As FDA Commissioner Henney has testified:
    ``PDUFA is among the most successful agency programs in history. 
Within its first five years of implementation, the increased resources 
provided by PDUFA to hire additional review staff has resulted in 
cutting the average review times for new drugs, without compromising 
the high standards that FDA has traditionally applied in weighing the 
risks and benefits of new drugs and thereby in determining their safety 
and effectiveness.''
    Under PDUFA, the pharmaceutical industry and FDA are continuing to 
work to serve a common client--the patient. The industry is working to 
develop new and better drugs, FDA is striving to improve the drug 
development and review process.
    The critical importance of this partnership, in cooperation with 
Congress, in delivering new medicines to patients as soon as possible 
cannot be overemphasized. The 30 new drugs and 9 new biologics approved 
by FDA in 1998 are to treat diseases that affect 180 million patients 
and that cost more than $400 billion a year. New treatments include 
medicines for patients suffering from AIDS, cancer, including breast 
cancer, cardiovascular disease, Crohn's disease, tuberculosis, 
rheumatoid arthritis, depression, Parkinson's disease, erectile 
dysfunction, and the first vaccines to prevent Lyme disease and 
retrovirus infection.
    The prescription drug user fee program--which must be sharply 
distinguished from proposals for general purpose user fees--is based on 
three key principles:
  --User fees must supplement FDA appropriations, not substitute for 
        them.
  --User fees must be targeted to the review and approval of innovative 
        prescription medicines and their supplemental indications, and 
        are not to be used for general agency activities.
  --User fees must be applied to meet specific performance goals, 
        agreed upon by FDA, to ensure the timely review and approval of 
        new drugs.
    Before user fees, FDA review times averaged about 30 months. But 
the 30 drugs approved in 1998 were reviewed in an average of 11.7 
months slightly better than the 12-month goal specified in PDUFA II. 
FDA also exceeded the fiscal year 1998 goal to review 90 percent of all 
standard new drug and biologic applications within 12 months, by 
completing 100 percent of the reviews within this timeframe.
    The prescription drug user fees collected in fiscal year 2000 will 
enable FDA to continue to meet its PDUFA II performance goals, 
including:
  --Review and act upon 90 percent of standard original NDA and PLA/BLA 
        submissions filed during fiscal year 2000 within 12 months of 
        receipt, and review and act on 50 percent within 10 months of 
        receipt.
  --Review and act on 90 percent of priority original drug NDA and 
        biotechnology BLA submissions filed during fiscal year 2000 
        within six months of receipt.
  --Review and act on 90 percent of standard drug efficacy supplements 
        filed during fiscal year 2000 within 12 months of receipt, and 
        review and act on 50 percent within 10 months of receipt.
  --Review and act on 90 percent of priority drug efficacy supplements 
        filed during fiscal year 2000 within six months of receipt.
    What this means is that FDA can continue to build on its record of 
helping patients to obtain new medicines more than a year and a half 
sooner than they did before user fees were enacted, while maintaining 
its high standards of safety and effectiveness.
    In addition, FDAMA contains important provisions that facilitate 
access by patients to experimental drugs; give FDA more flexibility in 
determining effectiveness; expand access by doctors to peer-reviewed 
medical information; and encourage the development and testing of 
medicines for children.
    The U.S. system of new drug approvals is the most rigorous in the 
world. On average, a company invests about $500 million and takes about 
12-15 years to discover and develop a new drug. Only five in 5,000 
compounds that enter preclinical testing make it to human testing. And 
only one of these five is approved for use by patients.
    R&D investment by research-based pharmaceutical firms continues to 
break records. In 1999, pharmaceutical companies will invest $24 
billion to discover and develop important new medicines. That figure 
represents a 14.1 percent increase over last year's record setting R&D 
spending. And no industry devotes a higher percentage of sales to R&D--
20.8 percent--than the research-based pharmaceutical industry.
    However, the pharmaceutical industry's ever increasing R&D 
investment, and FDA's determined efforts to improve the drug 
development and review process, will be nullified if adequately 
increased baseline appropriations for all of the agency's programs are 
not provided.
    For these reasons, PhRMA strongly urges that Congress appropriate 
$1.016 billion (exclusive of rental payments) in fiscal year 2000 for 
FDA salaries and expenses, as requested by the Administration, to 
ensure that the agency can fulfill its vital responsibilities to 
promote and protect the health and safety of the American people.
                                 ______
                                 

        PREPARED STATEMENT OF THE PREDATOR CONSERVATION ALLIANCE

    I am writing you regarding appropriations of federal funds for the 
U.S. Department of Agriculture ``Wildlife Services'' program (formerly 
called, ``Animal Damage Control''). I am writing on behalf of Predator 
Conservation Alliance, a non-profit conservation organization based in 
Bozeman, Montana. We urge you and the other members of the Subcommittee 
to cut $10 million from Wildlife Service's ``livestock protection'' 
program, which is almost entirely comprised of lethal predator control 
in the western United States.
    The federal Wildlife Services program has received much public 
scrutiny and criticism for its livestock protection program, which 
primarily involves killing coyotes, mountain lions and other predators. 
The problem with the USDA's Wildlife Services program is that public 
money is being spent to kill publicly owned wildlife, often on public 
lands, for the benefit of a small percentage of private livestock 
producers, who are neither required to change their management 
practices to reduce livestock/predator conflicts nor directly pay for 
this government ``service.'' Of the federal funds Congress allocates to 
Wildlife Services, we find that the majority goes to the western 
states, and the majority of that is spent on killing predators.
    Our analysis of Wildlife Service's own data on its expenditures and 
kill figures from fiscal year 1998 (the most recent data available to 
the public) reveals the following problems:
  --Despite a Clinton Administration policy that federal dollars should 
        fund no more than half of Wildlife Services' state office 
        expenditures, this is violated in 10 of the 17 western states;
  --Western livestock producers, including individuals and 
        organizations, contributed less than 17 percent in direct 
        payments for livestock protection, and less than 29 percent 
        when indirect payments to county governments (typically due to 
        a ``head'' tax on livestock) are included;
  --Livestock protection--which is almost exclusively lethal predator 
        control--accounts for three-fifths (61 percent) of Wildlife 
        Services' western state office expenditures, and about the same 
        percentageer the (63 percent) of its western state office 
        expenditures of federally appropriated funds;
  --Over the past several years, Wildlife Services' western state 
        office expenditures to kill predators has exceeded reported 
        livestock losses to predators in those states by more than 
        three times!
    Predator Project considers the Clinton Administration's recent 
proposal to reduce Wildlife Services' operational budget for fiscal 
year 2001 by $2.8 million a step in the right direction. However, we 
urge Congress to further reduce Wildlife Services' budget by $10 
million, by eliminating federal appropriations for the lethal predator 
control work conducted through the Wildlife Services' ``livestock 
protection'' program. For fiscal year 1998 (the most recent years for 
which figures are available) Wildlife Services state offices spent 
$9.58 million of federally appropriated funds on livestock protection. 
We propose a $10 million cut in Wildlife Services' annual federal 
appropriations to eliminate this aspect of the Wildlife Services 
program. It is important to note that this total comprises the amount 
spent by state offices only. Additional federally appropriated funds 
are spent by the western and national Wildlife Services offices to 
manage lethal predator control work; these funds will be unaffected by 
this cut, and will therefore be available to provide technical 
assistance to livestock producers, targeted lethal predator control, 
and other Wildlife Services activities in the western 17 states. 
Eastern Wildlife Services activities, which largely assist landowners 
in managing their own wildlife problems, would be unaffected by this 
reduction.
    Predator Conservation Alliance is not alone in suggesting that 
Congress end the wildlife control program. In January, an unusual 
coalition of taxpayer and environmental groups released ``Green 
Scissors 2000--Cutting Wasteful and Environmentally Harmful Spending'' 
(see attached). Wildlife Services was one of 77 programs which the 
report recommended be cut, because the program is ``preying on 
taxpayers.'' According to the report, not only is the program harmful 
and costly, it does not even work: ``This program kills hundreds of 
thousands of wild animals, but has not significantly reduced livestock 
losses due to predators.'' In addition, Wildlife Services' livestock 
protection activities benefit western ranchers to the exclusion of most 
eastern ranchers. In fact, data recently obtained by the New Mexico-
based group New West Research reveal that only a small percentage of 
western ranchers use Wildlife Services.
    A final good reason for cutting the predator control component of 
Wildlife Services' budget is that this program is outdated and no 
longer supported by the majority of Americans. Our nation spends 
millions of dollars each year to aid wildlife, and the killing of 
wildlife by Wildlife Services directly contravenes these efforts.
    We look forward to working with you to reduce the Federal 
Government's operations and budget on this issue.
                                 ______
                                 
         PREPARED STATEMENT OF THE RED RIVER VALLEY ASSOCIATION

    Mr. Chairman and members of the Committee. I am Wayne Dowd, and I 
am pleased to represent the Red River Valley Association as its 
President. Our organization was founded in 1925 with the express 
purpose of uniting the citizens of Arkansas, Louisiana, Oklahoma and 
Texas to develop the land and water resources of the Red River Basin.
    As an organization that knows the value of our precious water 
resources we support the most beneficial water and land conservation 
programs administered through the Natural Resources Conservation 
Service (NRCS). We understand how important a balanced budget is to our 
nation; however, we cannot sacrifice what has been accomplished. The 
NRCS programs are a model of how conservation programs should be 
administered and our testimony will address the needs of the nation as 
well as our region. We believe strongly that the whole, national 
program must be preserved.
    We appreciate that the fiscal year 2001 President's budget 
increases the NRCS overall funding; however, some programs are NOT 
adequately funded, to the detriment of the agency and our citizens. The 
increases are earmarked for grants, financial assistance and other non-
federal personnel items. The effect is a decrease of funds for direct 
technical assistance.
    We would like to address several of the programs affected by the 
President's fiscal year 2001 budget proposal. Failure to fund these 
initiatives would reduce assistance to those who need it.
    Conservation Operations Budget.--This has been in steady decline in 
real dollars over the past several years. This has apparently happened 
partly as a result of dollars being diverted from Conservation 
Operations to fund new programs, especially the increases in financial 
assistance for conservation. We appreciate the increase for 
Conservation Technical Assistance to $653,805,000; however, this falls 
short of what is required. We request that $900 million be appropriated 
for Conservation Technical Assistance.
    Conservation Technical Assistance is the foundation of technical 
support for conservation to the private users and owners of land in the 
United States. The President's Clean Water Action Plan and the Unified 
Strategy for Animal Feeding Operations will rely heavily on the 
technical assistance provided through NRCS's Conservation Operations 
Program. However, the Administration's proposal is to increase CCC 
programs such as WRP, EQIP, CRP and the newly proposed CSP. The problem 
is that personnel funded from these programs can only provide technical 
assistance for those enrolled in these cost share programs leaving a 
large percent of the agricultural community without technical 
assistance. We recommend that funding for all technical assistance 
should be placed in `Conservation Technical Assistance' and allow NRCS 
to perform their mission of implementing these programs and providing 
assistance to everyone, including those not fortunate enough to be 
selected to participate in cost share programs..
    With increases to EPA's manpower and decreases to NRCS you are 
emphasizing enforcement and reducing assistance. This is the wrong way 
to go. We encourage you to change this trend and allow our agricultural 
community to have access to technology for better conservation than be 
harassed by the constant threat of penalties for non-compliance.
    Section 11 Caps.--Another factor which has seriously reduced the 
ability of NRCS to meet the considerable demands for its technical 
assistance is the limitation on funding which can be provided to NRCS 
due to the Section 11 cap on transfer of funds from the Community 
Credit Corporation (CCC). The CCC provides the funding for NRCS 
technical assistance for several programs including EQIP and CRP. 
Currently, this cap prevents NRCS from covering its staff costs for 
these crucial programs. We support the lifting of the Section 11 cap 
which was established before EQIP, CRP and WRP were created.
    Watershed and Flood Prevention Operations (Public Laws 566 & 
534).--More than 10,400 individual structures have been installed 
nationally. They have contributed greatly to conservation, 
environmental protection and enhancement, economic development and the 
social well being of our communities. More than half of these 
structures are over 30 years old and several hundred are approaching 
their 50 year planned life.
    Today you hear alot about the watershed approach to resource 
management. These programs offer a complete watershed management 
approach and should continue for the following reasons:
  --They protect people and communities from flooding.
  --Their objectives and functions sustain our nation's natural 
        resources for future operations.
  --They are only federally assisted and do not grow the federal 
        government.
  --Initiatives and decisions are driven by the communities.
  --They are cost shared.
  --They follow NEPA guidelines and enhance the environment.
  --They often address the need of low income and minority communities.
  --The benefit to cost ratio of this program has been evaluated to be 
        2.2:1.
    What other federal programs can claim such success?
    There is no doubt of the value of this program. The cost of losing 
this infrastructure exceeds the cost to reinvest in our existing 
watersheds. Without repairing and upgrading the safety of existing 
structures we will miss the opportunity to keep our communities alive 
and prosperous. It would be irresponsible to dismantle a program that 
has demonstrated such great return and is wanted by our citizens.
    We fully support H.R. 728, introduced in the 106th Congress by 
Representative Frank Lucas (R-OK) and Representative Wes Watkins (R-OK) 
as well as S. 1762 introduced by Senator Blanche Lincoln (D-AR); both 
from the Red River Valley Region. This is a crucial bill to address a 
serious problem.
    In addition to the needs for reinvesting in existing infrastructure 
there are many new projects which are awaiting funds to be built. The 
present level, outlined in the budget, of $43.4 million is not 
adequate. We strongly recommend that a funding level of $250 million be 
dedicated to Flood Prevention; Public Law 534, $30 million, and 
Watershed Operations Public Law 566, $220 million. This is more 
realistic and compares to the programs appropriated in the years prior 
to 1997. At the proposed funding level it would take over 30 years to 
complete just the identified projects, with no attention given to 
rehabilitation needs.
    Emergency Watershed Protection Program.--This program comes under 
Watershed and Flood Prevention Operations, but is a separate line item. 
This has been a zero budget item; however, there will always be 
emergency needs.
    As our land use expands, to include sensitive environmental 
ecosystems, major weather events will have an adverse impact requiring 
NRCS to assist under this program; therefore it should be funded up 
front. It is important for NRCS to be prepared for a rapid response. 
With funds available they can react immediately to an emergency when it 
occurs.
    We request that a minimum of $20 million be appropriated for this 
program in the fiscal year 2001 budget and that these funds are not 
taken from elsewhere in the NRCS budget.
    Conservation Reserve Program (CRP).--This program, administered by 
Farm Services Agency, impacts NRCS the most. NRCS conducts and is 
reimbursed for the technical assistance of this program.
    We agree with the President's initiative to increase the enrollment 
cap and request that, as a minimum, the CRP cap be increased to 45 
million acres. This is an extremely beneficial program to our nation 
and should not be allowed to expire. It provides a safety net to those 
farmers trying to make a living on the marginal lands most suited for 
this program.
    Watershed Survey and Planning.--This was budgeted by the President 
at $10.4 million and is an extremely important community program. NRCS 
has used this to become a facilitator for the different community 
interest groups, state and federal agencies.
    As our municipalities expand the water resource issue tend to be 
neglected until a serious problem occurs. Proper planning and 
cooperative efforts, through this program, can prevent problems and 
insure the water resource issues are met. We request that this program 
be funded at a level of $25 million.
    Forestry Incentives Program.--The President's budget has no funding 
for this program. Congress transferred this program to NRCS from the 
Farm Service Agency as a restructuring in the Federal Agricultural 
Improvement and Reform Act of 1996. Forestry on small, privately owned 
lands is recognized as a farming activity. NRCS is the best agency to 
administer this program which assists farmers in production 
agriculture. It is more than just a timber production program. Forests 
are the most effective land users as they relate to water quality, non 
point source pollution, air quality, greenhouse gas reduction and 
wildlife habitat.
    We request Congress fund the Forestry Incentives Program at a level 
of $6.5 million for fiscal year 2001.
    Environmental Quality Incentives Program (EQIP).--Requests for 
assistance through the EQIP program have been overwhelming. The 
resulting requests far exceed the available funds and is an additional 
workload on NRCS's delivery system. Additionally, adequate funding for 
technical assistance must be provided to implement the program at a 
minimum of 19 percent of the total program.
    The $325 million proposed by the President for the EQIP program is 
an adequate budget for fiscal year 2001; and the technical assistance 
for this program budgeted at $61.750 million meets the 19 percent 
level.
    Wetlands Reserve Program (WRP).--This is a very popular and 
important program. It serves as a safety net to those farmers trying to 
make a living on these marginal lands. It also addresses conservation 
needs from water quality to global warming.
    We agree with the President's request to raise the cap 560,000 
acres over two years. We strongly recommend that this program be 
supported at this level. This will allow the program to continue until 
fiscal year 2002 when a reauthorization for the program can be made.
    Red Bayou Irrigation ``Demonstration Project''.--Recent findings in 
the Natural Resources Inventory (NRI) have concluded that irritated 
agriculture is moving from western states to the east. A prime example 
of this is the interest to irrigate along the Red River in Arkansas and 
Louisiana. The drought conditions being experienced has accelerated the 
efforts of different regions to form irrigation districts and start the 
process to install systems. The farmers along Red Bayou, Caddo Parish, 
Louisiana, have been very aggressive in their attempts to become 
operational. We request that this project be `earmarked' as a 
demonstration project to be used as a model throughout the Red River 
Valley. NRCS was requested to determine the cost for this irrigation 
system and we request maximum federal participation for funding of this 
endeavor.
    Over 70 percent of our land is in private ownership. This is 
important to understanding the need for NRCS programs and technical 
assistance. Their presence is vital to ensuring sound technical 
standards are met in our conservation programs. These programs not only 
address agricultural production, but sound natural resource management. 
Without these programs and NRCS properly staffed to implement them many 
owners of our private lands will not apply conservation measures needed 
to sustain our natural resources for future generations.
    The administration has proposed `new' Clean Water Initiative, but 
why do they ignore the agency that has a proven record for implementing 
conservation watershed programs? Congress must decide: will NRCS 
continue to provide the leadership within the communities to build upon 
the partnerships already established? The President's proposal does not 
provide for that leadership and so it is up to Congress to insure NRCS 
is properly funded and staffed to provide the needed help to our 
taxpayers for conservation programs. This can be accomplished simply by 
Funding Conservation Technical Assistance at $900 million and 
eliminating the Section 11 Caps.
    All these programs apply to the citizens in the Red River Valley 
and we are concerned for the future. The RRVA is dedicated to work 
toward the programs which will benefit our citizens and provide for 
high quality of life standards. We therefore request that you 
appropriate the required funding levels within the individual programs 
to insure our nation's conservation needs are met.
    I thank you for the opportunity to present this testimony on behalf 
of the members of the Red River Valley Association and we pledge our 
support to assist you in the appropriation process
    Grant Disclosure.--The Red River Valley Association has not 
received any federal grant, subgrant or contract during the current 
fiscal year or either of the two previous fiscal years.
                                 ______
                                 

                      REGIONAL AQUACULTURE CENTERS

 PREPARED STATEMENT OF LESTER W. MYERS, SOUTHERN REGIONAL AQUACULTURE 
                                 CENTER

    Mr. Chairman and Members of the Subcommittee, I thank you for the 
opportunity to provide testimony in support of the USDA-CSREES Regional 
Aquaculture Centers. My name is Lester Myers. I own and operate a 
catfish farm near Inverness, Mississippi, and am President and General 
Manager of Delta Western, Inc., Indianola, Mississippi, the largest 
catfish feed mill in the United States.
    Over the last 20 years, aquaculture has become an important part of 
United States agriculture. Production of channel catfish, the largest 
sector of domestic aquaculture, has increased more than 30 percent in 
the last 10 years--a growth rate matched by very few industries. Farm-
raised channel catfish now makes up a remarkably large proportion of 
domestic seafood consumption and, on a value basis, catfish ranks 
fourth in the United States, behind only shrimp, salmon, and crabs. 
Further, a significant portion of the salmon consumed by Americans also 
derives from aquaculture.
    As the catch from wild fisheries continues to decline, with no end 
in sight, the shortfall in seafood production must be met by increased 
aquaculture production. However, continued expansion and profitability 
of the aquaculture industry will depend on development of new 
technology to reduce production costs and make production more 
competitive in the global market. For the past several years, I have 
been actively involved with the Southern Regional Aquaculture Center as 
Chairman of the Industry Advisory Council, and I feel that the Regional 
Aquaculture Center program is essential to help meet the need for 
technology development. Already, results from the Regional Center 
projects are having a significant impact on domestic aquaculture. I 
would like to illustrate that point with the results of one project 
that I am very familiar with through my role as General Manager of a 
catfish feed mill.
    Feeds represent about half the cost of raising fish in aquaculture, 
so advances in feed formulation and feeding practices can have a great 
impact on profitability. The recently completed project ``Improving 
Production Efficiency of Warmwater Aquaculture Species through 
Nutrition'' was one of the most successful projects developed through 
the Southern Regional Aquaculture Center. Scientists from nine states--
Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, North 
Carolina, Tennessee, and Texas--cooperated on the project. These 
researchers, worked collaboratively to identify the most cost-effective 
levels of vitamin and protein supplementation in feeds. Their work 
resulted in improved feed formulations and feeding practices that have 
saved the catfish, baitfish, and striped bass industries millions of 
dollars a year. For example, in the catfish industry alone, feed costs 
have been reduced $2-$4 a ton as a direct result of work on this 
project. Assuming overall feed use of 600,000 tons per year in the 
catfish industry, cost savings average $1.8 million annually--over 
three times the amount spent on this project over its 3-year duration.
    The project mentioned above is just one of many projects supported 
through the Regional Center program that return economic benefits many 
times the amount invested. This funding efficiency is the result of the 
decentralized structure of the Regional Centers and the unique 
cooperative process used to develop research projects.
    In summary, representatives of the U.S. aquaculture industry are 
convinced that the Regional Aquaculture Center programs are highly 
valuable and productive. Additional new research findings will help 
insure future success for aquaculture production in the United States. 
The authorized level of funding for the five Regional Aquaculture 
Centers is $7.5 million annually. Despite an outstanding performance 
record and an organizational structure that has become a model for 
collaborative research in agriculture, funding for the Regional Center 
program has remained level at half the authorized level of funding, or 
$4.0 million per year ($800,000 for each of the five Regions). This has 
resulted in a steady erosion of actual operating funds, at the very 
time when industry expansion calls for greater investment in research 
and development. I respectfully request that you recommend the full 
authorized level of $7.5 million for the existing five Centers to 
support these extraordinarily important and effective programs.
    On behalf of the U.S. aquaculture industry, I thank you for the 
opportunity to present testimony in support of the Regional Aquaculture 
Centers, and express my sincere appreciation for the support you have 
provided in previous years. Again, I would like to emphasize that 
significant benefits have already been provided from work conducted by 
these Centers and additional funding is urgently needed by our 
industry.

PREPARED STATEMENT OF RAMSEY REIMERS, TROPICAL AND SUBTROPICAL REGIONAL 
                           AQUACULTURE CENTER

    Mr. Chairman and Members of the Subcommittee: Thank you for 
allowing me the opportunity to submit testimony on behalf of the 
Regional Aquaculture Centers and the Center for Tropical and 
Subtropical Aquaculture.
    Robert Reimers Enterprises, Inc. has been involved in various 
aquaculture projects for the last 15 years. Until two years ago, we 
were the only private sector company involved in aquaculture in the 
Republic of the Marshall Islands.
    To date, we have experimented with a wide range of aquaculture 
products including Corals, Giant Clams, Sponges, Sea Cucumbers, Trochus 
Shell, Moi (Threadfin Shad), Shrimp and Black Pearl Oysters. We have 
invested over $1,000,000 in these ventures and our aquaculture facility 
is the largest of its kind in Micronesia.
    The investments we have made to date are now experiencing a 
financial return. Our Giant Clam Farm is now cash flow positive and the 
Black Pearl Oyster project shows tremendous potential. These projects 
represent two of the very few export products that our country 
produces, bringing in foreign exchange dollars and providing employment 
for our local residents.
    We can say, unequivocally, that a large portion of our success to 
date is due to our relationship with the Center for Tropical and 
Subtropical Aquaculture (CTSA) and their direct involvement in our 
programs.
    CTSA provides a critical link between the scientific community and 
farm operators through the Aquaculture Extension/Development project 
which operates in our region. Intensive extension services were 
provided to us in Giant Clam, Coral, Moi and Black Pearl Oyster 
culture. Without the hands on demonstrations and the frequent research 
bulletins provided, we would not have had the ability or courage to 
enter these industries. Just as important is the constant encouragement 
and moral support that we receive from all levels of CTSA personnel. 
For companies pioneering aquaculture ventures in third world countries 
such as ours, this level of support was absolutely essential.
    In addition to the Extension/Development services, CTSA provides an 
opportunity to directly learn from others in our industry. The annual 
Industry Advisory Council meeting is one example. For those living in 
the more remote locations of the Pacific, this meeting provides an 
especially valued opportunity to meet with other aquaculture 
professionals, to discuss problems related to our regional industry 
development, to hear of new products and techniques, and to make 
synergistic business contacts.
    CTSA works hard at its mission to develop the aquaculture industry 
and potential in its region. The management of CTSA makes a concerted 
effort to listen to industry and respond to industry issues. This is 
most refreshing coming from what many may view as an obscure research 
facility. CTSA conducts the research that we, the industry and 
investors, want to have done. CTSA research helps streamline our 
processes and will ensure the economic success and continued growth of 
our projects for as long as it is in existence.
    It is our hope that with this testimony, your esteemed offices will 
consider continued and expanded support for this valuable agency, the 
Center for Tropical and Subtropical Aquaculture.

PREPARED STATEMENT OF CARTER NEWELL, NORTHEASTERN REGIONAL AQUACULTURE 
                                 CENTER

    Mr. Chairman and members of the Subcommittee: I am Carter Newell of 
Great Eastern Mussel Farms and Pemaquid Oyster Company, two shellfish 
aquaculture companies located in mid-coast Maine. I am the immediate 
past Board Chair of the Maine Aquaculture Innovation Center, and I also 
sit on a marine advisory panel for the newly-formed Maine Technology 
Institute. I have been active in commercial aquaculture in my state for 
twenty-five years.
    Although most aquaculture in Maine is conducted in the ocean, our 
finfish and shellfish growers have much in common with land-based 
farmers, especially those who rear livestock. We have many similar 
problems and concerns. It is understandable therefore that we often 
look to the United States Department of Agriculture (USDA) for 
assistance. In Maine we believe that USDA, with its research, 
extension, and commercialization experience has much to offer our 
growing aquaculture industry.
    We connect with USDA through the Northeastern Regional Aquaculture 
Center (NRAC) which has its office in Massachusetts near New Bedford. 
Each of the twelve northeastern-most states and the District of 
Columbia are represented on the NRAC Board of Directors. Through their 
NRAC affiliation, land grant universities and state trade associations 
are able to keep up to date with USDA's activities relating to 
aquaculture industry development.
    Recently, the U.S. Department of Commerce (DOC), has taken an 
increased interest in aquaculture, particularly marine culture. The 
National Sea Grant College Program, a DOC agency has been involved in 
NRAC from the beginning. Therefore it can be said that NRAC provides a 
bridge between Federal agencies, as well as a bridge between the 
Federal Government and aquaculture in the states.
    The recently completed National Census of Aquaculture, based on 
1998 data, shows that Maine overall has the fourth largest aquaculture 
industry in the United States, behind Florida, Mississippi, and 
Arkansas. However, when it comes to mariculture (ocean aquaculture) 
Maine is the top producer in the United States. The value of Maine's 
Atlantic salmon, oyster, and mussel harvests this year is expected to 
exceed $67 million at the farm gate. This makes aquaculture an 
important force for economic development in my state.
    I am personally involved in an initiative designed to increase one 
segment of aquaculture in Maine. Four years ago, as Chair of the Maine 
Aquaculture Innovation Center, I established a ``Mussel Working Group'' 
tasked with the responsibility of investigating whether mussel 
``suspension culture'' (from rafts or longlines) could work in Maine. 
Public interest in this project has been encouraging. We now have over 
80 people (many are capture fishermen) who are actively following the 
progress of our investigations regarding the suspension culture of 
mussels. Ten rafts of varying designs are now in place.
    Suspension techniques, long utilized in European waters, and off 
Prince Edward Island in Canada, seem to show promise. But we still face 
a number of serious obstacles, and this is where an organization like 
NRAC can play an important role. Let me give you an example.
    We are learning that bird predation--mostly from eider ducks, 
threatens the success of mussel rafts. We need to comprehensively focus 
on ways to keep waterfowl away from the rafts, through the use of 
acoustical devices or protective netting. Now, Maine has sources to 
which a commercial farm can go for sponsorship of aquacultural 
research, but usually, state agencies require match funding. Here is 
where the RACs can make a real difference.
    In the past, NRAC has assisted industry by bringing people 
together, sponsoring research on environmental, disease, and marketing 
topics, and effectively communicating the outcome of research of 
interest to industry. With additional annual appropriations from the 
Congress, NRAC could do much more in the area of applied commercial 
research. Support from USDA could be matched with support from state 
sources, academia and industry. Working together, these partners could 
concentrate their efforts on the obstacles that currently prevent 
entrepreneurs from making major leaps forward.
    You are all aware, I believe, that aquaculture does not fit neatly 
into one department of the Federal government. At last count, some 
fourteen Federal agencies are involved in one way or another with our 
fledgling industry.
    Imagine how this situation confounds the young businessperson 
trying to establish an aquafarm. Right now, the Northeastern Regional 
Aquaculture Center is the best place for an interested person to go and 
obtain Federal information concerning fish farming. By linking with 
NRAC, the prospective fish farmer can identify people who can provide 
assistance and training, can obtain fact sheets and easy to read 
reports on completed and ongoing research. The ``information clearing 
house'' function alone should justify continued Congressional support 
of the RACs.
    As the industry becomes more sophisticated, its members will 
realize that the RACs can play a greater role. We ask that your 
subcommittee give the RACs the resources they need to realize their 
full potential.
    Thank you for your attention to these remarks.

   PREPARED STATEMENT OF MYRON KLOUBEC, MIDWEST REGIONAL AQUACULTURE 
                                 CENTER

    Thank you Mr. Chairman and Members of the Subcommittee for allowing 
me the opportunity to submit testimony on behalf of the Regional 
Aquaculture Center Program. Kloubec Fish Farms is one of the Midwest's 
largest fish producing operations with hatchery, fingerling ponds, and 
indoor food fish facilities. Originally conceived by my father as a 
hobby in 1976, it was later developed by myself into a permanent 
alternative agriculture business in 1981. The business has had 
considerable success supplying a wide variety of fingerling stock into 
numerous recreational areas, including regional farm ponds, state and 
county parks, and private lakes. Since 1981 Kloubec Fish Farms has 
evolved into a wholesale and retail distributor of quality fish for 
sale nationwide, and has spread into international markets. My farm has 
expanded from four ponds and three species in 1976, to over 50 ponds 
and 14 species currently covering 50 acres. Consisting of spawning labs 
and a hatchery, Kloubec Fish Farms has become Iowa's largest privately 
owned and operated fish farm. The operation now has 2 employees. Given 
the necessary financial and operational inducements I think that my 
aquaculture operation is an example of what can be done in today's 
agriculture.
    Aquaculture is a young and developing industry, especially here in 
the Midwest. As with any new agricultural enterprise, we have had to 
produce new products that consumers wanted as well as obtain the 
necessary financing to allow our operation to keep growing. At the same 
time regulations associated with aquaculture have not always been that 
conducive to the private sector. I personally see a bright future for 
aquaculture in the U.S. as long the following occurs: (1) increasing 
research and technology transfer activities in aquaculture, (2) reduce 
the over-regulation of aquaculture (state and federal), and (3) provide 
more access to financing for aquaculture ventures. One way in which 
Congress can influence these factors is to fully fund the $7.5 million 
authorization for the Regional Aquaculture Centers; Congress has never 
fully funded the Centers. If the fully authorized amount is not 
appropriated, then they should at least be funded at the level they 
have received over the last few years which is $4.0 million. The 
savings in increased taxes resulting from less imports and more 
domestic production in aquaculture will help to produce a sound economy 
for this county. Thank you.
                                 ______
                                 

      PREPARED STATEMENT OF THE SANTA CLARA VALLEY WATER DISTRICT

                                SUMMARY

    The statement urges the Committee to support adequate funding for 
the Public Law 566 program in the Administration's budget to provide $1 
million for the Llagas Creek Project and $6 million for the Lower 
Silver Creek Project.

                               BACKGROUND

    The Public Law 566 Watershed Protection and Flood Prevention 
Program has provided funding for flood prevention projects that have 
benefitted communities and agricultural interests throughout the United 
States. Beginning in 1954, the Santa Clara Valley Water District 
(District) has participated in the program with three projects in Santa 
Clara County: Llagas Creek Project, Lower Silver Creek Project, and 
Upper Penitencia Creek Project. The passage of the federal 1990 Farm 
Bill, however, halted the Natural Resources Conservation Service 
watershed plan for Upper Penitencia Creek. Despite the project's high 
benefit-to-cost ratio of 1.7 to 1.0, the U.S. Department of Agriculture 
would not approve the project under the Farm Bill because the 
agricultural benefits are less than the prescribed 20 percent.

                            PROJECT SYNOPSIS

    Public Law 566 projects in Santa Clara County have been 
significantly delayed in recent years because of the program's limited 
funding. This drawn-out schedule has caused a significant hardship for 
the communities. For example, in Morgan Hill, where residents have been 
waiting since 1954 for project completion, severe flood damages were 
sustained in 1997 and 1998 from Llagas Creek.

Llagas Creek Project
    The Llagas Creek Project is located in the southern Santa Clara 
County and serves the communities of Gilroy, San Martin, and Morgan 
Hill. Llagas Creek has flooded in 1937, 1955, 1958, 1962, 1963, 1969, 
1982, 1986, 1996, 1997, and 1998. In the areas of Morgan Hill and San 
Martin, where protection is proposed, flood damages of $150,000 were 
sustained in 1997 and $200,000 in 1998. However, in both years, the 
floods did not damage Gilroy, which was protected by the completed 
portion of the Llagas Creek Project.
    The proposed project will protect more than 1,100 homes, 500 
commercial and industrial buildings, and 1,300 agricultural acres from 
a 1 percent flood.
    The Llagas Creek Project has not been funded for the last four 
years by the Natural Resources Conservation Service. The legal transfer 
of construction authority and program funding from the U.S. Department 
of Agriculture to the U.S. Army Corps of Engineers (Corps) was 
completed under the Water Resources Development Act of 1999 (Section 
501).

Lower Silver Creek Project
    The Lower Silver Creek Project is located in eastern Santa Clara 
County, within the boundaries of the city of San Jose. The creek has 
flooded in 1952, 1955, 1958, 1967, 1982, 1983, and 1986. The proposed 
project on Lower Silver Creek will primarily protect a residential area 
in eastern San Jose. Approximately 1,400 buildings are located in this 
flood prone area. Due to curtailment of Public Law 566 federal funding, 
the District is working with the Natural Resources Conservation Service 
on a reimbursement agreement to design and build the Lower Silver Creek 
Project.

                        FISCAL YEAR 2000 FUNDING

    The level of Natural Resources Conservation Service funding for the 
fiscal year 2000 Public Law 566 program did not provide funds for the 
Lower Silver Creek Project. $250,000 was appropriated for Llagas Creek 
in the Corps budget.

                FISCAL YEAR 2001 FUNDING RECOMMENDATION

    Based on the need to provide critical flood protection for Santa 
Clara County, it is requested that the Congressional Committee support 
adequate funding for the Public Law 566 program in the Administration's 
fiscal year 2001 budget to provide $1 million for the Llagas Creek 
Project and $6 million for the Lower Silver Creek Project.
                                 ______
                                 

          PREPARED STATEMENT OF THE SEMINOLE TRIBE OF FLORIDA

    The Seminole Tribe of Florida is pleased to submit this statement 
regarding the fiscal year 2001 budget for the Natural Resources 
Conservation Service (NRCS) in the Department of Agriculture. The Tribe 
asks that Congress provide $903.8 million for NRCS's Conservation 
Operations-01 Partnership; this request exceeds the administration's 
budget request for fiscal Year 2001 by $250 million. The Seminole 
Tribe's agricultural enterprises and environmental programs benefit 
from the technical assistance the NRCS provides through its 
Conservation Operations Partnership. Recently, the Tribe has been 
working closely with the Florida State Conservationists on a number of 
1996 Farm Bill programs and anticipates increased technical assistance 
needs in the coming fiscal year.

                     THE SEMINOLE TRIBE OF FLORIDA

    The Seminole Tribe lives in the Florida Everglades. The Big Cypress 
Reservation is located in the western basins, directly north of the Big 
Cypress National Preserve. The Everglades provide many Seminole Tribal 
members with their livelihood. Our traditional Seminole cultural, 
religious, and recreational activities, as well as commercial 
endeavors, are dependent on a healthy Everglades ecosystem. In fact, 
the Tribe's identity is so closely linked to the land that Tribal 
members believe that if the land dies, so will the Tribe.
    During the Seminole Wars of the 19th Century, our Tribe found 
protection in the hostile Everglades. But for this harsh environment 
filled with sawgrass and alligators, the Seminole Tribe of Florida 
would not exist today. Once in the Everglades, we learned how to use 
the natural system for support without harm to the environment that 
sustained us. For example, our native dwelling, the chickee, is made of 
cypress logs and palmetto fronds and protects its inhabitants from the 
sun and rain, while allowing maximum circulation for cooling. When a 
chickee has outlived its useful life, the cypress and palmetto return 
to the earth to nourish the soil.
    In response to social challenges within the Tribe, we looked to our 
Tribal elders for guidance. Our elders taught us to look to the land, 
for when the land was ill, the Tribe would soon be ill as well. When we 
looked at the land, we saw the Everglades in decline and recognized 
that we had to help mitigate the impacts of man on this natural system. 
At the same time, we acknowledged that this land must sustain our 
people, and thereby our culture. The clear message we heard from our 
elders and the land was that we must design a way of life to preserve 
the land and the Tribe. Tribal members must be able to work and sustain 
themselves. We need to protect the land and the animals, but we must 
also protect our Tribal farmers and ranchers.
    Recognizing the needs of our land and our people, the Tribe, along 
with our consultants, designed a plan to mitigate the harm to the land 
and water systems within the Reservation while ensuring a sustainable 
future for the Seminole Tribe of Florida. The restoration plan will 
allow Tribal members to continue their farming and ranching activities 
while improving water quality and restoring natural hydroperiod to 
large portions of the native lands on the Reservation and ultimately, 
positively effecting the Big Cypress National Preserve and Everglades 
National Park.
    The Seminole Tribe's project addresses the environmental 
degradation wrought by decades of federal flood control construction 
and polluted urban and agricultural runoff. The interrupted sheet flow 
and hydroperiod have stressed native species and encouraged the spread 
of exotic species. Nutrient-laden runoff has supported the rapid spread 
of cattails, which choke out the periphyton algae mat and sawgrass 
necessary for the success of the wet/dry cycle that supports the 
wildlife of the Everglades.
    The Seminole Tribe designed an Everglades Restoration project to 
allow the Tribe to sustain ourselves while reducing impacts on the 
Everglades. The Seminole Tribe is committed to improving the water 
quality and flows on the Big Cypress Reservation. We have already 
committed significant resources to the design of this project and to 
our water quality data collection and monitoring system. We are willing 
to continue our efforts and to commit more resources, for our cultural 
survival is at stake.
    In addition to addressing the ecosystem concerns related to the Big 
Cypress Reservation, the Tribe has been actively involved in the 
development of the ecosystem-wide restoration plan. The Tribe, as an 
active member of both the Governor's Commission for a Sustainable South 
Florida and the South Florida Ecosystem Restoration Task Force and 
Working Group, has worked cooperatively with our neighbors to design a 
sustainable future for all of South Florida.

            SEMINOLE TRIBE EVERGLADES RESTORATION INITIATIVE

    The Tribe has developed a conceptual water conservation plan that 
will enable us to meet new water quality standards essential to the 
cleanup of our part of the South Florida ecosystem and to plan for the 
storage and conveyance of our water rights. We have also designed, with 
the assistance of the NRCS, the Tribe's best management practices 
program. We continue to use available funds to further the design and 
planning work necessary to implement our Everglades Restoration 
Initiative.
    The Tribe's Everglades Restoration Initiative is designed to 
mitigate the degradation the Everglades has suffered through decades of 
flood control projects and urban and agricultural use and ultimately to 
restore the nation's largest wetlands to a healthy state. Our 
Everglades Restoration Initiative will enable the Tribe:
  --to collect and monitor data to establish a baseline and to evaluate 
        performance of the overall system design;
  --to design and construct surface water management systems to remove 
        phosphorus, convey and store irrigation water, improve flood 
        control, and rehydrate the Big Cypress National Preserve;
  --to commit to the long-term operation and maintenance of new water 
        management systems; and
  --to design and implement comprehensive best management practices for 
        the Big Cypress Reservation.
    This project will enable the Tribe to meet proposed numeric target 
for low phosphorus concentrations that is being used for design 
purposes by state and federal authorities. It will also provide an 
important public benefit: a new system to convey excess water from the 
western basins to the Big Cypress National Preserve, where water is 
vitally needed for rehydration and restoration of lands within the 
Preserve.

                               CONCLUSION

    Everglades restoration is a well-recognized national priority. 
Through its assistance to the Tribe, NRCS has provided valuable 
technical assistance to date. Beginning in fiscal year 1999, NRCS has 
provided programmatic support through EQIP and WRP, which is 
anticipated to continue. The Tribe also anticipates additional 
programmatic assistance through the implementation of a portion of the 
Tribe's water conservation plan through the small watershed program as 
authorized through Public Law 83-566. None of the joint objectives of 
the Tribe and the NRCS can be accomplished, however, without sufficient 
funding of the Florida Conservationist's technical assistance budget.
    The Seminole Tribe is ready, willing, and able to begin work 
immediately. Doing so will require substantial commitments from the 
Tribe, including the dedication of over 9,000 acres of land for water 
management improvements. However, if the Tribe is to move forward with 
its contribution to the restoration of the South Florida ecosystem, a 
substantially higher level of federal financial assistance will be 
needed as well.
    The Tribe has demonstrated its economic commitment to the 
Everglades Restoration effort; the Tribe is asking the federal 
government to also participate in that effort. This effort benefits not 
just the Seminole Tribe, but all Floridians who depend on a reliable 
supply of clean, fresh water flowing out of the Everglades, and all 
Americans whose lives are enriched by this unique national treasure.
    Thank you for the opportunity to present the request of the 
Seminole Tribe of Florida. The Tribe will provide additional 
information upon request.
                                 ______
                                 

        PREPARED STATEMENT OF THE SOCIETY OF AMERICAN FORESTERS

    Mr. Chairman, I am William H. Banzhaf. I am the Executive Vice-
President of the Society of American Foresters (SAF). The more than 
17,500 members of the Society constitute the scientific and educational 
association representing the profession of forestry in the United 
States. SAF's primary objective is to advance the science, technology, 
education, and practice of professional forestry for the benefit of 
society. We are ethically bound to advocate and practice land 
management consistent with ecologically sound principles.
    I am especially pleased to be here today to comment on the fiscal 
year 2001 budget for the Department of Interior and Related Agencies. I 
wish to thank the subcommittee for its continued support of 
professional forestry, and its continued support of our priorities. I 
thank the Chair for the opportunity to testify on these important 
issues.
    The public policy activities of SAF are grounded in scientific 
knowledge and professional judgment. From this perspective we review 
proposed budgets for forestry and related natural resource programs to 
determine their adequacy to meet stated objectives and public needs.

                        THE USDA FOREST SERVICE

Forest Inventory and Analysis
    Of all Forest Service programs, the Forest Inventory and Analysis 
(FIA) is our top funding priority for fiscal year 2001. The Agriculture 
Research, Extension, and Education Reform Act of 1998 demonstrated how 
strongly Congress supports an improved FIA program. The Forest Service 
has developed a strategic plan for the program, a plan that we believe 
strongly responds to Congress' intent, and the recommendations of a 
blue ribbon panel designed specifically to evaluate the progress of the 
program and make recommendations for its improvement. The plan calls 
for an $8 million increase per year through 2003 to fully implement the 
program. Full implementation ought to be our goal.
    We are extremely concerned that the Administration does not truly 
support this important program. The President's budget proposal 
provides no new money for the FIA program. We do believe the Agency 
itself is committed to the program. This is evidenced by a Memorandum 
of Understanding (MOU) between the National Association of State 
Foresters and Chief Dombeck on February 15, 2000. This MOU commits the 
Forest Service to fully implementing the strategic plan, which would 
elevate the role of FIA within the Forest Service and hopefully, 
increase future funding requests from the Administration. The MOU also 
encourages states to make financial and other contributions toward 
fully implementing the FIA program, which is absolutely necessary to 
make it a success.
    In the past, we have discussed a problem with internal funding 
within the Forest Service. Essentially the National Forest System (NFS) 
was not making an appropriate contribution to the FIA program that 
collects inventory data on NFS lands. Chief Dombeck has shown real 
leadership in improving this problem, and we are pleased that the 
Forest Service will allocate funding to assure that all NFS lands are 
inventoried as outlined in the FIA Strategic Plan.
    The Forest Inventory and Analysis program provides accurate, 
comparable data across all forestlands in the United States. Local 
governments, journalists, environmental groups and private citizens, in 
addition to forestry professionals in every employer category, need and 
use this information. Understanding the condition of the nation's 
forests is critical for appropriate planning and sustainable 
management. We believe the subcommittee has recognized the importance 
of this program in the past, and will continue to do so in the future.
    Moving toward the new annualized inventories and increasing the 
range of data collected will create new demand for this important 
program. In order to support these endeavors, we encourage the 
subcommittee to continue to support increased funding for this critical 
program.

Cooperative Fire Protection Programs
    We also strongly support funding for the Cooperative Fire 
Protection programs. Uncontrolled wildland fires pose a tremendous 
threat to the lives, property, and natural resources across the 
country. Conditions are particularly hazardous in the wildland-urban 
interface, a zone where human development intermingles with forests and 
grasslands. In order to secure firefighter safety, minimize property 
damage, and resource loss, cooperative approaches must be effective. 
Firefighters must receive the training, information, and equipment 
necessary to safely carry out their responsibilities.
    Wildfire does not respect political boundaries. Effective wildfire 
response requires a coordinated interagency effort. Frequently, federal 
land managers call upon state and volunteer firefighters nationwide to 
assist in coping with wildland fires, and to provide assistance to 
carry out prescribed burns and fuel reduction programs.
    There are two components of the Cooperative Fire Protection 
programs: the State Fire Assistance program and the Volunteer Fire 
Assistance program. The State Fire Assistance program provides state 
forestry agencies with assistance in delivering a coordinated wildfire 
response and in complying with national safety and training standards 
allowing state and local crews to be deployed to federal fires and 
other emergency or disaster situations. The program also assists states 
with hazard assessments, fuel treatment projects, and public education 
efforts.
    State forestry agencies administer the Volunteer Fire Assistance 
program through grants and other assistance to local fire departments 
for training and equipment. The program's main focus is on rural and 
urban interface communities that need assistance in meeting both 
existing and expanded fire suppression responsibilities. The Volunteer 
Fire Assistance program is another strong cost share program that helps 
rural firefighters secure the latest training and equipment. Rural 
communities fight forest fires, and without this program they would not 
have the appropriate resources. This funding is critical because these 
communities have seen a significant decline in receipts from national 
forest and BLM revenue sharing programs. Resources are scarce in rural 
America.
    Cooperative Fire Protection programs are critical to both forest 
health and the safety of our communities. We ask the subcommittee to 
consider strong funding levels for these programs.

Addressing the Ecological Infrastructure Backlog
    Much has been said about the backlog issues associated with the 
national forests. Whether it is forest health, deteriorating forest 
roads, endangered species, salmon habitat, recreation facilities, 
hazardous fuels, or any number of other issues, it is clear that the 
national forests desperately need attention. The Forest Service must 
address its ecological infrastructure backlog. Ecological 
infrastructures are those mechanisms that allow forest and other 
natural systems to function properly. Any one component of a system 
that is not functioning properly has the potential to impact other 
parts of the system. This is not always the case, but clearly there are 
examples in the national forests. Humans manipulate these processes 
sometimes acting as an equalizer, sometimes doing more damage. The key 
is allowing professional natural resource managers to put the 
infrastructure back in place.
    The Agency is attempting to deal with all the ecological 
infrastructure needs. They have mapped areas of forest health risk 
across the nation. They are addressing a very serious problem with the 
National Forest System road network. They are addressing wildland/urban 
interface issues. The most frustrating thing about all of these efforts 
is the estimated costs associated with addressing them. The Forest 
Service believes it will cost $8.6 billion to address the road backlog 
it faces. The Congressional Research Service believes it will cost $3.9 
billion to completely address the hazardous fuels buildup on the 
National Forest System. These figures do not include other ecological 
infrastructure issues that plague the National Forest System, such as 
the costs associated with restoring salmon habitat, enhancement of 
endangered species habitat, or a host of other problems. While these 
figures are astronomical and beyond what Congress can realistically 
fund, the Forest Service will receive money to address some of these 
problems and one problem should not be favored over the other by the 
Congress or the Administration. Forest Service managers on the ground 
know where critical problems exists, they know how to address them, and 
they have the wherewithal to get the job done. The Forest Service 
should continue to develop plans and tools like the forest health risk 
maps, which Congress can study and consider. We believe this helps 
Congress, in their oversight role, fund backlogged work with confidence 
that the work will be completed. The Forest Service needs a reliable 
multi-year source of funding to address these issues, and the ability 
to set the priorities at the local level. The Agency also needs 
adequate and appropriate staff to carry out these activities.
    We appreciate the efforts the Forest Service has made to respond to 
repeated criticisms regarding accountability. We note that one of their 
responses has been to collapse numerous line items in the National 
Forests System Account to three. We do not support this initiative. 
Collapsing the line items reduces one's ability to understand where the 
Forest Service priorities lie. We do support the Forest Service's 
efforts to detail performance measures, and we believe this process 
will improve over time.

America's Forested Landscape
    It is important that the Forest Service and the federal government 
strengthen their commitment to state and local forestry agencies and 
the 10 million nonindustrial private forestland owners of this nation. 
The Forest Service has a unique partnership with the state forestry 
organizations, a partnership that has the opportunity to improve the 
health of our nation's forests through technical assistance, inventory 
and monitoring, and protection from fires, insects, and disease on the 
543 million acres of non-federal forests. Due to limited funding, the 
State and Private Forestry programs have yet to fully meet their 
potential, however, SAF supports these programs and hopes Congress will 
as well.
    We are concerned about the status of private forestland in this 
nation. State, county, private, and industrial lands are increasingly 
producing forest-related goods and services. The most dramatic change 
on these lands is the shift in production of timber. Approximately 94 
percent of all timber produced in the U.S. is produced on non-federal 
lands. The volume of timber from national forests has decreased 
dramatically, from 12.7 billion board feet (bbf) to 3.4 bbf, over the 
past 12 years. Such reductions shift the burden of producing wood fiber 
to state and private lands in order to meet the nation's increasing 
demand for forest products. The federal government has some 
responsibility to protect and enhance the sustainable flow of forest 
products from state and private lands precisely because of the 
substantial decrease in production on Forest Service lands. We are 
seeing examples of increasing urban sprawl, forest fragmentation, and 
more importantly large managed private forests sold as smaller parcels 
to individual owners reducing overall land management opportunities. As 
a nation we have decided that forests, both public and private, are 
important for economic, environmental, human health, and spiritual 
reasons. We express the importance and value of our forest resources 
through a variety of mechanisms, including legislation. Many federal 
statutes, including the Endangered Species Act, the Clean Water Act, 
the Clean Air Act and others, have a regulatory impact on the 
management of private lands. Other statutes, the Cooperative Forestry 
Assistance Act of 1978, and the 1990 Farm Bill Forestry Title, for 
example, take a cooperative, incentive based approach to non-federal 
forests. These acts recognize the need for state, federal, and local 
cooperation to achieve resource benefits across the landscape, and they 
use a non-regulatory, incentive-based approach to achieve them. This 
cooperative approach is vital on issues that cross ownership 
boundaries, such as watersheds, forest insects and disease, and 
particularly wildfire.
    Adequate funding is essential if the program is to reach non-
industrial private landowners, only about 10 percent of whom have 
written management plans for their land. Even worse, the majority of 
timber sales on private lands go forward without the benefit of 
professional forestry advice. While this may seem like merely a problem 
of poor business practices, we in the forestry profession view it as a 
serious threat to the long-term sustainability of the nation's forest 
resources. Private land has public value. That is why we actively 
support programs that increase the amount of forestry advice available 
to non-industrial private forest landowners. In addition to private 
sector consulting and industry efforts, extension programs, and other 
mechanisms, we believe the State and Private forestry programs can help 
both public and private sector foresters meet these challenges.
Maintaining and Enhancing Forest and Rangeland Research
    There has been a general clamor for increased funding for forestry 
research since the publication of the 1990 RPA program report, which 
identified improving scientific knowledge about natural resources as a 
high priority. The National Research Council's (NRC) 1990 report, 
Forestry Research: A Mandatefor Change, found the knowledge required 
for sound forest management policies inadequate. The 1997 NRC report 
entitled Forested Landscapes in Perspective, which focused on the needs 
of non-industrial private landowners, continued to report that 
information needs were not being met. There are ongoing efforts 
studying the question of the adequacy of forestry research, and they 
all come to the same conclusion: current forestry research efforts are 
inadequate.
    SAF is concerned about the relatively stagnant Forest Service 
research budget of the last few years, but have been encouraged by 
recent modest increases, and we thank the Committee for that support. 
These appropriations, however, represent a significant decline in 
constant dollars and have lead to the unavoidable loss of not only 
administrators but scientists with significant expertise in highly 
specialized areas.
    Natural resource management issues are more complex today than they 
ever have been in the past. To find solutions we need interdisciplinary 
research in the biological, physical, and social sciences. The Agency 
has done a good job, and could do more, to reduce overhead and put more 
research dollars to work in direct research projects. But if we 
continue to lose scientists and research dollars, we believe complex 
issues are unlikely to be resolved, and the future of the Forest 
Service research program will be in jeopardy. With recognition of this 
disturbing trend, we encourage the Committee to increase the 
appropriation for Forest Service Research above the President's 
request. We have presented separate testimony on this issue, and we 
thank the Committee for its continued interest in the need for forestry 
research.

The Bureau of Land Management
    The fiscal year 1998 Interior and Related Agency Appropriation Act 
(Public Law 105-83) included language that expanded the use of the 
Bureau of Land Management's Forest Ecosystem Health and Recovery Fund 
(FEHRF), allowing the BLM to expand silvicultural treatments to improve 
forest ecosystem health. Funds from this account are used to support 
Public Domain forest management efforts, including reforestation, 
thinning, salvage timber sales and other fuel reduction activities 
including prescribed fire. The expanded authority for the FEHRF, 
combined with increased funding for prescribed burning, will provide 
BLM managers with the tools to improve forest and wildlife habitat on 
BLM lands. And again, we thank the Committee for developing this change 
in authority.
    In spite of the funding available under the FEHRF to implement 
ecosystem health projects, the BLM lacks the on-the-ground personnel, 
within the Public Domain, necessary to plan and implement these 
important activities. Since 1981, the BLM Forestry Management program 
has experienced an inflation-adjusted 65 percent budget decrease, 
whereas the entire Management of Lands and Resources budget has 
experienced only a 10 percent decrease over the same time period. With 
this in mind, we do support the modest increase of about $2.8 million 
requested in the President's budget to complete on-the-ground forest 
management projects. However, we firmly believe the BLM needs to 
increase its forest management expertise in order to take full 
advantage of the FEHRF and effectively shift to a focus on forest 
restoration. Therefore, we support an increase in funding and 
congressional direction for additional forestry personnel to plan and 
administer forest health improvement activities under the BLM Forestry 
Management program.
    In conclusion, we strongly support Forest Service research, in 
particular Forest Inventory and Analysis, and the Cooperative Fire 
Protection programs, and state and private programs. We also support 
the BLM's Forest Ecosystem Health and Recovery Fund and the effort to 
restore the Public Domain forests. Thank you, Mr. Chairman for the 
opportunity to share our views with you and the subcommittee today.

                           ABOUT THE SOCIETY

    The Society of American Foresters, with about 18,000 members, is 
the national organization that represents all segments of the forestry 
profession in the United States. It includes public and private 
practitioners, researchers, administrators, educators, and forestry 
students. The Society was established in 1900 by Gifford Pinchot and 
six other pioneer foresters.
    The mission of the Society of American Foresters is to advance the 
science, education, technology, and practice of forestry; to enhance 
the competency of its members; to establish professional excellence; 
and to use the knowledge, skills, and conservation ethic of the 
profession to ensure the continued health and use of forest ecosystems 
and the present and future availability of forest resources to benefit 
society.
    The Society is the accreditation authority for professional 
forestry education in the United States. The Society publishes the 
Journal of Forestry; the quarterlies, Forest Science, Southern Journal 
of Applied Forestry, Northern Journal of Applied Forestry, and Western 
Journal of Applied Forestry; The Forestry Source; and the annual 
Proceedings of the Society of American Foresters national convention.
                                 ______
                                 

  PREPARED STATEMENT OF THE SOCIETY FOR ANIMAL PROTECTIVE LEGISLATION

    We greatly appreciate the support this Subcommittee has provided to 
these programs of the U.S. Department of Agriculture and respectfully 
request the following modest appropriations and oversight to ensure 
that the laws passed by Congress are being carried out effectively.

   A $15.175 MILLION APPROPRIATION IS NEEDED FOR APHIS/ANIMAL CARE'S 
                 ENFORCEMENT OF THE ANIMAL WELFARE ACT

    An unprecedented coalition of organizations has joined together 
seeking adequate funds for enforcement of the Animal Welfare Act (AWA). 
The Coalition includes national groups such as the American Veterinary 
Medical Association, the American Zoo and Aquarium Association, the 
National Association for Biomedical Research and the Society for Animal 
Protective Legislation, as well as grassroots organizations from across 
the country. This represents a unique meeting of the minds between the 
regulated community and the animal welfare community, who recognize the 
desperate need for increased funding for this vital program.
    The Animal Welfare Act is the chief federal law for the protection 
of animals. The USDA seeks compliance with its minimum standards for 
the care and treatment of animals during transportation and at the more 
than 10,000 sites of dealers, research, testing and teaching 
facilities, zoos, circuses, carriers (airlines, motor freight lines and 
other shipping businesses) and handlers (ground freight handlers).
    Forty-five percent of the facilities that are inspected are found 
to be noncompliant. Facilities with serious deficiencies require 
reinspections to ensure that corrective action is taken. Our review of 
inspection reports shows a widespread inability of inspectors to make 
the needed reinspections; the only reason they are unable to reinspect 
is a lack of sufficient funds.
    In 1966 the Laboratory Animal Welfare Act (later renamed the Animal 
Welfare Act) was adopted in an effort to prevent the sale of lost or 
stolen pets into research. Nevertheless, this has continued to be a 
serious problem. In an attempt to address this problem, in the mid-
1990s, Animal Care instituted a policy of conducting quarterly 
inspections of random source dealers. Since stepping up its enforcement 
in this area (which has come at the expense of inspections conducted 
elsewhere), USDA has revoked 11 dealer licenses and imposed over 
$500,000 in fines. The number of random source (USDA licensed Class B) 
dealers supplying dogs and cats to research has dropped from 104 to 32.
    This example illustrates the value of frequent, unannounced 
inspections of licensees and registrants. Increasing the number of 
inspections will significantly improve compliance with the law.
    Limited resources could be better utilized if Congress prohibited 
the supply of dogs and cats by Class B dealers altogether. It is not 
feasible for AC to expend the tremendous effort necessary to track the 
sources on each random source dog and cat. As a result, AC is unable to 
provide an assurance that each dog and cat from these dealers is not a 
lost or stolen pet. There is no need for continued reliance on Class B 
dealers because there are other sources for the dogs and cats needed 
for research purposes including breeders. Report language from the 
Subcommittee could offer support for H.R. 453, the Pet Safety and 
Protection Act, which would end the supply of dogs and cats to research 
facilities by random source dealers. Adoption of this legislation would 
reduce USDA's regulatory burden, while permitting experimentation to 
continue unhindered. The 1985 amendment to the AWA mandates at least 
one inspection per year of all registered research facilities. A 
vigorous inspection program is vital to maintaining public confidence 
in the quality of research and ensuring the humane treatment of 
research animals. With the need to evaluate performance, as well as 
engineering, standards, each inspection is extremely time-consuming and 
labor intensive.
    Increased funding will permit AC to hire and equip more inspectors, 
whose numbers have declined from a high of 88 to a current low of only 
64. AC will be able to increase its searches for unlicensed/
unregistered facilities, an important effort because failure to obtain 
licensure or registration is a widespread problem with many entities 
purposefully evading AC and the requirements of the AWA. The area most 
frequently ignored for lack of sufficient funds has been inspection of 
airlines. Increased funding will permit AC to conduct an adequate 
number of inspections of airlines in an effort to protect against the 
injury, loss or death of animals being transported by air and to help 
meet the requirements of the recently adopted Federal Aviation 
Administration amendment for safe transport of animals by air.

 A $1 MILLION LINE ITEM APPROPRIATION IS NEEDED FOR THE ANIMAL WELFARE 
    INFORMATION CENTER LOCATED AT THE NATIONAL AGRICULTURAL LIBRARY

    The Animal Welfare Information Center (AWIC) was established by the 
1985 amendment to the Animal Welfare Act, the Improved Standards for 
Laboratory Animals Act, to serve as a clearinghouse and educational 
resource of information on alleviating or reducing pain and distress in 
experimental animals (including anesthetic and analgesic procedures), 
reducing the number of animals who must be used for research and 
identifying alternatives to the use of animals for specific research 
projects.
    Animal Care is seeking to maximize compliance with the Animal 
Welfare Act, and the AWIC is the single most important resource for 
educating research facility personnel on their responsibilities under 
this law. There are more than 1,200 registered research facilities 
nationwide, and the services of the AWIC are available to all 
individuals at these institutions.
    The AWIC staff, four full-time professionals, one technician and 
two part-time professionals, respond to requests for information on 
topics covered by the Animal Welfare Act including alternatives to 
painful procedures, unproved methodologies, training, environmental 
enrichment for nonhuman primates, and checking for unintended 
duplication. The staff conduct training, present at meetings, exhibit 
at conferences, produce documents, maintain a website and work on 
special projects.
    The AWIC website (http://www.nal.usda.gov/awic) receives 
approximately 30,000 hits per month. According to AltaVista, there are 
links to the AWIC site by approximately 765 pages. Annually the AWIC 
staff fills more than 18,000 requests for specific publications and has 
provided reference services in response to more than 1,900 requests.
    The AWIC has not received an increase in appropriations during its 
14 years, restricting the services it is able to provide. Though a 
number of documents are in the final stages of preparation, there are 
insufficient funds to provide print and electronic versions of them 
all. These documents include an updated listing of animal-related 
audiovisuals in the National Agricultural Library collection, two 
issues of the Animal Welfare Information Center Bulletin, a database on 
swine (who are being used in increasing numbers) as an animal model, an 
information resource on the use of fish, amphibia, reptiles, 
cephalopods, and insects in research, and processing a series of data 
sets on anesthetics, analgesics, and tranquilizers into searchable 
files on the AWIC website.
    Funds are urgently needed to permit the AWIC staff to develop a 
training program to help Institutional Animal Care and Use Committees 
best fulfill their responsibilities under the Animal Welfare Act. The 
increased costs of personnel, publishing, journals and books, computer 
hardware and software, travel and exhibiting have all increased 
dramatically since 1986 when the AWIC was first funded.

       $500 THOUSAND FOR ENFORCEMENT OF THE HORSE PROTECTION ACT

    It has been thirty years since the Horse Protection Act was adopted 
by Congress, yet soring of Tennessee Walking Horses continues to be a 
widespread problem. Soring is defined by APHIS as ``the application of 
any chemical or mechanical agent used on any limb of a horse or any 
practice inflicted upon the horse that can be expected to cause it 
physical pain or distress when moving.'' Horses are sored to produce an 
exaggerated gait.
    The most effective method of reducing the showing of horses who 
have been sored is to have Animal Care (AC) inspectors present at the 
shows. AC has been restricted to attending less than 6 percent of horse 
shows because of extreme shortage of funds. Unless sufficient funding 
is provided to enable AC to attend more events, the industry will 
continue to defy the law with impunity.
    Lack of financial support has made it necessary for Animal Care to 
rely heavily on the industry to assume responsibility for enforcement 
of the law. This is the same industry that has turned a blind eye to 
compliance with the law since 1970! ``Designated Qualified Persons'' 
(DQPs) are the ``inspectors'' from industry who are supposed to assist 
AC in identifying sore horses and pursuing action against the 
individuals who are responsible. The history of the DQPs reveals their 
failure to achieve the level of enforcement of the unbiased, well-
trained, professional inspectors who work for AC. In fiscal year 1997 
(the most recent year for which such information is available), the 
rate at which DQPs turned down horses for soring was 1.42 percent. The 
turndown rate more than doubled to 3.57 percent when government 
inspectors were present to oversee the activities of the DQPs.
    An increase in appropriations to $500,000 would permit AC to attend 
a greater percentage of horse shows, thereby ensuring significantly 
stronger compliance with the Horse Protection Act.

  CONGRESS NEEDS TO PROVIDE INCREASED OVERSIGHT OF WILDLIFE SERVICES 
                        OPERATIONS AND RESEARCH

Mammals
    Wildlife Services (WS) has been involved in an extremely effective 
oral rabies vaccine program. Use of treated baits has been successful 
in curbing the spread of rabies. Unfortunately, the Administration has 
suggested a reduction in this funding. Resources should be maximized to 
address the rabies threat before it spreads to additional states. We 
encourage that full funding be restored for this vital effort.
    Wildlife Services (WS) needs to utilize a variety of tools for 
management of wildlife under its purview. However, it is essential that 
these tools are effective and publicly acceptable.
    WS needs to begin a phase out of use of steel jaw leghold traps. 
Leghold traps slam shut with bone-crushing force on the limbs of their 
victims, tearing ligaments and tendons, severing toes and causing 
excruciating pain. These traps, opposed by the vast majority of 
Americans, have been condemned as ``inhumane'' by the American 
Veterinary Medical Association, the American Animal Hospital 
Association and the World Veterinary Association.
    On December 11, 1997, the United States Government reached an 
``Understanding'' with the European Union in which the U.S. agreed to 
phase out use of ``conventional steel-jawed leghold restraining 
traps.'' WS has the responsibility of complying with the U.S. 
obligation by ending its use of these barbaric devices.
    WS should begin by immediately prohibiting use of leghold traps for 
3 species for which there is extensive documentation that effective, 
publicly acceptable, less cruel alternatives exist. These species are 
raccoon, beaver and opossum. While we believe that this policy should 
extend to all species, there is no justification for refusing to 
implement this modest step in alleviating unnecessary animal suffering 
at once.
    WS should pursue no further testing of leghold traps as this would 
be an extremely wasteful and cruel use of taxpayer money. Previously, 
funds designated for trap research were merely passed on to a 
nongovernmental organization to utilize as it saw fit, without 
involvement from WS. If funds are allocated for trap testing, WS should 
conduct the research since the agency has the appropriate technical 
expertise.
    Further, WS should adopt a policy of checking all restraining traps 
within a 24-hour period. A wealth of scientific studies documents the 
fact that the longer an animal is in a restraining trap, the greater 
the injury. For this reason, the majority of states have a daily trap 
check requirement. Animals should not be subjected to long-drawn out 
pain because of a failure to assume the responsibility of carefully 
checking traps every day. This policy will help reduce the trauma 
experienced by non-target animals, too, ensuring that more of these 
animals will be able to be released alive.
Birds
    WS is expected to approve the poisoning of two million blackbirds 
with DRC 1339 which takes one to three days to kill the birds by uremic 
poisoning. We urge this distinguished Subcommittee to eliminate funding 
for this empty gesture to appease the growers of sunflower seeds which 
the birds eat during their spring migration.
    The poison is a cruel and basically ineffective means of attempting 
to control blackbird numbers since there are over 35 million blackbirds 
in this portion of the flyway! WS' specious claim that no other birds 
are harmed by the poison is patently incredible. The American taxpayer 
is certainly harmed by being forced to contribute to this cruel 
boondoggle.
    WS is developing a fertility control substance, which could be 
genuinely effective in reducing blackbird numbers. We urge the 
Subcommittee to encourage this sensible effort by WS and cut the 
useless funding for painful poison application. We agree with the 
National Audubon Society demand for an immediate end to the project.
                                 ______
                                 

              PREPARED STATEMENT OF THE STATE OF ILLINOIS

    As you begin to formulate your appropriations and funding 
priorities for fiscal year 2001, I respectfully urge you to consider 
the following items for inclusion in the upcoming agriculture 
appropriations bill. Each request is followed by a brief description of 
the project. These projects and funding requests are of particular 
importance to the State of Illinois and I hope you will be able to 
include them in this legislation. In addition, I am grateful for all of 
the assistance that you have been able to provide to the State of 
Illinois--your efforts are greatly appreciated and provide many 
benefits throughout the state.

                   NATURAL RESOURCES AND ENVIRONMENT

Illinois River Basin Restoration Program, ``Illinois River 2020''--Farm 
        Bill Components
    The Illinois River Basin Restoration Program is a comprehensive 
proposal of authorizations and appropriations that will address the 
serious threats to the Illinois River and its tributaries and implement 
Illinois' goals for the restoration, enhancement, and conservation for 
the Illinois River and its 55 county watershed. The Illinois River 
Basin Restoration Program is a two-tiered approach to provide a 
voluntary, incentives-based program that restores and protects the 
Illinois river hydrology and water quality, addresses urban non-point 
source issues, farmland protection and open space, land treatment for 
stormwater, and best management practices for upland areas that drain 
into the river and its tributaries.
    The following natural resources and environment requests relate 
directly to the Illinois River Preservation Initiative:

Environmental Quality Incentives Program (EQIP)
    Request. Fully fund the Environmental Quality Incentives Program 
(EQIP) at its authorized level of $200 million nationally and increase 
Illinois' share to $9 Million.
    Description. Illinois only received $2.4 million in EQIP dollars in 
1998 and in 1999, respectively. In 1999, over 160 landowners could not 
participate in the program because there was a shortfall of $1.8 
million for projects. An additional $4.5 was needed in 1999 to fund new 
EQIP priority areas that were denied because of insufficient funds.

Farmland Protection Program (FPP)
    Request. Dedicate $10 million in fiscal year 2001 and fiscal year 
2002 in the FPP for the Illinois River Basin.
    Description. The FPP provides matching funds (up to 50 percent of 
the fair-market value) to state, local and Tribal governments to 
permanently protect farmland threatened by development from urban and 
suburban sprawl, through the purchase of easements that preserve the 
land for farm use.

Wildlife Habitat Incentives Program (WHIP)
    Request. Dedicate $1 million in both fiscal years 2001 and fiscal 
year 2002 to the Wildlife Habitat Incentives Program (WHIP) for the 
Illinois River Basin.
    Description. WHIP offers cost-share assistance for up to 75 percent 
of the habitat restoration expenses and technical assistance for 
farmers, ranchers and other landowners who wish to implement wildlife 
habitat practices. Eligible practices include native grass restoration, 
riparian area restoration, and aquatic habitat establishment.

Conservation Reserve Program (CRP)
    Request. Dedicate 400,000 acres of Conservation Reserve Program 
acres to the Illinois River Basin for fiscal year 2001 and fiscal year 
2002.
    Description. The CRP provides farmers with technical and financial 
assistance, including annual rental payments, in exchange for removing 
environmentally sensitive land from production and implementing 
conservation practices such as wildlife habitat restoration and field 
windbreaks. This expansion of acreage would bring an estimated $909 
million in new federal funding to Illinois for restoration over 15 
years of the CRP contract lifetime.

Wetlands Reserve Program (WRP)
    Request. Dedicate 10,000 acres of Wetland Reserve Program to the 
Illinois River Basin for permanent easements.
    Description. The WRP offers technical and financial assistance to 
farmers who wish to restore and protect agricultural wetlands. The USDA 
provides up to 100 percent of the wetland restoration costs and up to 
100 percent of the fair market agricultural value of the land in return 
for permanent or 30-year easements or wetlands restoration cost-share 
agreements. The allotment of this acreage would bring an estimated $11 
million in new federal funding to Illinois for wetland restorations.
    Other natural resources and environment requests include the 
following:

Trees Forever Illinois Buffer Initiative (Illinois Department of 
        Agriculture)
    Request. Annual commitment of $200,000 over five years for the 
``Trees Forever Buffer Initiative.''
    Description. Agriculture and rural America continue to face various 
water quality issues including but not limited to surface water quality 
and TMDLs, Gulf Hypoxia, nutrient management planning and many others. 
The Trees Forever Illinois Buffer Initiative is a project targeted at 
the establishment of demonstration projects across the state, which 
will highlight the benefits of various types of vegetative buffers. 
Projects will include strearnside buffer plants of trees, shrubs and 
grasses; streambank stabilization demonstrations; stream channel 
enhancements; constructed wetlands; livestock facility border plantings 
and various combinations. The purpose of the project is to bring 
together various state, federal, and local groups which may already be 
promoting components of these practices and apply them to specific 
whole farm or whole resource needs.

Mahomet Aquifer Consortium
    Request. $10 million for an extensive study of the Mahomet Aquifer 
in Central Illinois.
    Description. The Mahomet Aquifer Consortium is proposing a study of 
the Mahomet Aquifer in Central Illinois. The Study will identify and 
resolve water quality and quantity issues, help ensure a water supply 
for the future, optimize future water costs, and promote planned 
economic development for the communities affected by the aquifer. The 
project is broken down into 2 phases with phase one taking 3 years and 
an estimated cost of $4 million dollars. Phase two will cost $6 million 
and take 6 years to complete.

                  FOOD NUTRITION AND CONSUMER SERVICES

    Request. A total of $405 million to Illinois for the following 
domestic food programs:
  --National School Lunch Program.--Full funding of this program will 
        translate into $329.7 million for Illinois. There are currently 
        1,864,271 students enrolled.
  --School Breakfast Program.--Full funding of this program will mean 
        $22.2 million for Illinois. There are currently 1,022,966 
        students enrolled.
  --Child and Adult Care Food Program.--Full funding of this program 
        will mean $46 million for Illinois. There are currently 114,819 
        students participating.
  --Summer Food Service Program.--Full funding of this program will 
        mean $5.0 million for Illinois. There is currently a daily 
        average of 118,200 students attending.
  --Special Milk Program.--Full funding of this program will mean $2.1 
        million for Illinois. There is currently a daily average of 
        161,876 students attending.
    Description. Every Illinois student needs a strong foundation for 
learning. Thousands of children come to school already at risk of 
academic failure and we must break that cycle. These nutrition programs 
serve a vital role in supporting student educational programs and it is 
critical that they be funded at the highest possible levels.

             AGRICULTURAL RESEARCH, EDUCATION AND ECONOMICS

National Corn to Ethanol Research Pilot Plant
    Request. $14 million for a National Corn to Ethanol Research Pilot 
Plant (NCERPP).
    Description. The State of Illinois has appropriated $6 million for 
construction of the NCERPP at Southern Illinois University at 
Edwardsville. The total cost of constructing the project is estimated 
at $20 million. The cost of operating the facility will be borne by 
industry and university research conducted at the plant. A total of $14 
million is needed, and no federal funds were appropriated for this in 
fiscal year 2000.

Center for Alternative Agriculture Crops and Products (Southern 
        Illinois University)
    Request. $1.95 million for the Center for Alternative Agriculture 
Crops and Products at SIU-Carbondale.
    Description. This center synergizes various corporations, agencies, 
and regional universities of the heartland and mid-south to explore 
alternative income crops and products for Southern Illinois, Illinois, 
and the entire region. Emphasis would be on increased farm income and 
increased rural development through added production, processing, and 
employment. The plan calls for $1.95 million for renovation and 
expansion of a 13,000-sq. foot building on SIU-Carbondale campus.

Southern Illinois University/University of Illinois Agriculture 
        Outreach Center
    Request. $2.5 million for a joint SIU/U of I agriculture outreach 
center.
    Description. Located on the Carbondale, IL Campus, University of 
Illinois Extension Service and SIU College of Agriculture Agribusiness 
Economics Department will partner to serve Southern Illinois 
constituents via on-site classroom instruction, digital television 
delivery, and web-based access. Building 103 on the Carbondale campus 
would be renovated, expanded, and rewired. Estimated cost is $1.8 
million.

Plant and Alternative Crop Training Center-Belleville, IL
    Request. $2.5 million for a Plant and Alternative Crop Training 
Center at Southern Illinois University Belleville Research Station.
    Description. Project seeks to add a 10,000-sq. ft. facility for 
university and industrial training on the SIU Belleville Research 
Station site near the Mid-America airport. The facility would allow 
agricultural industries of the Metro-East (St. Louis) area to have 
access to an indoor multimedia training/meeting facility. This plan 
allows for synergy with Donald Danforth Plant Science Center shared use 
of land and 1,200-sq. ft. of wet-laboratory space. Construction cost is 
estimated to be $2.5 million.

Soybean Genomics Lab at Southern Illinois University
    Request. $189,000 for the Soybean Genomics Lab at SIU.
    Description. Expand the current laboratory at Southern Illinois 
University to accommodate four added faculty researchers in soybean 
genomics and transformation.

Peoria Research Lab Invasive Species Biological Control Center (through 
        Agriculture Research Service.)
    Request. $4-8 million to establish an Invasive Species Biological 
Control Center.
    Description. The U.S. is facing an unprecedented need to develop 
viable strategies for management of invasive species. Biological 
control is a fundamental management strategy that can be used to manage 
invasive pests both before and after introduction. The Midwest has 
become a focal point for invasive species introductions due to its 
location at the heart of the Great Lakes Region and as home to major 
international shipping and air transportation systems. We propose that 
developing a coordinated administrative structure and facility to 
enhance invasive species management and biological control activities 
in the region should be a joint priority of USDA and state partners.

Agriculture Research Service--Greenhouse Facility at University of 
        Illinois
    Request. $4 million for the University of Illinois for construction 
of a state-of-the-art greenhouse facility.
    Description. The State of Illinois seeks to construct a state-of-
the-art greenhouse facility that will support research associated with 
the Maize (corn) Genetics Stocks Collection and the National Soybean 
Germplasm. Collection at the University of Illinois. (The University 
received $400,000 in planning funds in fiscal year 2000 for this 
project.)

Agriculture Research Service--Laboratory in Peoria
    Request. $4 million for the ARS Laboratory in Peoria
    Description. The State of Illinois supports funding for 
improvements and renovation to the ARS laboratory in Peoria. ($1.8 
million was appropriated for fiscal year 2000 for this purpose.)

Soybean Disease Biotechnology Research Center
    Request. $3.5 million for the National Soybean Research Laboratory 
(NRSL) at the University of Illinois.
    Description. Fiscal year 2001 request is $3.5 million. To be 
established within the National Soybean Research Laboratory (NSRL) at 
the University of Illinois, the Center will be the first line of 
defense against major soybean diseases that threaten the most important 
``biofactory'' of new foods and uses in the future, namely, the soybean 
crop. Scientists in the Center will employ cutting edge biotechnology 
research to provide soybeans with new and improved mechanisms of escape 
from, tolerance of, and resistance to major pathogens, including 
soybean cyst nematode (SCN) and other soy diseases that threaten the 
profitability of the soybean industry. The Center will draw on the 
17,000 lines in the National Soybean Germplasm Collection at the NSRL 
and apply the power of structural, comparative, and functional genomics 
and genetic transformation. The Illinois soybean industry will provide 
funds to help establish the Center and support its research program.

Illinois-Missouri Biotechnology Alliance
    Request. $3 million in funding for the Illinois-Missouri 
Biotechnology Alliance.
    Description. The State of Illinois supports funding for the 
Illinois-Missouri Biotechnology Alliance to continue research at the 
Universities of Illinois and Missouri on biotechnology. Congress 
appropriated $1.184 million in funds for this project in fiscal year 
2000.

Postharvest Antimicrobial Resistance
    Request. Support funding for Agriculture Research Service's 
Postharvest Antimicrobial Resistance food safety research project at 
the Peoria Lab.
    Description. Congress appropriated $400,000 for this project in 
fiscal year 2000.

Aflatoxin Research at the University of Illinois
    Request. $130,000 for Aflatoxin Research at the University of 
Illinois.
    Description. The State of Illinois requests funds to continue 
aflatoxin research at the University of Illinois.
                 farm and foreign agricultural services

Warehouse Examination Agreements (Illinois Department of Agriculture)
    Request. $400,000 to cost-share additional expense of warehouse 
examinations.
    Description. Prior to 1985, federal policies dictated that 
commodities would be isolated from market prices and forces until 
prices rose to specified levels. As a result, large inventories and 
Government owned commodities and commodities pledged as collateral for 
price support loans accumulated and the facilities win which these 
commodities were stored had to be examined to adequately protect the 
Commodity Credit Corporation's (CCC) interests. This led to CCC relying 
heavily on cooperative agreement because the volume of workload 
associated with these high stock levels did not make it feasible for 
CCC to hire and train a workforce that would be adequate to conduct all 
the necessary examinations. USDA terminated this program in 1997. 
Illinois' storage share and federal reimbursements were: In 1993/4, 
7.78 million bushels of grain stored--$364,920 reimbursed; in 1994/5, 
7.87 million bushels--$364,820 reimbursed, in 1995/6, 8.04 million 
bushels of grain--$379,487 reimbursed. Given the fact that today USDA 
is estimating that 70 percent and 80 percent respectively of Illinois's 
1999 corn and soybean crops are presently committed in LDP's or CCC 
loans, the Department is asking USDA to again cost share the additional 
expense of warehouse examinations.

                   FOOD SAFETY AND INSPECTION SERVICE

Quality Assurance Pilot Certification Program for Small Meat Processors
    Request. $200,000 per year over three years for a Quality Assurance 
Pilot Certification Program for small meat processors.
    Description. This Pilot Program is an effort by the Illinois 
Department of Agriculture to establish a Quality Assurance 
Certification Program for small meat and poultry slaughter and 
processing plants. Under this certification program, the Department 
will contract with food safety experts to provide education and HACCP 
compliance training to plant management and employees. After completion 
of the project, material can be used by other states.

National Center for Food Safety and Technology
    Request. $3 million for the National Center for and Technology
    Description. The State of Illinois seeks continuation of the $3 
million received by the Illinois Institute of Technology (IIT) for its 
National Center for & Technology through the fiscal year 2000 
Agriculture Appropriations bill. The Center needs the funding to 
continue its progress in fighting the growing incidence of food borne 
illness. The NCFST has been fighting food borne illness for over a 
decade. It is a unique collaboration between government, academia and 
the food industry that develops manufacturing methods to detect and 
prevent contamination of foods. The NCFST's partners are the U.S. Food 
& Drug Administration, IIT and almost 70 members of the food industry.

IIT Center for Safe Food for Small Businesses
    Request. The State of Illinois supports the Illinois Institute of 
Technology's request for $3 million in federal support.
    Description. This Center provides direct technical assistance to 
small and medium sized food manufacturers to assure both safe products 
for public consumption and improve the companies competitiveness. IIT 
will be requesting continuation of federal funding for the overall 
National Center for Food Safety & Technology. The State of Illinois 
will provide $1 million in fiscal 2001 for this project.

National Food Testing Center at the University of Illinois
    Request. $25 million to create a state of the art National Food 
Testing Center at the University of Illinois.
    Description. To create a state-of-the-art facility for conducting 
safety and efficacy research on new, improved, and functional foods, 
including health-related, genetically enhanced foods. The National Food 
Testing Center will support and expedite the most important experiments 
on foods, that is, tests to assure that they are safe and effective. 
Through these experiments, hundreds of new and improved foods and 
related products will be tested and approved for human use, resulting 
in greatly improved human health, quality of life, and longevity. This 
will enable the U.S. to capture proprietary benefits from its 
investment in agricultural and biomedical research. In addition, 
consumers of these products will be fully confident that these products 
will be safe and effective.

                           RURAL DEVELOPMENT

Pork Producers' Producer-Owned Cooperative Initiative
    Request. Support funding for the capitalization of pork producers' 
producer-owned cooperatives.
    Description. The National Pork Producers are asking for $200 
million for grants to develop, establish, and assist in the 
capitalization of producer-owned cooperatives. These will facilitate 
slaughtering, processing, distribution, and marketing of livestock and 
livestock products. They believe that producer-owned, value-added 
marketing cooperatives provide the best tools for the future and will 
allow independent pork producers to stay in business.

Belvidere-Boone County, Illinois New Uses Ag-Tech District
    Request. $400,000 annually five years for the Belvidere-Boone 
County, Illinois New Uses Ag-Tech District
    Description. The New Uses Economy from bio-based products is poised 
for growth as public and private sectors begin to shift their research 
and development away from petroleum-based products. In order to 
leverage local, state and private investment and to continue the 
development of the project, federal funding of $400,000 per year is 
necessary for the next five years to undertake the following: (1) 
Continuation of the discovery process including the definition of the 
New Uses Economy and the definition of a Green Zone Program; (2) 
Expansion of partnerships with the private sector, universities, and 
the State; (3) Development of the Ag-Tech Park including master 
planning and site development; and, (4) Pursue continued funding 
through private corporations, foundations, and state and federal 
grants.

                      MARKET DEVELOPMENT PROGRAMS

Market Access Program
    Request. Fully fund market development programs.
    Description. The Market Access Program (MAP) uses funds from the 
U.S. Department of Agriculture's (USDA) Commodity Credit Corporation 
(CCC) to help U.S. producers, exporters, private companies, and other 
trade organizations finance promotional activities for U.S. 
agricultural products. Each year, MAP activities help launch and expand 
sales of a wide variety of U.S. agricultural, fish, and forest products 
overseas.
    Farmers benefit from MAP as the primary suppliers of commodities. 
All regions of the country benefit from the program's employment and 
economic effects from expanded agricultural export markets. In 1997, 
agricultural exports totaled $57.3 billion, generating about 974,000 
full-time American jobs, including 562,000 non-farm sector jobs.
    More than one million Americans now have jobs that depend on U.S. 
agricultural exports. USDA economists calculate that each dollar earned 
from agricultural exports stimulates another $1.32 in business activity 
for the economy.
    Since 1985, the Market Access Program and its predecessors, the 
Targeted Export Assistance Program (TEA) and the Market Promotion 
Program (MPP), have helped boost agricultural exports, resulting in a 
positive agricultural trade surplus of $12.5 billion in fiscal year 
1999, and contributing billions of dollars more in increased economic 
activity and additional tax revenues.

Agriculture Structure Center (University of Illinois)
    Request. $320,000 for an Agriculture Structure Center in Illinois.
    Description. The start of the new millennium finds farmers dealing 
with a lot of stress. In addition to 12 year lows in corn prices, 27 
year lows in soybean prices and 50 year lows in hog prices, tremendous 
concern lies in the rapid consolidation of farms and the businesses 
that serve them. In the United States, essentially five companies 
control most of the field seed business, four to five companies control 
most of the meat packing business, twenty to twenty-five companies 
control most of the chicken business and ten companies control half of 
the food retailing business. Within ten years, thirty beef cattle 
feeding and fifty hog-producing businesses will finish 50 percent or 
more of all beef cattle and hogs. This rapidly changing structure has 
led many in production agriculture to wonder if there will be a role in 
the future for independent producers. Existing public and private 
institutions are not well situated at this time to provide answers to 
these producers on how they can remain relevant and competitive in a 
highly integrated, global business.

Institute for Value Added and Alternative Agriculture Products at 
        Southern Illinois University
    Request. $175,000 for an Institute for Value Added and Alternative 
Agriculture at Southern Illinois University.
    Description. One method of improving the economic condition of the 
agricultural sector is to increase the value of the products that are 
sold and to create a greater demand for existing or new food or 
agricultural products which can be produced in Illinois. If more feed 
grains, as well as other agricultural produce, were processed before 
they leave the state, it would not only increase the value of the 
product being exported, but also provide tremendous employment 
opportunities and industrial growth. An institute for value added and 
alternative agricultural products would contribute to economic growth 
through research and development of new and/or improved products. The 
proposed institute would be a focal point for agricultural commodity 
groups and agricultural related industries. The university is in a 
unique position to support such an institute with a well established 
College of Agriculture with current programs in food and nutrition, 
animal and plant science, agricultural economics, as well as faculty in 
other colleges with interests in marketing, genetics, bioengineering 
and economic development.

                      FOOD AND DRUG ADMINISTRATION

Clinical Pharmacology Program
    Request. $3 million for fiscal year 2001 for the FDA's Clinical 
Pharmacology Program.
    Description. The existing clinical pharmacology program offers many 
benefits-development of new drugs, training in pharmacology, important 
research, resource for the local and regional communities, and 
maintaining the U.S. as a world leader in drug development and 
research. Some of the research projects that clinical pharmacology 
programs have been involved in are: AIDS, diabetes, heart attacks, 
lupus, and kidney disease. Despite an authorization of $3 million in 
fiscal year 2000, the program only received an appropriation of 
$500,000. Congress first authorized the clinical pharmacology program 
in 1991. Up to $1.9 million annually in funds was authorized for FDA to 
set up clinical pharmacology programs at several medical schools 
throughout the U.S. An FDA peer review panel established the program at 
four universities: U of I College of Medicine in Peoria, Meharry 
Medical College in Tennessee, Mayo Clinic in Minnesota, and the State 
University of New York in Buffalo. IN 1998, the program was 
reauthorized in the FDA Modernization Act until 2002 at $3 million per 
year.

             ANIMAL PLANT HEALTH INSPECTION SERVICE (APHIS)

National Food Animal Institute (Illinois Department of Agriculture)
    Request. Three-year commitment of $1 million annually for a 
National Food Animal Institute in Illinois.
    Description. The Institute would be established by the Illinois 
Department of Agriculture to review research through peer review and to 
publish and disseminate unbiased information about all the aspects of 
the food animal industry. It would maintain comprehensive information 
systems for the improvement and enhancement of the food animal industry 
for use by the public, government agencies, and other interested 
parties. The Institute must fulfill its purpose with unbiased 
integrity.

Pseudorabies Swine Slaughter
    Request. Support full funding for Animal Plant and Health 
Inspection Service (APHIS). Funds from APHIS would be used to institute 
a pseudorabies swine slaughter surveillance collection point at 
Johnsonville Packing, Momence, IL.
    Description. Currently, Illinois is struggling to acquire an 
adequate number of slaughter surveillance samples to maintain the 
compliance established by the National Program Standards. In 1998, 
first point testing was conducted at the end of the year to achieve the 
required numbers. It has been established that slaughter surveillance 
of cull sows and boars is the superior method of determining the PRV 
status in herds at the grassroots level. Funds from APHIS are critical 
toward the establishment of a pseudorabies swine slaughter surveillance 
collection point in Illinois.

Swine Producer Laboratory Testing
    Request. Support a one-time appropriation from Animal Plant and 
Health Inspection Service (APHIS) for $100,000 to defray the cost for 
swine producers conducting laboratory testing necessary to diagnose or 
maintain the health of their swine herds.
    Description. With the current low prices for hogs, many producers 
are either foregoing diagnostic or preventative health measures in an 
effort to obtain some profit from their animals. Maintaining a healthy 
swine herd helps the producer produce his product in a more efficient 
manner. Providing this assistance would insure that animals that are 
unhealthful and diseased would have access to proper diagnosis and 
eliminate potential disease situations arising in the herd and possible 
spread within the swine industry. In 1997, Illinois produced 1.82 
billion pounds of pork, placing it fourth in U.S. hog production. The 
number of hog producers in Illinois continues to drop: 8,800 hog farms 
in 1996; 7,500 hog farms in 1997; and 7,000 hog farms in 1998.

APHIS-Gypsy Moth ``Slow the Spread'' Program
    Request. Support fiscal year 20O1 spending levels to provide 
Illinois with an estimated $200,000 for the APFUS program.
    Description. The Illinois Department of Agriculture, under 
authorities provided in the Insect Pest and Plant Disease Act, annually 
cooperates with APHIS and various units of local and county government 
to identify and control the Gypsy Moth in Illinois. The annual program 
includes both the identification of gypsy moth infestations as well as 
a treatment control program. In the past, no funding has been 
transferred between agencies. In the trapping (identification) program, 
APHIS has concentrated on the Chicago Metropolitan area and the 
Illinois Department of Agriculture has worked in the balance of the 
state. Once an area is identified as being in need of a treatment 
control, the APHIS has provided the biological pesticide, the local 
unit of government has provided funding for the applicator and the 
Illinois Department of Agriculture has provided overall project 
oversight and coordination. In fiscal year 1999, the APHIS provided 
funding to states for an expansion of the trapping (identification) 
program to attempt to further reduce the spread of the insect.

Johne's Disease Pilot Program (Illinois Department of Agriculture)
    Request. Support a three-year commitment from the Animal Plan and 
Health Inspection Service (APHIS) for $200,000 for the purpose of 
establishing a Johne's Disease pilot program.
    Description. Johne's disease is a wasting disease of cattle, sheep, 
goats and cervidae. This disease is contracted through direct contact 
with infected animals, which are generally infected at a young age, but 
may not exhibit signs of the disease until they are four or five years 
of age. Johne's disease is characterized by weight loss, severe 
diarrhea, depression, and poor performance. There is no cure for 
Johne's disease. It has been estimated that economic losses can amount 
to $227 per cow. A recent National Animal Health Monitoring System 
(NAHMS) sampling of Illinois dairy cows, indicated a prevalence of at 
least 10 percent in the cull cows from the dairy herds tested. Illinois 
would like to start a pilot program that could be used as a model for 
the U.S.

Renewables Bioprocessing Research Program (University of Illinois)
    Request. $20 million for the Renewables Bioprocessing Research 
Program (RBRP) at the University of Illinois.
    Description. The Renewables Bioprocessing Research Program (RBRP) 
is an effort by the University in collaboration with other agencies and 
institutions to provide ``plant to product'' research information for 
the production and processing of corn, soybeans, and wheat. Objectives 
of the RBRP program are: (1) Establish an interdisciplinary 
collaborative research effort in the production and development of new 
food and industrial products from corn, soybeans, and wheat coproducts; 
(2) Establish an interdisciplinary collaborative research effort to 
improve the overall efficiency of converting renewable corn, soybean 
and wheat coproducts into saleable products; (3) Enhance the 
development of small-scale laboratory procedures to accurately predict 
the genetic capabilities of different genotypes, phonetypes, and 
varieties to make desired end use products; and, (4) Provide commercial 
companies with a single integrated program of contract research.

National Facility for USDA Animal Health
    Request. Support USDA's efforts to fund a national facility for 
Animal Health in Ames, Iowa.
    Description. This new facility would replace the National Animal 
Disease Center (NADC), the National Veterinary Services laboratory 
(NVSL), and the Center for Veterinary Biologics (CVB). All of these 
units are in substandard facilities, except for one building at the 
NADC that is new and few APHIS buildings that will be renovated to fit 
in the new plan. The three laboratories, especially NADC, are national 
and international in that they have the capability address a broad 
spectrum of major livestock diseases in BL-2, BL-3, and BL-3 Ag 
(containment facilities.) Improving competitiveness in the world 
market, enhancing our nation's livestock industries, and protecting 
against emerging diseases more than ever depends on maintaining 
disease-free animals and ensuring that systems are in place to respond 
to disease outbreaks. Healthy livestock are fundamental to a safe food 
supply for the American public.

National Coolwater Broodfish Center, SIU
    Request. The State of Illinois and Southern Illinois University 
request $250,000 per year for this project.
    Description. SIU seeks funding of $250,000/year from USDA to 
establish a center than can expand the aquaculture industry in 
Illinois. The goal of this concept is to develop a center to 
domesticate suitable strains of coolwater fish species that will allow 
the farm belt to become a greater participant in the aquaculture 
industry. Currently, most aquaculture occurs with warm water fish 
(catfish) in the south and coldwater fish (trout and salmon) in the 
north. There is a lack of domesticated species suitable for aquaculture 
use in the middle latitudes in the U.S. The impact of this project 
extends to a vast area beyond. The proposed center would take advantage 
of the existing on-campus strength present at the Fisheries and 
Illinois Aquaculture Center, and would:
  --Domesticate suitable strains of coolwater species for commercial 
        foodfish production.
  --Selectively breed coolwater fishes for desirable traits (e.g., 
        rapid growth, improved dress-out percents, and disease 
        resistance).
  --Maintain genetic histories of coolwater broodfishes.
  --Provide selectively bred coolwater broodfishes to commercial 
        producers throughout all coolwater regions of the U.S.A.

Land Use Impacts and Water Quality Research
    Request. $450,000 for Land Use Impacts and Water Quality Research 
at Southern Illinois University (SIU)
    Description. Building on 8 years of collaborative research focusing 
on basic and applied research concerning groundwater, agricultural 
chemicals, and the impacts of natural disasters on groundwater, soils, 
and diversity, this proposal focuses on the impacts of land use on 
water quality. Changes in land use due to urbanization, growth of large 
animal feed lots, and agricultural practices impact water quality, 
flow, and management. SIU will organize and manage a research program 
to provide a scientifically valid basis upon which to base management 
and regulatory decisions on land use and water resources. $350,000 was 
included for this project in fiscal year 2000 Agriculture Appropriation 
Bill.
    Should you need additional information, please do not hesitate to 
contact Bobby Thomson in my Washington, DC office at (202) 624-7772. 
Thank you for your consideration of these requests and for your 
leadership on this most important legislation.
                                 ______
                                 

               PREPARED STATEMENT OF THE STATE OF WYOMING

    This testimony supports fiscal year 2001 expenditures for the 
Department of Agriculture's Environmental Quality Incentives Program 
(EQIP) in the amount of $350,000,000 and requests that $12,000,000 be 
designated for the Colorado River Salinity Control Program.
    This testimony supports fiscal year 2001 appropriations for the 
Department of Agriculture's Environmental Quality Incentives Program 
(EQIP) to carry out Colorado River salinity control activities. The 
State of Wyoming is a member State of the Colorado River Basin Salinity 
Control Forum (Forum), a seven-State organization created by the 
Governors of the Colorado River Basin States. The Forum's Executive 
Director, Jack Barnett, will submit separate testimony in support of 
this requested appropriation and the State of Wyoming has participated 
in the development of, and concurs with the statements made in, the 
Forum's testimony to this Subcommittee.
    Wyoming is also represented on the Colorado River Basin Salinity 
Control Advisory Council, which was created by the 1974 Colorado River 
Basin Salinity Control Act (Public Law 93-320). Like the Forum, the 
Advisory Council is composed of gubernatorial representatives of the 
seven Colorado River Basin States and serves as a liaison between the 
seven States and the Secretaries of the Interior and Agriculture and 
the Administrator of the Environmental Protection Agency (EPA). It 
advises these Federal officials and the involved agencies on the 
progress of efforts to control the salinity of the Colorado River and 
annually makes funding recommendations, including the amount believed 
necessary to be expended by the USDA for its on-farm Colorado River 
Salinity Control (CRSC) Program. Our testimony makes those funding 
requests that are contained within the Advisory Council's written 
program funding recommendations.
    The Plan of Implementation and the numeric water quality criteria 
set for three Lower Colorado River stations constitute the State-
adopted, EPA-approved, water quality standards for salinity the 
Colorado River. Jointly developed and revised each three years by the 
States and involved Federal agencies, the Plan of Implementation is 
being carried out to ensure continuing compliance with the numeric 
water quality criteria for salinity.
    During its October 1999 meeting, the Advisory Council recommended 
that at least $17,500,000 be expended by the Department of Agriculture 
for cost-sharing to implement salinity reduction practices (funds that 
are matched with individual contractor's cost-share funds) in fiscal 
year 2001, plus sufficient funds for administration, technical 
information and education, to assure that the Program's progress of 
removing salt and preventing additional salt loading into the Colorado 
River system stays on the schedule set forth within the Plan of 
Implementation.
    Should a lesser funding level be provided for this important basin-
wide water quality program, the progress (as measured in tons of salt 
prevented from entering the Colorado River system) achieved by the USDA 
component of the multi-agency, State and Federal Colorado River Basin 
Salinity Control Program will fall far short of meeting the rate of 
salinity control determined to be determined necessary to assure 
compliance with the basin-wide standards for salinity in the Colorado 
River. Failure to maintain the standards' numeric criteria could result 
in the imposition of state-line water quality standards (as opposed to 
the successful basin-wide approach that has been in place since 1975) 
and impair the Colorado River Basin States' ability to develop their 
Compact-apportioned water supplies. Further, it is unmistakable that 
funding shortfalls will result in significantly higher costs to 
implement the same level of salinity control through the CRSC Program 
in future years.
    The Federal Agriculture Improvement and Reform Act of 1996 (Public 
Law 104-127) provided for the CRSC Program to continue in the future--
as a component part of the Environmental Quality Incentives Program 
(EQIP). We view the inclusion of the Salinity Control Program in EQIP 
as a Federal recognition of commitment to complying with the Colorado 
River salinity water quality standards. The Secretary of Agriculture 
has a vital role in meeting that commitment. We urge the Subcommittee 
to remind the Secretary of Agriculture of his obligations under that 
Federal commitment as he makes decisions about national conservation 
priority areas and priority resource concerns. The intention of Public 
Law 104-127 is that the nation's agricultural programs be ``locally led 
and driven'' and we agree with that approach. Since the enactment of 
that law, however, the Salinity Control Program has not been funded at 
a level adequate to ensure that the water quality standards for 
salinity in the Colorado River can be maintained at or below the 
numeric criteria levels specified in the standard.
    The Colorado River Basin States have urged the U.S. Department of 
Agriculture to designate the Colorado River Salinity Control Program as 
a national conservation priority area as provided for in the USDA's 
promulgated regulations for the EQIP. Although numerous requests have 
been made for this designation, USDA's responses have justified the 
lack of national conservation priority area designations by pointing to 
the lack of adequate EQIP funding. An authorization of $350,000,000 for 
EQIP funding in fiscal year 2001--an additional $150,000,000 above the 
$200,000,000 level minimum specified in Public Law 104-127--is both 
appropriate and needed.
    I accordingly request that this committee support the borrowing of 
$350,000,000 from the Commodity Credit Corporation (CCC) in fiscal year 
2001 for the EQIP Program, and that the Congress advise the 
Administration to designate $12,000,000 of the EQIP funding for the 
Colorado River Basin Salinity Control Program. Thank you for the 
opportunity to submit this testimony.
                                 ______
                                 

               PREPARED STATEMENT OF TEXAS A&M UNIVERSITY

    Mr. Chairman and members of the Committee, I am Ed Hiler, Vice 
Chancellor for Agriculture and Life Sciences in the Texas A&M 
University system. I appreciate the opportunity to appear before you 
today, to describe a few exciting research projects we have underway, 
and to ask for your support for continued federal funding. New 
technology is the life blood of American agriculture. With the 1996 
Farm Bill and resulting phase down in federal farm programs, it is 
imperative that research continues providing a technological 
underpinning for agriculture. Today, I will describe several examples 
of how we can provide this underpinning.

 DESIGNING FRUITS, VEGETABLES AND OTHER FOOD PLANTS FOR PREVENTION OF 
                       LIFE-THREATENING DISEASES

    To identify plant ``phytochemicals'' that prevent disease and 
enhance those compounds in fruits, vegetables, and other food plants 
that promote human health. Objectives seek to reduce the risk of, to 
slow, and/or to prevent diseases such as cancer, heart disease, stroke, 
and atherosclerosis. Consumers, health care providers, farmers, and 
government will benefit from the production, consumption, and health 
effects of producing and consuming these improved plants. We are 
requesting increased funding for this important continuing project at 
$2,000,000 for fiscal year 2001.

  EFFICIENT IRRIGATION FOR WATER CONSERVATION IN THE RIO GRANDE BASIN

    Recent drought conditions in the border region of the Rio Grande 
Basin highlight the importance of ample water resources for the 
region's economy and environment. More efficient agricultural and urban 
irrigation systems can conserve large amounts of water that can be used 
for other purposes. The objective of this two-state initiative is to 
increase the efficiency of agricultural and urban landscape irrigation 
and encourage development of efficient water markets in the basin. We 
are requesting funding for this project at $3,250,000 for fiscal year 
2001.

                         ANIMAL FIBER RESEARCH

    Appropriations are sought to conduct wool, mohair and cashmere 
research that will stabilize and increase the profitability of the 
sheep, Angora, and cashmere goat industries in the United States and 
Texas while providing U.S. consumers with high quality animal fibers at 
internationally competitive prices. In this three-state initiative, 
emphasis will be placed on the development and expanded use of 
objective fiber measurements in the areas of nutrition, management, 
selection, harvesting, and marketing. We are requesting funding for 
this project at $300,000 for fiscal year 2001.

               FARM-LEVEL IMPACTS OF AGRICULTURAL POLICY

    Funds are needed to conduct agricultural policy research that 
directly supports congressional committees involved in setting 
agricultural policy. This two-state research activity emphasizes the 
regional and farm-level effects of alternative agricultural policies on 
crop producers. Monitoring performance at the farm level continues to 
be particularly critical as government explores its role in providing 
an income safety net for American agriculture. We are requesting 
funding for this project at $500,000 for fiscal year 2001.

                  LIVESTOCK AND DAIRY POLICY ANALYSIS

    Funds are needed to allow Texas A&M University and Cornell 
University to conduct agricultural policy research on the livestock and 
dairy industries that will assist congressional committees in 
developing new legislation for agricultural programs. Legislative 
options will be analyzed to determine policy impacts on various sectors 
of the agricultural economy, markets and land prices. Monitoring the 
performance of the dairy sector at the farm level will be particularly 
critical at a time of regulatory dairy policy reform mandated by the 
1996 Farm Bill and government roles in providing an income safety net 
for American agriculture. We are requesting funding for this project at 
$625,000 for fiscal year 2001.

                   CENTER FOR NORTH AMERICAN STUDIES

    This two-state funding initiative, which has received continual 
support from Congress since fiscal year 1994, would continue and expand 
the programs of the Center for North American Studies headquartered in 
The Texas A&M University System. The Center provides leadership for the 
promotion of stronger agricultural relationships among Canada, Mexico 
and the United States through cooperative study, research, policy 
analysis and training. We are requesting funding for this project at 
$300,000 for fiscal year 2001.

   CONSORTIUM FOR AGRICULTURAL SOILS MITIGATION OF GREENHOUSE GASES 
                                (CASMGS)

    A consortium of eight Land Grand universities, USDA agencies, and a 
private-public research laboratory seeks funds to develop and verify 
scientifically defensible methods to measure and estimate the effects 
of soil conservation and crop management practices on carbon 
sequestration in agricultural soils. The consortium will also assess 
the economic and environmental consequences of programs designed to 
sequester atmospheric carbon dioxide in agricultural soils. We are 
requesting funding of $5,000,000 from USDA for this project for fiscal 
year 2001.

                      SHRIMP AQUACULTURE RESEARCH

    Federal support is needed to maintain continued funding for ongoing 
efforts and to expand programs of the U.S. Marine Shrimp Farming 
Program (USMSFP). This program, currently funded by the USDA/
Cooperative State Research, Extension and Education Service (CSREES) 
through the Oceanic Institute in Hawaii and the Gulf Coast Research 
Laboratory Consortium as based in the Texas Agricultural Experiment 
Station and The Texas A&M University System Agriculture Program. We are 
requesting funding for this project at $5,000,000 for fiscal year 2001.

       INTERNATIONAL GOAT RESEARCH AT PRAIRIE VIEW A&M UNIVERSITY

    Congressional funds are sought to continue the effort supporting 
dairy and meat goat research at the International Goat Research Center 
at Prairie View A&M University, a member of The Texas A&M University 
System. We are requesting funding for this project at $750,000 for 
fiscal year 2001.

    NEW PRODUCTS FROM RANGELANDS AT TEXAS A&M UNIVERSITY-KINGSVILLE

    Congressional funds are sought to continue research efforts to 
support the commercialization of new industrial and food crops from 
native plants--such as cacti and mesquite--from arid lands, greatly 
benefitting Americans who live in the southwestern United States. We 
are requesting funding for this project at $120,000 for fiscal year 
2001.

        SOUTHERN PLAINS COTTON RESEARCH AND EDUCATION CONSORTIUM

    The cotton industry in the Southern Plains is under unprecedented 
stress from declining prices due to strong global competition, improved 
boll weevil management, and increased cotton acreage in the 
southeastern U. S. An agricultural research and education consortium 
composed of Texas Tech University, the Texas Agricultural Experiment 
Station, the Texas Agricultural Extension Service, and USDA 
Agricultural Research Service has been formed to address these 
challenges in the Southern Plains. The consortium proposes to initiate 
a five-year, $27.5 million program to increase profits of Southern 
Plains cotton farmers and processors. The effort will accomplish its 
goal by developing and disseminating improved cotton germplasm, crop 
management practices, pest control programs, textile processing 
technologies, and marketing programs. We are requesting funding for 
this project at $5,500,000 for fiscal year 2001.

           AGRICULTURE AND THE ENVIRONMENT--LANDSCAPE ISSUES

    The focus of the Texas Institute for Applied Environmental Research 
is on agriculture and the environment. Funding for this initiative will 
be used to continue development of (1) conceptual approaches that can 
be used to resolve environmental problems in agriculture while 
maintaining the competitiveness of the industry, (2) modeling tools 
that analyze policy alternatives to determine their effectiveness in 
achieving environmental objectives and their economic impacts on the 
targeted industry, and (3) implications of smart growth initiatives on 
production agriculture. We are requesting funding for this project from 
USDA at $750,000 for fiscal year 2001.

  PROTECTING U.S. AGRICULTURE FROM BIO-TERRORISM & EXOTIC BIO-INVADERS

    An integrated system for protecting U.S. agriculture and its food 
supply against the threat of bioterrorism is recognized as an 
increasingly high priority addition to similar systems for protecting 
humans and cyberspace. The system will also work for natural or 
accidental outbreaks of animal and plant disease resulting from 
introduction of exotic bio-agents. The proposed agricultural bio-
security system will include a surveillance network utilizing GPS and 
satellite imaging technology, field and laboratory based diagnostic 
capacity deploying DNA-chip technology to identify and characterize 
bio-agents, and a geo-referenced information system for predicting and 
tracking the spread of bio-agent after introduction. The system will 
include means to support intervention and mitigation following attack. 
The system will be developed in partnership with the USDA's 
Agricultural Research Service, other universities, and the private 
sector. We are requesting funding for this project at $5,000,000 for 
fiscal year 2001.

                CENTER FOR FOOD SCIENCE AND ENGINEERING

    Appropriations are requested to construct and equip a 125,000 sq. 
ft. facility at College Station, Texas to house: USDA-Agricultural 
Research Service food safety programs and the Texas A&M University 
Institute of Food Science and Engineering. Dedicated incubator space 
will be provided for entrepreneurs seeking to break into food 
manufacturing. We are requesting funding for this project at 
$30,000,000 for fiscal year 2001.

ECONOMICALLY & ENVIRONMENTALLY SOUND RICE PRODUCTION AND MANAGEMENT IN 
                                THE U.S.

    Privately held rice lands provide several societal and ecological 
benefits. Rice has an annual impact of about $13 billion on the economy 
of the U.S., and represents the economic, social, and environmental 
underpinning of major sections of the Gulf Coast. Rice production in 
these soils provides several environmental benefits, including wildlife 
habitats, water filtration through wetlands, and flood protection. 
Federal support is needed to identify and place values on ecological 
services provided by rice production and to design and evaluate 
technologies and policies that increase these public benefits while 
improving the industry's economic viability. We are requesting funding 
from USDA for this project at $1,000,000 for fiscal year 2001.

     INCREASING FOOD SAFETY THROUGH ADVANCED MOLECULAR TECHNOLOGIES

    Appropriations are sought to develop and test the application of 
advanced molecular technologies for enhancing the safety of the 
nation's supply of meats, fruits, and vegetables. Foods contaminated 
with animal wastes and other sources of bacterial pathogens annually 
cause millions of illnesses and thousands of deaths. New and rapidly 
advancing molecular technologies promise to make possible the early and 
economical tracking and investigation of such pathogens. This will 
significantly increase our ability to determine sources of outbreaks 
and to anticipate the effects of food production and processing 
practices on the ability of these organisms to cause disease. The Texas 
and Iowa Agricultural Experiment Stations and Texas Tech University 
propose cooperative public-private research needed to put such 
technologies in place throughout the nation and the world. We are 
requesting funding for this project at $1,250,000 for fiscal year 2001.

               NATURAL FIBERS MARKETS AND POLICY ANALYSIS

    Scientists at Texas Tech University and Texas A&M will determine, 
monitor and continuously assess the status of the U.S. natural fiber 
(cotton, mohair and wool) industries within the context of the U.S. and 
world natural and synthetic fiber markets. It will periodically 
evaluate the impacts of proposed, anticipated and potential policy, 
trade and macroeconomic changes/trends in both the U.S. and abroad, on 
the U.S. natural fiber and textiles markets. The program will 
anticipate shifts in the levels of competitive advantage of U.S. 
industries and the resulting capital/resource flows that might result 
from changing economic and policy environments. These types of analyses 
are particularly important in light of the current debate about the 
role that the U.S. government should play in the agricultural sector/
markets, and about the costs and benefits of global trade 
liberalization. We are requesting funding for this project at $550,000 
for fiscal year 2001.

                       RISK MANAGEMENT SAFETY NET

    Increased volatility of commodity prices and dissatisfaction with 
crop insurance as a policy tool have heightened interest in the role of 
government in providing a safety net for U.S. agriculture. This 
initiative would support analyses of alternative safety net proposals 
as a risk management tool for production agriculture as a substitute 
for conventional farm programs. We are requesting funding for this 
project at $500,000 for fiscal year 2001.

  STRENGTHENING OUR CAPACITY TO CARE: COMMUNITY SUPPORT FOR YOUTH AND 
                                FAMILIES

    This initiative will provide a comprehensive youth and family 
development program designed to strengthen and enhance local community 
educational programming in youth life skills, community service, 
workforce preparation, character education, fathering support and 
parenting education. The goal of this initiative will result in the 
empowerment of families and increased ability of youth to be successful 
contributing members of society. We are requesting funding for this 
project at $2,500,000 for fiscal year 2001.

  IMPROVED STRESS TOLERANCE OF CORN FOR THE SOUTHERN GREAT PLAINS AND 
                          DEVELOPING COUNTRIES

    Farmers and consumers in many parts of the world would benefit from 
corn hybrids that combine high yield potential (like those developed in 
the United States and Europe) with the stress tolerance found in 
certain tropical and subtropical varieties. Working in close 
cooperation over the past several years, the Texas A&M University 
System (TAMUS), Texas Tech University (TTU), and the International 
Maize and Wheat Research Center (CIMMYT) have demonstrated the 
feasibility of introducing genes for stress tolerance into germplasm 
with high yield potential. These three partner institutions propose a 
five-year, $7.5 million effort to introduce multiple and complementary 
genes for drought, heat, nutrient, disease, and insect tolerance (from 
tropical and subtropical germplasm) into high-yielding germplasm 
adapted to the Southern High Plains and tropical/subtropical 
environments. The anticipated result of this effort are hybrids with 
yield potentials equal to the best commercially available materials and 
no more than half the sensitivity of current materials to moderate and 
severe drought, heat, nutrient, disease, and insect stresses. We are 
requesting USDA funding for this project at $500,000 for fiscal year 
2001.

                   CENTER FOR HISPANIC FAMILY STUDIES

    This initiative from Texas A&M University-Kingsville will provide 
leadership for teaching and research about the Hispanic family in the 
United States, including life span analysis ranging from infant studies 
to gerontology. Child care, nutritional and educational services will 
be offered to the studied population. We are requesting funding for 
this project at $3,300,000 for fiscal year 2001.

       THE BORDERLANDS: HUMAN IMPACTS ON AVIAN COMMUNITY DYNAMICS

    Texas A&M University-Kingsville seeks appropriation to examine the 
immediate and future impacts that a growing human population in 
southern Texas/northern Mexico borderlands is having (and will have) on 
the diverse avian communities that share this region. The evaluation of 
the effects of invasive species, urbanization, environmental 
contaminants, and agricultural practices have on avian ecology, such as 
changes in reproduction, mortality, resource allocation, and the 
temporal and spatial distribution of species will benefit our 
understanding of how to better manage this rich resource now and in the 
future. We are requesting funding for this project at $1,660,000 for 
fiscal year 2001.

          ENHANCING AGRICULTURAL PRODUCTION IN SALINE REGIONS

    Congressional appropriations are sought to conduct research into 
methods of increasing terrestrial and aquatic agricultural production 
in regions with shortages of fresh water but abundant supplies of 
saline water. Technology developed as a result of this research effort 
will be transferred to the private sector for commercialization. Texas 
A&M University-Kingsville requests funding for this project at $320,000 
for fiscal year 2001.

 EMERGING HEALTH & TRADE ISSUES IMPACTING NATIONAL CATTLE INDUSTRIES: 
                            JOHNE'S DISEASE

    Develop modern methods for detecting and preventing Johne's Disease 
of cattle to improve animal health, enhance production efficiency and 
eliminate disruption of vital interstate and international trade. We 
are requesting funding for this project at $2,000,000 for fiscal year 
2001.

                        A FUNGAL GENOME INTERNET

    The Fungal Genome Internet (FGI) will integrate fungal genome 
research at institutions in Georgia, Louisiana, New Mexico, North 
Carolina, Oklahoma, and Texas. The long term objective of the FGI is to 
use the information derived from fungal genomes to enhance the 
beneficial aspects of fungi and to control their negative impact on our 
society. The FGI will be an academic focal point for the functional 
analysis, including bioinformatics and transcriptional profiling, of 
three important fungal genomes. The FGI will also coordinate functional 
genomics activities in other academic and industrial labs. At Texas A&M 
University, the FGI will be a joint effort with the Departments of 
Biology, Plant Pathology and Microbiology, Biochemistry and Biophysics 
and the Crop Biotechnology Center. Texas A&M University requests 
funding for this project at $3,000,000 for fiscal year 2001.

 NEW FOOD AND ANIMAL WASTE COMPOSTING TECHNOLOGY--A NATIONAL OUTREACH/
                     TECHNOLOGY TRANSFER INITIATIVE

    New ``in-vessel'' composting technology has been developed at Texas 
A&M University-Commerce that will rapidly decompose, stabilize and 
sanitize food residuals, animal wastes and animal mortalities. Funding 
of this three-year initiative will (1) provide demonstration and 
implementation programs in strategic, visible national production 
centers, (2) facilitate and coordinate linkages between waste stream 
generators and end product users, and (3) focus efforts of the existing 
Center for Rural Water Studies toward value-added processing and 
utilization of noxious food and animal wastes. Texas A&M University-
Commerce requests funding for this project at $1,000,000 for fiscal 
year 2001.

                REDUCING AMMONIA EMISSIONS FROM FEEDLOTS

    Ammonia emitted from feedlot surfaces combines with combustion 
byproducts to produce minute particulate matter (dust) that is of 
significant environmental and health concern to the United States 
Environmental Protection Agency (EPA). The purpose of this initiative 
is to develop scientific and engineering methods for reducing ammonia 
emissions from feedlots and thereby reducing health and environmental 
problems. West Texas A&M University requests funding for this project 
at $1,500,000 for fiscal year 2001.

                     FOOD SAFETY AND WATER QUALITY

    Reducing levels of food-safety-related-pathogens in live animals is 
a potential means of increasing food safety. The purpose of this 
initiative is to characterize the role of water as a vehicle for food-
safety-related-pathogens in feedlot cattle in the Texas High Plains. 
West Texas A&M University requests funding for this project at 
$1,000,000 for fiscal year 2001.
                                 ______
                                 

            PREPARED STATEMENT OF THE U.S. APPLE ASSOCIATION

    The U.S. Apple Association (USApple) appreciates the opportunity to 
provide this testimony on behalf of our nation's apple industry.
    Our testimony will focus on the following three areas: the Market 
Access Program (MAP); Food Quality Protection Act (FQPA) 
implementation; and Agricultural Research Service (ARS) funding.
    USApple is the national trade association representing all segments 
of the apple industry. Members include 36 state apple associations 
representing the 9,000 apple growers throughout the country as well as 
more than 450 individual firms involved in the apple business. Our 
mission is to provide the means for all segments of the U.S. apple 
industry to join in appropriate collective efforts to profitably 
produce and market apples and apple products.

                      MARKET ACCESS PROGRAM (MAP)

    USApple strongly supports increasing the annual appropriation for 
MAP from $90 million to $200 million.
    All segments of the U.S. apple industry benefit directly from the 
use of export promotion funds, which increase export demand. In fiscal 
year 1999, the apple industry received $3 million in MAP export-
development funds. These funds are matched by grower funds, and are 
used to promote apples in more than 20 countries throughout the world. 
Since 1987, when the apple industry first utilized MAP funds, apple 
exports have increased by 88 percent.
    The U.S. apple industry faces keen competition around the globe 
from competitors who receive significant government funds for generic 
promotions. The governments of our foreign competitors spend 
approximately $500 million on export promotion and market development. 
It has become increasingly difficult for U.S. exporters to compete with 
European and Chinese producers who receive massive government 
assistance. Increased funding for this critical program will assist 
U.S. apple producers to better compete, and revive export demand in 
countries recently hit by adverse economic conditions.

           FOOD QUALITY PROTECTION ACT (FOPA) APPROPRIATIONS

    USApple strongly supports full funding for the following programs 
intended to facilitate fair FQPA implementation, and to offset its 
anticipated negative impact on apple growers.
    Specifically, USApple supports the U.S. Department of Agriculture's 
following budget requests.
  --$14 million for the Pesticide Data Program, administered by the 
        Agricultural Marketing Service;
  --$3.2 million for the National Agricultural Statistics Service 
        pesticide-usage surveys;
  --$2.6 million for the Office of Pest Management Policy administered 
        by the Agricultural Research Service;
  --$12.2 million for the Integrated Pest Management Research Grant 
        Program administered by the Cooperative State Research, 
        Extension and Education Service (CSREES);
  --$18 million for the Pesticide Impact Assessment Program, Crops at 
        Risk and Risk Avoidance and Mitigation Program also 
        administered by CSREES.

    (ARS) TEMPERATE FRUIT FLY RESEARCH POSITION--YAKIMA, WASHINGTON

    USApple requests the appropriation of $300,000 to fill a critical 
position at the USDA-ARS laboratory in Yakima, Washington to conduct 
research of temperate fruit flies, a major pest of apples.
    FQPA implementation is expected to significantly reduce the number 
of pesticides currently available to growers for the control of pests 
such as cherry fruit fly and apple maggot. Left unchecked, these 
temperate fruit flies can be devastating. Research is critically needed 
to develop alternative pest controls should growers lose access to 
presently-available crop protection tools as a result of FQPA 
implementation.
    Congress appropriated $300,000 last fiscal year for this critical 
position. We request that the committee appropriates $300,000 for this 
position in fiscal year 2001.

  (ARS) POST HARVEST QUALITY RESEARCH POSITION--EAST LANSING, MICHIGAN

    USApple requests that the committee direct USDA to provide 
continued funding for postharvest quality research at the ARS 
laboratory in East Lansing, Michigan.
    This facility is conducting research that is critical to the future 
economic recovery of the apple industry. Using a series of new sensing 
technologies, researchers at the East Lansing facility are developing 
techniques that would allow apple packers to measure the sugar content 
and firmness of each apple before it is shipped to consumers. Research 
has shown that consumers will increase purchases of high quality 
products that consistently meet their expectations. We believe 
consumers will eat more apples if this technology is fully developed 
and employed, by our industry.
    However, the administration is proposing to terminate the East 
Lansing research program effective Sept. 30, 2000. We request that the 
committee direct USDA to continue funding for this critical research.
    Thank you for this opportunity to present this testimony on behalf 
of USApple and the U.S. apple industry.
                                 ______
                                 

      PREPARED STATEMENT OF THE UNITED STATES TELECOM ASSOCIATION

                           SUMMARY OF REQUEST

    Project Involved.--Telecommunications Loan Programs Administered by 
the Rural Utilities Service of the U.S. Department of Agriculture.
    Actions Proposed.--Supporting RUS loan levels and the associated 
funding subsidy for the hardship, cost of money, Rural Telephone Bank 
and loan guarantee programs in fiscal year 2001 in the same amount as 
loan levels specified in the fiscal year 2000 Agriculture 
Appropriations Act which are the same levels as those requested in the 
President's budget for fiscal year 2001. Also supporting an extension 
of the language removing the 7 percent interest rate cap on cost of 
money loans. Also supporting continuation of the restriction on the 
retirement of class A Rural Telephone Bank stock in fiscal year 2001 at 
the level contained in the fiscal year 2000 Agriculture Appropriations 
Act and an extension of the prohibition against the transfer of Rural 
Telephone Bank funds to the general fund. Supporting funding in the 
amount of $25 million in loan and grant authority designated for 
distance learning and telemedicine purposes. Also supporting $2 million 
in direct loans and grants for a pilot program to finance broadband 
transmission and local dial up Internet service in rural areas as 
requested in the President's budget. Opposing the President's budget 
proposal to transfer funds from the unobligated balances of the 
liquidating account of the Rural Telephone Bank for the Bank's 
administrative expenses and loan subsidy costs.
    The United States Telecom Association (USTA) represents over 1,000 
local telephone companies that provide over 95 percent of the access 
lines in the United States. USTA members range from large public-held 
corporations to small family-owned companies as well as cooperatives 
owned by their customers. I am Roy Neel, President and CEO of USTA. I 
submit this testimony in the interests of the members of USTA and their 
subscribers.
    USTA members firmly believe that the targeted assistance offered by 
a strong RUS telecommunications loan program remains essential in order 
to maintain a healthy and growing rural telecommunications industry 
that contributes to the provision of universal telephone service. We 
appreciate the strong support this committee has provided for the 
telecommunications program since its inception in 1949 and look forward 
to a vigorous program for the future.

                          A CHANGING INDUSTRY

    As Congress recognized through passage of the Telecommunications 
Act of 1996, telecommunications in the United States is in the midst of 
the most significant changes any industry has ever undergone. Both the 
technological underpinnings and the regulatory atmosphere are 
dramatically different and changing at an extraordinarily rapid pace. 
Without system upgrades, rural customers will be left out of the 
emerging information revolution.
    The need has never been greater for the technology employed by RUS 
borrower rural telecommunications companies to continue to be 
modernized. In addition to upgrading switching capability to allow new 
services to be extended to rural subscribers, it is crucially important 
that rural areas be included in the nationwide drive for greater 
bandwidth capacity. In order to provide higher speed data services, 
such as Digital Subscriber Line (DSL) connections to the Internet, 
outside plant must be modernized in addition to new electronics being 
placed in switching offices. With current technology, DSL services 
cannot be provided to customers located on lines more than three miles 
from the switching office. Rural areas have a significant percentage of 
relatively long loops and are therefore particularly difficult to serve 
with these higher speed connections. Rural telecommunications companies 
are doing their best to restructure their networks to shorten loops so 
that DSL may be provided, but this is not an inexpensive proposition 
and may not be totally justified by market conditions. However, these 
services are important for rural economic development, distance 
learning and telemedicine. RUS-provided financial incentives for 
additional investment encourage rural telecommunications companies to 
build facilities which allow advanced services to be provided. The 
economic externalities measured in terms of economic development and 
human development more than justify this investment in the future by 
the federal government.
    Greater bandwidth and switching capabilities are crucial 
infrastructure elements which will allow rural businesses, schools and 
health care facilities to take advantage of the other programs 
available to them as end users. The money spent on having the most 
modern and sophisticated equipment available at the premises of the 
business, school or clinic is wasted if the local telecommunications 
company cannot afford to build facilities that quickly transport and 
switch the large amounts of data that these entities generate. RUS 
funding enhances the synergies among the FCC and RUS programs targeted 
at improving rural education and health care through 
telecommunications.
    The RUS program provides needed incentives to help offset 
regulatory uncertainties related to universal service support, 
interstate access revenues and interconnection rules with a reliable 
source of fairly priced, fixed-rate long term capital. After all, RUS 
is a voluntary program designed to provide incentives for local 
telecommunications companies to build the facilities essential to 
economic growth.
    RUS endures because it is a brilliantly conceived public-private 
partnership in which the borrowers are the conduits for benefits from 
the federal government to flow to rural telephone customers, the true 
beneficiaries of the RUS program. In fact, the GAO recently observed in 
a Congressional hearing that if there were no RUS telecommunications 
program, today's Congress would invent one. The government's 
contribution is leveraged by the equity, technical expertise and 
dedication of local telecommunications companies.

          IMPACT OF CREDIT REFORM ON THE RURAL TELEPHONE BANK

    Contrary to the intent of Congress, the interpretation of credit 
reform by the Office of Management and Budget (OMB) has significantly 
affected the operation of the Rural Telephone Bank (RTB). One of the 
most damaging impacts of OMB's interpretation of the credit reform law 
is to essentially cleave the RTB into two banks--a liquidating account 
bank which is responsible for pre-credit reform loans, and a financing 
account bank which is responsible for post credit reform loans. USTA 
has protested this arrangement since it began, since it prevents the 
relending of borrower repayments to fund new loans in direct 
contravention of Sec. 409 of the Bank's enabling act. This, in turn, 
forces the RTB to borrow unnecessarily from the Treasury to fund new 
loans. It also permits funds to build up in the liquidating account 
that were generated by GAO-documented interest rate overcharges, 
instead of those funds being returned through relending to the same 
universe of borrowers that initially generated them.
    In the fiscal year 2001 budget proposal, the Administration 
proposes, despite its recognition that these are equity funds belonging 
to stockholders, to take monies from the liquidating account and fund 
the loan subsidy for new loans as well as the RUS administrative 
expenses allocated to the RTB. This is in direct conflict with an 
existing provision of law, Sec. 403(b) of the Rural Telephone Bank Act 
(Public Law 92-12). That provision states ``. . . in order to perform 
its responsibilities under this title, the telephone bank may partially 
or jointly utilize the facilities and the services of employees of the 
Rural Electrification Administration or of any other agency of the 
Department of Agriculture, without cost to the telephone bank''. 
(Emphasis added)
    Instead of using the repayments into the liquidating account to 
fund the expenses of the RTB (contrary to the Rural Electrification 
Act) or to fund the loan subsidy, neither of which would result in any 
budget savings, OMB should adhere to Sec. 409 of the Rural 
Electrification Act and allow those repayments to be used to fund new 
RTB loans. It is ironic that in the same budget proposal that purports 
to have the RTB act more like a private bank, OMB continues to maintain 
the artificial split of the bank's resources which prevents it from 
acting as would a private bank--relending repayments.

                    RUS TELEPHONE PROGRAM PROCEDURES

    Under the leadership of Acting RUS Administrator Chris McLean and 
Assistant Administrator for Telephone, Roberta Purcell, significant 
steps have been made in streamlining the policies and procedures of the 
RUS telecommunications loan program. RUS should be commended for the 
progress it has made and continue to reduce regulation and improve 
service delivery, within the context of the government's interest in 
security for these rural telecommunications infrastructure improvement 
loans.

                            RECOMMENDATIONS

    Continuation of the loan levels and necessary associated subsidy 
amounts for the RUS telephone loan programs that were recommended by 
this committee and signed into law for fiscal year 2000 would maintain 
our members' ability to serve the nation's telecommunications needs, 
maintain universal service and bring advanced telecommunications 
services to rural America.
    For a number of years, through the appropriations process, Congress 
has eliminated the seven percent ``cap'' placed on the insured cost-of-
money loan program. The elimination of the cap should continue. If long 
term Treasury interest rates exceeded the 7 percent ceiling contained 
in the authorizing act, adequate subsidy would not be available to 
support the program at the authorized level. This would be extremely 
disruptive and hinder the program from accomplishing its statutory 
goals. Accordingly, USTA supports continuation of the elimination of 
the seven percent cap on cost-of-money insured loans in fiscal year 
2001.
    The restriction on the retirement of the amount of class A stock by 
the Rural Telephone Bank, adopted in fiscal 1997, should be continued. 
The Bank is currently retiring Class A stock in an orderly, measured 
manner as current law requires. This should continue. The Committee 
should also continue to protect the legitimate ownership interests of 
the Class B and C stockholders in the Bank's assets by continuing to 
prohibit a ``sweep'' of those funds into the general fund.
Recommended Loan Levels.
    USTA recommends telephone loan program loan levels for fiscal year 
2001 as follows:

                        [In millions of dollars]

RUS Insured Hardship Loans (5 percent)............................   $75
RUS Insured Cost-of-Money Loans...................................   300
Rural Telephone Bank (RTB) Loans..................................   175
Loan Guarantees...................................................   120
                                                                  ______
      Total.......................................................   670

Distance Learning and Telemedicine
    USTA strongly supports the loan and grant proposal and recommends 
its funding for fiscal year 2001 at the levels proposed in the 
Administration's budget submission, that is, $25 million for loans and 
grants. This program is a perfect complement to the traditional RUS 
telecommunications loan programs. For distance learning and 
telemedicine to become a reality, schools and hospitals need training 
and equipment. Similarly, local telecommunications companies need 
modern infrastructure to connect these facilities to the 
telecommunications network.
    Even though our members do not benefit directly, USTA also supports 
the $2 million requested in the President's budget for a pilot program 
of loans and grants to finance broadband transmission and local dial up 
access to the Internet in rural areas. RUS was founded on the notion 
that rural Americans should have no lesser service, facilities and 
prices for telephone service as those living in more densely populated, 
lower cost areas. As we move into the Information Age, in which 
increases in productivity, economic development, education and medicine 
can greatly benefit from the tremendous potential of the Internet, it 
is a continuation of the historic of the historic mission of RUS to 
support the extension of vital new services to rural America.

                               CONCLUSION

    Our members take pleasure and pride in reminding the Subcommittee 
that the RUS telecommunications program continues its perfect record of 
no defaults in over a half century of existence. RUS telecommunications 
borrowers take deadly seriously their obligations to their government, 
their nation and their subscribers. They will continue to invest in our 
rural communities, use government loan funds carefully and judiciously 
and do their best to assure the continued affordability of 
telecommunications services in rural America. Our members have 
confidence that the Subcommittee will continue to recognize the 
importance of assuring a strong and effective RUS Telecommunications 
Program through authorization of adequate loan levels.
                                 ______
                                 
            PREPARED STATEMENT OF THE UNIVERSITY OF ILLINOIS

    Mr. Chairman and distinguished members of the Agriculture, Rural 
Development, and Related Agencies Subcommittee: We are pleased to 
provide this updated testimony on behalf of the federally-funded 
project entitled ``Studies to Reduce the Aflatoxin Problem in Corn'' 
being carried out in the University of Illinois Crop Sciences 
Department by Professors J.M. Widholm and D.G. White, in cooperation 
with scientists in other institutions and agencies. Professors White 
and Widholm provided the technical information in this report. We wish 
to thank you, Mr. Cochran and others on the Committee, for 
appropriating $1,249,000 to date for this important research. We 
continued to make progress on the project during the past year. We 
request an fiscal year 2001 allocation of $180,000 so that we can move 
closer to achieving the goals of the project.

           THE AFLATOXIN PROBLEM AND OUR STRATEGY TO SOLVE IT

    Because of its toxicity and carcinogenicity (causes cancer), 
aflatoxin in corn grain is a very serious problem. When the causal 
fungus, Aspergillus flavus, is present on the grain, the toxin is often 
present also. Aflatoxin problems occur primarily in years and areas of 
moisture stress, which means their occurrence is relatively 
unpredictable. According to our studies of sixty-five widely grown 
commercial corn hybrids, including yellow dent corn, white corn, and 
food-grade white and yellow corn, there is little or no resistance to 
A. flavus in commonly grown hybrids.
    The toxin can form in the maturing grain before harvest and in 
stored grain if the moisture levels are too high. Due to the danger 
posed by aflatoxin, levels of the toxic compound are closely monitored 
in corn grain. If levels of aflatoxin are too high in a given sample, 
the grain represented by the sample cannot be sold in interstate 
commerce. There is a significant monitoring cost, but it is small 
relative to other costs incurred by aflatoxin.
    It is estimated that in any given year 5 to 30 percent of the 
nation's corn crop experiences severe moisture stress. Direct yield and 
quality losses caused by aflatoxin are at least $500 million annually. 
That loss accrues to producers. In addition, there are harmful health, 
social, and economic effects of aflatoxin when it is present in corn-
based food products. Aflatoxin is one of the most carcinogenic of 
naturally occurring compounds. It is very detrimental to the health of 
humans or animals that ingest it. For these reasons, it is important to 
eliminate aflatoxin from corn grain. That is the mission of this 
project.
    The strategy of the project is to: (1) through field tests, 
identify resistant germplasm in existing collections, (2) using tissue 
culture techniques, evaluate and select corn cultures that inhibit A. 
flavus growth and/or aflatoxin production, (3) regenerate promising 
plants for greenhouse and field evaluation, and (4) using recombinant 
DNA techniques, introduce into corn antifungal genes encoding enzymes 
such as chitinase and B-glucanase, which may impart resistance to A. 
flavus.

                 PROGRESS REPORT AND LOOK TO THE FUTURE

Previous and current conventional breeding and selection approaches
    Since 1991 we screened thousands of corn inbred lines, some of 
which already existed in various collections and some of which we 
derived from existing material. We discovered an additional 21 lines 
since last year for a total of 32 with high levels of resistance to 
Aspergillus ear rot and to the production of aflatoxin. We concentrated 
on sources of resistance that can be used to improve inbred lines B73 
and Mo17, from which most important commercially used inbred lines are 
derived.
    In inheritance studies, we found that resistance genes have both 
additive and dominant affects. It is desirable for resistance genes to 
be dominant, so that when resistant and susceptible lines are crossed, 
the resulting hybrids will be as resistant as the resistant parent. 
Some of the resistance genes discovered are strongly dominant. Much of 
the effort was concentrated on inbred line Tex 6, developed at the 
University of Illinois by selecting from a southern white corn 
population that has high levels of resistance to southern corn leaf 
blight. So far, Tex 6 is the best source of resistance produced in this 
project.
    Tex 6 confers extremely high levels of aflatoxin resistance when 
crossed with most of the inbreds that are important in the cornbelt. 
Inheritance studies indicate that the resistance in Tex 6 is controlled 
by just a few genes, which is very desirable. The fewer the genes 
controlling a trait, the easier it is to transfer that trait to 
otherwise desirable lines and the faster the trait can be introduced 
into widely used material using the common backcrossing approach.
    A major milestone was reached when, using Tex 6 and other 
experimental lines and the backcrossing approach, we were able to 
transfer effective aflatoxin resistance into commercially used inbreds 
related to both B73 and Mo17. In 1995, 1996, and 1999 yield trials, 
hybrids with some of these new aflatoxin resistance inbreds as one 
parent yielded as well as popular commercial hybrids. This breakthrough 
paves the way for private firms to introduce resistance to A. flavus 
and aflatoxin into their best lines.
    The most important development in corn production in recent years 
was the introduction of practical high oil corn hybrids by Dupont and 
Pfister Hybrids, using materials developed at the University of 
Illinois. Unfortunately, high oil hybrids, which are produced by the 
so-called TopcrossTM method, are more susceptible to 
Aspergillus ear rot and aflatoxin production than are normal hybrids of 
the same pedigree with a normal pollinator. Fortunately, high oil top 
crosses that involve some of the sources of resistance developed in 
this aflatoxin project are equal in resistance to normal resistant 
hybrids. Thus, this project is providing the mechanism to assure that 
the enormous potential of high oil corn is not reduced by aflatoxin.

Past, current, and future biotechnology research on aflatoxin
    Four years ago, we used Restriction Fragment Length Polymorphism 
(RFLP) markers to identify those chromosome regions associated with 
specific genes for aflatoxin resistance. We found that some genes 
confer resistance to the fungal disease organism (A. flavus) that 
causes ear rot. Some do not confer resistance to the fungal organism 
but do inhibit its production of aflatoxin. Some genes do both.
    A cooperator, Professor Gary Payne of North Carolina State 
University, identified a specific protein from seed of inbred Tex 6 
that inhibits aflatoxin production in culture but has very little 
effect on growth of the fungus. He identified another protein that 
inhibits the growth of the fungus. Apparently there are corn genes that 
code for each of these proteins. Among other advantages of this 
finding, corn breeders will be able to use marker-assisted selection, a 
molecular selection technique, which should greatly speed the process 
of screening and selecting high-yield, aflatoxin-resistant lines of 
corn.
    This year we completed work with inbred line C12, which has good 
levels of resistance and also makes a protein that blocks some, but not 
all, aflatoxin synthesis. If we can enhance the production of these 
blocking proteins and transfer the gene or crenes that code for them 
into otherwise productive corn hybrids, several advantages will accrue. 
Since fewer genes will have to be transferred, less time will be 
required to incorporate desirable aflatoxin-reducing genes into 
commercially important hybrids. Also, the fungus will be less likely to 
develop ways to defeat the resistance mechanism.
    Once these genetically controlled resistance mechanisms are fully 
understood, the resistance genes can be transferred to other crops, 
such as peanuts, that also have aflatoxin problems. Contrary to some 
previous indications, corn lines identified in this project that are 
resistant to A. flavus apparently are not consistently resistant to 
Fusarium maniliforme, which produces fumonison, another highly toxic 
and carcinogenic mycotoxin. There is direct evidence that fumonison 
causes cancer and birth defects in humans, not just in laboratory 
animals. We believe that some of the emphasis on this project should 
shift to fumonison, which may turn out to be a bigger problem than 
aflatoxin. Fumonison is produced by a common fungal disease of corn.

Biotechnology breakthrough
    We experienced a major breakthrough during early fiscal year 1998 
with the successful introduction of antifungal genes bean chitinase and 
B-1,3-glucanase into corn cells, both alone and in combination. The 
particle gun was used to accomplish this transformation. The 
transformed cells were regenerated into plants and were self-pollinated 
to obtain plants that are homozygous for the antifungal genes. 
Subsequently, we demonstrated by several different methods that the 
introduced genes are stable, are passed to progeny in normal 
reproduction, and are expressed in seeds of the transformed plants. In 
other species, these particular genes are expressed as enzymes that 
break down cell walls of invading fungi, thus preventing or reducing 
fungal diseases.
    During tests in fiscal year 2000, some of the transformed plants 
showed resistance, although none were as resistant as Tex 6. We found 
that Tex 6, which confers the highest level of natural fungal 
resistance, has high levels of natural chitinase in its tissues. This 
is a different chitinase, however, than the one we introduced by 
recombinant DNA techniques. During the past year, several new plants 
were transformed with aflatoxin resistance genes. They are being 
evaluated for resistance in the greenhouse and field.

Plans for fiscal year 2001
    In fiscal year 2001, we will continue to look for unique aflatoxin 
resistance mechanisms in the corn germplasm. We will seek to enhance 
natural resistance to A. flavus through conventional breeding 
techniques and will conduct further research aimed at increasing the 
resistance of high oil corn hybrids to the pathogen. We will also 
continue to evaluate plants transformed with resistance genes from corn 
and other species. We expect recent advances in the science of 
functional genomics to be useful in this project. Among other goals, we 
would like to develop additional genetic techniques that simplify the 
process of screening the thousands of lines of corn germplasm. Also, it 
will be very important to determine if a combination of chitinases 
confer greater and more lasting resistance than only one.

Cooperation
    We continue to have good cooperation with other institutions and 
USDA-ARS. Several sources of resistance we discovered and several 
resistant lines derived from them were shown to be resistant in field 
studies conducted by cooperators in Mississippi and south Texas. 
Professor Gary Payne of North Carolina State University continues to 
make valuable contributions to the project. Several private firms have 
shown interest in our aflatoxin resistant lines. So far, they have just 
been observing the material and comparing it with materials they 
already have. Reports on the new material are generally positive.
    Progress in moving the resistance genes to commercial lines is 
inhibited by a legal problem that confronts those who market seed. 
Increasingly, growers are inclined to sue companies when plants grown 
from seeds that are advertised as resistant to a disease have some 
level of damage. There is still enough uncertainty and variability with 
aflatoxin resistance genes that companies are reluctant to advertise 
the resistance trait. If companies cannot advertise the trait, they 
cannot differentiate their product from that of competitors. If they 
cannot differentiate their product, they cannot recover the costs of 
research required to introduce the trait. To the extent we can develop 
stable and predictable aflatoxin resistance in this project, we can 
help to overcome the barriers to adoption of an important technology.

                                SUMMARY

    We believe this project is making excellent progress toward the 
desired outcome of reducing or eliminating aflatoxin as a serious 
problem in corn production and use. To summarize project results to 
date, we identified several corn lines that are resistant to the 
organism (Aspergillus flavus) that causes ear rot and produces 
aflatoxin. We also discovered lines that inhibit aflatoxin production 
without inhibiting fungal growth. This increases the possibility of 
inducing aflatoxin resistance that does not decrease with time.
    We learned how aflatoxin resistance is inherited when crosses are 
made. We have sources of resistance that are effective when used in 
either the northern or southern corn belt. We developed practical 
tissue culture tests and DNA analysis techniques to identify resistant 
germplasm. We found that high oil corn hybrids are more susceptible to 
aflatoxin-producing organisms than normal hybrids, but that resistance 
sources developed in this project can be used to produce resistant high 
oil corn. The project continues to generate important papers in 
scientific journals. The papers provide valuable information on both 
practical and basic science issues associated with aflatoxin.
    In a landmark achievement, we introduced antifungal genes bean 
chitinase and B-1,3-gluconase from other organisms into corn cells and 
successfully regenerated plants that have these genes. We found that 
the introduced genes are stable, passed to progeny during normal 
reproduction, and expressed in seeds. We still need to screen more 
germplasin for resistance sources. Natural resistance genes tend to 
work for a while and then become less effective as the pests evolve new 
virulence mechanisms. We still have to broaden the base of inbred lines 
that will be used to introduce aflatoxin resistance into commercial 
varieties grown in the major corn growing regions of the nation.
    Our goal is to insert new resistance genes that can be moved 
rapidly into commercially used inbreds and that are effective in 
reducing and eliminating other mycotoxins as well.

                                REQUEST

    We respectfully request an allocation of $180,000 in federal funds 
for fiscal year 2001 to continue this important project. This amount 
will allow us to maintain the momentum and productivity of this 
innovative afloatoxin research program and capitalize on the progress 
made to date.
                                 ______
                                 
            PREPARED STATEMENT OF THE UNIVERSITY OF ILLINOIS

    Mr. Chairman and Distinguished Members of the Agriculture, Rural 
Development, and Related Agencies Subcommittee:
Request
    We request $3.5 million to create a unique integrated animal waste 
and odor management research program (AWORP). This program will focus 
on technology for reducing, modifying, recycling, and utilizing waste 
streams from livestock production and eliminating associated air, 
water, and soil quality problems.

Need
    The AWORP is essential if the U.S. is to:
  --Sustain economically, socially, and environmentally viable 
        livestock production operations in the central U.S.
  --Capture value added to feed grains by livestock production
  --Compete effectively in vast emerging markets for animal protein 
        products,
  --Recover and recycle nutrients used in production of feed grains, 
        principally corn and soybeans that are fed to livestock
  --Provide healthy working conditions for swine industry workers
  --Preserve safe and attractive environments in the vicinity of U.S. 
        livestock operations, and
  --Provide adequate protein at reasonable prices for U.S. citizenry 
        and other consumers around the world.

Background
    Livestock production in the U.S. permits consumers around the world 
to enrich their diets with high quality protein in many forms. Adequate 
levels of animal protein characterize healthy populations in affluent 
nations. Inadequate levels are characteristic of poor, undeveloped 
nations and unhealthy people.
    Currently, livestock production in the U.S. is threatened by fears 
concerning its environmental impact. Aerial emissions such as odor, 
particulates, and gases from livestock operations are already major 
concerns. A new area of concern is biological emissions, including 
microorganisms, their associated toxins, and ammonia. These emissions 
are potentially detrimental to the health and wellbeing of humans and 
animals who breathe or otherwise ingest them. Workers and animals 
within livestock production facilities are most likely to be affected.
    The nutrients in animal wastes are valuable if they can be retained 
in production animals or recycled through crop and natural ecosystems. 
It is very undesirable, from health, aesthetic, environmental, and 
economic standpoints, for nutrients to end up in rivers, lakes, or 
aquifers that provide water for humans or animals.
    Environmental problems related to livestock production are 
solvable. However, the complex interrelationships among variables 
influencing nutrient/contaminant production and flow through the system 
dictate that several factors must be managed simultaneously, in an 
integrated systems approach.
    Therefore, to improve waste and odor management, these factors must 
be researched simultaneously, using a systems research approach. 
Existing research programs tend to focus on only one factor at a time 
and do not reflect conditions caused by multifactor interactions in 
complex livestock/cropping systems. AWORP will be conducted within a 
research infrastructure and with research protocols that correct 
deficiencies in present animal waste research programs and facilities.

Objectives
    AWORP will produce practical technology and information that 
enables livestock producers to: reduce production of waste and odor in 
livestock operations; reduce waste and odor emissions from production 
facilities, reduce indoor levels of waste and odor components that 
cause human and animal health problems, rapidly and efficiently collect 
animal manure, treat manure to preserve plant nutrients and prepare for 
safe utilization, recycle manure, its constituent nutrients, and water 
in economically, socially, and environmentally acceptable ways, improve 
health, safety, and working conditions for livestock production 
workers, and make livestock production compatible with neighboring 
individuals and communities.
Features
    AWORP will utilize a flexible array of integrated components 
required for a systems approach to waste and odor research:
  --Pilot-scale swine and cattle production facilities for 
        investigating the interactive effects of facilities design and 
        operation, dietary and health management practices, and animal 
        management techniques on manure and nutrient output and 
        efficiency of manure collection.
  --Pilot-scale manure handling, processing, and storage capabilities 
        to evaluate a wide range of current and emerging technologies 
        for waste management, nutrient preservation, emissions control, 
        and odor elimination.
  --Well instrumented fields for use in comparing strategies for 
        capturing the nutrient output from livestock systems and in 
        measuring the short- and long-term effects of manure 
        applications on soil, water, and air quality.

Location and alliances
    AWORP will be headquartered at the University of Illinois at 
Urbana-Champaign (UIUC). It will be a powerful mechanism for resolving 
critically important livestock waste and odor problems and an important 
contribution to a huge national effort involving state, federal, and 
private cooperation and investment.
    Among several other related assets, the UIUC currently has a large, 
multidisciplinary research program on swine odor and waste management, 
which is funded at over $1 million per year in state and private funds 
overseen by the Council on Food and Agriculture Research (C-FAR). This 
C-FAR Strategic Research Initiative (SRI) is characterized by an 
unprecedented level of stakeholder involvement in priority setting, 
funding, and accountability.
    The initiative includes extensive atmospheric measurements, 
atmospheric chemistry studies, and studies of human health effects in 
cooperation with the Illinois Natural History Survey, Department of 
Atmospheric Sciences, and other units at the University of Illinois and 
with the National Farm Medicine Center in Marshfield, WI, which has an 
Animal Environmental Physiology Laboratory (AEPL) with experience in 
measuring ammonia and particulate emissions from livestock facilities.
Budget and Summary
    We request $3.5 million in federal funds to mount AWORP. These 
funds, complemented by significant state and private investments, will 
be used to staff, equip, house, and operate AWORP, and launch and 
sustain its projects. The University of Illinois will contribute the 
core staff (estimated cost, $300,000 annually) and a strategically 
located field site (estimated value, $150,000). The University will 
operate and maintain AWORP facilities (estimated cost, $500,000 
annually).
                                 ______
                                 
            PREPARED STATEMENT OF THE UNIVERSITY OF ILLINOIS

    Mr. Chairman and distinguished members of the Agriculture, Rural 
Development, and Related Agencies subcommittee:
    We request that $4 million in federal funds be appropriated in 
fiscal year 2001 to construct a state-of-the-art greenhouse facility at 
the University of Illinois. Detailed planning is underway, supported by 
the $400,000 which was appropriated in fiscal year 2000. We thank you 
and the Subcommittee for your past support. This facility will support 
research associated with the Maize (corn) Genetics Stocks Collection 
and the National Soybean Germplasm Collection. These collections are 
maintained at the University of Illinois by the United States 
Department of Agriculture--Agricultural Research Service (USDA-ARS). As 
a partner in this endeavor, the University of Illinois agrees to 
provide and prepare the site, provide utility connections, and operate 
and maintain the facility in support of the collections and for related 
research programs.

                                  NEED

    Currently, University of Illinois greenhouses are used to support 
the collections, but they are so heavily used by both state and federal 
scientists that not enough space is available to support the 
collections adequately, nor is the space designed properly for support 
of the collections. The new greenhouse facility will significantly 
enhance the rate at which state and USDA scientists can identify and 
evaluate useful plant genes and incorporate them into new and improved 
plant varieties, tailored to the needs and opportunities of American 
agriculture.
    To make effective use of conventional breeding and selection 
techniques and powerful new biotechnology approaches, scientists need 
excellent greenhouse facilities. Properly designed and efficiently 
operated greenhouses permit scientists to grow and maintain plants year 
round regardless of weather; perform experiments and evaluations 
requiring extraordinary levels of environmental control; and protect 
and reproduce valuable plants that are too fragile to survive in the 
natural environment. Genetically engineered plants being regenerated 
from single cells or small pieces of tissue are often fragile and need 
the protection of growth chambers and greenhouses.
    The Maize Genetics Stocks Collection and the National Soybean 
Germplasm Collection are unique and extremely valuable collections. 
Scientists all over the world request samples from among more than 
70,000 lines of corn maintained in the Maize Collection. They use these 
samples to study corn genetics and basic molecular genetics. Likewise, 
all soybean breeders, both private and public, can draw on 18,000 lines 
of soybeans in the National Soybean Germplasm Collection for materials 
to serve as sources of genes that impart new and improved 
characteristics to soybeans.
    Through negotiations spearheaded and financed by the Illinois and 
Iowa Agricultural Experiment Stations, Illinois and Iowa soybean 
checkoff boards, and USDA-ARS, the soybean collection has recently been 
enriched with over 2,000 new lines of soybeans from the genriplasm 
collection of the People's Republic of China, which maintains the 
largest collection in the world. This expansion of the collection will 
generate an even greater need for greenhouse space. The contributions 
from China are scheduled to continue at the rate of 500 new lines or 
more every two years. Evaluations to date indicate that there are many 
important quality and disease-resistance genes in the Chinese material 
that are not found in material already in the U.S. collection.
    The corn and soybean collections are the repositories for quantity 
and quality characteristics that will characterize and sustain the U.S. 
corn and soybean industries into the future. The future of these 
industries is, indeed, written in genetic code. The collections are 
unique in the nation and are absolutely essential to continued 
improvement of these two important crop species. The scientists 
directly associated with the collections are constantly collecting, 
classifying, evaluating, multiplying, and distributing new materials. 
In addition they continue to maintain and evaluate the materials 
already in the collection. The biotechnology revolution is providing 
many powerful new techniques for evaluating the collection and is 
stimulating scientists to use the collections much more than before.
    From time to time, because seed in the collections will only remain 
viable for five to ten years in storage, these materials must be grown 
to produce new seed. Many of the materials are not adapted to the 
outdoor environment of Illinois or they are too valuable to risk losing 
them to weather or other unpredictable events in the field. Thus 
greenhouses are essential to the maintenance of the collections. They 
are also essential to the performance of many other kinds of 
experiments involved in corn and soybean genetic improvement.
    The work of evaluating and using the collections continues to be a 
major area of cooperation between the USDA-ARS and the University of 
Illinois. While samples are available to scientists all over the world, 
University of Illinois scientists and graduate students and their 
genetics and plant breeding programs benefit considerably from their 
proximity to the collections and their direct access to the USDA-ARS 
people who maintain the collections. USDA-ARS scientists, in turn, 
benefit greatly from being located in this great institution, with its 
vast and diverse physical and intellectual resources.
    To illustrate the value of the University/USDA relationship, a 
Korean soybean land race obtained in an AID-financed University program 
and placed in the National Soybean Germplasm Collection, was discovered 
by a University of Illinois scientist to be the only line in the 
collection, perhaps the only soybean line in the world, that lacks the 
Kunitz trypsin inhibitor, which must be removed from soybeans by 
processing in order for them to be useful. The resulting introduction 
of Kunitz-free soybeans by the University and USDA-ARS is a very 
important contribution to the industry.

                        IMPLEMENTING THE PROJECT

    The proposed greenhouse complex will be created by constructing 
four greenhouse bays adjacent to and integrated with the Turner Hall 
greenhouse complex at the University of Illinois. The bays will be 
attached to the Turner Hall greenhouse service corridor, thus providing 
ready access to the rest of a very large greenhouse complex, its 
basement, and several adjoining laboratory and office buildings of the 
University of Illinois College of Agriculture, Consumer, and 
Environmental Sciences, including facilities in which the contingent of 
USDA-ARS scientists are housed.
    The four greenhouse bays will provide 10,000 net assignable square 
feet (nasf) of modern standard greenhouse space. This will meet current 
and anticipated greenhouse space needs for maintaining and expanding 
the collections. Basement space under these greenhouse sections will be 
used for additional cold storage for the Maize Genetics Stocks 
Collection, for laboratory space to support the nematology research 
program, and for unfinished space for future expansion as program needs 
develop.
    The integration of the facility with the existing greenhouse 
facilities will provide significant economies of scale and scope, 
simplify connection to existing utilities, and facilitate sharing of 
greenhouse equipment and support services.

                           SUMMARY AND BUDGET

    We request $4.0 million in federal funds in fiscal year 2001 to 
offset the costs of constructing the proposed greenhouse complex. As a 
partner in this nationally important effort, the University of Illinois 
agrees to provide land and utility connections, prepare the site, and 
pay the cost of operating and maintaining the facility henceforth. Site 
preparation and utility connections are estimated to cost $200,000. 
Annual operating and maintenance costs are estimated at $100,000.
                                 ______
                                 
 PREPARED STATEMENT OF THE LOVELACE RESPIRATORY RESEARCH INSTITUTE AND 
                        THE UNIVERSITY OF MIAMI

    Mr. Chairman and Member of the Subcommittee: We appreciate the 
opportunity to present jointly our testimony on behalf of the Lovelace 
Respiratory Research Institute (LRRI) in New Mexico and the University 
of Miami School of Medicine (UMSM) in Florida for our proposed Minority 
Health Tobacco Research Center (MHTRC).

                              INTRODUCTION

    Nicotine is a drug. It is a highly addictive drug that is 
unregulated. It is also a drug that appears to have profound inhibitory 
effects on the mammalian immune system. The delivery system of choice 
for this drug is the cigarette. There is no doubt that the use of 
tobacco products causes untold human injury and suffering. What is less 
well studied is the effect of secondary smoke (and by inference the 
delivery of nicotine to non-smokers) on the health of family members 
and co-workers of addicted users of these products. We propose the 
establishment of a center designed to study the physiology and 
behavioral medicine of secondary smoke combining the unique 
capabilities of two leading complementary research institutions, the 
University of Miami School of Medicine and its Drug Abuse Research 
Center in Florida and the Lovelace Respiratory Research Institute in 
New Mexico.
    Extensive experience in health research at UMSM in minority 
substance abuse and minority health will be linked to the world class 
physiology, cell and molecular biology and toxicology expertise present 
at LRRI to model the role of secondary smoke on the biology of the 
individual using cellular and rodent models followed by studies of 
family members of smokers. Medical and behavioral interventions will 
then be developed based on the resulting data.
    Although prohibited from regulating tobacco products as it does 
other drugs by court action, the FDA does have an obligation to study 
the effects of these drugs on the public health of the nation. By 
supporting the Minority Health Tobacco Research Center, the FDA will be 
contributing to the knowledge base of the scientific community on the 
effect of secondary smoke and low dose nicotine exposure on minority 
health.

        THE NEED FOR THE MINORITY HEALTH TOBACCO RESEARCH CENTER

    The MHTRC as a joint project will be devoted to the reduction of 
health risks associated with addiction to tobacco and other harmful 
substances. Approximately 20 percent of all deaths are associated with 
tobacco smoking. Tobacco kills more people than murder, AIDS, suicide, 
illicit drug use and automobile accidents combined. The medical 
consequences of tobacco addition include the three leading causes of 
death: cardiovascular disease, cancer and cerebrovascular disease. Its 
related medical costs are astronomical. For example, in Florida in 
1996, tobacco-related Medicaid payouts were estimated to be $264 
million and $365 million.
    Tragically, the use of tobacco is also the most preventable cause 
of disease and death. We now know that nicotine is at least as 
addictive as cocaine or heroin. Recent studies even suggest that 
nicotine interacts with other drugs of abuse, that it reinforces 
craving and increases intake of cocaine and other drugs. However, 
nicotine is a special case of addition because tobacco is legally sold 
and its use is not prohibited among adults. In spite of the evidence 
that nicotine is an addictive drug, which affects the brain in the same 
way that illicit substances such as opiates and cocaine do, nicotine 
dependence has not been considered substance abuse.
    The need to focus on the minority population is particularly 
significant given the underutilization of the health system by the 
population. This disturbing fact is documented in a recent study 
produced by the Commonwealth Fund and published on February 18, 2000. 
The report discovered that Hispanics account for an alarming one-
quarter of the nation's 44 million uninsured people. Hispanics are 
twice as likely as the general population to go without coverage. The 
number of uninsured Hispanics more than doubled to 11.2 million from 
1987 to 1998. ([email protected])

  LRRI AND UMSM ARE UNIQUELY QUALIFIED TO ADDRESS TOBACCO AND HARMFUL 
                          SUBSTANCE ADDICTION

    UMSM researchers have significant expertise and experience in many 
relevant areas including: substance abuse, evaluation research, 
community research, behavioral medicine, disease prevention, treatment 
of tobacco-related disease, basic science research, epidemiology, and 
public health. The University's Tobacco Research Evaluation and 
Coordinating Center (RECC) has been responsible for the evaluation of 
Florida's Tobacco Pilot Program. Other strengths in the area of 
biomedical research and treatment include pediatric oncology and the 
Bachelor Children's Research Center, the Pediatric Environmental 
Respiratory Center, as well as the proposed Minority Health Tobacco 
Research Center (MHTRC)
    LRRI has undertaken some of the leading studies of animal models of 
smoking and the role of nicotine in immune function. It is one of the 
few research organizations capable of undertaking complex inhalation 
exposure protocols with appropriate animal models that predict human 
physiological responses. LRRI will undertake experimental protocols 
investigating the role of second hand smoke on neonates and other 
adults. These models determine the precise immunological defects that 
result from these exposures. This data will then be compared to the 
cellular immune function of newborns, older children, and family 
members of minority subjects in Miami and New Mexico.

                     FOCUS ON MINORITY POPULATIONS

    The proposed MHTRC will be devoted to the study of unrecognized 
health risks associated with addiction to tobacco products, 
predominantly in minority populations. This group may be uniquely 
susceptible to immune suppression, increased fetal HIV transmission, 
increased respiratory inflammation and infection, synergistic negative 
health effects with other abused substances and impaired immunological 
function of non-smoking family members exposed at home or in urtero.
    The MHTRC will address the culturally relevant behaviors that 
underlie tobacco use in human populations. The importance of the MHTRC 
lies in its bridging the use of animal models to the study of disease 
in people and the subsequent formulation and testing of medical and 
behavioral interventions to improve or eliminate the negative health 
consequences associated with tobacco use. Of further interest is the 
opportunity to compare two different Hispanic populations that differ 
in genetics and cultural characteristics (Mexican and Hispanic in New 
Mexico and Cuban in Florida) as well as characterizing African-American 
and Caucasian populations. Creating the MHTRC represents a unique 
opportunity to build upon the rich diversity of Florida's population, 
the commitment of the UMSM to the community and its experience with 
behavioral intervention, particularly related to tobacco use and 
substance abuse. Florida is an ideal location for the proposed MHTRC, 
being a bellwether state for social, demographic and epidemiological 
changes that the rest of the nation is currently facing or will face in 
the near future. Our extensive experience working with traditionally 
hard-to-reach populations such as minority substance abuser will ensure 
that the interventions developed will be culturally and linguistically 
appropriate and acceptable. UMSM also has the means for rapid 
dissemination of effective prevention and intervention within the 
minority communities through an already developed community health care 
coalition.
    The goals of the MHTRC are to:
  --Identify risk behaviors which lead to tobacco use and substance 
        abuse.
  --Reduce the incidence and prevalence of tobacco use and that of 
        other addictive substances.
  --Reduce the development of and suffering from disease associated 
        with tobacco and other addictive substances through research 
        and interventions in the basic sciences, clinical medicine and 
        epidemiological research.
  --Reduce exposure to environmental tobacco smoke.
  --Develop, test and apply science-based community interventions to 
        achieve these goals. We know that intervention with effective 
        prenatal programs saves a tremendous amount of money that 
        otherwise would be spent on healthcare after birth. The same 
        can be said for early detection of breast cancer through the 
        screening of over 30,000 medically underserved women which has 
        demonstrated that early detection and intervention saves 
        dollars as well as lives. As is true for cancer, we already 
        possess a great deal of knowledge that could be used to develop 
        interventions and prevention strategies for addiction to 
        tobacco and other harmful substances. Applying this knowledge 
        could effect savings of billions of dollars for state, local 
        and national governments. Equally important, the quality of 
        life will be improved for individuals, families and their 
        communities as well as society at large. It is becoming ever 
        more apparent that we, as a society, cannot afford to ignore 
        prevention and early intervention strategies since crises 
        management is far too costly in terms of quality of life and 
        unnecessary expenditures of dollars.
    By achieving our stated goals, the MHTRC will be in a perfect 
position to:
  --Improve quality of life,
  --Decrease morbidity and mortality,
  --Increase survival and,
  --Significantly decrease health care expenditures by applying 
        effective prevention and intervention.
    For fiscal year 2001, we seek $4 million ($2 million for each 
institution) for this joint New Mexico-Florida initiative by the LRRI 
and UMSM. We feel strongly that the unique challenges you face have 
never been greater than at this point in history, but there has also 
never been a greater opportunity to apply science-based solutions to 
the riddle of addiction and greatly improving public health by 
eliminating or reducing is negative health consequences.
    We hope, Mr. Chairman, that you and your colleagues on the 
Subcommittee will find it possible to support this important 
initiative.
                                 ______
                                 

      PREPARED STATEMENT OF THE UNIVERSITY OF SOUTHERN MISSISSIPPI

    Mr. Chairman, distinguished Members of the Subcommittee, I would 
like to thank you for this opportunity to provide testimony describing 
ongoing research and commercializing efforts of The University of 
Southern Mississippi (USM) and the Mississippi Polymer Institute. I am 
very grateful to the Subcommittee for its leadership and the continued 
support of the Institute and its work. This testimony will include an 
update on the progress of the Institute since my testimony of 
approximately one year ago. During the past year, our efforts have 
focused principally on two commercialization thrusts. One effort 
involves our novel, agricultural-based inventions in emulsion 
polymerizations, and the other is to produce and commercialize a 
viable, formaldehyde-free, soybean derived adhesive for a variety of 
composite board materials, i.e., particleboard or oriented strand board 
(OSB). During the past year, we have continued to exploit the 
opportunities offered by these novel materials and continue to be 
optimistic about their commercial fate. I will discuss the two 
inventions separately in order to offer more clarity. In the case of 
castor, lesquerella, or soy oil, we have designed and synthesized novel 
monomers or polymer building blocks that offer state-of-the-art 
technology. For instance, the attributes of the technology includes the 
ability to produce odor free, solvent free, non-polluting latex 
coatings. This represents best-available-technology for the production 
of solvent free latex coatings. The success of the technology depends 
on the use of agricultural materials as a building block of emulsion 
derived polymers offering a new opportunity for ag derived materials as 
a raw material in the polymer industry. By contrast, contemporary latex 
coatings contain 1,500 grams and more of air pollutants or volatile 
organic content (VOC) per gallon. Moreover, this novel technology, if 
practiced, would allow governmental regulatory agencies to tighten the 
restrictions on volatile organic content (VOC) emissions of applied 
coatings without harm to the coatings industry. I intend to share 
details of this novel and patented technology with the Environmental 
Protection Agency so that they can, if they wish, make an independent 
evaluation to confirm its suitability and efficacy. Much of the 
fundamental scientific principles regarding its mode of action have 
been confirmed, yet additional data must be collected. Specifically, we 
have identified one specific area in which it can be used, i.e., 
emulsion polymerizations. However, there are other fields of 
specialization where it could be very valuable and these opportunities 
must be evaluated. In particular, we believe this technology can be 
employed in light industrial and original equipment manufacture (OEM) 
industrial coatings as well as architectural coatings, and confirmation 
of these concepts is a priority in future work. The second and 
critically important objective is to secure manufacturing facilities 
for commercial production of the new material(s). Thus, we are 
currently in negotiations with parties who have expressed interest in 
manufacturing the novel ag based monomer(s). It is imperative that a 
manufacturing facility be secured during the 1999-2000 period if this 
technology is to be successful. For instance, we have provided samples 
to our industrial partners from samples prepared in our laboratory. 
However, requests for the novel material are far too great to continue 
the practice of laboratory synthesis and thus we must move to an 
industrial type synthesis. In fact, one industrial client has expressed 
interest in placing orders for the monomer in the third or fourth 
quarter of 2000.
    Furthermore, the uniqueness of this technology has been confirmed 
in industry, and at least one participating polymer manufacturing firm 
is sampling polymers manufactured via this novel technology. Therefore, 
we believe that the time when industrial firms will seek production 
quantities of the novel monomer is drawing closer, and we must be 
prepared to meet their needs. This is indeed an exciting time as we see 
the fruition of your support, and our efforts coming to the conclusion 
we both desire--the commercial production and sale of novel ag based 
materials to the polymer industry.
    In yet another of our novel ag based technologies, we have 
developed formaldehyde-free adhesives for use in the composites 
industry, specifically for particleboard and oriented strand board. The 
new adhesives are composed of more than 98 percent agricultural 
products and are comparable in properties with traditional formaldehyde 
adhesives. Formaldehyde emissions are regulated as formaldehyde is 
considered a potential cancer producing agent. Consequently, there is a 
move afoot to remove formaldehyde from articles of commerce.
    In 1983, the Mississippi Legislature authorized the Polymer 
Institute at USM to work closely with emerging industries and other 
existing polymer-related industries to assist with research, problem-
solving, and commercializing efforts. During the past year, seventeen 
new polymer-related industries have located in Mississippi. In 
particular, during the past four years Sunbeam-Oster, Dickten and 
Masch, Wellman, and Kohler have constructed facilities approaching a 
cost of $1.4 billion and each has commented on polymer science and 
engineering as a significant factor in their decision to locate near to 
The University of Southern Mississippi and the Mississippi Polymer 
Institute.
    The Institute provides industry and government with applied or 
focused research, development support, and other commercializing 
assistance. This effort complements existing strong ties with industry 
and government involving exchange of information and improved 
employment opportunities for USM graduates. Most importantly, through 
basic and applied research coupled with developmental and 
commercializing efforts of the Institute, the Department of Polymer 
Science continues to address national needs of high priority.
    The focus of my work is commercialization of alternative 
agricultural crops in the polymer industry. This approach offers an 
array of opportunities for agriculture as the polymer industry is the 
largest segment of the chemical products industry in the world, and 
heretofore has been highly dependent upon petroleum utilization. 
However, my efforts are directed to the development of agricultural 
derived materials that will improve our nation's environment and reduce 
our dependence on imported petroleum. As farm products meet the 
industrial needs of the American society, rural America is the 
benefactor. Heretofore, this movement to utilize alternative 
agricultural products as industrial raw materials has received some 
attention but much less than opportunities warrant. Your decisions are 
crucial to the accomplishment of these goals as funding from this 
Subcommittee has enabled us to implement and maintain an active group 
of university-based polymer scientists whose energies are devoted to 
commercializing alternative crops. We are most grateful to you for this 
support and ask for your continued commitment.
    The faculty, the University, and the State of Mississippi are 
strongly supportive of the Mississippi Polymer Institute and its close 
ties with industry. Most faculty maintain at least one industrial 
contract as an important part of extramural research efforts.
    Polymers, which include fibers, plastics, composites, coatings, 
adhesives, inks, and elastomers, play a key role in the materials 
industry. They are used in a wide range of industries including 
textiles, aerospace, automotive, packaging, construction, medical 
prosthesis, and health care. In the aerospace and automotive 
applications, reduced weight and high strength make them increasingly 
important as fuel savers. Their non-metallic character and design 
potentials support their use for many national defense purposes. 
Moreover, select polymers are possible substitutes for so-called 
strategic materials, some of which come from potentially unreliable 
sources.
    As a polymer scientist, I am intrigued by the vast opportunities 
offered by American agriculture. As a professor, however, I continue to 
be disappointed that few of our science and business students receive 
training in the polymer-agricultural discipline as it offers enormous 
potential. The University of Southern Mississippi and the Mississippi 
Polymer Institute are attempting to make a difference by showing others 
what can be accomplished if appropriate time, energy, and resources are 
devoted to the understanding of ag based products.
    I became involved in the polymer field 36 years ago and since that 
time, have watched its evolution where almost each new product 
utilization offered the opportunity for many more. Although polymer 
science as a discipline has experienced expansion and a degree of 
public acceptance, alternative agricultural materials are an under-
utilized national treasure for the polymer industry. Moreover, there is 
less acceptance of petroleum derived materials today than ever before 
and consequently the timing is ideal for agricultural materials to make 
significant inroads as environmentally friendly, biodegradable, and 
renewable raw materials. These agricultural materials have always been 
available for our use, yet society for many reasons, has not recognized 
their potential. The following examples are included and represent 
opportunities other than those already described which supports this 
tenet:
  --A waterborne, waterproofer has been designed and formulated with 
        the help of several natural products. The material functions as 
        a waterproofer yet is carried in water. However, after 
        application to the intended substrate, typically wood or 
        cementous products, the material becomes hydrophobic and highly 
        water resistant. We have collected two and one-half years of 
        exposure data on this product with excellent success. It is 
        currently being marketed via Southern Chemical Formulators of 
        Mobile, AL. The distribution of this material has been slowed 
        as the result of a fire at Southern Chemical Formulators that 
        destroyed production facilities. We will make additional 
        contacts with industrial firms this year who would be possible 
        distributorship candidates.
  --A new, multi-functional polymer additive was designed, synthesized, 
        tested, and submitted to the patent office. The patent office 
        has approved the issuance of a patent entitled, ``Novel Multi-
        Functional Surface Active Agents, Syntheses and Applications 
        Thereof,'' U.S. patent no. 5,807,922, September 15, 1998. The 
        product is currently being evaluated by the Hanson Company as a 
        potential commercial product. It is a highly efficient, multi-
        faceted additive that functions as a dispersant, a defoamer, an 
        adhesion promoter, a gloss enhancer, and corrosion inhibiting 
        species. It is derived from an agricultural raw material and is 
        very novel in its performance and applications. We will utilize 
        this technology in the synthesis of our own emulsion polymers 
        and test them for property improvements and thus commercial 
        viability.
  --We have exploited the potential of lesquerella, a crop that 
        produces a triglyceride similar to castor oil. Several high 
        performance products have been prepared and include polyesters, 
        stains, foams, pressure sensitive adhesives, and 100 percent 
        solid ultraviolet (UV) coatings. This technology was 
        highlighted at the AARC/NASDA meeting in Washington, DC. We are 
        developing a cooperative relationship with Alcorn State 
        University, Lorman, MS to grow and thus evaluate the agronomics 
        of lesquerella as a new crop for Southeastern U.S. region.
  --Novel open cell foams have been designed and prepared from 
        lesquerella and/or castor oil. They are of high quality and can 
        substitute for foams used extensively in industrial settings. 
        Moreover, this ag based foam technology will be exploited 
        during the coming year as a potential weed deterrent and mulch. 
        The idea is to apply a layer of foam around crops to retard, if 
        not stop, weed intrusion and their associated competition for 
        food and water.
    U.S. agriculture has made the transition from the farm fields to 
the kitchen tables, but America's industrial community continues to be 
frightfully slow in adopting ag based industrial materials. Let us 
aggressively pursue this opportunity and in doing so:
  --Intensify U.S. efforts to commercialize alternative crops and 
        dramatically reduce atmospheric volatile organic content 
        emissions. The result will be much cleaner air for all 
        Americans.
  --Reduce U.S. reliance on imported petroleum.
  --Maintain a healthy and prosperous farm economy.
  --Foster new cooperative opportunities between American farmers and 
        American industry.
    Mr. Chairman, your leadership and support are deeply appreciated by 
the entire University of Southern Mississippi community. While I can 
greatly appreciate the financial restraints facing your Subcommittee, I 
feel confident that further support of the Mississippi Polymer 
Institute will continue dividends of increasing commercialization 
opportunities of agricultural materials in American industry. Advances 
in polymer research are crucial to food, transportation, housing, and 
defense industries. Our work has clearly established the value of ag 
products as industrial raw materials and we must move it from the 
laboratories to the industrial manufacturing sector. Only then can the 
U.S. enjoy a cleaner and safer environment which these technologies 
offer, as well as new jobs, and expanded opportunities for the U.S. 
farmer. We are most grateful for the support you have provided in the 
past. The funding you have provided has allowed the laboratory work to 
be conducted, yet we are at the crossroads of commercialization and 
additional funds are needed to take this technology from the laboratory 
to the manufacturing facilities. Moreover, past funding has been 
essentially level with some slight increases. Our current circumstance 
finds us in dire need of additional resources to take these 
technologies to the market place and to continue our developments of 
other exciting technologies. Thus, we respectfully request $1.5 million 
in federal funding to exploit the potentials of commercializing 
alternative agricultural materials and to continue our initiatives. 
Thank you Mr. Chairman and Members of the Subcommittee for your support 
and consideration.
    Mr. Chairman, I have included with this testimony written 
descriptions of our most advanced technology based on castor and/or 
lesquerella oils. I am told that 30,000 acres of castor beans are being 
planted in Texas, and I have herein already described our efforts to 
accelerate the adoption of lesquerella as a new industrial crop. The 
presentations are presented in the ``lay'' and ``technical'' fashion in 
an effort to meet the needs of the non-scientist as well as the highly 
technical professional, respectively.
                                 ______
                                 

  PREPARED STATEMENT OF THE UPPER MISSISSIPPI RIVER BASIN ASSOCIATION

    The Upper Mississippi River Basin Association (UMRBA) is the 
organization created 19 years ago by the Governors of Illinois, Iowa, 
Minnesota, Missouri, and Wisconsin to serve as a forum for coordinating 
the five states' river-related programs and policies and for 
collaborating with federal agencies on regional water resource issues. 
As such, the UMRBA has an interest in the budget for the U.S. 
Department of Agriculture's conservation programs and technical 
assistance.
    Of particular importance to the UMRBA is funding for the 
Conservation Reserve Program (CRP), Wetlands Reserve Program (WRP), and 
Environmental Quality Incentives Program (EQIP). Taken together, these 
three Commodity Credit Corporation-funded programs provide an 
invaluable means for the USDA to work with landowners, local 
conservation districts, and the states to ensure that agricultural 
productivity is maintained while protecting the nation's soil and water 
resources. As stewards of some of the nation's most productive 
agricultural lands and important water resources, the five states of 
the Upper Mississippi River Basin believe these programs are vital. 
Strong farmer interest and state support demonstrate the region's 
commitment to the objectives of these programs. In 1998, state, local, 
and private entities matched every dollar of NRCS investment in the 
five states with an additional $0.80.
    The President's fiscal year 2001 budget proposal includes a $1.3 
billion Farm Conservation Initiative, a combination of new legislative 
and funding proposals with important potential implications for the 
USDA's core conservation programs. Funding for the CRP would be 
increased modestly to $1.742 billion and the CRP acreage cap would be 
raised by 3.6 million acres to 40 million acres. The UMRBA would 
welcome such an adjustment to the CRP cap and also supports efforts to 
ensure that future CRP enrollments target the best opportunities to 
improve water quality and habitat values. Only 40,000 acres will remain 
next year under the current WRP acreage cap. The UMRBA supports 
legislation to increase the cap to permit enrollment of 250,000 acres 
per year in the WRP from 2001 to 2005. In order to realize the 
potential benefits of such an increase in the acreage cap, it is of 
course essential to provide the funds necessary to support additional 
enrollments. The Administration has proposed increasing WRP funding to 
$286 million in 2001.
    The CRP and WRP have been extremely effective in helping Midwest 
farmers to protect land and water resources by curtailing production on 
some of their most sensitive land. And there are certainly many more 
opportunities to make good use of the CRP and WRP in the region. 
However, it is also essential to support sound conservation practices 
on the far greater amount of land that remains in production. EQIP is 
the USDA's largest and most effective means of assisting farmers and 
ranchers to implement conservation practices on land currently in 
production. The President is proposing legislation to increase the 
authorized CCC funding to EQIP by $625 million over five years. Such an 
increase would provide significant benefits to our region's farmers and 
natural resources. Under the Administration's plan, a portion of these 
increased funds would assist animal feedlot operators to implement 
conservation practices. Various incidents throughout the country have 
clearly demonstrated the need for such assistance, which can help 
balance the new dynamics of livestock production with the need to 
protect soil and water resources.
    The President is also proposing a new, $600 million Conservation 
Security Program (CSP), to be administered by the NRCS. The CSP would 
provide assistance to farmers and ranchers who implement various 
conservation practices. The UMRBA states are keenly aware of the need 
for more resources to support practices such as conservation tillage 
and buffer strips. However, it is not clear whether additional 
resources should be directed to existing programs such as EQIP or to a 
newly established CSP.
    The UMRBA does remain concerned with the adequacy of funding and 
staffing levels in the NRCS' conservation operations account. The 
technical assistance funded through conservation operations provides 
the foundation for the USDA's voluntary conservation planning. The 
Administration has proposed an increase of $86 million in conservation 
technical assistance funding for fiscal year 2001. However, a large 
part of this increase would be dedicated to specific programs and 
initiatives outside of the USDA's core conservation programs. As a 
result, NRCS field staff will likely continue to have difficulty 
providing the timely, comprehensive technical assistance that farmers 
need if they are to participate effectively in the USDA's conservation 
programs. A 1998 National Workload Analysis indicated that the NRCS 
needed as many as 4,000 employees at the field level in the Midwest. At 
the time, actual field staff in the region numbered fewer than 2,500. 
The UMRBA urges Congress to ensure that the NRCS has both the staff and 
funding necessary to deliver its conservation programs effectively.
    The Midwest and indeed much of the nation will face significant 
challenges in the future as dams built under the Public Law 534 and 
Public Law 566 programs age. More than 200 floodwater dams in the NRCS' 
Midwest Region will reach the end of their design life within 10 years. 
Many of these structures must be rehabilitated if they are to continue 
to function safely and effectively. The UMRBA encourages Congress to 
provide USDA with the authority and funding it needs to serve as an 
effective federal partner in addressing these needs.
    The five states of the UMRBA acknowledge that our region faces 
enormous soil and water conservation needs and limited public and 
private resources to address those needs. In this context, it is 
imperative that NRCS work with the states, conservation districts, and 
farmers to identify and target the most pressing problems. Coordination 
and communication with the states is particularly critical to success 
in addressing the interstate resource challenges faced on the Upper 
Mississippi River. Success in addressing such complex, large-scale 
issues will not come quickly. It will require long-range thinking and 
commitment over time from all levels of government and from farmers. 
The states look to both Congress and the Administration to join them in 
providing such leadership.
                                 ______
                                 

             PREPARED STATEMENT OF THE USA RICE FEDERATION

    The U.S.A. Rice Federation wishes to express our opposition to the 
recommendations of the Administration for reductions in the 
appropriation for fiscal year 2001 for the Department of Agriculture 
for two items that are of importance to the rice industry. We are 
seeking funding for these two items at last year's levels. In addition, 
we support the requested funding levels for the White River Irrigation 
Demonstration Project and the Bayou Meto Project.
    The U.S.A. Rice Federation is the nation's largest rice 
association, representing all segments of the U.S. rice industry. The 
Federation's charter members are the U.S.A. Rice Council, U.S. Rice 
Producers' Group and the Rice Millers' Association. Through these 
organizations, Federation membership encompasses U.S. rice producers 
who grow 80 percent of America's rice crop; farmer-owned cooperatives 
and privately owned mills comprising virtually all of the U.S. rice 
milling industry, with members in Arkansas, California, Florida, 
Louisiana, Mississippi, Missouri, and Texas; and a wide range of allied 
businesses in these and other states. The diversity and scope of this 
association permits it to provide a view common to all aspects of the 
industry, and to the vast majority of its participants.
    The first item of concern to the industry relates to the funding of 
the Dale Bumpers National Rice Research Center at Stuttgart, Arkansas. 
This Center is the only one of its kind in the United States. It was 
established with the view of making U.S. produced rice more competitive 
in the global market through research for improved yields, a superior 
grain quality, pest resistance and stress tolerance. It has just 
recently commenced operations with emphasis on genome research that 
would focus on rice genetics. The results of the genome research would 
be of benefit not only for rice but also for other crops as well.
    The Administration has proposed a major reduction in funding of 
this Center. The Administration has proposed for fiscal year 2001 a 
reduction in the current appropriation of $5,336,700 to $4,502,500 by 
terminating two projects and reducing the appropriation for rice 
research by $382,500 and for aquaculture by $457,700. The reduction for 
rice research would seriously impair the genome research efforts of the 
Center, and unduly impair the objectives for which the Center was 
established.
    The other appropriation item on which we wish to comment is the 
appropriation for wildlife services operation contained in the budget 
for APHIS. The Administration has proposed a cut of $2 million in this 
appropriation by reducing the appropriation from $31 million to $29 
million in fiscal year 2001. One of the activities carried out by this 
appropriation is work on efforts to control blackbird populations which 
are a scourge of the rice industry, particularly in Louisiana, and 
Texas. The appropriation is used to apply bait that has been treated 
with a chemical, DRC 13329, as well as conducting baiting studies and 
studies on new chemicals that may be used as repellants for blackbirds. 
The appropriation from the Department of Agriculture supplements funds 
generated by producers in these states under their rice research and 
promotion legislation. The industry depends on this appropriation to 
aid in its efforts to control damage to the crops caused by the 
tremendous number of blackbirds that descend on the fields each spring.
    We also support the requested funding levels of $22.7 million for 
the White River Irrigation Demonstration Project and $9.5 million for 
the Bayou Meto Project in Arkansas.
    We wish to thank you for your help to the rice industry in the past 
and encourage you to continue your support for this industry.
    Please include this statement in the record of the hearing and make 
copies available to the members of the Subcommittee.
                                 ______
                                 

        PREPARED STATEMENT OF THE WILDLIFE MANAGEMENT INSTITUTE

    Mr. Chairman, I am Ronald R. Helinski, Conservation Policy 
Specialist for the Wildlife Management Institute. Established in 1911, 
the Institute is staffed by professional wildlife scientists and 
managers. Its purpose is to promote the restoration and improved 
management of wildlife in North America. I am submitting testimony for 
the Subcommittee on Agriculture, Rural Development and Related 
Agencies--Senate Committee on Appropriations for:

                 NATURAL RESOURCES CONSERVATION SERVICE

    Conservation Operations-Technical Assistance (TA).--The President's 
budget request is for $86.431 million taking into consideration an 
increase of FTE's amounting to 1,843. WMI supports additional needed 
Technical Assistance (TA) both via funding and through the use of 
innovative delivery mechanisms. WMI submits that there are other ways 
to deliver TA, primarily through partnerships. Over the past several 
years, Congress has emphasized the need for a balanced budget. NRCS 
FTE's over that time period have been status quo. During that time, 
NRCS had to find new ways to provide services to its constituent base 
(landowners, farmers, and ranchers). Through NRCS's innovative spirit, 
more partnerships than ever before occurred. They effectively leveraged 
monies enabling them to continue to offer services to landowners. These 
partnerships bloomed into cooperative ventures with state fish and 
wildlife agencies to address needed expertise and assistance with Farm 
Bill programs. In many instances through the use of MOA's NRCS match 
dollar for dollar with state fish and wildlife organizations to hire 
needed FTE's to facilitate fish and wildlife TA to landowners. This 
innovation enabled NRCS to: 1) obtain needed expertise where they 
lacked it and 2) were able to increase FTE's on the ground providing 
needed TA. The continuation of this management style will provide more 
actual dollars to landowners via established Farm Bill programs 
(financial assistance) without taking away from TA funding. 
Partnerships with state fish and wildlife agencies and conservation 
NGO's are paying off and should be continued--it provides flexibility 
and needed services in a time of fiscal responsibility. An example of 
how this process works can be found in the states of: AR, MO, KY, TX, 
NC, GA, CO and WY.
    With Farm Bill program demand ratios of 3:1 for WRP, 3:1 for WHIP, 
2:1 for CRP and 4:1 for EQIP its not just about staffing needs but 
financial assistance too. Increased monies are needed to facilitate the 
demand. It's a true limiting factor for the demand far exceeds the 
available dollars available. With an increase in TA dollars being used 
in a partnership effort with state fish and wildlife agencies and/or 
conservation NGO's more services will be delivered on the ground thus 
meeting constituent demand.
    There also is an increasing need to properly evaluate applications 
of Farm Bill programs on the ground. The above mentioned partnerships 
are a means to an end. Follow up with landowners has been hit or miss 
based on NRCS field priorities and current priority workloads. State 
fish and wildlife agencies and conservation NGO's would help supplement 
on site visits and offer a more umbrella approach to follow up visits. 
Properly evaluating implementation of Farm Bill programs on the ground 
will reinforce conservation connections and help catch problems in 
their early stages, thus saving money in the long run.
    Programs-Wetland Reserve Program (WRP).--WMI is in support of 
increasing acreage to the 250,000 enrollment level in fiscal year 2001. 
With the national ratio of eligible offered acres to enrolled acres 
being 5:1 there is a need to expand the popular WRP program to meet 
national conservation goals. This program returns long-term benefits to 
both farmers and the American public.
    Wildlife Habitat Improvement Program (WHIP).--WMI supports an 
increase in funding for this very successful program. With a 3:1 demand 
to approved contract ratio, $50 million (12.5 for TA/37.5 for financial 
assistance) is far below the needed amount to meet constituent desires. 
As a result of the zeroing out of this program in fiscal year 2000 the 
pent up demand will be high. WMI supports a $100 million allocation 
annually for this program. As mentioned above, through the leveraging 
of TA funds, more monies can be made available for direct financial 
assistance--we recommend $87.5 million for landowners.
    Conservation Security Program (CSP).--WMI applauds the recognition 
of strengthening conservation efforts on private land. With the focus 
on family farms and specific attention to private grazing lands, 
orchards, vineyards and other non-program crops, needed niches are now 
being addressed. ``Thinking about the land itself as our most valuable 
commodity'' is, as stated by Secretary Glickman, necessary for long 
term conservation needs. To that end, WMI supports this $600,000 
million program with these caveats: (1) by complimenting other Farm 
Bill programs CSP will support the coequal status of soil, water, and 
wildlife and (2) that evaluation mechanisms be established to monitor 
RESULTS from the investment of those monies.
    Forest Incentives Program (FIP).--Zeroing out this program is a 
mistake. In most cases wildlife has benefitted from landowner use of 
available FIP funds. This is especially true when it comes to utilizing 
the management technique of forest stand improvement. WMI recommends 
that this program allow cost sharing for the use of prescribed fire on 
non-industrial, private lands. By doing this you will help encourage 
aggressive fuels management as well as assist with the development of 
needed understory and successional forest stage development for such 
wildlife species as bobwhite quail, woodcock and a variety of other 
bird and mammal species. Thus you will be promoting forest health, 
reduce unwanted wildfire risk, and improve wildlife habitat. To 
accomplish the above WMI recommends funding FIP at a $25 million level.

                          FARM SERVICES AGENCY

    Conservation Program Initiative (CPI).--WMI supports the increase 
from 36.4 million to 40 million acres in fiscal year 2001. The 
Conservation Reserve Program (CRP) is a voluntary and incentive-based 
program that have turned millions of acres of marginal cropland into 
vital wildlife habitat. These programs also help stem soil erosion, 
help agricultural producers meet the requirements of a variety of 
environmental laws and regulations. CRP also helps producers remain 
economically viable in an era of low commodity prices through program 
payments and increased opportunity for income from hunting, fishing and 
other recreational activities.
    We also support the bonuses of $125 million each year in fiscal 
year 2001 and 2002 for continuous CRP sign ups.
    Supplementary Income Assistance Payments budgeted at 2.464 billion 
needs to include conservation compliance as part of the delivery 
mechanism to landowners. Accountability for the use of public funds to 
constituents concerning improvements to water, soil and wildlife is a 
must.
    Technical Assistance (TA).--WMI recommends leveraging some of the 
$52 million available with state fish and wildlife agencies and 
conservation NGO's to assist NRCS with TA delivery to landowners. In 
these times of balanced budgets, emphasis has been on streamlining 
government. Efficiency and becoming more effective are the rallying 
calls of those in Congress. With that in mind, WMI suggests that there 
are other ways to deliver TA to this nation's private landowners. We 
suggest going the route of developed partnerships with state fish and 
wildlife agencies and conservation NGO's. Through the use of MOA's NRCS 
can match dollars with the above partners to expand TA as well as offer 
more monies to Farm Bill program participants. MOA's currently in 
effect in AR, MO, KY, TX, NC, GA, and WY are a model of how such 
leveraging can occur.
    Wildlife Services, Animal and Plant Health Inspection Service 
(APHIS).--WMI recommends that the President's Budget for APHIS Wildlife 
Services (WS) be increased by $1.0 million from $28.7 million to $29.7 
million. This increase should be earmarked for the increased cost of 
maintenance and operations of the National Wildlife Research Center. 
WMI accepts the President's Budget request (a reduction of $2.7 million 
and $190,000 respectively) for the Operations and Aquaculture line 
items, provided that program cuts are only made in states that do not 
meet a 1:1 cost share match.
    The WS program is a complex array of state and local partnerships 
that contribute financially to the overall program. These partnerships 
cooperate to control wildlife damage to agriculture, aquaculture, 
forest, range and other natural resources, and to protect public health 
and safety through control of wildlife-borne diseases and wildlife 
hazards at airports. The funding and support level should be governed 
by the cooperative agreements in place with the respective state 
agencies and be subject to the agreed to 50/50 cost share policy.
    Providing a no net loss of funding for Methods Development is vital 
to continue the ongoing work of finding alternatives to existing 
control methods. New technology is the only answer to resolving the 
controversies surrounding some of the current control methods. Without 
the $1 million increase, the program. would be required to cut research 
efforts in order to pay for the increased maintenance for the research 
facility.

 COOPERATIVE STATE RESEARCH, EDUCATION, AND EXTENSION SERVICE (CSREES) 
                     U.S. DEPARTMENT OF AGRICULTURE

    The Wildlife Management Institute (WMI) recognizes that the 
research and educational programs of the CSREES and its Land Grant 
Partners effect relevant, positive changes in attitudes and 
implementation of new technologies by private landowners, managers, 
community decision makers, and the public. This results in significant 
benefits to individuals and to the Nation through building and 
sustaining a more viable and productive natural resource base and a 
competitive and profitable agriculture. Since over two-thirds of our 
lands, approximately 1.35 billion acres, are controlled by over 10 
million private landowners and managers, it is most appropriate that 
the CSREES-Land Grant System, with its grass roots credibility and 
delivery system, be adequately funded to translate and deliver 
research-based educational programs and new technologies to help the 
Nation's private landowners and managers move toward a more sustainable 
society. However, in the President's fiscal year 2001 budget, we see 
virtually no emphasis on natural resources research and education 
directed toward helping these clientele. In short, only about four 
percent of CSREES' proposed budget of $972,395,000 supports research 
and extension activities pertinent to the nation's forest and range 
lands and associated wildlife and fisheries resources. This amount is 
infinitesimal and needs to be significantly increased.

                                PURPOSE

    The Institute recommends that the fiscal year 2001 budget for 
CSREES should redirect funding to accomplish the following goals:
    WMI recommends that the Renewable Resources Extension Act be funded 
at a minimum level of $15.0 million in fiscal year 2001.--The RREA 
funds, which are apportioned to State Extension Services, effectively 
leverage cooperating partnerships at an average of about four to one, 
with a focus on the development and dissemination of useful and 
practical educational programs to private landowners (rural and urban) 
and continuing education of professionals. The increase to $15.0 
million would enable the Extension System to accomplish the goals and 
objectives outlined in the 1991-1995 Report to Congress. The need for 
RREA educational programs is greater today than ever because of the 
fragmentation of ownerships, the diversity of landowners needing 
assistance, and the increasing environmental concerns of society about 
land use. An increase to $15.0 million would enable the Extension 
Service to expand its capability to assist over 500,000 private 
landowners annually to improve decision making and management on an 
additional 35 million acres while increasing productivity and revenue 
by $200 million.
    WMI recommends that Smith-Lever 3(b)&(c) funding be increased five 
percent to $290,000,000, and that the increase be allocated to the 
Natural Resources and Environmental Management (NREM) base program.--
WMI appreciates that Smith-Lever 3(b)&(c) base programs provide ``Block 
Grant'' type funds for land grant universities to provide essential 
educational outreach based on local need assessments. The requested 
increase will enable NREM programs to develop a critical mass of 
expertise at the State and local levels to address natural resource and 
environmental issues that are directly affecting small landowners and 
farmers in both rural and urban communities nationwide. Expanding 
Extension public issues education programs on such issues as forest 
health, wetlands, endangered species, and human/wildlife interactions, 
as well as strengthening programs in urban and community forestry and 
environmental education as called for in the 1990 FACT Act is essential 
to the sustainability of these critical resources. Such an increase, 
targeted appropriately, would help producers better understand and 
implement the changes in the 1995 Farm Bill's Conservation Provisions 
and those conservation issues that are expected in the next Farm Bill. 
Moreover, we are concerned about declining natural resources staff in 
CSREES as well as at the Nation's Land Grant Universities including the 
predominantly Black and Tribal Institutions.
    WMI encourages continuation of close cooperation between State 
Cooperative Extension Services and their State Fish and Wildlife 
agencies, as well as other appropriate State and Federal agencies and 
conservation organizations. Extension 4-H Youth natural resource 
program and projects continue to increase with over 1,350,000 
youngsters presently enrolled from both urban and rural communities 
across the Nation. Increased Smith-Lever funds targeted appropriately 
will enable CSREES to carry out its environmental education and NREM 
National Strategic Plan obligations nationwide.
    WMI recommends restoration of the Rangeland Research Grants 
$500,000 budget for fiscal year 2001.--The Institute is disappointed 
that the practical and applied problems addressed by the Rangeland 
Research Grants (RRG) program were zeroed out in the President's 1998 
budget and totally ignored in the fiscal year 1999, 2000, and 2001 
budgets. Over one half of the land area of the United States is 
rangeland; and elimination of the only federal competitive grants 
program for rangelands has serious implications for wildlife, 
watersheds, and other natural resources. Modest appropriations for RRG 
in the past have supported some of the most important rangeland 
research conducted over the past decade, and wildlife issues on 
rangelands will present some of the more critical rangeland research 
problems over the next decade. This would help increase the 
interdisciplinary capacity of research and educational programs to help 
landowners improve the adoption of forests and rangelands ecosystem 
management and the conservation of biodiversity on an ecoregion level.
    WMI recommends that an appropriate portion of the total increased 
appropriation for Pest Management should be dedicated to educational 
programs for prevention and control of vertebrate pests in urban and 
rural communities.--WMI notes significant increases in the President's 
budget for Pest Management research and extension programs with no 
opportunity for addressing vertebrate pests. Yet, vertebrate pests have 
been identified in many States as posing the most significant problems 
that agricultural producers and other private landowners and managers 
need educational assistance with. The targeting of Pest Management 
funds for vertebrate pest research and educational programs would 
effectively advance the knowledge and capability of landowners and 
managers to significantly reduce the losses caused by these problem 
species.
    WMI recommends that the Hatch funds be increased eleven percent to 
$200,000,000, and McIntire-Stennis funds fourteen percent to 
$25,000,000 and, if necessary, the increase be redirected from the 
proposed addition to NRI funding.--WMI is pleased that the 
Administration proposes an increase in basic research identified under 
the National Research Initiative (NRI) as Natural Resources and the 
Environment. However, what is proposed in the current version of the 
President's Budget does not address natural resource issues that the 
Natural Resource Community, the public, and the over 10 million private 
landowners are vitally concerned about. The Institute is extremely 
disappointed in the Goal 4 ``Greater Harmony between Agriculture and 
the Environment'' which is the only one of the 6 CSREES Strategic Goals 
that even purports to address natural resources. There is no mention of 
research or extension programs to address the erosion of the nation's 
natural resource base except that alluded to by the Integrated Research 
and Extension Water Quality Program. The others are totally focused on 
agriculture production. The nation's agricultural base cannot be 
sustained if its natural resource base is not sustained.

                                SUMMARY

    The Wildlife Management Institute, based on the above 
considerations, recommends the following for the fiscal year 2001 
budget of CSREES:
  --The RREA budget be increased to $15.0 million;
  --Smith-Lever 3(b)&(c) base program funding be increased to 
        $290,000,000;
  --Rangeland Research grants be restored at $500,000 level;
  --A portion of the Pest Management and related increase be targeted 
        to provide increased research and education programs to address 
        vertebrate pest prevention and control; and
  --McIntire-Stennis and Hatch Act funding be increased to $200,000,000 
        and $25,000,000 respectively.


       LIST OF WITNESSES, COMMUNICATIONS, AND PREPARED STATEMENTS

                              ----------                              
                                                                   Page
Ackerman, Kenneth D., Administrator, Risk Management Agency, 
  Department of Agriculture......................................   183
    Prepared statement...........................................   234
Ad Hoc Coalition, prepared statement.............................  1051
Alachua County Board of Commissioners, prepared statement........  1054
American:
    Chemical Society, prepared statement.........................  1055
    Farm Bureau Federation, prepared statement...................  1056
    Federation of Government Employees, prepared statement.......  1059
    Honey Producers Association, Inc., prepared statement........  1065
    Indian Higher Education Consortium, prepared statement.......  1066
    Rivers, prepared statement...................................  1069
    Seed Trade Association, prepared statement...................  1070
    Society for Microbiology, prepared statements............1080, 1082
    Society for Nutritional Sciences, prepared statement.........  1077
Association of:
    American Medical Colleges, prepared statement................  1084
    Research Directors of the Historically Black 1890 Land-Grant 
      Universities, prepared statement...........................  1085
ASTA Corn and Sorghum Basic Research Committee, prepared 
  statement......................................................  1072

Baker, James R., Administrator, Grain Inspection, Packers and 
  Stockyards Administration, Department of Agriculture, prepared 
  statement......................................................   604
Biotechnology Industry Organization, prepared statement..........  1087
Bond, Hon. Christopher S., U.S. Senator from Missouri:
    Questions submitted by......................................97, 472
    Questions submitted to the Departmental Administration.......   882
    Statement of.................................................     8
Bosecker, R. Ronald, Administrator, National Agricultural 
  Statistics Service, Department of Agriculture, prepared 
  statement......................................................   611
Burns, Hon. Conrad, U.S. Senator from Montana:
    Prepared statements.....................................5, 200, 408
    Questions submitted by.......................................   100
    Questions submitted to:
        Farm Service Agency......................................   267
        Foreign Agricultural Service.............................   373
        Risk Management Agency...................................   378
Byrd, Hon. Robert C., U.S. Senator from West Virginia:
    Questions submitted by.......................................   568
    Questions submitted to:
        Farm Service Agency......................................   274
        Foreign Agricultural Service.............................   377
        Risk Management Agency...................................   380
Byrd, Robert J., Deputy Commissioner for Management and Systems, 
  Chief Financial Officer, Food and Drug Administration, 
  Department of Health and Human Services........................   383

California Industry and Government Central California Ozone Study 
  Coalition, prepared statement..................................  1088
Chambers, Samuel, Jr., Administrator, Food and Nutrition Service, 
  Department of Agriculture, prepared statement..................   591
City of Gainesville, Florida, prepared statement.................  1090
Coalition to Promote U.S. Agricultural Exports, prepared 
  statement......................................................  1091
Cochran, Hon. Thad, U.S. Senator from Mississippi:
    Opening statements......................................1, 183, 383
    Prepared statement...........................................   386
    Questions on Government Performance and Results Act:
        Agricultural Marketing Service...........................   997
        Agricultural Research Service............................  1011
        Animal and Plant Health Inspection Service...............  1005
        Cooperative State Research, Education, and Extension 
          Service................................................   920
        Departmental Administration..............................  1018
        Economic Research Service (ERS)..........................   984
        Farm Service Agency......................................   938
        Food and Nutrition Service...............................   959
        Food Safety and Inspection Service.......................  1037
        Foreign Agricultural Service.............................  1043
        Grain Inspection, Packers and Stockyards Administration..   989
        Hazardous Materials Management Program...................  1026
        National Agricultural Statistics Service.................   979
        National Appeals Division................................   993
        Natural Resources Conservation Service...................   971
        Office of Budget and Program Analysis....................   926
        Office of Communications.................................   950
        Office of the Chief Economist............................  1000
        Office of the Chief Financial Officer....................   932
        Office of the Chief Information Officer..................  1021
        Office of the General Counsel............................   928
        Office of the Inspector General..........................   954
        Risk Management Agency...................................   944
        Rural Development Service................................   965
    Questions submitted by......................................62, 427
    Questions submitted to:
        Agricultural Marketing Service...........................   649
        Animal and Plant Health Inspection Service...............   650
        Cooperative State Research, Education, and Extension 
          Service................................................   653
        Economic Research Service................................   883
        Farm Service Agency......................................   266
        Food and Nutrition Service...............................   886
        Food Safety and Inspection Service.......................   889
        Foreign Agricultural Service.............................   277
        Office of the Chief Information Officer..................   895
        Risk Management Agency...................................   377
Collins, Keith, Chief Economist, Office of the Secretary, 
  Department of Agriculture......................................1, 183
    Prepared statement...........................................   187
    Statement of.................................................   185
Colorado River Basin Salinity Control Forum, prepared statement..  1092
Colorado River Board of California, prepared statement...........  1094
Colorado State University, prepared statement....................  1096
Cooper, Norman G., Director, National Appeals Division, 
  Department of Agriculture, prepared statement..................   615
Cosmetic, Toiletry, and Fragrance Association, prepared statement  1097
Council for Agricultural Research, Extension and Teaching, 
  prepared statement.............................................  1098

Defenders of Wildlife, prepared statements...................1099, 1100
Dewhurst, Stephen B., Budget Officer, Office of the Secretary, 
  Department of Agriculture......................................     1
Dorgan, Hon. Byron L., U.S. Senator from North Dakota:
    Prepared statement...........................................     4
    Questions submitted by.......................................   488
    Statements of................................................3, 201
Durbin, Hon. Richard J., U.S. Senator from Illinois:
    Prepared statements.........................................10, 204
    Questions submitted by.......................................   490
    Statements of................................................9, 204

Easter Seals, prepared statement.................................  1102

FDA-NIH Council, prepared statement..............................  1104
Federation of American Societies for Experimental Biology, 
  prepared statement.............................................  1106
Feinstein, Hon. Dianne, U.S. Senator from California, statement 
  of.............................................................    48
Florida State University, prepared statement.....................  1109
Friends of Agricultural Research-Beltsville, Inc., prepared 
  statement......................................................  1110
Friends of the National Arboretum, prepared statement............  1112
Fritz, Richard G., General Sales Manager, Foreign Agricultural 
  Service, Department of Agriculture.............................   183

Galvin, Timothy J., Administrator, Foreign Agricultural Service, 
  Department of Agriculture......................................   183
    Prepared statement...........................................   242
Generic Pharmaceutical Industry Association, prepared statement..  1113
Glickman, Dan, Secretary of Agriculture, Office of the Secretary, 
  Department of Agriculture......................................     1
    Prepared statement...........................................    18
    Statement of.................................................    14
Gorton, Hon. Slade, U.S. Senator from Washington:
    Prepared statement...........................................   388
    Question submitted by........................................   473
    Questions submitted to:
        Farm Service Agency......................................   267
        Foreign Agricultural Service.............................   372
    Statements of...........................................7, 198, 387

Harkin, Hon. Tom, U.S. Senator from Iowa:
    Prepared statement...........................................   416
    Questions submitted by.......................................   486
    Statement of.................................................    13
Health Industry Manufacturers Association, prepared statement....  1115
Henney, Jane E., M.D., Commissioner, Food and Drug 
  Administration, Department of Health and Human Services........   383
    Prepared Statement...........................................   393
    Statement of.................................................   389
Horn, Dr. Floyd P., Administrator, Agricultural Research Service, 
  Department of Agriculture, prepared statement..................   575

Illinois Soybean Association, prepared statement.................  1118
Imperial County, California, prepared statement..................  1120
International Association of Fish and Wildlife Agencies, prepared 
  statement......................................................  1123
Izaak Walton League of America, prepared statement...............  1128

Jill Long Thompson, Under Secretary for Joslin Diabetes Center, 
  prepared statement.............................................  1129

Kaplan, Dennis, Deputy Director for Budget, Legislative and 
  Regulatory Systems, Office of Budget and Program Analysis, 
  Department of Agriculture......................................   183
Kelly, Keith, Administrator, Farm Service Agency, Department of 
  Agriculture....................................................   183
    Prepared statement...........................................   221
Kloubec, Myron, Midwest Regional Aquaculture Center, prepared 
  statement......................................................  1196
Kohl, Hon. Herb, U.S. Senator from Wisconsin:
    Prepared statements........................................231, 407
    Questions submitted by.....................................110, 474
    Questions submitted to:
        Farm Service Agency......................................   269
        Foreign Agricultural Service.............................   373
        Risk Management Agency...................................   379
    Statements of...............................................12, 230

Laughlin, Dr. Charles W., Administrator, Cooperative State 
  Research, Education, and Extension Service, Department of 
  Agriculture, prepared statement................................   588
Levitt, Joseph A., Director, Center for Food Safety and Applied 
  Nutrition, Food and Drug Administration, Department of Health 
  and Human Services.............................................   383
Lovelace Respiratory Research Institute and the University of 
  Miami, prepared statement......................................  1230

McConnell, Hon. Mitch, U.S. Senator from Kentucky, questions 
  submitted by...................................................   474

Merrigan, Kathleen, Administratore, Agricultural Marketing 
  Service, Department of Agriculture, prepared statement.........   571
Metropolitan Water District of Southern California, prepared 
  statement......................................................  1130
Minor Crop Farmer Alliance, prepared statement...................  1133
Mississippi State University, prepared statement.................  1135
Mitchell R. Zeller, Director, Office of Tobacco Programs, Food 
  and Drug Administration, Department of Health and Human 
  Services.......................................................   383
Myers, Lester W., Southern Regional Aquaculture Center, prepared 
  statement......................................................  1193

National:
    Agricultural Aviation Association, prepared statement........  1136
    Alliance for Food Safety, prepared statement.................  1137
    Association of Pharmaceutical Manufacturers, prepared 
      statement..................................................  1113
    Association of State University and Land-Grant Colleges, 
      prepared statement.........................................  1139
    Association of University Fisheries and Wildlife Programs, 
      prepared statement.........................................  1142
    Commodity Supplemental Food Program Association, prepared 
      statement..................................................  1155
    Congress of American Indians, prepared statement.............  1144
    Consortium for Rural Geospatial Innovations, prepared 
      statement..................................................  1146
    Cooperative Business Association, prepared statement.........  1148
    Corn Growers Association, prepared statement.................  1150
    Council of Farmer Cooperatives, prepared statement...........  1152
    Fisheries Institute, prepared statement......................  1158
    Food Processors Association, prepared statement..............  1159
    Grain and Feed Association, prepared statement...............  1161
    Pharmaceutical Alliance, prepared statement..................  1113
    Potato Council, prepared statement...........................  1164
    Rural Telecom Association, prepared statement................  1165
    Telephone Cooperative Association, prepared statement........  1169
    Treasury Employees Union, prepared statement.................  1171
    Utility Contractors Association, prepared statement..........  1173
    Watershed Coalition, prepared statement......................  1174
Nature Conservancy, prepared statement...........................  1177
New Mexico Interstate Stream Commission, prepare statement.......  1179
Newell, Carter, Northeastern Regional Aquaculture Center, 
  prepared statement.............................................  1195
Northwest Indian Fisheries Commission, prepared statement........  1181

Oceanic Institute, prepared statement............................  1183
Offutt, Susan E., Administrator, Economic Research Service, 
  Department of Agriculture; prepared statement..................   584
Organization for the Promotion and Advancement of Small 
  Telecommunications Companies, prepared statement...............  1184

Pharmaceutical Research and Manufacturers of America, prepared 
  state- 
  ment...........................................................  1187
Predator Conservation Alliance, prepared statement...............  1189

Red River Valley Association, prepared statement.................  1190
Reed, Pearlie S., Chief, Natural Resources Conservation Service, 
  Department of Agriculture, prepared statement..................   616
Reimers, Ramsey, Tropical and Subtropical Regional Aquaculture 
  Center, prepared statement.....................................  1194
Rominger, Richard, Deputy Secretary, Office of the Secretary, 
  Department of Agriculture......................................     1

Santa Clara Valley Water District, prepared statement............  1196
Schumacher, August, Jr., Under Secretary, Farm and Foreign 
  Agricultural Services, Department of Agriculture...............   183
    Prepared statement...........................................   212
    Statement of.................................................   209
Schwetz, Bernard, D.V.M., Ph.D., Acting Deputy Commissioner, Food 
  and Drug Administration, Department of Health and Human 
  Services.......................................................   383
Seminole Tribe of Florida, prepared statement....................  1197
Shackelford, Parks, Associate Administrator for Programs, Farm 
  Service Agency, Department of Agriculture......................   183
Shalala, Hon. Donna E., Secretary, Department of Health and Human 
  Services.......................................................   383
    Prepared statement...........................................   386
Shumaker, Doug, Under Secretary, Farm and Foreign Agriculture 
  Services, Department of Agriculture............................     1
Society for Animal Protective Legislation, prepared statement....  1203
Society of American Foresters, prepared statement................  1199
Specter, Hon. Arlen, U.S. Senator from Pennsylvania:
    Questions submitted by.......................................    94
    Statement of.................................................     6
State of Illinois, prepared statement............................  1206
State of Wyoming, prepared statement.............................  1214
Stevens, Hon. Ted, U.S. Senator from Alaska:
    Prepared statement...........................................   388
    Questions submitted to the Risk Management Agency............   379
    Statement of.................................................    14

Texas A&M University, prepared statement.........................  1215
Thompson, Jill Long, Under Secretary for Rural Development, 
  Department of Agriculture, prepared statement..................   642
Thompson, Sally, Chief Financial Officer, Office of the Chief 
  Financial Officer, Department of Agriculture, prepared 
  statement......................................................   622

U.S. Apple Association, prepared statement.......................  1219
United States Telecom Association, prepared statement............  1221
University of Illinois, prepared statements............1224, 1227, 1228
University of Southern Mississippi, prepared statement...........  1232
Upper Mississippi River Basin Association, prepared statement....  1235
USA Rice Federation, prepared statement..........................  1236

Viadero, Roger C. Inspector General, Office of Inspector General, 
  Department of Agriculture, prepared statement..................   625

Watkins, Dayton J., Administrator, Rural Business-Cooperative 
  Service, Department of Agriculture, prepared statement.........   639
Watkins, Shirley R. Under Secretary, Food, Nutrition and Consumer 
  Services, Department of Agriculture, prepared statement........   596
Wildlife Management Institute, prepared statement................  1237
Williams, Dennis P., Deputy Assistant Secretary for Budget, 
  Department of Health and Human Services........................   383


                             SUBJECT INDEX

                              ----------                              

                       DEPARTMENT OF AGRICULTURE

                     Agricultural Marketing Service

                                                                   Page

Agricultural marketing, changes in...............................   571
Budget request summary...........................................   575
Commodity purchase services......................................   574
Federal-State Marketing Improvement Program......................   649
Foreign market news..............................................   573
Market news, mandatory...........................................   572
Marketing orders and organic production..........................   573
Microbiology Data Program........................................   574
Mission..........................................................   571
National Organic Program.........................................   649
Organic:
    Certification................................................   572
    Market news..................................................   572
    Seafood standards............................................   650
PDP--Water Testing Program.......................................   573
Small farmers and FSMIP..........................................   573

                     Agricultural Research Service

Budget, fiscal year 2001.........................................   577
Buildings and facilities.........................................   582
Major ARS accomplishments........................................   576
Pay costs........................................................   582
Project terminations.............................................   582
Research initiatives, new and expanded...........................   577

               Animal and Plant Health Inspection Service

Emergency management system......................................   651
Emerging plant pests.............................................   652
Grasshopper/mormon cricket.......................................   651
Increases and decreases, summary of..............................   653
Kudzu............................................................   651
Line item funding................................................   650
National poultry improvement plan................................   653
Pink bollworm....................................................   651
Scrapie..........................................................   652
Wildlife services operations.....................................   652

      Cooperative State Research, Education, and Extension Service

Advanced Spatial Tech, Mississippi (Precision Agriculture).......   653
Aflatoxin Research, Illinois.....................................   654
AG-Based Industrial Lubricants Research Program, Iowa............   658
Agricultural:
    Development in the American pacific..........................   813
    Diversification and Specialty Crops Grant....................   655
    Diversity/Red River, MN and ND...............................   656
    Waste utilization, West Virginia.............................   814
Agriculture:
    In the classroom...........................................838, 876
    Telecommunications, NY.......................................   659
    Water usage, GEORGIA.........................................   661
Alliance for food protection, NE, GA.............................   661
Alternative crops:
    For arid lands, Texas........................................   664
    North Dakota.................................................   663
Alternative Salmon Products Program, Alaska......................   665
Animal:
    Science Food Safety Consortium...............................   666
    Waste management, Oklahoma...................................   816
Anti-Hunger and Food Security Grants Program.....................   880
Apple fire blight, Michigan and New York.........................   667
Aquaculture:
    Louisiana....................................................   668
    North Carolina...............................................   671
    Product and marketing development, W.V.......................   672
    Research, Stoneville, Mississippi............................   670
    Virginia.....................................................   671
Babcock Institute for International Dairy Research and 
  Development....................................................   673
Beef improvement--Arkansas.......................................   839
Biobased products................................................   880
Biodiesel research, Missouri.....................................   675
Biotechnology research, Mississippi..............................   818
Blocking anhydrous methamphetamine production, Iowa..............   676
Botanic Garden initiative, Illinois..............................   840
Bovine tuberculosis, Michigan....................................   676
Brucellosis vaccine, Montana.....................................   677
Budget highlights, fiscal year 2001..............................   589
Center for:
    Agriculture and Rural Development, Iowa......................   818
    Animal Health and Productivity, Pennsylvania.................   677
    Innovative Food Technology, Ohio.............................   819
    North American Studies, Texas................................   820
    Rural Studies, Vermont.......................................   679
Chesapeake Bay:
    Agroecology, MD..............................................   680
    Aquaculture, Maryland........................................   681
Citrus tristeza..................................................   682
Climate change research, Florida.................................   821
Coastal cultivars, GA............................................   682
Competitiveness of agriculture products, Washington..............   683
Conservation technology transfer, Wisconsin......................   841
Cool season legume research......................................   684
Cotton research, Texas...........................................   822
Cranberry and blueberry, Massachusetts...........................   685
Cranberry-blueberry disease and breeding, New Jersey.............   686
Critical issues..................................................   687
Curriculum development/Mississippi Valley State University.......   822
Dairy and meat goat research, Prairie View A&M, Texas............   689
Data information system..........................................   824
Delta:
    Rural revitalization, Mississippi............................   690
    Teachers Academy.............................................   841
Designing foods for health, Texas................................   691
Diabetes detection and prevention, Washington and Hawaii.........   843
Diaprepes/rootweevil, Florida....................................   692
Drought mitigation, Nebraska.....................................   693
Ecosystems, Alabama..............................................   694
Environmental:
    Research, New York...........................................   695
    Risk factors/cancer, New York................................   697
Environmentally safe products, Vermont...........................   698
Expanded wheat pasture, Oklahoma.................................   699
Expert IPM decision support system...............................   700
Extension:
    Federal administration projects..............................   838
    Indian Reservation Program...................................   875
    Extension specialist, Mississippi............................   844
Farm and rural finance, Illinois and Arkansas....................   702
Feed barley for rangeland cattle, Montana........................   704
Floriculture, Hawaii.............................................   704
Food:
    And Agriculture Policy Institute, Iowa and Missouri..........   705
    Irradiation, Iowa............................................   706
    Marketing Policy Center, Connecticut.........................   708
    Processing Center, Nebraska..................................   709
    Quality, Alaska..............................................   710
    Safety Initiative--National Research Initiative..............   859
    Safety, Alabama..............................................   711
    Systems Research Group, Wisconsin............................   712
Forages for advanced livestock production, Kentucky..............   713
Forestry research, Arkansas......................................   713
Fruit and vegetable market analysis, Arizona and Missouri........   715
Generic commodity promotion, New York............................   716
Geographic information systems...................................   826
Global change....................................................   717
Global marketing support services, Arkansas......................   719
Grain sorghum, Kansas............................................   720
Grass seed cropping systems for sustainable agriculture..........   721
Gulf coast shrimp aquaculture....................................   828
Human nutrition:
    Iowa.........................................................   722
    Louisiana....................................................   723
    New York.....................................................   724
Hydroponic tomato production, Ohio...............................   725
Illinois-Missouri alliance for biotechnology.....................   726
Improved:
    Dairy management practices, Pennsylvania.....................   727
    Early detection of crop disease, N.C.........................   728
    Fruit practices, Michigan....................................   729
Income enhancement demonstration, Ohio...........................   845
Infectious disease research, Colorado............................   730
Institute for food science and engineering, Arkansas.............   730
1890 Institutions................................................   871
1994 institutions................................................   869
Integrated:
    Activities...................................................   878
    Cow-calf management--Iowa....................................   846
    Pest management..............................................   731
    Production systems, Oklahoma.................................   733
    Research, education, and extension activities................   878
International:
    Agricultural market structures & institutions, KY............   734
    Arid lands consortium........................................   734
Iowa biotechnology consortium....................................   736
IR-4 minor crop management.......................................   737
Jointed goatgrass (Aegilops Cylindricum).........................   739
Livestock:
    And dairy policy, New York and Texas.........................   741
    Marketing Information Center, Colorado.......................   830
Lowbush blueberry research, Maine................................   742
Maple research, Vermont..........................................   743
Mariculture, North Carolina......................................   830
Meadowfoam, Oregon...............................................   743
Methyl Bromide Transition Program................................   880
Michigan biotechnology consortium................................   744
Midwest Advanced Food Manufacturing Alliance, Nebraska...........   746
Midwest agricultural products, Iowa..............................   747
Milk safety, Pennsylvania........................................   748
Minor use animal drugs...........................................   749
Molluscan shellfish, Oregon......................................   751
Multi-commodity research, Oregon.................................   753
Multi-cropping strategies for aquaculture, Hawaii................   752
National:
    Alternative fuels laboratory.................................   815
    Biological Impact Assessment Program.........................   754
    Center for Peanut Competitiveness............................   831
    Education Center for Agricultural Safety, Iowa...............   847
    Research initiative..........................................   870
Nematode resistance genetic engineering, New Mexico..............   756
Nevada arid rangelands initiative, Nevada........................   757
New crop opportunities:
    Alaska.......................................................   757
    Kentucky.....................................................   758
Nonfood Agricultural Products Program, Nebraska..................   758
Oil resources from desert plants, New Mexico.....................   759
Organic waste utilization, New Mexico............................   760
Pasture & forage research, Utah..................................   761
Peach tree short life in South Carolina..........................   762
Peanut allergy reduction, Alabama................................   763
Pest:
    Control alternatives, South Carolina.........................   764
    Management alternatives......................................   765
Phytophthora root rot, New Mexico................................   766
Pilot technology:
    Project, Wisconsin...........................................   852
    Transfer projects, Oklahoma and Mississippi..................   850
Plant, drought, and disease resistance gene cataloging...........   767
PM-10 study, California and Washington...........................   832
Potato research..................................................   768
Pre-harvest food safety, Kansas..................................   770
Precision agriculture:
    Alabama and Tennessee........................................   833
    Kentucky.....................................................   769
Preservation and processing research, Oklahoma...................   771
Range policy development, New Mexico.............................   853
Rangeland ecosystems, NM.........................................   772
Red snapper research/Alabama.....................................   773
Regional:
    Barley gene mapping project..................................   774
    Crop information and policy centers..........................   869
Regionalized implications of farm programs.......................   775
Research Federal administration projects.........................   813
Rice modeling, AR................................................   776
Rural development:
    Alaska.......................................................   854
    Centers......................................................   777
    Oklahoma.....................................................   856
    Through tourism, New Mexico..................................   855
Rural:
    Health projects, Louisiana and Mississippi...................   877
    Policies Institute...........................................   779
    Rehabilitation, Georgia......................................   857
Russian wheat aphid, Colorado....................................   780
Seafood:
    Harvesting, processing, and marketing, Alaska................   783
        Mississippi..............................................   783
    Safety/Massachusetts.........................................   784
Small:
    Farms initiative.............................................   879
    Fruit research, Oregon.......................................   785
Smith-Lever 3(D) farm safety and agrability......................   870
Southwest consortium for plant genetics and water resources......   786
Soybean cyst nematode............................................   788
STEEP--water quality in Pacific Northwest........................   789
Sustainable agriculture:
    California...................................................   790
    Michigan.....................................................   791
    Systems, Nebraska............................................   793
Sustainable:
    And natural resources, Pennsylvania..........................   792
    Beef supply, Montana.........................................   794
    Pest management for dryland wheat, Montana...................   795
Swine waste management, North Carolina...........................   796
Tillage, silviculture, and waste management, Louisiana...........   797
Tomato wilt virus, Georgia.......................................   798
Tropical:
    And subtropical research.....................................   800
    Aquaculture/Florida..........................................   799
Turkey carnavirus, Indiana.......................................   801
Urban pests, Georgia.............................................   803
Vidalia onions, Georgia..........................................   804
Viticulture consortium, New York and California..................   804
Water:
    Conservation, Kansas.........................................   805
    Quality--Illinois............................................   834
        North Dakota.............................................   836
Weed control, North Dakota.......................................   806
Wetland Plants, Louisiana........................................   808
Wheat Genetics, Kansas...........................................   809
Wood:
    Biomass, New York............................................   858
    Research.....................................................   811
    Utilization research.........................................   810
Youth Farm Safety Education and Certification....................   870

                      Departmental Administration

Contracts to private sources for services........................   882

                       Economic Research Service

Budget...........................................................   584
Carbon sequestration.............................................   884
Customers, partners, and stakeholders............................   587
Geographic breakdown of obligations..............................   886
Mission..........................................................   584
    Area goals, ERS contributions to.............................   584
Research priorities..............................................   884
Structural changes and concentration.............................   883

                 Farm and Foreign Agricultural Services

Administrative convergence.......................................   263
Africa, food assistance for......................................   206
American agriculture, President's 2001 budget proposals for......   213
CCC:
    Automated data processing cap................................   218
    Program outlays..............................................   218
Cooperative Development Initiatives, fund........................   218
Disaster assistance, impact of...................................   259
Emergency assistance payments....................................   258
Farm loan........................................................   219
FFAS funding issues..............................................   240
FSA:
    County employees, status of..................................   228
    Implements New and Ad Hoc Assistance for Farmers.............   258
    Workload.....................................................   229
Funding needs, supplemental......................................   228
Legislation on budget, impact of.................................   263
Programs:
    Conservation, price impact of................................   261
        Reserve..................................................   240
    Cottonseed assistance program................................   257
    Dairy Options Pilot..........................................   233
        Price Support, extend the................................   218
    New in 2000..................................................   258
Public Law 480...................................................   265
Realized losses, reimbursement for...............................   218
Service centers..................................................   220
Singapore, closing ATO...........................................   241
Staffing.........................................................   220
State mediation grants...........................................   219
Surplus commodities, donations of................................   264
Trade policy initiatives.........................................   217

                          Farm Service Agency

Administrative:
    Convergence..................................................   263
    Support......................................................   226
Appreciation agreements, shared..................................   271
Cattle farmer amendments.........................................   274
CCC ADP cap......................................................   230
Commodity Credit Corporation.....................................   221
County office staffing...........................................   273
Dairy assistance payments........................................   272
Drought..........................................................   274
Emergency loans..................................................   266
Farm loans.......................................................   266
FSA:
    County employees, status of..................................   228
    Office space.................................................   273
    Temporary staffing...........................................   229
    Workload.....................................................   229
Funding needs, supplemental......................................   228
Programs:
    Appropriated, other..........................................   226
    Conservation.................................................   266
        Reserve..................................................   240
    Cottonseed Assistance........................................   257
    Dairy Export Incentive.......................................   230
    Farm Loan....................................................   225
    Grain Storage Loan...........................................   272
Staffing.........................................................   220
State mediation grants...........................................   269
USDA/SBA emergency ``eligibility'' gap...........................   271

                       Food and Nutrition Service

Alternative protein products.....................................   888
Budget request, 2001.............................................   592
Child:
    Nutrition programs...........................................   593
    Nutrition State Administrative Expenses......................   886
Commodity Assistance Programs....................................   595
Farmers' Market Nutrition Program................................   594
Food:
    Program administration.......................................   595
    Stamp Program................................................   592
Government Performance and Results Act...........................   596
Incentive payments...............................................   886
Nutrition:
    Education and training.......................................   887
    Program for the elderly......................................   595
School:
    Breakfast demos..............................................   887
    Meals initiative and team nutrition..........................   593
Special Supplemental Nutrition Program for women, infants, and 
  children (WIC).................................................   594
Studies and evaluation...........................................   595
Studies and reports..............................................   889
WIC electronic benefit transfer (EBT)............................   594

                 Food, Nutrition and Consumer Services

Child Nutrition Programs.........................................   602
Commodity Assistance Programs....................................   603
Food:
    Donations programs...........................................   603
    Highlights...................................................   597
    Program administration.......................................   603
    Stamp Program................................................   601
Request, fiscal year 2001........................................   601
Special Supplemental Nutrition Program for women, infants and 
  children (WIC).................................................   603
Studies and evaluations..........................................   604

                      Foreign Agricultural Service

Agricultural trade office........................................   279
Allocations....................................................302, 317
Budget request...................................................   251
Capacity building................................................   257
DEIP.............................................................   376
Export credit guarantee activities...............................   346
Farm income, FAS efforts to support..............................   243
FAS:
    Houses.......................................................   278
    Housing......................................................   375
Foreign:
    Market development...........................................   302
    Trade........................................................   377
        And assistance...........................................   373
Maintenance account, buying power................................   279
Overseas offices.................................................   342
Pakistan, wheat sales to.........................................   372
Pay costs........................................................   279
Priorities:
    For 2001.....................................................   245
    Global.......................................................   246
    Regional.....................................................   248
Programs.........................................................   252
    Cochran Fellowship...........................................   254
        Funding for..............................................   314
    Cooperator...................................................   280
    Export Enhancement...........................................   374
    Market access and foreign market development.................   374
    Scientific Cooperation Research..............................   281
Public Law 480.................................................265, 376
Russia and the New Independent States............................   249
Section 108......................................................   371
Singapore, closing ATO...........................................   241
U.S. trade prospects.............................................   242
World hunger/U.S. assistance.....................................   374

        Grain Inspection, Packers and Stockyards Administration

Budget request, fiscal year 2001.................................   610
Civil rights.....................................................   609
GIPSA's:
    Federal Grain Inspection Service.............................   606
    Organization.................................................   605
    Packers and Stockyards Programs (P&S)........................   605

                National Agricultural Statistics Service

Major Activities of the National Agricultural Statistics Service 
  (NASS).........................................................   613
Plans, fiscal year 2001..........................................   614

                       National Appeals Division

Budget request, fiscal year 2001.................................   616
Mission..........................................................   616

                 Natural Resources Conservation Service

American Indians and Alaska Natives, additional assistance to....   894
Commodity Credit Corporation Funded Conservation Programs........   620
Conservation through partnerships................................   621
Eqip national priority areas.....................................   895
Farm Safety net initiative.......................................   893
Funding, discretionary...........................................   617
Funds available for CRP and WRP..................................   894
General provision section 717, impact of.........................   895
Operation of plant materials centers.............................   894
Rescission of financial assistance...............................   894
Studies and reports..............................................   895
Watershed Loan Program subsidy...................................   893

                 Office of the Chief Financial Officer

Budget request, fiscal year 2001.................................   623
Working Capital Fund.............................................   624

                Office of the Chief Information Officer

Capital planning and investment control (CPIC) process...........   895
Common computing environment/service center modernization........   903
Consolidating/outsourcing USDA headquarters information 
  technology functions...........................................   911
E-Commerce.......................................................   900
    Government...................................................   920
Information systems architecture.................................   900
Infoshare balances...............................................   920
IT:
    Acquisition moratorium.......................................   918
    Moratorium...................................................   899
President's decision directive (PDD) 63..........................   918
Security.........................................................   913
Service center implementation oversight..........................   909
Telecommunications enterprise network............................   919
USDA information technical infrastructure........................   917

                      Office of Inspector General

Accounting and financial management..............................   638
Audit and investigations activities..............................   629
Employee integrity...............................................   631
Farm and Foreign Agricultural Services...........................   633
Food:
    Nutrition, and Consumer Services.............................   634
    Safety.......................................................   629
Information resources management.................................   632
Natural resources and environment................................   637
Rural development................................................   636
Workplace violence...............................................   632

                        Office of the Secretary

Administrative convergence.......................................    76
Advisory committees, panels, commissions, and task forces........    92
After-school centers.............................................   166
Agricultural:
    Concentration...............................................80, 121
    Slump, causes of.............................................   205
AMTA:
    Program......................................................    57
    Recipients, ineligibility of current.........................    37
Animal welfare...................................................   120
Aquaculture research funding.....................................   118
Bio-terrorism....................................................   113
Biobased products/bioenergy......................................    77
Biotechnology...........................................74, 75, 97, 109
    Activities...................................................58, 60
Breakfast:
    Pilot........................................................   163
    Reimbursement rate, temporary increase in....................   164
Buildings and facilities.........................................   108
C&H sugar refinery...............................................    50
Change current farm program......................................    56
Child and adult care food program pooling........................   165
CIO priorities...................................................    91
Citrus canker....................................................    53
Civil rights............................................18, 47, 80, 103
    Complaints, resolution of....................................   104
    Investigation and enforcement................................   111
    Settlements..................................................   104
Climate change technology........................................   119
Colonias site selection..........................................    67
Commission on 21st century agriculture...........................   112
Commodity Credit Corporation.....................................    71
Computer security................................................    62
    Funding......................................................    63
Congressional request, administration ignoring...................   100
Conservation and dairy...........................................   159
Conservation:
    Programs.....................................................    45
        Price impact of..........................................   261
    Reserve program..............................................   160
    Security program.............................................   105
    Technical assistance.........................................   159
Cottonseed assistance............................................    63
County-based staffing levels.....................................   160
Cranberries......................................................   122
Crops eligible for subsidies, new................................    38
Dairy............................................................    94
    Assistance...................................................    39
    Forage/integrated farming systems............................   117
    Market loss program..........................................   127
    Options pilot program........................................   155
    Price support................................................    16
Debt for nature..................................................   158
Delta:
    Initiative, new..............................................    38
    Regional authority, new......................................    66
Departmental management activities...............................    34
Detailees........................................................    92
Disaster assistance, impact of...................................   259
Drought..........................................................    95
Egg safety action plan...........................................   124
Emergency loans..................................................    72
Exotic pest infestation..........................................    51
Export:
    Credit guarantee program.....................................    16
    Enhancement program..........................................    46
    Program funding..............................................   104
Factors affecting the outcome, other.............................   193
Farm and foreign agricultural services...........................    19
Farm:
    Crisis aggregate indicators, implications of the.............   189
        Farm level indicators, implications of the...............   191
    Economic:
        Downturn in more detail, explaining the..................   188
        Situation................................................    15
    Loans........................................................    71
    Safety.......................................................    81
        Net proposal.............................................    15
    Safety net...................................................   203
    Service agency...............................................    99
    Storage facility program.....................................    16
FARM*A*SYST/HOME*A*SYST..........................................   112
Fiscal year 2000:
    Funding for common computing environment.....................    89
    Supplemental request.........................................    95
Flood control structure rehabilitation...........................   158
Food:
    Nutrition....................................................    18
    Recalls......................................................   126
    Safety.......................................................17, 28
Food stamp information:
    Builds on existing efforts...................................    68
    Information, provision of....................................    67
    Program......................................................    44
Food, nutrition and consumer services............................    27
Forage crop insurance program....................................   156
Frito lay........................................................    47
FSA:
    County office personnel......................................   157
    Staffing.....................................................   101
FSIS:
    Inspector shortage.........................................105, 125
    Food Inspector Recruitment Efforts..........................83, 125
General economy booms; agriculture slumps--why?..................   187
GIPSA and biotech grains.........................................   123
Global change research...........................................   108
GMO crops and livestock..........................................    97
    Mandatory labeling...........................................97, 98
Grain storage loan program.......................................    97
HACCP............................................................   123
    Inspection models............................................   126
    Models.......................................................    98
HHS RE nutrition education, coordination with....................   166
Hunger:
    Cause of high rate of........................................    69
    In seven states, actions to address..........................    69
Inspector General, Office of.....................................    36
Invasive species............................................48, 74, 119
Land acquisition.................................................    46
Lands legacy initiative..........................................   106
Listeria testing.................................................   126
Livestock reporting..............................................    82
Lower Mississippi Delta nutrition research.......................    68
Mandatory funds, technical assistance for........................    70
Market:
    Information Program..........................................   108
    Prospects--the next 12-18 months.............................   191
Marketing:
    And inspection...............................................    17
        Regulatory programs......................................    33
Methyl bromide.................................................113, 115
Migrant farm workers, emergency assistance to....................    72
Milk:
    Forward price contracts......................................   123
    Price protection.............................................   157
Minor use pesticides...........................................116, 117
Monitoring abuse via electronic benefit transfer (EBT)...........    68
NAD decisions..................................................127, 154
Native:
    American programs............................................   162
    Americans class action lawsuit...............................   103
Natural resources and environment................................    30
Natural resources:
    Conservation service.........................................    99
    Management...................................................    18
Nonfat dry milk..................................................   232
Nutrition education and program information......................    67
One-stop customer service........................................    90
Organic rules....................................................   122
Outreach/technical assistance....................................    92
Overseas markets, recent progress in the opening and expansion of    78
Partnership for change:
    Colonias initiative..........................................    66
    Other sites considered for...................................    67
    Time frame for...............................................    67
Plum pox.........................................................    95
Program civil rights cases, settlement of........................   110
Project terminations.............................................   107
Puerto Rico's EBT program and program abuse......................   162
Rapid response teams.............................................   121
Regional dairy compacts......................................40, 42, 43
Research.........................................................    17
    Education, and economics.....................................    31
Resource conservation and development............................   158
Round II EC/EZ, funding for......................................   161
Rural:
    America, fund for............................................   112
    Development..............................................17, 25, 99
    Housing direct and guaranteed loans..........................    72
RUS FFB activity.................................................   161
Safety net program...............................................    37
School breakfast:
    Participation................................................   163
    Reimbursement................................................   164
Section:
    11 cap.......................................................    45
    764 and 765, discontinuation of..............................   161
    2501 funds, use of...........................................   111
Service center:
    Business process reengineering...............................    90
    Information technology.......................................    91
    Modernization funding........................................    83
        Request..................................................    89
Storage facilities...............................................    98
Sugar:
    Issue........................................................    54
    Program......................................................    55
    Tariff rate quota............................................    55
Supplemental appropriation.......................................    50
Supplemental income assistance program...........................    64
Sustainable agriculture research and education...................   113
Telecommunications to rural areas................................   105
Trade............................................................77, 79
Under the rule...................................................    60
USDA:
    Inspectors, shortage of......................................    53
    Understaffed inspectors......................................    49
User fees........................................................   112
Wheat loan deficiency payments...................................   110
WIC:
    Farmers market funding:......................................
        Delays...................................................   165
        Immediate availability of................................   165
    Food packaging recommendations...............................    96
    Vender:
        Aaccess in rural areas...................................    70
        Accessibility...........................................69, 162
Year 2000 computer problem:
    Lessons learned from the.....................................    91
    Spending to resolve..........................................    92
Year 2000 dietary guidelines.....................................    95

                         Risk Management Agency

Company underwriting gains.......................................   378
Conservation technical assistance................................   239
Crop insurance legislation, proposed.............................   262
Dairy Options Pilot Program......................................   379
Expenses, administrative and operating (A&O).....................   236
FCIC fund........................................................   236
Information technology (IT) costs................................   378
Legislation on budget, impact of.................................   263
Market, responding to the........................................   235
Resources, leveraging scarce.....................................   235
Risk management education........................................   377
USDA assistance, imbalance of....................................   380

                   Rural Business-Cooperative Service

                                                                    639
Appropriate technology transfer for rural areas..................   641
Bio-based products...............................................   641
Business and Industry Guaranteed and Direct Loan Programs........   639
Cooperative:
    Capitalization Fund..........................................   642
    Research agreements..........................................   641
Intermediary Relending Program...................................   640
National Sheep Industry Improvement Center.......................   641
Rural Business:
    Enterprise grants............................................   640
    Opportunity grants...........................................   641
Rural:
    Cooperative development grants...............................   641
    Economic development loans and grants........................   640
    Empowerment zones and enterprise communities grants..........   642
Salaries and expenses............................................   642

                           Rural Development

                                                                    642
Budget request...................................................   644
Expenses, administrative.........................................   644
Program budget request...........................................   645
Rural:
    Business-Cooperative Services................................   646
    Housing Service..............................................   645
    Utilities Service............................................   648

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                      Food and Drug Administration

Antimicrobial products...........................................   480
Assessing the quality of dietary supplements.....................   448
Automated identification systems, report on......................   450
Biotechnology foods..............................................   411
Bioterrorism.....................................................   426
Bottled water study..............................................   476
Budget request, fiscal year 2001.................................   400
Buildings and facilities.........................................   457
Clinical Pharmacology Program....................................   444
CODEX............................................................   490
    Standards, selected..........................................   491
Collaboration and leveraging opportunities.......................   395
Consumer information.............................................   478
Dietary supplements..................................413, 420, 448, 562
    Ephedra......................................................   417
Egg safety.....................................................425, 477
Europe, FDA-type structure in....................................   416
FDA:
    Counter-bioterrorism activities..............................   451
    Infrastructure...............................................   405
    Science base, strengthening................................397, 427
FDAMA implementation.............................................   396
Fees, few user...................................................   421
Food:
    Biotechnology................................................   424
    Contact substance............................................   476
    Safety.......................................................   433
        And Technology, National Center for......................   560
        Initiative.............................................397, 474
Gene therapy...................................................419, 566
Generic drugs........................................410, 424, 480, 568
Ginseng..........................................................   477
Healthy people 2010..............................................   463
Human antibiotics in animals, use of.............................   560
Illegal internet drug sales......................................   428
Imported food..................................................491, 492
    Action plan..................................................   425
Internet drug sales............................................423, 478
Irradiated foods--labeling.......................................   408
Laboratory:
    Arkansas regional............................................   483
    Detroit......................................................   482
    Los Angeles..................................................   482
Managing risk, assuring safety by................................   394
Mandatory costs, absorption of...................................   429
Market through strong science, bringing new products to..........   401
Medical:
    Device review................................................   459
    Devices, single use........................................414, 481
    Error initiative.............................................   431
    Errors.......................................................   418
Neutraceuticals..................................................   569
Orphan drugs...................................................447, 563
    Evergreening.................................................   479
Prescription drug:
    Foreign purchase of..........................................   411
    Pricing......................................................   410
President and the Congress, initiatives of special note and 
  interest to the................................................   403
President's egg safety plan......................................   561
Recruitment and training.........................................   406
Rent and related activities......................................   454
Safety net through strong science, assuring a strong.............   401
Sara Lee listeria outbreak.......................................   562
Science base, strengthening......................................   407
Seafood:
    Equivalency................................................422, 558
        Agreements...............................................   445
    Inspection...................................................   422
        From Commerce............................................   476
Single-use medical devices, reuse of.............................   564
Tobacco..........................................................   419
    Reducing young people's use of...............................   399
Voluntary Seafood Inspection Program, transfer of................   446
U.S. blood supply, assuring safety of the........................   398
User fees........................................................   485
Waste-management and research consortium.........................   445

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