    [House Hearing, 107 Congress]
    [From the U.S. Government Publishing Office]

                      AGRICULTURE, RURAL DEVELOPMENT, FOOD

                      AND DRUG ADMINISTRATION, AND RELATED

                        AGENCIES APPROPRIATIONS FOR 2003

    _______________________________________________________________________

                                    HEARINGS

                                    BEFORE A

                               SUBCOMMITTEE OF THE

                           COMMITTEE ON APPROPRIATIONS

                             HOUSE OF REPRESENTATIVES

                          ONE HUNDRED SEVENTH CONGRESS
                                 SECOND SESSION
                                    ________
         SUBCOMMITTEE ON AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG
                      ADMINISTRATION, AND RELATED AGENCIES
                         HENRY BONILLA, Texas, Chairman
     JAMES T. WALSH, New York            MARCY KAPTUR, Ohio
     JACK KINGSTON, Georgia              ROSA L. DeLAURO, Connecticut
     GEORGE R. NETHERCUTT, Jr.,          MAURICE D. HINCHEY, New York
    Washington                           SAM FARR, California
     TOM LATHAM, Iowa                    ALLEN BOYD, Florida
     JO ANN EMERSON, Missouri
     VIRGIL H. GOODE, Jr., Virginia
     RAY LaHOOD, Illinois

     NOTE: Under Committee Rules, Mr. Young, as Chairman of the Full
    Committee, and Mr. Obey, as Ranking Minority Member of the Full
    Committee, are authorized to sit as Members of all Subcommittees.
       Henry E. Moore, Martin P. Delgado, Maureen Holohan, and Joanne L.
                            Perdue, Staff Assistants
                                    ________
                                     PART 2
                            CONSERVATION PROGRAMS AND
                        MARKETING AND REGULATORY PROGRAMS
                                                                       Page
     Natural Resources Conservation Service...........................    1
     Marketing and Regulatory Programs................................  409
         Agricultural Marketing Service...............................  557
         Animal and Plant Health Inspection Service...................  708
         Grain Inspection, Packers and Stockyards
             Administration........................................... 1035
                                    ________
             Printed for the use of the Committee on Appropriations
                                    ________
                         U.S. GOVERNMENT PRINTING OFFICE
     79-721                     WASHINGTON : 2002

                          COMMITTEE ON APPROPRIATIONS

                       C. W. BILL YOUNG, Florida, Chairman

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

     VIRGIL H. GOODE, Jr., Virginia

                     James W. Dyer, Clerk and Staff Director

                                      (ii)

       AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND
                    RELATED AGENCIES APPROPRIATIONS FOR 2003

                                  ----------

                                          Wednesday, February 27, 2002.

                       NATURAL RESOURCES AND ENVIRONMENT

                                   WITNESSES

    MARK E. REY, UNDER SECRETARY, NATURAL RESOURCES AND ENVIRONMENT
    PEARLIE S. REED, CHIEF, NATURAL RESOURCES CONSERVATION SERVICE
    BRENDA THOMAS, ACTING DIRECTOR, BUDGET PLANNING AND ANALYSIS DIVISION,
        NATURAL RESOURCES CONSERVATION SERVICE
    DENNIS KAPLAN, BUDGET OFFICE, DEPARTMENT OF AGRICULTURE

                                Opening Remarks

        Mr. Bonilla. The subcommittee will come to order. Good
    morning to everyone. If some are curious as to the reason for
    the lights and the extra microphones on the podiums today, it
    is because later today there is going to be a hearing on Secret
    Service needs. I would like to think that this hearing would be
    the center of attention, but that is the reason for the
    different environment that we are going to be working with this
    morning.

                           Introduction of Witnesses

        We are pleased to be holding a hearing today for the
    Natural Resources Conservation Service fiscal year 2003 budget
    request. Appearing before us today are Mark Rey, the Under
    Secretary for Natural Resources and Environment; Pearlie Reed,
    the chief of the NRCS; and Brenda Thomas, the acting budget
    officer at the NRCS. Also at the witness table is Dennis
    Kaplan, who is pinch hitting today for Mr. Dewhurst, who I
    understand is on the dark side, as we sometimes call it
    appearing over there with the Secretary. We welcome you today.
        Mr. Rey, I know this is your first time before this
    subcommittee. I want to welcome you and I want to congratulate
    you on your appointment. It has been reported that you stated
    that you have lowered expectations for this job, so much so
    that one of your objectives is just to keep the job, unlike
    your two predecessors who were unable to keep it. You do have a
    tough job ahead, Mr. Rey. We know that you will be dealing with
    two agencies under your jurisdiction that have a great impact
    on public lands, through the forest service and on private
    lands through the Natural Resources Conservation Service. I am
    sure you are very much up to the task.
        Mr. Reed, this is not your first time before this
    subcommittee, so I want to welcome you back. I would just like
    for you to think about the importance of your agency, and the
    impact that it has on private lands in this country. I would
    encourage you to do everything you can do to ensure that your
    programs are carried out with as little bureaucracy as possible
    to get the financial resources on the ground where they are
    sorely needed.
        We have your statements before us, and we have reviewed
    them. We will enter those statements into the record, but
    before we begin, I would like to recognize my ranking member,
    Ms. Kaptur, a great partner in this process.
        Ms. Kaptur. Thank you, Mr. Chairman, very much, and we
    welcome you, Mr. Under Secretary, and, of course, Chief Reed
    and all of the members of your staffs that you have brought
    with you today. I just wanted to say I was so pleased to read
    your background. We share Ohio heritage, particularly northern
    Ohio heritage. And also the University of Michigan.
        So probably I will be interested in asking you during my
    question period whether you took the same course in woody
    plants that I did, and having come from the school of natural
    resources there with all of your experience in the Senate, I
    mean, my goodness, what an excellent background you have for
    the position you currently hold, and so we look forward to your
    testimony.
        Mr. Bonilla. Thank you, Ms. Kaptur. We will start by
    recognizing Mr. Rey, and then if Mr. Reed has an opening
    statement as well, we will proceed with that. Thank you.

                          Under Secretary's Statement

        Mr. Rey. Thank you, Mr. Chairman, Ms. Kaptur, Mr. Walsh. I
    am grateful for the opportunity to appear before you today to
    present the fiscal year 2003 budget and program proposals for
    the Natural Resources Conservation Service of the Department of
    Agriculture. In addition to Mr. Reed and Mr. Kaplan appearing
    with me today are Brenda Thomas, who is the acting NRCS budget
    director, and Mack Gray, behind me, who is the deputy under
    secretary for Natural Resources and Environment. I will
    summarize and submit my entire statement for the record.
        Mr. Chairman, the President often reminds us that every day
    is Earth Day when you work the land, and from my perspective,
    it is clear that the men and women of NRCS out in the field are
    making a tremendous difference to ensure that farmers and
    ranchers have the resources and expertise they need to care for
    natural resources and respond to emerging challenges. This
    happens through conservation operations and specifically
    through conservation technical assistance.

                      AMERICAN CUSTOMER SATISFACTION INDEX

        Interestingly, NRCS has one of the highest ratings for
    customer satisfaction among all government and private sector
    organizations. Last year, NRCS participated in the American
    Customer Satisfaction Index, which surveyed customers of NRCS'
    conservation technical assistance program.
        The ACSI, the American Customer Satisfaction Index, is
    administered by the University of Michigan Business School, an
    institution both Ms. Kaptur and I can attest to the competence
    of. It is the only uniform cross industry and government
    measure of customer satisfaction which allows benchmarking
    between the two sectors. The NRCS results were the highest for
    any USDA agency participating in the 2001 survey, and are
    comparable to the results received from private sector
    companies such as Mercedes-Benz and the Ritz-Carlton Hotel
    chain. Our customers have come to expect excellent service from
    the agency, and it will be a challenge to continue to ensure
    that funding and resource support for our staff are sufficient
    to help them meet the expectations of farmers and ranchers.

                     RESOURCE CONSERVATION AND DEVELOPMENT

        Let me turn to the Resource Conservation and Development
    program. Because of the support of this subcommittee, the
    Secretary was able to announce the selection of 20 new RC&D
    areas earlier this year, bringing the total number of
    authorized areas to 368. Through this program, non-Federal
    Government agencies, including State, local and tribal
    governments, as well as private and not-for-profit
    organizations, are playing important roles in conservation
    policy. The RC&D program has been extremely successful in
    leveraging and matching resources among these different
    organizations. We continue to receive excellent applications,
    deserving of USDA recognition, and we want to enhance and
    maintain this very popular program.

                          EMERGENCY WATERSHED PROGRAM

        Turning to our water resource-related programs, we know
    that emergency needs for watersheds resulting from natural
    disasters averaged 110 million dollars per year over the last
    several years. However, in the past, rather than planning for
    this need, we have historically relied upon emergency
    supplemental appropriations to respond to stricken communities
    often months after the disaster. The administration's fiscal
    year 2003 budget proposes $111 million for the Emergency
    Watershed Program, which will allow us the latitude to better
    respond to disasters more quickly.
        In conclusion, the programs presented to this subcommittee
    for funding are essential to the policy objectives proposed in
    our overall agriculture, conservation area framework in three
    areas: First, support for the cadre of trained and skilled
    professionals out on the land working with farmers and ranchers
    every day through Conservation Operations; second, providing
    that workforce and the workforce of State and local government
    cooperators with the very best data, technical tools and
    training through Conservation Operations; and third, continuing
    to foster collaboration and partnership with other
    organizations through Conservation Operations.
        I thank the subcommittee for the opportunity to appear and
    would be happy to respond to any questions, including the woody
    plants curriculum at the University of Michigan School of
    Natural Resources, which not only Ms. Kaptur and I
    participated, but in the sense of the fact that it is a small
    world, Mr. Reed's predecessor, Paul Johnson, taught that
    program one semester as well. So it seems that there is a large
    community of alumni from the woody plants program. Thank you
    very much.
        Mr. Bonilla. Thank you, Mr. Rey.
        [The statement of Mr. Rey follows:]

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Bonilla. Mr. Reed.

                            Conservation Operations

        Mr. Reed. Mr. Chairman, thank you and members of the
    committee, for the opportunity to appear here before you today.
    With your permission, I would like to submit my written
    testimony for the record.
        Mr. Chairman, for the past 32 years, each day I come to
    work, I think about what is important and how the NRCS can get
    more conservation on the ground. Today, I would like to take
    advantage of this opportunity briefly to tell you what I
    believe is the most important investment you can make to
    private lands conservation. That investment is in our
    Conservation Operations account. The Conservation Operations
    account underpins our entire national private lands
    conservation infrastructure in this country. It leverages more
    than a billion dollars annually in State and local conservation
    investments. These investments are primarily with the local
    soil and water conservation districts. The partnership USDA has
    with conservation districts is a locally-led, integrated
    approach for voluntary private lands conservation. Also, that
    partnership provides safe passage for USDA employees into local
    communities, on farms and ranches, so they, in concert with
    land owners, can practice the science and art of putting
    conservation practices on the ground.
        Mr. Chairman, I am pleased to be here today, and again,
    thank you for this opportunity.
        Mr. Bonilla. Thank you, Mr. Reed and Mr. Rey.
        [The statement of Mr. Reed follows:]

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Mr. Bonilla. We are going to proceed a little differently
    this morning. We had a little mix-up at the last hearing, and I
    apologize for that to Mr. Boyd. He was recognized out of order.
    I am going to yield to him first today.
        Mr. Boyd. Thank you very much, Mr. Chairman. I appreciate
    that. I feel sort of strange jumping in front of Ms. Kaptur and
    Mr. Walsh and others, but you are the Chairman.
        First of all, let me say welcome to all of you, and Mr.
    Secretary, it is great to see you sitting in that seat. I have
    had the pleasure of working with you on a very important
    landmark piece of legislation that improved communities that
    have national forests in them. Many of us who are now
    benefiting from that legislation owe a great deal of thanks to
    you for shepherding that through when you were in a very
    important position on the Senate staff. So thanks for that, and
    thanks for being here.

                              Watershed Protection

        I want to start my line of questioning by focusing on the
    area of watershed protection, because I know there seems to be
    a change of direction in the watershed programs in the
    President's budget. The PL 566 program specifically is a
    nationwide program, as you know, that was designed to protect
    and improve watersheds up to 250,000 acres in size.
        Currently there are approximately 515 active watershed
    projects under this program around the country, while I don't
    understand all of what is going on in the rest of the country,
    I do understand what is going on in Florida, and I want to give
    you a very specific example of how the NRCS, with this
    watershed program, has made our lives better.

                              Suwannee River Basin

        There is a rather famous river down there called the
    Suwannee River, which many of you have heard about. That
    Suwannee River builds up in south Georgia in the Okefenokee
    Swamp, and it flows across the Georgia line and into the Gulf
    of Mexico. It is a historic natural resource, and obviously the
    pressure around that river to build, to have agricultural
    businesses, has been immense over the last 50 years. But at the
    mouth of that river there is a very important shell fish
    industry, oystering and clamming and those kinds of things.
    Over the last 15 years, the Federal Government, the Department
    of Labor, and the State Department of Agriculture have worked
    hand in hand with the local community to build an agriculture
    industry that has become very successful and has really helped
    our communities.
        We are only able to do that because we kept that river
    clean. In the northern Suwannee basin, there are probably 75 to
    80 dairies. It is a big dairying community. About 8 years ago,
    we put in place the PL 566 program to clean up--or help assist
    these areas in their waste disposal.
        It has been a very successful program, and we are in the
    9th year of that program, and this budget ends what we are
    about 3 years away from completion. Just this morning, I talked
    to our water management district director down there, and we
    are going to need about a million dollars funding each year
    over the next 3 years, but your budget ends that. This problem
    is what I want to focus my question on, and I want you to talk
    to me a little bit about the so-called--emergency watershed
    protection proposal which you have that seems to take those
    kinds of programs and shift them to something to respond to
    some emergency.
        My contention would be that if we would prevent the
    emergency from happening to start with, we would be a lot
    better off.

                         Watershed Program Termination

        Mr. Rey. The discussion within the administration about the
    watershed operations program of NRCS was, I think, honestly
    speaking, the greatest challenge that we faced in the
    development of the NRCS 2003 budget. And that has been the case
    in the past, that is not necessarily a new development. In
    fiscal year 1994, for instance, at the end of the day, Congress
    reduced the watersheds operations budget by 50 percent to
    respond to emergency flooding in 1994 with what was supposed to
    be a one-time reduction that was never modified thereafter. So
    funding has stayed flat from 1994 to present.
        In this budget cycle, we face challenges and difficulties
    in making trade-offs more severe than we faced in 1994, and the
    treatment of the watershed operations program is a reflection
    of that.
        At the same time, we are mindful of the fact that the
    program has a great deal of local support and support among
    members of Congress. Indeed, in fiscal year 2002, 64 percent of
    the funds for the watershed operations account were earmarked
    by members of Congress, which to me is a reflection of strong
    congressional support. The one thing that I can commit to you
    is that the discussion over what priority this program should
    enjoy, given the other budget priorities we are trying to deal
    with, both administration-wide and within the Department, is a
    discussion that will continue.
        It is not uncommon, for programs that are authorized by
    statutes that are 40 and 50 years old, which is the case with
    both of our watershed operations accounts, to face this kind of
    scrutiny. It is a scrutiny that we don't shirk from, and a
    discussion that we want to continue to have with you.
        Mr. Boyd. Mr. Chairman, I will follow up, since I see my
    red light is on I will follow up later on. Thank you----
        Mr. Bonilla. Thank you, Mr. Boyd.
        Mr. Boyd [continuing]. For your kindness.
        Mr. Bonilla. Mr. Boyd hit the nail on the head this
    morning, Mr. Rey. I feel that we are going to probably hear
    from a lot more members on this subcommittee about this
    specific subject. This is the subject that had Mr. Boyd not
    started out with it, I was going to begin with it myself. I can
    assure you that we are hearing from our project managers, not
    only in our particular areas, but from people all over the
    country. There is great concern about how to fund some of the
    smaller projects, and some of the new projects that are
    pending. So we are going to work this out, and I think after
    this morning, you will walk away with a clear sense of the
    feeling of every member on this subcommittee about this
    watershed issue.
        Ms. Kaptur.
        Ms. Kaptur. Thank you, Mr. Chairman, and I am always happy
    to yield to my good friend from Florida, Mr. Boyd, and I thank
    you for your courtesy to him.

                          Administrative Efficiencies

        I wanted to ask Secretary Rey, now, in the budget that you
    submitted, as I read it, there are proposed cuts, or you
    describe them as savings, of over $30 million from what is
    called administrative efficiencies that were not mentioned in
    your testimony this morning. The budget provides almost no
    details on these so-called efficiencies. I have several
    questions in regard to this. First of all, I would like to know
    whether when your budget was submitted to OMB, whether those
    efficiencies were a part of your original proposal or not, and
    whether the budget you are submitting to us today is the same
    one that you submitted to OMB.
        I would like to know how did you arrive at such a precise
    estimate of efficiencies of $30.8 million in 341 staff years,
    and I would like to know that if these savings are not
    achieved, what happens to the conservation operations account?
        Mr. Rey. I don't think it will surprise anyone on this
    subcommittee to know that the budget that we submitted to OMB
    is not the final budget that we sent to Congress. I doubt that
    that is the case for any agency or department of the
    government. We did submit to OMB some efficiencies which we
    believe would result in savings. They had some additional
    efficiencies that they suggested to us would result in greater
    savings. In the course of working back and forth with them
    about what we thought we could reasonably achieve in the course
    of a fiscal year, we agreed on the number that is included in
    the President's budget.
        Most of those efficiencies--and I will let Mr. Kaplan
    expand on this--but most of those efficiencies are efficiencies
    associated with our continuing effort to collocate offices with
    other USDA agencies and to combine administrative functions in
    the field and to continue to extend the service center concept.
    So I don't think that those efficiencies imply reductions in
    Conservation Operations. To the contrary, the idea is to try to
    stretch our dollars further to achieve more conservation
    operation per dollar, but most of them instead envision one set
    of support service staffs serving NRCS, FSA and Rural
    Development as we continue to collocate offices.
        Did you want to add to anything?
        Ms. Kaptur. No. That is fine. Is it possible then for you
    to provide more detail to us----
        Mr. Rey. Sure.
        [The information follows:]

        NRCS has been working with the USDA Service Center Modernization
    Initiative (SCMI) to restructure county field offices, modernize and
    integrate business approaches and replace the aging information systems
    with a modern common computing environment (CCE) that optimizes
    information sharing, customer service, and staff efficiencies. There
    are many proposed, planned, and ongoing management initiatives designed
    to reduce overhead expenses thereby allowing additional resources of
    the County Based Agencies (CBA's) to be shifted to the field level.
    These initiatives include: completing the Common Computing Environment;
    updating telecommunication capabilities; competitive sourcing of 15% of
    the FTE's on the FY 2000 Federal Activities Inventory Reform Act list;
    studying efficiencies that can be gained by restructuring or
    reengineering the CBA's administrative functions; and additional
    service center office consolidations.

        Ms. Kaptur. How do you actually calculate these savings or
    efficiencies? And you are saying that you assume you will
    achieve these? But in any case if you don't, there will not be
    a hit on the conservation operations account?
        Mr. Rey. No. There would not be a hit on the Conservation
    Operations account. If we don't achieve them, we will have to
    reprogram in the following year, but so far--and I sort of have
    to knock on wood--so far when we have agreed to a target with
    OMB, we have met it. Now, that is not to say that as an initial
    matter at the beginning of the discussion we will be starting
    an agreement, but ultimately when we have reached an agreement
    on what are achievable levels of efficiencies, we have, over
    the last three or four cycles, achieved them.

                          CONSERVATION INFRASTRUCTURE

        Ms. Kaptur. All right. Let me move quickly to Chief Reed
    and ask, as you look at your entire, really, stellar career,
    what would you say are some of the major achievements that you
    feel that you have had, and as you look forward, what are some
    of the challenges we still face in the conservation arena as we
    try to think more at the policy level rather than the
    accounting level here? Where should Congress be focused?
        Mr. Reed. Well, first I think the greatest achievement I
    have seen in my 30-plus-year career is the pulling together of
    the basic conservation infrastructure out in the countryside.
        Ms. Kaptur. And how much, Chief Reed, of the countryside do
    we now cover, of the private lands where we have got voluntary
    groups working?
        Mr. Reed. Under our Conservation Operations activity, we
    cover all the continental United States and the areas outside
    the continental United States, with few exceptions. Keeping the
    basic Conservation infrastructure together and the partnerships
    so that we can deliver the basic conservation programs and
    services to the farming and ranching community, is where the
    Congress should be focused as the current farm bill is being
    debated. I see the greatest challenge for NRCS is being able to
    keep a good solid professional workforce in place throughout
    the country so that we can provide the appropriate level of
    technical assistance so that we can implement programs that are
    being debated, programs that we know will be needed in the
    future.

                            CUSTOMER SERVICE RATING

        Ms. Kaptur. I know that my time is expired on this first
    round, but I just wanted to say, to receive an 81 percent score
    from the University of Michigan's business school is unheard
    of, even in the private sector, and so to have that kind of
    favorable response to your activities is a true credit to the
    professionalism of those cooperators and advisers all over this
    country, and I guess that tells me that USDA better be careful
    in the future to not make changes that would harm that level of
    service.

                                 LAND STEWARDS

        I just wanted to mention that recently in my own community,
    one of our chief cooperators and land stewards died, and I had
    the privilege to attend his funeral. It really made me think
    about how we recognize these individuals, and I don't think we
    really do very well. I represent both an urban and a rural
    area, but we have had just these tremendous stewards that have
    helped to develop a conservation ethic in our region, and I
    have been thinking about what more could we do to acknowledge
    and lift up these people as models to the broader community. If
    you have any suggestions about that, I really have been
    thinking about that of late. There are a whole set of
    individuals who are part of this team locally, the original, I
    guess you could say, the original plantings, and they have now
    matured and moved on. But we don't seem to--at least in our
    region--recognize them appropriately to the broader community.
    If you have any suggestions on how we might do that, I would be
    most grateful to you.
        Mr. Reed. We are in the process right now of internally
    developing a program to address just that. I would like to
    follow up sometime in the next 2 or 3 days and provide you with
    a status report on where we are with that project.
        Ms. Kaptur. I thank you. Thank you, Mr. Chairman.
        Mr. Bonilla. Thank you, Ms. Kaptur.
        Mr. Walsh.

                       IMPORTANCE OF WATERSHED PROTECTION

        Mr. Walsh. Thank you, Mr. Chairman, and thank you both for
    your testimony today. I would like to associate myself with the
    remarks on my colleague from Florida, Mr. Boyd and with the
    chairman on watershed protection. We spend, in our office, an
    inordinate amount of time on water resources. We have lots of
    water in New York. It is extremely important to our quality of
    life to industry and to the environment, and also the
    conservation reserve program, which has benefitted primarily--
    primarily the western part of the country, but we have great
    interest in that program, and I will continue to be a supporter
    of that program. And we very much appreciate what you will do
    to protect those resources.

                ENVIRONMENTAL RISKS OF ANIMAL FEEDING OPERATIONS

        My question regards animal feeding operations, and as you
    mention in your testimony, there are significant environmental
    risks posed by these operations. And they also pose a
    tremendous difficulty for farmers to comply with the
    regulations that have been proposed by EPA and USDA. I believe
    that in order for farmers to comply with those regulations, we
    are going to have to be supportive and do our part, and I just
    wanted to ask you your thoughts, either or both, on what you
    feel are the major obstacles that animal feeding operations
    will have, and are we prepared to provide them with the
    resources they need to meet these new regulations?
        Mr. Rey. I will start, and then I will ask Mr. Reed if he
    wants to augment the remarks.
        I think the challenges are twofold. First, the development
    of reasonable and understandable requirements, and then second,
    the assurance of a delivery system on the ground that assists
    farmers in meeting those requirements. We are committed to
    addressing both of those challenges.
        In the first instance, with EPA's cooperation and support,
    USDA has formed an interdepartmental working group, which Dr.
    Gray behind me cochairs with the EPA, to work on the
    development of both animal feeding operation and concentrated
    animal feeding operation regulations, as well as a number of
    other common concerns affecting the environmental implications
    of agricultural operations.
        I believe what we are going to see as a result of that
    collaboration are a set of regulations that are farmer friendly
    and that can be reasonably implemented to affect material water
    quality improvements.
        The second challenge, developing delivery systems to assure
    that farmers have the assistance and the resources to implement
    those regulations, is something that I hope and believe that we
    will be assisted in as Congress completes its work on the farm
    bill. There is a considerable amount of EQIP money devoted to
    that task, and if Congress does finalize the farm bill and
    continue that approach, we are eager to get about the task of
    implementing it.
        Mr. Reed. I would just like to add to that by saying that
    the amount of technical and financial assistance available to
    farmers, in my opinion, will be key relative to USDA's ability
    to support the farming and ranching community.
        Mr. Walsh. The approach that EPA takes is far more
    regulatory, and USDA tends to stress voluntary compliance. And
    as we all know, EPA will, in effect, put a gun to the head of a
    municipality to meet clean water standards based on waste water
    treatment and those sorts of problems, pollution--other
    pollution nonpoint source, too.

                         TMDL and CAFO Rules Compliance

        With the promulgation of TMDL rules and CAFO rules, which
    are absolutely needed to protect water resources in the country
    and ultimately the entire national environment, the road to
    hell is paved with good intentions, and farmers who are
    operating on a very slim margin, certainly in my area, which is
    primarily dairies, really, really worry about the ability--
    their ability to meet these requirements.
        So I would just urge you when you go to prepare your budget
    and when you go to OMB, make the case, and we will, too, and we
    will support you, that we need additional resources to help our
    farmers comply so that they can do their fair share. I don't
    think anybody would disagree that farmers are excellent
    husbands of the land, but they can't jump through all these
    hoops without our help.

                             Relationship with EPA

        Mr. Rey. Those are good points that we are mindful of. I
    think one of the advantages of the cooperative relationship
    that we have developed with EPA is that we are beginning to get
    a common cultural approach to dealing with the environmental
    quality implications of agriculture, and EPA is beginning to
    adjust what I consider classical regulatory thinking in terms
    of what will really work on the ground. We are not going to
    bridge that divide overnight, but I think with Dr. Gray's
    assistance, we have at least concurred interdepartmentally on
    which end of the cow gets up first.
        Mr. Walsh. Thank you. Thank you, Mr. Chairman.
        Mr. Bonilla. Thank you, Mr. Walsh.
        Mr. Farr.
        Mr. Farr. Thank you very much, Mr. Chairman. I appreciate
    this hearing today. I am looking over the USDA's agency list,
    and as I look at the budgets in your agencies, you rank about
    number 4 among them. Half the budget goes to food and
    nutrition, but the rest of the budget of the agency, you rank
    number 4, and it is kind of interesting.

              Agency Dealing with Dirt and What comes off the land

        The way I look at it, you are the only agency in the USDA
    that deals with dirt, and everything comes from the dirt. I
    mean, everything else we spend money on comes from what is
    coming off the land. You are the only agency that puts time and
    energy into what goes into the land, and if we are going to
    preserve agriculture, then we have got to do it.

                     Termination of Water Resources Program

        What I can't understand is why, after this committee spoke
    to the Secretary last week, emphasized that it is what is
    running off the land. It is about management practices that are
    causing great concerns, and yet when I look at your budget on
    the watershed flood operations, it is zeroed out. On the
    watershed surveys and planning, it is zeroed out. On the
    watershed rehabilitation program, it is zeroed out. And on the
    emergency supplemental funding, it is zeroed out.
        Yet you have done a survey showing that the investment in
    the watershed program that benefits to the Nation generate
    about $1.6 billion. Again, my question is that you propose
    eliminating the watershed and flood prevention operations, and
    you say that these needs can be addressed by local governments,
    yet you don't point out why. Yet last year the Department
    advised this committee that there was an unfunded Federal
    commitment to this program, about $1.4 billion. And I am really
    puzzled why that last year this was an unfunded Federal
    commitment, and this year it is not. Can you explain that? And
    do you really expect the State and local governments to provide
    for the $1.4 billion Federal commitment?
        Since it was so cost effective last year, why is it all
    zeroed out? And I think frankly you are going to hear from this
    committee over and over again. What I don't understand about
    the Department is that why don't we tie in conditions for risk
    management? Why isn't insurance based on these things? I mean,
    it is nice to ensure a crop, but if there is damage done to the
    land and there is runoff, somebody else has to pay it. That is
    a risk.
        Why not--the cooperative State research and extension
    services, why can't those grants be tied into the efforts of
    NRCS? Why not allow the animal plant inspection service which
    also has a much higher budget to be tied into these practices?
    What I am trying to say, and I think the rest of the committee
    says, is that what is happening in America is people are
    understanding that it is--under it all, is the land. You are
    the only agency in the USDA that really deals with the land,
    and if we are going to preserve this land and protect it so
    that it doesn't have downstream--you know, we can do fine on
    the site, but if it is having--if that site creates problems
    downstream, we are going to pick that--we are going to have to
    pay for that somewhere else.
        So to me, zeroing out the watershed management program is,
    you know, robbing Peter to pay Paul. It is just foolish,
    totally foolish. It doesn't make any sense at all, and in light
    of what you said last year about the program, can you explain
    why it is zeroed out this year?
        Mr. Rey. I think on the watershed programs, I am getting a
    fairly consistent theme here. We are a little dense, but we are
    not that thick. So we will obviously take that back. We will
    obviously continue to talk about that as this budget cycle
    progresses. And as I said earlier, the priority setting that we
    do as an administration, that you do as a Congress, with
    respect to the watershed program is not new this year. We cut
    the program in half in fiscal year 1994, and that money was
    never restored, even though it was supposed to be a one-time
    effect in response to flood conditions. But clearly, this
    discussion on watersheds will continue.

                      Erosion and Conservation Operations

        With regard to erosion and Conservation Operations, I would
    make two points. One, I think our budget is sound there. It is
    not reduced from fiscal year 2001 levels. But, two, and
    probably more importantly, much of the effort that will go into
    those on the land programs are going to be a combination of not
    only this budget but the funds that are provided through the
    farm bill programs which provide the majority of assistance to
    farmers today for those kinds of programs including EQIP, CRP,
    farmland protection, wetlands reserve, and wildlife habitat
    improvement.
        So I don't think you are seeing the full picture with just
    this budget. Once Congress completes its work on the farm bill,
    and put that alongside the budget, I think what you are going
    to see in total--and, again, I am not talking about watersheds
    now, I am talking about on land conservation, I think what you
    are going to see in total is a pretty robust program for moving
    forward in the next century.
        Mr. Farr. What about the integration of all of the
    agencies?
        Mr. Rey. I think we are seeing more of that now. It is
    something that we work on a lot, both in collocation, as well
    as in combining planning functions. But we can do better at
    that, and we will continue to strive to do better at that.
        Mr. Farr. Thank you.
        Mr. Bonilla. Thank you, Mr. Farr.
        A little logistical information here. We are going to have
    to go vote soon. Mr. Latham, my vice chairman on the
    subcommittee, is now on the floor and will return and continue
    the hearing immediately upon his arrival. So you might need to
    be patient with us for just a couple of minutes.
        But at this time we do have a couple minutes before we have
    to depart, so I would like to yield once again to Mr. Boyd if
    he has any additional questions.

                           Conserving Soil and Water

        Mr. Boyd. I really didn't want to leave this topic without
    saying to you good folks who have spent your life in the
    business of helping America's ag producers conserve soil and
    water that this panel recognizes the importance of your work. I
    have got pictures on my office wall at home of my family farm
    that were taken in 1940, when my father started farming it and
    there are washes and ditches in it large enough to park a truck
    in.
        The efforts of the United States Government through the old
    soil conservation service, now NRCS--and we can argue about how
    we put it together, what vehicle we do it with, but the efforts
    that we have made together with the industry have made us the
    premier ag-producing country in the world. We know that times
    have changed, and now our challenges are different. They are
    not how do we keep holes from getting in our field. We figured
    that out long ago.
        In most of our productive ag land, we have good practices
    in place. Our challenge now is the pressure being put on our
    ag-producing land from outside urbanization and developing ways
    to deal with those problems?
        That is really what we are talking about here today, and
    the watershed program is one way to preserve our natural
    resources, make sure that our estuaries are clean, make sure
    that our drinking water in our urban communities is clean, and
    make sure that the streams and ponds are productive for fish
    and those kind of things. That is really what we are talking
    about and that is what this committee wants to focus on. How do
    we take the needs of the changing times in conservation and
    focus on that.
        I just want to put a face on this watershed thing.
        In 1994, when the program started, we asked 43 dairies in
    the Suwannee Valley area to participate in the program. Now,
    you all know that getting a farmer to participate in a Federal
    program is not an easy thing to do. We got 40 out of 43 dairies
    who committed to clean up their waste coming out of that area.
    With the help of NRCS we have completed 30 of those.
        We still have 10 that are in the implementation process,
    and we just can't pull the plug on those guys. I mean, I can't
    go home and face those guys if I have to tell them that the PL
    566 program is no longer in place. Not only am I not going to
    be able to face them, I am not going to be able to face the
    oyster men and the clam fishermen down on the coast.
        I just wanted to put that personal face on what you are
    doing and the importance of the work that you all have spent
    your life dedicated to. I know there is no question there, Mr.
    Chairman, but I just wanted to make sure that it got to be part
    of the record.
        Mr. Bonilla. Thank you, Mr. Boyd. Again, Mr. Boyd is
    reflecting the views of perhaps every member of this
    subcommittee.
        Mr. Rey. I don't think there is any ``perhaps'' about it.
        Mr. Bonilla. I only hedge it somewhat, because there have
    been a couple of members who have not shown up for the hearing.
        Mr. Boyd. Mr. Chairman.
        Mr. Bonilla. Yes, Mr. Boyd.
        Mr. Boyd. One other thing I want to say is obviously--and I
    have known this for a long time, that Mr. Mark Rey is a very
    quick study.
        Mr. Bonilla. The word around town is as much.
        Mr. Farr. Mr. Chairman?
        Mr. Bonilla. Yes, Mr. Farr.

                              Forest Service Issue

        Mr. Farr. I have one other question before we go to the
    vote, and let me read this. My office has been contacted by--I
    know this is in your bailiwick, but not under this committee's
    jurisdiction. It is in regards to the forest service and it is
    Los Padres National Forest out in my district. Both by letter
    and by person of several employees of that forest, concerning
    the management practice of the former supervisor Jeannine
    Derby, these employees have expressed concerns to me about what
    they believe a hostile work environment created by Ms. Derby's
    management, in particular, several have cited the climate where
    harassment goes unpunished and where victims who complain are
    subject to various forms of workplace retaliation. I am not in
    the position to judge the individual merits of these
    complaints, but I have concluded that there is enough smoke
    that there must be some fire there, and I understand that the
    forest service has initiated several internal reviews of the
    problems, and I ask that your office advise me as soon as
    feasible as to the results of these reviews, and further ask
    that the--keep me informed on the steps that will be taken to
    fix any of the problems that you might identify out there.
        Mr. Rey. We would be happy to do that. We have a new
    regional forester in California, and dealing with this, and
    some similar personnel issues is one of his top priorities. He
    came on board the first of the year.
        Mr. Farr. I appreciate that.
        Mr. Rey. At some point when we have got some results, we
    will make an appointment with you and go through them.
        Mr. Farr. Okay. When I come back from the vote, I want to
    talk more about watersheds.

                                   FARM BILL

        Mr. Latham [presiding]. Good morning. You are very
    fortunate. I think we are going to have a short hearing this
    morning. I just had a couple questions. I guess on the farm
    bill, it would appear that both versions really have competing
    interests, real strong commodity title and a real strong
    conservation title. And I would be curious if you have done any
    kind of background or research or--Pearlie, I don't know if you
    have information on it, but how is this going to shake out with
    all of the incentives in both the House and the Senate bills
    for production? Strong incentives on conservation? Have you
    seen where one side--I mean, both side is fully funded,
    basically. How do we resolve that?
        Mr. Reed. I have what I would consider to----
        Mr. Latham. And also tell me about farmland.
        Mr. Reed. First, I would like to defer to Mr. Rey. I think
    he would be the person to first address your question.
        Mr. Rey. The administration is committed to a fully funded
    farm bill that is consistent with the budget resolution
    limitation. We would like the funding levels to be even
    throughout the life of the farm bill so that the money is not
    front-loaded in a way that it diminishes the baseline funding
    in the outyears. Within that overall limitation, we think there
    is sufficient funding, both to meet our obligations to farmers
    in the commodity programs, as well as to mount a robust
    conservation effort. Discussions are ongoing about the balance
    between the two, and that is probably not a question we can
    unilaterally answer, given the status of the conference. But I
    think that I can say one thing, and that is whatever emerges
    from conference will be the strongest congressional commitment
    to conservation programs since the dust bowl era. Assuming that
    it fits within the budget resolution, it will be signed by the
    President, and it will be our honor to embark on a program of
    conservation that will far exceed what many of us thought
    possible a year or 18 months ago.
        Mr. Latham. Do you share my concern that--and I am an Iowa
    farmer. I live on a farm a mile outside of the big town of
    Alexander there, 167 people, and just being a farmer myself, if
    the incentives are there for full production, and Senator
    Harkin's staff person has said that that will bring in--their
    bill would bring, according to their study, a little over 2
    million acres into production. I know my neighbors, and I know
    the way farmers like to grow corn and soybeans in our part of
    the country, that with that much incentive in there in a
    commodity title, do you have concerns about the conservation
    side, that how do you compete with production? I think we are
    looking at a bill--it becomes more apparent to me that if you
    are a fertilizer chemical dealer, you have got a really good
    deal coming.

                           COMMITMENT TO CONSERVATION

        Mr. Rey. I think the commitment to conservation in both
    bills is real, and designed to fit within the budget
    resolution, there will have to be some give, both in the
    commodity programs and in the conservation programs. But I
    think and hope we will end up with a product that strikes a
    reasonable balance. Senator Harkin's bill is very generous to
    the commodity programs, but it is also very generous to the
    conservation programs.
        Mr. Latham. But I just know Iowa farmers, and I know my
    neighbors love to grow corn, and I would like to see the
    conservation side much stronger, myself. I don't think there is
    a balance right now. That is my major concern on the farm bill.
        Okay. In 1999 there was the USDA verdict that said that the
    NRCS misunderstood and improperly enforced the wetland
    conservation provisions of the farm bill, that the landowner is
    entitled to make improvements needed to maintain the levels of
    use, scope and effect that resulted from more far-reaching
    modifications than in the past. Have you started to enforce
    that or write new rules, or do you know what is happening?
        Mr. Reed. I believe that is the Nebraska situation isn't
    it?
        Mr. Latham. I believe so.
        Mr. Reed. We are working with that family and are in the
    process of working through, under the minimal effects
    provisions, the solution to that problem. We are also working
    with our Office of General Counsel, taking a look at the ruling
    and going back to look at everything we do to make sure we take
    what came out of that particular ruling into consideration.

                         CONSERVATION SECURITY PROGRAM

        Mr. Latham. what is USDA's estimate to carry out the
    conservation security program as included in the recently
    passed Senate farm bill for each of the fiscal years 2002 on?
    How much of the total would go towards technical assistance for
    each of the fiscal years 2002 through 2011? Would all the
    technical assistance be carried out by the NRCS? That is an
    easy question for you, Pearlie. Come on.
        Mr. Reed. I would like to defer it to the Secretary. But
    let me take a quick shot at it. We are developing those
    estimates. If you are interested in the details, I could ask
    our deputy chief of programs, Tom Weber, to come up, or we
    could follow up and provide that to you. And, with respect to
    us carrying out the technical assistance to do the work, we
    know that we don't have the wherewithal to do that. We are
    looking into third-party vendor provisions that we think will
    come out of the farm bill, as well as all other options that
    might be available to us in working with our partners to get
    the work done.

                          BUDGET FOR UNDER SECRETARIES

        Mr. Latham. Okay. Thank you. Mr. Rey, I know the account
    for the Under Secretary is a small part of the overall budget
    request, but on the department-wide basis, the request appears
    to be in excess of $55 million over the funding level
    appropriated in fiscal year 2002. Do you think the increases
    should be devoted to offices here in Washington, or do you
    think that the increases should be devoted to the field where
    the programs are delivered?
        Mr. Rey. You said $55 million over. I assume you meant
    $55,000 over 2002.
        Mr. Latham. Apparently it is $55 million on all of the
    Under Secretaries.
        Mr. Rey. I see. The Office of the Secretary item
    generally----
        Mr. Latham. $55 million.
        Mr. Rey. $55 million. Generally speaking, we are about
    putting resources to the ground, and that is a consistent
    thread throughout the USDA budget, particularly with the
    Natural Resources Conservation Service and the Forest Service,
    the two agencies that this mission area oversees. The increases
    in the Office of the Secretary's account are, I think, as a
    result of two things, and I will let Mr. Kaplan elaborate on
    these. One is some accounting changes, or putting costs of
    certain functions in the personnel area back to departments and
    agencies. You will find these increases in not only the Office
    of the Secretary's budget, but in other budgets as well.
        The second thing I think is a function of a different
    management philosophy in the Department. And that is, we are
    not asking the agencies to account for as many individuals that
    we are bringing on as Schedule C appointments, as has been the
    case in previous administrations.
        With that, I will acknowledge my lack of expertise in the
    overall Office of the Secretary budget line, and turn to Mr.
    Kaplan to elaborate.
        Mr. Kaplan. The staffing in the Under Secretary's Office,
    Mr. Rey's and the other Under and Assistant Secretaries is
    maintained from 2002 and 2003. There is money for pay costs,
    there is money for inflation. The biggest increase in the
    Office of the Secretary is $28 million for security
    improvements.
        Instead of trying to put money in all of the agencies'
    budgets to continue what we have gotten in the homeland,
    security supplemental in 2002, there is a lump sum in the
    Office of the Secretary that she can use wherever it is needed
    in 2003 to move along the security improvements at the
    Department of Agriculture.
        There is also an increase of $5 million for streamlining
    costs. As we try to downsize and co-locaate more offices, we
    wanted a pot of money to be able to cover some of the costs in
    order to streamline our programs.
        So it is not that we are adding people in the offices
    themselves, these are program areas that we funded out of the
    Office of the Secretary.
        Mr. Latham. In the Office of the Under Secretary, there is
    an increase of $152,000--that is not that many dollars--for
    unspecified programs and other activities. There is no real
    clear information about what it is. Can you give us any
    enlightenment? And we will be asking a lot of folks what those
    dollars are, that $152,000.
        Mr. Kaplan. It is cost to maintain 6 staff years in the
    Under Secretary's Office. There are pay costs, there is a
    salary adjustment because salaries go up, there is the shift of
    retirement costs.
        Mr. Latham. There is no line that just says ``Program'' and
    ``Other.''
        Mr. Kaplan. Well, there is a table in our explanatory notes
    that does break it out between pay costs, salary adjustments,
    inflation and things like that. But the idea is just--to fund
    the 6 staff years that are in the office today. But we will
    supply more information for the record.
        [The information follows:]

        The Under Secretary's office has an increase of $20,000 for pay;
    $57,000 for salary adjustments; $2,000 for inflation and $93,000 to
    ensure that he can fill vacancies with qualified individuals and pay
    office expenses. The total request for this office is $923,000.

        Mr. Latham. I would recognize the gentleman from Virginia,
    Mr. Goode.

                            Watershed Rehabilitation

        Mr. Goode. Thank you, Mr. Chairman.
        Let me ask you this, Mr. Under Secretary. In the funding
    for dam rehabilitation, you know, the program that we passed
    last year, and it was 25 million, you cut that and several
    other things in the soil and water conservation districts, and
    there is much concern. Tell me what your rationale was on doing
    that. Why?
        Mr. Rey. The cuts that are resulting in the greatest degree
    of concern are in our watershed program accounts, watershed
    operation accounts. And as I indicated earlier, the discussion
    within the administration about the funding for those accounts
    was perhaps the most difficult part of the development of the
    NRCS fiscal 2003 proposal.
        That is not new this year. Those accounts were reduced by
    50 percent in 1994 on what was to be a one-time basis. That
    turned out to be a continued flat lining of the account.
        In 1994, we were responding to other priorities associated
    with flood conditions that were particularly difficult that
    year. In this budget cycle, we are responding to other
    priorities for Federal funding that are equally or even more
    difficult. And so consequently, as we rate our priorities,
    those programs resulted in cuts.
        At the same time, as I also indicated earlier, we are
    mindful of the fact that those programs enjoy considerable
    support within Congress. Indeed, those programs were 64 percent
    earmarked in the 2002 budget cycle, which is a reflection of
    strong congressional support.
        So we understand that. We are going to continue to discuss
    funding for those programs as this budget cycle unfolds, this
    being the beginning, not the end of that discussion.
        Mr. Goode. You mentioned the watershed cuts. But let's go
    back to the dam rehabilitation. Do you lump that in with that
    too, and you--it just--it was tough, of course, you had to make
    the cuts.
        Mr. Rey. It is all part of the same program.
        Mr. Goode. In a number of States you will acknowledge that
    there are dams that are in bad need of repair?
        Mr. Rey. There is no question that we have a large backlog
    of rehabilitation needs. That reality raises two underlying
    questions that I think we will be exploring as we discuss this
    budget area over the course of the year.
        First, in light of that, should we be devoting additional
    new funds to new watershed structures? And that is what those
    accounts were providing for in previous cycles.
        And, second, in light of this large backlog of
    rehabilitation needs, a backlog that everyone understands with
    the most generous budget scenarios we would only be able to put
    a small dent in, what priorities should we place on which
    facilities we rehabilitate first?
        Mr. Goode. Let me ask you this. Do you place a higher
    priority on building new structures or taking care of what you
    got?
        Mr. Rey. My personal view is, given the backlog of
    rehabilitation needs, we probably are faced with an
    appropriation where if we have to make that choice, we ought to
    be looking to rehabilitation first.
        Mr. Goode. And the 25 million that was in the budget last
    year, that was for rehabilitation, was it not?
        Mr. Rey. I don't think it was 25. I think it was closer to
    $10.
        Mr. Goode. Yes. I think 25 was maybe what we hoped for and
    ended up with that.
        Mr. Rey. Twenty-five was, I think, the authorization; 10
    was the appropriation.

                    Conservation Reserve Enhancement Program

        Mr. Goode. Okay. Let me ask you this about the CREP
    program. A number of farmers in my area in the Fifth District
    of Virginia, Nelson County being one, Albermarle County being
    another, Green County being another, have participated in that
    program. And someone here in Washington is holding up those
    funds, which I understand are available, but it has to do with
    their interpretation of well digging. Can you make a comment on
    that?
        Mr. Reed. If you are talking about the Conservation Reserve
    Enhancement Program it is an FSA issue, that we will have to
    follow up on.
        Mr. Goode. Can you see, if you can, what the problem is,
    because the farmers went into this to get the cows off the
    streams. You have got to have a well source away from the
    stream, and they included the paying for drilling the wells as
    part of the CRE program. Now those farmers that have wells as
    part of their conservation measures are not--they are not
    releasing the funds for that.
        Mr. Reed. We will follow up with the FSA folks this
    afternoon and get back to you.
        Mr. Goode. Thank you.
        [The information follows:]

        After the Appropriations Hearing, the National Resources
    Conservation Service (NRCS) contacted the Farm Service Agency (FSA) and
    received a status report on Congressman Goode's request concerning the
    release of funds in the Conservation Reserve Enhancement Program (CREP)
    in the Fifth District of Virginia.
        FSA did suspend the approval of CREP contracts in Virginia,
    particularly where wells were planned. At the time, Viriginia was not
    adhering to the CREP policy that prohibits drilled wells as part of
    this program. Subsequently, FSA has established CRP policy that allows
    for the drilling of wells. This policy change is reflected by CRP
    Notice Number 396 issused and made effective on March 1, 2002. A copy
    of the CRP Notice is provided for the record.

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                                 New RC&D Areas

        Mr. Bonilla [presiding]. Thank you, Mr. Goode. I wanted to
    raise one issue that I think was received very well by most
    members of the subcommittee, and beyond; the USDA announcement
    last month of the 20 new RC&D areas that would be covered by
    new projections. There are dozens of counties as I look at the
    list here in those areas, dozens of counties that will benefit
    from those new projects.
        My question is, what level of funding is needed to fully
    support this program and to take in these new projects?
        Mr. Rey. The administration's budget request provides
    funding for all of the existing areas including the 20 that
    were approved earlier this year.
        It does not include funding for any new projects for fiscal
    year 2002. And we can provide you with the data. I think it
    probably would require about $66 million in total to fund both
    the existing projects--66.4 million, my memory only goes to the
    first two decimal points--66.4 million to fully fund existing
    projects as well as to favorably respond to the new proposals
    that we anticipate during 2002, some 20 or so new projects for
    that year.
        Mr. Bonilla. I have a couple more questions I will submit
    for the record.
        I will yield once again now to Ms. Kaptur.

                              Reprogramming Funds

        Ms. Kaptur. Thank you, Mr. Chairman. Mr. Secretary, you
    talked about the potential to reprogram funds within the Agency
    in the event that you could not make the $30.8 million in
    administrative efficiencies.
        How would you reprogram? Where would you reprogram from in
    order not to hurt conservation operations?
        Mr. Rey. Well, I think that your question was if we don't
    achieve those efficiencies, will there be a shortfall in
    Conservation Operations? And our expectation is that at this
    point, no. The question would be if we don't make the
    efficiencies, and therefore have higher administrative costs,
    where would we secure the additional funding?
        The short answer is that I don't know that I could tell you
    that right now, because that would be the kind of decision that
    we would be looking at mid-year, but it would be dependent on
    where we have unexpended balances. But I can assure you, based
    on the committee's reprogramming requirements, that you would
    have to approve whatever we suggested by way of fund transfers
    to meet any shortfalls that occur.
        Ms. Kaptur. Those fund transfers would come out of
    conservation operations?
        Mr. Rey. Not necessarily. If again, if we had to make a
    reprogramming request to the committee, the reprogramming
    request would probably be one that looked across our program
    accounts to see where we had unexpended balances that we didn't
    think we would expend by year end in money that was 2003 money.
    Those would be the first priorities.
        As I said, I don't know that I could predict that for you
    right now. But clearly if we do get to that point--and in
    parenthesis, I hope and don't see that we do--but if we do get
    to that point, any reprogramming will be before you as a
    committee, and not something we do as a matter of course.

                      Conservation Operations--A priority

        Ms. Kaptur. Well, I just wanted to urge you--I read your
    testimony and your involvement in the proposals for the farm
    bill and overall departmental policy and so forth. When you
    look at the amount of money that the American people are
    shelling out across this country to keep agriculture propped
    up, we don't have a market solution to agriculture here, we
    have a government solution. So we are farming the government,
    we are not farming the market. As a minimum, we ought to be
    getting much more in terms of conservation for those dollars
    that are going out. I would urge you not to cut in the
    conservation area but to find ways, in fact, to use the
    billions and billions in support that are coming to the
    agricultural sector to exact more in the way of conservation.
    And we certainly will look at any follow-up from the Department
    on this. On Mr. Walsh's comments and others on this whole issue
    of land toxicity, water table penetration by toxics related to
    animal feeding, I want to urge you to do whatever you can.
    Coming from the Michigan School of Natural Resources, you
    understand the connect here that Michigan is draining on Ohio.
    So I will get real regional about this.

                      Impacts of Animal Feeding Operations

        If we look at the CAFO operations in cattle and dairy that
    have been placed on that western side of Michigan now, what is
    happening is the water table drains into my district and
    adjacent to my district. And counties like Williams County at
    the Michigan-Ohio line are really deeply worried about their
    aquifers. At the same time, we have a number of Dutch dairies
    now locating in western Ohio, and they are large. And they are
    acquiring just enough cattle--I am trying to remember what the
    number is. If the regulation start at 1,000--then they are
    buying 999. I mean, this is what is going on in western Ohio.
        My question to you is, how do we work with RC&D so as
    rather than getting a fight--let me give you one other example.
    We have got Buckeye Egg now, a German firm that can't do
    business in Germany because it was such a bad actor. Ohio
    welcomed them. They are now the largest egg producer in Ohio,
    and Ohio is a leading egg producing State. But the problem is
    they are an enormous polluter. So our State attorney general
    has Buckeye Egg in court right now, and we have got all of
    these environmental problems that attend to this particular
    facility. That is poultry. I mentioned dairy earlier.
        How do we work with you? How does my region work with you?
    It is Michigan, it is Ohio. How can we be proactive, to get
    RC&D out there in front, to help us find a better answer?
    First, to test the water systems that are being polluted--how
    bad is it--but then to develop a management plan before all of
    those places open up? Could you enlighten me as to the system
    that currently exists so we can be more proactive, rather than
    just ending up in court, which is what our attorney general has
    done on this Buckeye Egg situation. How do we use the tools
    that you currently have to help us in our region, not harm the
    water, clean up the mess that has already been generated, and
    not allow the soils to become toxic? How do we use the tools
    that you have to do this?
        Mr. Rey. The two initiatives that will contribute the most
    to the problem that you are describing are the CAFO regulations
    that EPA and we are working on together to develop an
    understandable and farmer-friendly regulatory tool that doesn't
    exist at present. And second, the delivery system that we
    believe will be provided by the increases in amount and the
    utilization for technical assistance to animal feeding
    operations combined with EQIP money in the farm bill that is
    currently before Congress.
        It is our hope that the two of those together will set us
    off in a new direction toward addressing what I consider to be
    one of the most rapidly developing environmental problems that
    we have today; that is, the concentration of operations in the
    animal feeding industry.
        Ms. Kaptur. I know my time has expired. But I wanted to see
    if Mr. Reed wanted to add to the answer, what this means. Do we
    have to wait maybe another year? My problem is existing, it has
    existed for a while. What do I do while I am waiting for all of
    this? And what does the rest of the country do while we wait
    for EPA and wait for the CAFO regulations? What do you do now?

                          Conservation Infrastructure

        Mr. Reed. I really don't have anything to add to what
    Secretary Rey said, other than you made reference to RC&D maybe
    being a tool that we can use. And I would add to that that all
    of our partners in this soil and water conservation
    infrastructure that we have out there right now are in an
    informal way collectively working on those issues. I think we
    need to continue to support and nourish that voluntary approach
    to dealing with the problem.
        Ms. Kaptur. Well, let me just say as you think about this
    question, I would appreciate any recommendations for what our
    particular region of the country could do while we are waiting
    for more advanced development of these regulations and so forth
    and the passage of EQIP and so forth to prevent further damage
    and to try to remediate the damage that has already been done.
    And so any further enlightenment you can provide me there on
    existing programs that we can use would be greatly appreciated.
    Thank you.
        Mr. Bonilla. Thank you, Ms. Kaptur. Mr. Boyd.

                        Farm Bill Conservation Programs

        Mr. Boyd. Thank you, Mr. Chairman.
        I would like to ask this question to both Secretary Rey and
    Chief Reed. As you know we are conferencing a farm bill now, or
    about to conference a farm bill. If you were king for a day and
    could write the section of the farm bill that applies to
    conservation of our natural resources and environment, how
    would you do it? What programs would you keep, eliminate,
    change, add money to, take money away from? That is a very
    simple question. Just what is your vision for how we, for the
    next 7 years or 8 years, how we deal with our natural resources
    conservation?
        Mr. Rey. I find the problem with answering "if you were
    king for the day" questions is that you end up spending the
    rest of the day in the dungeon.
        But I think, generally speaking, both bills have provisions
    that are going to take us a long way to improving our
    conservation programs. And there are some provisions in the
    Senate bill that we prefer over the House language. There are
    probably more provisions in the House bill language that at
    least in terms of simplicity and flexibility look to us to be
    preferable.
        But I think the better answer to the question is that
    either bill makes such a pronounced advance in conservation
    operations that the best thing that can happen is that we
    resolve the differences between the two bills quickly and begin
    to put the results of that collaboration on the ground as fast
    as possible, particularly to respond to developing situations
    that Ms. Kaptur has pointed out.
        Beyond that, I would be happy to share with you the side-
    by-side comparisons that we have. It is not a situation where
    one or the other body's bill is, unfortunately, superior to the
    other. There are provisions in each that are worthy of support.
        Mr. Boyd. Thank you, Mr. Rey, I got the answer that I
    suspected I would get. And that is okay.
        Chief Reed.
        Mr. Reed. If I were King for a day. I would make sure that
    there are no unfunded mandates coming out of the process. And
    as a part of that, I would make sure that the full costs of
    carrying out these programs that are authorized are provided
    for in some way.
        Mr. Boyd. But nothing jumps out in terms of the programs
    themselves that you would add or take away--you think the----
        Mr. Reed. I think in both the House and Senate versions,
    there is a good mix. And I think we can use whatever comes out
    of what is there now and integrate it in such a way so that we
    can make it all farmer-friendly. So I think it is good.
        Mr. Rey. There is one provision in the Senate bill that I
    think is worthy of serious consideration by the House. And that
    is the reauthorization of a 501(c)(3) foundation to work with
    NRCS to bring private sector dollars, which are not currently
    flowing into the system, into conservation operations. And it
    would be, I believe, very helpful if the House were inclined to
    entertain the Senate's vision there, with whatever changes you
    think are necessary, and give us the opportunity to create that
    foundation and to begin to expand on the public-private sector
    collaborations that we already have in the conservation area.
    Because I think with some creative activity, we can bring some
    dollars into conservation operations that aren't there right
    now. And they would not be taxpayer dollars in this case.
        Mr. Boyd. Thank you. May I follow up with one additional
    question for Chief Reed?
        Mr. Bonilla. Go right ahead, Mr. Boyd.

                            Florida Farm Foundation

        Mr. Boyd. Chief, there is a program that you all have been
    involved in, and I am not sure which section it is under.
    However, there has been a collaboration with a group called
    AFAM which is part of the Florida Farm Foundation which--you
    are familiar with that.
        Mr. Reed. I am.
        Mr. Boyd. Would you comment on the effectiveness of that?
    Also I understand there have been some internal problems in
    AFAM. How is that affecting your thought process about our
    involvement in that?
        Mr. Reed. Mr. Boyd, the details I don't know. But we have
    Larry Clark, who is our deputy chief of science and technology,
    leading that effort. If you would like, we can ask him to come
    up and respond to the question, or we can follow up and provide
    information for you for the record.
        Mr. Boyd. Maybe we can do some of both. It would be great
    if the Chairman would allow me the time.
        Mr. Clark. Thank you, Mr. Boyd.
        The AFAM project is one that we started a year or so ago
    and has been producing some very innovative approaches to
    dealing with some of the animal waste issues in Florida and
    North Carolina. We think there is a great deal of opportunity
    to continue that effort to partner with others--non-profits--
    who can carry out this kind of activity.
        The problems and issues in the organization have pretty
    much been resolved, and we are happy to see the cooperative
    effort continue.
        Mr. Boyd. Thank you very much.
        Mr. Reed, do you have anything to add?
        Mr. Reed. No.
        Mr. Boyd. Mr. Chairman, if I could ask Secretary Rey to
    submit for the record the side-by-side comparisons of the House
    and Senate--your part of those titles.
        Mr. Rey. What you will find, it is a provision of the
    summaries side by side.
        Mr. Boyd. No recommendations?
        Mr. Rey. No.
        [The information follows:]

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        Mr. Bonilla. Thank you, Mr. Boyd. I do believe we have one
    remaining round of questions from Ms. Kaptur based on our
    informal survey of members. I believe that that will be the
    final round, Mr. Rey and Mr. Reed. Ms. Kaptur.

                      PRIVATE LAND CONSERVATION ACTIVITIES

        Ms. Kaptur. Thank you, Mr. Chairman. Mr. Rey, if I were to
    go into an audience of people who are not trained in your
    profession, and I were to try to simply explain to them how the
    jurisdiction you cover is different than the Department of
    Interior in terms of forestlands as well as land conservation,
    how would you describe the extent of coverage of the activities
    over which you have jurisdiction versus the Department of
    Interior? What about numbers of acreage of forestland, land
    held in the public domain versus the private domain,
    conservation programs? How would you give people a sense of the
    scale of that?
        Mr. Rey. What I have described to people is that as far as
    private land conservation activities are concerned, that is the
    almost exclusive domain of the Department of Agriculture.
        There are limited programs of a specific nature, for
    instance wildlife-related programs, that are administered
    through Interior. But for broad purposes, if you are talking
    about private land conservation, the Natural Resources
    Conservation Service is the government's leader and occupies
    most of the field in that regard.
        With regard to Federal lands, what I have told people is
    that, generally speaking, the Federal Government manages on
    behalf of the American citizens roughly a third of our Nation's
    lands. There are four major land managing agencies that have
    the responsibility for that estate. Three of them are in the
    Department of the Interior, one in the Department of
    Agriculture.
        In the Department of the Interior, two of the agencies have
    specialized holdings, the National Park Service and the Fish
    and Wildlife Service, which manage the national park system and
    the national wildlife refuge system.
        The third is the Bureau of Land Management which manages
    what remains, which we call the public domain, which has not
    been reserved either for the parks, wildlife refuges, or in the
    case of the Department of Agriculture, the national forest
    system.
        And that is pretty much how we describe it. Each of the
    agencies has a somewhat different purpose. The purpose of the
    Bureau of Land Management and the Forest Service are the most
    closely comparable in the sense that both agencies have a
    mandate to accommodate a variety of uses as they go about
    managing the lands to which they are entrusted.
        The Park Service and the Fish and Wildlife Service have a
    somewhat narrower mandate: in the first case, the enhancement
    of wildlife populations through the management of the refuge
    system; in the second case, the preservation of America's parks
    for the enjoyment of the public, not only the American public,
    but citizens of the world.

                       PRIVATE VS. PUBLIC LAND TREE COVER

        Ms. Kaptur. If you were to fly over from coast to coast and
    look at the tree cover in the United States and ask yourself,
    in the public domain, how much of that tree cover is managed by
    the Forest Service versus the Department of Interior, where is
    the acreage greater?
        Mr. Rey. The acreage is by far greater with the Forest
    Service. The Bureau of Land Management lands tend to be lower
    elevation, dry grasslands. There are exceptions. I am speaking
    in broad generalities now. The forests, which were the origin
    of the national forest system, were created in large part at
    the turn of the century by taking higher elevation areas with
    forest cover and removing them from the public domain to place
    them in forest reserves for, at that time, two primary
    purposes: to provide for watersheds and water supply stability,
    to provide for a sustainable supply of fiber resources.
        So if you are flying east to west, at the point that you
    are flying over the eastern forest today, the acreage you are
    looking at, predominately although not exclusively, is
    privately owned lands. Once you cross the 100th meridian, you
    are looking at grasslands. Once you get into the inner mountain
    area past the front range of the Rocky Mountains, what you see
    forested is predominately in Forest Service ownership. What you
    see in grasslands is predominately either private land or
    Bureau of Land Management public domain land.
        And then finally, once you reach the West Coast, you cross
    the Sierras, the forested acreage that you are seeing is a mix
    of Forest Service and private land. The unforested acreage is
    predominately private agricultural lands.
        Ms. Kaptur. And if you were to put it on a percent scale of
    those--let's talk about the forested or tree-covered lands over
    which you have jurisdiction. What percent of the total would be
    within USDA's and Interior's jurisdiction?
        Mr. Rey. I think it is, roughly speaking, three-quarters
    Interior, one-quarter USDA; because, by far and away, the
    Bureau of Land Management owns the largest estate.
        Ms. Kaptur. Okay. All right. I am going to ask you to
    provide some of those numbers for the record, talking about
    crop land, grazing land, forestland, and so I can get a clear
    picture in my mind of the overall breakdown.
        [The information follows:]

        The Forest Service manages approximately 192 million acres of
    public land--an area about 110 percent the size of the State of Texas--
    located in 44 States, Puerto Rico, and the Virgin Islands. These lands
    are known collectively as the National Forest System (NFS).
    Approximately 110 million NFS acres are classified as rangeland,
    although a large portion of these lands are also forested. Of the
    rangeland acres, 92 million are classified as grazing allotments of
    which 84 million acres are active allotments. National Grasslands are a
    separate component and occupy 831,000 acres.

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                     LAND COVERED BY CONSERVATION PROGRAMS

        Ms. Kaptur. I am also going to ask you to provide some
    numbers for the record on the various conservation programs
    that you administer to incorporate the amount of acres and the
    kind of technical assistance available to people, so I can get
    a handle on the magnitude of this and who holds responsibility
    for those lands.
        [The information follows:]

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                                 BIOBASED FUELS

        Ms. Kaptur. Though the Forest Service itself is not under
    our jurisdiction, they manage one of the largest vehicle fleets
    in the Government of the United States. And I am very
    interested in the biofuels issue and the use of forest residue
    for the production of biofuels.
        I want to ask you, how much do you know about the
    composition of vehicles within the Forest Service; to what
    extent any of them use biofuels, ethanol, biodiesel, in either
    acquiring vehicles that use them or currently vehicles under
    their jurisdiction using that type of fuel? In other words, can
    you be a partner as a part of the Department of Agriculture in
    our efforts to really promote biofuel production through our
    national energy policy and through the farm bill?
        Mr. Rey. Clearly we can be and want to be a partner in
    promoting the use, the development and use of biofuels. And if
    you look at the Forest Service budget, you will see additional
    recommendations for research appropriations in the development
    of biofuels.
        I cannot today tell you whether and what the percentage of
    the Forest Service fleet uses biofuels, but I will get you that
    information for the record.
        One of the things about the Forest Service fleet, as
    opposed to the inventory of vehicles nationwide, is that our
    fleet tends to run more heavily toward 4-wheel drive and
    utility vehicles, pickup trucks, because of the terrain that
    they are required to traverse. And to the extent that we are
    focusing more of the effort on developing mixed fuel vehicles
    in the general passenger vehicle category, that won't be
    necessarily something that our fleet will accommodate to the
    extent that passenger fleet as a whole will be. But I can get
    you specific numbers.
        [The information follows:]

        The Forest Service (FS) owns and operates a fleet of approximately
    19,000 vehicles, which includes heavy equipment, off-road vehicles,
    snow machines, boats and airplanes. Passenger carrying vehicles make up
    approximately 3 percent of the total fleet and work trucks comprise
    another 86 percent of the fleet. Included in the FS vehicle fleet are
    more than 150 alternative fuel vehicles. The alternative fuels used in
    these vehicles include compressed natural gas, liquid propane gas,
    propane gas, methanol, ethanol and electricity. FS also operates more
    than 4,000 vehicles with diesel engines that can run on bio-diesel
    products. FS uses on an annual basis approximately 60,000 gallons of
    alternative fuels in its fleet vehicles. Executive Order 13031--Federal
    Alternative Fueled Vehicle Leadership--requires that 75 percent of
    nonexempt vehicles acquired by Federal agencies for use in metropolitan
    statistical areas with populations of 250,000 or more use alternative
    fuels. Approximately 90 percent of the nonexempt vehicles FS acquires
    for use in these areas are alternative fuel vehicles. The remaining FS
    vehicles are associated with law enforcement or fire activities, are in
    lesser populated areas, or meet other conditions that exempt them from
    the Order. Long-range acquisition plans include the annual purchase of
    more than 50 alternative fuel vehicles.

        Ms. Kaptur. I come from a district that makes a lot of
    truck transmissions. I would urge you to engage with those in
    the administration who are involved in this new freedom car. We
    had the old partnership for a new generation of vehicles. And I
    really think that you have something to contribute here. And
    certainly as we clear residue from many of our forests, and you
    have this enormous passenger power for fuel within your
    service, I think that you can be part of the solution. I would
    urge you to look at that at the highest levels of your
    responsibility.

                                  URBAN SPRAWL

        I want to move to the issue of urban sprawl. If I might ask
    you or Mr. Reed, what programs you have in place to assist
    local, State, and regional efforts to effectively deal with
    urban sprawl?
        Ohio, as you know has more urban areas than anywhere, and
    farming is our largest industry, farming and food processing.
    We really do have enormous conflicts. We are sort of at the
    point of making final choices as to what the land will look
    like 100 years from now, and it is actually a very painful
    process.
        I am just curious to what extent NRCS is involved in
    assisting communities and States in this regard. What types of
    programs do you have underway or are considering to help
    provide the technical assistance and help for township trustees
    and land conservers and conservation groups that are trying to
    get a handle on this and how to be proactive in establishing
    land trusts and development rights and so forth, farmland
    protection? How do you deal with this?

                  FARMLAND PROTECTION--FOREST LEGACY PROGRAMS

        Mr. Rey. The two premiere programs that we operate are the
    Farmland Protection Program, and the Forest Legacy Program.
    Both programs provide financial assistance on a cost-share
    basis to purchase easements of farm and forestlands,
    predominately those that are threatened by urban sprawl. And
    those are program areas where both in the case of the Forest
    Service fiscal 2003 budget, we are recommending significant
    increases in funding.
        Ms. Kaptur. How much is that, please?
        Mr. Rey. We are recommending $70 million for fiscal 2003,
    which would be roughly a 20 percent--18 percent increase over
    2002 levels. Additionally, both the Farmland Protection Program
    and the Forest Legacy Program are scheduled for healthy
    increases in the farm bill that is currently in conference.
        Ms. Kaptur. What are you asking for in the Farmland
    Protection Program, and is that an increase over last year?
        Mr. Rey. In the Senate bill, the provision is for $150
    million in 2002, $250 million in 2003, $400 million in 2004,
    $450 million in 2005, and $500 million in 2006. That is a 5-
    year bill, so that is as far as it goes.
        The House bill provides funding at $50 million per year
    through 2011. That is a 10-year bill. So it provides monies
    spread over a longer time horizon. And what did we spend this
    past year on farmland protection? This past year we spent $17.5
    million in farmland protection. So either bill represents a
    pretty dramatic increase in the Farmland Protection Program.
        Ms. Kaptur. All right. Is there any summary that is
    available from the Department as to how those Farmland
    Protection-Forest Legacy dollars have been used over the years?
    I don't need a lengthy report, but to get a sense of how those
    dollars have been used, so one can talk about it intelligently
    to the public, which States have participated, which have not,
    what you expect from the States or localities. I know in our
    own State, one of the tragedies is Ohio seems to be not leading
    but following the pack on this. They didn't even have
    legislation in place, and so even if you had regions of a State
    that were interested in participating, if the State government
    wasn't interested, you couldn't do anything regionally, which
    was a great frustration of ours in our part of the State. And
    the State finally got its act together, but they are very late.
        And so any enlightenment you can provide there will be
    greatly appreciated.
        [The information follows:]

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                               WATERSHED PROGRAMS

        Ms. Kaptur. I also support my colleagues on their concerns
    about the watershed programs. I think those are all of my
    questions, and we thank you so very, very much. We hope that
    your tenure is a very successful one, and we ought to get you
    written up in the Michigan Alumni Magazine if it hasn't already
    been done, a famous graduate of the School of Natural
    Resources.
        I wanted to say to Chief Reed, it is always a pleasure to
    have you here, and your thoroughness and your professionalism
    and your 81 percent grade are a tribute to the fine work that
    has been done by NRCS over the years. And we hope you come back
    very often here. We enjoy having you.
        Mr. Bonilla. Thank you, Ms. Kaptur. We have now been joined
    by Mr. Nethercutt, so I will now yield.
        Mr. Nethercutt. Thank you, Mr. Chairman. Members of the
    panel, welcome. I apologize to you for being late. We have had
    three hearings going on. I know the Chairman does also, and
    other members, so thank you for being here. I am sorry to have
    missed your testimony, but I have been told what you said, so I
    am ready to ask a couple of questions that I hope will be of
    interest to you.

                                  AIR QUALITY

        My understanding is there has been discussion in the whole
    area of conservation relating to water and land conservation. I
    would ask anyone on the panel, to what extent do you believe
    air quality should also be a subject of concern as it relates
    to conservation? Out our way, we have the issue of stubble
    burn. That is a controversial issue. But what can you tell us
    about what the Department is doing with respect to the subject
    of air quality, and to what extent is there collaboration going
    on with interested parties as it relates to air quality
    conservation as opposed to land and water conservation?
        Mr. Reed. Mr. Nethercutt, as you know, the Chief of NRCS
    serves as chairman of the USDA Air Quality Task Force. We have
    a very, very strong task force. I would like to just cover two
    or three major accomplishments of the task force.
        First, we have developed priorities for research. The
    research priorities focus primarily on particulate matter, PM
    210, PM 2.5, as well as issues dealing with animal odors and
    emissions. We are in the process of pulling together a good
    solid set of recommendations centered around voluntary
    incentive-based air compliance programs in working with EPA,
    and we have also recommended a burning policy. Also we have an
    EPA representative on the task force.
        Mr. Nethercutt. I appreciate that. It is a difficult issue
    out our way. When you are growing crops that are enhanced by
    burning but yet you are facing the issue, the very emotional
    issue of air quality, and, you know, in stubble burning you see
    smoke in the air, and suddenly there is grave concern that
    children are going to have asthma attacks and so on. This is an
    emotional issue, the issue of burning. Yet notwithstanding
    that, it happens about 4 days a year, or has in our State. But
    Idaho, to the east of us, is engaged in a burning policy that
    sends the smoke our way even though our agriculture industry is
    not guilty.
        It is a tough issue. I would hope that would be a
    coordinated effort and a fair analysis recognizing that there
    is an economy here, an ag economy that we have to maintain and
    do our best to go to other opportunities for cultivation and
    production of crops without burning. I don't think it can be
    done overnight. Field burning is a tough issue that I know you
    and probably members of the entire panel are familiar.
        Mr. Rey. In some parts of the country, the air quality
    implications of agricultural operations are one of the fastest
    growing areas where we get requests for technical assistance. I
    think one of the benefits of the upcoming farm bill allocations
    will be the ability to provide some of that assistance either
    through our technical assistance accounts or through EQIP.
        Mr. Nethercutt. Am I still able to ask another question?
        Mr. Bonilla. Go right ahead.
        Mr. Nethercutt. I don't want to hold you up.
        Mr. Bonilla. You are the final member to be recognized. I
    think Ms. Kaptur also has one more question.

                              THIRD-PARTY VENDORS

        Mr. Nethercutt. I am sorry to delay. Let me ask the panel
    what your thoughts are on contracting with certified third
    parties to provide technical assistance to the land owners for
    certain practices.
        I have heard some concerns that technical assistance is
    sometimes delayed to complete projects such as inspection prior
    to timely seeding of CRP to recover crop. Delayed seeding,
    particularly in arid regions, increases the risk of a poor
    stand, and both landowners and taxpayers may have to provide
    additional funds to successfully complete the project,
    something that you all have had to address in your particular
    work. Is it something you would consider, is it a bad idea, a
    good idea, what is your sense of it?
        Mr. Reed. There are several issues, Mr. Nethercutt. Number
    1, the issue of third-party vendors is one that we have been
    participating in to one degree or the other for a long, long
    period of time. As you know, there are provisions in both
    versions of the farm bill for a more extensive use of third-
    party providers to help with the technical assistance workload.
    And we are getting geared up to do just that.
        Also you mentioned CRP. FSA is in the process right now of
    conducting a pilot testing for the use of third-party vendors.
    And we, of course, will take that information and incorporate
    it in what we do as we get geared up to implement the third-
    party provisions that will come out of the 2002 farm bill.
        We think that the only way we will be able to get the work
    done is to expand our use of third-party providers.

                     LAND OWNERS IMPORTANT DECISION MAKERS

        Mr. Nethercutt. Thanks. I know in your statement, your
    written statement that you made mention that the most important
    members of the conservation partnership are the people who own
    the land and make the decisions for its use. I would just
    conclude by saying I agree with you. As we look at CRP versus
    continuing land in production, CRP has a negative impact on
    rural communities that are under stress alone in terms of
    economic growth and continuation. When the land goes into CRP,
    the seed man and the farm implement guy and everybody suffers.
    Conservation of land is important. But conservation of
    productive land in production is also important as we keep
    farmers on the land and keep them growing crops as opposed to
    the alternatives. So it is a tough equation. I happen to like
    the House bill on the Conservation Reserve Program allocations
    as opposed to the Senate just for that reason. We need to have
    production agriculture flourish in this country, as well as the
    conservation side of agriculture.
        So, with that, I thank all of you for your commitment to
    the government and your assistance to agriculture.
        Mr. Bonilla. Thank you, Mr. Nethercutt. I understand Ms.
    Kaptur has one area.

                            REPROGRAMMING AUTHORITY

        Ms. Kaptur. Yes, Mr. Chairman. Just to follow up on this
    whole question of reprogramming within the Agency. For the
    record, we will just ask if you can please provide the scope of
    your reprogramming authority under NRCS.
        Mr. Rey. Sure. We can provide you that.
        [The information follows:]

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        Mr. Bonilla. Mr. Goode.
        Mr. Goode. Can I have one more question?
        Mr. Bonilla. Absolutely.

                       DAM REHABILITATION PRIORITIZATION

        Mr. Goode. To Mr. Rey. We were talking about the dam
    rehabilitation fund that has 11 million in it. Now, you are
    spending the money during this fiscal year. Who makes the
    decision on which dams get rehabilitated? You can't
    rehabilitate too many with that 11 million.
        Mr. Rey. Right. The act as passed in 2000 gives us criteria
    to use in making the prioritization of which dams are first in
    the queue for rehabilitation. And the ultimate decision, I
    think, is the Chief of the NRCS.
        Mr. Reed. Basically we have a diverse committee of folks
    from the outside that make recommendations, and we try to treat
    the worst first.
        Mr. Goode. Yeah. That diverse committee, who is on that
    diverse committee?
        Mr. Reed. Primarily the NRCS State conservationists or his
    or her representatives from the various States, plus we have--
    --
        Mr. Goode. So it is at least 50 on the committee?
        Mr. Reed. No. We don't have watersheds in all of the 50
    States.
        Mr. Goode. How many are on the committee?
        Mr. Reed. I don't know the exact number.
        Mr. Goode. 35?
        Mr. Reed. 16 States.
        Mr. Goode. How much is it costing you to administer this?
        Mr. Reed. I can't tell you that off of the top of my head.
        Mr. Goode. Not even a ballpark?
        Mr. Reed. Well, we have three people working.
        Mr. Goode. It is no more than 2, maybe 1 or 2 percent of
    it.
        Mr. Reed. It is more than that when you add up all of the
    administrative costs associated with contracting and
    procurement and those kind of things. But the basic leadership
    to make sure we establish priorities of plan and scale, we have
    the equivalent of about 2-\1/2\ staff years invested in that.
        Mr. Rey. I think it is also generally a fair proposition to
    state that the highest priority in rehabilitating dams is where
    there are downstream threats to humans and property.
        Mr. Goode. I agree.
        Mr. Bonilla. Thank you, Mr. Goode.
        I am delighted this morning that we have had ample time for
    every member of the subcommittee to ask all of their questions
    that they have brought to this hearing. They are juggling
    several hearings, as Mr. Nethercutt pointed out. This is the
    appropriation hearing season and we get it done somehow,
    bounding around, doing votes and all of the other things we
    need to get done as well. I appreciate you all being here
    today. You helped us tremendously in getting this process
    started.
        Mr. Rey, Mr. Reed, Ms. Thomas, and Mr. Kaplan, we
    appreciate your time and we look forward to working with you as
    we move forward to put this bill together. Thank you very much.
    This hearing stands adjourned until tomorrow.

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                                              Wednesday, March 6, 2002.

       UNITED STATES DEPARTMENT OF AGRICULTURE MARKETING AND REGULATORY
                                    PROGRAMS

                                   WITNESSES

    WILLIAM T. HAWKS, UNDER SECRETARY
    BOBBY R. ACORD, ADMINISTRATOR, ANIMAL AND PLANT HEALTH INSPECTION
        SERVICE
    A.J. YATES, ADMINISTRATOR, AGRICULTURAL MARKETING SERVICE
    JOANN WATERFIELD, DEPUTY ADMINISTRATOR FOR PACKERS AND STOCKYARDS
        PROGRAMS, GRAIN INSPECTION, PACKERS AND STOCKYARDS ADMINISTRATION
    STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE
        Mr. Bonilla. The subcommittee will come to order.
        I am delighted today to be holding this budget hearing for
    the marketing and regulatory programs at USDA. The agencies
    under marketing and regulatory programs include the men and
    women who are charged with keeping America's agriculture safe
    from foreign pests and diseases, ensuring that agriculture
    markets are operating with the greatest efficiency by promoting
    fair and competitive trade practices that benefit consumers and
    American agriculture.

                           Introduction of Witnesses

        We have with us today Mr. Bill Hawks, the Under Secretary
    for Marketing and Regulatory Programs; Mr. Bobby Acord, the
    Administrator for the Animal and Plant Health Information
    Service; Mr. A.J. Yates, the Administrator for the Agriculture
    Marketing Service; and JoAnn Waterfield, Deputy Administrator
    for Grain Inspection, Packers and Stockyards Administration.
    And, of course, we always welcome Mr. Dewhurst, who wasn't with
    us recently.
        We understand that you had a little rough going over on the
    other side of the Hill the other day. We read about that,
    Steve. We have fun over here, and we welcome you back.
        We have read your statements and have entered them into the
    record. We will be delighted to hear from all of you in just a
    moment, but before we begin, I would like to yield to my
    friend, Ms. Kaptur, for any comments that she may have before
    we continue.
        Ms. Kaptur. Thank you, Mr. Chairman. I just want to welcome
    our witnesses and to say that you have some of the most
    important responsibilities in our country. We appreciate your
    service, and we are very anxious to hear your testimony this
    morning, and we want to help you do your job better. Thank you
    very much.
        Mr. Bonilla. Thank you very much, Ms. Kaptur.
        Mr. Hawks, we will go ahead and begin with you. We
    understand others would like to make some opening remarks and
    again we have entered all of your statements into the record.
    We will be delighted to hear from all of you this morning. We
    will begin with Mr. Hawks.

                               Opening Statement

        Mr. Hawks. Thank you, Mr. Chairman, members of the
    Committee. It is indeed a pleasure for me to be here to discuss
    the budget for the Marketing and Regulatory Programs for the
    2003 fiscal year. We do have the budgets for Agriculture
    Marketing Service, AMS; Animal and Health Plant Inspection
    Service, APHIS; and the Grain Inspection, Packers and
    Stockyards Administration, GIPSA.
        Joining me today also is my deputy from the great State of
    Texas; Jim Butler is sitting right behind me. And as you have
    already said, we have A.J. Yates from AMS, Bobby Acord from
    APHIS and JoAnn Waterfield representing GIPSA.
        I would like to start by giving you my philosophy, and that
    is working together--and I have worked with my agencies to
    draft goals for which we can be held accountable--I intend to
    see that MRP works. Those goals are, one, building broader
    bridges. We will increase cooperation and strategic
    partnerships with farmers, ranchers, States, foreign
    governments, congressional offices and other interested parties
    to ensure that our policies benefit producers and consumers
    alike.
        Second, we are intent on moving more product. We will
    facilitate expanded domestic and international market
    opportunities for U.S. agriculture products, including value-
    enhanced products and products of biotechnology.
        Third, we are investing in infrastructure. An agriculture
    that is healthy both biologically and economically is
    marketable agriculture.
        Fourth, we believe in growing our people. We will make a
    concerted effort to recruit, recognize and reward
    accomplishments and inspire current and future leaders within
    MRP.
        Last, but certainly not least, is selling agriculture as a
    profession. We will creatively market the vital role that
    agriculture plays in all Americans' lives to assist our effort
    to recruit, retain the highest caliber work force for MRP and
    USDA.
        The funding sources for our agency that we are proposing
    today are funded both by taxpayers and beneficiaries of the
    program services. The total budget is nearly $1.5 billion, over
    $500 million of which is funded by user fees paid by the
    beneficiaries of the services.
        On the appropriations side, APHIS is requesting $395.4
    million, of which $13.2 million is for building and facilities.
    AMS is requesting $105.2 million, and GIPSA is requesting $42.9
    million.
        The Agricultural Marketing Service, or AMS, activities are
    an integral component of the USDA-wide effort to assist the
    U.S. agricultural industry in marketing their products and in
    finding ways to improve their profitability. Many of the
    programs administered by AMS are aimed at building cooperative
    and strategic partnerships with the agriculture community and
    State institutions that support it.
        Additionally, AMS provides oversight to research and
    promotion programs that allow producers, handlers, processors
    or importers to collaborate to solve marketing problems and to
    increase sales domestically and abroad. USDA continues to
    believe that the National Commodity Research and Promotion
    Programs offer opportunities to maintain, develop and expand
    markets.
        AMS is requesting much-needed additional funding to
    maintain the viability of the Federal seed programs and to
    bolster exports through international market price reporting.
        The Animal and Plant Health Inspection Service, as you well
    know, the primary mission is to manage issues involving animal
    and plant health, conflicts with wildlife, environmental
    stewardship and animal well-being, and I am certainly pleased
    to see the beetle on the wall back here today.
        Together with the States and industries, APHIS protects and
    promotes U.S. agricultural health, preserving and expanding
    domestic and international markets for U.S. agricultural
    products.
        Recent events have highlighted the need to protect the
    security of our agriculture production sector and our food
    supply. However, well before September the 11th and long before
    foot-and-mouth disease crippled the British agricultural
    sector, APHIS had been fully engaged in activities to detect
    and exclude agricultural health threats and ensure preparedness
    and appropriate infrastructure to address pest and disease
    emergencies that occur.
        We have indeed encountered emergencies. Just in the last
    year alone the Department released $336 million in funds from
    the Commodity Credit Corporation to address outbreaks of
    disease. Asian long-horned beetle, chronic wasting disease,
    citrus canker, karnal bunt, Medflies, plum pox, pseudorabies
    and tuberculosis.
        The Grain Inspection, Packers and Stockyards
    Administration's mission is to facilitate the marketing of
    livestock, meat, poultry, cereals, oilseed and related
    agricultural products and to promote fair and competitive trade
    for the benefit of the consumers of American agriculture.
        It helps move more product, both domestically and abroad,
    by investing in domestic infrastructure that supports marketing
    within the grain, poultry, livestock and meat industries.
    GIPSA's Federal Grain Inspection Service is requesting
    increased funding that will allow it to expand its newly
    established biotechnology programs and to keep pace with the
    rapid introduction of new value-added products, whether
    developed through biotechnology or conventional breeding.
        This concludes my statement, and I look forward to working
    together as we proceed in the 2003 budget appropriations
    process. We believe the proposed funding amounts and sources of
    funding are vital to providing the infrastructure to protect
    American agriculture from pests and disease and for moving more
    product, especially for increasing exports to foreign markets.
    It will provide the level of services expected for our
    customers, the farmers, the ranchers and the agriculture
    marketing industry and consumers.
        We are happy to answer any questions that you may have.
    Thank you.
        [The statement of Mr. Hawks follows:]

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        Mr. Bonilla. Thank you, Mr. Hawks. We do appreciate the
    photo you sent us of the beagle. It adds a lot to the room, and
    we appreciate that.
        Mr. Yates, did you have some opening comments?

                Agricultural Marketing Service Opening Statement

        Mr. Yates. Yes. Thank you.
        It is a pleasure to be here, and I certainly agree with
    Congresswoman Kaptur in the opening statement that she made
    about the importance of the Agriculture Marketing Service to
    agriculture.
        I am a farmer from California and I had the opportunity of
    working in the California Department of Agriculture for 9
    years. I know that the programs that AMS provides to
    agriculture are critically important in helping them move their
    products into not only the national marketplace, but also the
    international marketplace.
        We do that in a variety of ways, and naturally price
    reporting, whether it be on livestock or in a market, on fruits
    and vegetables and other commodities, is of critical importance
    in the ability of farmers to move their product on a timely
    basis.
        In those, we have our research and promotion programs which
    are very important for the producers to be able to promote
    their product to consumers, both in the United States and
    internationally, as well as marketing orders which help our
    growers develop standards where the consumer knows what they
    are buying when they buy it from long distances.
        We also provide a service of Section 32 in helping farmers
    with surplus commodities, at the same time providing very
    nutritious food for our schoolchildren, as well as needy people
    throughout the United States.
        Farmers markets and direct marketing are critically
    important to our small farmers, who represent 90 percent of the
    farmers in the United States. We work closely with them. I had
    experience for 9 years working with farmers markets in
    California, and I know what they do for agriculture.
        We also provide a service of pesticide detection programs,
    which helps not only protect the food supply, but it also gives
    us the ability to register the tools that we need to produce a
    nutritious and healthy product.
        I appreciate the opportunity of being here today, and I
    would be more than willing to answer any questions you might
    have.
        [The statement of Mr. Yates follows:]

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        Mr. Bonilla. Thank you, Mr. Yates.
        Ms. Waterfield.

                            GIPSA Opening Statement

        Ms. Waterfield. Thank you, Mr. Chairman. Briefly, I just
    appreciate the opportunity to be here, and I want to thank the
    subcommittee for the support it has shown GIPSA in the past. I
    will defer to the comments that my colleague, Mr. Shipman, has
    already submitted to this committee; and I will be happy to
    answer any questions put forward by the committee. Thank you.
        Mr. Bonilla. Thank you.
        [The statement of Mr. Shipman follows:]

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        Mr. Bonilla. Mr. Acord.
        Mr. Acord. I have submitted a statement for the record, Mr.
    Chairman. I have no further comments other than I appreciate
    the opportunity to work with the committee on the 2003
    appropriation.
        [The statement of Mr. Acord follows:]

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                    Proposed Language Change, CCC Authority

        Mr. Bonilla. Mr. Hawks, I would like to begin with an issue
    here that is apparently a policy change in the budget request.
    That is a proposal to delete the Secretary's emergency
    authority to use the Commodity Credit Corporation, which, as we
    all know, is CCC, to finance emergency pest and disease
    outbreaks. This authority has been in place since 1984, and it
    was this subcommittee that provided this authority. The
    proposed language would give the Secretary the authority to use
    CCC only for an emergency that was not funded out of the CCC in
    the previous fiscal year. I want to learn how this authority
    would work, so I ask you to indulge me for just a second.
        If I understand the proposal correctly, funds to combat the
    Asian long-horned beetle, which was funded out of CCC in fiscal
    2002, would not be eligible for CCC funding under the proposed
    language in fiscal year 2003. Is that correct?
        Mr. Hawks. Yes, sir, that is correct. The proposal that we
    presented suggests that after the emergencies are declared,
    they should be shifted to appropriated funds.
        Mr. Bonilla. Would the language allow you to seek funding
    to combat the longhorn beetle in fiscal year 2004?
        Mr. Hawks. I am going to defer to Mr. Dewhurst on that one.
        Mr. Dewhurst. There is money in the budget to deal with the
    current outbreaks that we know about. If there were new
    outbreaks in different locations or under different
    circumstances, I believe we would use the emergency authority
    to deal with those new outbreaks. I think that is the way the
    budget is set up.
        Mr. Bonilla. So if there was a major outbreak of longhorn
    beetle in fiscal year 2003, for example, and the cost exceeded
    the funding levels, this will be appropriated under this
    proposal. Are you suggesting then that you would have to go to
    that emergency designation?
        Mr. Dewhurst. If we had a new outbreak in a different
    place, I believe we would use the emergency authority.
        What we have in the budget is money for the known
    outbreaks--Chicago and New York, as I recall. We would use the
    appropriated money for those concerns.
        Mr. Bonilla. I just want to state for the record that this
    proposal would be a significant change in the way we have
    responded to pest and disease outbreaks in the past. History
    shows that the current method of response has worked pretty
    well so far. USDA is committed to eradicating several pest and
    disease outbreaks that were declared emergencies by the
    Secretary, and we will work with you to ensure that you have
    the resources available to you to complete the job.
        This budget proposal is something we definitely want to
    bring to everyone's attention at this point.
        Mr. Hawks. Mr. Chairman, I would like to add to that, and
    say thank you for your commitment to help us address those
    needs that we do have. I certainly appreciate that.
        Mr. Bonilla. At this time I am going to yield to Ms.
    Kaptur.
        I want to advise folks that we are expected to have a
    Journal vote shortly after 10 o'clock. We might have to take a
    quick break at that time. I would hope that one of my
    colleagues can get back here and take the Chair for a moment so
    we can have as much continuity as possible during this
    interruption.
        Ms. Kaptur.
        Ms. Kaptur. Thank you, Mr. Chairman, very much. Thank you
    all for your testimony.
        Under Secretary Hawks, you struck a real chord with me in
    the beginning of your testimony where you talk about selling
    agriculture as a profession. With the new eye that you have on
    Washington, I would like to invite you to go look at the
    agriculture exhibit at the American History Museum and see if
    you were a young person 17 years old, if you would ever
    consider agriculture as a profession if you looked at it.
        I think that as we are redoing some of the buildings here
    in Washington for agriculture, we need to sell agriculture to
    the millions of visitors that come here.
        You talk about biotech, and we know the plant genetic work
    that is being done and all of the work. Here is a brochure on
    ethanol. Now, what is going on around this country to move us
    into a new emerging future based on agriculture? We have to
    make this field exciting to the youth of this country, and
    those exhibits are great historically, but they do not give a
    sense of the contemporary nature of agriculture.
        If you go into the computer exhibits, the kids are all over
    there, and I think our private companies could be challenged.
    If you look at what goes on at Epcot Center down in Florida in
    promoting agriculture through the displays that are there, I
    would just suggest that as you are wandering around town you
    familiarize yourself with the turf here.
        You have an ally up here on selling agriculture as a
    profession in its full dimension.
        Mr. Hawks. Ms. Kaptur, I would like to say to you that this
    is my first cut on this--and we did this collectively, setting
    these goals. I even suggested that we set that goal of selling
    farming. Having spent the last 30-odd years--or actually my
    entire life in production agriculture and never serving in
    Federal Government until last May, I have a keen interest in
    selling agriculture as a profession.
        I think it is a great profession, I think it is a noble
    profession, just like a lot of other professions that we have;
    and I would be delighted to work with you to make sure that we
    are displaying and exhibiting it in the appropriate manner that
    actually reflects agriculture today. I think if a lot of
    younger people who are in college or in high school really
    understood what agriculture is all about and how it affects the
    lives and livelihood of every person in the world, that we
    would have a lot more interest in agriculture; and that is
    exactly what we intend to try to do. So I am looking forward to
    working with you in whatever capacity we can.
        Ms. Kaptur. Well, I hope that you go sit down with the head
    of the Smithsonian and tour those buildings. I hope that as we
    invest the money in the South Building at agriculture, you
    think about the way that it speaks to the public.
        You know, we had to fight prior to your service to get the
    farmers market over there on the Mall; and all of a sudden
    everybody goes, oh, gee, it is successful, oh, surprise,
    surprise. Yes, well, those were small steps, but so much more
    can be done because this whole city is a museum and people
    learn by coming here.
        And so thank you for your receptivity. I think Secretary
    Veneman probably shares this perspective.
        I wanted to say to Mr. Yates that as I listened you
    referenced farmers markets in your testimony. But if I look at
    the budget, there are no program increases for two activities
    important to farmers markets in your budget, the Wholesale
    Farmers and Alternative Market Development Program and the
    Payments to States and Possessions Program. I merely point that
    out to you as we fine-tune the submission through this
    appropriations process.
        It is just amazing some of the work that has been done with
    farmers markets, and I have always thought the greatest job in
    the world would be to be in charge of networking all the
    farmers markets of this country so that the soup produced in
    North Carolina could end up on the shelves of our local farmers
    market in Toledo and to provide a real alternate marketing
    opportunity for a lot of the newer products coming out where
    the income goes right to the producer.
        And I notice, Mr. Hawks, that you are largely a row-crop
    farmer, although you have many other things in your background.
    But I have to put in a word for the specialty crop producers
    here.
        I represent both, and I can tell you that some of these
    farmers market programs adjacent to cities are among the most
    important ways we can actually get them access to the customer.
    And so I hope that you might take another look at those
    programs. If you wish to make any comments on your perspective
    on farmers markets, I would appreciate it.
        Mr. Hawks. Ms. Kaptur, I certainly appreciate the
    importance of farmers market; and to share with you, I actually
    was in specialty crops. I was in vegetable production. I paid
    my way through college by growing peas, butter beans and snap
    beans every summer on our farm and selling them at the farmers
    market in Memphis, Tennessee. So I have a keen interest and an
    understanding of farmers markets.
        After coming back from college while I was starting my row-
    crop operation, I did the same thing. So I have a keen interest
    in farmers markets and a great understanding and appreciation
    for them, as well.
        Ms. Kaptur. And I can tell you from our part of the
    country, our cattle producers, our pork producers, are really
    frozen off the shelves of the major supermarkets, and were it
    not for opportunities to sell through our farmers markets, they
    couldn't reach the public unless they did it out of their own
    operation--which is generally in the country, so you don't have
    as many customers driving by.
        I know my time has expired, but I look forward to the next
    round of questions.
        Mr. Bonilla. Thank you, Ms. Kaptur.
        We will go to Mr. LaHood and then Mr. Boyd. Mr. LaHood.

                               Homeland Security

        Mr. LaHood. Let me ask, since it is the favored topic of
    everyone around here if--have you folks been involved in
    discussions with Governor Ridge and his staff in his office, if
    there was some sort of national calamity that took place in our
    country with respect to food, food supply, origins of food
    coming in, are you a part of a team of people that has been
    working on a plan to make sure that the food supply in our
    country is safe and that you would be working with Governor
    Ridge?
        What have been your activities with his office in securing
    the food supply of our country if something were to happen?
        Mr. Hawks. Yes, sir, Congressman, we have. Actually, we
    have, within USDA, a homeland security structure. The Deputy
    Secretary is the direct interface with Homeland Security, with
    Governor Ridge's office. Dr. Elsa Murano, the Under Secretary
    for Food Safety, and I cochair Agriculture's Production and
    Protection of the Food Supply Council within USDA.
        We have numerous working groups working with Governor Ridge
    in the Office of Homeland Security. I have primarily been
    working on the border issue; Mr. Acord and myself have both
    been working very closely with that. Other members of the USDA
    team have been working on other specific issues.
        So I could, go to great length in talking about border
    issues and what we are doing there if you would care to do
    that. We do recognize there is a tremendous need for greater
    coordination and cooperation between our border agencies to
    make certain that we do keep out of this country the things
    that we want to keep out of it.
        I will share with you that agriculture plays a very vital
    role in that process, and I do not take lightly the
    responsibility of excluding harmful plant and animal pests and
    disease out of this country.
        So we are working. We are engaged in that and will be
    continue to be engaged.
        Mr. LaHood. Is there a plan in place and can you assure us
    today that there is a plan in place to make sure that the
    homeland food supply is safe and secure in the event that
    somebody tries to--we know there are people that want to do in
    the United States. We know that the war is being fought not
    only in our own country, but in other places of the world. But
    with respect to the food supply, can you tell us today that
    there is a plan in place and that we are prepared to deal with
    any kind of an assault on our food supply?
        Mr. Hawks. I can tell you that we do have plans. They are
    in place. It is our intent to protect the food supply. There is
    no question about it.
        I would like to share with you, on 9-11, that very day
    before we left our offices, the then-Chief Veterinary Officer
    of the United States sent out an e-mail that was circulated,
    and the e-mail said for everyone to heighten their vigilance,
    because of what happened. And along with that e-mail, he
    suggested to share it wherever the recipient chose to.
        Would you believe that that same afternoon that e-mail had
    circulated back to me through a veterinarian out in the
    countryside? So we had plans in place before 9-11. We are
    obviously continuing to evaluate our plans in light of the new
    environment that we are living in today.
        Mr. LaHood. Has your agency or have your folks had a chance
    to look at the amendment that was offered in the Senate by
    Senator Tim Johnson having to do with the sale of livestock 14
    days before? And do you have any comments on that in terms of
    your ability implement it if that were to become law, in terms
    of really being able to administer that new law; or do you have
    any thoughts about that amendment and do you support it? What
    is your feeling about all of that?
        Mr. Hawks. The administration has not taken a position on
    that particular amendment, and I was in a meeting the other day
    with some of the administration people that are working
    directly on it, and the fact was pointed out that we feel like
    Congress should work its will on some of these.
        But I will defer to JoAnn Waterfield, who is involved in
    the Packers and Stockyards Administration, to talk about the
    mechanics of administering that.
        Mr. LaHood. Let me just say one thing. This is an important
    amendment. And you know as well as I do--that I have a very
    high regard for Secretary Veneman. I like her very much and she
    is a friend.
        But, you know, one of the criticisms of the USDA has been
    that they haven't weighed in either in the House or Senate, as
    these bills have been marked up--now we are talking about farm
    policy for the next several years, and I would be curious to
    know at some point how--you folks are going to have to
    administer this if this becomes law. This is an important
    change, and I have been hearing from a lot of my people about
    it, one way or another; and at some point I hope you folks
    weigh in on this because you are going to have to administer
    it.
        Mr. Hawks. I will defer to JoAnn to answer about
    administering it.

                               Johnson Amendment

        Ms. Waterfield. Yes, obviously we are following the debates
    on the amendment very closely, and we are paying attention to
    the language of the bill and also to the debates behind the
    bill, so that if the amendment is passed and becomes part of
    the farm bill, we understand as much as we can about what
    Congress intends to pass.
        We will promulgate regulations setting forth how we will
    interpret the bill if and when the Johnson amendment is
    incorporated into the statute, so that the industries that we
    regulate clearly understand what the statute's requirements
    are. At the time that we promulgate regulations, the industry,
    of course, will have the opportunity to comment on our
    interpretation.
        Once the regulations are promulgated, though, they will
    have the force and effect of law. And we, of course, will
    enforce the law. But at the time that the regulations go into
    effect, there will be no surprises, so that the industry will
    understand exactly what control means from USDA's perspective.
        Mr. Bonilla. Thank you, Mr. LaHood.
        Mr. Boyd.
        Mr. Boyd. Thank you, Mr. Chairman.
        I want to start by saying, Secretary Hawks, that I have
    read your biography, and I very closely identify with many
    things that you have done in your life, not only in the
    specific tasks that you performed, but of the time in our
    country that you performed them; and I am very happy that you
    were there.
        I want to start by following up with Mr. LaHood's comments
    and say that I share the same concerns that he does about the
    Johnson amendment. I have been talking to my farmers back home;
    and actually they are very mixed about whether they support it
    or don't support it. They are not sure, because they don't even
    understand it.
        I think one of the things that concerns me about a
    statement that I just heard from Ms. Waterfield is that you
    said ``we will interpret what it means after it goes into
    law.'' We need more than that. We need to understand what it
    means before it goes into law, so that we can know how to fix
    it or whether we ought to do it or not do it. I think maybe
    that was where Mr. LaHood was going.
        Our people are very confused about it. I think many of the
    Members of Congress are very confused about what it does. Does
    it inhibit our ability to do the things--contracting, hedging--
    that we have been doing up to this point or not?
        So I would encourage the administration to weigh in as
    well. No question there. I just wanted to make a follow-up on
    what Mr. LaHood said.
        I would like to ask Mr. Acord a question.

                                 Citrus Canker

        We have a high level of interest in a little pest that came
    in through the Miami Airport in the early 1990s, brought in
    through the APHIS inspection system people. Some tourists
    brought it in, or some resident--citrus canker.
        Would you, Mr. Acord, update this committee from your
    perspective, on how we are managing in that fight against
    canker? Are we making progress? Are we losing? What is it
    costing us? How much more is it going to cost us?
        If you would, I would appreciate that.
        Mr. Acord. I would be happy to do that, Mr. Boyd.
        The progress we have made in trying to eradicate citrus
    canker obviously has been slowed by the lawsuits that we have
    had in Miami-Dade and Broward Counties. This stopped the
    removal of trees from--within the 1,900-foot barrier that the
    scientists have told us is necessary to prevent the spread of
    citrus canker.
        Notwithstanding that, we still have the ability to remove
    infected trees, and this State, through our cooperative
    program, is doing that. The legislature in Florida, according
    to the Commissioner of Agriculture, is near passing a bill
    which would mandate the 1,900-foot barrier, and we would remove
    trees within that 1,900-foot barrier under State law.
        If that law passes, and there are no further court
    challenges, that removes the major barrier to progressing with
    the eradication program. As long as we continue to have those
    trees infected or exposed in the Miami-Dade-Broward County
    areas, we are going to continue to have a source of infection
    that will continue to move up--or potentially move up to the
    major citrus producing area in Florida.
        So our hope is that, through the settlement of the lawsuits
    or the passage of a State law, that we will get on with that
    tree removal.
        One other concern we have, is continuing the ability to
    achieve the kind of cooperation that we have with the State;
    and we have had a good, cooperative relationship with the
    State.
        Mr. Boyd. I want to make sure that the committee
    understands what the 1,900-foot issue is. Also, I agree with
    you, I think the legislature is close to codifying that, and
    that will help us.
        Mr. Acord. Yes, sir.
        Mr. Boyd. However, I hear you saying that you think if we
    get the rule codified that you are optimistic about our battle
    against canker, and you think it is within our reach in the
    near term to wipe it out?
        Mr. Acord. I do, near term, it may be an overstatement.
        Mr. Boyd. A year?
        Mr. Acord. Within a year we should have the trees removed.
    We should have the source of inoculum removed, and with good
    sanitary practices among the growers. I really think it is
    achievable at that point.
        Mr. Boyd. Okay.
        Mr. Chairman, I noticed the red light, but could I continue
    on this issue?
        Mr. Bonilla. Go right ahead.
        Mr. Boyd. Mr. Acord, it is my understanding that there has
    been no problem in the commercial grower industry in terms of
    the 1,900-foot rule.
        Mr. Acord. That's correct.
        Mr. Boyd. By the way, 1,900 feet, for the members of the
    committee that don't know, states when you find one infected
    tree, you have to draw a circle 1,900 feet around it and
    destroy the trees within the circle. That is the only way to
    get rid of it. I understand, 260 acres of producing citrus
    groves have been destroyed, and our growers have been most
    cooperative in their efforts to assist the State and the
    Federal Government in eradicating this.
        Can you talk to me about why you think they have been
    cooperative, and what do you think the cost will be to continue
    the eradication program? Also, talk to me about the
    compensation issue.
        Mr. Acord. One of the major reasons the industry has
    cooperated has been the compensation that they have received
    for their trees. After all, this is a commercial enterprise.
    They do have to continue in business, and the only way they can
    do that is with compensation for the lost trees and the lost
    income that results from losing those trees. Because the
    important thing to recognize here is, this is the first--or one
    of the first--diseases that we have ever had to battle where
    you remove the host crop.
        There is no spray for it. There is no other treatment. You
    have to remove the trees. So that is taking away the livelihood
    of the producers.
        They have been very cooperative because of the compensation
    that they have received. Besides that, collectively the
    industry recognizes that failure to remove those trees
    represents a threat to the entire industry. It has the
    potential to devastate the entire State.
        On the other hand, the homeowners, over time--those that
    have so adamantly opposed the removal of the trees, are going
    to lose those trees anyway. If we only remove the ones that are
    infected, then it is simply going to spread to the others, and
    over time they are going to wind up losing those trees. But it
    is hard to convince people when you are taking a 10-year-old
    tree out of their yard that we are doing the right thing.
        Mr. Boyd. Mr. Acord, assuming that we get the 1,900-foot
    rule codified quickly or we win the lawsuit, what do you think
    the cost under the current compensation formula will be on the
    commercial grower side?
        Mr. Acord. My hope is that we would not have to get into
    any more commercial compensation. We don't know at this point
    and don't have an estimate on what that might be over the next
    year or so. If we are able to get in and remove the trees, we
    think that any further infection of a commercial grower is
    going to be minimal. It is simply a guessing game at this
    point.
        Mr. Boyd. Mr. Acord, you are very, very optimistic about
    that, and as you know, that fund balance is zero now.
        Mr. Acord. That is correct.
        Mr. Boyd. There are no unpaid commitments, but the citrus
    industry folks are very concerned about the future. I would
    encourage you to meet with them and talk a little bit about
    this. However, I just don't see how we get through this without
    some more help, and I just want to make sure that we get you on
    board with that.
        Mr. Acord. Well, I didn't mean to imply that it is zero.
    There is--obviously some. It is just very, very difficult at
    this point to estimate what that might be.
        I am well aware of the industry's concern about that, sir,
    and they never miss an opportunity to make me aware of it.
        Mr. Boyd. Thank you very much.
        And, Mr. Chairman, that is all I have. But before I quit, I
    want to associate myself with the comments that you made about
    the $162 million account. I didn't get into that, but I could
    ask many questions about that, how it would work mechanically
    in terms of new canker finds. Would that be a new emergency? Or
    will that be the old emergency? And which account will it be
    paid out of?
        Also, 162 million to pay for all the invasive pest
    emergencies of this country for 1 year may not be enough. When
    you look at what has been done historically, what we have had
    to pay out of CCC in the last couple of years is about double
    that. So I would like to associate myself with the opening
    remarks of the chairman about that way of doing business.
        Mr. Bonilla. Thank you, Mr. Boyd. And also with the point
    you brought up, I think I would like to emphasize the need for
    us to continue to have that emergency authority to deal with
    some of these things when they break out. That is what we are
    talking about here today.
        I have a couple of questions remaining, as well, but I
    would like to go ahead and yield to my friend, Mr. LaHood.

                                MAD COW DISEASE

        Mr. LaHood. Let me just ask one other question, Mr.
    Chairman.
        One year ago, your agency, particularly the Secretary, the
    number one topic was mad cow disease. Is that still a problem
    in the world, and is it a problem for our country? We haven't
    heard much about it. I haven't read much about it, and I am not
    certain if that is because we have eradicated it, the world
    community has, or if other things have grabbed the headlines.
        Mr. Hawks. Actually, the Department had entered into a
    contract with Harvard to do a risk assessment on BSE, or mad
    cow disease, and we issued that report about a month to 6 weeks
    ago. The finding by the scientific community in a very, very
    detailed research project was that the risk of mad cow disease
    in this country was very minimal, and that even in the event
    that it was here and had been here, it would be stopped.
        And there has recently been a GAO report that I am sure you
    are familiar with, that actually didn't look at it in depth
    like the scientific study did and had, maybe, some other
    conclusions that one could draw.
        But it is our belief in the Department of Agriculture that
    the risk assessment that Harvard did--and they are well known
    for their ability to assess risk--says that there is a very
    minimal risk for mad cow disease in this country.
        Mr. LaHood. What is happening in other countries?
        Mr. Hawks. There are other countries that did not implement
    the same things that we did with feed bans, with various
    processes to mitigate for mad cow disease that are actually
    showing up. As you are familiar, I am sure, Japan recently had
    mad cow disease there. It is showing up in other countries as
    well.
        But as I said, we feel that this country has a very minimal
    risk. We have actually strengthened and increased surveillance.
    As you are aware, the only way right now that we have to test
    for this is to test the brains of a dead animal.
        We are increasing that surveillance. We are increasing the
    surveillance on farms. We are actually doubling our
    surveillance. I think we have done at least 500 now off of
    farms, and that is the highest risk that we have there.
        There are a lot of issues involved in this, and when you
    start looking at it and start trying to mitigate all of these
    issues, you come up with other issues. So we have to be very
    careful on how we approach this, but we think the surveillance
    that we are doing for the most likely places is a good way to
    determine whether we do or don't have it.
        But as I said, it is a very minimal risk, at best.
        Mr. LaHood. Congratulations. This was obviously a hot topic
    a year or so ago, and obviously somebody has been doing a lot
    of good work at the Department.
        Let me just go back to the issue that I raised before, Ms.
    Waterfield. And, Mr. Secretary, I will just make this point.
    You can respond to it if you want.
        I think there are two issues here with this amendment. One
    is the policy; the other is the money. I mean, our committee
    has the responsibility for appropriating money, and I guess
    what I am wondering is--what do you need to look at is, if this
    becomes law, what does it mean in terms of your agency, in
    terms of inspection and the relationship that you have with the
    packers and with the livestock people?
        I mean, this is a significant change in the way this kind
    of operation is carried out, the selling of livestock and the
    packers and so forth, and that is the issue that I want to
    raise--not only the policy part of it but the money part of it.
        It looks to me like, in your budget, there hasn't been a
    dramatic increase in inspections at places where livestock are
    slaughtered, and so I really think you need to look at this
    from both points of view. The policy point of view which--as
    Mr. Boyd said, in my area it is the same.
        There is a conflict, you know. People are trying to figure
    out if it really does make good sense in terms of policy, but
    in terms of your point of view, I think it is going to add
    additional cost. But--you know, you are smarter than I am about
    that, but I think you need to look at that.
        Thank you, Mr. Chairman.

                               WILDLIFE SERVICES

        Mr. Bonilla. Thank you, Mr. LaHood.
        Mr. Acord, I want to talk about Wildlife Services for a
    second. That has always been an issue that is not only
    important to the country, but important to my area. I believe
    it was Mr. Butler that came in the other day and emphasized the
    point that this is not just a problem for rural areas. A lot of
    urban areas out there have problems with animals--for example
    birds getting in the way of planes at JFK Airport. Did you
    bring the picture of the coyote on the subway?
        Mr. Hawks. I brought the picture.
        Mr. Bonilla. That coyote on the subway, that famous picture
    will be used down the road, Mr. Hawks, when I am sure there
    will be another effort to try to cut this line item as we move
    this bill forward. Some people don't understand that this is
    not just a rural problem.
        That coyote on the subway is a clear example of the
    problem. We will probably get it blown up, and no matter what
    subway they might think it is, we are going to tell them it was
    on their subway.
        Mr. LaHood. Do you think that picture will be on the wall
    in this room, Mr. Chairman?
        Mr. Bonilla. Well, I would like to honestly explore the
    possibility. If you can get that picture blown up, I would like
    to have that picture on this wall. Let us do that if it is
    possible.
        Mr. Hawks. Mr. Chairman, I encourage you to do that, and we
    will take charge of getting it blown up for you.
        Mr. Bonilla. I have a question on Wildlife Services and
    cooperators in different States paying their fair share of
    program costs. In our State of Texas, for example, we are
    funding nearly 50 percent more than the Federal Government's
    share of Wildlife Services, and we are glad to do that. We know
    it is important.
        Understanding that the budget request is going to try to
    count on more of this in the future, my question is, how much
    of a reduction is there in the Wildlife Services request that
    reflects the move for cooperators to pick up a larger share of
    the program? Are the funds available in the budget request to
    match the Federal Government's share up to the level of the
    cooperator's share, Mr. Acord?
        Mr. Acord. No, sir. They are not in terms of the last part
    of your question.
        The budget request does, as you have suggested, contemplate
    the cooperators providing additional funds. There is about $9
    million--in terms of the reduction, that the cooperators would
    be expected to pick up.
        The cooperative share that is paid by the States around the
    country is very, very uneven. Texas happens to be one of those
    great States that, has a very, very high cooperative share on
    the State side. There are others that don't have quite that
    high level, but we simply don't have the funds to equalize the
    cooperative cost share all across the country.
        Mr. Bonilla. Well, that is something that we are going to
    have to work on--not just in my area, but we are going to have
    to work on that nationwide to make sure that these folks do
    have the resources they need to handle this problem.
        Mr. Acord. Well, it is a program that while it does have
    some controversy associated with it, I don't think there is a
    group of men and women that work any harder in the government
    anywhere or that are more ingenious or more creative when it
    comes to finding solutions to difficult problems. And we have
    always appreciated your support for the Wildlife Services
    program.
        Mr. Bonilla. I am honestly baffled year in and year out
    when some people do try to add controversy to this issue,
    because these are some of the most thoughtful, humane people
    behind these programs. They are carrying out the program for
    the right reasons and not for some of the reasons that people
    are just dreaming up in their heads to try to create
    controversy.
        Mr. Boyd.

                                INVASIVE SPECIES

        Mr. Boyd. Thank you, Mr. Chairman. I want to say to you all
    that I believe there is an increase in requests for salaries
    and expenses on the APHIS side which recognizes the whole
    problem we have with invasive pests. I know we got some money
    in the antiterrorism supplemental, and so I just want to tell
    you all that this member, and I am sure other members of the
    subcommittee also, want to be supportive and helpful.
        We know that we starve you and expect you to get the job
    done at places like Miami and the other places around the
    country where we have this problem. I just wanted to compliment
    you for doing the best you could on the budget side and want to
    offer our support; and I really don't have a question.
        Thank you, Mr. Chairman.
        Mr. Bonilla. Thank you. Mr. Boyd, did you have anything
    further? Mr. LaHood?
        Mr. LaHood. No, I don't.
        Mr. Bonilla. My understanding is Ms. Kaptur is going to
    return with additional questions. She will be returning
    shortly, as well as Mrs. Emerson from Missouri who is trying to
    juggle a couple of things on the floor. We do expect a vote
    within about 6 or 7 minutes. If you all would be patient with
    us, we would appreciate that. Mr. Boyd?
        Mr. Boyd. Mr. Chairman, do you want to fill time?
        Mr. Bonilla. If you have questions, we would be delighted
    to hear them.

                               AERIAL OPERATIONS

        Mr. Boyd. Something has come to my attention that--we have
    got these experts here, we can always find out good additional
    information.
        But APHIS is involved in the safety of aerial operations,
    with the birds around the airports; does that make sense? Can
    you talk to me a little bit about that and what kind of problem
    that is. And I understand that several States ranked pretty
    high in bird strikes. And how many people do we have, and what
    kind of people do we need or resources do we need? How do we
    fight this problem?
        Mr. Acord. There have always been problems with birds and
    airplanes in the same airspace. This is a growing problem,
    around the country. We started out probably with one of our
    first big programs at Kennedy Airport with gulls getting into
    the airspace in one particular runway. We have continued to
    work with the Air Line Pilots Association, with States, with
    State wildlife agencies, to find solutions to these problems,
    because oftentimes airports seem to be located near water. They
    seem to be located near landfills, or landfills are located
    near the airports because of the way the land use patterns are,
    and it creates an inherent problem.
        One of the things we have tried to do is work with the
    airline industry to develop methods of control in and around
    airports, to do research on how the environment impacts the
    birds--what kind of birds does it attract, the height of the
    grass in and around the airport and other environmental factors
    that might influence the birds' presence in and around
    airports.
        Miami happens to be an airport that has a particular
    problem.
        We are continuing to try to work with the airport authority
    in most of the situations where they request it in order to
    enter into a monitoring program and an assistance program where
    the birds can be scared or there can be other environmental
    modifications around an airport that would prevent the birds
    from wanting to congregate there.
        Most of this work is funded by the airport authority; it is
    done cooperatively with them. The issue becomes the research
    and who funds the research, and we have received money from
    FAA.
        We work cooperatively with FAA as well. We maintain the
    database for FAA on bird strikes.
        But it is not just birds. It is other wildlife. In some
    cases, deer get into jet engines, and it doesn't take much
    imagination to figure out what happens there. So we work on all
    wildlife, not just birds.
        Mr. Boyd. It sounds like cubed venison to me.
        Okay. Is there anything we need to do? I mean, the only
    thing I can offer is that we have a lot of hunters at home. If
    you provide the planes----
        Mr. Acord. In today's environment, anyone around an airport
    with a gun is going to have great difficulty. So that is why
    they are looking for someone with a security clearance to get
    on an airport to perform this work.
        Mr. Boyd. Thank you, Mr. Acord.
        Mr. Bonilla. Thank you, Mr. Boyd.

                              FEDERAL SEED PROGRAM

        Mr. Hawks, the AMS Federal Seed Act program regulates
    agricultural and vegetable seed moving in interstate commerce.
    It prohibits false labeling in advertising of seed to ensure
    farmers and consumers can purchase the correct variety of seed.
    Seed shipments are sampled by State departments of agriculture
    and apparent violations of the act are sent to AMS for
    regulatory action. The Seed Act budget is $1.3 million in 2002.
        My question is directed to Mr. Yates. You are requesting
    $1.1 million in increases for your Federal Seed Act program. If
    approved, this increase would almost double the size of the
    program.
        Tell us why you are requesting such a significant change
    and what the benefits of that increase will be to agriculture
    in this country.
        Mr. Yates. Thank you, Mr. Chairman. This is critically
    important.
        Our seed program for the last 20 years has not had any
    additional appropriations. In fact, the appropriations have
    decreased over the last 20 years. And so we have not filled
    positions of people that have retired, and the equipment that
    we are operating with today is 20 years old--not only our seed
    testing equipment, but also our computer equipment that we use
    to track all of the violations and all of the certifications of
    seed. This is really important for agriculture, because we
    market 30 percent of the seed that we produce in the United
    States in the international marketplace.
        Another piece of this is that we have to have our seed lab
    accredited. Accreditation is critically important to where we
    are recognized in the international marketplace and where we
    have the ability to move our seed, as well as being able to
    work with our State partners and make sure that they are
    considered accredited also. That is the main reason that we
    have asked for this increase.
        Mr. Bonilla. Folks, the bells have just gone off for a
    vote. We will take a 5-minute break and resume the hearing when
    we are able to return. Mrs. Emerson will likely be the first
    one to resume questioning.
        We will take a very brief break, and we will be back with
    you.
        Mr. Boyd, did you have--I am sorry. Did you have----
        Mr. Boyd. Can I?
        Mr. Bonilla. Absolutely.

                                  BOLL WEEVIL

        Mr. Boyd. Thank you. One of the programs that the chairman
    and this member both are interested in is the boll weevil
    eradication program, and I notice a significant decrease in the
    budget request.
        Do we have good news there, that the reduction is because
    we don't have anymore boll weevils to eradicate, or the bad
    news is that we just are refusing to do it?
        Mr. Hawks. Mr. Boyd, obviously being from Mississippi, the
    Boll Weevil Eradication Program is very important to me as
    well. The program has been very successful. We are moving into
    different phases of the program now. Actually, the cooperators
    are picking up more of the expense of that program, but as we
    move forward into the later phases of the program, there are
    actually less demands on that program.
        Mr. Boyd. Thank you very much. It has been a very
    successful program. Thank you.
        Mr. Bonilla. Thank you for bringing that up, Mr. Boyd. You
    are right, that is a very, very big deal for my State as well.
    At this time, we will take a few minutes break and we will
    return.
        [Recess.]

                                   DEBARKING

        Mrs. Emerson [presiding]. I will reconvene the hearing.
    Thanks for being here. Sorry I missed the beginning of your
    testimony. I have an interesting question, and one that I am
    most concerned about. It has to do with hardwood debarking. It
    is my understanding that APHIS is going to be supporting the
    position of the wood products industry that would have the
    debarking requirement deleted from proposed International Plant
    Protection Commission wood packing regulations. Given the fact
    that I have 1.1 million acres of Mark Twain National Forest,
    and this is critical to my district and the thousands of
    individuals who are employed in the wood packing and related
    industries, plus my little bitty sawmill owners, I would like
    to hear about your support for this. Hopefully you support
    this.
        Mr. Hawks. Yes, ma'am. Ms. Emerson, we did meet last week
    with your constituents, I think last week or week before last,
    to have a discussion about that, and the fact is there are some
    proposals before the IPPC now. Actually Rich Dunkle, who is
    sitting right behind me, is our representative to that
    committee, and certainly he is working with his counterparts in
    both Mexico and Canada to try to have a unified voice toward
    that, and I can share with you people think that this guy must
    have done everything in the world.
        But I am a former owner of one of those little sawmills as
    well, and not only an owner of the sawmill, I worked at that
    sawmill. So I certainly understand and appreciate your concerns
    there.
        Mrs. Emerson. I hope it all works out, because the people
    who are really impacted in my district are those whose yearly
    incomes may be 7, 8, 9, $10,000 maximum. To see their success
    pulled out from under them would be devastating. So I
    appreciate that.

                            CHRONIC WASTING DISEASE

        Let me ask you another question that we are concerned about
    within the Missouri Department of Agriculture. It has to do
    with the potential for an outbreak of chronic wasting disease
    in captive elk herds, and I am told CWD is readily
    transmittable to deer. I would like to know what you all are
    doing to try to stop the spread of chronic wasting disease.
        Mr. Hawks. I will answer that, and then I will turn to the
    real expert as well. We are in the process right now. We got
    emergency funding for the depopulation of those elk herds that
    have been diagnosed with chronic wasting disease that has been
    going on for probably about a month now. I personally got
    involved, as well as the Deputy Secretary in that process,
    because it concerns me as well.
        And I think as you said that there is a possibility of it
    transmitting to white-tailed deer. So that is obviously
    something that I am very interested in and very concerned
    about, and I will ask Mr. Acord to give you more detail.
        Mrs. Emerson. Thank you Mr. Hawks.
        Mr. Acord. Ms. Emerson, as Mr. Hawks indicated, we have an
    emergency program underway to depopulate those farm-raised elk
    that have been found to have chronic wasting disease in those
    herds, and we have also taken out the remainder of the herd
    because of their having been exposed. The major focus of that
    program has been in Colorado, but as we begin to trace out
    other animals that have interacted with those herds, we expect
    to find others in other parts of the country.
        We are working cooperatively with the State Departments of
    Wildlife to assist with the laboratory diagnosis of the samples
    that have been submitted from hunter harvest sampling. You
    probably are aware that just this week, there were three deer
    confirmed in Wisconsin as having chronic wasting disease.
        It is a concern to us. We certainly want to make sure that
    we continue to focus on the farm-raised elk and deer, and that
    we continue to assist the States with the survey of the disease
    in the wild populations so that we have knowledge of the
    distribution of the disease in the country. The work so far is
    concentrating on those farm-raised animals that are in
    Colorado, a herd in Oklahoma, and another in Nebraska.
        Mrs. Emerson. Do you feel you have the necessary resources
    to do the job?
        Mr. Acord. The difficulty right now is we do not know how
    big the job is. The more surveillance that we do, the more we
    are apt to find; we have the resources for the job that we now
    know about. We have the request in for an increase to deal with
    next year, but the more we learn, the more we may find.
        Mrs. Emerson. I appreciate that. Thank you, Mr. Acord. My
    time is up, and I will yield to my colleague from Ohio.
        Ms. Kaptur. I thank the Chairlady very much, and I wanted
    to just float an idea, Under Secretary Hawks, and see if you
    consider this within your purview at MRP. Though the food and
    nutrition service is not under your jurisdiction this year, we
    are being asked to appropriate over $10\1/2\ billion for
    purchases of commodities that go into our school breakfast and
    lunch programs.
        Under the AMFS, I think you have a request for about $700
    million for supplemental commodities that are brought for
    various reasons for market stability and that are incorporated
    into the school breakfast and lunch programs. But as you think
    about the concept of marketing, let me give you a specific
    situation from my own State, where I think the Department of
    Agriculture needs to help the States meet the farmers who could
    provide the food into the school breakfast and lunch programs.
    What has been happening is, in many places where we have
    farmers producing product, whether it is apples or beef or
    chickens, which could be made into Chicken McNuggets, the
    problem often is that the farmers are not organized in a manner
    to bid on the State contracts.
        So in the State of Ohio, for example, the contract for the
    food programs comes through Department of Education, which
    really doesn't talk to the State Department of Agriculture and
    there is a misfire. I think that that probably happens in many
    places in the country. I had a group of farmers in my office
    yesterday. They were up here with the land grant institutions,
    and many of them were talking about what happens inside those
    cafeterias and how the kids do not eat the proper food. They
    are drinking pop, they are not drinking orange juice.
        I had mothers in my office yesterday talking about how
    children are refusing orange juice in droves in Ohio because
    they do not know what it is. This is in the rural communities.
    This is not to say, that it is not going on in urban areas.
    This is out in the rural areas. What is happening to our
    children's diet? We know one of the big problems we face is
    obesity among our children, improper exercise and improper
    diet, and though you probably do not see this as your role, I
    would encourage you to look at that 10.5 billion dollars and
    see, perhaps, in a demonstration basis, with the nutrition
    service, how we can have farmers working with our local school
    systems providing that food.
        Farmers are the best stewards we have. They understand the
    nutritional content of food and there is a huge divorce going
    on between the ways these State Departments of Education,
    whoever is buying the food and what happens with our local
    agricultural communities.
        So it is not a problem you can solve overnight, but really
    you need to have some discussions at the highest levels and you
    will find what USDA has been doing in this regard is very
    small.
        Mr. Hawks. Thank you, Ms. Kaptur. You are exactly right,
    and we do have projects going on now that address that. I had a
    group in my office within the last few months and we were
    talking about this very situation, and I am going to turn to
    Mr. Yates to talk to you in depth, I think, about that, because
    he is much more familiar with it because it is operated out of
    his mission area, but I agree with you that we need to have
    that connection.

                              LOCAL FOOD PURCHASES

        Mr. Yates. Thank you. It is an important piece which we
    have been working on, and you may be correct that we could do
    more and do a better job because it is critically important to
    small farmers that they have the ability and the opportunity to
    market their product where everybody else markets it. We have
    had a number of programs going on that are working with local
    communities and with school districts and educating them that
    there is product at home. You can buy it here.
        And so we will take your suggestions seriously and look
    into what we can do to improve the fate of the small farmer,
    being able to move their product into the purchases that are
    made and into this pot of money that is there to buy
    agricultural products.
        Ms. Kaptur. In some cases, processing is needed.
        Mr. Yates. That is correct.
        Ms. Kaptur. In other cases, for instance, in Ohio,
    Congressman Hall came to me a few years ago. There was a
    problem because the school systems in Ohio, the Department of
    Education in Ohio, wouldn't buy apples from Ohio apple
    producers because somebody had written some contract that the
    kids would only eat applesauce and not fresh apples or some
    ridiculous thing, and we had to get into that. I thought this
    is unbelievable.
        The whole system fights against working with our local
    farmers and welcoming them into the supply chain and making it
    easy. I do not understand what is going on there, but it is
    pretty serious when you have got $10\1/2\ billion out there.
    That is a significant segment of the market and we need to
    connect our farmers to that.
        I just might mention, and I know this round is up, but that
    in two other programs, the women, infants and children farmer
    markets program and senior farmer market nutrition programs,
    there are no funds provided in the administration's budget. I
    mentioned this to the Secretary, and I do not appreciate that
    because I am a big advocate of those programs. But I can tell
    you they are not only good for the recipients and the buyers,
    but they are superb for farmers because it is direct cash
    income into their operations. There is a fault line in
    agriculture between the really big producers and between the
    smaller and medium-sized producers. For the smaller and medium
    producers, this is the difference between making it into the
    next fiscal year and not.
        I just, again, would draw your attention to those programs
    because they really do directly provide income to farmers who
    cannot find their way to the shelf at the way the grocery
    industry is structured today.
        So, again, those are programs that I am just rising to
    raise consciousness here with every single top level person who
    comes before us. They really do help farmers survive. Their
    operation survive in communities like mine, and we have lost so
    many. We have the last generation of farmers out there. I am
    talking to the kids and I am concerned about what our
    communities are going to look like 40 years from now, and so I
    want to use every tool at the Department of Agriculture to help
    these folks survive and thrive.
        Mr. Yates. I appreciate that. I oversaw the farmers market
    WIC program in California, so I understand what it can do, not
    only for farmers, but also for the people who need help. It is
    a very successful program, and we will certainly take your
    comments to heart and look at this to see if we can find a way
    that we can improve small agriculture out there.
        Ms. Kaptur. Thank you.

                               ANIMAL WELFARE ACT

        Mrs. Emerson. Mr. Hawks, you are new to this job but some
    of the proposals in your budget request are not. Your testimony
    indicates that legislation will be submitted to recover about
    $34 million more in user fees to recover the cost of new
    license fees in the packers and stockyards administration,
    additional license fees for facilities regulated under the
    Animal Welfare Act, and additional grain inspection fees for
    grain standards.
        Obviously, we here in Congress would need time to review
    the proposal, hold hearings, pass legislation in both bodies,
    and then conference before a bill could be signed into law. Has
    this legislation been drafted yet, or if not, when do you plan
    on submitting it to Congress?
        Mr. Hawks. I actually do not know whether the legislation
    has been drafted. JoAnn, can you address that, or Stephen?

                                 LICENSING FEES

        Ms. Waterfield. The legislation for packers and stockyards
    licensing fees has been drafted. It is in the clearance process
    in the Department.
        Mrs. Emerson. That portion of it has been drafted and then
    it will be submitted to the agriculture committee?
        Ms. Waterfield. Yes.
        Mrs. Emerson. Okay. Do you have any sense on the timing for
    the other pieces?
        Mr. Dewhurst. The other is the Animal and Plant Health
    Inspection Service. I think the status is the same. I think the
    legislation has been drafted. It is working its way through the
    process.
        Mrs. Emerson. As well as additional grain and inspection
    fees for grain standards?
        Ms. Waterfield. My understanding is the legislation for the
    grain standards has already been submitted.
        Mrs. Emerson. Okay. I appreciate that. Thank you very much.
    It is important for us to look over that if we want to get it
    done in a fairly rapid way. You know how the process up here
    works. It can take a bit of time.
        Let me direct the next question to you, Ms. Waterfield.
    Your budget request includes a total of about $3.4 million for
    various information technology and biotechnology initiatives
    that would enhance GIPSA's capabilities to conduct its work.
        This represents almost half of your total increase. Can you
    tell the committee how these technological enhancements would
    improve your work product and how American agriculture would
    also benefit?

                                   E-COMMERCE

        Ms. Waterfield. The majority of the increases that you just
    mentioned are for e-commerce. It is to increase our ability to
    communicate with the constituents that we serve. Right now, the
    majority of the work that we do is done with a traditional
    paper trail. What we want to do is increase our ability to move
    the information that we have electronically on both sides of
    our house, both with the grain work that we do and with the
    work that we do in the livestock and packing industries. Most
    of the people that we serve and regulate have capabilities to
    communicate with us electronically. Unfortunately, we do not
    have the capabilities to communicate with them electronically.
    What we do have right now is a simple Web site. What we need to
    have is the ability to give and receive information
    electronically.
        On the grain side, we are just starting to have the ability
    to transmit documents from multiple sites. So like documents
    that will facilitate the shipment of grain from multiple sites
    all the way to the ship, we want to increase our ability to do
    that.
        On the packers and stockyard side, we have annual reports
    that we collect. We have postings that we do with stockyards.
    We have all kinds of information that we move back and forth.
    We have investigators stationed throughout the country that are
    constantly out in packing houses, and auction markets. We need
    to be able to move information to them immediately, so they
    have instant access, and the only way that we can do that is to
    upgrade our computer systems, and this is going to take a
    substantial amount of funding.
        On the biotech side we need $450,000 in order to update and
    keep our new facility in Kansas City up to date so that we can
    provide testing on lab kits and proficiency testing for
    laboratories that the industry uses to provide services to
    itself.
        Mrs. Emerson. How long you think it will take, at least on
    the packers and stockyards part, to get your upgrades or
    enhancements completed?
        Ms. Waterfield. The time line right now is to complete most
    of those by the end of fiscal year 2003, I think, but it is an
    ongoing process, so we do the best that we can with the current
    funding that we have.
        Mrs. Emerson. Is the system really pretty obsolete at this
    point in time?
        Ms. Waterfield. We have some national databases. We have
    three regional offices. Some of those databases are local. What
    happens with some of them is that they have to send it
    overnight. So we have a national database in DC, with local
    databases in the regional offices, so it is very cumbersome.
    What is most difficult is that we have resident agents in 38
    different locations, and it takes them a long time to get
    information from the computers.
        They have to call back to our offices, which means that we
    have to keep our offices staffed with people able to give them
    information, which means that we cannot send those people out
    to do investigations. And as you know, we have less than 200
    people to police a huge industry, so we do the best we can with
    limited resources.
        Mrs. Emerson. But you feel pretty confident that the plan
    you all have put together will solve the challenges that you
    presently have?
        Ms. Waterfield. Yes. One of the things that GIPSA did this
    year was to consolidate our information technology staff on the
    grain side and the packer side to make the best use of the
    resources we have. We are constantly looking for ways to
    increase our efficiency.
        Mrs. Emerson. I wish you the best of luck. I yield back to
    Ms. Kaptur.
        Ms. Kaptur. Thank you very much. I would like to continue
    on the AMS front here. I understand that the Department of
    Agriculture currently holds about 900 million pounds of nonfat
    dry milk as a part of its price support operations, which is
    about a 2-year supply or 2 years' production of milk, and I
    know it costs something to maintain that. I wonder if someone
    in the audience might be able to give us that number; but my
    real question is, does the Department, if you are anticipating
    further acquisition of such product, have the ability to
    contract with processors to get the milk in another form such
    as nonfat cheese, for example, or low fat cheese, that we could
    use in our food assistance programs?
        Mr. Hawks. I personally do not feel that comfortable
    answering this question because that is clearly one that is
    handled by the Farm and Foreign Agricultural Services. They
    handle the price support end of it. We are not involved with
    that, but I think Mr. Dewhurst would probably be the
    appropriate person to address that.
        Mr. Dewhurst. Well, you are right. We have a huge supply of
    nonfat dry milk in storage in Kansas City. I did not bring that
    number, but I can certainly provide it for the record, but we
    have large amounts of nonfat dry milk and sugar.
        [The information follows:]

        CCC COMMODITY INVENTORY NONFAT DRY MILK AND SUGAR--March 1, 2002
                              (Millions of pounds)
    ------------------------------------------------------------------------
                               Commodity                              Amount
    ------------------------------------------------------------------------
    Nonfat dry milk................................................    914.7
    Refined sugar..................................................    181.1
    Raw cane sugar.................................................    588.2
    ------------------------------------------------------------------------

        Ms. Kaptur. You are saying that from a departmental
    standpoint, the people doing this are not thinking about what
    you all think about in terms of marketing, and so we have got
    to look at this one right, and one thing I do know the kids eat
    in the school is cheese on pizza, they will eat that, and it
    just seems to me it would be very interesting to see what that
    storage number is.

                      FOOD PURCHASES AND THE SMALL FARMER

        Similarly let me ask, I believe you purchase 683 million
    pounds of fruits and vegetables for the food assistance
    programs at a cost of about $340 million. My questions really
    are, if anyone could enlighten us on where you buy, whether it
    is from commodity brokers, wholesalers and how the individual
    farmers fit into this purchase process.
        Mr. Yates. Once we decide by analysis that there is some
    agricultural entity with an oversupply, an economic problem, we
    then go out to publish that need for bids, and so everyone who
    is in that commodity has the opportunity to bid on that,
    providing it meets the specifications. So those bids come
    forward and we select the lowest bid for the commodity. I don't
    know if that totally answers your question.
        Ms. Kaptur. Well, I am very curious, administrator Yates,
    in terms of how do individual farmers learn about these, and do
    they bid and what does the history show. Maybe you could
    provide this to the record. Are we basically getting commodity
    brokers or are we getting wholesalers? Are we getting
    individual farmers to bid into this? I don't know at what
    quantity you ask a supplier to provide you product, but again,
    this is an income stream that is out there for our farmers. My
    question is how much of it is actually getting to them directly
    as opposed to indirectly?
        Mr. Yates. When we put out a bid, there will be multiple
    cities that this product is going to be supplied to, and so
    each location has to be individually bid. Most of these bids, I
    will grant you, come from maybe a packing house where you will
    have multiple growers that supply this packing house. So it
    does get down to smaller growers through this larger packing
    house, but if you are taking most of the meat purchases, these
    are rather large purchases, and so it basically has to be a
    rather large company. We do deal with minority purchasers and
    try to help them through this process and be able to be a part
    of it.
        The small farmer issue--I think that most of that is done
    through cooperatives and bids that would come from a packer or
    a middleman that deals with their product.
        Ms. Kaptur. Is there a minimum volume limit that is
    established in the contract?
        Mr. Yates. I would be glad to check on that. I don't know
    that answer right offhand.
        [The information follows:]

        The minimum volume purchased is a truckload quantity--
    generally 36,000-48,000 pounds. AMS normally does not buy
    directly from farmers because most commodities are at least
    minimally processed to meet recipient requests. For example,
    the program buys large quantities of ground beef and canned
    vegetables. While the majority of purchases are from businesses
    that pack and process commodities, many of these firms procure
    raw materials from independent small farmers. For example,
    while we purchase poultry products from some of the largest
    poultry processing firms in the country, small farmers provide
    the chickens to the processor. In addition, during fiscal year
    2001, approximately 50 percent of AMS purchases were from small
    businesses.

        Ms. Kaptur. Let me use one example. I am just trying to
    illustrate a point here because of the situation facing so many
    of our producers both on the livestock side and specialty crops
    and so forth, but just on livestock, in my part of the country,
    now we do not have the big feed lots like they do in the West,
    but the life of an individual beef producer cattleman in
    northwest Ohio is totally controlled by IBP over in Indiana,
    for the most part, and they can choose to welcome them that day
    or not because we do not have processing capability, and if
    they drive their animals across the State line and they try to
    get them slaughtered and they say sorry, we just closed the
    door, they have to drive them back, and they cannot get their
    product on the shelf of the local supermarket because the
    supermarkets tend to follow the same pattern of buying from the
    big processor.
        We are having a really giant struggle to try to find a way
    to bring really quality beef to the market because the
    processing capabilities are there no longer and this is
    happening across our country. We are not the only place that
    this happens, and so we have very good product raised by our
    individual companies, and so my question to you, I am looking
    for other ways to move to product into the market to help these
    people survive.
        They have got to meet the quality, they have got to meet
    the price and all the rest which they can do, but I have just
    seen the system move to a point where we have these large
    processing facilities that control so much, and they basically
    shut out individual producers.
        If there are co-ops, I know they exist in some parts of the
    country, that is one way up the chain, but Ohio, we haven't
    followed the co-op route as much. We are much more into small
    enterprise individual enterprise, and I am looking for ways to
    help those folks bid on product.
        So that is kind of where I am coming from. So whether it is
    fruit and vegetables, whether it is meat, whether it is milk,
    whatever, we will ask several questions for the record so we
    can see what is happening. It doesn't hurt us to look at what
    is happening out there in the system and then ask some
    questions about small and medium size enterprise and minority
    enterprise.
        Women are moving into many of these specialty crop areas.
    How do we get them information so at least they can think about
    how to bid?
        Mr. Yates. One of the interesting things I am very familiar
    with, and I was in the cattle business for 20 years myself, so
    I understand the issue you raise, but in the local area where I
    live in California, it is the center of the raisin industry for
    the United States, and the average raisin grower in the Nation
    is 30 acres. All of them happen to be right there within a 50-
    mile radius of Fresno. So the average size is 30 acres, and we
    have bought numerous product in the last number of years,
    including some this year, through a packer that concentrates
    this product to prepare it for shipment. The small grower in
    that instance is benefiting greatly from the ability to move
    product through the school lunch program and the EFE program.
        Ms. Kaptur. Well, I have to say that I am considering some
    type of small farmer producer set aside. I want to see what the
    numbers show us, though, and we will submit more questions to
    the record on it. Thank you for thinking with us on this.
        Mr. Yates. I appreciate that.
        [The information follows:]

        During fiscal year 2001, AMS spent more than $1 billion on
    commodities. Of that amount, approximately 50 percent was awarded to
    small businesses, with firms participating in the Small Business
    Administration's 8(a) Program receiving 6 percent and Women-owned and
    Historically Under-utilized Business Zone businesses receiving almost 1
    percent each.

        Ms. Kaptur. My time is up.
        Mr. Bonilla [presiding]. Ms. Kaptur, if you have additional
    questions, you may proceed. My understanding is that there no
    other members have any remaining questions.
        Ms. Kaptur. All right. Thank you, Mr. Chairman, very much.
    I am trying not to make it too long here.
        We have several questions for the record, but let me ask
    you, Under Secretary Hawks, what role do you see yourself
    having in the marketing of biofuels? Here we are engaged in
    Enduring Freedom, this long and protracted effort, and our
    politics, in my opinion, totally tied to, unfortunately, the
    acquisition of oil from very undemocratic places in the world,
    a half of our trade deficit now centered in the import of oil
    from such democratic places, put that in quotes, as Saudi
    Arabia and Kuwait and the United Arab Emirates, even Iraq,
    which is such a dilemma, isn't it?
        I am just such, I am almost a zealot in the area of soy
    diesel and ethanol and any kind of cellulosic biofuel that we
    could produce. What do you see your role in helping this
    industry grow and prosper in our country in providing new
    income streams to our farmers?
        Mr. Hawks. In the position that I hold here, Under
    Secretary for Marketing and Regulatory Programs, and it is
    somewhat limited, but the tremendous asset that we have here
    and an opportunity that I see for us is within our market
    promotion and research programs that we oversee within AMS. We
    can work with those commodity organizations there to try to
    facilitate the development and expansion of areas like ethanol,
    like biodiesel, where a lot of research has been done within
    those market promotion programs. But then it would become a
    wider discussion, I think, within USDA, and it would probably
    be more appropriate to address with rural development.
        I can see rural development having tremendous opportunities
    there as well, and if it is a broad overarching question, then
    it goes to a governmentwide question, I would say, with the
    Department of Energy in conjunction with USDA. There are a lot
    of discussions going on, a lot of things going on, and where
    Mr. Dewhurst has the overall perspective from the Department of
    Agriculture, he very well may want to address some of these.
        Mr. Dewhurst. I think in the previous hearing we talked
    about providing you all with some crosscuts of the issue areas,
    and biofuels is one of them. We have some numbers and
    description that we will lay out for you showing what our
    various agencies do in that area.
        With regards to biofuels in the Department, there is work
    done at ARS and the CSREES in the form of research. There is a
    program in the CCC that subsidizes ethanol production. There is
    some work in the Forest Service and a number of other agencies,
    all overseen by a structure in the Department that looks at the
    question of energy policy and biofuels. So we will provide you
    with that information and be glad to.
        [The information follows:]

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Ms. Kaptur. I really think you have the keys to the
    kingdom. We have the keys to the kingdom. Now we just have to
    enlighten others.
        The Department of Energy historically, this is nothing
    against them, but I mean, they grew out of the nuclear industry
    so you have a very heavy prejudice there and weight of opinion
    of the side of nuclear. Those that like nuclear, so be it, but
    I am sort of in the renewables arena and what we can do.
        There is just a great article I talked about last night on
    floor of Congress written by Senator Lugar and the former CIA
    director, James Woolsey that was published in foreign affairs
    in late 1999 called The New Petroleum, and it talked about
    cellulosic biofuels, and I would just refer it to you just as
    truly pleasure reading and a view of the future. I would love
    to find a way to put a soy diesel pump or biofuel pump over at
    the USDA the same way we did farmers market and let people
    think a little bit about this, enlighten the American people.
        This should be part of that exhibit at the Smithsonian.
    This is the future for us and you have the collection
    capabilities, you have the research capabilities, you have the
    marketing capabilities, and within USDA, we need to ratchet it
    up a bit, and I think every single person there has a
    responsibility in helping to crystallize this for the American
    people, and frankly for us, so we can be more helpful in
    building a new future.
        Christine Todd Whitman just said this morning on C-SPAN
    that she drives an EP vehicle, ethanol powered vehicle. Just to
    tell you how seriously deficient we are in unlocking the keys
    to the kingdom, we had the head of the Forest Service up here
    the other day in our CS, and I said you have one of the largest
    fleets in the country. What percent of your vehicles are
    powered by biofuels? They are unconscious. They are not
    thinking about it. It isn't part of their mission, and so even
    within the Department we have a job to do. Enough said on that
    one.

                                    IMPORTS

        I wanted to go to APHIS if I might and just observe that in
    the budget submission you have made to us there is increase in
    appropriated dollars to deal with many of the pests and
    problems we are having due largely to imports, and I have said
    this at other meetings, but I am going to say it again, and
    that is a huge international legal question, who is really
    responsible for paying the costs of infestation that affects
    our food system?
        If one takes the Asian long-horned beetle, for example,
    knowing its origin, why should I be asked to use taxpayer
    dollars sent here by people from my community and Congressman
    Bonilla's community when they did not cause the problem? They
    are the victim. The cities of Chicago and New York are the
    victims of infestation that has come from offshore.
        We have talked to the Secretary about the international
    trade agreements that we sign and some of the international
    forums in which she would appear. I really do not think the
    answer to this is more appropriations. That is a short-term
    emergency answer perhaps but long term, the cost of this is
    phenomenal, just on citrus canker and Asian long-horn beetle,
    the remediation.
        I know you have presented a traditional request to us, but
    as you think about this problem, it is massive, and it is
    taking other resources we need for other purposes, and I really
    think that the Department ought to consult with groups like the
    World Logging Institute to deal with torts and liability at a
    much higher level, because we are not going to be able to
    afford this, at least what we are going to have to take money
    from to pay for it, and I just wonder, Mr. Acord, as you think
    about the rising costs of the APHIS budget, if we look at the
    last 5 years, for example, what are some of your thoughts in
    this regard? Are you just going to continue coming to us to
    take taxpayer dollars directly appropriated to try to
    remediate? Is this how we are going to solve this problem, in
    your opinion?
        Mr. Acord. Well, philosophically, I would agree with you
    that we ought to try to find someone to send the bill to, if
    you will. The reality is where are we going to find that person
    or that country, the practicality, just the pragmatic issues of
    trying to do that and then trying to collect. Our legal counsel
    tells us that they do not believe that currently it is legal to
    do that or that we could find a way to do it, in spite of
    whether we would like to do it or not.
        The other side of that coin is that we may be getting bills
    from others. While we believe that we are clean in our exports
    and we are not exporting disease, you certainly have to face
    the possibility that that could happen because we do have some
    diseases here that we could get the bill for through some
    accidental introduction to some other country in the world.
        The reality is that we have to find new and creative ways
    to deal with these pests. We have to find them sooner. We have
    to react to them sooner before they become the kind of problem
    that citrus canker has been, or that some of the others have
    been. Frankly, we found the Asian long-horn beetle soon enough
    to where it did not become perhaps the national problem that it
    could have been.
        The focus needs to be on the early detection and rapid
    response to these kinds of pest problems that we keep the costs
    down, keep the spread down, and minimize the impact that they
    potentially can have in the U.S.
        Ms. Kaptur. I thank you for your comments, and I would just
    observe that yesterday or early this week, the President made a
    decision on the steel industry, and whether one agrees with the
    decision or not, there is a method of assessing damage and
    responsibility, and it is very important in the behavior of
    countries and companies to have a regular order in the global
    marketplace and rules that are understood, and I think that we
    are in the environmental arena, and I would classify this in
    the environmental arena. We need the same regimen, and if the
    United States does something to harm another country, you know
    what, I think we should be responsible, and I think that exacts
    a discipline on our own people.
        And so in this important area, I would appreciate, Mr.
    Acord, if you would think about this conversation a little bit,
    and if there are additional resources we could provide you to
    produce the kind of analysis that would lead us to a different
    future on this environmental front rather than just keep
    absorbing these costs through discretionary spending, I think
    we really need that. That report could include the rising costs
    that we have been asked to pay over the last several years, but
    it seems to me that we have to go beyond what your general
    counsel says is what the law allows.
        This is the problem. The law needs to be broadened because
    of the increased volumes of trade that the world is now
    experiencing. We have to find remedies to assess responsibility
    where harm has been done and we are the largest importing
    Nation in the world. I mean, we take more in here I think than
    any other country, and so we are more likely to be harmed, and
    I just would urge you not to be bound by the status quo, but to
    help us deal with the rising costs that you are bringing to us
    in a more future-oriented manner. At least give us some
    options, and if you need help in hiring the people to help
    think that through, please let us know.
        Mr. Acord. Thank you. We will take your advice seriously,
    and I believe the economic research service has been requested
    to do a study, or they have a request in this year's budget to
    do a study on the cost of invasive species and where we should
    be spending our resources, and we certainly look forward to
    that report.

                                   SCREW WORM

        Ms. Kaptur. Okay. I wanted to just turn for a second the
    Chiapas facility. About 2 years ago, there was to have been a
    meeting to talk about the reuse of that facility in a very key
    area of southwest Mexico, and where there has been a lot of, I
    am sure you are aware indigenous unrest, and our government had
    been operating that facility for a very good biological purpose
    to eliminate, I think it was either screw worm or med fly.
        Mr. Acord. Screw worm.
        Ms. Kaptur. That is what I thought, and we had asked a
    prior administration to make a proposal to us that if we were
    going to diminish that facility and discontinue the activities
    that were ongoing, what recommendations we might have to turn
    it into a research station or a place where tropical fruits,
    for example, could be either researched or propagated working
    with the local people, but we never did get an answer back on
    that.
        Mr. Hawks. I will answer.
        Ms. Kaptur. All right. Secretary.
        Mr. Hawks. I was not here 2 years ago or even a year ago,
    but I can share with you what has transpired since my coming to
    USDA. We have completely, with our partners in that project,
    the Mexican government, and the Screwworm Commission, have
    reevaluated that situation. It is our intent now for that
    facility to stay open, and I have actually signed a decision
    memo to that effect. So it is actually a state-of-the-art
    plant. There have been a lot of upgrades there. There is a
    tremendous need for that facility there. There is also a need
    for an additional facility farther south, but the answer to the
    question is that that facility will be staying open, and I
    think the chairman has a certain interest in screwworms as
    well, and so we will assure you that that facility will be
    maintained.
        Ms. Kaptur. Thank you for that very clear answer. Will it
    be performing its current function?
        Mr. Hawks. Yes, ma'am. There is a continued need for that
    facility to produce the sterile flies there, and so it will
    remain open.
        Ms. Kaptur. I know that it was a huge employer in that
    area.
        Mr. Hawks. Yes, ma'am.
        Ms. Kaptur. And that was a very sensitive issue, and we had
    urged prior Secretaries to talk to AID and other
    instrumentalities of our government to do something, maybe
    working in cooperation with CSREES. They could raise coffee,
    they could raise tropical income. They basically need income.
    These are subsistence people. So I thank you for your attention
    to that, and if there is anyway we can broaden the purpose of
    that in conjunction with some of the other programs we operate,
    either through USDA or other instrumentalities of our
    government, I would appreciate the recommendations.
        I wanted to just shift, if I could very quickly, to the
    Packers and Stockyards Administration, and the testimony
    submitted indicates there were 124 callers who contacted your
    hotline last year to report concerns. Can you give us a little
    feel for the nature of those calls and what it is that is being
    reported to the Department?

                              GIPSA HOTLINE CALLS

        Ms. Waterfield. Those would just be the hotline calls. We
    receive hundreds of calls to our field offices. So that is
    actually just a hotline that allows people to call anonymously.
    It is important to realize that we receive calls every day
    throughout the year in each of our field offices, and we
    respond to every call that we receive. Last year we performed
    more than 1,600 investigations, and as a result of those
    investigations and the work that we performed, we returned more
    to the industry than the amount of money that Congress
    appropriated to our programs. I would have to get back with you
    on the nature of the calls that we received and the breakdown
    of the types of complaints that we received.
        Ms. Kaptur. Give us a sense of what happens there with the
    hotline call. Do people call with a concern about a given
    facility?
        Ms. Waterfield. Sure. Our complaints on the hotline range
    anywhere from a call about the Johnson amendment to a specific
    packer, to a poultry grower complaining about his or her
    contract, to a complaint about territorial allocation, to
    someone calling to say that she did not get paid for a cow that
    went through a sale barn. So they range anywhere from a
    particular transaction to conditions in the marketplace.
        Ms. Kaptur. Well, we will ask some questions to the record
    on the nature of the calls and the types of complaints. That
    gives us information that we need here as well----
        Ms. Waterfield. Okay.
        Ms. Kaptur [continuing]. To give a sense of what is
    happening in the country. I know that we have been joined by
    Mr. Nethercutt, and I have some additional questions on GIPSA,
    but I will hold them, Mr. Chairman, if you would like to call
    on Mr. Nethercutt.
        Mr. Bonilla. Thank you, Ms. Kaptur. We have a lot of
    members of the Agriculture Subcommittee juggling several
    hearings this morning. We welcome Mr. Nethercutt who has been
    bouncing between hearings and the House floor as well. Welcome,
    Mr. Nethercutt.

                               ANIMAL WELFARE ACT

        Mr. Nethercutt. Thank you, Mr. Chairman. You are right,
    Defense and Interior, and now here. I appreciate your patience.
        Mr. Chairman I welcome all the witnesses. You may have
    known that I and many others in the Congress are concerned
    about the issue of security of our research facilities that are
    funded by agriculture research dollars from what I call
    domestic terrorist groups, like Earth Liberation Front, and the
    Animal Liberation Front. These groups get information off Web
    sites about researchers and research through the Freedom of
    Information Act, and then use that information to do damage. I
    think it is outrageous, and I do have legislation that
    addresses this issue and tries to solve that problem.
        Secretary Hawks, we did send you a letter on February 8,
    2002. You probably haven't had a chance to even look at it yet,
    but in that letter, we encouraged APHIS to work with the
    research community to evaluate the problem I will call
    overexposure. I am informed that some of the material has been
    taken off the web, and that is positive. I know there are legal
    issues to review regarding security in the Freedom of
    Information Act and so forth, but I know also that the older
    American Welfare Act or Animal Welfare Act inspections are
    still available. I think they ought to be looked at very
    carefully as well.
        Maybe you have some comments about how we might think
    through this whole issue of security from these kinds of
    organizations that really are terrorist in nature. The FBI says
    ELF & ALF are the number one domestic terrorist group in the
    country. I think we should consider whether we might insulate
    some of this information from Freedom of Information Act
    requests. I know it is a sensitive area, and I support FOIA,
    but I do think we need to be careful about this as it relates
    to researchers and research dollars. So maybe you have some
    thoughts.
        Mr. Hawks. Yes, thank you, Mr. Nethercutt. I share your
    views and your beliefs. It doesn't matter whether a terrorist
    is homegrown or imported, they are still a terrorist, and we
    have been evaluating the types of information that is on Web
    sites, the information that is readily available. And you are
    correct, some of the things have certainly been changed that
    are being put up. It is a sensitive nature with the FOIA. There
    have been some changes made there in animal care as well on E-
    FOIAs, and so we are evaluating that. I share your concerns.
        I share your interest there. We will continue also
    departmentwide evaluating all of our security issues there. We
    have had some external contractors look at some of our
    facilities to help us try to discover ways to prevent the
    terrorist activities that potentially could be there. So we are
    working on this issue.
        Mr. Nethercutt. Well, that is great. I hear a lot, from
    researchers all across this country, not just ag researchers,
    but private researchers. I have a brand new health sciences
    facility in my district. The universities there collaborated
    and put the money up. They are worried about people coming in
    and burning them down. Really, I think forewarned is forearmed.
    I think we need to be sure these places are protected.

                                WOLF ACTIVITIES

        Mr. Acord, I know that APHIS conducts livestock protection
    activities for resource owners around the country in
    cooperation with private and government agencies, and I see
    that you mention wolf capture and relocation activities in your
    testimony. A couple of years ago, I asked a question regarding
    the cost of the wolf program and whether the Department of
    Interior, which manages that program, is paying for its fair
    share of the control cost. Can you tell us what the
    relationship is there, whether your budget is benefited by the
    fact that Interior's helping on this?
        Mr. Acord. Mr. Nethercutt, thank you for your question. I
    think you can see from our appropriation request that we
    obviously have a deep interest in wolf control. We are
    certainly providing all the control for protecting livestock
    and the movement of or the relocation of wolves. Interior does
    not fund any of that activity. It all comes out of the wildlife
    services appropriation.
        Mr. Nethercutt. Given that, it seems to me we have got a
    lot of pressure on ag programs. I am on the Interior
    Appropriations Subcommittee too, so I will ask Secretary Norton
    in due course, about this issue. It is their program, as I
    understand it, and I have questions about it.
        I think my memory is that we had testimony a few years ago,
    that the cost of reintroduction of 15 wolves into my part of
    the country was $6 million. That seems excessive to me, but in
    any event, it is costing you money, and I think money is at a
    premium these days for all that you need to do and want to do.
        Mr. Acord. Mr. Nethercutt, the cost of reintroduction is
    not nearly as expensive as the cost of staying, and that is
    what we deal with, the cost of the presence of the wolves when
    it comes to their depredation on livestock. That is an expense
    often overlooked in the reintroduction program, and it is
    something that needs to be considered.
        Mr. Nethercutt. Thank you, Mr. Chairman. Thank you all for
    your testimony.
        Mr. Bonilla. Thank you, Mr. Nethercutt. I have a comment on
    your point about the agri-terrorism issue. That is a very
    important issue. These people, in my view, are terrorists
    because they have no regard for human life. They will destroy
    anything just to make a statement. I want to applaud you for
    your work on this issue. I know last year we had a discussion
    about possibly putting something in our bill for this cause.
    However, last year, members of this subcommittee were extremely
    cooperative in getting the bill done. We did not put any
    authorizing language of this nature in the bill. I have to tell
    you, if I had to pick one issue this year, that would be the
    one we would put in this year's bill.
        Mr. Nethercutt. Well, it is a new year. We will keep
    talking.
        Mr. Bonilla. We want another clean bill this year, but
    seriously, George, that is a very, very important issue that I
    fully support. I hope we can get that done somehow. Thank you.
        Ms. Kaptur.
        Ms. Kaptur. Thanks, Mr. Chairman, I have got my last round,
    and I wanted to go back to GIPSA if I could, the packers and
    stockyards, and I have many questions for the record, but I
    wanted to ask you if your agency receives complaints regarding
    the poultry industry in this country.

                          POULTRY INDUSTRY COMPLAINTS

        Ms. Waterfield. Yes, ma'am. In fact our Atlanta office is
    our office that specializes in the poultry industry.
        Ms. Kaptur. Oh. Could you tell us a little bit about what
    the nature of those complaints might be? Can they be
    categorized? Is there a way to describe them? Do they receive
    more complaints than maybe other industries?
        Ms. Waterfield. Primarily, the nature of the complaints is
    that growers in the chicken industry are complaining about
    unfair treatment from their integrators under contract terms,
    and the vast majority of the time when we go out to
    investigate, we find that we can either resolve the complaints
    informally, meaning that the integrators will come into
    compliance with the contract terms or the complaints are not
    valid.
        Ms. Kaptur. I tell you, I was very surprised too; I went up
    to Delmarva Peninsula a couple of years ago, and walked through
    many of those farms and operations and met with some of the
    large processing companies then, and one of the impressions I
    took away with me from that trip, at that point, how the
    farmers had signed contracts that they really did not, they did
    not protect their own interests, and they were being asked to
    do things, and that started us off on this cause of trying to
    get USDA to put up on the Web a sample contracting site, which
    then USDA said they could not do, and I said, well, do not put
    up a specific contract, put up some samples of what the
    questions farmers should ask before they sign.
        Ultimately, USDA was helpful there, but I found great lack
    of information in the agriculture community on contracting and
    I was actually surprised because I had never experienced that
    before.
        One specific experience, I had one farmer I pointed out a
    manure pile because of the pollution in Chesapeake. Oh,
    Congresswoman, he thought I was going to cite him or something,
    he said we are going to get rid of that, we are going to get
    rid of all that, and the company is going to haul it away. I
    said haul it away? I said, sir, that is the one thing I know
    you own on this operation and you should actually sell that.
    That wasn't in the contract. I mean, I just could not believe
    some of what I learned.
        Then I went to one of the processing firms, and during
    lunchtime, one of the executives showed me a bottle where they
    had pelletized manure, and what a growth market that was for
    them and all, and I just had this experience with this farmer
    and then having the experience with the company. I thought
    something is missing, and so I appreciate the Department's
    support of our measure H.R. 231, to provide you with
    administrative authority to investigate, and I know Mrs.
    Emerson is a cosponsor with me.
        Ms. Waterfield. And Congresswoman, we are dramatically
    increasing our outreach to producers and growers, particularly
    in the poultry industry. Last fiscal year, we had about 20
    poultry town hall meetings specifically geared at growers to
    make sure that they understood the protections afforded them by
    the Packers and Stockyards Act, and we are trying each year to
    reach out further to growers to make sure that they understand
    that we are there and that they are one of the intended
    beneficiaries of the Act, even as the Act is written now.
        So we are trying to increase our efforts to reach them and
    to make sure that they understand what the Act does do, and AMS
    has led the effort within the Department to provide more
    information on contracting and what producers and growers
    should look for in contracts.
        Ms. Kaptur. Is there a simple way for you to describe to me
    what you can do with a complaint about bad practices in the
    livestock industry versus the situation you face in the poultry
    industry and what your powers are?
        Ms. Waterfield. In the poultry industry, our jurisdiction
    is limited to live poultry dealers and to any growing
    arrangements where poultry is grown for the purpose of
    slaughter. And as you know, the poultry industry is pretty much
    vertically integrated, which means that most growing of any
    kind of poultry is done under contract which would include any
    kind of eggs or hens, anything like that.
        The problem is that there is a huge misconception about our
    jurisdiction. We do not have jurisdiction over any kind of
    contracts for egg layers, for example, because those contracts
    are not done for the purpose of slaughter. Those contracts are
    done for the purpose of laying eggs. So even though the
    contracts are in place until the hens are spent and go off to
    slaughter, the purpose of those contracts is for the hens to
    lay eggs. We do not have jurisdiction over those and our
    jurisdiction is very limited, to only those contracts over
    growing arrangements for the purpose of slaughter.
        Ms. Kaptur. Who does have jurisdiction over?
        Ms. Waterfield. No one. That would fall to State law and
    contract law.
        Ms. Kaptur. You know what is interesting about that, in my
    State, we have one company that produces 2.6 billion eggs a
    year and they have refused to comply with eight contempt of
    court citations by our State Attorney General. I don't know if
    you have been involved in cases that have reached the point of
    having contempt in the livestock industry. Do you know of any
    where eight have been rejected by the company or not responded
    to, ignored?
        Ms. Waterfield. We have had several. There have been three
    or four, and generally in the livestock industry when that
    happens, usually because we are working through the Department
    of Justice at that point in time, we are able to get the person
    incarcerated.
        Ms. Kaptur. Okay.
        Ms. Waterfield. So one of the contrasting differences is
    that in the livestock industry we have civil penalty authority.
    Our jurisdiction is broader. We don't rely on State law. It is
    a Federal law. When we have a case involving contempt, if the
    Secretary were to take it to the Department of Justice, then it
    goes to Federal court. The Federal court judge then takes it
    more seriously. After several contempt instances, there is
    usually a probationary period and then incarceration. So what
    we find is that when we have a problem with violation of the
    law, we are taken more seriously, and so that is why we have
    supported your efforts to expand our authority.
        Plus, as we have just discussed from your reaction, I can
    tell there is a lot of confusion about what our authority is in
    the poultry industry. So we are constantly trying to explain to
    folks in the poultry industry that, I am sorry, we do not have
    jurisdiction over your contract because your contract is to
    produce eggs. It is not a contract to grow for the purposes of
    slaughter, and people do not understand that.
        So for lots of different reasons we would like to see our
    jurisdiction expanded.
        Ms. Kaptur. If there were to be a Federal agency
    responsible for oversight on the egg-laying aspect, would that
    be FDA, if the law permitted it, it wouldn't be your agency,
    you are saying, because you say you are only involved in
    slaughter?
        Ms. Waterfield. No.
        Ms. Kaptur. I know that, but if one were to think about who
    should be the logical instrumentality?
        Ms. Waterfield. It would probably be us, because the idea
    is to police unfair practices between the person growing or
    handling the chickens and the integrator or the processor. So
    you are basically overseeing the contract, which is we are
    overseeing the practices between the two parties, which is
    basically what we do in the other types of contracts that we
    are looking at. We are policing that industry for unfair
    practices in any other type of situation, so the contract
    specifies how the parties are to relate to one another. We just
    go in and make sure the contract terms are being applied fairly
    and uniformly.
        Ms. Kaptur. I thank you very much. It has been an
    enlightening discussion, and thank you, Mr. Chairman.
        Mr. Bonilla. Thank you, Ms. Kaptur. Mr. Goode has just
    joined us. I will yield to Mr. Goode.

                                    HYDRILLA

        Mr. Goode. Thank you, Mr. Chairman. I have really one
    question, probably to Mr. Acord. Can you tell me what you are
    doing researchwise, and also in working with communities in
    combatting hydrilla in inland lakes.
        Mr. Acord. We are not doing very much with that at all.
    That is research done by ARS and the other kind of outreach and
    discussion with communities would be done through the
    cooperative extension service and through State agencies.
        Mr. Goode. So your division then is not focusing on
    hydrilla at all?
        Mr. Acord. Not to any great extent. We have, in the past,
    performed control work on hydrilla, but it is very, very
    limited, and we haven't seen an expansion of that in a long
    time.
        Mr. Goode. That work that you did do, was it fruitful?
        Mr. Acord. In some cases we were successful. In others we
    were not. It depends on the level of local cooperation and
    local participation. I don't believe we are going to get into
    any larger-scale programs at this point.
        Mr. Goode. In the last 5, or even 10 years, where have you
    done hydrilla?
        Mr. Acord. We have done some technical assistance work with
    Virginia, some here in Potomac, or in the Potomac River. There
    is some work that was been done a number of years ago. Other
    sites, I cannot tell you specificly as to where we have done
    it, but we could certainly provide that for the record.
        Mr. Goode. Could you just tell me the sites you looked at
    in Virginia and when you did.
        Mr. Acord. The only ones that I am aware of was on the
    Potomac River.
        Mr. Goode. Okay. Thank you, Mr. Chairman.
        [The information follows:

        APHIS is aware of various hydrilla projects in the past for applied
    methods and in inland lakes. These projects include the following:
               APHIS Whiteville North Carolina Methods Development
            Lab led a Hydrilla project in the 1981-93. Efforts included
            pesticide treatment methods and use of triploid grass carp,
            mostly centered in Florida and the Imperial Valley irrigation
            canals of California.
               APHIS funded operational programs in irrigation
            canals in Mexico for the last several years. In 2002, APHIS is
            funding part of a Hydrilla triplois carp program in the lower
            Rio Grande river, in cooperation with the Bureau of
            Reclamation. This is a matching grant through the Pulling
            Together Initiative (PTI) sponsored by Federal Interagency
            Committee for Management of Noxious and Invasive Weeds, and
            managed by National Fish and Wildlife Foundation.
               Several aquatic weed survey efforts have been
            conducted including a Hydrilla survey though the PTI in recent
            years. Such a PTI grant funded in 2002 is an aerial survey
            project with Maryland Department of Natural Resources.
               APHIS has funded a small project on biological
            control of Hydrilla at Wakula Springs, near Tallahassee,
            Florida through a cooperative agreement with Florida A & M
            University. There appears to have been some survey and/or
            technical support efforts done or coordinated by Whiteville Lab
            in Virginia in the past, but not specifically by APHIS for
            control or eradication projects.
               In the past, state-funded pass-through money to the
            Virginia Department of Agriculture may have been provided to
            local cooperators. A private control company contact indicates
            several current privately funded Hydrilla control projects in
            Virginia combine integrated use of pesticides and triploid
            grass carp.

        Mr. Bonilla. Thank you Mr. Goode. We appreciate you all
    being here today and look forward to working with you as we put
    our bill together this year. We appreciate your patience with
    the vote we had that interrupted us for a few minutes, and we
    appreciate the subcommittee members who are juggling a lot of
    hearings today.
        Mr. Nethercutt mentioned the defense hearing. I happen to
    be on that one too. I missed the whole thing, but we are going
    to get our jobs done this year the best we can. At this time
    the subcommittee will stand adjourned.

                  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               W I T N E S S E S

                                   __________
                                                                       Page
    Acord, B. R......................................................   409
    Dewhurst, S. B...................................................   409
    Hawks, W. T......................................................   409
    Kaplan, Dennis...................................................     1
    Reed, P. S.......................................................     1
    Rey, M. E........................................................     1
    Thomas, Brenda...................................................     1
    Waterfield, JoAnn................................................   409
    Yates, A. J......................................................   409

                                   I N D E X

                                   __________

                     NATURAL RESOURCES CONSERVATION SERVICE

                                                                       Page
    Administrative Efficiencies......................................    28
    Agricultural Management Assistance...............................   245
    Air Quality......................................................   102
    American Customer Satisfaction Index.............................     2
    American Farm Bureau Federation Concerns.........................   227
    American Heritage Rivers.........................................   157
    Animal Agriculture and Production................................   158
    Animal Feeding Operations (AFO):
        Environmental Risks..........................................    30
        Impacts......................................................    50
        Technical Assistance...................................... 163, 190
    Barthel v. USDA..................................................   227
    Biobased Fuels..................................................95, 230
    Biographies:
        Mark Rey, Under Secretary Natural Resources & Environment....    11
        Pearlie Reed, Chief, NRCS....................................    23
        Lawrence Clark, Deputy Chief for Science and Technology......    24
        Brenda M. Thomas, Acting Budget Director, NRCS...............    25
    Budget for Under Secretaries.....................................    37
    Colleges and Universities Agreements.............................   182
    Commitment to Conservation.......................................    36
    Congressional Projects Funding...................................   173
    Conservation Compliance..........................................   122
    Conservation Infrastructure......................................29, 51
    Conservation Operations (CO):
        Allocations of Funds.........................................   179
        Erosion......................................................    33
        Funding Request..............................................   216
        Increased Funding..........................................176, 238
        Pay Cost Increase............................................   210
    Conservation Programs:
        Farm Bill Applications.......................................   239
        Land Covered.................................................    90
        Land Toxicity................................................    50
        Private Lands Conservation...................................12, 76
        State and Local Funding Activities...........................   124
        Technical Assistance Funding..........................124, 125, 176
    Conservation Reservation Enhancement Program.....................    39
    Conservation Reserve Program (CRP):
        Costs-Share Policy..........................................41, 182
        Funding......................................................   204
        Pilot Acreage................................................   225
        Technical Assistance Funding...............................197, 207
    Conservation Security Program....................................37, 24
    Conserving Soil and Water........................................    34
    Customer Service Rating..........................................    29
    Dought Risk Assessment...........................................   241
    Emergency Watershed Program (EWP):
        Emergency Watershed Program.............................3, 141, 195
        Draft Environmental Impact Statement.........................   196
        Flood Plain Easements........................................   173
    Environmental Quality Incentive Program (EQIP):
        Acreage and Funding..........................................   161
        Allocation Method............................................   159
        Farm Bill Funding............................................   204
        Priority/Non Priority Area Funding...........................   156
        Planning.....................................................   249
        Technical Assistance Reimbursement...........................   173
    Explanatory Notes................................................   251
    Farm Bill Conservation Programs.................................51, 238
    Farm Bill Conservation Title....................................35, 229
    Farm Size and Concentration....................................245, 247
    Farmland Protection Program (FPP):
        Cumulative Summary...........................................   101
        Farmland Protection Program..................................    99
        Forest Legacy................................................    96
        Funding......................................................   226
        Funds Awarded................................................   100
        Funds Requested..............................................   100
    Flood Plain Easements............................................   134
    Florida Farm Foundation..........................................    52
    Foreign Assignments..............................................   155
    Forest Service Issue.............................................    35
    Forest Service Vehicle Fleet and Alternative Fuels...............   230
    Forestry Incentives Program....................................194, 204
    Funding for:
        Advisory and Assistance Object Class.........................   211
        Land and Structures Decrease.................................   211
        New Information Technology Through CCE.......................   194
        Staff Year Costs.............................................   224
        The Environmental Conservation Acreage Reserve Program.......   225
        Water Quality Incentives Fiscal Years 1996-2003..............   145
    GIS Activities...................................................   126
    Grants and Agreements..........................................205, 214
    Grazing Lands:
        Acreage....................................................237, 239
        Funding....................................................151, 152
        Specialists..................................................   151
        Technical Assistance Staff Years.............................   151
    Grazing Lands Conservation Initiative (GLCI):
        Allocation...................................................   198
        Budget.......................................................   151
        Funding......................................................   158
        Increase.....................................................   188
    Guidance for Reprogramming Proposals.............................   105
    Headquarters Carry Over Funds....................................   210
    Headquarters Staff...............................................   122
    House and Senate Farm Bills......................................   238
    Hypoxia in the Gulf of Mexico....................................   150
    Illinois River Basin Pilot Project...............................   197
    International Activities.........................................   150
    International Involvement........................................   247
    Introduction of Witnesses........................................     1
    Land Owners Important Decision Makers............................   103
    Land Stewards....................................................    30
    National Grazing Land Technology Institute Funding...............   152
    National Grazing Lands...........................................   188
    National Soil Information System.................................   127
    Northwest Salmon Recovery Initiative.............................   157
    NRCS:
        Funding Requests.............................................   153
        Office Closures..............................................   197
        Staff Year Table.............................................   123
        Staffing Levels..............................................   153
        Vehicle Fleet and Alternative Fuels..........................   231
    Object Class Breakdowns..........................................   163
    Opening Remarks by Mr. Bonilla...................................     1
        Outsourcing Plan.............................................   217
        Performance Goal Pilot Project...............................   193
    Personnel Actions................................................   187
    Plant Materials Centers (PMC):
        Funding....................................................127, 128
        New Releases...............................................129, 130
        Royalty Collection...........................................   134
    Private vs. Public Land Tree Cover...............................    76
    Program Evaluation Studies.......................................   135
    Question Submitted for the Record:
        Chairman Bonilla.............................................   121
        Mr. Latham...................................................   227
        Ms. Kaptur...................................................   230
        Mr. Farr.....................................................   249
    Resource Conservation & Development (RC&D):
        Allocation to Centers and Institutes.........................   206
        Applicant Areas........................................49, 155, 191
        Applications Pending Approval.........................187, 190, 192
        Areas Funded..........................................156, 176, 204
        Council Funding............................................190, 192
        Councils Role................................................   187
        Federal and Non-Federal Assistance...........................   143
        Funding Request..............................................   216
        Loans........................................................   145
        Measures Adopted, Planned, and Completed.....................   144
        Northwest Iowa Prairie RC&D..................................   229
        Resource Conservation & Development.....................3, 196, 231
    Regional Project Allocations.....................................   148
    Reimbursements for Soil Surveys..................................   127
    Relationship with EPA............................................    31
    Report on Allocations to States..................................   207
    Reprogramming:
        Authority....................................................   104
        Funds........................................................    49
    Soil Surveys:
        Completed and Published......................................   126
        Funding and Staffing.........................................   155
        State Listing................................................   200
    State and Local Appropriations...................................   123
    State and Local Funding........................................134, 163
    Status of Texas Field Office Telecommunications Pilot Program....   210
    Suwannee River Basin.............................................    26
    Tanana River Assistance..........................................   197
    Technical Assistance for all Conservation Programs...............   125
    Technical Centers................................................   123
    Technical Service Centers and Regional Offices and Institutes....   123
    Termination of Water Resources Program...........................    32
    Third-Party Vendors..............................................   103
    TMDL and CAFO Rules Compliance...................................    31
    Transfer of GSA Rent Costs.......................................   216
    Urban Resources Partnership......................................   196
    Urban Sprawl....................................................96, 233
    Water Quality:
        Examples.....................................................   146
        Regional Projects..........................................148, 149
    Watershed and Flood Prevention Operations (W&FPO):
        Funding Request.......................................163, 195, 216
        Geographic Breakdown.......................................136, 137
        Unobligated Balance..........................................   139
    Watersheds:
        Allocation to Headquarters...................................   206
        Current Status of PL-534 Projects............................   135
        Watershed Program.....................................102, 193, 235
        Watershed Program Termination................................    27
        Watershed Projects Backlog...................................   189
        Watershed Projects Modified or Deleted During FY 2001.142, 143, 189
        Watershed Protection.........................................26, 30
        Watershed Rehabilitation..........................38, 120, 205, 216
        Watersheds Summary...........................................   140
    Wetlands Reserve Program (WRP):
        Acres......................................................121, 182
        Farm Bill Acreage............................................   226
        Staffing and Costs.........................................121, 182
    Wildlife Habitat Incentives Program Funding......................   226
    Written Testimony:
        Statement of Mark Rey........................................     5
        Statement of Pearlie S. Reed.................................    13

                         AGRICULTURAL MARKETING SERVICE

    Administrative Expenses..........................................   587
    ADP Purchases....................................................   591
    Biography, Administrator, A.S. Yates.............................   457
    Electronic Business Standards....................................   625
    Electronic Marketing.............................................   624
    Explanatory Notes................................................   641
    Farm Bill........................................................   620
    Farmers Market.................................................573, 622
    Federal Milk Order Program.......................................   615
    Federal Seed Act.................................................   579
    Federal Seed Program......................................532, 608, 629
    Food Purchases and the Small Farmer..............................   539
    Food Purchases, Linkage of with Nutrition Reports................   625
    Global Market Expansion..........................................   626
    Grading..........................................................   568
        Cotton and Tobacco...........................................   591
        Grading Fee Increase.........................................   569
        Qualified Through Verification Program.......................   592
    Inspection and Certification of Equipment........................   601
    International Standards..........................................   606
    International Trade Prices and Volume............................   599
    Lamb Grading and Certification Support...........................   615
    Livestock Mandatory Price Reporting..............................   601
    Local Food Purchases.............................................   535
    Market News:
        Reports......................................................   569
    Mandatory Price Reporting........................................   562
    Microbiological Data Program:
        Baseline Data..............................................632, 636
    Opening Statement................................................   442
    Organic Certification Program....................................   558
    Organic Labeling.................................................   619
    Payments to States and Possessions.............................652, 579
    Perishable Agricultural Commodities Act..........................   585
    Pesticide Data Program....................................577, 602, 608
        Great Lakes Watersheds.......................................   629
        INternational Marketing......................................   619
        Re-Registration..............................................   588
        Rapid Response...............................................   600
        Spending by Agency...........................................   600
    Pesticide Recordkeeping Program..................................   589
    Plant Variety Protection Act.....................................   592
    Producers, Small and Medium......................................   620
    Program Fee Increase.............................................   569
    Questions Submitted for the Record:
        Chairman Bonilla.............................................   557
        Mr. Kingston.................................................   616
        Ms. Kaptur...................................................   619
        Mr. Farr.....................................................   636
    Referenda........................................................   578
    Reports:
        GAO Report Findings..........................................   596
        OIG Report Findings..........................................   594
    Research and Promotion....................................577, 597, 616
        Pork Check-Off Program.......................................   630
        Task Force...................................................   606
    Research Cooperative Agreements..................................   597
    Retail Marketing.................................................   624
    Section 32:
        Commodity Procurement........................................   616
        Commodity Purchases and Nutrition.....................582, 601, 612
        Surplus Removal..............................................   581
        Emergency Surplus Removal..................................580, 614
        Export Purchases.............................................   582
        Summary of Pork Purchases....................................   599
        State Option Contracts.......................................   612
        Un-obligated Balances........................................   612
        Removal of Defecting Commodities.............................   613
        Direct Payment Program.......................................   613
        Spending.....................................................   614
    Standardization..................................................   567
    Tobacco Programs.................................................   568
    Trade Agreements.................................................   620
    Transportation...................................................   590
    Transportation and Marketing Programs............................   617
    Transportation System............................................   607
    Wholesale Market Development...................................570, 574
    Witness Statement--AMS...........................................   443

                   ANIMAL AND PLANT HEALTH INSPECTION SERVICE

    Accomplishments.................................................895-896
    Agricultural Quarantine Inspection....759-765, 790, 791, 794, 806, 897,
                 907
    Ames Facility....................................................   902
    Animal and Plant Health Regulatory Enforcement...................   786
    Animal Health Monitoring and Surveillance.......................898-899
    Animal Import Centers...........................................782-783
    Animal Welfare/Animal Care.................................708-750, 887
    Argentine Citrus................................................793-794
    Asian Longhorned Beetle.........................................791-792
    Automated Targeting System.......................................   911
    Avian Influenza..................................................   900
    Aviation Operations and Safety...................................   797
    Biologics.......................................................788-789
    Biotechnology..................................................784, 902
    Bison Quarantine Facility........................................   885
    Boll Weevil.......................................756-757, 884-885, 891
    Bovine Spongiform Encephalopathy...........................878-879, 900
    Brown Citrus Aphid..............................................785-786
    Brucellosis...............................................751, 805, 885
    Budget Request.................................................785, 910
    Cattle Ticks....................................................765-766
    Chronic Wasting Disease.........................................885-886
    Citrus Canker.....................................799-800, 858, 889-890
    Civil Penalties..................................................   756
    Commodity Credit Corporation......................801-802, 805-806, 908
    Congressional Directives........................................858-875
    Contingency Funds...............................................782-783
    Cost Share......................................................908-909
    Emergency Authority........................................773-777, 808
    Emergency Management System................................799, 879-880
    Emergency Preparedness...........................................   899
    Exotic Ticks....................................................877-878
    Exports....................................................896-897, 904
    Farm Bill......................................................892-8984
    Federal/Non-Federal Dollars.....................................780-781
    Feral Swine............................................800-801, 809-810
    Financial and Personnel Resources................................   892
    Food Safety.....................................................911-912
    Foot-and-Mouth Disease...........................................   752
    Foreign Animal Diseases.......................787-788, 806-807, 876-877
    Foreign Pests and Diseases...............894-895, 896, 897-898, 907-908
    Fruit Fly.........................................752-753, 875-876, 894
    Genetically Engineered Crops.....................................   906
    Grants to States.................................................   900
    Grasshopper......................................................   888
    Golden Nematode.................................................887-888
    Health and Safety Standards.....................................905-906
    Homeland Security................................................   875
    Imported Fire Ant..........................................789-790, 798
    Imported Meat...................................................910-911
    Integrated Systems Acquisition Project..........................757-758
    Interceptions....................................................   897
    International Programs..........................................784-785
    Invasive Species...........................................904-905, 906
    Kapra Beetle....................................................900-901
    Kudzu............................................................   790
    Livestock Protection Program....................................810-811
    Management Information System....................................   809
    Management Information System....................................   809
    Medicine.........................................................   900
    National Germplasm Quarantine Center.............................   769
    National Monitoring and Residue Analysis Laboratory..............   787
    National Wildlife Research Center................................   794
    Nonlethal Methods..........................................790-791, 903
    Noxious Weeds..............................................755, 888-889
    Object Class Breakout...........................................811-858
    Outbreaks of Pests and Diseases.................................770-773
    Overseas Locations.........................................778-779, 895
    Palmer Alaska Facility...........................................   805
    Pest Detection..................................................881-884
    Pierce's Disease................................................804-805
    Pink Bollworm..................................................781, 889
    Plum Island Animal Disease Center...............................769-770
    Plum Pox Virus...................................................   886
    Port Information Network Operations..............................   911
    Predator Control...............................................796, 802
    Pseudorabies....................................................753-755
    Public Information Campaigns.....................................   898
    Questions Submitted for the Record:
        Mr. Bonilla..................................................   708
        Ms. Kaptur...................................................   892
        Ms. DeLauro..................................................   910
    Rabies.....................................................786, 802-803
    Regionalization.................................................807-808
    Research and Development Contracts...............................   813
    Saltcedar Tree...................................................   789
    Scrapie........................................................765, 886
    Screwworm......................................................795, 801
    Silverleaf Whitefly............................................783, 790
    Smuggling Interdiction.........................................897, 898
    Sudden Oak Disease...............................................   799
    Testing..........................................................   903
    Travel..........................................................813-858
    Tropical Bont Tick..............................................777-778
    Trust Fund Agreements...........................................792-793
    Tuberculosis.....................................................   757
    VAC-TRAC Verification System.....................................   797
    User Fees.............................................783-784, 794, 808
    Wildlife Services............................766-768, 796, 802, 808-809
    Wolf Control....................................................795-796

            GRAIN INSPECTION, PACKERS AND STOCKYARDS ADMINISTRATION

    ADP Hardware/Software Purchases.................................. 1,050
    Aflatoxin Inspections............................................ 1,040
    Anti-Competitive Behavior........................................ 1,051
    Anti-Competitive Provisions of the P&SA.....................1,055-1,056
    Auction Market Failures.......................................... 1,043
    Anti-Competitive Practices..................................1,060-1,061
    Biography of Deputy Administrator Waterfield.....................   484
    Biosafety Protocol..........................................1,054-1,055
    Biotechnology.................................................... 1,054
    Biotechnology Facility........................................... 1,052
    Carcass Merit Purchasing Technologies.......................1,057-1,058
    Comparison of International Standards............................ 1,062
    Competition, Fair Trade Practices, Financial Protection.......... 1,046
    Competitive Structure of the Poultry Industry.................... 1,051
    Complaints From Livestock Producers.............................. 1,035
    Custodial Account Compliance Audits.........................1,045-1,046
    Dealer Failures.................................................. 1,047
    Dealer/Order Buyer Financial Failures.......................1,041-1,042
    E-Commerce......................................................537-538
    Economic/Statistical Analysis...............................1,046-1,047
    eGovernment Initiatives.......................................... 1,056
    Explanatory Notes...........................................1,067-1,108
    Exported Grain Complaints........................................ 1,040
    Foreign Complaints Regarding U.S. Grain Exports.............1,064-1,065
    Four Firm Concentration.....................................1,042-1,043
    FY 2003 Budget Request........................................... 1,046
    GIPSA Hotline Calls..............................................   550
    GIPSA Opening Statement.........................................458-483
    Grain Dust Explosions............................................ 1,040
    Grain Facilities............................................1,035-1,036
    Grain Inspected and/or Weighed..............................1,036-1,039
    Grain Inspection................................................. 1,063
    International Monitoring Program............................1,048-1,049
    IT Environment................................................... 1,053
    IT Security.................................................1,053-1,054
    Johnson Amendment................................................   524
    Licensing Fees...................................................   537
    Livestock Slaughter.........................................1,043-1,044
    Live Weight Purchases.......................................1,056-1,057
    Measures of Carcass Quality.................................1,058-1,059
    Packers & Stockyards Act v. Perishable Agricultural Commodities
      Act.......................................................1,061-1,062
    Pesticide Data Program........................................... 1,048
    Poultry Compliance Complaints.................................... 1,041
    Poultry Industry Complaints.....................................553-555
    Proposed Legislation............................................. 1,059
    Proposed Regulation--Feed Weighing............................... 1,050
    Questions Submitted for the Record:
        Chairman Bonilla............................................. 1,035
        Ms. Kaptur................................................... 1,060
    Rapid Response Teams........................................1,051-1,052
    Rapid Test Performance Evaluation Program...................1,062-1,063
    Select Elements in Grains........................................ 1,047
    Slaughters/Processors Subject to the P & S Act..............1,044-1,045
    Unified Data Warehouse........................................... 1,053
    Unrecovered Losses............................................... 1,047
    User Fees........................................................ 1,066
    Violation Cases--Grain........................................... 1,048
    Violation Report Calls........................................... 1,041
    Web Server Farm.................................................. 1,052